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Monthly Archives April 2015

Need to See a Doctor? There’s an App for That

We are currently on the verge of the most pronounced growth in the geriatric population ever experienced. By 2050, the United Nations estimates that the elderly population of the world (persons 65 and over) will double, from 7.6% to 16.2%. The fastest increase will be of those 85 and older. What is so critical to the healthcare industry is that with increasing age comes greater comorbidity and likelihood of an adverse drug reaction or interaction. Aging impacts the pharmacokinetics and pharmacodynamics of many drugs by reducing hepatic metabolism (as low as 30-50%) and renal function while increasing the volume of distribution of lipid soluble drugs. Consequently this extends a drug’s elimination half-life.

Thus, there has been an ongoing call to action by experts in aging to the therapeutics industry to modify the way we do business, particularly in the area of drug therapy development. In fact, as far back as 20 years ago, experts raised concern regarding the lack of consideration for the geriatric population during the planning and development of drug therapies, even those specifically targeted for use by older individuals. A summary from a workshop piloted by the Institute of Medicine (IOM) focused on Drug Development for the Geriatric Population published in 1990 expressed the need for significant changes in the effort to address this demographic shift.

As it has been 20 plus years since this document was written, I thought would be important to determine how much progress the industry and related stakeholders have made. I have chosen to focus this post as well as the next on three of the key recommendations offered by this expert panel with an assessment of any developments that may have taken place. The final three will be covered in a subsequent article.

1. Design drugs specifically for older people. The experts suggested that drugs destined for the geriatric population should be developed so that they ideally fit the needs of the aging body. They would produce effects at a pace which maintains physiological balance. This would be slow enough to reduce shock to the system yet as quickly as possible to relieve symptoms at minimal doses.

While such products do not yet appear to be available, there is evidence of developments which if applied effectively could eventually accomplish this goal. For example, personalized medicine such as intelligent dosing uses computer models. It takes into consideration a multitude of factors to determine the ideal medication dose for a given patient. In the area of drug delivery, innovations such as a multi-unit particulate system may allow drugs to be dosed in a highly precise and individualized manner by allowing a combination different pellets within a capsule or tablet to take effect at different times and at varying strengths. More appropriate drug formulation is also being examined; possibly greater availability of liquid formulations, rapidly dissolving tablets, and even drug-impregnated film that may be placed on the tongue. Additionally, there has been interest among some researchers to address deficits in visual and tactile ability which result in difficulty of patients to differentiate one pill from the other.

While the number is still relatively low, companies have been taking interest in therapies for diseases of aging and those for frailty itself. In particular, for a few years now, Sanofi has had the Aging Therapeutic Strategic Unit. This department is charged with rethinking how treatments to the aging population should be developed and delivered. According to an article discussing the Unit, there is concentration in detecting, preventing and reversal of age-related dysfunctions, disorders, and diseases including Alzheimer’s, chronic pain, osteoarthritis, hearing disorders, sarcopenia/frailty. More recently, Abbvie and Google have paired up with the goal of spending up to $1.5 billion to research and commercialize novel drug treatments for diseases common in aging individuals. This ranges from cancer to Alzheimer’s disease.

2. Increase training in geriatrics, pharmacology, and pharmacoepidemiology. The report commented that in the late 1980’s there were few geriatric trained faculty in medical schools. They blamed those circumstances on the lack of “drive to develop a geriatric research environment”.

As of 2013, there were 137 Liaison Committee on Medical Education (LCME)-accredited medical schools in the US. The encouraging news is that the vast majority of schools offer in some form, geriatric education or training. Still, the majority of the faculty who lead these programs do not have formal geriatric training; as of 2005, only 44% of directors of geriatric academic programs underwent either geriatric fellowship or earned a Certificate of Added Qualifications in geriatric medicine. Furthermore, of schools awarding a degree of MD, in 2005 only seven reported having a full-fledged “department”. Instead, they tend to be divisions or sections of other departments such as internal medicine. As expressed in a 2009 article by Bernard, et al., a department provides for “a seat at the table” with respect to budgeting, strategic planning and allocation of resources within an academic institution. Such status may indeed enhance research program development. It should also be noted that as of this posting, unlike pediatrics, geriatrics is still considered a subspecialty. In contrast, in 16 countries within the EU, geriatrics is indeed a specialty; the differences between the US and the EU will be discussed in a future posting.

3. Study very old – get results to physicians. The experts commented on the paucity of clinical trial data at the time in the very old and “oldest old”. This includes patients over 75 and older and 85, respectively. Furthermore, this included the proposal to create a method of dissemination for such data to the wider group of clinicians who manage these patients. This database would include the latest information on pharmacodynamics, pharmacokinetics, and interactions.

The number of older patients enrolled in clinical trials has somewhat increased since the IOM document, however there is still not adequate data available so that providers can be confident that the medications they use in their geriatric patients are safe and effective in this population. For example, in a 2007 study sponsored by the Robert Wood Johnson Foundation which reviewed 109 clinical trials, it was revealed that a fifth of them excluded patients above a specified age, and that almost half of the remaining studies used criteria likely to exclude the elderly disproportionately—frailty or impaired cognition.

These results are echoed in a 2013 article by Hamaker and colleagues who reviewed 1207 clinical trials in hematological malignancies and found that patient-centered outcome measures such as quality of life, health care utilization and functional capacity were only incorporated in a small number of trials. Even in trials developed exclusively for older patients, the primary focus lies on standard end points such as toxicity, efficacy and survival, while patient-centered outcome measures are included in less than one-fifth of studies. In other words, the data from these studies are inadequate in their ability to provide effective guidance to clinicians on these therapies’ effect on the very old.

In 1993, the FDA released guidelines focused on increasing the amount of geriatric information available in the label for drugs which will be predominantly used in this population. By 1997, a “Geriatric Use” section was added to the label in order to report any pharmacokinetic or pharmacodynamic differences between the geriatric and overall populations. Recently there has been a greater push by regulatory agencies both in the US and Europe with the release of ICH E7, guidelines driving toward the goal of ensuring that “real world” geriatric patients including “oldest old”, those with comorbidities, and receiving concomitant therapies are well-represented in clinical trials of new therapies or formulations. At current time, these remain only guidelines. The FDA is currently holding meetings with experts on how to improve the data coming out of trials of therapies designed to treat diseases of aging.

The EU seems to be taking a more aggressive role as the EMA as part of the Agency’s Road Map to 2015, has devised a “Geriatric Medicines Strategy ” and has even put together a Geriatric Expert Group that is charged with providing scientific advice to CHMP and the EMA on issues related to the elderly.

The next post will outline and discuss key recommendations offered by the expert panel with respect to cost-containment, geriatric-specific endpoints, and with an assessment of any developments that may have taken place. In the meantime, I look forward to your thoughts.
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Melissa Hammond, MSN, GNP is Managing Director at Snowfish and an expert in aging and aging issues as it relates to therapy development and commercialization.

Posted by Melissa Hammond  |  Comments Off on Need to See a Doctor? There’s an App for That  |  in Management Consulting

Has the “Gilligan’s Island Effect” Impacted You? What Can Be Done?

In the life sciences industry, pigeonholing or typecasting is very real among individuals and companies alike. Job candidates cannot shake the perception of what they were in their old position. Companies are only considered for the particular service or product they last provided, even if they have multiple core capabilities.

I like to refer to this as the “Gilligan’s Island Effect” referring to the iconic 1960’s US-based show Gilligan’s Island. For those who are unfamiliar or need a reminder, the show featured seven radically different individuals including the Skipper, his first mate (Gilligan), a movie star, farm girl, extremely wealthy couple, and professor went on a three hour tour and ended up on a deserted island. Thereafter the entire premise revolved around the crazy antics of the group in their quest to return to civilization. The show was wildly popular with the talent of the main actors driving its success with viewers. Still, even though they were all accomplished thespians with talent to tackle various roles most were unable to disconnect themselves with their characters. This resulted in extreme difficulty for the show’s actors to get other jobs following the show’s ending. Blame it on re-runs, but in actuality, they were indeed typecast – unable to shake the perception of who they were in the show.

A company may have particular core competencies, be it strong science, innovation, analytic skills, or marketing. However based upon a particular service or product provided to a customer or customer group the company may be perceived as having expertise limited to that specific entity. For example, Snowfish has worked successfully with a number of companies to profile their KOLs. The same expertise in creative analytics also has applicability to various other areas such as gap analysis, market assessment, publication analysis and planning, and competitive intelligence. Since those specific clients were only exposed to our talents in KOL profiling we were essentially typecast in that role, making it difficult to sell our other comparable services to those companies.

Another case is the medical device company that has a product which competes in the pharmacotherapeutic or biologic space. That is, it could serve as a device-based alternative to drug therapy. Prior technologies marketed by the company were used for indications for which surgery was the only option. Thus, the company was viewed as only able to provide such types of therapeutic solutions. The success of the new device necessitated targeting and engaging new customer segments not traditionally focused on by the company – non-surgeons/interventionalists. Now, this company had many attributes which would make it well-respected by any physician: it has been producing therapeutic medical products for decades, has demonstrated strong science, conducts well-designed clinical trials, very few product recalls, and is a leader in innovation. Still, non-surgical physicians have a hard time viewing a device as having the ability to treat a condition traditionally managed with drug therapy or the company having anything to offer them. Like Bob Denver and the rest of the castaways from Gilligan’s Island, this company too is suffering from pigeonholing. Their products are viewed as only valuable for surgeons and conditions that can only be dealt with surgically.

Once it is perceived, removing a professional stereotype is not an easy task. Actually the ideal way is to avoid being typecast in the first place. I have included a few tips below:

  1. Position you or your company not for particular service or product but for a set of capabilities that can be translated to a number of areas and functions. Define yourself by your capabilities as opposed to the specific area they have been applied.
  2. People generally have little ability or desire to think abstractly, make sure you are able to provide concrete examples of how those capabilities will transfer to various disciplines and specialties.
  3. Don’t wait to branch out to other specialties or disciplines. In the medical device company example, they should always be reaching out to non-surgeons even if they are not a main target. Continually build your network.
  4. Upon launch of a particular product or initiation of service engagement, start looking at the next opportunity and identify/engage valuable champions in these other areas that you think you will need to target.
  5. Produce thought leadership pieces that demonstrate your core capabilities.

It is not clear if back in the 1960’s this would have helped the Gilligan’s Island cast, but it might be presumed that with a more proactive approach they could have escaped their on-screen personas once the series ended. With the right amount of thought and positioning, you or your company can do the same.

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Dave Fishman is President of Snowfish, LLC, a strategic consulting firm which specializes in commercial analytics for the pharmaceutical, biotechnology and medical device industries. Dave can be reached at info@snowfish.net.

Posted by Dave Fishman  |  Comments Off on Has the “Gilligan’s Island Effect” Impacted You? What Can Be Done?  |  in Management Consulting

Pharmaceutical Mergers and Acquisitions: Will they drive growth?

As someone who works in the pharmaceutical industry as well as an investor, I was curious as to the net result of all the mega mergers and acquisitions occurring within large pharma. Examples of such mergers and acquisitions could fill multiple blogs but I thought I would point out a brief history of a few industry leaders that were chosen at random.

In 2006, AstraZeneca acquired Cambridge Antibody Technology followed by the purchase of MedImmune in 2007. Sanofi-Aventis was formed in 2004 when Sanofi-Synthélabo acquired Aventis. Pfizer is now the amalgamation of Pfizer plus Warner–Lambert (2000), Pharmacia (2003), and Wyeth (2009). In 2009 Merck acquired Schering-Plough. In 2009 Roche fully acquired the remaining stake in Genentech. Clearly, mergers and acquisitions are occurring all the time and seemingly represent “usual” business as opposed to the exception. Ever since, there has been a virtual explosion of M&A activity of various flavors and motives including large company acquiring small company, small company grabbing large company, merging for assets, acquiring for tax benefits. Various models are also being employed such as the J&J approach of maintaining the name and culture of the their procured businesses but under their umbrella and the recent example of Novartis who purchased not GSK in its entirety, but only their oncology business.

Regardless of their form, the question still remains: have mergers and acquisitions delivered more products and thus more shareholder value, for large pharma? Additionally, how should the value that is being created be assessed and from which viewpoint? Let me start with probably the easiest-long term benchmark to measure, the number of newly approved drugs by the FDA.

More Approved Drugs
Between 1996 and 2000, the FDA approved on average, 41 new molecular entities and biologic license applications per year. Over the next five years (2005 to 2010), the number was averaging 22 per year – a nearly 50 percent drop. Last year the number of new approvals did increase but it is far from clear that mergers and acquisitions are driving the development of more products in large pharma. One critic, in a 2012 article in Forbes Magazine, opined that just the opposite has in fact occurred; large mergers may indeed be stifling innovation. Danzon et al. (2007) analyzed the effect of mergers in pharma/biotech on various measures of performance. He concluded that mergers result in slower growth and a reduction in operating profit. This was echoed by another study in which Ornaghi (2006) examined post-merger performance in the industry, but focused on productivity. Three years following a merger there is a decline in both R&D spending and productivity as measured by patents.

Based on the evidence, the argument that larger mergers and acquisitions result in more approved drugs or innovation is far from compelling.

Shareholder Value
Mergers are often promoted by very senior management as a way to increase shareholder value by reducing costs and duplication. In certain cases mergers are specifically designed to fill gaps in a product portfolio. However, irrespective of the merger’s objective, the net result should be increased shareholder value over the long term.

I was interested in evaluating how much the collective stock prices have changed for the big pharma companies given the mergers which have taken place, so I performed a retrospective analysis. Five large pharma companies were selected at random, AstraZeneca, Sanofi, Pfizer,

Merck, and Roche, all of which had been involved in large mergers over the past decade and in certain cases multiple mergers. I chose the period from 4/21/06 to 4/23/12. While these are arbitrary dates they represent a period long enough where I would expect to see return given the mergers which had taken place. Furthermore, the period starts before the market crash in 2008 and includes the recent recovery. The results of my analysis are as follows. If I purchased one share from each company on 4/21/06 the combined value would have been $196.86. As of 4/23/12 the combined value of the same group of five stocks would be $188.46. So I would have essentially lost ($8.40) on my investment. There are dividends involved but the story is not really about stock appreciation.

The logical question to ask is how these five stocks compare to the broader industry over the same six year period. I looked at an electronically traded fund (ETF) with a symbol of XBI that represent 40 plus biotechnology stocks. Since XBI follows an equal-weight methodology, smaller component holdings have an equal say in the portfolio’s overall performance, compared to large-cap holdings. On 4/21/06 XBI was trading for $47.82. As of 4/23/12 the ETF basket of stocks was valued at $79.08. Had I invested in this EFT I would have made $31.26 per share or 65% as opposed to losing -4% with my basket of five large pharma stocks. Clearly, the five large cap merger stocks have underperformed a broad based ETF of over 40 companies over the same period. This leads me to question whether large mergers and acquisitions by large pharma regardless of the company, deliver stock appreciation. This is not meant to be a definitive inquiry but it does raise a basic question about the supposed value created by mega mergers in pharma.

Therefore, if it does not lead to more products or increased shareholder value, what is the value of these mega mergers?

Alliances a More Promising Alternative
One of most extensively published studies examining the performance of alliances was performed by Danzon et al. (2005). This report notes that products developed through an alliance tend to have a higher probability of success, at least for phases 2 and 3, and especially when the licensee is a large pharmaceutical firm. Another study, Arora et al. (2007) observed the role of licensing and alliances from 3000 R&D projects in pre-clinical and clinical trials in the United States. One of their chief findings is that licensing improves the probability of success.

In contrast to the results of studies focused on mergers and acquisitions, those investigating alliances found positive effects on R&D performance. They indicate that development experience is generally associated with higher success probabilities, especially in later R&D stages.

I leave it to the reader to consider whether alliances and product licensing are a more prudent task to take for large pharma. You can also learn about a process we have developed for identifying strategic partners by requesting our white paper. I welcome your thoughts.
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David Fishman is President of Snowfish, a leader in commercial analytics for life science companies with products in all stages of the life cycle. Snowfish specializes in driving innovation and challenging companies to look in new directions through a unique collaboration of strategic vision and sophisticated analytics overlaid with solid domain expertise. He can be reached at dave.fishman@snowfish.net.

 

Posted by Dave Fishman  |  Comments Off on Pharmaceutical Mergers and Acquisitions: Will they drive growth?  |  in Management Consulting