A BPI Theater Roundtable at the 2016 BIO Convention

On Wednesday, 8 June 2016, Joshua Speidel (managing director of the commercial practice team at the Latham Biopharm Group) chaired an afternoon roundtable titled, “On- Demand Product Development Teams.” He brought together a panel of four experts:

• Matt Rebold (director of business development at ICON Imaging and Technology — West Coast)
• Paul Jojorian (global head of technology transfer for Patheon Biologics)
• Eiry Wyn Roberts (vice president of research and development for Chorus at Eli Lilly and Co.)
• Susan Linna (managing director of BDO).

Introductions

Speidel said the Latham Group works with a small companies that need external resources. “We help them gain needed resources through outsourcing and forming relationships.” For this roundtable, he wanted to find out from senior executives when they choose to bring in external resources, what those resources are, how they manage them using best practices.

Linna has experience developing both drugs and vaccines. Her consultancy supporting the drug development needs of clients in those fields.

Jojorian said that he works with Patheon customers in transferring their assets from development laboratories to manufacturing. His background is primarily in process development. He wanted to provide some insights on how his company’s assets have helped customers from large pharmaceutical companies to small virtual companies.

Roberts is a cardiologist and clinical pharmacologist by training, with 25 years of experience in the pharmaceutical industry. With 50 employees, Chorus is like a small biotech company within Eli Lilly. The staff is responsible for development of molecules from late research through early phase 2.

Rebold works for a contract research organization (CRO) that works for both large pharmaceutical and smaller biotechnology companies. He was on the commercial side of pharmaceuticals for about 20 years and has been in CROs for the past seven years, with experience on the clinical side as well.

Discussion

Moderator Joshua Speidel posed several questions to his panel.

Why do companies outsource? The reasons are different from company to company. Large companies with a lot of drugs in their pipelines do not want to expand until those drugs are proven successful. They outsource for the immediate work that they need. Small companies have very little staff and infrastructure. Sometimes they are just investors who have acquired a product but have no technical knowledge. They might hire consultants and contract development and manufacturing organizations (CDMOs) to develop their products. Companies working in international situations might find that cultural expectations are for long-term hires; outsourcing allows them to fill short-term needs. Companies who take on projects and then realize that they don’t have the expertise necessary find it easier to hire a CDMO than trying to quickly hire staff. When you hire a CRO, you get a group of experienced experts who understand many different types of molecules.

In essence, you are turning fixed costs into unfixed costs, which becomes more important when developing novel drugs. For example, Roberts said that Chorus can perform primary research and clinical development without Eli Lilly investing much until results are available. He said that two out of five recent assets have been successful. Those successful molecules went back to Eli Lilly for further work and now are proceeding through the regulatory process.

Is it a more effective use of money to spend on a third party CMO, CDMO, or CRO than to on in-house work? Investing in fixed costs early when you are still testing a product can be costly. And it is a challenge to identify what capabilities you need. For companies just “testing the waters,” it makes good economic sense to outsource.

Does it work to have more costs up front but ultimately have a more successful pipeline? The lean-to- proof-of-concept (L2POC) model says that for each research effort coming out of a laboratory and going into clinical trials, companies should perform the critical set of early experiments needed to determine whether it is a viable medicine by the end of phase 1. They might invest more funds earlier by having more patients or using technologies like biomarkers. Roberts said that this is the model Chorus uses.

Can you comment on how you know when something will or won’t work? A strategic consulting group can help clients plan their entire program early in the development process. That includes determining where their decision points should be and what their exit strategy should be if a product is unsuccessful. Hiring an experienced team can save you resources and frustration.

Once you are in an outsourcing relationship, what are the best practices? It is critical to set up avenues of communication early, with transparency, to understand your customers, and to know what kind of feedback they want (daily reports of raw data, polished reports less frequently, or talking with consulting scientists). Also, outsourcing companies should be up-front about costs. Biologics development and manufacturing are difficult, and something usually goes wrong during a given process. You don’t want to find out about unresolved problems at the end. All collaborators should solve problems together and work as one team toward a common goal.

Face-to-face meetings are valuable, as is actually knowing who your partners are. Roberts said that Chorus has “little robots carrying iPads” for people who are away to attend meetings remotely — a way to get that face-to-face contact without even being in the same room.

Do you use risk-management tools? It is critical to document risk, to make sure that clients understand them, and to engage in solving them. One way is to use a risk-mediation plan from the beginning and actively manage it. Do not assume that clients understand the risks associated with their work; formally describe those risks and explain your mitigation plans.

What happens when clients think that they know what they are doing, but you disagree? How do you manage a situation when you want to do something one way, but your client wants to go a different direction? Rebold said that CROs often must play an educational role. “You need to explain concepts, cite literature, use your risk-management plan, and present case studies to your clients with good statistical findings.”

Roberts said that Chorus listens to novel approaches from its clients and has tried some innovative plans that led to good outcomes. To determine whether or not to try something new, the panelists agreed, companies should rely on the principle of not putting patients at risk.

Are there times when you should not engage an external party to do research, but rather keep it in-house? When working on cutting-edge innovations that are ahead of the rest of the industry, many companies will do all associated work internally so as not to lose their advantage. Also, many want to have internal expertise for certain capabilities (e.g., toxicology). Companies need to consider how outsourcing will benefit them and then define their needs.

Audience Questions

What are the pros and cons of hiring a company that can take on a whole project or hiring several companies to do different parts? It saves time to hire one company because it is extremely challenging to manage a project that is partitioned too much. If you are going to use several companies or do some work internally and some externally, then you need to be really clear about where the partitions are. However, if you have one specific need, then it does make sense to outsource that portion alone. All clients should have someone who can manage and interact with their CRO to make sure that work is performed to their satisfaction.

What kind of agreements do you have with start-up companies: equity, fee-for-service, or something in between? Patheon and ICON use a fee-for-service approach because they work for so many different organizations that they can’t assume everyone’s risk. Chorus has a different situation because Eli Lilly is willing to coinvest with others on projects. So the investors hire Chorus to be their research and development company.

One audience member asked simply, “When and what to outsource?” Small companies typically need help with process development and establishing good manufacturing practice (GMP) manufacturing because they do not have the infrastructure. It costs a lot to develop drugs, so strategic development consultants can help them find the most efficient, cost-effective way to proceed — including when and what to outsource.

Is personalized medicine affecting the type of companies you see and changing the types of services you can provide? The CMO model is well suited to personalized medicine, making smaller batches using single-use technologies. Regulatory knowledge is critical here, and so is the ability to work with patient advocacy and support groups. For orphan drugs, it is a challenge to find patients to volunteer for clinical trials. •

Alison Center is editorial assistant (acenter@bioprocessintl.com) for BioProcess International, PO Box 70, Dexter, OR 97431. Recordings of many of these full presentations are available online at www.bioprocessintl.com/BIO2016