Managing Biotechnology

From Science to Market in the Digital Age

Francoise Simon, Glen Giovannetti

• Publisher: Wiley
• Year: 2017
• ISBN:
  9781119216193
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Industria farmacéutica, biotecnológica y sanitaria

A comprehensive overview of the new business context for biopharma companies, featuring numerous case studies and state-of-the-art marketing models

Biotechnology has developed into a key innovation driver especially in the field of human healthcare. But as the biopharma industry continues to grow and expand its reach, development costs are colliding with aging demographics and cost-containment policies of private and public payers. Concurrently, the development and increased affordability of sophisticated digital technologies has fundamentally altered many industries including healthcare. The arrival of new information technology (infotech) companies on the healthcare scene presents both opportunities and challenges for the biopharma business model. To capitalize on new digital technologies from R&D through commercialization requires industry leaders to adopt new business models, develop new digital and data capabilities, and partner with innovators and payers worldwide.

Written by two experts, both of whom have had decades of experience in the field, this book provides a comprehensive overview of the new business context and marketing models for biotech companies. Informed by extensive input by senior biotech executives and leading consultancies serving the industry, it analyzes the strategies and key success factors for the financing, development, and commercialization of novel therapeutic products, including strategies for engagement with patients, physicians and healthcare payers. Throughout case studies provide researchers, corporate marketers, senior managers, consultants, financial analysts, and other professionals involved in the biotech sector with insights, ideas, and models.

JACQUALYN FOUSE, PhD, RETIRED PRESIDENT AND CHIEF OPERATING OFFICER, CELGENE

"Biotech companies have long been innovators, using the latest technologies to enable cutting edge science to help patients with serious diseases. This book is essential to help biotech firms understand how they can–and must–apply the newest technologies including disruptive ones, alongside science, to innovate and bring new value to the healthcare system."

BRUCE DARROW, MD, PhD, CHIEF MEDICAL INFORMATION OFFICER, MOUNT SINAI HEALTH SYSTEM

"Simon and Giovannetti have written an essential user's manual explaining the complicated interplay of the patients who deserve cutting-edge medical care, the biotechnology companies (big and small) creating the breakthroughs, and the healthcare organizations and clinicians who bridge those worlds."

EMMANUEL BLIN, FORMER CHIEF STRATEGY OFFICER AND SENIOR VICE PRESIDENT, BRISTOL-MYERS SQUIBB

"If you want to know where biopharma is going, read this book! Our industry is facing unprecedented opportunities driven by major scientific breakthroughs, while transforming itself to address accelerated landscape changes driven by digital revolutions and the emergence of value-based healthcare worldwide. In this ever-changing context, we all need to focus everything we do on the patients. They are why we exist as an industry, and this is ultimately what this insightful essay is really about."

JOHN MARAGANORE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ALNYLAM PHARMACEUTICALS

"Since the mapping of the human genome was completed nearly 15 years ago, the biotechnology industry has led the rapid translation of raw science to today's innovative medicines. However, the work does not stop in the lab. Delivering these novel medicines to patients is a complex and multifaceted process, which is elegantly described in this new book."

Part 1
New Models for Networked Innovation

Chapter 1
Digital Evolution of Biotechnology

For nearly four decades, biotechnology has driven the transformation of many sectors, from healthcare to food and energy, and it has grown into a global industry. It is now being transformed itself by its convergence with information technology (infotech). Biotechnology has been defined as “the use of living systems or molecular engineering to create and manufacture biologic therapies and products for patient care” [1], but it can be more broadly seen as the application of molecular biology across industries.

From the start, biotechnology grew together with other sciences. A first inflection point, Watson and Crick's 1953 discovery of the structure of DNA, depended on the development of X-ray crystallography by Franklin and Wilkins. By 1986, the first automated gene sequencer by Hunkapiller at Applied Biosystems supported Venter's National Institutes of Health (NIH) research, and a later-generation ABI sequencer, introduced in 1998, further enabled his research at Celera. This led to a second inflection point, in 2000, with the draft of the human genome by Celera and the Human Genome Project. The synergy between computing and bioscience continued with the emergence of bioinformatics and the 2003 launch of IBM's Blue Gene supercomputer, with a focus on structural proteomics.

Another technology has evolved over the past three decades, supported by the optimization of gene sequencing: CRISPR (clustered regularly interspaced short palindromic repeats). This nucleotide sequence was first identified in Japan in 1987, but it took decades to define its function as a molecular scalpel and an RNA guide capable of editing genes. By 2007, it was shown that spacer DNA could alter microbial resistance, and by 2012, a team including Doudna and Charpentier showed that a simpler CRISPR system relying on the Cas9 protein could work as an editing tool in human cell culture. In 2014, Platt used a Cas9 mouse to model lung adenocarcinoma. CRISPR may be first developed for monogenic diseases such as beta thalassemia, but challenges include safety (avoiding activity in unintended parts of the genome), delivery (via methods such as lipid-based nanoparticles or virus-based particles) and manufacturing [2].

Unlike computing, bioscience has not progressed in linear fashion, due to the inherent risk of working with animal and human biology. After the 1953 discovery of the DNA structure, it took 29 years for the launch of the first recombinant human insulin, discovered by Genentech and licensed to Eli Lilly. Monoclonal antibodies, developed by Köhler and Milstein in 1975, were not marketed until the introduction of IDEC's Rituxan (rituximab) in 1998, after several failed attempts by firms such as Hybritech.

Similarly, the first genotype-specific oral therapy, Novartis's Gleevec (imatinib) for Philadelphia—positive chronic myeloid leukemia, was approved in the United States, Europe, and Japan in 2001, but it took decades to develop it; the abnormal Bcr-Abl gene coding for tyrosine kinase, stimulating leukemia cell growth, was identified in 1985, and the molecule was first synthesized in 1992 (Figure 1-1).

Figure 1-1 Biotechnology milestones

Industry Applications

Today, biotechnology has matured and is driving innovation across sectors, from medicine and food to agriculture and biomaterials (Figure 1-2):

• In healthcare, red biotech has led to novel biologic therapeutics, including recombinant proteins such as insulin and growth hormone, monoclonal antibodies such as Genentech's Herceptin (trastuzumab) for HER2-positive breast cancer, vaccines, molecular diagnostics, gene and stem cell therapy, tissue engineering, and regenerative medicine.
• In food and agriculture, green biotech has improved crop efficiency and used bioremediation for environmental reclamation. It has blurred the distinction between food and medicine, with the emergence of medical foods and innovations such as a strain of “golden rice” yielding provitamin A [3].
• Marine biology has led to blue biotech, with food products and ingredients derived from algae, invertebrates, and fish; diagnostic agents such as fluorescent reporter protein; and marine extract additives in cosmetics.
• In industrial processes, white biotechnology has produced biodegradable plastics, renewable chemicals, pollution-eating bacteria, and advanced biofuels [4].

Figure 1-2 Biotechnology across industries

The following chapters will focus on red biotech, including the transformational impact of digital technologies and the convergence with infotech. A new form of digital convergence has emerged, which presents both an opportunity and a threat for the biopharmaceutical sector. From mobile devices, such as the Fitbit wristband biosensor, to R & D analytics tools such as IBM's Watson, infotech companies are playing a key role in meeting consumer and researcher communication needs.

Impact of Megatrends

Multiple trends are disrupting business models and leading the industry to define value differently. For consumers, longer life spans are increasing the incidence of chronic conditions such as diabetes and heart disease, across developed and also emerging markets, driving demand as incomes rise. However, this is also placing manufacturers on a collision course with resource-constrained payers, who are increasingly defining value in terms of outcomes achieved by new therapies. For researchers, postgenomic science is driving precision medicine, which has already yielded a new wave of targeted therapies but is struggling to handle an explosion of data: at the individual level, “small data” from biosensors, monitors, smartphones, and smartwatches; at the population level, “big data” from genomic, clinical trial, and insurer databases. These conflicting trends have led to a disconnect within the biopharma space.

Consumer-generated health data need professional interpretation, which medical offices largely cannot provide online due to liability and reimbursement issues and which cannot be transmitted to most hospital electronic health records (EHRs). Researchers now access an overwhelming amount of health data, well beyond clinical trial databases, which has led to the entry of information technology leaders into healthcare. Apple is partnering with the Mayo Clinic with its HealthKit and ResearchKit software that links patients, physicians, and EHRs. IBM aims to streamline R & D with its Watson Health unit and has made significant acquisitions in data analytics, including Explorys, Phytel, and Merge. Alphabet is partnering through its Verily unit with Sanofi, Dexcom, and Medtronic in diabetes, and in 2013 it launched Calico, a biotech company focused on longevity. Qualcomm and Novartis have set up the dRx Capital joint venture to invest in digital startups and optimize clinical trials. The interaction of these transforming forces is summarized in Figure 1-3.

Figure 1-3 Transforming forces

Digital Health Opportunities

From research to postmarketing surveillance, digital health has the potential to greatly improve R & D and manufacturing efficiency, as well as product co-creation and communication with patients:

• In R & D, digital health can optimize diagnostics through integrated biomarkers, increase speed to market, and streamline data analytics.
• In manufacturing, digital technology can adapt processes to reduce costs.
• From a regulatory and reimbursement standpoint, it can enable real-time drug monitoring and support health economics dossiers with real-world evidence.
• At the commercial end, digital health can allow deep integration of the customer voice, from drug co-creation to postlaunch communications, and it can help collect real-world evidence to support economics dossiers (Figure 1-4).

Figure 1-4 Impact of digital solutions on the value chain

Infotechnology Initiatives in Healthcare

The health sector has been slower than other industries such as banking and retail to adopt digital technology, due to regulation, physician concerns about liability and reimbursement, and upfront costs and resistance to changing workflows, as well as consumer concerns about data security and privacy.

By contrast, infotechs have entered this space rapidly, for various reasons. Companies such as IBM may grow their businesses by addressing large database interpretation problems that require platform technologies such as Watson. Consumer-focused firms such as Apple are responding to market demand for online healthcare information by adding health apps on their mobile devices.

While infotech leaders are reluctant to become directly involved in healthcare due to the heavy burden of regulation and long development cycles, they still have the potential to disrupt the sector, for instance, if digital interventions prove more effective than some drug therapies. To support their healthcare penetration, infotechs have the added advantage of massive resources. Apple's market capitalization passed $800 billion by May 2017, well above that of Johnson & Johnson, which led biopharmas at nearly $346 billion at the same time. A key advantage for Apple is its brand value among consumers. Alphabet combines advertising revenue from Google with strong gains in mobile search, and infotech growth, in general, is driven by the rise of the cloud, that is, the shift of many computing operations to online services [5].

As mobile health (mHealth) comes to dominate the sector, through the fast growth of mobile devices versus PCs or laptops, infotechs play a key role in all of its aspects. As defined by the World Health Organization (WHO), mHealth is “medical and public health practice supported by mobile devices such as mobile phones, patient monitoring devices, personal digital assistants and other wireless devices” [6]. At the consumer end, infotech provides hardware and software from biosensors and smartphones and also enables real-time interactions via social media. At the research end, infotech aims to optimize predictive analytics to gain deeper insights into the origin of dis...