The 21st annual CED Life Science Conference achieved its mission of cementing the Research Triangle Park as a hotbed for innovation and opportunity in biotech. The 2012 CED LSC showcased local leaders like Victor Dzau, President and CEO of Duke University Health Systems, and former four-term North Carolina governor James B. Hunt, as well as national and international biotech leaders like Christopher Viehbacher, CEO of Sanofi, William Hawkins III, retired CEO of Medtronic, and Deborah Dunshire, President and CEO of Millennium Pharmaceuticals. In addition to featured speaker presentations, panel sessions, and dual company showcase events, this year the conference hosted partnering meetings. These structured one-on-one meetings are increasing in popularity, and were a productive venue to discuss new technologies and investment opportunities, and helped facilitate the formation of strategic alliances.
Despite the flurry of panels, presentations, and partnering, a unified message emanated from the CED LSC. Dr. Deborah Dunshire gave an insightful presentation at the conference closing that did an excellent job of integrating and focusing this message. Using the Wizard of Oz as an underlying metaphor, she explained the challenges that biotech faces, and the steps we all need to follow if we are to escape our current economic reality. Dr. Dunshire began by explaining that we weren’t in Kansas anymore, and that we were a long way from home. She asserted that with courage, heart, and brains we would outline a path for industry, and following that yellow brick road would lead us out of Oz.
Courage and Heart
The global contraction stemming from the financial collapse of 2008 and 2009 have left courage and heart commodities at a premium. This is the case for professionals in virtually every sector, and biotech is no exception. Patent cliffs loom large over the industry as blockbusters like Plavix, Lipitor, Singulair, and Aranesp go off patent. An estimated $63B in annual income is expected to vanish by 2014 as a result of this patent erosion. Add to that increased regulatory burden and complexity which continue to stretch investor timelines, policy uncertainty with respect to reimbursement in U.S. healthcare, China and other emerging markets increasingly competitive in the space, and a dismal IPO market that now serves as a funding event rather than a liquidity event, and it’s no wonder the estimated Compounded Annual Growth Rate (CAGR) for the U.S. pharmaceutical market is currently projected at around 1%. Furthermore, and it should come as no surprise, there has been an 80% decrease in venture capital funds for series A and B funding since 2009. The cumulative weight of these factors on inventors and investors alike threatens to crush innovation in a way analogous to how the Wicked Witch of the East experienced Dorothy’s modest Kansas home. As is often the case, however, this increased complexity and the heightened hurdles create opportunity for those who are prepared and capable. The courage to believe that innovative products adding true value will be reimbursed, and the heart to see wealth creation as a result of well-placed investments are of absolute necessity for those seeking success in the new normal of the biotech sector. For this to be possible the third, and most critical ingredient, will be needed.
Innovation, dynamism, and resourcefulness will be required for professionals in drug development moving forward. The good news is that the molecular biology revolution has happened. Talented scientists in public and private labs around the world can now fit more investigational power on a bench top than airplane hangars housed a decade or two ago. This generation of scientists has access to an exponentially increasing bank of knowledge, and discovery of new pathways and targets is happening at light speed. As a result our understanding of the molecular underpinnings behind the pathogenesis of virtually every human disease is being rapidly elucidated. Despite the doom and gloom that is pervasive throughout the biotech industry, there is almost universal agreement among scientists that we are living through the most exciting and productive scientific era of all time. In response, technology transfer groups, translational medicine programs, entrepreneurial incubators, and support networks for innovators of every shape and size are springing up everywhere. The real choke point in the talent supply chain that connects microscope to market is with regulatory strategy and trial design professionals.
Prior to the molecular revolution, the number of drug targets tested and scrutinized was limited. Accordingly, regulatory strategy and trial design was of a similar scope. As a result of the molecular revolution, the number of legitimate drug targets has exploded, as has the means to regulate those targets. Small molecules, nanoparticles, siRNA, monoclonals, gene therapy, epigenetic manipulation, companion diagnostics to harness the power of personalized medicine, and combinatorial applications of everything mentioned are now all at the doorstep of those in the business of drug development. It is the regulatory strategy and trial design professionals who possess a firm grasp of these technologies, and apply innovation dynamism, and resourcefulness to each development program, that will achieve success in this new era of biotech.
The FDA has already begun programs, such as the Driving Biomedical Innovation Initiative, to begin to address the regulatory challenges posed. They are writing and finalizing draft guidances on biomarkers, devices, companion diagnostics, adaptive trial design, enhanced enrollment techniques, and many other topics pertinent to the new age of drug development. The onus is on regulatory professionals to understand the technology being developed, and devise a development strategy that meets the needs of the FDA. This strategy should take into account the increased demands of the FDA in clinical development and post-marketing assessment, as well as the speed to market that is highly valued and sought after by inventor and investor alike. Success in the CRO market is possible, but meeting these demands will be tough. It’s going to take brains to get this done. Scarecrows need not apply.