More Biotech Mixology For Successful Outsourcing
By Louis Garguilo, Chief Editor, Outsourced Pharma
Last we left off, M. (Ken) Kengatharan, PhD, MBA, serial start-up entrepreneur and scientist – or biotech mixologist, as we’ve been calling him – was mixing examples of outsourcing that included falsely inflated balloons and Super Hero deliveries of API. (If you didn’t read part one, it’s worth the price of admission.)
Kengatharan, currently president of Armetheon, Inc., below draws some final lessons and insights into outsourcing.
Keep Your Bartenders On Staff
I ask Kengatharan of all the “ingredients” he’s mixed over the years – biotech business models, drug researchers and developers, private and venture capital / entrepreneurs and investors, incubators and outsourcing – where does that final one rank in terms of difficulty?
“It’s a very difficult part, because you need to maintain such a high level of involvement,” he answers. "Biotechs particularly have to understand you aren’t outsourcing your role in knowledge creation, problem solving or intellectual curiosity, which are all critical to discovering and developing novel drugs.” He adds, “Outsourcing is a high-frontal cortex activity. You have to be thinking constantly about what you’re doing and getting.”
This leads Kengatharan into perhaps the most important lesson for biotechs and their CMOs. If we believe in the aphorism that it takes one-something-billion dollars to get a drug to commercial, then basically we cannot have a biotech business, let alone a sustainable industry. Biotech needs to think in different terms; it must create “high capital efficiency” and new “risk-managed pathways.” Kengatharan says, “Where Big Pharma may conduct a thousand studies and experiments to go from conception through NDA, a biotech has to figure out how to progress along the same trajectory with maybe half the number of those activities. This necessitates that you compensate for less data through other means.”
According to Kengatharan, despite the high degree of external-partner involvement, “other means” start with staying close to all the science, the assays, experiments, studies, scale ups, and their results. He advises ensuring “the relevancy to the compound of everything you are doing, as well as continuing to understand the science from a target point of view.” He calls for articulating to regulatory authorities how fewer critical studies can provide the same information about safety and efficacy as a more comprehensive list. To accomplish all this, he says it’s vital to keep your “idea originators and problem solvers” in-house and fully involved, from early discovery through NDA.
“It’s a classic example of the growing pains biotech went through in the early 2000s, and some models are built on today,” continues Kengatharan. “Once a compound moves into clinical development, companies let go of their research staff. They say, ‘We’re a development company now; there’s no work for research.’ But the development folks have a different mentality when it comes to moving a compound along. It’s still a cyclical and iterative process, rather than a linear one. Challenges with the compound continue to be encountered throughout development, and often it requires going back to the drawing board, for example, coming up with a new formulation, or in some cases, reverting to a back-up or fast-follower compound. Those with the most knowledge and experience around your compounds and targets to help overcome key development challenges are your researchers and human knowledge base.
“Biotech is about thinking differently, taking on challenges others won’t, employing intelligent risk-calculation and successful iteration, all in a cost-efficient manner,” Kengatharan says. He concludes here by changing our metaphor a bit: “This process of innovating under pressure is the bread and butter of any biotech startup.”
Proprietary Blenders
Biotechs – via internal prowess and external partners – need to figure out what is core and essential to their program. This also necessitates early and close discussions with the regulatory authorities on strategies for robust but minimal requirements.
Another product of this approach may come from the biotechs’ service providers. Increasingly, CMOs offer new and proprietary development and delivery systems as competitive advantages for sponsors. To their credit, and as a sign of maturation in the industry, service providers continue to create new technologies – and acquire companies with them –to enable better outcomes. (ADCs – antibody drug conjugates – are a good example.) But despite these best intentions, Kengatharan says this is an area that needs to be considered carefully.
Before committing to a proprietary system or platform, biotechs must have a high degree of certainty that these are fully validated, and that the CMO itself will be around all the years it takes to get compounds to NDA, or even commercial. “The last thing you want is to generate data or create a process using a proprietary system, and somehow this particular system gets pushed aside, or worse the partner closes shop,” says Kengatharan. “If you’ve prospectively committed to the FDA to use that system in the future … who knows what could happen to your drug development program?”
An unfortunate example of this generated a fair deal of media attention recently, not the least of which because it tangentially touched the new head of the FDA, Dr. Robert Califf. He was a founder of a research institute that conducted clinical trials for the pharma industry. One of those clinical trials was for the subsequently FDA-approved, oral blood-thinning (anticoagulant) Xarelto (rivaroxaban). A concern arose over a defective anticoagulation (or INR) testing device used in a pivotal trail to calibrate warfarin dosage – the standard-of-care comparison drug – that could have skewed data and results. This became an issue after a recall of that device. A great effort was needed by the pharmaceutical company and the CRO to substantiate to the FDA the effectiveness of the drug as demonstrated in the trial.
Don’t Drink Alone
Taken right after the discussion directly above, our final anecdote falls somewhat into the “on the other hand” category.
The biotech CoMentis needed to take multiple measurements of patients’ spinal fluid to test a drug in clinical development. This necessitated the insertion of a port into patients, a highly specialized and potentially dangerous procedure (usually performed in hospitals when needed). A European-based CPO – contract partner organization, as Kengatharan likes to call valuable service providers –agreed to work closely with CoMentis. The CPO would charge minimal set-up and validation costs, but asked for the rights to offer any new technology developed to other CNS (central nervous system) targeting drug companies.
CoMentis agreed. The CPO then succeeded in developing an advanced technology and assay for this difficult procedure. “The data obtained became a crucial part in a major licensing and cooperation deal we concluded with a global pharmaceutical company,” says Kengatharan. “The CPO became one of few specialists who offer this particular service. I believe it’s become a revenue generator and profitable for them. We both won.”
Along with the obvious lesson of a mutually rewarding relationship, Kengatharan uses this example to bring us back to his first point in our first article. “You’ve got to find the right people and expertise at your partner. Otherwise, it’s only a CRO or CMO activity: commoditized and transactional. Don’t focus on price. Pick partners – CPOs – and consider them an extension of your organization.” In other words, mix carefully, and use the best ingredients. And here’s to your health.