Escape The Biotech's Valley Of Death

By Louis Garguilo, Chief Editor, Outsourced Pharma

In too many cases, say industry and outsourcing experts such as Hedley Rees, acclaimed author and managing consultant at PharmaFlow Ltd., a promising drug candidate “dies in this valley” because a sponsor simply runs out of cash before it can reach the next financing, milestone, partnership, acquisition, or clinical inflection point.

Antiksha Joshi, Director & Principal Consultant, Urmi Quality Management Consulting Pty Lt., says all those reasons Rees mentions may have a common denominator:

Companies cannot effectively manage all the professionals, processes, and data associated with the project and partners.

The scene:

• The science is owned by the biotech, but may have come from academia or in-licensed.
• A CRO generates data
• One CDMO may develop a process and run early scale ups; a second manufacture clinical/commercial-ready material
• Specialized testing labs provide analytical results throughout the lifecycle
• Consultants advise on all the above, regulatory strategy, etc.

Work is distributed. Each activity draws down on available financial resources at the drug sponsor, and often there are demands for more funding to keep going.

It’s a biopharma’s responsibility to preside over this ecosystem of external partners, and this is where Joshi believes many biotechs overlook the importance of a relatively “unglamorous capability,” as she describes it: project management.

This often taken-for-granted position within the world of outsourcing – and even less considered in the halls of biotech financing – can determine whether an outsourced development program avoids our proverbial valley of death.

The Outsourcing Multiplier

Depending on the transience of investment environments, funding for biotechs on the development path may start out looking adequate (but limited), yet quickly fall behind.

Regulatory paths narrow, scale-up assumptions fail to pan out, clinical supplies are underestimated; these and other happenstances drive the equation for  “more time equals the need for more money.”

Among those “other occurrences,” Rees mentions geopolitical uncertainty, micro- or macro-activated supply-chain disruptions, natural disasters, and as a shortage of technical talent at CDMOs.

(Note: There’s also a topic we’ll pursue at a different time with Rees: the inability of CDMOs to invest in facilities and equipment to meet the growing requirements of today’s sponsors.)

Mixing our metaphors, there is a financing hourglass, and any number of setbacks can send more sand through to shorten the time a biotech has to reach its next milestone.

While by industry design, we might say, outsourcing is often the sole method to move programs forward economically, each additional partner also introduces certain complexities for management.

Joshi points out how  a “poorly executed technology transfer” can require weeks or months of additional work. An undocumented process decision can force a team to reconstruct why something was done as it was months earlier. A single missed manufacturing milestone can push back a clinical trial.

For a venture-backed biotech operating on a finite runway, these items can be existential, and can actually be precipitated by biotech sponsors sorely underestimating the value of project management.

Many causes for drug failures can be attributed to science, says Joshi, but a more nuanced look demonstrates they are just as likely to be caused by “a failure to manage the program advancing the science.”

Despite this, PMs can still be viewed as administrative overhead rather than a core development capability. Even as sponsors demand their CDMOs assign PMs on their end, the management internally is lacking.

Consider what transpires when a biotech is working with outsourcing partners.

Start with the coordinating of development and manufacturing activities, analytical testing, regulatory requirements and documentation – CMC in total dispensation – as well as timelines and budgets.

Perhaps you do have the resources to assign a PM team to each CDMO and other service provider you contract with, and establish sturdy communication structures, but who is looking across the network? That ideally falls to an experienced internal project manager, says Joshi.

The project in this case? The entire outsourced supply chain.

This see-it-all capability, as Joshi describes the role, is critical to keeping finances on projected paths.

Back to the more traditional project manager, here is something she will face each day.

• What is holding up the tech transfer timetable?
• What’s happening at the CDMO today this week, this month?
• What does the analytical laboratory need before it can begin its work?
• Which activity is on the critical path that will impact next steps?
• What earlier assumption are now threatening budgets and timeline?
• What do we do proactively to ameliorate any issues as per the above?

Today the answers to these questions are more readily sought after and trickle up through the sponsor organization to boards and investors. PMs are the properly informed conduits.

Thus Joshi – assuredly like so many others – insist it’s good financial sense to think deeply about project management from the outset of the first outsourcing decisions.

Spend Money To Save Budgets?

Interesting here is that none of the above necessitates hiring a full-time PMs from day one of a biotech’s outsourcing journey.

Depending on supply-chain complexity and the actual capabilities and capacities needed, project-level management roles can be filled by experienced but part-time employees, or knowledgeable consultants.

But someone needs ownership of the entire picture, “and project management principles provide the structure for the work,” says Joshi, “and fit-for-purpose quality and knowledge systems providing the PM with what she needs to put it all together coherently is key attribute.”

Those systems we’ll leave to another day. To wrap up here, sponsors operate on shortened runways, but the worst outcomes may by spending too little attention on managing your outsourced assets, and thus spending too much money to avoid the valley of biopharma death.