Multiplying Development Capacity: A New Model

Most pharmaceutical and biotechnology companies, regardless of size, face a common challenge: how to appropriately invest in research and development to maximize the number of therapies brought to market without sacrificing shareholder value.

Photography: Comstock Illustration: Paul A. Belci

When prioritizing R&D allocations, pharmaceutical and biotechnology companies are often forced to make difficult decisions about which clinical research programs get priority funding. In many cases, a company is unable to fully realize the potential of its complete pipeline of compounds—some research projects have to be delayed or cancelled to fund either more promising compounds or compounds that are in a more advanced stage of development.

Solvay was faced with this exact challenge. With the majority of the company's research budget allocated to Phase III studies, there was a troubling bottleneck in the pipeline, with many Phase II trials lacking necessary funding. Most companies, when faced with this dilemma, often turn to Wall Street or venture capitalists for funding, or develop a third-party research company to fund research programs. Solvay opted for a more inventive approach: collaborating with a contract research organization, Quintiles, to open its bottleneck.

This approach is not simply a partnership between two companies. In our model, Solvay and Quintiles operate as a single global team—sharing the risks and benefits of the research and development process. Making this partnership work required a leap of faith for both companies. But the benefits have far outweighed the risks. This innovative strategic partnership has allowed studies on 10 new compounds to move forward. Although still relatively new, the partnership has already shown successful results and may provide a useful model for other companies to follow as they look to solve their own R&D issues.

Partnership in action

In our specific "risk-sharing" partnership, Quintiles' strategic investment group (PharmaBio) makes an investment to fund about half of the normal costs of 10 proof-of-principle trials, providing clinical monitoring, data management, biostatistics, quality assurance, patient recruitment, clinical trial supply services, and central laboratory services to Solvay. Quintiles has assumed a partnership—versus a vendor—role in drug development and works hand-in-glove with Solvay counterparts in the development process. As projects move more quickly into Phase III trials, Quintiles continues to generate more clinical work for the company—work that will be funded by Solvay under pre-existing preferred partnership agreements.

As a result of this partnership, Solvay has effectively doubled its clinical research capacity on a significant portion of its early stage pipeline that would otherwise have been delayed. For example, Solvay was able to complete two separate Phase II studies in a timeframe nearly one year faster than it could have on its own. And in the short time the new model has been in place, Solvay estimates that efficiency of its clinical development program has already increased by about one-third.

The foundation for development of this risk-sharing model, initiated in September 2004, was built on a five-year relationship between the two companies that established both mutual trust and significant business successes. These successes included the completion of a Phase III program for cilansetron, which delivered conclusive results within 2.5 years—a timeframe that Solvay could not have delivered on in the past.

A win–win situation

This specific type of strategic partnering model may be the first arrangement of its kind between a pharmaceutical company and a pharmaceutical services organization, and it is one that can be applied to just about any pharmaceutical or biotechnology company. For Solvay, chief among the driving forces behind the agreement was the motivation for accelerated, high-quality product development. Quintiles, for its part, was motivated by sustaining long-term, stable customer relationships.

Companies thinking about a similar arrangement should assess the following five key considerations:

1. Begin with a solid relationship. A successful risk-sharing alliance is not created overnight. A winning relationship requires mutual trust and experience established over several years. Having a structured partnership in place means that smoothly functioning teams already exist. There is no need to staff up or figure out how relationships will work with each new project. The level of consistency this partnership provides allows the alliance to work effectively from the start and with each new project.

2. Manage risk and reduce potential obstacles. Specific steps were taken to ensure top-to-bottom buy-in for this program. That meant obtaining commitment from senior management at both companies and reducing potential for pushback or project derailment from R&D staff within the company. To pre-empt internal friction, Solvay decided to outsource all of its data management, biostatistics, and clinical monitoring to Quintiles, which had to assume much more accountability in delivering results.

3. Constantly re-evaluate and learn from each experience. It is important to incorporate systems to maintain an open exchange of ideas and opinions among the teams. You may find that you need to constantly coach individuals to ensure that they stay focused on the objectives. One particularly helpful feature of this partnership is an ongoing session called "Lessons Learned." Following every clinical project, both sides meet to discuss what worked and what didn't, with the goal of improving processes and avoiding the same mistakes in the future. Questionnaires are also used to evaluate the partnership. Distributed to staff regularly, they allow each team to measure the performance of the other and allow all team members to evaluate the overall relationship between the two companies.

4. Learn to let go and trust your partner. Adjusting to a true clinical research partnership may be difficult for both teams. Because both teams have equal say in the development of clinical programs, clinical trial managers and external project managers are almost certain to have conflict when determining the overall design and oversight of each clinical program. For example, research staff on the pharmaceutical side will need to become comfortable with accepting an "outsider" as an equal. Conversely, the research organization staff will need to recognize their accountability and be prepared to take responsibility for their decisions.

5. Remain cognizant of each team's issues and concerns. As the partnership grows, each team (on both the pharmaceutical side and the CRO side) will be faced with similar yet disparate challenges that could cause the relationship to sour. On the pharmaceutical side, these may include:

• How do you engender trust and resist second-guessing an outside company to ensure their role as partner versus vendor?

• How does the research and development team prove its value to the company, when many of their responsibilities have been outsourced?

From the CRO side, issues and challenges might include:

• How does the team leader ensure a mindset of proactivity and partnership versus direction taking?

• Conversely, how can the team act as partners while being sensitive to the needs and responsibilities of the team within the pharma company?

• What can the CRO do to ensure disagreements regarding cost, speed, and quality of work are kept to a minimum?

Risk-sharing arrangements offer companies a huge potential to unclog their pipeline bottlenecks. Given the enormous cost of delays in drug development, this increased efficiency may not only be advantageous from a financial standpoint, but it may also benefit patients in the long run by bringing new drugs to market faster.

The new paradigm is an innovative way of doing business, requiring a fundamental shift in perspective for pharmaceutical companies and service providers alike. This particular model has been successful, and is continually evolving. Because both companies have seen meaningful results in a relatively short period of time, they remain strongly committed to continuing and deepening this arrangement.

Bram van Rossum is senior director, clinical development and R&D services, Solvay Pharmaceuticals, PO Box 900, 1380 DA Weesp, The Netherlands, +31 6 53 81 33 66, email: bram.vanrossum@solvay.com Jan de Witt, MD, is vice president, corporate development, Quintiles Transnational, Ch. de Bourbonlaan 58, 3708 CD Zeist, The Netherlands, +31 6 52 00 53 67, email: jan.dewitt@quintiles.com