Supply Chains Are Orderly. Biotech Innovation Is Messy


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ideas are great, but others just don’t contribute to making a better decision. Some come from habit or dogma (“we always run this assay, why haven’t you run this assay?”). Or someone wants to see just one more variation on the dosing schedule in an animal model. Or a slightly different control arm. Or maybe the partner told you something last year, but management turnover or M&A has upended the priorities this year.

More critically, the more innovative the science, the more likely it is that the real challenge is to cultivate a new vision. I was recently in a discussion with a pharma company about an Alzheimer’s program. I asked about possibly stratifying patients in a mid-stage clinical trial to try to target the drug to a certain group of patients where it might be more relevant. They said they wouldn’t want to do that because it would limit the ultimate market size. They didn’t comment on whether the idea made scientific sense or not.

I didn’t know how to respond to that, except to realize that if I wanted to work with that organization, a new vision of Alzheimer’s had to be cultivated. To me that’s the signal of a huge opportunity.

Pharma companies have seen, collectively, a hell of a lot more drugs than any biotech, and those lessons stick in both good ways and bad. Pharma has a lot of great people and much more experience thinking downstream, asking important questions about a drug’s clinical and commercial future. How will regulators think about this? What are physicians’ perspectives and habits? What will best fit into a patient’s life? What will this compete with? What are the keys to reimbursement? How are these different in different care settings? Different countries?

Biotechs can be naïve and vastly underestimate those complexities. But we can also more easily shake off dogma and pursue an unconventional path. I worry that that’s unlikely to happen if you prewire the plan with a future acquirer.

The best interactions are two-way and iterative. But you can’t give up your vision or let yourself get whipsawed by the input. It’s necessary to sort through it.

Ultimately, the biotech company needs to decide what data are really needed to advance their drug and to do it efficiently. Capital and time are costly. You need to be confident that the data package you create will be inherently meaningful, beyond the point of view of any one company or thought leader.

The supply chain discussion proposed the car or airplane industries as templates for our industry, a system to create new drugs more efficiently. I’m not sure I see that. What was the last really innovative thing that happened in the automobile industry? The vehicle equivalent of, say, RNAi or vemurafenib (Zelboraf) or ivacaftor (Kalydeco)? I wouldn’t compare those to better brake pads.

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4 responses to “Supply Chains Are Orderly. Biotech Innovation Is Messy”

  1. Couldn’t agree more. Just blogged about it, in fact!

  2. Jonathan says:

    Well said Katrine. My fear is that the suppy chain or 5 year flip mentality has taken over the biotech start-up and early stage ecosystem vs trying to build innovative companies with multiple programs/projects and in 10 years will not give pharma what they are crying out for, innovation.

  3. Guy Page says:

    To me, the idea looks a lot like an RFP from the federal government. An organization with large scope and long term perspective looks for solutions to its problem from innovative providers. In a sense, the Pharma in this case provides the market analysis that smaller companies often lack, in exchange for the innovation that the Pharma often lacks. Seems like a good deal to me.

  4. I worry that even the ideas that are the start of innovation would be turned down in a “supply chain” model. It is hard to present a really new idea as clearly it is unproven at the beginning. It is much easier to “sell” an incremental improvement where the partner knows how to evaluate it.