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EXCLUSIVE LIFE SCIENCE FEATURE leaders LIFESCIENCELEADER.COM 28 NOVEMBER 2014 He says the oncology situation illustrates another principle that Andrew Witty has advocated: "We will discover what we dis- cover, and we will develop the medicines we want to develop. We won't always be the right company to commercialize a product, but we must be sure to apply our focus and our size appropriately." Such a flexible strategy seems well-suited to the small-team, entrepreneurial approach of DPUs and MDTs, where risk may be more quickly recognized and, hopefully, mitigated. So is GSK starting over in a totally dif- ferent way with oncology? "That is exact- ly what we are doing," Vallance replies. "Immuno-oncology and epigenetics are likely to require greatly different develop- ment tools and a different way of think- ing about development, and exploring the new areas gives us an opportunity to do just that. Increasingly, one gets drawn into more and more combinations of thera- peutics with a variation of MOAs (mecha- nisms of action). This gives us a chance to rethink things. No one knows yet exactly how to develop an immunotherapy or epi- genetics drug. We don't even know yet how we should be thinking about the ways to deliver the drugs, what the safety profiles should be, and so on. All of it will require a whole new look at the organization." Some of the products in GSK's pipe- line may initially target rare diseases or narrow indications, yet turn out to be applicable to much broader treatments. In immuno-oncology, certain MOAs now in testing seem to work equally well in many different kinds of common tumors as conventionally defined, by organ. (See also Part 3 of "Combination Cancer Immunotherapy — A Virtual Roundtable," on page 36.) Vallance gives an example in another area, an ex-vivo stem-cell/gene therapy in Phase 3 for a rare, fatal childhood dis- ease called adenosine deaminase severe combined immunodeficiency (ADA-SCID). Although the disease is extremely rare, the therapeutic mode has far-reaching implications, he says. "Cell/gene therapy is where we need to be because it allows us to really understand how to apply a new tech- nology. We may ultimately have broader bursement planning, and other resources tasked with supporting the small R&D; units. "The platforms exist to support the projects and not the other way around," he says with emphasis, highlighting a role reversal from the industry's traditional platforms-drive-research paradigm. A NEW FOCUS ON ONCOLOGY Six years into GSK's R&D; restructuring, another earthshaking change now comes to challenge, or perhaps liberate, the orga- nization. As proposed, the Novartis deal redraws the landscape of therapeutic areas and destinations in GSK's pipeline. As of press time, the regulatory process is still unfolding and it is too soon to describe the agreement as final, but the general outlines are clear: GSK's vaccine business, separate from the pharma unit, will of course grow larger, but the entire commercial line of cancer drugs will go to the other company. Aside from the corporate impacts on critical mass and market portfolios, the deal's effects on R&D; may be dramatic. In oncology, the organization will no lon- ger focus on postmarket development but must realign to an early development, pio- neering mode in epigenetics and immuno- oncology. Why does the company want to abandon even a nominally successful product line to chase after therapeutic approaches still as unproven as they are far-reaching? Vallance explains that, despite having a good track record in oncology discov- ery, GSK ranked only about 15 in cancer drug sales, and though it might aspire to the top 10, it would likely never reach 1 or 2. Moreover, the drugs the company had commercialized would continue to demand more and more support with expensive postmarketing studies. "The deal allows us to go back and focus on the earlier areas that have excited us, epigenetics and immuno-oncology, to make sure that we really invest in those properly. If all goes well, they will become anchor areas for the next wave of prod- ucts in the pipeline, which at some point will take us back into oncology commer- cially or make us partner of choice for Novartis or another company." three of the units, reduced funding on five, and raised funding on six. Thus, it is apparent DPUs compete for budgets and must manage their finances like an independent company. They are judged on their outputs by a panel that includes external advisers as well as inter- nal experts from R&D.; "The change to DPUs has been an extremely successful path for us," says Vallance. "It has cre- ated what I call integrated drug discovery. When I joined GSK, most discovery people were either running a chemistry line, a biology line, or a clinical development proj- ect. What the DPUs have done is create individuals who run virtual biotechs. The units have been very successful in the inte- gration of disciplines and progression of projects in a focused way, rather than a reli- ance on the volume or number of projects." Receiving the nascent medicines from the DPUs are Medicines Development Teams (MDTs), which take responsibil- ity for getting the surviving product can- didates through late-stage development. Even smaller than the DPUs, the MDTs each own an individual project in the late- stage pipeline with "a lot of accountability, a lot of ability to do things the way they want to do them, and a lot of team respon- sibility for results," Vallance says. On an even wider scale than the inter- nal reorganization, the externalization of research has brought extensive restruc- turing affecting several thousand more jobs and careers. The company saw the strategic changes as necessary to break the ice jam holding back pharma R&D; productivity for GSK specifically and the industry in general — in any case, forcing the large companies to obtain most of their winning new drugs from the entre- preneurial sector. "Underpinning every- thing are strategies to diversify through business development and increasingly through links in academia," says Vallance. In Vallance's view, the final leaf in the table, ace in the hole, winning play, or what-have-you is the leverage of using the unique platforms a Big Pharma brings to the table — small molecule and/or bio- pharmaceutical production, clinical trials management in multiple countries, a high- quality regulatory organization, reim- GLAXOSMITHKLINE — REFOCUSING, RESHAPING ONCOLOGY R&D; By W. Koberstein