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EXCLUSIVE LIFE SCIENCE FEATURE leaders LIFESCIENCELEADER.COM MARCH 2015 22 T he German proverb, "Wer rastet, der rostet," loosely translates to, "He who rests grows rusty." This saying occurs to me as I sit across from Grünenthal's chief scientific officer, Klaus Langner, Ph.D. We are at the Omni hotel in San Francisco, and it is very late. However, since we are in town for the 33rd Annual J.P. Morgan ( JPM) Healthcare con- ference, each of us knows this is far from our last meeting of the day. Langner's dark suit still looks crisp, and his white shirt is still bright. I think to myself, "He has no 'rust' on him." Only the slight loosening of his tie provides any evidence his metal is beginning to fatigue. "It's pronounced Grew – nen – tall," he politely corrects in English laden with a German accent. "We are a fully integrated R&D; company, having always a strong footprint in internal research." In 2013, Grünenthal, a nearly 70-year- old family-owned German drug developer that has primarily focused on discovering new ways to treat pain, invested approxi- mately 27 percent of its revenues back into R&D.; For the same year, that's five percentage points higher than Novartis, one of the most innovative pharmaceuti- cal companies in the world. Like most companies in this industry, Grünenthal recognizes that to develop a sustainable business model, it must adopt an open and collaborative approach to R&D.; But how is a company the size of Grünenthal, with revenues of approximately $1.2 billion (€1 billion) in 2014 supposed to compete for collaborative R&D; partners so that it can continue to grow and remain "rust-" free? According to Langner, Grünenthal intends to broaden its business by imple- menting a new entrepreneurial specialist and networked approach to R&D; built on the foundation of its focused drug discovery and development legacy. R EAP THE VALUE OF S TR AT EGIC PARTNERSHIPS One of Grünenthal's first R&D; success stories was tramadol, a narcotic-like pain reliever which was marketed by Janssen in the U.S. as Ultram. According to Langner, after Ultram, the company took an "opportunistic approach" to R&D;, seizing opportunities not necessarily closely related to the development of pain-oriented therapies. "But from the 1990s onwards," he explains, "we began to focus more and more on pain." From then on, the company developed tapent- adol, a centrally acting opioid analgesic. In the EU, Grünenthal markets the drug under its brand name, Palexia. In the U.S. however, tapentadol was, until very recently, marketed by Janssen under the brand Nucynta. "Tapentadol represented a real innovation in pain," Langner points out. "With respect to the development of a new chemical entity [NCE], prior to tapentadol, nothing new had happened in pain for 30 to 35 years." Grünenthal's R&D; approach reveals a pattern worthy of emulation, especially for small to midsize biopharmas. First, focus on your drug development niche. Second, when you are a small company seeking entry into the biggest and most stringent biopharmaceutical market in the world (i.e., the U.S.), seek highly repu- table therapeutic category champions as your partners. "The U.S. is an important market for us, but only via partners," Langner states. Grünenthal has other reputable pain management collaborators. Purdue Pharma, known for bringing pain relief to millions via OxyContin, licensed the tech- nology patents from Grünenthal for their crush-resistant manufacturing technology which raises the hurdle for tampering and abuse. If you're a small pharma or bio company trying to grow, there are lessons to be learned from Grünenthal's partnering examples. For instance, don't put all your niche drug development into the basket of a single partner. And make sure you create strategic partnerships earlier than the out-licensing phase. FO C US ON C OR E C OMPE T ENCI ES During our conversation, Langner explains why it's important to adopt a focused approach to R&D.; He says that if you wanted to develop an analgesic with a broad label, you would have to run up to nine Phase 3 trials in different pain subcategories, each with its own standard of care. "This broad approach increases your risk — heavily," he attests. Instead, to reduce risk, he advocates a more targeted approach, focusing on developmental compounds with smaller labels, as well as smaller patient populations. "Neridronate is a nice example of this right here in the U.S.," he states. Neridronate is registered in Italy for the treatment of several diseases (e.g., osteo- genesis imperfecta and Paget's disease of bone). CRPS (complex regional pain syndrome) is a progressive disease of the GRÜNENTHAL BUILDS A NEW ENTREPRENEURIAL AND NETWORKED APPROACH TO R&D; By R. Wright The U.S. is an important market for us, but only via partners. K L A U S L A N G N E R Chief Scientif c Off cer of Grünenthal