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LIFESCIENCELEADER.COM THE CMO LEADERSHIP AWARDS 2017 64 By L. Garguilo GUIDANCE & PREDICTIONS FROM NEW OUTSOURCING ADVISORY BOARD MEMBERS BEST PRACTICES Outsourcing commercialization, within a highly regulated industry. If you're discovering and developing drugs, then you need to know the entire industry framework you're working within." DON'T OVERTHINK THE PATH FORWARD In Can Pharma Build An Innovation Business Model For CMOs?, featured in Life Science Leader's 2017 Industry Outlook issue, Neervannan of Allergan agrees that mov- ing from a traditional model of fee-for-service to one of partnerships is key to the industry's future. He also makes clear you don't need to overthink this concept. "Shared innovation can be approached initially from a strict business sense," he says. "You can ask if a quid- pro-quo approach works ... where the innovators are rewarded with payments for specific innovations. This can then evolve into an ongoing milestone approach, not unlike licensing deals we are familiar with. It does require, though, evolved thinking from both the spon- sors and providers — specifically on how to estimate valuation — and coming to a mutually acceptable busi- ness agreement." Has Allergan put this into practice? "Yes, we've worked effectively with several vendors and partners on novel technologies," Neervannan replies. He says while innovation isn't "a routine selection criteria for CMOs, we are increasingly selective in looking for inno- vative partners." Examples include for "difficult-to-syn- thesize molecules or unique formulation technologies." Are the CMOs ready to help with innovation? "I believe most large CMOs today are looking for big manufacturing contracts and not so interested in R&D; work where more innovation is called for," he says. "At the same time, we are seeing more boutique companies — mostly in the U.S. and Western Europe — that thrive on this innovation model, and we increasingly seek them out." These relationships, he explains, "are dependent on mutual trust and respect. That starts with a big com- pany like mine realizing we want the help from the outsourcing innovator community, and taking respon- sibility for providing the appropriate incentives." Most important is for sponsors to provide "clear rewards in exchange for solutions to problems. Ultimately," he concludes, "it comes down to recognition and reward." WHAT REALLY HELPS DRUG SPONSORS Larson of Achaogen (who is on the cover of this issue) says, "It's interesting to think about why the small mol- ecule industry — including CDMOs and CMOs — hasn't learned or revolutionized in the way the biologics industry has, even in places where we have common technology. If you can get 200 percent more out of a bio- logics manufacturing process from a CMO, who cares? That's not what's driving our cost." L Here are some of those questions, specific to driv- ing innovation and new technologies throughout the external supply chain: ▶ Would having internal funding for innovation in your budget help you get customers? ▶ How many of you have lost a customer because your company couldn't innovate? ▶ How many CMOs believe some clients may have not approached you at all because you've made it clear you don't partner for innovation or codevelopment? ▶ If Big Pharma approaches you with an opportuni- ty, you also have to entice the customer, show you have some skin in the game. What are you [the CMO] bringing to the table to help us [pharma]? Regarding this last topic, Huyghe adds: "Today, Big Pharma does pay CMOs to innovate and learn. And CMOs will most likely be able to utilize that new technolog y — potentially even with our competitors. So what are we really getting out of the relationship? From the CMO perspective, yes, the challenge is very much to justify the cost. But for us, we're not always looking at the best price, but we are always looking for the best deal." SO YOU WANT TO BE A PROJECT MANAGER? In the OutsourcedPharma.com articles Required Skills For Project Management At Genzyme and Sanofi Genzyme — And CMOs — Serious About Training Project Managers, Sherako of Genzyme stipulates that any presumptive candidate for project manager should have an inher- ent desire to understand what makes a project tick. "Unfortunately," she concludes, "this concept can get lost nowadays. Some project managers don't have the awareness — or that drive — to translate research and development strategy into detailed activities and plans that can be supported by a cross-functional team. Yet they want the title of project manager. It concerns me." First, to call yourself a project manager, you need the basic skills to understand how to take strategy and translate it into a detailed 'work-breakdown' structure of all project activities. Planning activities, sequencing them, resourcing them, coming up with a schedule, and then managing to a critical path — that is an abso- lute. Openly sharing the overall project plan with your outsourcing provider so everyone understands where they fit into the scheme is enlightening and engaging for both sides." A second prerequisite for project managers, accord- ing to Sherako, is to have industry-specific knowledge. "I don't care if it's the defense industry or environmen- tal remediation. This has to do with a deep understand- ing of the strategic stage-gates and specific require- ments to drive a project forward, from discovery to