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Moving Beyond 'Me-Too'

AstraZeneca's Boston site offers a window into how a big drug firm plans to regain its competitive edge

by Lisa M. Jarvis
October 9, 2006 | A version of this story appeared in Volume 84, Issue 41

Credit: AstraZeneca
Richard Alm, principal scientist in infection research, adds a probe sample to a microarray gene chip at AstraZeneca's Boston R&D site.
Credit: AstraZeneca
Richard Alm, principal scientist in infection research, adds a probe sample to a microarray gene chip at AstraZeneca's Boston R&D site.

The pharmaceutical industry's declining productivity, and its penchant for "me-too" products, has led many industry observers to wonder whether big companies have permanently lost their innovative edge to biotech firms. There is a perception that big pharma has become too unwieldy to act swiftly, take risks, and encourage the kind of open exchange among scientists that is generally associated with the success of smaller firms.

In recent years, AstraZeneca has been among the most scrutinized of the drug majors, taking heat from consumer groups over the value and pricing of newer products while also experiencing several major disappointments with its new drug pipeline.

But following a shift in its top management, the London-based company is starting to reverse that image. AstraZeneca is trying to prove the naysayers wrong by tweaking the way it does research to create a culture that is more reactive and innovative. The operations at the company's Boston R&D site in Waltham, Mass., provide a glimpse into how that effort could actually play out.

AstraZeneca is a perfect example of how big pharma is stuck in a blockbuster rut, says Simon King, an analyst at the health care consulting firm Datamonitor. King points out that the four drugs that are going to drive sales growth at AstraZeneca between 2005 and 2011 are all essentially me-too products.

He notes that the asthma treatment Symbicort is a combination of two older drugs. The schizophrenia drug Seroquel has a better side-effect profile than other drugs in its class but, King says, is not hugely innovative. The antiulcerant Nexium is a follow-on to Prilosec and is generally considered a life-cycle extension product. And the anticholesterol drug Crestor is yet another statin, King notes, albeit an extremely potent one.

"There are already other products [meeting the same needs] on the market," King says. "It's the old argument that big pharma is using its marketing strength to push its drugs through."

When Tom McKillop, AstraZeneca's chief executive officer, retired at the beginning of the year, "there did seem to be a call to arms to change their approach to R&D," King acknowledges. "They are now looking to address those gaps."

David Brennan, the former head of AstraZeneca's North American operations, took over as CEO in January, and the company has since embarked on a three-pronged strategy to revitalize its pipeline. The company is making changes to improve its in-house discovery and development efforts and at the same time is aggressively pursuing in-licensing opportunities to support those internal activities.

Hot House
Credit: AstraZeneca
AstraZeneca's Boston site is designed to foster sharing among scientists.
Credit: AstraZeneca
AstraZeneca's Boston site is designed to foster sharing among scientists.

Meanwhile, AstraZeneca has committed to substantially integrating biotherapeutics into its drug business, which, today, is built on small molecules. It claims that biologics will account for 25% of its pipeline by 2010—a goal aided in no small part by the recent acquisition of the British biotech firm Cambridge Antibody Technology.

Citigroup stock analyst Kevin Wilson says he is "impressed with the subtle change in style" since Brennan took over, noting that it has been accompanied by an almost 30% rise in the company's shares over the past 12 months.

That improvement stems, in part, from recognition in the investment community that steps are being taken to "prevent R&D mistakes," Wilson says. He cautions, however, that "it remains at least 12 months too soon to determine whether the new approach to R&D will result in a mid-to-late-stage pipeline with significant revenue potential."

AstraZeneca's Boston R&D facility is emblematic of the change in style across the research organization. The company believes that the site, which focuses on oncology and infectious disease, is a prime example of how big pharma can replicate the research culture of a small company but leverage the resources of a global organization to accelerate drug discovery.

The idea for the Boston site was conceived at Astra, the Swedish pharmaceutical company that merged with Zeneca in 1999 to create the European drug giant. The goal was to allow the U.S. outpost, which was under construction at the time of the merger, to establish its own objectives and culture to foster a unique environment for discovering new drugs. Researchers in Boston would have to find and remove the kinds of roadblocks that had typically kept discovery projects from moving forward.

The cancer program in Boston started out in 2001 with "seven scientists, no labs, no budget," says Jeff Hanke, the site's vice president for cancer discovery. "Since then, we've built up a fully integrated drug discovery unit to consistently deliver new therapies to the clinic." That integration has entailed bringing discovery and product teams closer together, and working with the clinical development organization even in the early phases of discovery.

In addition to their internal efforts, scientists at the site have reached out to other AstraZeneca R&D sites as well as external cancer centers to help tackle some of the toughest obstacles in treating the disease.

"Where we usually lose the race is moving into clinical development," Hanke says. The structure at the Boston site has helped to uncork that bottleneck, thus enabling the company to get into the clinic faster and design trials around a more focused patient population. "This site allowed us to be smaller and more nimble by removing distractions and allowing us to have access to the best talent in the world," he adds.

Those efforts seem to be paying off: Two cancer compounds discovered in Boston have already entered the clinic, and Hanke expects three more drugs to be nominated for clinical development by the end of the year. He notes that four out of the five compounds are first-in-class agents. "We have been able to move things incredibly rapidly," he says. "In some programs, we've delivered things in a fifth of the time it has typically taken."

Researchers at the site continue to try to find and weed out roadblocks to innovation and efficiency. A major effort has been made to foster a culture that encourages a real exchange among scientists, says John Primeau, head of infectious disease chemistry at the Boston site.

Researchers there believe that while the tool kit is critical—a company must have technology for target identification and validation and for drug lead generation—it is the corporate culture that determines the speed and edginess of research. "You've got to have a culture of sharing information as quickly as you can, not just within Boston, but across all 10 of our discovery sites," Primeau says.

The company is attempting to bring together talent that is spread not only across one campus, but across a global network of R&D sites. Aiding this effort are new information technology systems that enable data to be shared throughout the organization.

"Over the past several years, we have been building systems to find ways of making sense of the data for everyone," says Lynne Lesho, director of scientific information services. The company will soon begin to roll out the new system, which will enable "a scientist in Boston to see chemical data generated in England or assay data generated in Sweden very much in real time," Lesho says.

According to Primeau, the system eliminates the hierarchy around information sharing that has tended to exist within big pharma. Chemists on the bench will have access to all the information in the system-a critical change, he says, because scientists, not managers, make the difference in taking ideas forward.

Pointing to the novel therapeutics discovered in Boston, both Hanke and Primeau take issue with the perception that big drug companies are stuck on making copy-cat versions of existing products. "We're committed to generating innovative new medicines that people need-we're not going to be in the me-too business," Primeau says. This is particularly true in the antibacterial space, he notes, where "me-too is not going to get you very far" because resistance occurs across classes of compounds.

Yet the scientists also point out that improving the efficacy, safety, or targeted nature of a drug does add value for patients. When a molecule is discovered, Hanke says, the first question to be answered is whether it works. But a second question immediately follows: How can we improve how it works? "Sometimes small changes are key," he says.


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