GHP April 2016

ghp April 2016 | 41 Innovation & Technology Clearly, the pharma and biotech industry is under pressure. This latest agreement, among a number of other factors ranging from evolving lab processes and technologies through to M&A activity, are reshaping the R&D ecosystem as we know it. How will these changes impact the lab environment, and what can we expect the ‘lab of the future’ to look like as a result? Putting a price on innovation The cost of drug development has continued to grow. Estimates now stand at around £1.7 billion per drug, which highlights the mounting cost pressures faced by research organisations developing new drugs. There has been some debate over that figure, of course – it could be lower or higher, depending on what you read. The elevated costs of developing a breakthrough blockbuster drug to deal with more complex, chronic diseases have combined with the effects of the so- called patent cliff – the expiry of patents on a slew of drugs that has put pressure on the industry over the last few years. This complex scenario has taken a further twist with the development of personalised medicine – which can focus the applicability of a given drug on a subset of the population – and the challenges of protecting the intellectual property of this via the traditional patent system. The debacle surrounding Turing Pharmaceutical’s re- cent price hike, and the exclusivity debate heightened by the new TPP deal, underscore the limitations of either relying on patent protection or raising prices to protect the bottom line from the publicised ever-grow- ing drug development costs. Unsurprisingly, companies have led the charge in finding other ways of creating value for shareholders. Record-low US interest rates have helped fuel a frenzy of M&A activity in the pharma and biotech industry amounting to £144 billion worth of deals in the first half of 2015. Brent Saunders, CEO and President of Actavis, described his company’s £46 billion takeover of Allergan as creating a leader in a new industry model: ‘Growth Pharma’. While analysts expect this ‘bull run’ to continue through 2015, it’s a short-term fix and the expected rise in US interest rates will make debt loading less attractive to shareholders. Ultimate- ly, pharma and biotech companies will have to look beyond M&A and become even more resourceful in order to create value and turn a profit. From across the hall to across the globe As the industry strives for ways to make resources go further, many see collaboration as the silver bullet. For today’s research-oriented organisations, collabo- ration and outsourcing parts of the R&D process often makes business sense, as well as opening up access to new technologies and skills. It has even been taken up by the previously hesitant pharma sector. The result is a complex ecosystem of stakeholders involved in R&D from contract research organisations (CROs) to contract manufacturing organisations (CMOs) and academic partners. With collaboration and outsourcing becoming the norm, the research environment has gradually be- come more like a ‘virtual lab’ with a disparate number of actors working towards a common goal. But this business model brings a new set of challenges. In a virtualised environment, how do you ensure that the right person has the right data on time? How do you secure and protect intellectual property, and how do you safeguard data quality? There is a host of other considerations too, including systems integration and interoperability, data archiving, the sample and test logistics and efficient payment systems that all need addressing to make virtualised research work. Turning challenge into opportunity Growth from M&A has long been the accepted route for pharma and biotech companies to expand and compete quickly. But with a wave of new technologies changing the way we think of the lab, this virtualised approach represents the next stage for R&D – where ‘big pharma’ buy proven new drug candidates and develop them, the smaller players do the research and early development, and the CMOs focus on optimising production. This is a simplified view of the new drug value chain, but it does give an indication of how the market will work. The advent of the electronic laboratory notebook (ELN), meanwhile, has certainly brought progress in R&D efficiency but even larger, more fundamental shifts are underway. The tools and data management infrastructures that support lab work will be even more critical in the new world order, where greater efficiency and greater levels of innovation require even more intelligent and scientifically aware software, machines and automation. This increased efficiency won’t replace humans in the lab – it will supplement, speed up and ensure greater accuracy in the work they do. And with the future lab being a more collaborative endeavor, we can also expect to see teams using software that incorporates more ‘social’ features, such as the ability to easily share and comment on others’ findings. This repre- sents a radical departure from the siloed, paper-based way of working of years gone by. It’s become clear that the convergence of cost and competitive pressures, IP challenges, new technolo- gies and a potential M&A slump are playing a signif- icant role in shaping the way drugs are discovered, developed and brought to market. Above all, industry players that have a robust technology strategy in place to support a collaborative, secure, virtual lab environ- ment will win out in the long run. Company: VP Strategic Solutions, IDBS Name: Paul Denny-Gouldson