We are in the most competitive period ever for the pharmaceutical industry, characterised by incremental innovation and looming patent cliffs – and path-to-market strategy firm IDEA Pharma believes the solution lies in the decisions companies make about an asset right from the very beginning of development.
Though IDEA began as a broader consultancy firm for the life sciences industry, it has sharpened its focus in recent years.
“That focus came about because when we took a look at where we are absolutely the best and what work we enjoy doing the most, it has been where we’ve helped people influence how they get to market successfully,” says the company’s CEO Mike Rea.
The company’s core work is in positioning products in their early phase so that they can do as well as possible in the market, and consulting on innovation in that space. IDEA has been involved with eight of the 15 biggest drug launches of the last three years – including Opdivo, the most successful oncology launch ever, and Ocrevus, which Roche claim as their best-ever launch.
“Our footprint is pretty significant for a company of our size,” says Rea. “It’s not that we claim credit for those eight drugs – rather I think people who want to launch great drugs, and who want that degree of challenge, will often come to us.”
Dr Alexander Gray, the company’s chief medical officer, adds: “Very early on we realised there are a lot of companies in our space who made money out of largely re-purposing what a company has already done and telling them what they already knew.
“It’s very evident that the old model of just being able to heavily market something when you’ve got a label died years ago. These days, you’re going to have to get a lot more creative developmentally. Things like beyond the pill strategies are becoming increasingly important. Companies need the ability to look at a range of options at the right point in the life cycle, and make decisions based on a range of criteria.”
IDEA have become advocates of making the right decisions and looking at the asset as broadly as possible in the early stages of development, as it is often difficult to make directional changes from phase 2b onwards.
“We realised that a long time ago, and that’s why we focused our activity there in early phase,” says Gray. “If you can bring the right people together with the right thinking at that point, that’s when you’re going to make the difference. Anything later than that, you’re going to make a single digit percentage point difference, not double-digit.”
IDEA is now moving to a model where they will be paid in royalties rather than just get fees for their advice.
“Lots of companies have problems because they get paid more for the amount of work they do,” Rea explains. “We want to align ourselves with value rather than the amount of work we do, and also give the industry some tools to be better at doing this work.”
One of those tools is IDEA’s Pharmaceutical Innovation Index – a yearly report that ranks companies in their ability to bring products from phase 2 to market and commercialise them successfully, utilising a range of clinical, regulatory and commercial metrics to do this, ranging from the corporate level down to individual products.
“We started the Index as a way of learning what tends to lead to success and make companies more innovative,” says Rea. “It began as an internal exercise but it has become a useful external exercise.”
The key question behind the Pharmaceutical Innovation Index was a simple one: if you gave the same product to two different companies, would they be equally successful?
“Everyone knew that the answer to that was no, but we wanted to know why,” says Rea. “The Pharmaceutical Innovation Index is a rearview look at the last five years, but it’s meaningful. We picked up AstraZeneca’s growth as an innovator. We noticed that J&J were successful a while back and that some of the innovation ecosystems they had were going beyond the usual big pharma philosophy of, ‘We’re going to stay as a monolithic pharma company and do things the way we always used to and hope, somehow, we’re going to do it better with different managers in charge of the team’. We’re now talking to them about how to adapt to those changes.”
Gray says that adapting company culture in this way is often just as important as changing R&D processes.
“There’s often a siloed culture between clinical, commercial and R&D,” he says. “We’ve seen companies with archaic decision-making systems where they just bring forth their ideas to the CMO who then passes judgement on them.
“Culturally they are not set up in a way to innovate. They rely on just a few individuals to make very big decisions. The crossover between clinical, commercial and R&D is poor, and the full story of what is possible never gets presented to decision makers. They’re incentivised to go along and try to tell the best story possible about what they’ve done rather than consider wider options and examine their pros and cons in detail. Then, it is either thumbed up or thumbed down, almost like Emperor Nero at the gladiators’ arena!
“You can have all the best intentions in the world but if you don’t have the right culture it isn’t going to happen. This is one of the reasons some biotechs have been so successful: their structure allows much better communication between key internal stakeholders, and a more open discussion of possibilities.”
Though the Pharmaceutical Innovation Index has become a key barometer for companies and the media, it has also proved helpful in shaping IDEA’s own tools that they are bringing into their work with the industry.
“We’ve long hated some of the processes that pharma find themselves bound to, like the target product profile (TPP),” explains Rea. “We’re launching an alternative process to help companies do more useful designs for their path-to-market in the early phases.”
The ‘FIVE-X’ Process is about having five competing paths to market rather than the current standard of one.
“FIVE-X is built to capitalise on what we call ‘asymmetric learning.’ Given that it would be impossible to know in early phase whether your asset is better than someone else’s, your main task is to learn better than the other guys about where and how your asset can win. That might be getting it to market faster, or into a different set of indications, or finding a sweet spot within an indication faster or more cost-effectively than the competition. That kind of diversity of approach is built into FIVE-X.
“Some of this is about not making decisions too early when you don’t know enough, and making very good decisions when you do,” Rea adds. “It’s about looking where the drug works and killing more drugs early on so you clear the pipeline of ‘zombies’. Then you have more great drugs coming through that will make a difference.”
This approach could also help companies be more successful in actually launching drugs.
“There’s no molecule less useful than one that you don’t launch,” says Mike. “It makes no difference to anybody, and it’s just a waste of time if you don’t launch it. There are good drugs that will never make it to market because companies don’t have that kind of persistence, or the resources are constrained. They’re being put on the scrapheap when better planning could have got them to market.
“Putting a drug into the right indication instead of the wrong indication early on might help it survive. Often this is binary – you might kill a good drug that could have succeeded in a different environment. That’s not the right kind of thinking.”
He adds: “When IDEA defines innovation, we say that innovation should be a product you launch that is something that people want and can use. It has approval, it has reimbursement, and people want it. Something that you launch and no one wants is not an innovation – it’s an invention.”
This was the hypothesis that the Pharmaceutical Innovation Index was built on – that innovation should be measurable. “You should know that you’ve done it. You can’t game the system, you can’t talk about smart contact lenses and your next big cure for cancer if you don’t launch it,” adds Rea.
“I think the important thing is to focus on the things that you can fix,” adds Gray. “Go back and look at where the attrition occurs, where the successes occur and understand the links in the chain that you can fix.
“You’re never going to get the attrition rate in CNS from 85% to 20%, for example. That would require such a seismic shift in our ability to test assets pre-clinically and weed out the ones that work: the translation science just isn’t good enough, and is not improving that rapidly. I’m sure we won’t get to that attrition rate within my lifetime. But there’s a lot you can do when you’ve got a viable asset in early phase to understand how you can maximise where it could go. We’re talking about taking things that work and making sure you’re maximising the approach. That’s a very different question from ‘does it work?’”
IDEA’s view of the world, therefore, is that phase 3 shouldn’t be about finding out if your drug works, it should be about proving it, moving from exploration to exploitation.
“That’s the core of how IDEA succeeds,” says Rea. “We’re not a development organisation, we’re a company that advises people on development and how to move it back and add more discipline. We make a difference to the way people choose to do phase 2 trials as an exploratory phase rather than a kind of mini phase 3. That’s important because when a lot of people hear feedback from the market they take a pretty boring market position and then design a pretty boring phase 3 to get there. Then they design the phase 2 just to give them enough of a signal to go to phase 3.
“They’re not using this stage to ask if it could work in other areas or in places no one else is going. You end up making a decision to go to phase 3 based on only a limited set of knowledge in one area without knowing anything about whether it would work in any other areas. Of course, you can’t take a decision to go into those areas in phase 3 because you’ve got no evidence.”
He says that the industry also needs to see innovation in the commercial model. “Take Novartis and their CAR-T therapy Kymriah – in 2018 worldwide less than 100 patients were treated with that medicine, but they are still expecting it to become a blockbuster. Part of the problem they’ve got is that their commercial model is still pretty old. A lot of the products that they’re hoping will somehow become blockbusters, Kymriah, Entresto, even Cosentyx, they’ve probably damaged with the very old fashioned commercial models.”
Rea uses BMS’s cancer immunotherapy Opdivo, which IDEA worked on, as an example of how this kind of thinking can be applied successfully.
“Opdivo has had huge success and generated $6 billion more than Keytruda did in the first three years. But on paper you would regard them as two largely interchangeable molecules – and certainly at the time the decisions were being made, you couldn’t have predicted one would be better than the other.
“$6 billion is a big difference and some of that was down to BMS understanding the way the market actually works versus listening to market research. One of the biggest things that made a difference to Opdivo, we would say, would be the positioning towards what people wanted it to be, not just laying out data, as well as other small things like not launching with the biomarkered population.”
He explains: “If you ask physicians whether they want a biomarker for their oncology drugs, of course they’ll say yes, but in reality a better question is ‘Would you be prepared to wait two weeks for the test to come back and understand that that test might not be specific enough to tell you whether this patient should be on the drug’? Of course, when you ask that question you get a very different answer.
“None of that’s about the molecules, it’s about the product you choose to launch. Part of our philosophy is that the idea is not in the molecule, it’s in the products. The product is a bunch of decisions that you took next to the indication, next to the claims that you want to make for it, next to the formulation of dose and the patient population within the indication. It’s a result of hundreds of different decisions, any one of which could be enough to give you success or make you an also-ran in the marketplace.”
Rea says that this is where IDEA is really seeing companies that are doing better – by understanding that you can’t just look at molecules on paper and hope yours is better than everyone else’s. “If you draw them into the same studies you’ve got to make a meaningful difference in your process as a decision maker,” he says. “That’s the only way your team wins on the day.”
“Things will change. Things have to change to reflect the system that we are in these days. We’re seeing lots of exciting products going through. We’re seeing lots of new players. Good things will happen.”
It’s clear that pharma companies can often be too close to their own, well-established processes to see the wider picture of what might be going wrong, so fresh perspectives like IDEA’s are always welcome in an industry in need of change – even if it doesn’t realise it.
Mike Rea is CEO of IDEA Pharma and an industry expert in Positioning. He was voted one of the Top 10 Innovators in Pharma (pharmaphorum), 100 Most Inspiring People in Healthcare in 2011, 2013, 2015 and 2016 (PharmaVoice, lifetime Red Jacket winner), Global Power List 100 (Medicine Maker, the 100 most influential people in healthcare, 2017, 2018).
Outside work, Mike owns an independent record label, Medical Records, enjoys advanced and track driving, listens to too much music and plays the guitar badly. His only citation on Wikipedia, however, is for establishing the UK college American Football league.
Dr Alexander Gray is IDEA Pharma’s chief medical officer. He trained as a physician, specialising in immunology, and previously worked in the NHS while co-writing books on immunology in his spare time. Prior to IDEA, he worked as a senior medical projects manager at Medical Action Communications and a medical director at Choice Medical Communications.