SAN DIEGO - While bustling between panels at the 14th Annual CALBIO conference, even native San Diegans had to pause on the patios and outdoor walkways to appreciate the weather: a sunny 70 degrees with clear skies and ocean breezes. But back inside, the talk quickly turned from San Diego's famous "morning board meetings" - local slang for surfboard schmooze sessions - to trends in commercialization, partnering, financing, and other issues critical to biotech success.
Over the last several years, fewer licensing deals have included worldwide rights as more biotech companies opt to co-promote their products. But co-promotion means plunging into the complex world of commercialization, which many biotech companies are unfamiliar with. In a panel titled "What We Wish We Knew When Preparing for a Commercial Launch," experts shared insights with biotechs preparing to market their first product.
Charlotte Sibley, senior vice president of global business research and intelligence at Shire plc, outlined mistakes companies often make during their commercial assessment. She cited not understanding the competitive environment, underestimating the competition, and being unrealistic about the probability of success as common problems.
Sibley also emphasized the need to talk to the potential patient population, not just key opinion leader physicians, when preparing a commercial plan. She recalled when a group of physicians recommended that a herpes zoster treatment be formulated as a spray so that patients would not have to touch their lesions during application. Yet patients in a subsequent focus group stated that a spray would be cold and painful, and that they would prefer a cream and didn't mind touching their own lesions. The feedback dramatically changed the commercialization plan for the product.
Joseph Reiser, president and CEO, Locus Pharmaceuticals Inc., added a few lessons learned during the launch of an unnamed cancer drug, including ensuring the manufacturer can reliably produce the product, seeking out nay-sayers within the physician community beforehand to learn their criticisms, and allowing plenty of time to work with both the FDA and the Centers for Medicare & Medicaid Services (CMS).
Sibley agreed that not starting early enough is the single biggest mistake companies make. Planning for a commercial launch should begin "much sooner than most companies think; certainly at preclinical," she said.
The topic of planning ahead came up again during a panel on reimbursement, when Randel Richner, president and founder of Neocure Bioeconomic Strategies, said it is "not uncommon to begin thinking eight years in advance" about your CMS strategy.
Richner also discussed the "fundamental disconnect" between FDA and CMS, which can result in a misalignment between patient populations approved by the two groups. Yet she added that the agencies are likely to collaborate more closely as Phase IV trials are increasingly built into coverage decisions.
Several other topics discussed at the conference reflected trends echoed throughout the industry.
Drew Senyei, managing partner of Enterprise Partners, spoke about the importance of capital efficiency and the increase in virtual business models to achieve "venture-like" returns in a market where the average exit is $300 million. And Elliot Parks, managing partner with Hamilton Bioventures, pointed out that when it comes to exit strategies in the public markets, "not all roads go through New York" and foreign exchanges are generating significant activity.
Outside of the public markets, several panels touched on the continued increase in mergers and acquisitions as an exit strategy.
Barbara Yanni, vice president and chief licensing officer with Merck & Co. Inc., explained that "a lot of discussions start out as licensing and then become an acquisition," pointing to Merck's buy-out of Sirna Therapeutics Inc. as an example. (See BioWorld Today, Nov. 1, 2006.)
Yanni and fellow panelists from Bristol-Myers Squibb Co., Eli Lilly and Co. and Wyeth Pharmaceuticals Inc. all advised biotechs on how to win their attention, but seemed decidedly eager to hear new product pitches.
"Don't worry about your product being too early; let us make that decision," Yanni said. "And don't worry that you're bothering us - it's our job to look at your proposals."
Jack Tupman, senior director of corporate business development at Eli Lilly, also spoke about his company's interest in not just in-licensing, but "out-partnering." He said Eli Lilly will out-partner legacy products as well as products the company is no longer interested in developing but would like to one day have a royalty stream on, and products that need the investment of a partner during a given window but that will eventually be optioned back.
While much of the conference focused on business topics, omnipresent in the background were the broader healthcare issues troubling not just the industry, but the nation. Conference attendees debated how to deal with the obesity epidemic, improve healthcare for developing nations, fund translational research and development, manage pricing pressures, and resuscitate the industry's public image.
Those are issues for which there are no easy answers, but acknowledgement and open, collaborative discussion must surely be a step in the right direction. And as Vince Papale, the cancer survivor and Philadelphia Eagle whose story inspired the movie "Invincible," took the stage to applaud attendees for their important contributions to improving quality of life, it was hard not to feel optimistic.