Backup Compound Strategies: Best Practices for Reducing Phase II Risk

SUMMARY

Backup compound planning has risen in importance as the percentage of R&D projects focused on unprecedented targets has skyrocketed. Heads of R&D and chemistry, therapeutic area heads, portfolio analysts, and project managers all recognize that there is no surer way to minimize Phase II risk than a well thought-out backup plan.

This report drives home real world experiences and best practices in backup compound strategies with:

• Case studies of actual backup programs at large and small pharma companies
• Expert interviews with senior R&D managers who discuss the nuts and bolts of backup planning, and offer best practices and cautionary examples
• A proprietary survey of the views, practices, and plans of individuals in R&D involved with backup decision making.

Backup Compound Strategies: Best Practices for Reducing Phase II Risk details the strategic and tactical aspects of backup planning, examining organizational issues and business considerations such as:

• What organizational design - pure functional vs pure project, with varying matrix forms in between - is best suited to backup planning
• What to do with backups once the prototype has entered the market
• Determining the level of resources available to a backup program

Despite the paramount importance of having well-thought-out SOPs for backup compounds, CHI's proprietary research shows that nearly 40% of companies surveyed (N=36) do not have a clearly articulated way of thinking about backup compounds, and an additional 14% employs a backup plan only at "some sites." This is not surprising in view of the daunting number of factors to be taken into account in the backup calculation. Such key decisions as the number of backups, when to begin development, and the level of investment required are, in turn, determined by numerous strategic and tactical factors, such as:

• The type of company
• The importance of the therapeutic area to the company
• The importance of the project to the therapeutic area
• The risk of the prototype molecule's attrition for chemical or biological reasons
• Whether the project strongly meets the target product profile criteria Etc.

The most complete backup strategies include one or more backup programs in addition to the backup or follow-on compounds for the primary compound. These additional backup programs may be based on the same target in the same biological pathway, or on a target in a different biological pathway.

This report is a trove of proven experience and sophisticated thinking about a critical but often neglected R&D decision.

TABLE OF CONTENTS

Chapter 1

• INTRODUCTION
• 1.1. Definitions
• 1.2. Scope and Organization of the Report

Chapter 2

• STRATEGIC CONSIDERATIONS
• 2.1. Importance of the Project
• 2.2. Type of Company
  • Big Pharma Companies
  • Smaller Biotechnology Companies
• 2.3. Risk of Attrition
  • Chemical Versus Biological Risk
  • Selection of Compounds
  • Market Risk
  • Interviewee Comments on Project Risk and Attrition
    • Big Pharma Companies
    • Smaller Biotechnology Companies
  • Timing
• 2.4. Backup Strategy: One-Size-Fits-All Versus Ad Hoc
• 2.5. Role of Modeling and Simulation in Devising Backup Strategies
  • Applying Statistical Methodology to Optimize a Backup Strategy
  • Valuing Backup Compounds and Projects
  • Backup Strategy Involving 2 or More Distinct Mechanisms for the Same
  • Indication
  • Structuring the Product Development Pipeline

Chapter 3

• TACTICAL ISSUES RELEVANT TO BACKUP COMPOUNDS AND PROGRAMS
• 3.1. Chemical Diversity of Backup Compounds
• 3.2. Level of Testing for Backup Compounds
• 3.3. Use of Target Product Profiles
• 3.4. Backups at Bristol-Myers Squibb

Chapter 4

• ORGANIZATIONAL CONSIDERATIONS
• 4.1. Designing a Backup Plan
• 4.2. Influence of Portfolio and Strategic Planning Managers
• 4.3. Availability of Resources
• 4.4. The In-licensing Alternative

Chapter 5

• BUSINESS CONSIDERATIONS
• 5.1. Applying Business Analysis to the Development of Backup Strategy
• 5.2. Organizational Learning from Failures
• 5.3. Fate of Redundant Backups
• 5.4. Role of Competitive Analysis

Chapter 6

• CHI INSIGHT PHARMA REPORTS BACKUP COMPOUNDS SURVEY-JUNE 2007

Chapter 7

• BEST PRACTICES
• 7.1. Three Industry Views on Backup Strategies
  • An Ideal Scenario
  • The Role of Backup Strategies in Pharma's R&D Productivity Crisis
  • Efficiency in Backup Strategies
• 7.2. Considerations in Backup Strategies
  • Type of Backup Menu
  • Time Constraints
  • Strategic and Tactical Issues
  • Learning from Failure
  • Limiting the Number of Disease Areas Addressed

Appendix A

• EIDOGEN-SERTANTY'S APPROACH TO BACKUP STRATEGY
• Interview with Steven Muskal, PhD, CEO, Eidogen-Sertanty
• Eidogen-Sertanty Technology

Appendix B

• TARGET PRODUCT PROFILE TEMPLATE

Appendix C

• ABBREVIATED TARGET PRODUCT PROFILE

Appendix D

• INTERVIEWS WITH INDUSTRY EXPERTS
• Mark Ashwell, PhD, Vice President, Chemistry, ArQule
• Dario Doller, PhD, Group Leader Medicinal Chemistry, in a pharmaceutical research and development organization
• David Lester, PhD, Principal Consultant, ITHW, Inc.; Senior Vice President, Strategy and Corporate Development, Gene Express; former pharmaceutical R&D executive and FDA staffer
• Note: Interviews with other industry experts appear throughout the body of the report. These interview subjects, who requested anonymity, include strategic planning managers, project managers, discovery strategy managers, and discovery product managers in big pharma.

References