Assessing and Building Value in Early Stage Pipeline

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Assessing and Building Value in Early Stage
Pipeline
Bill Friedrich, Pfizer Pharmaceuticals Susan
Newlin, MedQ Research Prepared for PBIRG
Fall Biotech Education
Workshop December 7, 2009
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Todays Agenda

• Introduce concepts for a biopharma application
• Disease Area focus can improve efficiency in
  decision-making
• Strategic assessment to create Future Landscape
• Scenario Development to plan in the context of
  uncertain futures
• Valuing your product within these perspectives

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Agenda Well break our discussion into three
sections
Integrating Team Knowledge to Speed RD
Decision-Making
1
Scenario Building to Facilitate Strategic
Planning Build Value
2
Final Thoughts Discussion
3
4
Agenda
Integrating Team Knowledge to Speed RD
Decision-Making
1
Scenarios to Facilitate Strategic Planning
Build Future Value
2
Final Thoughts Discussion
3
5
Product launch numbers are declining increases
the pressure to speed development process

• Discovery Explosion of scientific and technical
  advances
• Development Timeline and success rates havent
  kept pace with discovery
• Worse than 10 years ago 20 of PIII biopharma
  products failed, now 50
• BioPharma processes changing to identify
  failures early, increase efficiency

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Longer Development Times and fewer launches
increases pressure to make better and faster
decisions
Source Nature Perspectives, vol 7479-488, June
2009
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One Example Learn and Confirm Structure
Increase RD efficiencies speed decision making
Traditional Approach
Transition Zone
Ph 2a
Ph 3
Ph 2b
Ph 1
Ph 0
Discovery
New Approach
Transition Zone
Transition Zone
Learn Disease Focus
Confirm Product Focus
Discovery
Learn
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Disease Clustering in Early Development
Leverages teams knowledge moves to follow-on
products faster
How the New Approach is different
Traditional 5 product pipeline
Prod 1
ABC-155
ABC-155
Prod 2
DEF-100
GHI - 200
DEF-100
GHI - 200
Prod 3
JKL - 175
Prod 4
JKL - 175
ABC - 195
ABC - 195
Prod 5
One team for each disease cluster, multiple
products per team, All MOAs
One team for each individual product
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This approach increases accountability and
streamlines investment decisions
Learn Team
Cross functional subteam
Cross functional subteam
Cross functional subteam
Cross functional subteam
Cross functional subteam
Cross functional subteam
Functional subteam
Functional subteam
Functional subteam
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The Learn Team - Disease Area Focus a major
change, foundation elements remain
Confirm
Learn
Scope and Limits of the Opportunity
Drug Performance, Market Requirements, Regulatory
Commercial Opportunity
Prove, Enhance Deliver Product, Science
Message to the Market
Develop Asset
Define Asset
Deliver Asset
Initial Commercial Assessment
Initial Commercial Strategy
Initial Commercial Launch Plan
Commercial Strategy
Commercial Launch Plan
Commercial Assessment

• FDL
• Disease Patient Targets
• Competitive Pipeline
• Indications
• TPP
• Positioning Hypothesis
• Forecast

• Claims Grid
• PR Assumption
• Updated Competitive Assessment
• Incremental Value Proposition
• Initial COGS

• Promotion Platform
• Messages, Claims
• Draft Label
• Health Outcomes
• Initial Launch Resources

• Initial Positioning Statement
• PR Strategy
• Launch Resources / Transition Time
• Tech Transfer Supply Strategy
• Tradedress
• Primary Name Selection

• Brand Optimization Strategy
• Update Positioning
• Update Label
• Draft Core Claims
• Tradedress
• Brand Name

• Global Launch Readiness Plan
• US
• Ex-US

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Key Takeaways

• Disease Area Focus in early development
• May help identify emerging MOAs for discovery or
  licensing
• Teams can move faster to go / no-go decisions
• Ability to bring follow-on products to the
  forefront
• Can increase RD efficiency
• Individual products studied in multiple disease
  areas
• Starting focus is on a Mechanism of Action
• Can re-prioritize and move resources to new
  indications more quickly
• Likely to have different Investigator leads, work
  across teams
• As a biotech company working with large pharma
  companies, you may see very different decision
  process structures
• Their decision-making may be different from yours
• It is important to understand what it is so you
  can be a strategic partner

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Topics
Integrating Team Knowledge to Speed RD
Decision-Making
1
Scenarios to Facilitate Strategic Planning
Build Future Value
2
Final Thoughts Discussion
3
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Scenario Development

• Scenarios
• Although it is surprisingly hard to create good
  ones, they help you ask the right questions and
  prepare for the unexpected.
• That is hugely valuable.
• - Charles Roxburgh, Director of the McKinsey
  Global Institute, Nov. 2009

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Business Needs Drive Research Recommendations
Disease Area Expertise and the Research/Consulting
Process
New Disease Area
Disease Experience market changing events,
Opinions vary on market forces
Disease Experience market changing as
anticipated, common opinion about future

• No prior Future Disease Landscape
• Secondary research helps focus primary research
• External KOL point of view
• Realistic view of future opportunities, unmet
  needs

• Completed FDL in past 2-3 yrs
• Monitoring market/ landscape
• Team consensus view in doubt with unexpected
  events?

• Completed FDL in past 3-5 years
• Monitoring market/ landscape
• Anticipated scenarios / signposts occur as
  expected
• RD projects / product team have regular access
  to KOLs, Investigators

• Full FDL and Workshops
• Build disease knowledge and common team view of
  potential market scenarios / strategies

• More focused version of FDL
• Update disease/market/ knowledge
• Review scenarios and signposts
• Add scenario-building workshops strategy
  alternatives

• Continue Targeted MR
• Evolves to address more project specific business
  questions
• Update general disease knowledge with each project

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Anatomy of a Project
Key Focus 5-10 Years for Disease Area Opportunity
Phase 1 Information to Consensus Building the
FutureScape
Phase 2 Scenarios to Strategies
Establishing Value

• Phase 1a
• Internal Assessment
• Workshop 1 Kick-off
• Internal Focus Group w/ Whole Team
• Review of internal knowledge

• Transition
• Reporting Consensus
• Workshop 2
• Sharing information
• Scenario building

• Phase 2a
• Strategic Review
• Workshop 3
• Core team planning for strategy alternatives and
  next steps

• Phase 1b
• External Assessment
• High level KOL interviews

• Phase 1c
• Pipeline Analysis
• Pipeline assessment (pending MOAs)
• Emerging competitor analysis

• Phase 2b
• Building Value
• Forecast and Value Story

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Future Disease Landscape5 to 10 Year Horizon
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Future Disease Landscape Setting a Framework
with Team Consensus
Unmet Need
Regulatory Legal
Technology Science
Pricing Reimbursement
Healthcare Practice Delivery
Competition Activity
Customer Segments Attitudes
Disease Population Demographics
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Information Gathering
. . . To assure a common building block for
decision-making

• Workshop 1 Kick-off with team
• Sharing information
• Gaining buy-in
• Review internal syndicated data
• What do you know already?
• Review pipelines
• Internal interviews
• Consensus-building through shared information
• Thought leader interviews
• Checking our assumptions against external
  resources
• Community physician interviews

• Ultimately, building the foundation of knowledge
  upon which to build team consensus

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Patient Flow MappingUnderstanding Healthcare
Practice of the Future
Hypothetical Future Patient Map Looking for
Future Opportunities
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A Competitive Map Looking for Opportunity
Where are the targets for differentiation,
exclusivity, other advantage?
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Scorecard A brief and top level picture per
Disease Area
Hypothetical Market Picture
One for Each Indication / Disease Area
Patient Segmentation
Morbidity and Mortality from Stroke

• Mortality from stroke is reported as 26.5/100,000
  population.
• Mortality rates improved between 1960 and 1992,
  with better control of blood pressure, but have
  begun to rise in the last few years.
• Of Survivors, the level of impairment was listed
  as
• Requiring assistance 31
• Need help walking 20
• Institutionalized 16
• Vocationally impaired after 7 years 71
• Unemployed and lt 65 years 34

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The Picture is Complete Or Almost .

• We have specified the Disease Areas to study
• We created the framework to apply across all
• We used strategic evaluative tools in a common
  way
• And we share this information together as a team
  grounding all in a common background and
  understanding

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Scenario Building A Team Exercise
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Why Scenario Building?
Allows a company to test internal mental models
and current assumptions and lay alternative plans
for the future.

• Recognizes that changes dont happen overnight
• Anticipates change
• Prevents unexpected surprises
• Examines/tests mental models
• Allows quick reaction to external events

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Critical Elements for Scenario Development

• Assigns a Name and Characterization of each
  potential future scenario
• Incorporates Signposting oracles that forecast
  which of the anticipated futures may evolve
• Identifies Market Drivers and Market Hurdles that
  will impact success in each potential future
  environment
• Describes Strategy Elements - or critical
  factors and/or potential strategies that will
  drive success for our market

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Creating Scenarios What drivers will create
powerful change?

• The Four Generic Platforms
• Demographic shifts
• Economic action / reaction
• Reversal of unsustainable trends
• Scheduled events
• AND gtgtgt
• Scientific breakthrough

Examples
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Complete Scenario Templates Break-out then
discuss and develop consensus
Pessimistic Case
Scenario 1
Description

• Genetic breakthrough identifies predisposition
  for T2DM, ability to identify and monitor
  individuals. Clinical trials with TZDs and DPP4s
  support ability to prevent progression to full
  diagnosis

Rationale

• Reports in Nature have identified genetic
  clusters routine testing is possible in a 5
  year time span

Sign Posts of Change (what to watch for)

• KOLs believe in ability to test and to treat to
  prevent progression
• Frequent discussion at international diabetes
  meetings
• Tests are validated used by biopharma companies
  in clinical trials

Opportunities / Drivers for Success

• Xxx
• Xxx

Example

• Xxx
• Xxx
• Xxx

Threats / Hurdles to Success

• 25

Probability of Occurrence
Impact on Strategic Direction

• High Potential to target a very large population

• Xxx
• Xxx
• Xxx

Strategies for Success
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The Strategy Development Process
Superior Business Results
A good strategy is grounded in the appropriate
time and setting Your Future Scenario

• Performance measurements

• Annual plans and budgets
• Key business product strategies
• Functional plans
• Gaps identified LA opportunities
• Tactics

Company Business Plans

• Franchise detailed franchise strategies to
  achieve vision
• Brand detailed product strategies tactics

Franchise Plans
Brand / Product Plans
Your Company

• One-Pager with Sub-Objectives, Milestones,
  Measures

Strategy

• Set direction
• Energize and stretch organization

Vision Mission
Future Scenario
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Sign Posts
Signposts put in place give go/no go and
directional guidance.

• Examples
• Refereed Journals
• Clinical Trial Publications
• Meetings and Abstracts
• Advocacy Newsletters
• Congressional/ Advisory Panels
• Press Analyst Reports
• Clinical Trial Press Releases
• Patents
• Others?

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Your Company Team is Now in Consensus

• You have agreed on the Future Disease Landscape
• You have formulated and agreed upon Future
  Scenarios
• You have laid out the signposts
• You have laid out the alternative strategies
• So

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Establishing Value and Forecast
In An Uncertain Future
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Scenarios Using Them to Assign Value
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Building Value in Future Scenarios
Size of Market
X
Cost of Product
X
Our Share

• Who and how many
• How many diagnosed
• How many treated
• How many fail 1st therapy

• Value defined by
• Unmet needs
• Differentiation
• Reimbursement

• Differentiation
• Competitive Landscape
• Penetration identified

• Further value
• Focusing on disease, building value early
• Killing failures early
• Targeted clinical trial plan
• Annual portfolio review

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Reality Check for Innovative Product Forecasts
Is it larger or smaller than a bread box?
2007 Sales

• Many biotech products achieve FDA Orphan Drug
  List status
• Most will be lt 500 MM
• Adding indications increases earnings
• Example Products gt 1B
• RA Enbrel, Humira, Remicade
• Oncology Gleevec
• Growth factors Neupogen, Epogen

Number of Products
Source FDA Orphan Drug List, IMS Health MIDAS
Worldwide Sales, FY2007
Worldwide based on Wyeths MIDAS Country and
Subscription
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Agenda
Integrating Team Knowledge to Speed RD
Decision-Making
1
Scenarios to Facilitate Strategic Planning
Build Future Value
2
Final Thoughts Discussion
3
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Value Through the Process What you gain with
Disease Area Focus and Scenario-based Planning

• Rapid Learning
• Adaptive trial designs to combine PI, PII
• Use emerging data to transition seamlessly from
  PII to III
• QUICKER decisions
• Go/no go

• Faster Reactions
• Common vision for disease area pipeline
• Expected tech advances / impacts identified
• Emerging MOAs
• Sign posts of change
• Anticipated strategies

• Value Differentiation
• Clinical endpoints that drive value
• Evolving patient needs
• Manage safety risks
• Meaningful differentiation
• Claims, label, value proposition
• Perceived payor value
• Forecast tied to value proposition

• Science / Business Consensus
• Identifies/resolves diverging views
• Clinical trial plans, alternatives in place
• Alternative products / indications
• Selecting most relevant endpoints
• Right evaluative tools, biomarkers, patient
  types