True, but that's unfair to lemmings. This is Raghuram Selveraju of Aegis Capital, talking about deal-making executives in the big pharma companies and the string of costly blowups so far this year. That link has the list, and it's quite an impressive string of fireballs.
“What all of these deals had in common was the desperation of big pharma, because its R&D productivity has been dropping and we’ve known that for a long time,” he said.
That desperation leads to the repetition of familiar mistakes which derive from the predictable thinking of too many business development executives at big pharma, Selveraju opined. First, when looking for licensing opportunities, pharmas very often seek out their comfort zone – a potential product for which they can deploy an existing sales force or promote to doctors they already know and communicate with. Also, to be confident in an experimental drug’s preclinical and clinical data, pharmas often want to go into areas where their competitors also have a compound as well as into validated targets.
“Basically, they’re a bunch of lemmings,” Selveraju said. “As soon as a target becomes hot, they all have to have a molecule in that space, hitting that target."
But who could blame them? Going out into areas that haven't been explored, or haven't worked out for others, can get you slaughtered, too (ask Eli Lilly about Alzheimer's). And when that happens, you have nowhere to hide. If everyone else was rushing into a given therapeutic area and it turns out to be a disaster, well, you yourself might be able to get by, because that's just one of those things, and it happened to everyone at the same time. It reminds me of something I saw years ago about investment managers. If you go out and buy a bunch of (say) IBM for your clients and it drops, people might say "Man, what's wrong with IBM?" But if you go out and buy a bunch of WhoZat, Inc., and it drops, people will ask what's wrong with you.
My own biases make me think that if the chances for failure are high both ways, then maybe you should go ahead and strike out for the unknown territory, because the payoff is larger if you succeed. Selveraju himself has a much more cautious (and perhaps outright dispiriting) recommendation:
What then is Selveraju’s prescription for better business development practices? It might disappoint those who want pharma to be in the vanguard of innovation. He recommends incremental innovation – using FDA’s 505b2 pathway to develop products with already defined efficacy and safety – as well as biosimilars and re-purposing. Pharma also should focus on niche and specialty indications, and largely eliminate primary care products and the large commercial operations that come with them.
That's cranking up the dial even more on the Bernard Munos strategy. Munos also recommends getting out of the big, expensive areas and going more for niche and specialty ones, but mainly because of the cost of the clinical trials (and the validation step inherent in them). Alzheimer's, for example, scores big on innovation, but very, very poorly on the risk/cost ratio, since it's going to take you years and years in huge clinical trials to see if you've got something.
But that "develop products with already defined efficacy and safety" line is Selveraju’s own, and doesn't that sound like loads of fun? Coming up with new formulations and dosing schedules of existing drugs is what a 505(b)(2) strategy amounts to, and it brings up thoughts of alternative careers - going off to trucking school and learning to drive the big rigs, for example. Actually, as a drug-discovery chemist, that's probably what I'd end up doing if everyone switched to that plan, since you certainly don't need people like me if you're five-oh-five-bee-twoing.