DRUG DEVELOPMENT PROCESS

Bob Sturm Director, IT Validation

Goals for Today

• To understand the Drug Development Process

• How long does it take?

• How much does it cost?

• Where does I.T. fit in?

Purpose of I.T. at any company

• What is the purpose of I.T. at any company?

• Why does I.T. exist?

Purpose of I.T. at any company

• As told to me by a manufacturing company CFO

– I.T. exists to increase profits or decrease costs

– After profits and costs, everything else is fluff

Purpose of I.T. at any company

• Told to me by a manufacturing company CFO

– I.T. exists to increase profits or decrease costs

– After profits and costs, everything else is fluff

• I added that following the law comes first – FDA, CIA and SOX

• Then we have the profits and costs axiom

Service Level Agreement I.T. Vision Statement

• The goal of the I.T. organization is to support its customers to bring new patient treatments to market by providing information technology services that optimize business processes to reduce time and cost associated with product development.

Drug Development Process – 28,800 hits

Process vs. Creativity over Time

Time

Drug Development Cycle Time to Market - 2003

Infotechgraphics.com/projects/drug-development-cycle/

Critical Path for Medical Product Development and Approval per the

FDA

FDA, Challenge and Opportunity on the Critical Path to New Medical Products 2004, p. 4

Three Dimensions on the Critical Path - FDA

FDA, Challenge and Opportunity on the Critical Path to New Medical Products 2004, p. 10

Drug Development Cycle – FDA Interactions

FDA, Challenge and Opportunity on the Critical Path to New Medical Products 2004, p. 12

CDER New Drug Development and Review Process

See notes for additional explanation of this chart.

Clinical Trial Process Ph 3 Costs Exceed $26,000 / patient-2006 (1)

1) prnewswire.com, Phase 3 Clinical Trial Costs; Ph 1: $15.7k/ patient, Ph2: $19.3k/patient, Ph3 $26k/patient See Definitions for an explanation of the Approval Process

Drug Development by the Numbers (DiMasi et al, 2003, except where noted)

• Drug synthesis to FDA approval is about 12 years

• Drug Synthesis to IND is ~4.3 years

• IND submittal to NDA submittal is ~6 – 7 years

• NDA submittal to FDA approval is ~0.5 – 1.5 years

• Clinical phases 1, 2 and 3 are ~5.7 years (phases overlap each other)

• Only 1 in 3 drugs cover their R&D costs (1)

• Roche stopped a Ph 3 study of 15,000 patients for a cholesterol drug (2)

1) Grabowski et al, “Returns on R&D”, 2002, p. 27: 2) Pharmalot.com, August 2012

Total Drug Development Costs (1)

2011: New drug development costs are about $1.3 billion (2)

1) DiMasi et al 2003, p.167. Columnar years are 1979, 1991 and 2003 2) http://csdd.tufts.edu/news/complete_story/pr_outlook_2011/, Drug developers are aggressively changing the way they do R&D

Clinical Trials (Trail Duration and Capitalized Expected Costs (1) / Approved Drug)

• Phase 1 (22 months / $30.5 million) – Evaluate Safety

• Phase 2 (26 months / $29.5 million) – Identify the correct dosing level – Monitor safety

• Phase 3 (31 months / $37.4 million) – Evaluate safety in a large population over time – Evaluate effectiveness (Meets it’s end points?)

• Long Term Animal Studies (37 mo / $3.0 million) • Phase 4

– Marketing studies DiMasi et al, 2003, p. 165, Table 3

1) Includes out-of-pocket costs, inflation rates, cost of capital, attrition rates, see DiMasi pp 158 – 161;

Total Costs/Approved Drug – the Math: C x P = E

• (Actual Capitalized Costs) X (Probability of success) = Capitalized Expected Costs

• (Actual Capitalized Costs) X 21.5% (1) = $100.4 Mil

• Actual Capitalized Costs = $467 Million • Preclinical Costs = Discovery + Preclinical • Preclinical Costs = $335 Million • Total Costs / Approved Drug = $802 Million

1) 21.5% - Source: DiMasi et al, 2003, p 165;

IND Filing to NDA Filing Time (All NMEs Approved 1981 to 1989)

Differences due to process efficiencies and drug types

New Product Revenue – 2002 Approved drugs

Avg. of 118 NMEs introduced into the US market from 1990 - 1994

Generics Quickly Impact Sales Volume

• For 2010 within six months of a patent loss, generics took more than 80% of sales volume from the branded version (on average). (1)

• Plavix (BMS) went off patent in May 2012. Within 2 months it’s sales dropped by 60%. (2)

• Avapro (BMS) went off patent in March 2012. By July 2012 it’s U.S. sales dropped by 85%. (2)

• Singulair (Merck) went off patent in August 2012. Merck expect sales to drop by 90%. (3)

Fierce Pharma: 1) April 20, 2011; 2) July 25, 2012; 3) August 6, 2012

Impact of Generics

Increased Product Revenue

Strategies for Profits / Costs • Fail fast, Win quick • Focus on niche population instead of a block buster

– Genentech’s Heparin • Adaptive trial design

– Modify the trial at specific points • Reformulate and extend patent exclusivity

– Oxycontin – Perdue Pharma (1)

• Get an expert opinion to shorten the clinical trial time – KaroBio for their cholesterol drug (2)

1) Wall Street Journal - June 28, 2012 2) Business Week May 31, 2010

Gov’t Pricing System/Medicaid

Commercial FDA Clinical Pre-clinical

Drug Dev. Cycle - Application Systems

Discovery Research

Documentum / Ascent Capture

eCTD Xpress/ ISI Toolbox

SLIM STAT

MediData

WinNonlin

SAS

Refrigeration Manager

Chemstation /Chemlaunch/Chemstore

Calibration Manager

CRM

Infomatica

Business Intelligence

SAP

Argus Drug Safety IDBS Activity Base

CCP4

Rigaku

Pipeline Pilot

Symyx Compound Reg

Symyx Isentris

Lasergene

GCK

MOE

Cellomics cHCS Viewer

GeneGo

Where Does I.T. Fit In?

• Decrease Costs – Cloud strategy

– SharePoint 2010

– FAST search

• Increase Profits – Reduce time to product launch

Questions??

Definitions

BLA: Biologics License Application NDA: New Drug Application

CNS: Central Nervous System NME: New Molecular Entity

IND: Investigational New Drug R&D: Research & Development

FDA: Food and Drug Administration

NCE: New Chemical Entity

Approval process: Final review of process before patients are recruited. It includes drug supply, randomization, FDA forms, signed patient consent forms , CRFs and Life Sciences company and vendor project team readiness, etc.

References

• DiMasi, et al, 2003. The price of innovation: new estimates of drug development costs. Journal of Health Economics 22, 151-185.

• Grabowski, H.G., et al, 2002. Returns on research and development for 1990s new drug introductions. Pharmacoeconomics 20 (Supplement 3), 11-29.

• Food and Drug Administration, March 2004, Challenge and Opportunity on the Critical Path to New Medical Products