Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd...

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Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005

Transcript of Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd...

Page 1: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Alan E SmithSenior Vice PresidentChief Scientific OfficerGenzyme

MIT R&D Conference November 3rd 2005

Page 2: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Biotechnology - business appears to be great …

~ 150 marketing approvals for biotech drugs and vaccines in last 5 years – more than all previous years combined

Many big revenue products:- Enbrel - Aranesp/Epogen - Cerezyme - Rituxin- Remicade - Neulasta/Neupogen - Synagis - Rebif- ReoPro - Avonex - Herceptin - Viread

2004 R&D approx 32 new - 1st indication “biotech” products approved 350 products in clinical stage development

2004 Financing 37 Biotechs went public WW, 28 in US $21B financing raised; 2nd best year ever

Page 3: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Our business is time-consuming, expensive, & riskyCenter for Study of Drug Development, Tufts University, 2003 - 2005

. . . but the Biopharmaceutical World is tough

10,00010,000

250250

1010

11

2 4 86 1210 14

15 Years

Lead Discovery

Safety & efficacy in animals

Safety & efficacy in humans

Regulatory Approval

~$1B

Post - Approval : 73% need additional studies 30% recoup development costs 0

Page 4: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

PhRma 2002, Nature Drug Discovery 2005

The Productivity Conundrum

NMEs approved

R&D Spending ($B)

20

25

30

35

40

45

50

55NMEs

15171921232527293133$35B

19960.3

19970.5

19980.7

1999 0.7

20001.0

20011.4

20031.6

20022.1

15 13

$B/NME

Increased R&D investment hasn’t translated into more products

Page 5: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

But in even this environment Genzyme is doing well

Revenues & R&D Spending

0

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1.0

1.5

2.0

2.5

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

To

tal R

eve

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es

($B

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50

100

150

200

250

300

350

400

450

R&

D S

pen

din

g (

$M

)1st $Billion – 19 Years2nd $Billion – 3 Years

Page 6: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Where do opportunities that drive long term growth come from?

Current +1 +2 +3 +4 +5 +6 +7

Re

ven

ue

CommittedGrowth

Rate

Existing Product Revenue

RevenueGap

New Product Revenue

Success demands continuous development of new opportunities

Year

Always a revenue gap in the out years

Page 7: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Internally Originated Discovery Programs

Preclinical Candidates

Drugs inClinic

Marketed Drugs

Clinical Candidates

Drugs inClinic

Marketed DrugsDiscover more:

Discover outside & partner or acquire:

Discover inside:

We have to do all three

MarketedProductsDiscovery

Preclinical Research

Preclinical Development Pivotals

ClinicalResearch

Our Model

Page 8: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Why look outside?

Estimated global health R&D funding 2000

Public funding: advanced countries

Private funding: Pharma, Biotech

Private funding: not for profit

Public Funding: developing countries

TOTAL

$38.0B

$53.0B

$9.4B

$2.5B

$103B

* Global Health Forum 2001, PMPRB 2002, Genzyme Est.

Page 9: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Of the top 10 selling drugs in 2002 . .

Monsanto3.0NSAIPfizer

Ferrosan3.0Anti-depressantsGlaxo SmithKline

Takeda3.1AntiulcerantsTAP Pharma

Pfizer/Sumitomo3.8Calcium antagonistsPfizer

Kirin-Amgen4.2AntianaemicsJohnson & Johnson

Warner-Lambert7.9AntihyperlipidaemicsPfizer

Originator‘02

$BTherapeutic

CategoryCompany

Celebrex9

Seroxat/Paxil8

Prevacid7

Norvasc5

Procrit/Eprex4

Lipitor1

Product#

Success demands it

Page 10: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Risk of Failure

Cost of Deal

Preclinical Candidates

Drugs inClinic

Marketed Drugs

An investment balance required – early & late stage partnerships

Every company strives hard to strike the correct portfolio balance between the risk of early stage and the growing cost of late stage partnerships

Page 11: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Genzyme has ongoing collaborations with all kinds of organizations

Public/Commercial•Pharmaceutical companies•Biotech companies•Startups•Venture Capital groups

•Private/Non-Profit •University Investigators•Clinical / Hospital Investigators•Government Institutes•Private Research Institutes

How do you do it?

Page 12: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Genzyme’s Unsolicited Partnering Opportunities Q1-Q3 ’04 Snapshot Total - 538 submissions

89 (16.5%) Interesting

14 - Followed up by BD or Scientist

27 - Received more information; then no interest11 - Pending with additional information

37 (6.9%) - Initiated a Confidentiality Agreement

7- Pending review of information 1 (0.2%) - Received info = SRA

3 (0.5%) - Received info = MTA

1 (0.2%) - Received info = LIC25 - Received info: no interest

A 1% hit rate . . . about average

Page 13: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Renagel example - partnership and acquisition

• Henri Termeer• Chairman, Genzyme Board of Directors • Member, Geltex Board of Directors

• Bob Carpenter • Chairman, Geltex Board of Directors • Member, Genzyme Board of Directors

• Joint venture with Geltex in 1997 before product approval • $27.5M for 50% of Renagel in US & Europe

• Geltex acquired in 2001 after Renagel launch, • $1 Billion in cash and stock

• 2005 revenues ~$400M (annualized Q2 2005)

Later stage acquisition lowers risk . . .but at a price!

Page 14: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

. . . but acquisitions have downsides too

Cost of acquiring quality late stage products candidates is high, and getting higher –

Buying someone else’s innovation . . .

to reduce internal risk . . .

with steadily increasing competition – many in same game, many with deep pockets - all looking for the same thing

Many, perhaps most, acquisitions fail to live up to expectations

Outside collaborations and acquisitions must be carefully chosen and managed. How? …

Page 15: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Reproducible ‘proof of concept’ efficacy data in relevant disease model

Preliminary animal safety data

Stable prototype formulation

Production plan for manufacturing product

Commercial plan – including access to IP, competition, etc.

Regulatory strategy

Clinical development plan

What’s important: 1) a solid, compelling story

A development checklist:

Page 16: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

• Financial – Upfront and ongoing commitment• Financial – Expected return on investment • Timing – Pipeline needs• Technical – Therapeutic area experience and expertise• Technical – Therapeutic platform• Capacity – People and facilities• Market – Call point• Strategic – Desired area of growth

Needs & abilities on both sides of the table:

Initial partnering requirements: a compelling story AND a good fit:

What’s important: 2) a fit

Page 17: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Personal

•Connection - awareness of opportunity wherever it might be•Champion(s) - person(s) who are connected & truly believe• Initiative – turning belief into action •Persistence – there are always non-believers & setbacks•Dedication – it’s always more work than you think

Organizational

•Flexibility – Partners have differing needs from relationship•Openness – Frequent face-to-face communication•Experience – Realistic expectations, well-founded decisions •Quality – Essential in all aspects of a collaborative

After the ink is dry, success requires people who will are committed andorganizations that – while recognizing and respect differences - are compatible

What’s important: 3) people & organization

Page 18: Alan E Smith Senior Vice President Chief Scientific Officer Genzyme MIT R&D Conference November 3rd 2005.

Summary

Biotech industry • Success is rare, time consuming, and very expensive• Committed to aggressive long-term growth• Seeks and commercializes innovation• An essential part of the equation is partnering & acquisition

Partnering• Must choose wisely • Need an extensive understanding of external landscape and a• Through understanding of internal needs that partnership will fill• Goal is to find a fit between the external opportunity and internal need• Dedicated people and receptive organizations make the relationship work