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Almost every other pharma RD conferences these days would invite a keynote speaker who would use statistic data to show that the productivity and efficiency of pharma R&D declines while cost increases.

People claiming that the pharma RD productivity are on the decline often calculate the productivityas the Outcome (# of new drugs)/Investment (R&D cost). Although, that seems an ultimate way to estimate the pharma RD productivity, it does not consider the fact that many drug targets under research today are novel as the results from the newly revealed human genome.  These targets hold the key to future drugs but may not give the quick return as analysts expected.  Just to make the situation even worse, study on these new targets often requires newer but more expensive technology with higher sensitivities. However, the question is: does that mean our productivity and efficiency are on the decline?

Many researchers would disagree with the conclusion, simply because they have witnessed the great increase of productivity and efficiency in the lab research from last 10-20 years. Works used to be completed in weeks, now can be done in days or hours. Large scale work, such as chemical library screening, that was not imaginable many years ago now can be carried out in a lab with just a few robots and readers. Our information and knowledge of human diseases are much richer and deeper. All these speak for an industry-wide increase of productivity and efficiency.  Although there is no statistic data, it is clear that the number of “products” as mesured by the number of compounds synthesized, number of assay datas, etc are continousely on the rise and the cost of generating these materials and information are on the decline. In another word, many scientists see the opposit picture thar the pharma R&D productivity and efficiency are indeed going up.

So, which would be the better way to estimate pharma R&D productivity and efficiency? In my 0pinion, the latter is a bette formula since it ties the investment with outcome that, if does not produce immediate drugs, will product future potential drugs. With my many years industrial experience, I don’t see much varition from lab to lab in terms of productivity and efficiency as technologies and information are spreading fast in the industry. However, there are huge differences in productivity and efficiency from company to company simply due to different infrastructures and managment styles. Companies with unnecessary management  layers and fragmented departments clearly suffer greatly in their productivity and efficiency.

For people who are interested to know how your company’s productivity and efficiency is doing, I’d like to offer a simple and empirical method that I would name  the “Bench Index” (BI) with a value between 0-1. BI calculates the fraction of FTE (from CEO to research assistant) time spends on bench work where the “products”, chemicals and assay data, are eventually produced. Based on this index, companies with more “Chiefs” than “Indians” will have lower BI (i.e. lower productivity).  Companies spend more time on “integration” and “communications (i.e. meetings)” will have lower BI (i.e. lower efficiency). On the other hand, based on this theory, higher cost is not a factor of concern if it also produces more “products” and will eventually leads to new drugs.

If you are interested, give it a try on your department or your company, it your company’s BI is between 0.3-0.5, you are probably doing fine regardless what others think.

Don’t ask me where I got the magic number.

The latest issue of <<Nature Drug Discovery>> (issue 8, 2009) published an Editorial by John Dixon et al., with a rather provocative subject. In contrast to the trends of large M&A’s among big Pharmas in a rush to become world’s largested integrated company that we have seen since eary this year, the authors virtually announced that such business model has failed. Instead, they suggested the pharmaceutical industry should go the opporsit diretion to become disintegrated “vertically” to increase efficiciency and productivity. According to the proposal, the pharma industry should be disintegrated into largely three pieces: discovery, development and marketing. Companies should be “specialized” on one but not all stages of drug R&D and look for partners or buyers to complete the process. There are a couple of fundamental reasons to support this model. First, VC market would more likely be able to support a company of smaller size with clear focus. Secondly, product from a company, either a drug candidate or a new technology, would have more chance to find its matching partner or buyer in an open market, than “asvocateing” internally for various reasons.  “Desintegration” is not a new idea, people questioning the productivity of large pharmas have been advocating for such model for some time. Some large pharms, such as GSK, are also expreiementing such idea by creating an “internally” disintegrated structure to promote more innovation. Whether a disintegrated pharma industry will be more productive remains to be proved. Meanwhile, thousands of new “start-up”s are doing exactly the same as the authors proposed: being specialized on one area and taking products to the market by collaboration or transactions. That has in fact created a “vetically disintegrated” industry alone with the integrated large pharms. Before closing this blog, it will be of interest to point out that, in a “vertically disintegrated” world, one will see more integration of drug discovery and service which is not seen in integrated companies. Smaller companies would maximize their “experties” by developing its own products while providing service to other non-competitive companies. Alone with that, there will be increasing need for CRO services.

Anti-aging research has on the raising recently. However, comparing with researches on other disease areas, such as cancer or cardiovascular diseases, researching on aging is less clearly defined and suffers from lacking defined molecular targets and mechanisms.  To start with, there is no clear definition for aging as a disease.

Is aging a disease? If the answer is yes, why everyone gets it? If the answer if not, why do we need to research and treat it?

Aging is definitly a naturely occuring process. Such process could have started when we are born and becomes dominated when we get old.  Is it enough to define aging a natural process than a disease? Not that soon.  Since we don’t know what a “natural aging process” is, we can not decide if the aging process that occured inside eveuryone’s body is “natural”.  The only way to determine if an aging process is natural is by comparising historical record. The human life expectancy has signifcantly increased in the last centry, from aroung 50 to 70. That means, if one lived upto 50 years old and died “naturally” 100 years ago, his aging process would be considered “natural” then. However, if he lives today, we would consider his death is “premature” and his aging process would be “un-natural”.  Since we do not know what is the maximum life expectancy of human being, if there is one, it would be safe to assume that everyone is living with an “accelerated” aging process. By that assumption, the “accelerated” aging process we are experiencing is not natural and is a disease. Such “accelerated” aging process should and could be treated.

That is not the end of the discussion yet. Very small percentation of people actually died naturally (that means no obvious disease found). Most of us will likely die from one or another disease. Therefore, there is a reason to assume that “aging process” is not a disease by itself  but a “condition” for diseases to occure.  If so, treatment for aging would be different from treating a well defined disease such as infection or cancer.

So, putting all the thoughts together, we might be able to give anti-aging research the following definition:

“Anti-aging research and treatment is to prevent and reverse accelerated aging process and to improve the health conditions against other diseases.”

Does that make any sense to you?

The flagship pharmaceutical CRO in China, Wuxi Pharmatechs, recently was selected by <Fast Company> as the #8 most innovative company in the world. It was ranked alone with companies such as Google and Apple, as well as the Obama Team. 

<Fast Company> did not give clear reasons why a CRO compnay was nominated for innovation. But it does mention at the end that Wuxi Pharm would become a serious competitor to its curently customers such as Pfizer. If that turned to be true, it would mean a fundamental transformation of business model for Wuxi Pharmatechs from a CRO to a pharmaceutical company.

Starting from only a short 8 years ago, Wuxi Pharm is now the largest and most reputable CRO in China and possibly the largest in Asian. I had personally have the opportunity to know the funder soon after the company was formed. In one occasion, he asked me if I think Wuxi Pharmatech would be ever successful. My answer to him was that SOMEONE would make it a successful business, because the whole world needs the service and China is the right place for such business.  It did not take long for Dr Ge Li proved to us that he was THE One. 

It will not surprise me if Wuxi Pharmatech one day makes such transformation. I have all my confidence in the vision and management skil of the funder himself and the team. If such time comes and condition matures, they will not be reluctant to take the step. Afterall, Wuxi Pharmtech is indeed an innovative one!

The latest research by French scientists on why our hiar growing gray as we getting older revealed that hydrogen peroxide may play a key role in the process. If that is the case, the graying process would be more like a “natural bleaching”. 

If one is looking for supporting evidence, he or she does not need to go too far. A Chinese herb named ”He Shou Wu” (polygonum multiflorum), literally meaning “black head” in Chinese, has long been used to prevent premature gray hair.  Laboratory studies by Chinese and Japanese scientists suggest that polygomum multiflorum could increase syntheiss of antioxidant Anthraquinone in cultured hair folics. Anthraquinone is a strong redox  agent. The fact that A derivative of anthraquinone (2-ethylanthraquinone) is used to produce hydrogen peroxide commercially suggests that it could be involved in life cycle of hydrogen peroxide synthesis and eleimation. If that is confirmed, we may find another link of traditional Chinese medicine with modern medicine.

Last week, two news hit the “cloning” world and both involved Chinese cloning scientists.

Last Friday, Dr Jerry Yang of UConn died after 10 years’ fighting against cancer. Jerry was credited for cloning the first live animal in US, the caw “Amy”.  His death was very unfortunated since his next goal was to clone human cells for medical treatment.

Just a few days before Jerry’s death, another breakthrough news hit the world. A Chinese professor Dr Li announced that his team had successfully cloned first set of human embryronic cells. Aming the 5 successful clones, 4 from adult skin cells and one from lymph cells of a patient suffering from Parkinson’s disease. Is this exactly what Jerry was dreaming of? 

Hum…may be it is still too early to say.

Immediately after the news broke out, comments rushed into internt. Many of them questioned the validity of the report. Some internet-searching went even further to question the education background of Dr Li. The atmosphere  reminds us a similar situation when the Korean scientist claimed successful cloning of wolf a few years ago 

So the question is: Is it a cloning of a human cell or a human “Fraud”?

No matter how evil the company management may be seen by emplyees that are laied off, the fact is company does not like layoffs either, let alone at such a significant level. Layoff is a painful process for both the emplyees and the company.

Although many think that the current wave of layoff is unfortunated, the question is will the business go through the similar cycles of “hire and layoff” again in the future? The answers probably not.

The solution forthe company to smooth the fratuation of emplyeement between business cycles is to outsource most of “technical” and “processing” work while keeping a relatively stable “core” team.

If that trend grows, we will see a significant “outsourcing” sction in every industry including high tech and biotech industry. People who work as the “core” team member of a company will be less affected by the business fractuation, while those work in the “outsourcing” section will be able to have a relatively stable job by serving broader clients population.

Would that be a win-win stuation?

These days with deepening recession, one likely wakes up with a news that so-and-so is plan to lay off hundrds to thousands employees.  Lay-off seems the first choice that company would think of when the business faces hardship.

It is partly true that when business goes down, the management could immediately see that many positions are no longer required and people at those positions would be better to let go.  That will bring the cost down to match the income. In another word, to make the balance sheet even.

But is that the best way to weather the hardship? Fortune just reported on 9 companies that have never had layoff –in  good or bad time (http://money.cnn.com/galleries/2009/fortune/0901/gallery.no_layoffs.fortune/index.html).

These companies do things differently, but there is a common feature of their management: they do treasure their workforce. Even if is not for the sake of employees, one CEO was cited to say that layoffs is “counterproductive,” since they “erode morale, create fear and reduce productivity.” What the CEO did not mention there was that rebuilding an experienced workforce when business takes off is not easy either.

The difference between these CEO’s and others? These CEO’s see the companies as long-term businesses, the others see business as a monthly balance sheet.

I recently attended an interesting panel discussion. Among the questions that were raised, one really caught the attention of the audience. That was around a new bold change of a large mult-international pharm. The panelist at the focus has been recently recruited by a large Pharma from a small biotech company to lead a new business unit. Different from traditional business unit or therapeutic area run by a large pharma, the new business unit is set more like a small biotech company. Not only the key managers are recruited from small biotech companies, they are also given a fix-term contract to come up with a new drug. They are given sufficient funding and almost unlimited power to mobile all the resources they have in order to develop a new drug!.Large pharma companies are increasingly unhappy about progress in their pipelines.  The CEO of Pfizer recently acknowledged that to public. As a result, Pfizer laid off hundreds of its research scientists. Similar actions can be seen in other big pharmas. Traditionally, when there is a short of pipeline, big pharmas would go for shopping and take the new lead in-house for further development. Lately, they seem to prefer cutting off their own RD unit and to swallow a small company with their pipelines. The difference between the two approaches is a “spirit” issue. They feel that people working at a small biotech company are more “motivated”, and more ”adventurous” and are eager to achieve, whereas such a “high spirit” got lost in large pharma when all the best working conditions, pay benefits and job security are provided. Therefore, it woul help to increase performance by bringing such spirit back to large pharmas. Having worked in small start-up, med-sized biotech and now in a large pharma myself, I can see why such an idea would be so attractive to the management team of large pharmas.

While almost everyone on the panel would like to see such approach succeed, they do point out a few issues that may work against it.  The higher productivity of a small start-up is usually achieved under unique circumstances. The owner and funding scientists are often passionate about their idea and are willing to sacrifice themselves to achieve their dream. At the same time, shot of fund is a constant treats hunting them down 24/7.  All these force the starters to work much harder, much more creative with much less. If there is such a thing of “start-up spirit”, it certainly demonstrated under those conditions.

What if those conditions/restrictions are all or mostly lifted? Can our entrepreneurs still keep such “spirit” when “money is not an issue” ? In another word, would the new model “spirit + money” work better or big pharma?

I am sure all the panelists including those in the game are eager to see the results.

 

 

 

The Chinese New Year is almost here now. Chinese allover the world are celebrating it just as it was started thousands years ago.

The coming year, according to the Chinese zoology, is the year of “OX”.  Besides the animal sign of “OX”, many people probably don’t know the year is also “numbered”, based on ancient Chinese numeric system, as “Ji-Cou“.  Year of “Ji-Cou” is the 27th year in a 60-year cycle and is the third of the five “OX”  years in each cycle. In another word, everyone will have five times, only five times, to meet the year that bares the same animal symbol and number as the year he was born when he reaches his 60 years old.  I guess the number 60 per cycle was not chosen casually. For thousands of years, 60 year would cover the longest life-expectancy of individuals. However, with rapid advance in modern medicine and improved living conditions, 60 is no longer the end of one’s life but could well be the beginning of another cycle of 60 years!

The Chinese character for year of “OX” (not the character for OX itself) “Cou” means “ugly”. People often wonder by we use that for oxen, considering how much we had loved them and admired their personality for thousands of years. In fact, that is simply a case of ”lost in translation” between ancient and modern Chinese. The character that means “ugly” today is the second in the set of 12 characters that were probably first used to name the 12 month in a year and 12 hours in a day. In that context, it actually means the “warm air has not falling onto earth yet” and is a good sign for “beginning of recovery from the cold”.  Oxen got this Character is probably purely by accidence since it happens to be the second animal in the set of 12 animals.   

When the 12 animal system was introduced to the English world,  the animal was translated to “OX” (or oxen). That has been the “standard” translation for a long time. However, this year, someone has proposed to change it to “Bull”.  Is it simply an dispute in translation? Certainly not.

Oxen are cattle trained as working animals and are unfortunately often castrated males. They are trained for plowing, transporting and other tough jobs.  Because of that, oxen are often given the characters as hard working, obedient, enduring and giving.  Chinese for many years have been very proud of ourselves partly because we also have the “spirit of Ox”. Such spirit had help generations of Chinese, domestic or oversea, to go through many tough times and had kept them productive and to some extent helped them to become rich and powerful.

But that does not seem enough for the new generations of Chinese any more. They start to set their eyes on another type of cattle with almost the opposite characteristics: the Bull!

Bulls are also adult cattle (also used for other large animals) but they are often trained to fight! It may have certain characteristics as oxen, such as strength, power, endurance, but they are not likely obedience or inceptive. On the contrary, they are aggressive. They will not take any challenge lightly and will charge an offence to the challenger when there is a chance. Therefore, it is not surprising that ”Bull” becomes the name of an economy at expansion or a stock market on the raise.

Do we need more explanation for why people perfer “Bull” than “Ox” for the coming year of 2009?