Lean Drug Development Model based on Operational Efficiency & Shared Risk
Madhav Reddy, founder of Maya Clinicals, a Northern California based CRO, talked about a novel risk sharing, open model of drug development at http://www.bio2devicegroup.org . This new, lean drug development model sidesteps the traditional development paths and avoids committing large blocks of capital before human efficacy is proven.
No one can deny that the drug development process needs an overhaul. It takes 9 therapeutics in phase 1 to get 1 to market and number of novel drugs coming out has been flat, though expenses keep climbing up. Perhaps the big pharma overspends or relied too heavily in the past, on block busters or FDA needs to change the risk tolerance profile; but something needs to be done, whilst keeping in mind that drug development ultimately depends on basic science, said Reddy. Different models for more efficient drug development, are explored that include, university collaborations, orphan indications, strategic relationships, biomarkers, soft ware modeling, genomics, high throughput screening and so on.
What we need is breakthrough in basic science or a new operating model and an ability to get toxicity and efficacy data to push R&D productivity, at lower cost. There is no shortage of IP and big Pharma also excels at commercializing. But the so called valley of death that sucks up resources, is right in between the IP and commercialization, said Reddy. Before spending large blocks of cash, people want to see proof of efficiency and safety. Smaller companies often do not have adequate resources to execute these studies fully. Also, their resources get divided among their core focus and other tangential concerns like fundraising, team assembly and so on. While the big pharma has the resources, a problem is that a project with gravity sucks in the resources and many early stage compounds are dropped before they are fully investigated, in the early stage.
Reddy said, his new model for quick turn drug development addresses both the lack of parallelism at big pharmaceutical companies and the resource limitations of start-up companies. Maya Clinicals is a CRO, deeply focused on clinical trials and related logistics and is based on an operational platform with all the crucial pieces required for success. They are asking biotech companies to focus on their core strength, their compound and Maya would push it through, with efficient use of infrastructure, shorter startup and execution, efficiency in distributed setup, and geographic savings. Besides doing this in a fee for service model, Maya is also willing to share the risk and participate in the upside. Utilizing Maya’s operational efficiency, and equity sharing model a development program can be brought down to 1/10 of the traditional cost. Compared to the traditional model however, the owners of the compound will have to give up a large portion of the equity in return for the increased speed and lower development cost.
With this new model, Maya Clinicals is counting on boosting its pipeline, run parallel programs in identical indications, and overcoming the limitations of startup model, and get the upside from equity sharing based on its operational efficiency. Maya is not counting on its ability to pick compounds at this stage. Instead, Maya is picking proven entrepreneurs and then relying on mathematical probabilities of success. Maya does not have a preference but indicated that that re-purposed compounds, and those targeting infectious diseases will be quickest. Maya is clear however, that its core ability is not in choosing a compound but in pushing it through and getting a faster idea of its probability of success, based on basic science. The talk was followed by Q&A.