A majority of the recent press on AstraZeneca has tried to criticize the company over its late-phase failures with once-promising products in development. But in many ways the fates of those products were sealed years ago — long before the large-scale human trials were completed and their results tallied. Yet the choices made now and the company’s current moves to reverse its fortunes will neither face their ultimate test nor show their true worth for many years to come. So how do we judge their chances of success before then?
It would be easier if this were the first time AZ attempted an R&D turnaround. Like most of Big Pharma, however, the company had already gone through various reconstructions before its new CEO, Pascal Soriot, arrived in March 2012 — the previous one in 2010 under then R&D chief Martin Mackay and other management since departed. Many of Mackay’s moves headed in the same direction as the current push toward clearer therapeutic focus and science-driven portfolios; the strategic mantra, “winning with science” originated with Mackay’s reforms. But the new structure under Soriot further simplifies the therapeutic focus and management structure, reinforces an emphasis on tapping scientific expertise, and places major bets-to-win on science-driven models for its research units.
Today, three R&D executives report directly to the CEO, with hands-on responsibility for small-molecule and biologics discovery and clinical development. The company’s “core” therapy areas, where it focuses the weight of its internal research and business development, include respiratory, inflammation, and autoimmunity; cardiovascular and metabolic disease; and oncology. The company is also engaged in neuroscience and infectious disease research. Menelas Pangalos, executive VP of innovative medicines, is one of the three direct-to-CEO reports, responsible for small-molecule discovery and early-stage (through Phase 2) development. To feed the late-stage pipeline, Pangalos works shoulder-to-shoulder with Bahija Jallal, EVP of AZ’s biologics division, MedImmune.
CAN SCIENCE LEAD TO SUCCESS?
The Innovative Medicines organization was already responsible for generating the Phase 2 pipeline in small molecules, but its range has now expanded to include the organization running clinical development through that stage. When Pangalos arrived at the company in 2010, his group conducted an early pipeline assessment, reviewing five years of data on the selection of candidates from preclinical to Phase 2 with the goal of improving the decision making. “One of the key findings was that we had to do a much better job of understanding the basic biology of the target and the mechanism and its role in the disease that we’re trying to treat,” Pangalos says.
He offers an example. “Historically, a company might decide to go into asthma, with a single compound to capture a larger share of the total population and market — which we now believe is the wrong thing to do. Now we stratify the asthma into, for example, neutrophilic- or eosinophilic- driven disease. We are focusing our programs on the right patient population based on sound science and the population that will best respond to our medicine, for maximum efficacy and the best possible risk/benefit.”
The same assessment led the group to identify the areas where it was strongest scientifically, where its approach was innovative, and where it was ahead of the competition, according to Pangalos. Subsequent decisions to narrow AZ’s therapeutic-area focus, retaining current areas and dropping others, stemmed from those findings.
“Picking the right molecules, with the right properties for the right patient population” equals an “increased probability of success” in the disease areas where the company is most competitive — in AZ’s equation. Pangalos says strong support from the new top management has helped his group put those terms into action.
“Pascal has been pushing the new agenda forward, and it’s a continuation of the journey we’ve been on. One of the core goals of the journey is building our scientific reputation. We have been pushing our organization to focus on deeper scientific understanding of molecular mechanisms, disease pathophysiology, and disease heterogeneity, and our corporate strategy is now perfectly aligned with our scientific focus.”
BRIDGE OVER THE LARGE-SMALL MOLECULE DIVIDE
Physical relocation for the sake of co-location will occupy much of AZ’s resources for some time to come. Construction of a £330 million ($500 million) R&D center in Cambridge, England, along with other site expansions and closings, has generated most of the headlines around the company’s “turnaround.” AZ is consolidating its R&D at Cambridge and two other centers in Gaithersburg, MD, and Mölndal near Gothenburg, Sweden.
Plans alone have not satisfied the company’s critics who doubt the R&D restructuring, accompanied by thousands of layoffs and expansion in emerging markets, will rescue its pipeline and commercial portfolio. But AZ has momentum in early discovery and development and seems determined to lay the intellectual foundation for a new kind of pharma R&D built on working relationships among its constituents.
At the top level, a critical collaboration crosses the traditional line between biologics and small-molecule science. MedImmune and Pangalos’ Innovative Medicines group closely coordinate their discovery and development efforts in many areas and indications.
“Bahija and I are fully dependent on each other for being successful,” says Pangalos. “Our therapy area heads all work together; for example, our respective heads of oncology prioritize their projects together across the oncology pipeline. They also think about product combinations wherever combinations maximize the value of the portfolio. Their partnership and synergy differentiates us from some other companies where it might be more difficult for the small-molecule and biologics developers to share priorities.”
MedImmune and Pangalos’ Innovative Medicines will also be sharing facilities to a greater extent once the Cambridge center is finished. Corporate officers and the commercial team will locate in the R&D center as well, an arrangement intended to expedite decision making but keep science at the top of the agenda, according to Pangalos.
“We’ll be surrounding ourselves with scientific excellence from places like the Addenbrooke’s Hospital, the MRC Laboratory of Molecular Biology, Cancer Research UK, and the Babraham Institute. There are many top-quality research labs and a vibrant biotech sector there as well, making our whole ecosystem very attractive. Our scientists will be rubbing shoulders with some of the best scientists in Europe, an incredibly exciting proposition for scientific innovation.”
By sheer reduction of internal personnel along with associated labs and other infrastructure, weighed against a necessarily ambitious R&D agenda, AZ must obviously rely more on external collaborations for drug discovery and development, mainly with academia and biotech. “I am encouraging my scientists to work with new and different partners across sectors, to speed the translation of good science into innovative medicines,” says Pangalos.
To illustrate, he says the NIH announced funding on June 18 for a collaborative program that aims to develop new medicines, matching U.S. academic researchers with previously studied compounds. AZ and other pharma companies partnered with the NIH’s National Center for Advancing Translational Sciences (NCATS) by making dozens of their compounds available for study. “Because of our involvement, AstraZeneca’s investigational compounds are now the subject of three separate proposals that will receive funding via NCATS and allow our scientists to work together with some of the top academic research institutions in the United States.”
AstraZeneca and MedImmune have multiple iMeds (Innovative Medicines units) that conduct small-molecule and biologics discovery and early development together covering all of the therapeutic areas, with each iMed dedicated to a specific therapy area. Separate from the iMeds, an early clinical development function reports to Pangalos and is accountable for conducting the early clinical trial work on candidate drugs from the iMeds; it also provides a key link between the individual iMeds and late-stage clinical development. A small “emerging innovations” group of scientists and clinicians focus on repositioning AstraZeneca and MedImmune molecules into alternate indications, particularly those outside the core therapy areas, and open innovation opportunities around the world. The group initiated the collaborative drug repurposing efforts with NCATS and the UK-based Medical Research Council.
A NEURAL NETWORK FOR NEUROSCIENCE
Beyond AZ’s “core” therapeutic areas in R&D, where it sees the most immediate opportunities, the company has chosen to persist in other areas of “high risk” but potentially with high rewards. For CNS, perhaps the riskiest of spaces historically, the company has adopted an externally based model — closing internal programs and turning to a network of outside partners. The Neuroscience iMed will presumably deal with the risk as independent life sciences companies do — responsible to AZ as its chief “investor,” but otherwise operating entrepreneurially and autonomously.
“CNS is high risk because disease understanding is somewhat more limited, trials are particularly expensive and long, and clinical endpoints in some areas are challenging and quite subjective,” explains Pangalos. “But research in neuroscience is actually moving rapidly these days, and some high quality academic and biotech groups are working in this space. So we wanted to work in the space in a more collaborative way.”
The iMed employs 40 experienced neuroscientists with expertise in biology, chemistry, clinical, toxicology, and all other aspects of neuroscience R&D. In addition to coordinating external partnerships, the unit has access to AZ resources such as its high throughput screening, protein crystallography, and drug safety. It is charged with running research and clinical development of a portfolio using academic, biotech, and CRO networks. “What we want them to do is spend our CNS dollars on projects and innovative science, not bricks, mortar, and infrastructure.” (See also “AZ’s Neuroscience iMed — Virtual Model for a High-Risk Area.”)
EXCITEMENT & EXPECTATION FOR THE EARLY PIPELINE
Even as this article was in preparation, more headlines arrived to declare a late-phase setback, disappointing sales results, downgraded S&P rating, and more patent-loss worries for AZ. But the Innovative Medicines unit, in tune with MedImmune, sounds a more optimistic note.
“I see huge opportunities in areas like oncology, with new genetic targets and new ways of stratifying disease in lung, prostate, and breast cancer appearing almost monthly,” says Pangalos. “Doing great science and building a pipeline doesn’t happen overnight; it’s a long journey, and we’re on that road. Our pipeline is on the right path, and it will take time to manifest itself in terms of launching molecules into the marketplace and to patients. Having the patience for us to deliver on that vision is important.”
As short-term milestones, Pangalos foresees AZ moving the following early-stage development programs into Phase 3:
“Moving some of those molecules from an early development to Phase 3 development will give people confidence that the direction we’re taking is the right one,” he says with real excitement. He mentions AZ’s recent partnership deal with Moderna, developer of messenger-RNA-based therapies in Boston, and a collaboration with Karolinska Institutet in Stockholm focused on translational research in his cardiovascular metabolic group, as “indicating the direction we’re taking the company is really science, science, science. To me, as an R&D leader, it doesn’t get better than that.”
Science is not faith. Though it requires belief, it is a belief based on the scientific method and placed on investigative principles that, if followed with minimum outside bias, reliably lead to valid conclusions. But “winning with science” does demand a leap of sorts — not in faith so much as in dedication to a higher purpose. When pharma scientists envision the market, and they do, it must be in terms of how well their work ultimately serves the needs of the key players: patients, physicians, and payers. In due time, whether short or long, the world will see how well AstraZeneca navigates its scientific path to victory.
AZ’S NEUROSCIENCE iMED — VIRTUAL MODEL FOR A HIGH-RISK AREA
To gain further insights on AstraZeneca’s new Neuroscience Innovative Medicines (iMed) unit, we spoke with John Dunlop, vice president, responsible for the unit’s discovery and preclinical portfolio.
HOW IS RUNNING A VIRTUAL RESEARCH GROUP DIFFERENT FROM OPERATING A SIMILAR UNIT INSIDE THE COMPANY?
By externalizing research into a collaborative model, we don’t have access to our own neuroscience labs, though we can access other resources within AstraZeneca to help us move our portfolio. We are also free to look for the best opportunities and collaborations that we might find in the outside world. We spent a lot of time developing tools and infrastructure, including IT, that allow us to manage and oversee an external “workshop” of people on our projects.
WHEN YOU GO FROM AN INTERNAL TO AN EXTERNAL MODEL, WHAT HAPPENS TO THE LEGACY THAT YOU HAD FROM THE INTERNAL MODEL?
We built the foundation of the group on a set of projects that came from the legacy organizations in both AstraZeneca and MedImmune. We spent a lot of time with knowledge transfer, and half of our current team came from those organizations. But it was important early on to make sure that we transferred the resources and capabilities of those projects to the now large network of external CRO and academic partners. Then we could supplement the portfolio by both seeking opportunities on the outside as well as thinking about starting additional programs.
WHAT IS AN EXAMPLE OF NEW AREAS THAT THE EXTERNAL APPROACH HAS OPENED UP FOR YOU TO THIS POINT?
We took an asset that was sitting in our portfolio and pursued historically for Alzheimer’s disease and found a new indication for it. We looked at the whole totality of the data and found the compound was strongly implicated as a potential target for the treatment of complications of dopamine treatment in Parkinson’s disease. So following where the science took us, we moved into an area that traditionally has not been an area of focus for AstraZeneca. Also, as an example of collaboration with the patient community, we are researching this compound in Parkinson’s disease via a grant from the Michael J. Fox Foundation.
HOW DOES BEING AN EXTERNAL GROUP AFFECT YOUR WORKING RELATIONSHIP WITH CORPORATE MANAGEMENT?
We have been given quite a significant amount of autonomy, especially in the early-stage portfolio. We have an allocated budget for our group, and we make decisions without too much need to check in with the larger organization on how we allocate those resources. We tend to have a much closer alignment with the larger organization as molecules advance closer to our clinical development, especially in oversight for patient safety. We must also think about how our programs will fit strategically with AstraZeneca.