By Rob Wright, Chief Editor, Life Science Leader magazine
Driving down Route 422 a few miles away from Pfizer’s Specialty Care Business Unit headquarters in the eastern Pennsylvania town of Collegeville, you might notice the remnants of a dilapidated farm. Past the rotted out, collapsing walls of the barn, you can still see the faded white top of a silo that once was used to store and isolate one type of grain from another. The image serves as a grim reminder for Pfizer employees Andrew Callos and Kevin Lee that in order to avoid a similar fate, their two business units, commercial operations and rare disease R&D, cannot operate in “silos” but must collaborate.
If you have worked in or studied business, you have probably observed, or perhaps experienced firsthand, the “silo syndrome,” whereby divisions within a company work in a vacuum with little or no communication between them. The end result is often a colossal failure, and you find yourself asking, “Who thought this was a good idea?” At Pfizer, about three years ago, it was recognized that there needed to be an active collaboration between commercial operations and the rare disease R&D unit. This was especially evident since the company was fresh off its $68 billion acquisition of Wyeth in 2009 and a subsequent acquisition of FoldRx, a little-known privately held Cambridge, MA-based biotech focused on developing treatments for conditions caused by the improper folding of proteins. But in order to leverage the collective strengths of the combined organizations toward rare disease drug discovery, the company needed to appropriately balance the desire for scientific innovation with the practicality of business. “Most importantly, we want to innovate where there’s a high unmet need, while making sure we generate a reasonable return,” says Callos, VP of commercial development in Pfizer’s Specialty Care Business Unit. “It’s got to be both.” Kevin Lee, Ph.D., VP and CSO for Pfizer’s Rare Disease Research Unit, agrees with Callos on the need for balance between scientific intrigue and commercial practicality. “There’s a healthy tension that exists between the scientific desire of the researchers to take on new programs and the commercial team providing a reality check,” states Lee. “It’s a great dynamic that we should strive to maintain.” Callos and Lee explain how the internal collaboration between their two teams serves as the foundation for developing a sustainable business in rare disease research.
The Rare Disease Opportunity
The FDA Office of Orphan Products Development (OOPD) is charged with encouraging companies such as Pfizer to develop orphan drugs for the treatment of rare diseases. Encouragement by OOPD takes the forms of simplification of marketing authorization procedures, tax credits and research aids, and seven years of market exclusivity after FDA approval of a drug. Incentives aside, Callos and Lee affirm that pursuing drugs for rare diseases has to start with the patients and the science, not the incentives.
In 2010, Callos observed the number of rare disease drug approvals was approaching 40% of all U.S. drug approvals. According to Lee, the science was evolving, resulting in a de-risking of rare disease research, making it more tractable. Further, of the 7,000 rare diseases, only about 5% presently have approved therapies. There seemed to be a growing opportunity for success in the rare disease space. Through many of its legacy companies, Pfizer already had a long-standing presence in rare diseases, including approved treatments for hemophilia and rare endocrine diseases. “If we continued the way we were going, perhaps we would have created new therapies for rare disease,” Callos matter-of-factly states. “However, there was recognition that rare diseases are a different business model, requiring a different approach in terms of the way we think about investing in R&D, conducting clinical trials, engaging patients, and bringing products to market.” Callos needed to bring these rare disease differences to the forefront to improve the ability to compete for internal resources and investment in both the commercial and research sides. Given the size and scale of Pfizer, he thought a greater strategic and more specific rare disease focus, as opposed to lumping rare diseases in with specialty care, would provide the opportunity to make a much larger impact for patients and Pfizer.
Orphan diseases are defined as affecting fewer than 200,000 people in the U.S. Because the populations can be relatively small, there is a risk that companies investing in developing cures and treatments for rare diseases may not see a reasonable return, possibly even lose money. “We can’t just generate therapies for patients without getting a return, because we won’t be a company of the future, to generate more medicine,” Callos explains. There needs to be a balance between scientific intrigue to finding cures and commercial practicality of providing a reasonable return.
Achieving Balance Between Science And Business
When you are dealing with 7,000 possible rare diseases, you can’t build infrastructure for every single malady. You need focus. “We needed to focus on the areas where we have capability and knowledge and ideally, existing assets,” says Lee. Callos described the team applying an analytical filtering process, viewing the opportunities through a series of “lenses” — scientific tractability, risk assessment, unmet need, and commercial viability. The first filtering pass removed oncology, given that a separate unit within Pfizer focuses on this area. This initial filter cut the number of potential rare disease targets to around 3,500, still a pretty large number. To narrow it further, they began the iterative filtering process anew, beginning with science and risk. This was accomplished through the creation of a cross-functional team, which included research unit, medical, regulatory, portfolio analysis, and commercial colleagues. “We had a lot of discussions with internal, and sometimes external, experts in both clinical practice and academia,” he explains. “We really looked at which diseases are well-categorized.” This was done by asking a number of questions to determine the diseases of interest, such as, “Do we really understand the pathogenesis of the disease?” “Is there a good understanding of the natural history of the disease?” “Are the diseases being studied?” “Are the regulatory pathways somewhat established?” “If not, could a regulatory pathway with defined endpoints be established, given the understanding of the disease?” “Are there ‘drugable’ targets available from mechanisms that have been described?” Through this drilling-down process, the team created a database of potential target diseases. “We tried to look at each one to determine the tractability from a research and risk point of view,” Callos explains. “We also focused on diseases that were monogenetic.” Through their collaborative analysis, the list was narrowed to around 40, though Callos and Lee note that Pfizer continues to evaluate every opportunity, as the science can change quickly.
Once the team had a thorough understanding of the risk and scientific tractability of the approximately 40 potential targets, they began to look at the unmet medical need of each disease. The group wanted to be sure the target diseases were very debilitating, with high morbidity and/or mortality rates. In addition, the team looked at diseases that affected children. “We really wanted to make sure that we were focused on where we could have the potential to significantly improve patients’ lives and outcomes,” Callos affirms.
The last filter the team applied was the viability from a commercial point of view. “What kind of investment do we need to make in each one of these disease areas?” he pondered. “What is a reasonable return, and will the investment we make cause us to compete for internal resources or could we partner externally?” The end goal, according to Lee and Callos, is to generate a meaningful return that would continue the investment, resulting in a robust disease area within Pfizer that is fully functional, growing over time, generating a meaningful difference to society, as well as a meaningful difference to shareholders.
Due to confidentiality constraints, Callos and Lee were unable to share what Pfizer considers to be a “reasonable return.” However, Callos says, “One way to look at it is to ask, ‘Are we getting appropriate return on our investment relative to other investment options within Pfizer outside of rare diseases?’” According to Lee and Callos, the fact that the rare disease units, respectively, continue to sign external collaborations and launch new rare disease products while progressing a number of programs in development demonstrates the commercial/rare disease R&D collaboration as being a success. They point to the fact that the rare disease pipeline now includes a number of investigational compounds in development for ailments such as Duchenne’s Muscular Dystrophy, Pulmonary Sarcoidosis, and vaso-occlusive events in patients with sickle cell anemia. “We have developed a partnership with a company called GlycoMimetics, for an exclusive worldwide licensing agreement for a drug candidate, GMI-1070, currently in research for patients experiencing vasoocclusive crisis associated with sickle cell disease,” relays Callos. GMI- 1070 just completed enrollment for Phase 2 and has received Orphan Drug and Fast Track status from the FDA. Callos also notes the EU approval of Vyndaqel (tafamidis) for the treatment of transthyretin familial amyloid polyneuropathy (TTR-FAP) in adult patients with Stage 1 symptomatic polyneuropathy, a rare neurodegenerative disease that is estimated to affect 8,000 people globally. Unfortunately, Pfizer received a Complete Response Letter from the FDA on its NDA (new drug application) for tafamidis this past June. Pfizer is currently in dialogue with the FDA to discuss a potential path forward for tafamidis in the U.S. Despite this setback, the units continue to press forward. For example, Pfizer signed an agreement last year to expand on its relationship with Cystic Fibrosis Foundation Therapeutics, Inc., whereby the foundation will invest up to approximately $58 million into cystic fibrosis research at Pfizer. Additionally, “We have progressed assets in Phase 1 research for Factor VIIa and Duchenne Muscular Dystrophy,” Callos adds, further noting the license agreement brokered with Repligen for research in spinal muscular atrophy. “I think you can see from our internal investment that we have multiple investigational compounds now in the clinic.” By taking a focused approach to rare disease drug discovery — balancing the scientific curiosity for wanting to find cures, with the commercial practicality of generating a reasonable return — Pfizer has created the foundation for a sustainable business model for rare disease research.
Don’t Underestimate The Importance of Collaborations Being Seamless
“I think from a scientific perspective it is hard at times, but yet so crucial to the success of a drug discovery program, to keep in mind that if you want to make medicines, you have to have good alignment with the medical and commercial groups,” surmises Kevin Lee, Ph.D., VP and chief scientific officer for Pfizer’s Rare Disease Research Unit. Lee’s advice to avoid having to learn lessons the hard way is to start projects by asking the tough questions at the beginning, rather than halfway through, or worse yet, at the end.
That being said, Andrew Callos, VP of commercial development in Pfizer’s Specialty Care Business Unit, admits that even with trying to proactively address the tough questions up front, some lessons remained to be learned the hard way. “The organization between the research and commercial units needs to be seamless,” he testifies. “We need to be operating and thinking as one, not two distinct units. I think we probably underestimated the importance of that in the beginning,” confides Callos. “We’ve done a lot in the last year and a half, two years, to make the communication more seamless between rare disease R&D and the commercial organization, to make us operate more as one group. We went back to basics like high frequency face-to-face interactions despite our different locations. In addition, we align early on potential collaborations and internal programs vetting the science, the unmet need, the chance of success, and commercial viability, and we go forward with recommendations as a single unit.” As a result, the two organizations are now functioning as one. “Like a company within a company,” he analogizes. According to Callos, every large company, including Pfizer, has a way in which it assesses and thinks about decisions, investments, and how to approach problems and opportunities. “Pfizer has a very robust, well-thought out approach,” he states. “But I don’t know that we really thought through that decision process, relative to rare disease investment, where clinical trials can generally cost less than trials in other areas, but where the disease and regulatory endpoints are perhaps not as well-understood.” Callos and Lee admit they may have stumbled a bit in the beginning in their approach to decision making, understanding investment decisions, and gaining seamless alignment of the units. However, by having open dialogue and transparent communication, these areas have been rectified.
Steps To Preventing Silo Syndrome
The purpose of agricultural silos was to keep one type of grain isolated from another. The same approach in business, having departments operate in isolation from one another, can be detrimental to successful innovation. Commonly referred to as “Silo syndrome,” it can hamper any type or size of organization from achieving its true potential. Here are a few simple steps to encourage cross-departmental cooperation.
Step 1 - Change your style of management, taking more of a consultant approach.
Step 2 – Update your company’s core values, focusing on collaboration, communication, innovation, and teamwork. Communicate these, and then live by them.
Step 3 - Create cross-functional teams based on shared company goals, being sure to provide them with proper leadership.
Step 4 - Change performance metrics so that they are aligned, and reward collaboration/ innovation.
Step 5 - Focus on the customer, placing them above all else, and share relevant information throughout the entire organization. Having an external focus tends to diminish the development of internal silos.