by Patti Seymour
For life sciences organizations, the escalation of the coronavirus (COVID-19) pandemic is already starting to have direct impact on operations in the form of access challenges and broader supply chain disruptions—negatively effecting patient care.
China ranks second among countries that export drugs and biologics to the United States and first for medical devices, according to FDA data. Nearly nine in 10 of the medicines in the U.S. strategic national stockpile use at least one component that’s sourced from China. The halt in China’s manufacturing operations is negatively impacting the supply of life-saving drugs, medical devices and products, and prolonged supply chain disruption will only do further damage.
Overcoming these operational challenges to secure patient care and proper treatment is priority #1. However, to do that, organizations must develop an enterprise risk plan to ensure they can maintain operations and provide quality products to healthcare providers.
Refocusing R&D strategies towards diagnostics and considering industry partnerships should be key considerations when developing such plans.
Seventy-eight percent of life sciences organizations plan to increase R&D spending in 2020, according to BDO’s Sustaining Life Sciences, a survey of 100 CFOs at middle-market life sciences companies. More than a third (43%), meanwhile, anticipate a recession in 2020 or 2021—a percentage that has likely increased since the survey was conducted in the Fall of 2019, following the immediate economic impact of coronavirus.
Amid high recessionary fears and ongoing public pressure to lower costs, life sciences companies must forge ahead in R&D in a more focused way. Before the coronavirus outbreak spread to the United States, more than half (60%) of life sciences companies cited three to four promising products in their portfolio for commercialization. Among smaller companies, nearly seven in 10 cited the same, signaling emerging opportunities for investors.
However, given the current focus to develop treatments for COVID-19, some organizations may need to press pause on products currently in the pipeline. Nearly half (46%) of life sciences CFOs say their organization has done this in the past year, by ending a research project because of concerns around future ROI. In today’s environment, examining portfolios and identifying which ones to prioritize—and which ones to hold on—will be even more critical.
For products being prioritized, guiding them to commercialization will require even more precise, proactive planning. To maximize value from R&D, organizations must focus more on:
- Developing an accurate commercialization roadmap, including shoring up supply chains and reassessing their business continuity plans given the coronavirus outbreak
- Determining the best pricing, contracting and reimbursement strategy, as well as government-specific pricing strategies
Focusing on Diagnostics
The diagnostics sub-sector began seeing a boom in 2017, when clinical diagnostic companies began developing products based on the more accurate next generation sequencing (NGS) technology. NGS allows diagnostics tools to interpret much larger amounts of biological data at quicker rates, which lead to more accurate—and efficient—results.
Now, life sciences organizations are rightfully paying more attention to diagnostics: 49% of CFOs say they’re investing significantly in the area this year. That number could increase, though, as more life sciences organizations refocus R&D efforts to address the urgent need to more safely—and accurately—diagnose coronavirus to allow for better containment.
The lessons learned from how the industry responds to this need could lead the way for robust innovations in at-home testing and diagnostic kits or wearable technologies that can track regular movement patterns to determine people’s risk for contracting the disease.
Biofourmis, for example, is one startup that’s using a biosensor to gather biological information from patients and AI-based analytics to identify changes in health, including those that could be related to the coronavirus. Clinicians can then remotely keep up with their patients and intervene when needed.
Collaborative Industry Partnerships
In early March, the White House gathered industry leaders to emphasize how important it is that they work together to discover and develop a vaccine or therapeutic to treat coronavirus. “A challenge like coronavirus requires every organization to bring forward its resources and expertise to manage health risks that evolve daily,” Pfizer Chief Scientific Officer Mikael Dolsten wrote in Forbes.
Pursuing partnerships with external organizations—whether under a joint venture model or otherwise—to safely share certain proprietary resources with each other for the good of developing a treatment sooner could be critical.
GSK, for example, has offered to share its vaccine-boosting platform with Chinese biotech Clover Biopharmaceuticals, as the latter company works to develop a product that could stop infection from coronavirus. Under the partnership, GSK will provide Clover with proprietary compounds that can boost vaccine effectiveness.
To limit consumer and economic impact, it’s more important than ever that life sciences organizations continue to break down silos within their own organization—and beyond it—to support more efficient innovation across the health ecosystem.
Patti Seymour, MBA, CSCP, is a managing director in BDO’s BioProcess Technology Group. She can be reached at email@example.com.