Unity In More Than Name

By Wayne Koberstein, Executive Editor, Life Science Leader
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In the beginning, there was Paul Janssen — a veritable god of pharmaceutical innovation in his time and founder of the company that bears his name. In the present, the eponymous company has evolved into the family of Johnson & Johnson (J&J) businesses called Janssen Pharmaceutical Companies, including the newly named Janssen Biotech (JB) and a global R&D organization responsible for all Janssen discovery and development.

Janssen Biotech brings the combined heritage of J&J’s biotech businesses into the Janssen family fold, capping the past half-decade of reorganization and change. To examine the company’s recent history and transformation — as well as how it interacts with the global R&D group — I spoke with JB’s President Rob Bazemore and Sue Dillon, global therapeutic area head, immunology, Janssen Research & Development. We discussed the pathway that led to JB’s new identity and structure, the advantages and challenges it inherited from its predecessors, and its unfolding contribution to the kind of innovation the company’s namesake championed.

FROM MANY TO ONE
On the surface, the shift to Janssen Biotech may appear as little more than a logo change — from Centocor, its predecessor as leader of the J&J biotech pack, to the new name. But the larger significance of bestowing the Janssen name upon its biotech division seems unavoidable, as do the related organizational changes, largely beyond public view. (See “What’s in a Name?”)
Only six years ago, Centocor was center stage. J&J had always been a relatively opaque organization, with the operations, results, and even the management of individual units hidden behind the corporate face. But in 2005, to spotlight its biotech side, J&J decided to make the Centocor brand more visible and transparent to investors and the public. At the same time, it separated the commercial entity of Centocor, R&D, and manufacturing into three business units to serve what were then multiple biotech companies within the corporation.

Centocor absorbed Ortho Biotech in 2008, however, combining their respective areas of immunology and oncology. In June 2011, formally joining the Janssen pharma group, Centocor and the other J&J biotechs such as Scios, Alza, and Tibotec came together under the new Janssen entity.

“The recent major changes in our company are largely related to our structure and what we look like, and less about our vision and our mission,” says Bazemore. “J&J has always been a company that operates with small independent operating companies; that internal structure works well for us, and it hasn’t changed. But, what has changed is our face to the customer,” Bazemore explains.

Having so many commercial entities, from pharmaceuticals to devices to consumer products, complicates relationships with payers, managed care plans, and other customers, he says. “So we decided to unify our presence to our customers worldwide into one pharmaceutical business called Janssen.” The Janssen group now contains Janssen Biotech, Janssen Therapeutics, and Janssen Pharmaceuticals with its separate CNS (central nervous system) and internal medicine business units.

Within the commercial entity now called Janssen Biotech, Bazemore runs a board that includes all of the “cross-functional partners” who head areas such as manufacturing and supply chain. Dillon also sits on the board. Further, she has an R&D board to run the immunology R&D organization, and that board includes one of Bazemore’s commercial vice presidents.

“With the dual-board structure, we can ensure good commercial input into clinical trial design, selection of products for development, and so on,” Bazemore says. “But we also make sure we are staying close to what’s happening within the R&D organization as we make commercial decisions, and that affects how we think about our longer-term commercial strategy in a therapeutic area like immunology.”

Bazemore also sits with other Janssen-company presidents on a North America leadership team, where “we talk a lot more about how best to optimize the value of a compound that might apply across businesses.” He cites JB’s star immunology product Remicade (infliximab). “Because the internal medicine business calls on gastroenterologists and other specialists who use Remicade, they copromoted the product for us. Vice versa, our internal medicine unit sells Nucynta [tapentadol] as part of its pain franchise, but we also sell Nucynta to the oncologists as a pain option for cancer patients. So being a part of a larger company helps us leverage the assets across all four of the businesses.”

For similar synergistic reasons, it was a logical step to consolidate J&J’s biotech units into one commercial entity. Not only did the units’ customers overlap, so did their science and technology. Immunology and oncology are increasingly interrelated, and immunology itself links to other therapeutic areas and new technologies.
Thus, JB markets products that extend beyond dermatology, gastroenterology, nephrology, and rheumatology to areas such as virology and surgery. Procrit, for example, is indicated for HIV-related anemia (virology) and for reduction of allogeneic red blood cell transfusions in nonvascular surgery. In some cases, “pure” biotechnology gives way to small molecules as the best tool for the job.
But, according to Bazemore, the foci of JB’s R&D and commercial strategies are not just targets chosen for their market potential; they are the natural result of the company’s leadership and innovation in those areas. Immunology products Remicade, with indications in dermatology, rheumatology, and gastroenterology; Stelara (ustekinumab) in dermatology; and Simponi (golimumab) in rheumatology have all broken new ground. In oncology, Procrit for chemo-induced anemia with indications in several other areas, and most recently the small-molecule drug Zytiga, approved for metastatic castration resistant prostate cancer, are also breakthroughs.

JB’s challenge was to transfer the “visibility and equity” of the Centocor brand to the newly named entity. “It was all about communication,” says Bazemore. “We had to be very clear with our customers why and how we were making the change and that it didn’t involve any changes in our company structure, leadership, products, or anything else they relied upon. Everything essentially works just as it did before the integration under Janssen. From a customer’s point of view, the change has gone smoothly.”

MATRIX DEVELOPMENT
Internally, the view is more complex. First, says Bazemore, the company rationalized support services for the formerly separate businesses. “We took away a lot of duplication. By consolidating services such as market research, you can make your organization just work more efficiently. And now we can share best practices and talent across brands or therapeutic areas.”

Meanwhile, the company’s R&D organization went through a substantial structural transformation, as Dillon describes. “We had all the components of discovery and development holistically within the Centocor group, but we were really only focused on the two disease areas, immunology and oncology,” she says.

“Now with the unification of all R&D groups and the formation of the new organization that consists of the Centocor legacy groups and the legacy groups of J&J Pharmaceutical Research and Development, we’re focused on more therapeutic areas. In the immunology space, my group has responsibility for all of the research and development — whether biologics or small molecules or regardless of location around the world, it all rolls up into one end-to-end organization.”

Dillon explains that some of the functional groups that supported discovery and development are now matrix groups that support immunology and the other therapeutic areas. For example, the groups involved in creating small-molecule therapeutics in the discovery stage are now global organizations that support all the different therapeutic areas and their global regulatory organizations, global development organizations, and so on.
So what happens when the same compound overlaps multiple therapeutic areas? Which group takes the lead? Dillon answers that no hard rule applies.

“It depends on the stage of development,” she says. “For example, we have compounds already in development in immunology, and we recognize there is also an interest in developing the drug in cancer. So we coordinate through a global compound-development team, which then becomes responsible for moving the compound toward all of the potential indications. Of course, some teams specialize in specific diseases, but often there is tremendous common ground around the science, regulatory approach, safety, clinical-development strategies, and other areas, so it becomes a joint effort.”

Dillon says her group also has opportunities at the discovery stage to discuss drug targets that may have application in different diseases. “In fact, we have several instances of collaboration between different groups to bring compounds forward that we know from the outset will be applicable beyond immunology.”
Dillon says immunology most often interacts with oncology, but the company has an emerging interest in immunological approaches to neurological, pulmonary, and inflammatory diseases. In a May 2011 presentation, Chairman Duato, noting that JB leads the U.S. and Chinese markets with its immunology franchise, put a high priority on expanding the franchise worldwide. Oncology, likely working often in tandem with immunology, is set to expand in parallel.

Another level of collaboration takes place inside the company — the marriage of therapeutics and diagnostics. In immunology and oncology, for example, the therapeutic side looks for biomarkers of disease progression or response to certain drugs in development. And it cooperates with a recently created group, the Co-Diagnostic Center of Excellence, charged with developing diagnostic tests that could be commercialized along with specific drugs.

“You could think of it as a parallel to the paradigm of drug discovery and development,” observes Dillon. “There’s also diagnostic discovery and diagnostic development, and the expertise is somewhat different and specialized. We have set up these groups so that we can work together and ultimately bring drugs and companion diagnostics to the marketplace.”

Bazemore points to a supporting example in oncology: In 2011, J&J integrated Veridex (www.veridex.com), its developer of diagnostic tests, into Janssen R&D. “One of the tests measures circulating tumor cells. The decision was made to break that organization out of the J&J devices unit and move it under our pharmaceuticals R&D, specifically so that it can be a part of how we approach R&D investment in the oncology stage.”

PARTNER APPROACHES
Knowing JB’s development goals and plans can be generally useful to other, often smaller companies that seek corporate partnerships. But Bazemore and Dillon also give some insights into how their company evaluates and selects its research partners.

An outside company developing an immunological approach to cancer might contact JB at one of several levels, according to the state of development, explains Dillon. “We have a scientific licensing group and business development groups within immunology, and they work along with us to talk to biotech companies and academic groups about early-stage compounds or new platforms and technologies that align with our strategies.” Ones that already target a given disease might then be diverted to the appropriate TA group, she says, but if the approach focuses on a basic target in an inflammatory pathway, her group would evaluate it.
For a compound in late-stage development, Dillon says the evaluation is coordinated between the R&D group and Bazemore’s team, along with the other global commercial teams, to decide whether to establish a partnership around the asset. From the earliest to the latest stages, she says, Chairman Stoffels (Dr. Paul Stoffels is worldwide chairman, Janssen Pharmaceutical Companies of Johnson & Johnson) “keeps a good view across what’s happening in all of the different areas. But again, there is always close contact between all of the areas.”

Beyond evaluating the incoming approaches from potential partners, the company’s R&D groups work to stay in touch with the various consortia, academic centers, and even patient groups that often identify, fund, and advocate for innovative technology. Typically, says Bazemore, the patient groups become more involved in later-stage developments.

Late-stage clinical trials are also where the company places most of its R&D investment, according to Bazemore. Besides the more stringent regulator demands every company faces, JB has also been aggressive in generating cost-effectiveness and comparative-effectiveness data, as with its hallmark head-to-head psoriasis trial of Stelara versus the then market-leader, Enbrel (etanercept).

By such boldly intended moves, Janssen Biotech may hope to share Paul Janssen’s inventive spirit, follow his example, and build new markets in biotechnology, one step at a time. “We believe in the paradigm by which you can ultimately build to a blockbuster even if each separate disease, though an important unmet medical need, may not be a very large commercial opportunity,” says Bazemore. “That paradigm of success will carry us into the future.”