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International Clinical Trials

Pressure on the Pipeline

Mark Egerton of Quotient Clinical discusses a new development paradigm underpinned by horizontal integration of supply chains that offers a more intensive assessment of drug candidates in early development

As we progress into an era that will deliver unprecedented insights into the molecular basis of disease, it is ironic that the pharmaceutical industry has entered into a period of cataclysmic change. Major pharmaceutical businesses are under pressure, with a potential $250 billion of pharmaceutical sales under threat from generic competition between now and 2015 (1). R&D productivity remains low and has failed to deliver sufficient innovative products into industry pipelines. Consequently, we are witnessing cuts in R&D budgets, site closures and job losses.

Many organisations have chosen to outsource major components of their development operations. A number of the world’s largest pharmaceutical companies have formed strategic partnerships with some of the world’s largest contract research organisation (CROs), streamlining workflows for the companies taking this approach and providing cost advantages through more efficient working practices.

However, with the cost of developing a new medicine now estimated to exceed $1.5 billion, it is essential that the industry not only continues its drive to innovate the disease mechanisms that it targets for intervention, but that it also drives innovation of the drug development process and the supply chains that underpin it (2).


Numerous leaders within the industry have commented on their approaches to improve R&D productivity. A recent article by Steven Paul and colleagues provides a very useful insight into the strategic R&D thinking that has taken place at Eli Lilly (3). Like others, they have identified a reduction in Phase 2 and Phase 3 attrition, currently running at 66 per cent and 30 per cent respectively, as a central objective to improving productivity.

The conundrum, however, is that late stage attrition has to be cut back at a time when the number of unprecedented mechanisms being addressed by the industry has never been higher. The number of new drug candidates being progressed into development must increase, with an expectation that many of these will fail. In essence, early development has become part of the research continuum and, for the above strategy to deliver, it is imperative that each drug candidate is exquisitely interrogated in early development to remove technical uncertainty. As a result, the winners can be differentiated from the losers prior to a commitment to allocate the funds for full development. Paul et al describe this as the ‘quick win, fail fast’ development paradigm.


At the same time, R&D leaders are continually striving to shorten timelines and reduce costs. The implications of the ‘quick win, fail fast’ strategy across a development portfolio are profound when one considers that approximately 70 per cent of all projects will fail prior to or at the proof of concept stage (4). In other words, around 70 per cent of the funds invested into early development will not deliver a successful drug candidate into full development. With the spend on a traditional early development programme by a large pharmaceutical company estimated to be in the region of $20 million per molecule, and a typical portfolio containing upwards of 20 molecules, this is a significant amount of money to invest without any return (3).

The development project team is also presented with a paradox. On the one hand, it is challenged to accelerate development timelines, while at the same time being driven to undertake increasingly complex clinical investigations to identify any risks associated with the drug candidate that will be carried forward into full development.

Ultimately, organisational structures and development processes must evolve to enable a much more flexible and interrogative approach to early development. Early development plans must be tailored to individual molecules and focused on scientific interrogation to address the key questions that must be answered before the molecule can be progressed into full development.


Current structures and processes to support early development have evolved from legacy working practices and organisational structures initially formed decades ago within the large pharmaceutical businesses. The industry has subsequently consolidated around two vertically integrated supply chains: one that is focused on the ‘making’ of test materials (that is drug substances and drug products); and one focused on the ‘testing’ of those materials (that is preclinical and clinical). This approach has been further replicated in the outsourcing industry with a strong demarcation between contract development and manufacturing organisations (CDMOs) responsible for drug substance and drug product, and clinical CROs responsible for preclinical and clinical testing (see Figure 1).

Transfer of material between the make and test supply chains can be time-consuming and complex. For example, a biotechnology organisation seeking to use outsource partners to implement an early development programme (first-in-human (FIH) study through to proof-of-concept study) may use up to four different suppliers to deliver the drug product to the clinical centre(s), including a drug substance supplier, formulation development specialist, drug product manufacturer and packaging house. In addition to the obvious management burden that this process invokes, it also carries a signifi cant time penalty owing to the extended characterisation of the drug product (for example shelf life assignment) required to support its passage within the make and test supply chains.


A translational pharmaceutics platform in which the processes, teams and facilities required to support formulation development, GMP drug product manufacturing and clinical testing are integrated can drive innovation within early development – especially those processes leading up to the FIH dose or in subsequent work to optimise the drug product prior to full development.

Such a platform can enable the rapid and seamless manufacturing-to-clinic transfer of drug product, with manufacturing often taking place within a 24 to 72 hour period prior to dosing. The timeline savings – not to mention the cost savings – that can be delivered by this approach are signifi cant, typically being reduced by a third to half that of a conventional approach. In addition, the ability to undertake real-time manufacturing of the drug product in close proximity to the clinical dosing period means that the data from one clinical period can inform the drug product to be manufactured and tested in the next clinical period(s).

This approach enables innovative thinking for alternative designs of the early development programme, including the FIH single ascending dose (SAD) and multiple ascending dose (MAD) studies and, potentially, the proof of concept investigations.

In a conventional development paradigm, the FIH programme is typically undertaken with a single drug product in a relatively simple format – for example drug-in-solution or drug-in-capsule. Decisions on the nature of the drug product, such as formulation and dose strength(s), are taken while the drug candidate is still in the preclinical phase, sometimes even before the pivotal toxicology studies are initiated. Although this represents the standard industry approach, it carries a number of potentially significant drawbacks:

  • All up-front investment in pharmaceutical sciences and chemistry manufacturing and controls (PS/CMC), typically in the region of $300-500,000 , is lost if the molecule fails the FIH-enabling toxicology studies
  • Significant quantities of costly drug substance are consumed by the manufacture of large batch sizes of drug product to ensure product supply throughout the programme and of multiple dose strengths to allow fl exibility in dose selection during the ascending dose studies ● Decisions on drug product formulation and dose strength are made (guessed) in the absence of any human clinical data – data which are pivotal in driving the development of an optimal drug product confi guration
  • Depending on the FIH clinical data, the simple drug product used in the initial studies may not be appropriate for a proof-of-concept study. Consequently, there may be a lengthy hiatus before an optimised product is delivered for downstream development activities
The early development PS/CMC programme can be optimised by employing a translational pharmaceutics platform to deliver signifi cant benefi ts to the drug development project team (see Table 1). The ability to undertake drug product manufacturing in real-time allows major PS/CMC investment to be postponed until initial read-outs from the pivotal toxicology studies have been obtained, while at the same time maintaining the timeline to fi rst-subject-fi rst-dose in the FIH programme. Real-time manufacture also allows the results from one clinical study period to drive the product to be manufactured and dosed in the next – allowing the project team to respond immediately to emerging safety, pharmacokinetic and pharmacodynamic data.

Moreover, it allows the development team to undertake up front, molecule-specific ‘what if?’ risk assessments based on available biopharmaceutical and preclinical data, which can enable provision of contingency, or ‘second-generation’ formulations that can be immediately manufactured and dosed within the study protocol. Such formulations could be required in response to emerging data that highlight concerns over tolerability, solubility, bioavailability or half-life, or formulation switches can be deliberately planned within the protocol to transition from a fit for purpose FIH formulation to an enhanced drug product for downstream assessment. In both scenarios the clinical programme is able to respond instantly to emerging data, maintaining an accelerated timeline, while optimising PS/CMC investment.

This approach provides much greater fl exibility in the design of an early development programme and, when implemented within a regulatory environment that is permissive for early development, equips the project team with a powerful toolbox to interrogate development molecules and readily identify the winners from the losers. Ultimately, this approach will provide a fi rm foundation to deliver the new R&D paradigm and improve pharmaceutical R&D productivity.

The commitment from the pharmaceutical industry to a drug development outsourcing model appears irreversible. In a number of the strategic partnerships that have been announced in the public domain, it is evident that the major pharmaceutical partner has transferred major components of operational resource, sometimes in combination with an R&D facility, to the CRO partner (for examples see press announcements for the Sanofi Aventis-Covance, AstraZeneca- Quintiles, and Eli Lilly-Covance partnerships). These deals are multi-year partnerships and it is inconceivable that, at the end of the deal term, the pharmaceutical partner could recreate these competencies internally and remain competitive. Consequently, the outlook for the outsourcing industry is positive, with the market set to grow at rates of fi ve to ten per cent per annum over the short- to medium-term (5). However, to respond effectively to its customers in the context of a rapidly evolving R&D paradigm the outsourcing industry must itself drive innovation.


The strong demarcation between CDMOs and CROs that exists today is a barrier to innovation of the drug development process. Certainly in early development, there is an opportunity to make marked effi ciency improvements by integrating make-andtest supply chains. Such horizontal integration marks a change in direction from the vertical integration demonstrated by the industry to date, however the benefi ts that can be gained are signifi cant. Shortened timelines, reduced costs and effi ciency of supply chain management are headline benefi ts that any customer will appreciate. Arguably of greater importance, however, is the ability to undertake a more intensive assessment of drug candidates in early development to identify the winners from the losers that warrant the downstream expenditure of full development.

As the pharmaceutical industry traverses this period of reinvention, it will no longer be suffi cient for outsourcers to compete on the basis of time, cost and quality. There is a significant opportunity for those companies that, in addition to these fundamental business attributes, can deliver innovative solutions the enhance drug development efficiency.


1. Evaluate Pharma Alpha World Preview 2014, Evaluate Pharma Report, 2009
2. DiMasi JA and Grabowski HG, The cost of biopharmaceutical R&D: Is biotech different?, Manage Decis Econ 28: pp469-479, 2007
3. Paul SM, Mytelka DS, Dunwiddie CT, Persinger CC, Munos BH and Lindborg SR, How to improve R&D productivity: the pharmaceutical industry’s grand challenge, Nature Reviews Drug Discovery 9: pp203-214, 2010
4. Kola I and Landis J, Can the pharmaceutical industry reduce attrition rates?, Nature Reviews Drug Discovery 3: pp711-715, 2004
5. The CMO Market Outlook and The CRO Market Outlook to 2014, Business Insight Reports, 2009

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Mark Egerton joined Quotient Clinical in 2005. Mark has over 20 years’ experience in the pharmaceutical and biotech industry and has worked in a range of organisations including large multinational pharmaceutical companies through to private venture funded biotechnology companies. Prior to joining Quotient, Mark was the Chief Business Offi cer at Oxagen, a UK biotech company focused on novel therapeutics for respiratory diseases, where he played a key role in securing a $60 million series B fi nancing round, one of the largest biotech fi nancings ever in Europe. Email:
Mark Egerton
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