Collaboration as the key for turning around the drug discovery business (Part 1) – The Problem
Drugs commercialized today are often discovered in one organization and developed in another. It is a natural outcome of an increasingly expensive and specialized drug discovery process. The investment community and industry as a whole have moved their efforts downstream, focusing more resources on later-stage drug development. This trend has created a crying need to add value to early-stage assets in order to move forward new discoveries made by academia and startup companies. This need coincides with academia being the one place relatively unaffected by the economic self-correction of the past few years. Limited resources to add and realize value for science, infrastructure, and business development (beyond the initial discovery) are a major problem for these relatively smaller groups.
Conversely, large pharmaceutical and biotech companies suffer from enormous inertia, in spite of rapidly changing markets and the complex challenges of portfolio management. They also are suffering from patents expiration, mergers, outsourcing, and often predictably low morale.
In contrast to academia where there is little or no infrastructure, there is widespread redundant infrastructure for the relatively routine portions of drug discovery throughout industry. This widespread redundancy has removed the efficiencies typically observed from specialization. Most organizations recreate essentially the same technical and business processes just to realize intrinsic value.
To make matters worse, because drug discovery is such a long and complex process, collaborations are widespread, despite the redundant systems. Each player tends to take a drug candidate as far as possible through the discovery pipeline as a function of funds raised rather than core competencies. This leads to gross inefficiencies.
The bio-pharmaceutical industry is experiencing a lag in productivity compared to similar rapidly evolving IP-based industries. Despite numerous individual scientific discoveries and technical advances, the economics of specialization have not kicked in. An underlying reason for this inefficiency is the secrecy of information due to the emphasis on one molecule being a potentially large revenue stream…way downstream.
There is a burning need for an efficient mechanism for drug discovery scientists in academia and industry to collaborate and realize intrinsic value for their specialized knowledge, assets, and capabilities. In principle, specialized scientists should be able to contribute their unique skills in drug discovery collaborations now that all components of drug discovery services are available a la carte. In practice, scientists currently have three ways to advance projects: (1) by providing consulting support to other’s assets or projects, (2) by forming new companies that recreate the same drug discovery infrastructure from scratch, or (3) by transferring early assets prior to significant value creation to a larger or better financed partner.
We need for a better mechanism for scientists to push forward drug candidates, contribute, and share in the collaborative successes. An efficient mechanism will greatly lower overhead for everyone involved.
The irony is that the majority of processes are predominately the same at a meta level, even though the specifics for each drug discovery project differ slightly.
Government, industry, and academia are all becoming aware of these problems.
You can also download the full series “Collaboration as the key to turning around the drug discovery business” by Barry Bunin as a pdf document: