Virtual Pharma: Addressing Challenges and Opportunities in Biomedical R&D

Peter B. Corr, PhD, Co-Founder and General Partner, CELTIC THERAPEUTICS MANAGEMENT COMPANY LLLP;Formerly Senior Vice President, Science and Technology, PFIZER

Dr. Corr believes that the current crisis was very predictable. The electronic industry has suffered the same fate. We live in a world that is constantly changing, and how will we adapt to that going forward? Some of the problems are that the pipeline deficiencies exist in Pharma. The critical short term capital is not accessible to the biotechs. There are 23 new compounds a year, and each compound is approximately $2-$3 billion dollars. The average drug will bring in $750 million dollars a year. Expiring patents will result in $2 billion in loss. What’s the problem? There are over 2300 compounds in clinical development around the world. Of the compounds, 67% are in small biotech companies. They have 2% of the R&D spending, 8% of the cash and 3% of the market.

There is little to no IPO market in the United States. Why did they begin the new venture? Therapeutics is getting the compound, preclinical development is making it a medicine, exploratory development focuses on making the drug work and discovering the dose. Venture capitalists are good at getting something within early Phase II data. Large pharma tech companies try to do it all, but they can’t. They’ll have to work with partners to obtain the products they need to grow. Alliances with small biotech companies, a capital market breakdown, and they need products which will be best sought out with partnerships.

The investment strategy is to acquire ownership of potential products. They take the product through to Phase III, ready. And then distribute proceeds from sales to investors, they focus on developing their portfolio. Precompetitive alliances are essential in the success of these approaches. Information needs to be presented to the FDA about what the best way is to test a drug, and better test drugs. Everyone has a background level of information. A single format is then available to everyone. Companies will survive that effectively utilize the information. The goal was to bring all parties together. Precompetitive initiatives can save a lot of money for industry by working together. It doesn’t have to destroy the competitive nature.

Virtual Pharma is working together with a variety of CROs and other vendors in terms of bringing products to reality. The development organizations at Celtic is separate from management. Management does deals and gets the compounds. Development operations implement the overall strategy for particular product: Legal, Outsourcing, Finance, IT, HR and OA. The CRO and Development Partners work together with the Virtual Pharma company.

Advantages of virtual pharma model according to Celtic:

-Adapts more easily to strategic decisions

-Best in class

-Potential for faster development cycles

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