The R&D Revolutionary
Bernard Munos is the Big Pharma veteran who's been prescribing a radical dose of R&D change to the industry.
Long before Pfizer drew cheers from Wall Street with its insistence on deep cuts, Munos was pointing to the blockbuster-sized cost of drug research and preaching that the giant pipelines have to be restructured. And he's been winning over some of the leading figures in the industry along the way.
"Bernard put on the table that we don't just need a Band-Aid. We need transformational change." Corey Goodman told Matthew Herper at Forbes.
That means an end to these giant operations that too often focus on tiny improvements in health and an urge to embrace a big risk, and a turn to small, nimble operators like Zafgen to brew up big new drugs that change the standard of care.
The status quo, he warns, is a threat to the very existence of the industry. This new model, he adds, may be its only hope for survival. Tracking the steadily rising cost of drug development and a decadelong drought in new drug approvals--only slightly alleviated last year--more and more of the industry is coming to see it Munos' way.
When we were putting this report together, FierceBiotech asked Munos whether the industry was finally making progress on the R&D side. True to form, he turned to the numbers, detailing the low rate of approvals that has afflicted the biggest players in the industry for the past decade. Despite a surge of approvals in 2011, if you strip down the results you'll find that Big Pharma hasn't enjoyed great success.
"But I see the industry splitting down the middle," he adds.
"I am optimistic about Novartis, and cautiously optimistic about GSK and Sanofi. They have worked hard to retool themselves, and recreate an innovation culture in their R&D divisions. Novartis did it first almost 10 years ago. Sanofi started with an especially dire situation, but Chris Viehbacher has been deft at turning his company around. It's not easy, and the howls of protest coming out of GSK last fall when it was deciding which teams to fund or terminate, illustrate that challenge.
"I am apprehensive about AstraZeneca, Lilly, Merck, Pfizer, Amgen. Those are companies that have embraced a strong process culture, and insist on running regimented R&D divisions. It's a bankrupt model that has never delivered (for good reason). I fear real trouble in that group.
"I scratch my head (for different reasons) about Roche, Bristol-Myers, Bayer, Abbott and J&J. Genentech used to be the premier innovative company, but I hear ominous things since Roche has asserted its control. I am also not impressed with the Illumina bid. I am concerned Roche's senior management may be messing up a good thing. Bayer and BMY were really ailing a few years back. They have shrunk themselves and seem to be doing better, but I'd like to see more/better innovation from their labs before I feel better. J&J has a lot going for it, except its leadership, which is incompetent. Abbott is essentially a Humira company. It has produced very little innovation. The CEO is about to run with the better half of the company, a big red flag in my view."
FierceBiotech: Is the R&D model changing?
"Yes, for GSK and Sanofi. They are much more pragmatic, leverage external resources, have embraced open innovation and innovation networks. GSK has not always been the best implementer, but they are still serious about change.
"Novartis' problem is different. It's been producing more/better innovation than its peers for some time. But it must also produce affordable innovation. Joe Jimenez understands that, and is determined to take on the R&D cost issue (which is out of control across the entire industry). He's done it elsewhere, and seems to be pretty shrewd about it. I think he can pull it off. He is the only CEO who is addressing R&D costs, perhaps because he in as an outsider. The other CEOs, all of whom are insiders, prefer to regard high R&D costs as a fixture of the industry. ...
"Lilly is also doing interesting things with open innovation, but I don't think it is yet into the company's DNA. It's ironic for a company that pioneered the concept. Pfizer is trying hard, and doing some good things (e.g., various initiatives with academia), but it is so dysfunctional that it will take a while before it emerges, if it does."
Munos' willingness to call it like he sees it adds significantly to his influence in the industry.