Campbell Naryx

8/14/2019 Campbell Naryx

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Commercialization: From Bench toCommercialization: From Bench to

BedsideBedside

Robin D. Campbell, Ph.D.Robin D. Campbell, Ph.D.

President and CEOPresident and CEO

Naryx Pharma, Inc.Naryx Pharma, Inc.

April 2007April 2007


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A Common Opinion of CommercializationA Common Opinion of Commercialization


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What is Commercialization?What is Commercialization?

Default Definition: Sales & MarketingDefault Definition: Sales & Marketing

Missing:Missing: Tradeoffs between development decisions,Tradeoffs between development decisions,

manufacturing, and sales forecast, e.g.manufacturing, and sales forecast, e.g.

Product positioning alternatives as a function of productProduct positioning alternatives as a function of product

characteristics, such as formulation, deliverycharacteristics, such as formulation, delivery

alternatives, clinical plan, and labelingalternatives, clinical plan, and labeling

Target market alternatives and pricingTarget market alternatives and pricing

Business model optionsBusiness model options

Launch strategiesLaunch strategies

Partnering alternativesPartnering alternatives

Tradeoffs against fund-raisingTradeoffs against fund-raising


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A Suggested DefinitionA Suggested Definition

Commercialization in biotechnology is anCommercialization in biotechnology is an

integrated business strategy thatintegrated business strategy that

optimizes potential profitability byoptimizes potential profitability by

considering and balancing medical need,considering and balancing medical need,scientific feasibility, commercial reality,scientific feasibility, commercial reality,

time to market, resource requirements,time to market, resource requirements,

and investor expectations in developmentand investor expectations in development

of a product.of a product.


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Why integrate commercialization intoWhy integrate commercialization into

product development?product development?

We already know its a big marketWe already know its a big market

Well ask marketing for a forecast with 3 scenarios-mostWell ask marketing for a forecast with 3 scenarios-mostlikely, best case, worst caselikely, best case, worst case

At this stage, clinical, regulatory and manufacturing issuesAt this stage, clinical, regulatory and manufacturing issuesdrive value marketing comes later, after those problemsdrive value marketing comes later, after those problemsare solvedare solved

An exercise in futility how can you know the market 5An exercise in futility how can you know the market 5years from now?years from now?

Were going to find a partner for sales and marketingWere going to find a partner for sales and marketing


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The better mousetrap fallacyThe better mousetrap fallacy

Unique products and science will virtuallyUnique products and science will virtually

sell themselvessell themselves

Certainly desirable, but:Certainly desirable, but:

Nothing to model againstNothing to model against Blazing new trails in preclinical, clinical, and launchBlazing new trails in preclinical, clinical, and launch Inertia may be the biggest barrier to adoptionInertia may be the biggest barrier to adoption

A truly unique product or therapeutic approachA truly unique product or therapeutic approachmay be more complex (i.e., expensive) tomay be more complex (i.e., expensive) to

commercialize, at least in the early stagescommercialize, at least in the early stages


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Why is this so important early in aWhy is this so important early in a

companys/products lifecycle?companys/products lifecycle?


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Drug development takes time and bigDrug development takes time and big

moneymoney

Development of one drug can take up toDevelopment of one drug can take up to

10 years (or more)10 years (or more)

Odds are not with youOdds are not with you IND: 10% chance of approvalIND: 10% chance of approval

Phase I: 20-30%Phase I: 20-30%

Phase II: 40-50%Phase II: 40-50% Phase III: 70-80%Phase III: 70-80%

NDA:NDA: 80-90%80-90%


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and making the wrong decision is veryand making the wrong decision is very

expensiveexpensive

Financial impactFinancial impact

Early d/c in Phase IEarly d/c in Phase I == $180 M$180 M

Early d/c in Phase IIaEarly d/c in Phase IIa == $240 M$240 M

Late d/c in Phase IIb/IIILate d/c in Phase IIb/III == $470 M$470 M Opportunity costOpportunity cost == UnacceptableUnacceptable

Really late d/c in NDAReally late d/c in NDA == $500 M$500 M Opportunity costOpportunity cost == CatastrophicCatastrophic


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Business model and portfolio decisions areBusiness model and portfolio decisions are

better informedbetter informed

If going alone (for as long as possible):If going alone (for as long as possible):

Less likely to underestimate capital needsLess likely to underestimate capital needs

Provides basis for better decision makingProvides basis for better decision making

(tradeoffs and choices)(tradeoffs and choices)

If partnering:If partnering:

A better understanding of the true marketA better understanding of the true market

valuevalue

Better prepared for a negotiationBetter prepared for a negotiation


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Sales ImpactSales Impact

10%90%Five yearmarket share

$10 MM$219 MMFirst year sales

MinimalExtensiveFollow onStudies

NarrowBroadFDA Approval

??Early onIntegration

Product BProduct AStrategy


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Biotech reality intrudesBiotech reality intrudesFinancial pressures in conducting clinical trialsFinancial pressures in conducting clinical trials

Fastest path to regulatory approvalFastest path to regulatory approval

(so that investors dont get impatient for results)(so that investors dont get impatient for results)

Lowest cost (smallest, fewest possible trials)Lowest cost (smallest, fewest possible trials)

(so that you dont have to go back to financial markets(so that you dont have to go back to financial marketstoo often and risk too much dilution)too often and risk too much dilution)

Highest probability of successHighest probability of success(so that negative clinical results dont send the stock(so that negative clinical results dont send the stock

spiraling)spiraling)

Good scienceGood science

(so that investors perceive value creation even if they(so that investors perceive value creation even if theydont understand the specifics)dont understand the specifics)

Marketing is not a priorityMarketing is not a priority Clinical development (and perhaps manufacturing)Clinical development (and perhaps manufacturing)

are largely unproven and mission-criticalare largely unproven and mission-critical

(well worry about marketing once we know we have a(well worry about marketing once we know we have a

product)product)


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but must be balanced by marketplacebut must be balanced by marketplace

realityreality

The decisions made early in clinical development - whileThe decisions made early in clinical development - while

expeditious and perceived as critical to company survival -expeditious and perceived as critical to company survival -

may compromise the long-term market potential for themay compromise the long-term market potential for the

productproduct The easiest/fastest indication is often not the largest marketThe easiest/fastest indication is often not the largest market

A single indication focus may miss the broad positioning potential forA single indication focus may miss the broad positioning potential for

the productthe product

The easiest endpoints may not be the ones customers value most (orThe easiest endpoints may not be the ones customers value most (or

will pay to achieve)will pay to achieve)

Good science may not translate into real customer benefits (e.g.,Good science may not translate into real customer benefits (e.g.,

clinical outcomes, QOL, cost effectiveness, etc.)clinical outcomes, QOL, cost effectiveness, etc.)

By the time you reach Phase II, it may be too late toBy the time you reach Phase II, it may be too late to

optimize product positioningoptimize product positioning

Clinical pathway is set - significant delays required to adjustClinical pathway is set - significant delays required to adjust

Changing direction will scare investorsChanging direction will scare investors

InertiaInertia


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What you can deliver, and what the marketplaceWhat you can deliver, and what the marketplace

needs, has to be balancedneeds, has to be balanced


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Three main considerations for successful productsThree main considerations for successful products

Underserved patientsFew alternative therapiesPoor outcomes w/existing TX

Commercial RealityScientific Feasibility

Unmet Medical Need

CompetitivelandscapeDelivery issuesReimbursementconsiderations

Compellingpreclinical science

Logical biology

Reasonabledevelopment path


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Companies that integrate their commercial andCompanies that integrate their commercial and

development plans early are good atdevelopment plans early are good at

Effective integration of productEffective integration of product

development and unmet marketplacedevelopment and unmet marketplace

needsneeds

Making the science important to externalMaking the science important to external

audiencesaudiences

Dealing effectively with the FDADealing effectively with the FDA


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Positioning hierarchyPositioning hierarchy

BASICPROMISE

SUPPORTINGARGUMENTS

Data Requirements

Key differentiating attributes

Believable arguments

Available orRealistically Obtainable

Scientific Data

The optimal market positioning is the set of differentiating attributes with the greatest positiveimpact on physician preference share while still having believable supporting arguments

based on available or realistically obtainable scientific data


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Positioning degrees of freedomPositioning degrees of freedom

Ultimate positioning for the product is largelyUltimate positioning for the product is largelydetermined by scientific decisionsdetermined by scientific decisions Product development decisionsProduct development decisions

Mode of administrationMode of administration FormulationFormulation DosingDosing PackagingPackaging

Clinical development decisionsClinical development decisions IndicationsIndications Patient inclusion/exclusion criteriaPatient inclusion/exclusion criteria Endpoints, outcomesEndpoints, outcomes

ComparatorsComparators Treatment settingsTreatment settings Physician specialtiesPhysician specialties Specific investigatorsSpecific investigators

LabelingLabeling


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Effective integrationEffective integration

An ideal package insert as a blueprintAn ideal package insert as a blueprint

Product development plans that integrateProduct development plans that integrate

clinical, operations, and marketplaceclinical, operations, and marketplaceconsiderationsconsiderations

A follow-on plan to increase addressableA follow-on plan to increase addressablepatientspatients


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Market research has to be real to be usefulMarket research has to be real to be useful


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Various techniques for market analysisVarious techniques for market analysis

Early stage market opportunityEarly stage market opportunity Secondary research for incidence, prevalence,Secondary research for incidence, prevalence,

treatment options, competition, etc.treatment options, competition, etc.

Thought leader attitudes and awarenessThought leader attitudes and awareness

(magnitude of medical need)(magnitude of medical need) Quantitative research and conjoint analysisQuantitative research and conjoint analysis

(ideal product characteristics)(ideal product characteristics)

Later stageLater stage

Health economicsHealth economics Channel strategyChannel strategy

Message testingMessage testing


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Applying early research to target indicationsApplying early research to target indications

Trade-offs aboundTrade-offs abound

Fast vs. broad indicationFast vs. broad indication Cost and timeCost and time

Scientific sexinessScientific sexiness Unmet needUnmet need

Dosage and administrationDosage and administration StabilityStability Ease of use (utilization barriers)Ease of use (utilization barriers) Reimbursement barriersReimbursement barriers


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Follow-on plan/lifecycle management shouldFollow-on plan/lifecycle management should

be considered relatively earlybe considered relatively early

Indicates commitment to the fieldIndicates commitment to the field

Attracts key opinion leadersAttracts key opinion leaders

Attracts talentAttracts talent

Keeps product fresh and newsworthyKeeps product fresh and newsworthy Expands indications and usage (thusExpands indications and usage (thus

growth)growth)

Creates competitive barriersCreates competitive barriers Costs/resource needs can be managedCosts/resource needs can be managed


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Make the science importantMake the science important

Appropriate communications with variousAppropriate communications with various

audiencesaudiences

InvestigatorsInvestigators

Healthcare providersHealthcare providers Wall StreetWall Street

General publicGeneral public

Benefits if done wellBenefits if done well

Builds excitement about potential therapiesBuilds excitement about potential therapies

Builds allies in the medical communityBuilds allies in the medical community

Builds credibility on Wall StreetBuilds credibility on Wall Street


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Necessary components for effective earlyNecessary components for effective early

communicationscommunications

A clear corporate visionA clear corporate vision

ValuesValues

CommitmentCommitment

ExpertiseExpertise Reality-based (underpromise & overdeliver)Reality-based (underpromise & overdeliver)

Clear product positioningClear product positioning

Signals the value to patients, providers, andSignals the value to patients, providers, and

payerspayers

But not so much to signal strategy details toBut not so much to signal strategy details to

competitorscompetitors


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Dealing with the FDADealing with the FDA

Everything is a negotiationEverything is a negotiation

Knowing your commercialization goals willKnowing your commercialization goals will

guide you in your FDA discussions (andguide you in your FDA discussions (andfilings)filings)

Early recognition that a a good P.I. is theEarly recognition that a a good P.I. is the

prizeprize The Package Insert determines what you canThe Package Insert determines what you can

claim and promoteclaim and promote


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What does it take to have a commercialWhat does it take to have a commercial

mindset?mindset?

Mandate from the topMandate from the top Business plans that require integrationBusiness plans that require integration

Cross-functional teams with outstanding teamCross-functional teams with outstanding teamleadersleaders

Marketers and product developers willingMarketers and product developers willingto work together (with clearly understoodto work together (with clearly understoodand mutual goals)and mutual goals)

Patient benefit is the holy grailPatient benefit is the holy grail


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In summaryIn summary

Commercialization is broader than just sales andCommercialization is broader than just sales andmarketingmarketing

An integrated business strategy should start earlyAn integrated business strategy should start early

in product developmentin product development

Product development plans should integrateProduct development plans should integratemedical need, commercial reality, and scientificmedical need, commercial reality, and scientific

feasibilityfeasibility

Effective corporate communications should beEffective corporate communications should be

part of any commercialization planpart of any commercialization plan

FDA communications and negotiations should beFDA communications and negotiations should be

informed by your commercial planinformed by your commercial plan


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Make sure the view is worth the climbMake sure the view is worth the climb

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