Archives for January, 2008
As all hell breaks loose in the markets, it’s probably healthy to step away from twitter for just a couple of minutes to take a longer-term perspective. I had the pleasure of attending the HBS Healthcare Club conference on Saturday, and thought I’d collect and post my notes on some of the big picture issues in healthcare and biotech that were discussed. I tended to stay at the product and technology focussed sessions, rather than those focussed on services and reimbursement, because, well, I’m a science guy at heart.
Outgoing Lilly CEO Sidney Taurel gave the keynote just after lunch, and he laid out the risks and changes facing the pharmaceutical industry (besides patent expirations!) and how Lilly is adapting to meet them.
- Global aging trend / ‘inversion of the age pyramid’
- Emergence of “Health Technology Assessment” agencies
- limiting access to new technologies
- Patent issues in developing countries
- Legislative risks: government interference with Medicaid in the US
- US is the last bastion of free markets
- Changing perceptions of risk vs. benefit
- Perceptions of drug costs
- ~ 10% of healthcare spend, but consumers are much more exposed to drug costs through copays than to other costs in the system
Changes that are going to help address these challenges:
- Individual patient outcomes
- Measuring outcomes instead of outputs; and focussing on individuals
- pharmaceuticals will become partly an information product
- Better (adaptive) clinical trials; Regulators are slow to adapt.
- Openness of information
- R&D moving towards a virtual organization
- FIBNET rather than FIBCO
- Outsourcing examples at Lilly:
- med chem moving to China and India (ChemExplorer in Shanghai doing 20% of global chemistry)
- Big opportunities to use IT to track outcomes after drugs come on the market
- Open source models for biomarkers
- Systems Biology (As a computational biologist myself, I’m somehow skeptical that this is going to come through for the industry in time to save them from patent expirations
- Sales: fewer people; more competent people
- Merging of pharma, biotech (Biologicals are already a huge part of Lilly)
Given what Mr. Taurel had said about the importance increasing openness and better post-approval outcome monitoring, I was very tempted to ask something about how the industry was increasing transparency and whether Lilly did everything it could in making data available about drugs like Zyprexa, but unfortunately we ran out of time for questions.
Trends in Medical Devices
The most interesting thing to me was the near consensus across the panel about the inevitable convergence of drugs, devices, and data.
Dr. Stephen Oesterle (one of the most provocative speakers, and certainly the funniest) suggested a few specific companies to watch. In drug delivery, Tempo Pharmaceuticals is developing nanoparticle delivery systems for (small molecule?) drugs that allow for control over release rate and timing of drug combinations. (Tempo just did a Series B for $8.1M from Polaris, Bessemer, and Lux Capital.) In biologics, he suggested having a look at Alnylam, which has most of the IP on RNAi therapeutics locked up. The importance of RNAi is motivated by a simplifed model of disease: all disease is caused by too much or too little protein. For those rare diseases caused by too little protein, we can give it back, via protein therapeutics, cell therapy, or gene therapy. Too much protein however, and we need RNAi, antisense, or antibodies. Biologics are going require clever and new delivery systems, and delivery technologies for biologics are still a big long-term opportunity. Finally, Oesterle suggested having keeping an eye on the spine. Back pain is huge, and current therapies (spinal fusion) are lacking, yet the spine is relatively simple and very accessible surgically, and therefore low hanging fruit for new devices and approaches.
Georg Nebgen said trends to watch included: disposable devices; battery powered device; and greater automation, diagnostics moving to point-of-care and away from central labs, and that acquisitions are moving later.
Another interesting trend proposed is the vanity of an aging population – a market that is happily self-paid by patients.
Communication between devices is going to be big: we’re going to see networks of monitors, and start to close the loop between diagnostics, treatment and discovery. Better monitoring is going to let us give drugs episodically, excactly when they are needed and effective, instead of all the time. Implanted sensors are going to start to happen. All these sensors and diagnostics are going to generate data that will require security, storage, and analysis of the resulting signals. Big opportunities; totally unclear who is going to do it yet. (Doctors? Google/Microsoft? Payors? NewCos?)
On the more mundane side of things, we’re going to continue to see big investments in informatics for clinical trials. Still a huge source of pain, with way too much paper.
The closing keynote was by Dr. Robert Langer, who somehow I haven’t heard speak before. Langer offered up a nice checklist of scientific characteristics of successful biotech startups, and then backed them up with examples of successful companies he had started, with the caveat that business issues — like the right team — generally matter more.
- Platform technology – applicable to multiple products
- Ideally a product company
- Seminal paper (Science / Nature)
- Seminal and blocking patents
- In vivo proof of principle
Overall, the conference was fantastic – congrats to the organizers for putting together a great panel of speakers and running everything so smoothly.