www.cvchem.com Bhaskar R. Venepalli Bhaskar R. Venepalli President President CiVentiChem LLC CiVentiChem LLC PO Box 12041 PO Box 12041 Research Triangle Park, NC 27709 Research Triangle Park, NC 27709 Tel:919-642-0100; Fax:919-642-0103 Tel:919-642-0100; Fax:919-642-0103 Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US Companies A Perspective from US Companies
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www.cvchem.com
Bhaskar R. VenepalliBhaskar R. VenepalliPresidentPresident
CiVentiChem LLCCiVentiChem LLCPO Box 12041PO Box 12041
Research Triangle Park, NC 27709Research Triangle Park, NC 27709
Tel:919-642-0100; Fax:919-642-0103Tel:919-642-0100; Fax:919-642-0103
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
www.cvchem.com
US Pharmaceutical industryUS Pharmaceutical industry New products developmentNew products development $$ Spent vs. products approved$$ Spent vs. products approved Innovation – Where?Innovation – Where? AlliancesAlliances Key success factorsKey success factors Conclusion and examplesConclusion and examples
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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US Pharmaceutical industryUS Pharmaceutical industry
Mergers Mergers
Living off few blockbuster drugsLiving off few blockbuster drugs
Sales revenue vs. R&D spendingSales revenue vs. R&D spending
New products approvedNew products approved
Conclusion and key learningsConclusion and key learnings
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
Global Sales
2001 Sales % of Global
Word Audited Market ($ Billons) Sales
North America $181.80 50%
Europe 88 24
Japan 47.6 13
Asia, Africa, Australasia 27.9 8
Latin America 18.9 5
Total $364.20 100%
C&E News, Dec 12, 2002
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AventisAventis: : Fisons, Hoechst, Marion Dow, May & Fisons, Hoechst, Marion Dow, May & Baker, Rhone-Poulenc, Rorer, Roussle UclafBaker, Rhone-Poulenc, Rorer, Roussle Uclaf
GSK:GSK: Allen&Hanburys, Beckman, Beecham, Allen&Hanburys, Beckman, Beecham, Burroughs, Wellcome, Glaxo, Smith Kline & FrenchBurroughs, Wellcome, Glaxo, Smith Kline & French
NovartisNovartis: Biochemie, Ciba, Geigy, Sandoz: Biochemie, Ciba, Geigy, Sandoz
PfizerPfizer: Agouron, Kabi, Monsanto (Searle), Pfizer, : Agouron, Kabi, Monsanto (Searle), Pfizer, Pharmacia, Upjohn, Warner-LambertPharmacia, Upjohn, Warner-Lambert
Wyeth (formerly AHP):Wyeth (formerly AHP): American Cyanamid, American Cyanamid, Ayerst, Genetics Institute, Lederle, Whitehall, WyethAyerst, Genetics Institute, Lederle, Whitehall, Wyeth
US Pharmaceutical Companies – US Pharmaceutical Companies – Path to Dominance by MergersPath to Dominance by Mergers
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Top Ten Pharmaceutical CompaniesTop Ten Pharmaceutical CompaniesChanges at the top – Mergers?Changes at the top – Mergers?
1990 Global 2000 Global
Market Market
Rank Company Nationality Share Company Nationality Share
1 Merck & Co. U.S. 3.80% Pfizer U.S. 7.10%
2 Bristol-Myers Squibb U.S. 3.5 Glaxo SmithKline U.K. 6.9
3 Glaxo U.K. 3.3 Merck & Co. U.S. 5.1
4 SmithKline Beecham U.K. 2.9 AstraZeneca U.K. 4.4
5 Ciba-Geigy Swiss 2.8 Bristol-Myers Squibb U.S. 4.1
6 American Home Products U.S. 2.6 Novartis Swiss 3.9
7 Hoechst German 2.6 Johnson & Johnson U.S. 3.9
8 Johnson & Johnson U.S. 2.2 Aventis French 3.6
9 Eli Lilly U.S. 2.2 Pharmacia U.S. 3.2
10 Bayer German 25.2 American Home Products U.S. 2.6
Top 10 Total 28.40% 45.20%
C&E News Dec 12, 2002
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
US. R&D Spending vs. New Product Approved from 1992-2002
0
5000
10000
15000
20000
25000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
Tota
l R&
D S
pend
ing
in
Mill
ions
0510152025
3035404550
NME
C&E News, July 7, 2003
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Of 1,035 drugs approved by US Of 1,035 drugs approved by US FDA between 1989 and 2000:FDA between 1989 and 2000:
•Only 351 were based on NMEsOnly 351 were based on NMEs
•674 contained APIs already available 674 contained APIs already available with other brands – new formulationswith other brands – new formulations
Old drugs in new bottles!!!Old drugs in new bottles!!!
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R&D Spending by big pharma – Key learningsR&D Spending by big pharma – Key learnings
•Innovation is the key for success Innovation is the key for success
•Complicated further - Genome informationComplicated further - Genome information
•New product development – Slow processNew product development – Slow process
•CompetitivenessCompetitiveness
•It is a RISKY Business: A possible solution – It is a RISKY Business: A possible solution –
• Diversify risk through AlliancesDiversify risk through Alliances
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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High Risk Process: 11-15 Years, $800MM+
Preclinical Pharmacology
Preclinical Safety
Millions ofCompounds Screened
IdeaIdea DrugDrug11 - 15 Years
1 - 2 1 - 2 ProductsProducts
DiscoveryDiscovery Exploratory DevelopmentExploratory Development Full DevelopmentFull Development
Phase I Phase II Phase III
00 151555 1010
Clinical Pharmacology& Safety
~100 Discovery Approaches~100 Discovery Approaches~100 Discovery Approaches~100 Discovery Approaches
R&D Cost for NME Introduction
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Peter Drucker defines innovation as the “Purposeful Peter Drucker defines innovation as the “Purposeful response to change”response to change”
Innovation is a social processInnovation is a social process Innovation is NOT just technology – It is new Innovation is NOT just technology – It is new
partnerships, new governance structures, new ways of partnerships, new governance structures, new ways of doing businessdoing business
Thus Innovative scenario implies that all citizens are Thus Innovative scenario implies that all citizens are competitive in the new economycompetitive in the new economy
““Globalization” of innovation Globalization” of innovation in life sciencesin life sciences
Competitiveness = InnovationCompetitiveness = Innovation
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““Globalization” of innovation in life Globalization” of innovation in life sciencessciences
R&D centers in many parts of the worldR&D centers in many parts of the world
Scientists in India are as good as Scientists in India are as good as scientists in other countriesscientists in other countries
Alliances across borders Alliances across borders
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – OpportunitiesOpportunities
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Alliances with in USAAlliances with in USA
•Fee for serviceFee for service
•IP ownership IP ownership
•Milestone paymentsMilestone payments
•EquityEquity
•Proven to be successful - examplesProven to be successful - examples
Global AlliancesGlobal Alliances
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Global Alliances – ChallengesGlobal Alliances – Challenges
•DistanceDistance
•Different time zonesDifferent time zones
•LanguageLanguage
•Communication channels Communication channels
•BT is different from ITBT is different from IT
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Global Alliances – Success factorsGlobal Alliances – Success factors
•Honesty and trustHonesty and trust
•IP issuesIP issues
•Meet delivery targetsMeet delivery targets
•Fulfill the commitments madeFulfill the commitments made
•““Under-commit and over-deliver”Under-commit and over-deliver”
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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R&D Alliances – Opportunities for R&D Alliances – Opportunities for Indian companiesIndian companies
•Discovery chemistryDiscovery chemistry
•Computational and Computational and in-silicoin-silico design - design - bioinformaticsbioinformatics
•BiologyBiology
•Methods developmentMethods development
•API and intermediate manufacturingAPI and intermediate manufacturing
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
Types of alliances for Indian Types of alliances for Indian companiescompanies• Fee for serviceFee for service• Joint VentureJoint Venture• PartnershipsPartnerships• Subsidiaries and branchesSubsidiaries and branches• Lessons for Indian companiesLessons for Indian companies
Move away from fee for service to more Move away from fee for service to more closer relationships like future royaltiescloser relationships like future royalties
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
Alliances by CiVentiChemAlliances by CiVentiChem• Formation of a subsidiary Formation of a subsidiary
Indus BioSciencesIndus BioSciences
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About CiVentiChem in RTP, NCAbout CiVentiChem in RTP, NC•Modern laboratoryModern laboratory
•Capacity to work from milliliter to Capacity to work from milliliter to 50 liters50 liters
•Access to excellent scientific talent and facilitiesAccess to excellent scientific talent and facilities
•Established relationships with several pharma/biotech Established relationships with several pharma/biotech companiescompanies
•High pressure/temperature equipmentHigh pressure/temperature equipment
•Access to UNC-Chapel Hill, Duke and NC StateAccess to UNC-Chapel Hill, Duke and NC State
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US Companies – A Perspective from US Companies –
CiVentiChem ServicesCiVentiChem Services
DiscoveryDiscovery DevelopmentDevelopment
GenomicsGenomics
SequenciSequencingng
Target IDTarget ID
ScreeningScreening
Natural Products Natural Products and Synthesisand Synthesis
HTSHTSLead Lead
OptimizationOptimizationPre-ClinicalPre-Clinical
DevelopmentDevelopmentLead IDLead ID
ClinicalClinicalTrialsTrials
FDAFDA
Launch ($$$$)Launch ($$$$)
Target Target ValidationValidation
Assay Assay DevelopmentDevelopment
Cell BiologyCell Biology
ChemistryChemistry
BiologyBiology
System System PathwaysPathways ProteomicsProteomics
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Our CustomersOur Customers
•Pharma, Biotech, Virtual, Crop Sciences etcPharma, Biotech, Virtual, Crop Sciences etc
Their needsTheir needs
•Global capabilities- small to large scaleGlobal capabilities- small to large scale
•Quick serviceQuick service
•Good communication and customer serviceGood communication and customer service
•Novel methodologiesNovel methodologies
•New technologies and productsNew technologies and products
•A new initiativeA new initiative - Indus BioSciences - Indus BioSciences
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
12,000 Sq Ft modern R&D laboratory in Hyderabad, India
In the vicinity of IICT and Osmania University
Contract R&D, scale-up synthesis and technology development
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IndusBiosciences
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
Customers
CiVentiChemPrimary contact
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Our servicesOur services•Discovery support and lead optimizationDiscovery support and lead optimization
•Chemists - FTE at CiVentiChem and IndusChemists - FTE at CiVentiChem and Indus
•Synthesis of intermediates, APIs, reference Synthesis of intermediates, APIs, reference standards and metabolitesstandards and metabolites
•Small and large scale synthesis Small and large scale synthesis
•Commercial or contract manufacturingCommercial or contract manufacturing
•Goal is to establish a win-win relationsGoal is to establish a win-win relations
Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
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Cross-Border R&D Alliances – Cross-Border R&D Alliances – A Perspective from US CompaniesA Perspective from US Companies
In SummaryIn Summary• Cross border alliances are beneficialCross border alliances are beneficial• Mutual commitmentMutual commitment• It is like marriage – all partners must It is like marriage – all partners must
work hard work hard • Can lead to a great successCan lead to a great success
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