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Industry Insights: Navigating Change in the Biotechnology and Pharmaceutical Industries

Pharmaceutical and biotechnology executives face similar challenges triggered by new interdependencies among large corporations and start-up firms, and a constant influx of potentially disruptive technologies.

Interviews with EMTM alumni, faculty and students reveal how these trends influence business and scientific leaders' critical decisions about research and development, manufacturing processes and information technology and overall corporate strategy.

New Interdependencies

"Most of the innovation in new drug discovery is started in biotech firms because a big company cannot absorb technology at the same rate that technology is getting into the market," says Ricardo Macarron, PhD, EMTM'06, Vice President of Compound Management at GlaxoSmithKline plc. "The typical biotech exit strategy is to be absorbed by larger pharmaceutical companies. For GSK, this means we must interact effectively with collaborators and business partners, understand what distinguishes a successful business from an unsuccessful one and make data-driven investment decisions in this complex environment."

According to Scott Diamond, Arthur E. Humphrey Professor of Chemical and Biomolecular Engineering, "The pharmaceutical industry can never test the thousand great ideas to find the ten winners that the biotech industry can produce, along with 990 struggling ventures. EMTM is particularly successful at aligning the skills needed to support the high risk entrepreneurship activities of early stage drug discovery at biotechs with the business realities faced by multi-national pharmaceutical firms."

"In the world of biotech start-ups, there are tremendous requirements for execution on intellectual property issues, fund-raising, and scientific and business development in a highly competitive and highly regulated constantly changing marketplace," says Diamond. "Biotech firms require competence in contract research, reagent sales, equipment sales and leasing, internal drug development programs and drug development partnerships. At the same time, these small, high risk biotech start-ups have to deal with the constraints and rigidity of a multi-billion pharmaceutical house that thinks in half billion dollar increments."

Disruptive Technologies

While pharmaceutical and biotech firms are situated on opposite sides of this rapidly-changing dance of collaboration, partnership and acquisition, over the past 15 years both types of firms have had to grapple with complex decisions about how and when to adopt disruptive technologies such as high throughput screening, DNA chips and microarrays.

"It's taken a good decade — many extremely successful businesses and many extremely unsuccessful businesses later — to establish the validity of these technologies for research and pharmaceutical development," says Diamond. "With new technologies, we see a common cycle in which the expectation exceeds the deliverable and even the expectation itself was originally na´ve. Now that these technologies have gone through several rounds of improvement there is an alignment of realistic expectations with a disruptive technology that can meet those expectations."

Likewise, Macarron says, "Innovation takes a long time to pay off. I've been devoting my life to screening at GSK for the last 14 years. The technology has changed dramatically in that time from assays we did by hand to our ability now to run a million compounds in a single day. However, the underlying challenges — the biology and chemistry of the body — are as complex as before. New technologies typically take a few months out of a process that takes on average 15 years to get from a working hypothesis about the therapeutic utility of a target or a compound to a drug. With only 1% of projects getting to market, that's a lot of failure."

Macarron adds, "We live in a very interesting time of new opportunities and information overload, for instance, with the decoding of the human genome. It's very important to be able to understand how to question the data and the technologies to try to foresee their usefulness. The whole range of subjects covered in EMTM make for a powerful set of skills with which to harness technology."

Timing Technology Investments

Decisions about when to invest in new technologies are similarly critical for non-R&D corporate functions such as information technology and manufacturing.

Dermot McCaul, EMTM'05, Associate Director of IT Strategy and Governance at Merck & Co., Inc., integrates data about manufacturing processes, laboratory systems and Merck's overall supply chain into useful information for Merck's manufacturing functions. "My IT portfolio is a mix of strategic work and tactical work to fix problems," says McCaul. "The key is to make sure we're not in reactive mode to everything and to align our IT vision, strategy and processes so we can get from our current state to our desired future state. You can't do everything so you've got to employ a clear common portfolio process to make sure to balance both needs."

"EMTM helps me evaluate with clarity when technology opportunities add value to our business and when they're just overhead," says McCaul. "I can evaluate where a technology is in its life cycle, how it fits with our risk strategy, whether it adds value to our business, whether to devise a scalable strategy and when an opportunity is worth the risk to just dive in."

Jim Breen, EMTM'07, Vice President of Worldwide Engineering for the $6 billion Global Biologics Supply Chain division of Johnson & Johnson, similarly anticipates that the EMTM program will help him evaluate when to invest in technologies that might reduce costs and compress time-to-market.

"We support manufacturing in an environment in which technologies, market conditions and government oversight changes constantly," says Breen. "Through EMTM, I'm gaining the tools and a broader vision with which to address these business challenges."

Transformative Skills

First year student, Jim Kulp EMTM'09, Manager of Operations Technical Support for Centocor Inc., already sees the value of the program. "In providing technical support for a group that manufactures a biological product, a monoclonal antibody, my role is to look for ways to improve product yield, reduce variability in the process and increase efficiencies. Just based on the caliber of people and the depth of the classes, it's already apparent that EMTM is leading me in the right direction."

For McCaul, "EMTM changed the slope of my trajectory at Merck. I was hired as a portfolio manager but this has been transformed into IT Strategy and Governance, a job that was created around my broader skill set. EMTM has changed my mindset from 'how fast do I do it?' to ask different questions such as 'what do we need to do, why do we need to do it?' I can provide guidance on how to develop options to solve business problems, including options that don't include IT."

This business context for decisions about technology is at the core of the EMTM program. "We give leaders the tools to assess a new technology and what it can deliver at present, to evaluate and manage its risk and cost factors and to determine at what point it should be adopted," says Diamond. "Students learn to think in an integrative way to understand the business issues, the scientific issues, the database issues, the organizational issues and how to manage at that interface."

EMTM appears to have accelerated Macarron's career progression at GlaxoSmithKline. "In 2006, I finished the EMTM program, was named president elect of the Society for Biomolecular Sciences, and was promoted from Director of Assay Development to Vice President of Compound Management at GSK," he says, adding, "It's been a fantastic year!"


Industry Insights: Biopharma

Ricardo Macarron

“Most of the innovation in new drug discovery is started in biotech firms because a big company cannot absorb technology at the same rate that technology is getting into the market.”

Ricardo Macarron, PhD, EMTM'06
Vice President of Compound Management
GlaxoSmithKline plc

Scott Diamond

“It's taken a good decade — many extremely successful businesses and many extremely unsuccessful businesses later — to establish the validity of these [disruptive] technologies for research and pharmaceutical development.”

Scott Diamond
Arthur E. Humphrey Professor of Chemical and Biomolecular Engineering
Penn Engineering

“EMTM helps me evaluate with clarity when technology opportunities add value to our business and when they're just overhead.”

Dermot McCaul, EMTM'05
Associate Director of IT Strategy and Governance
Merck & Co., Inc.


“We support manufacturing in an environment in which technologies, market conditions and government oversight changes constantly.”

Jim Breen, EMTM'07
Vice President of Worldwide Engineering
Global Biologics Supply Chain Division
Johnson & Johnson


“In providing technical support for a group that manufactures a biological product, my role is to look for ways to improve product yield, reduce variability in the process and increase efficiencies.”

Jim Kulp, EMTM'09
Manager of Operations Technical Support
Centocor Inc.


“In 2006, I finished the EMTM program, was named president elect of the Society for Biomolecular Sciences, and was promoted from Director of Assay Development to Vice President of Compound Management at GSK... It's been a fantastic year!”

Ricardo Macarron, PhD, EMTM'06
Vice President of Compound Management
GlaxoSmithKline plc

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