CLEVELAND, Ohio – Sometimes acquiring other drugmakers is the way to fill your company’s development pipeline with new drugs.
Fred Hassan, chairman and chief executive of Schering-Plough Corp., told attendees of the Cleveland Clinic’s 2009 Medical Innovation Summit on Tuesday that he would fly to Texas that evening to launch Saphris, a drug that treats patients who have schizophrenia and bipolar disorder.
The medical summit ends today with more talk about enabling therapeutic innovations to treat cancer, talks about how health care reform could change the lives of innovators and the announcement of the fourth annual list of Top 10 Medical Innovations for 2010.
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The U.S. Food and Drug Administration approved Saphris for sale in the United States in August. Schering-Plough bought Organon Biosciences NV, the Dutch company that developed Saphris, from Akzo Nobel NV in 2007.
At the time, another major drug company had just taken a pass at Organon, which was developing an anti-psychotic drug, asenapine, that appeared to be effective without some of the side-effects of competing drugs, Hassan said. “We looked at the product and the company as an opportunity.”
That said, Hassan doesn’t pass up innovation generated inside his company, either. “Innovation has to be the DNA of a company,” he said.
Hassan’s remarks were made during a panel discussion among drug, biologics and diagnostics developers around the question: “Go It Alone, Collaborate or Acquire?” Most big pharmaceutical companies are facing depleted development pipelines at the same time their blockbuster products lost their patent protections.
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Life Technologies has gone the acquisition route, too. The $3 billion biotechnology tools company was created late last year by combining Invitrogen Corp. (founded in 1987) with Applied Biosciences Inc. Between 2003 and 2005, Invitrogen made 15 acquisitions, said its chief executive, Greg Lucier.
Life Technologies makes the tools — from reagents to instruments — to help drug discovery and development, among other things. “No matter what goes on in pharma consolidation, there’s a march toward fragmentation of research and development,” Lucier said. “Technology will need giant investments. Globalization of this industry is inevitable. You need scale.”
Contrast that need for scale with Genomic Health, started by CEO Randy Scott in 2000 in response to a close friend’s struggle with colon cancer. Genomic Health tries to help cancer treatment decisions with research, development and commercialization of genomic-based clinical laboratory services. Its one product — Oncotype DX Breast Cancer Assay — is a laboratory test that analyzes the expression level of 21 genes in a woman’s breast tumor sample.
“We get too financially centric,” Scott said during the panel discussion. “At Genomic Health, the patient stays at the center of all we do.”
Then there’s Celgene Corp., a biopharmaceutical company that has developed most of its innovations from the inside. “We’ve been lucky,” said Sol Barer, Celgene’s CEO. “Most of drugs in our pipeline come from inside. But we’ve also done a number of collaborations and acquisitions of cutting-edge companies.”
“How did Celgene growth happen?” asked Barer, who has watched the company grow from 25 employees to 2,000 over three decades. “Brilliant management? No. Massive financial resources? No. Inovation initiatives? We have none,” he said. “There is a fundamental understanding that’s implicit in the company. Without innovation, the company will not survive.”
