By Allison Proffitt
Sept. 9, 2008 | BOSTON—Adopting a more agile biotech philosophy and an acquisition strategy akin to creating “a string of pearls” are the key ingredients to helping Bristol-Myers Squibb succeed as a next-generation pharma, according to CSO and president of R&D, Elliott Sigal.
Sigal, who keynoted DDT* in August, believes the industry’s current challenges are important, but surmountable. Sigal graduated from medical school in 1981 and began a career spanning medicine, research, and management. Before joining BMS in 1997, he held positions at pharmaceutical company Syntex and the genomics firm Mercator Genetics
From this vantage point, he sees the challenges facing biotech clearly: patent expiration, greater clinical and regulatory requirements, increased role of payers, and “a severe restriction of access to capital.” But he also sees much opportunity at this juncture.
“I’m speaking primarily from the standpoint of a mid-size pharma company,” he says. “We wonder whether the traditionally do-it-all, own-it-all from every part of the value chain is sustainable. It’s certainly a risky and costly model.”
Sigal proposes taking what we’ve learned over the past ten years about biotech and pharma and combining that knowledge into the “next-generation biopharma.”
“The great attraction of biotechs is their spirit, flexibility, adaptability, and discovery,” he says. “You can follow the science essentially wherever it leads, and we must continue to support that, even if it means that medicines are ahead but far ahead.” Sigal also believes that biotechs are getting it right when it comes to collaborations and partnerships. “I think biotech has really done that extremely well, whereas pharma has just come around to innovative-type partnerships.”
“For the best of pharma,” Sigal says, “we generally mean selecting and retaining the range of expertise and scope of resources and capabilities that have been part of the industry’s heritage, including strong small-molecule expertise, late-stage clinical development, and regulatory expertise. They typically have a base of real financial strength, scale, global reach, commercial expertise, and can work across multiple therapeutic areas and geographies.”
The combination of these traits will lead to a next-generation biopharma with an innovative portfolio, a continued focus on improving productivity, and a selective integration strategy when it comes to partnerships.
“Part of our selective integration certainly applies to what’s been called the String of Pearls strategy,” explains Sigal, describing recent BMS acquisitions and agreements, including the acquisitions of biotechs Adnexus and Kosan Biosciences, and a licensing agreement for cardiovascular disease with Kai Pharmaceuticals. Interestingly, Jeremy Levin, formerly of Novartis, has recently been named head of BMS’ new Strategic Transactions Group (see “Leading by Example,” Bio-IT World, March 2007).
“The goal of these transactions is consistent: to access innovation across specialty and biotech wherever it may be, or in pharma, that will enhance or complement our own internal expertise and build strength in key areas.” (As “what we hope will be a fourth addition to the string of pearls,” Sigal acknowledged BMS’ bid for ImClone, but only to read a brief statement saying the company believes the transaction to be a strategic next step of ImClone’s existing relationship with BMS.)
This is all very strategic, Sigal says. “We actually set our discovery engine to less capacity than what we thought the whole organization needed so that we would force our portfolio strategy to go outside, level attrition, and to access innovation.”
With their identity as a next-generation biopharma in mind, Sigal said that Britsol-Myers Squibb is focusing on choosing “disease areas where we saw significantly unmet needs and had the core competencies to address R&D and commercialization”. . . “multiple modalities to find the right approach to the right target”. . . “continuously pushing ourselves to develop medicines in different ways,” and developing new treatment options that “demonstrate compelling economic value for delivering that medicine to patients.”
He acknowledged that his plan isn’t for everyone. “I think for some companies this is a map for the next-generation biopharma, not for all,” Sigal said. But he believes BMS is perfectly positioned. “Major biotechs and mid-sized pharmas, I believe, are in the best position to have the agility and capabilities to make that bridge.”
* IBC’s Drug Discovery and Development of Innovative Therapeutics, August 4-7, 2008, Boston