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Turning the Titanic

March 16, 2010 | Scientia Advisors is a small life sciences strategic consulting firm in Cambridge, Mass., with about 30 employees, and as managing partner Intvu “Harry” Glorikian says, “back on the growth track” after a relatively quiet year. Scientia’s life sciences and health care clients range from venture-backed start-ups to companies with more than $150 billion in revenue. The five main verticals are: health care IT, life sciences tools and technology, in vitro diagnostics, medical devices, and therapeutics. Glorikian worked for 20 years in three of those verticals, most recently at Applied Biosystems, where he says, “I got to ride the genome up and I got to ride the genome down. We were talking about the impact of the genome on therapy and diagnosis long before it was common vernacular.” Kevin Davies spoke to Glorikian about the current trends in personalized medicine and how pharma is approaching the subject.

Bio•IT World: How did Scientia get interested in personalized medicine?
Glorikian: When we started Scientia, our first projects were around tools in genomics as well as the impact on diagnostics, because that was the first group that felt the pinch—using genomic information to better diagnose someone. The next natural thing is using genomic information to tell who should get what drug or whether one drug will work or not. The way the field started out was a very narrow definition of personalized medicine—more around the Her2/Herceptin definition. We’re probably one of the first companies that broadened and published on that definition—it’s giving an accurate prognosis of a patient with direct therapy. It is being able to monitor therapy, and now to predict, or for a test to be predictive, of therapy. These are new definitions in the past 2-3 years. It’s a very nascent field.

If Herceptin is Exhibit A, what are some of the other outstanding examples in personalized medicine?
Outstanding, I like that word! {laughs}. In reality, there’s a scale. After Her2/Herceptin, you’ve got KRAS for Erbitux and Vectibix and BRC/ABL for Gleevec, those are the examples. We have done research showing a clear trend in which payors will only reimburse for a targeted therapeutic if the corresponding test shows there is a high likelihood for response. Do you consider Genomic Health as a personalized test? Yes, because in that class of woman, she’s not going to get chemotherapy if her test doesn’t come up in the right direction. I would consider that a gatekeeper and clinical decision support system that is driving a therapeutic decision.

There is this model of how [Genomic Health] went to market, how they priced their test, which has caused a level of activity—every single company we deal with, the question comes up: do we need a CLIA lab? Do we go to market this way? What’s our pricing reimbursement strategy? It’s completely turned what was much more straightforward. That’s incredibly good for the IVD industry per se, and it’s opened the eyes of pharma to say, I can get decent pricing for this. This is not a $15 test. This could be a $3000-4000 test.

Genomic Health had an excellent go-to-market strategy—they went to the physician, not to the lab. They have an entire department—advocates for the patient—making sure everybody got reimbursed.

What sort of business models do you see working in personalized medicine?
Right now they’re all over the place. Anything from the partnering model to the we-should-have-our-own-diagnostic model. There’s the license-in-something model. Another client is thinking, what if we gave the diagnostic away, and the revenue comes from the therapy, not the diagnostic? There are so many permutations... For the past two years, we’ve had questions like this in almost every project.

The rumored end of the blockbuster model seems to go hand-in-hand with the emergence of personalized medicine. Is that what you see in pharma or are there still pockets of resistance?
I think there are more than pockets! You cannot take the Titanic and move it on a dime. And if you look at the time scale, we’re talking about less than a dime. You’re asking for a big shift very quickly. The threat for big pharma is the following: incremental value creation is shifting from developing new drugs to optimizing the use of the drugs we already have. But pharma isn’t built to capture value from that.

Personalized medicine is shifting therapeutic selection from an art that can be influenced by a detailer to a science where the detailer has very little impact. Pharma’s core competencies have weakening ability to generate shareholder value. These capabilities, in our opinion, will probably become increasingly obsolete. Their go-to-market plan over the next 5-10 years will become obsolete... Imagine telling the CEO of Pfizer that!

The opportunities are significant, but they need to redesign the business model… This may mean getting involved in the commercialization of IVD, monitoring or medical imaging or getting involved in the clinical decision support applications by partnering with various vendors. The IT component is going to be unbelievably important—much, much more important than anyone is giving it credit for today.

They can leverage their patient populations in three ways: identify appropriate therapeutic candidates within the original population via better disease segmentation; expanding into new indications, where Herceptin is now moving into Her2-positive colorectal cancer; enabling migration into earlier course of therapeutic treatments.

If you look at Clinical Data’s Vilazodone… that’s migration of a therapeutic treatment so instead of being third-line, it becomes second- or first. You can now charge higher prices for drugs that work better, because they’re coupled with the test. You’re making money … If it wasn’t for changes in the system, health care etc, pharma would still be pushing the blockbuster.

Could you name any specific organizations that you think really get this?
We’re helping a lot of people, but an organization where everybody gets it and they’re going to change their model? No. In very specific instances, there is a strategic decision that says, ‘We have to do this one this way. So we will. But the others? Let’s look at them one at a time.’ You can’t tell someone who has been doing it a certain way for 30 years to wake up and do it differently. The number of people within a pharma company that understand diagnostics, came from that world, we could count them on 1-2 hands.

Is personalized medicine impacting clinical trials, for example in the genotyping of patient populations prior to a trial?
It’s happening but not across the board. At one of our clients, we could see a large project planned to do something along those lines, but shelved, because it wanted to have a ‘blockbuster.’ Many companies across the board are clinging [to that model]. At some point, this diagnostic is going to be tied to my drug.

Do you disavow your clients of blockbusters and steer them to more tailored strategies?
We often get hired to advise firms which direction to take. People internally want to swing for the fences, but to me, that doesn’t mean anything. It’s a revenue target, but I can achieve that by many different avenues. You might want to go down Main Street, but that doesn’t mean you can’t go down Broadway and reach the same point... Let’s understand our biomarkers, the diagnostic modality, the diagnostic tool. Let’s understand how we take it to market. If I can take a drug from 30% to 70% efficacy, or if we stick to the 30%, how do we find that 30%? We’ll go through all those permutations and find the most effective business model. It’s definitely not ‘our opinion’ that one model is better than the other, we just try to make the best decision with the client.

Are the much publicized safety issues with Vioxx and other drugs fueling personalized medicine?
No. I don’t think so. I don’t mean to be so crass, but you have to look at it from a business perspective. They need to say, what is the best way to take this to market, with the biggest benefit for shareholders and patients? Does every drug have the Vioxx problem? No. So you’re also asking these guys to have a crystal ball.

Do you see pharma rushing to adopt affordable whole genome sequencing from firms such as Complete Genomics?
The initial discussion is not around money. It’s around what will we get out of it? How will we utilize it? If I find something useful, how will I take it to market?... How much money will I put in before I get something that pays back? Do I need to do it today or can it wait?

Do you see more interest in in silico modeling?
Not necessarily… I think the in silico model will become much more relevant when we have more datasets. Complete Genomics might bring something like that to the table, with 5,000 genomes (in 2010). At some point you’ll feel much more comfortable with the data.

What other technologies will impact personalized medicine?
Definitely immunohistochemisty will become very important. This will not be a genomics-only game. In reality, you may see a combination of the two being important. Imaging with certain agents working their way through the system. You’ll get a more personalized response based on those tests.

Overall, what is the outlook for personalized medicine?
There are groups doing incredibly good work. I don’t mean to sound pessimistic. But when you look at how big the pharma industry is, versus the number of personalized medicine products, we have a long way to go. There’s tremendous opportunity to be had… We’re encouraging pharma companies to become much more involved in diagnostic modalities, and very importantly from the IT perspective, clinical decision support develop personalized medicine. You will see successes over the next 2-3 years. Nothing happens overnight in pharma. I think you’ll see some making major changes now… the ones not moving effectively will have to spend more money or run into problems.

But there have been some high-profile success stories such as EGFR, KRAS, etc.?
What is happening is changing the dynamics of the industry. For example, Mass General [Hospital] had an ad where they were saying on the radio, ‘Come to MGH, we understand the genomics of your tumor better. We’ll give you the right treatment and therefore you’ll have a better response’...

The hospital is differentiating itself from any other institution. The doctors are doing well helping patients and they get to publish. The therapeutic company is doing well. And the patient gets a huge success, because they’re still alive! Ultimately, the health care system benefits because that patient is now out of the system…

If I can give a patient—not a perfect drug, but that third-line treatment earlier, because there’s a mutation there, the entire system benefits. The pharma benefits because it has a diagnostic, and it can make an economic argument for a more expensive dose. I don’t think anyone will argue if it is done well.

We have a good 50,000-foot view of the players. Who foresaw Google being anything 10 years ago? We see a shift like that happening in the market… I don’t think the usual suspects are anticipating the change that’s coming.

This article also appeared in the March-April 2010 issue of Bio-IT World Magazine.
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