Brilliant BioPharma

Wyeth BioPharma is the fourth largest biotech company in the world, Cavan Redmond and Dr. Michael Kamarck talk to NGP’s Rebecca Goozee about challenges, collaborations and the future of biotechnology.

One of the greatest challenges for any pharmaceutical company is plotting a long-term strategy that allows it to meet either new medical opportunities or emerging platforms. Many decisions made in the late 1990s by various pharma companies involved exploring new therapeutic areas. Wyeth looked at the assets it had; recent acquisitions of Genetics Institute and a majority share of Immunex; and found it had a major opportunity in biotechnology that allowed it to focus on new targets and ways to treat human diseases. This was the chance to create a very different type of opportunity for the company – Wyeth BioPharma.

Cavan Redmond, Executive Vice President and General Manager and Dr. Michael Kamarck, Senior Vice President for Wyeth BioPharma have worked together since the formation of the biotech business operation. Kamarck believes that Wyeth BioPharma has the potential to generate around $6 billion by the end of 2007, approximately 35 percent of the revenue from the pharmaceutical business in total, and goes on to suggest that the biotech unit is soon going to equal what the pharma unit brings in. This is an exciting time for Wyeth. Kamarck explains how they got here: “Around 2000, we made a strategic decision to invest over $3 billion in pulling together commercial and process development facilities in support of our biotechnology assets - including products from Immunex and Genetics Institute. Since then our revenues in biotechnology have been growing at more than 25 percent per year. All of that initial investment now provides an infrastructure that is supporting a pipeline of 24 biotech products in development today.”

How do they plan on climbing the ladder to top of the biotech food chain? Redmond answers, “There are three different areas we are concentrating on – R&D, commercialization, and manufacturing.” A third of Wyeth’s R&D pipeline is invested in biotechnology, in both early and late stage products, and Redmond is keen to stress that they have had a redoubling of efforts in the drug discovery area resulting in a huge increase in the number of targets they are working on.

Although the company is highly successful at collaborating with Amgen on Enbrel in the US and as a Wyeth-only product outside of the US, Wyeth anticipates continued growth of their other biotechnology drugs as well as learning how to add value to the healthcare system and how to market these new drugs in an ever-increasing competitive environment.

What Redmond and Kamarck hope to achieve in the third area is to manufacture without having the pressure of significant and risky long-term capital investments. “Five years ago,” explains Redmond, “we made a decision to invest as much as we could into building our infrastructure. We developed significantly in this area and we believe that this will allow us to not have to build new facilities in the future. Instead we can use our existing facilities in a different way, thus reducing the exposure risk of the most expensive part of the biotech development process.”

Challenges
Kamarck suggests that the biggest challenge for the biotech sector is to match capacity to demand. As Redmond pointed out, Wyeth invested in facilities and although they were expensive to set up it, is more expensive not to have the facility when you need it. “We first worried about breaking the bottleneck in terms of being able to manufacture and meet demand for all our biotech products and we’ve really been successful in meeting this goal,” says Kamarck. As Wyeth BioPharma goes forward, the next biggest challenge is to bring down the cost of biotech medicines to be as equally cost efficient as small molecule drugs.

Redmond suggests that another challenge facing the biotech industry is innovation and he believes that this will transform the industry over the next five to 10 years. The focus on innovation is important to Redmond; he feels there is a constant need to come up with new proteins, targets, and new ways of doing things to take advantage of the emerging science. “The focus on innovation is also going to be important because the next opportunity facing the industry is what is going to happen with biosimilars,” remarks Redmond. “It’s a very important political and social debate going on in both the US and Europe right now. As long as you continue to innovate with new products, improve old products, and understand the science of biotechnology, you will be able to have a successful biotechnology business regardless of changes in the biosimilar legislation, thus providing biotech companies a way to move forward and be successful.”

Collaboration
Looking at Wyeth’s biotech portfolio, about two-thirds of the products have a partner involved. Collaboration is important to Wyeth for a number of reasons. Kamarck points to the history of the biotech industry as the model for the industry today, as it is based on collaboration and partnership. There are in fact very few products that are globally manufactured, marketed, and sold through the original discoverer. “Partnerships also allow you to take advantage of your strengths,” comments Redmond, “and allow you to find synergies you may miss if you were doing it yourself.” Redmond uses Wyeth’s collaboration with Amgen as an example of a collaborative relationship that works well for both companies on the technical and commercial fronts. “It allowed us to make Enbrel one of the largest biotech products in the world. The fact that we have different cultures and alternate ways of problem solving encourages us to come up with some really unique solutions to very difficult challenges.”

Redmond and Kamarck agree that their choice to collaborate is driven by a desire to take advantage of the innovation and expertise of other companies that Wyeth does not necessarily have. They aim to create a win-win situation for all companies involved by establishing relationships that have a long-term viability and allow them the opportunity to make use of all the available science.

“To give you an example of how pragmatic we are,” says Kamarck, “we discovered a whole family of molecules called bone morphogenetic proteins from which we have a commercial product called Infuse, used widely for bone repair. In this case a partnership came to the table within discovery and manufacturing with Medtronic Sofamor Danek, who had expertise in the device industry. This partnership has been hugely successful and it goes both ways.” Redmond adds, “We’re not lacking for innovation but rather we are opportunistic about picking product opportunities and maximizing them.”

Wyeth opts for platform technology
Putting a manufacturing plant in the ground before you have an approved drug represents a major financial risk. Since it takes five years to build a manufacturing plant, it usually means your drug is in Phase II, without definitive information on its potential, when you have to make the decision. This is why historically companies have had to build at-risk, gambling on a drug’s future. If they fail to build soon enough, they usually cannot meet demand. “In the industry today,” says Kamarck, “roughly half the plants that are built currently manufacture the drugs they were originally intended to manufacture – so I guess you are right half the time.” The other half of the plants are producing alternate products so getting the timing right to match capacity to demand is almost impossible. Kamarck describes it being, “like an ocean liner chasing a jet ski.”

Redmond and Kamarck have spent a lot of time talking about how science and technology improve their ability on the process development side – establishing the way that products will be manufactured. They are able to develop virtually all of their pipeline compounds using the same manufacturing process, thus creating a platform technology. This gives them a huge amount of flexibility and reduces time from discovery to IND and eventually time-to-market. Instead of building dedicated facilities for each new product, they can use an existing facility since the process already ‘fits’. Kamarck: “Our facilities are flexible enough that as the pipeline emerges, we can pop the new products right in because in a real sense we’ve standardized manufacturing– we’ve used a platform.”

Wyeth BioPharma chose to locate major manufacturing plants in Massachusetts and North Carolina due to the density of talent and expertise in these areas. They also chose to locate in Ireland what is probably the world’s largest integrated biotech manufacturing plant. The reason for this, Kamarck explains, is threefold. Firstly, Wyeth has been in Ireland for 30 years and has great experience in Irish manufacturing. Second, they felt there was an untapped population of talent in Ireland. And thirdly, Ireland has a reduced tax rate compared to the US and other manufacturing locations. Kamarck: “The plant in Ireland is actually four discrete manufacturing facilities that are fully integrated. For example, the plant currently supports both our Enbrel and Prevnar biotechnology products.”

Advice
For those considering the biopharmaceutical line of business, Redmond suggests having a long-term horizon – just acquiring a biotech product or one biotech company isn’t enough. “You have to actually change the way you do business, the way you manage, and the risk profile of your company, and that is much misunderstood, especially the understanding of the risk profile of biotech versus small molecule.”

Secondly, Redmond recommends having the right people in place, saying that Wyeth chooses manufacturing sites based on multiple criteria, but the talent of available people is the biggest driver. “Mike hit it on the head,” remarks Redmond, “since biotechnology is only a 25-year-old industry, making sure that the right people integrate biotechnology into your company is a critical success factor.” The individual capabilities and the ability of management to accept different skill sets are make-or-break requirements when integrating biotech into a large pharmaceutical company.

Future of biotech
The innovations resulting from biotechnology over the past 25 years are huge; their impact on human health continues and extends to patients all over the world. “Alzheimer’s and other similar diseases are where biotechnology offers the huge advantage of biological specificity,” believes Kamarck, “this will allow us to address what’s gone wrong, what’s really broken.”

Redmond sees huge potential as the biotech industry matures: “We took biotechnology to a new level. What we did is integrate biotechnology into a pharmaceutical company, which allows us to leverage the advantages of a large pharmaceutical company. I do believe that the future holds a closeness between biotech and big pharma and that they need each other to be successful.”