Finding the R&D ‘sweet spot’

You’ll often hear Robert Ruffolo, President of R&D at Wyeth Pharmaceuticals, claiming his group to have found the ‘sweet spot’ in R&D – and with one of the most fruitful pipelines in the industry today, no one’s arguing with him.

Today, Wyeth boasts one of the highest levels of productivity in R&D – and estimates that in the last seven years it has improved its average overall productivity between 300 and 500 percent, based on drugs put into development, INDs filed to start phase I clinical trials and drugs moving into phase III.

Amid overall sagging R&D productivity levels, the industry standout’s envied pipeline includes Lybrel, a continuous contraceptive, and Toricel for renal cancer both approved by the FDA just weeks ago, along with a number of NDAs awaiting approval – including Pristiq for depression and for vasomotor symptoms of menopause, bifeprunox for schizophrenia, and many more.

So what’s the secret behind one of the most promising pipelines? Ruffolo narrows it down to one major initiative: clinical data management outsourcing. “We have six to eight drugs that are currently being evaluated by the FDA that could be approved in the next 12 to 18 months or sooner, and most of those would not have made it out of our pipeline if we hadn’t outsourced clinical data management.”

While outsourcing clinical data management (CDM) was a move that most of the industry frowned upon, the once highly criticized venture has paid dividends for Wyeth. Positioning itself at the forefront of CDM outsourcing in pharma has made Wyeth a textbook example for the industry of how outsourcing has opened up resources and accelerated the all-too-lengthy drug discovery process.

Reengineering R&D

So exactly how has Wyeth managed to position itself at the top amid an industry commonly sullied for its poor R&D productivity levels? A number of factors led to its drastic improvement, beginning with a basic reengineering of everything.

Wyeth started with discovery and worked their way through preclinical development to clinical trials to regulatory affairs by implementing breakthrough projects intended for quantum improvements in performance. Most of Wyeth’s breakthrough projects were completed utilizing Accenture – a global management consulting, technology services and outsourcing company – either as a consultant or having the projects turned over to Accenture altogether, as in the case of clinical data management.

Currently Wyeth is averaging 10 breakthrough projects a year, after having run more than 70 of these projects in the last seven years. “The first year we ran six of them just in discovery alone because if we didn’t get discovery right and get more molecules into development, then the rest of R&D didn’t matter,” Ruffolo explains. “Then the next year we worked on our preclinical development, so that we could get those drugs to the IND stage to start phase I clinical trials. Then we pretty much methodically moved down the value chain from discovery all the way through to late clinical trials.”

Such major improvements that qualified to be labeled breakthrough projects, ultimately translated to a great deal of change. Ruffolo feels that the rate of change embraced by Wyeth scientists has given them a leg up on the competitors. “Our scientists used to be afraid of these change initiatives when we first started because they represented major changes. Our scientists are now a lot more comfortable with change, and I think that this can be a competitive advantage for us.”

The most drastic and controversial change for Wyeth by far was the outsourcing of clinical data management. With clinical trials conducted around the world and the resulting data needed to be quality-checked, quality-assured and entered into a database, management of the data was identified as a transactional – not to mention expensive – process.

Considering that Wyeth retains data on every single patient in a clinical trial, turning to Accenture to outsource its CDM was not only a wise decision but a necessary one. “When you figure that we have tens of thousands of patients and hundreds of thousands of data sheets coming in each year, had we not outsourced clinical data management through Accenture, our own system would have collapsed under the weight of the phase III pipeline,” Ruffolo admits.

Industry examples

Wyeth’s outsourcing venture began with seeing clinical data management in a new light, and learning from other industry examples. “We decided to think of clinical trial data not as something magical and unique to our industry, which is what a lot of our competitors do,” Ruffolo explains. “We consider the management of clinical trial data to be the same as bank transactions or airline transactions, and we saw that Accenture was doing that for airlines, banks and lots of other customers.”

Ruffolo followed those industry examples and realized there was no reason why the same couldn’t apply to pharmaceutical. “We thought ‘Does it really matter to the person who is entering the data whether they were entering dollars and cents or millimeters of mercury for blood pressure’? That was the biggest leap of faith – and it turned out to be correct. Not only did they do it better, faster and more cost effectively, but the quality went up when we outsourced our CDM.”

As the first in the industry to embark on outsourcing CDM, Wyeth took necessary precautions to reduce the level of risk by incorporating incentives within the contract with Accenture, laying out rewards and penalties for meeting or not meeting targets. So far Wyeth has been very pleased with the arrangement with Accenture. “If they didn’t live up to pre-specified metrics – whether they were related to quality or quantity – they had to pay a penalty, and of course, if they exceeded them, we had to pay them more, so it worked out very well,” Ruffolo says. “There were probably 10 to 20 quality metrics that they had to hit and we set high hurdles.”

Identifying outsourcing opportunities

In fact, the arrangement with Accenture worked out so well that Wyeth found other areas of their business that could also be outsourced – and still examines whether parts of the business could be handed off to a third party.

Ultimately the decision of whether to outsource a particular area came down to identifying what is core and what is not core to the business – and then identifying whether it could be done more effectively by someone else. “One of the things that I think we’ve done better than some of our competitors is to make the tough choices as to what’s core and what isn’t core,” Ruffolo admits. “We’ve been better at defining what other people can do as well as us or maybe even better than us.”

After witnessing the benefits of outsourcing CDM, Wyeth extended their relationship with Accenture by outsourcing their training as well. Looking at its R&D training obligations, Wyeth recognized that there should be consistency among its training that goes across its clinical group, pre-clinical development group, safety group, and so on. Since then Wyeth has even changed the overall model of their training. Initially Wyeth was doing approximately 80 percent of training face-to-face and 20 percent online, and now it’s inverted the model to be 80 percent online and 20 percent face-to-face.

Outsourcing R&D training has reaped numerous benefits for Wyeth. “We provided some consistency and therefore cost savings, and importantly, better documentation because we have to document this for the FDA and the EMEA as well,” Ruffolo acknowledges. “We are doing it more efficiently, more consistently, and we can’t lose sight of the fact that we can actually now document it for regulators much more effectively than we could before because it’s also easy to retrieve this training information.”

Wyeth also identified that it could outsource some of the chemistry portion of the business. “We do a lot of medicinal chemistry, which is how we synthesize our molecules and make our drugs,” Ruffolo explains. “We felt that it didn’t all have to be done by us here in the US; we believed that parts of it could be done as well by a third party.”

As a result, Wyeth signed a multi-million dollar agreement with GVK-Bio, which included an initiative to have 150 chemists working exclusively for Wyeth in a facility owned by GVK-Bio, with only one or two Wyeth employees on site. The agreement has given Wyeth additional chemist resources without having to reduce the number of chemists in the US. “This gives us access to many more chemists than we otherwise would be able to afford,” Ruffolo says. “We simply took open positions in medicinal chemistry, moved them over to GVK and ended up with that many more chemists. So we’ve been able to use this outsourcing of medicinal chemistry not to decrease the number of chemists we have in the US, but rather to expand the number of chemists we have working for Wyeth overall.”

A healthy pipeline

After its significant rehaul of R&D through outsourcing initiatives, the results are already starting to bear fruit for Wyeth, largely evident through its promising pipeline. “All those NDAs that were submitted in the last couple of years – we have seven or eight drugs sitting at the FDA waiting for approval right now – would still be sitting in our pipeline if we hadn’t outsourced through Accenture,” Ruffolo says.

Wyeth has set specific metrics for the number of drugs to enter the pipeline each year – and right now the company is working its way to being the first to deliver two new drug applications (NDAs) every year. On top of its outsourcing, other initiatives are in the works to help reach this goal. “We allow our scientists to bring in drugs from outside Wyeth, and they count the same as if they were discovered internally. That has had a positive benefit because we don’t have the not-invented-here syndrome – it decreases some of the internal burden to discover those drugs ourselves.”

Still the vast majority of drugs in development comes from Wyeth’s own laboratories. While Wyeth plans to continue to keep its eyes open for new drugs around the world, it realizes it’s not in a position to get into a bidding war with a company the size of Pfizer. “We decided that we’d cherry pick the world where we can to find new drugs in order to strengthen our pipeline, but our own internal discovery group puts the lion’s share of drugs into development,” Ruffolo says. “That was basically the subject of the first year’s breakthrough projects in 2001 – to build discovery to the point where it can go from discovering three drugs a year to 15 new drugs per year, and that represents a 500 percent increase in performance.”

Aside from the recent Lybrel and Toricel approvals, Ruffolo has high hopes for the other drugs currently in the pipeline: keeping their fingers crossed for approval by the end of year for Pristiq for vasomotor symptoms of depression, the first non-hormone for hot flashes, and Viviant, their selective estrogen receptive modulator for the treatment of osteoporosis. Looking ahead to 2008, Wyeth has an FDA action date for methylnaltrexone for opiate-induced constipation, and Pristiq for depression in the first quarter, and is hoping for approval for bifeprunox sometime between late 2007 and early 2008.

Wyeth is also planning to submit the NDA on Aprela for the treatment of menopausal symptoms and osteoporosis by the end of this year, and ReFacto AF, a new formulation for recombinant Factor VIII for hemophelia. Towards the end of 2008, the company hopes to get Viviant approved for the prevention of osteoporosis. “That’s a lot of potential new drug approvals coming in the next 12 to 18 months,” Ruffolo says. “We’re sort of in the ‘sweet spot’ right now and as I said earlier, a lot of those drugs would still be in our pipeline if we hadn’t outsourced our clinical data management.”

The rising productivity and blossoming pipeline attests to Wyeth’s significant remodeling efforts around their R&D, at the core of which lies their outsourcing initiatives. The positive results reveal that overcoming low R&D productivity levels isn’t a matter of getting the best scientists but rather reengineering the processes around science. “R&D productivity was really a major issue for us and for virtually all other pharmaceutical companies as well,” Ruffolo says. “Many CEOs claim to have the best scientists in the industry – that’s nonsense. We all hire from the same gene pool – our scientists are no better or no worse than anybody else’s – so the one thing we thought we could do better than others was to build better processes, and that’s where we focused.”

Dr. Ruffolo is President of Research & Development for Wyeth Pharmaceuticals, and corporate Senior Vice President of Wyeth. He joined Wyeth in 2000 as Executive Vice President, responsible for Pharmaceutical Research and Development. Prior to joining Wyeth, Dr. Ruffolo spent 17 years at SmithKline Beecham Pharmaceuticals where he was Senior Vice President and Director of Biological Sciences, Worldwide. Before joining SmithKline Beecham, Dr. Ruffolo spent six years at Lilly Research Laboratories.

“Many CEOs claim to have the best scientists in the industry – that’s nonsense. We all hire from the same gene pool”

“All those NDAs that were submitted in the last couple of years … would still be sitting in our pipeline if we hadn’t outsourced through Accenture”