The change agent

Merck & Co., Inc. has been big pharma since the early 1900s – but recent years have seen it suffer its fair share of problems in the pipeline. Can the vaccination king future-proof itself? Damien Munroe spoke with Tony Ford Hutchinson, the company’s Executive Vice President of Research Medicine, to find out.

“I think we should be a global company … all companies are interested in growth markets like China and India”
-Tony Ford Hutchinson

According to its website, Merck & Co., Inc. is a “global research-driven pharmaceutical company dedicated to putting patients first”. It’s done a good job – the company’s researchers pioneered innovations for treating serious diseases and have been at the forefront of vaccine research since the early 20th century. And Merck remains one of only a few major vaccine manufacturers, compared with the number of companies that invested in vaccine research 30 years ago.

Can it continue, and how? To find out, Damien Munroe spoke with Merck’s Executive Vice President of Research Medicine Tony Ford Hutchinson at NGP’s R&D Summit in San Juan, Puerto Rico in February.

Developing discovery (and research)
Merck has been developing its R&D for the same reason that most big pharma companies have been developing their R&D: “because basically it was not delivering the required number of compounds through the pipeline,” says Ford Hutchinson. However, the way in which Merck have approached the problem is very different.

When Peter Kim took over from Ed Stolnik as president of Merck Research Laboratories just over five years ago, he really wanted to change the way the whole research structure was working. “We looked at what was going on in the industry,” explains Ford Hutchinson. “Our diagnosis was that the reason compounds were failing in the clinic was not because of toxicology, and not because of problems with pharmacokinetics, but because the mechanism was not producing the desired clinical outcome, or a commercially viable clinical outcome.” In other words: “all the easy stuff has been done and we’re now on much more difficult targets.”

Why was the mechanism failing? Ford Hutchinson: “The way things were being done at Merck is that we would think of targets, invest an awful lot in them, have very little customer input and very little commercial input, then go ahead and do long, complicated clinical trials – and then find the thing didn't work, and we’ve wasted an awful lot of money.”

Clearly the company needed to turn that paradigm around and, as befits big pharma, it didn’t do anything by halves. First of all, it was decided to change Merck’s basic structure. “We moved into what we call the balanced matrix,” says Ford Hutchinson.

There are two sides to this matrix. Firstly, the functional areas, which are the traditional elements such as preclinical basic research using Merck’s own resources (naturally under budgets). “On top of that, we layered a franchise structure,” says Ford Hutchinson. Initially there were six franchises: cardiovascular/atherosclerosis; diabetes; infectious diseases and vaccines; neurosciences; oncology; and endocrinology and immunology. “The idea was to put a franchise head in charge of all these franchises, so they can think of high-level strategy and not get lost in the details of ‘how do I actually do that?’”

One of the major objectives of these franchises was to invest very early on in technologies, especially biomarkers. “These models would allow you to assess compounds and what they are doing – is it anything useful and worth investing in, with minimal investments?”

Merck established what it calls its three “BMX departments”. Ford Hutchinson: “They were imaging, biomarkers – classical biomarkers, based out of the Rosetta organization, which we bought five years ago, we already had a profile in protein biomarkers – and experimental medicine, which was a new group carved out of clinical pharmacology. Their mandate was to do experimental models before you test the drugs. The whole concept is that you invest very early on, before you even start the program, and have in place the technology and the systems to assess whether you should invest further in the whole process.”

Ford Hutchinson’s role changed in the changes. He was head of basic research when Kim asked if he would initially look after four of the six franchises. “I was – on a temporary basis, not a permanent basis – looking after all of them except for neurosciences and oncology,” he recalls.

Since then, Merck has been recruiting. “We recruited Alan Azekowitz from Mass General who’s in charge of endocrinology and immunology. He came in early last year. Late last year, we recruited Luciano Rossetti, who’s a world expert in diabetes and so he’s taken over that franchise. Luciano has also been looking after cardiovascular/atherosclerosis – we transferred that one to him on the 1st of February.

“I’m now looking after the infectious diseases and vaccines franchise, which is a big chunk of Merck sales, covering anti-virals, anti-bacterials and all our vaccine products.”

In the meantime, of course, Merck had a change of CEO when Ray Gilmartin stepped down for Richard Clark over the Vioxx debacle. Clark brought in Peter Loescher from GE Healthcare as president, Global Human Health and, happily, they embraced the new model. The company’s entire human health division is now lined up on a franchise basis instead of being geographically organized.

The benefits of a small world
Another of Merck’s new initiatives is called End-to-End, or E2. “Now the franchise head covers from target through to phase two,” explains Ford Hutchinson. “From phase three to end of patent is covered by a franchise general manager. Basically the franchise head works hand-in-hand with the franchise general manager, and we devise strategies to go all the way through.”

Loescher, too, has made a lot of changes. Foremost amongst them, he’s moved the headquarters and support structures of the Asia Pacific, South America, and Europe divisions – and the rest – to their various locations. That’s Munich, Sao Paolo and Singapore respectively. “We’re moving from being a US-centric, or East Coast US-centric, company to being an international company.”

Globalization is good? “Well, I think we should be a global company. There has been a tendency in the past to be very US-centric because a lot of the value proposition came from the US market. With the pricing pressures in the US market being what they are, that’s becoming less important. And all companies are interested in growth markets like China and India, for example. We’re not alone in that. I suspect that the European companies have been more ahead of the American companies in that context.

“It also means that you get one viewpoint from marketing now, about what the value of a particular product is. Before, we would get multiple inputs from different geographies.”

Technology, strategy, plaque
What of those early investments in technology? Is there an area showing great potential for Merck?
The answer is yes and Ford Hutchinson believes it is biomarkers. “I think we’re investing very, very broadly in all types of biomarkers. There is no ‘one size fits all’ here. It involves molecular profiling and gene analysis; it involves insoluble biomarkers; it involves lots of imaging agents; it involves pharmacokinetic studies –we’re doing all of the above.”

How is this technology being integrated into Merck’s work? “Let me give you one good example in the atherosclerosis space, which I have been involved in. Currently, drugs for atherosclerosis are based around hypo-cholesteremic, so you focus on LDL cholesterol and HDL cholesterol, and you’ve got your biomarkers sitting out there. They have to resolve a problem that doesn’t necessarily correlate with clinical outcomes in the HDL area.

“The next generation of drugs are going to affect plaque inflammation and plaque stability. You can have good plaque, you can have harmless plaque, and you can have what we call high-risk plaque. The idea is that you can have people with plaque that is in danger of rupturing – and those are the ones that are at high risk for a heart attack.

“If you just got plaque that’s sitting there silent, your arteries are clogging up, but you’re not in immediate danger of a heart attack. You want to be able to identify those patients whose plaque is in danger of rupturing and treat them, and revert them back to a stable situation. At the moment, we have no way of doing that. With a consortium approach, we are doing it.”

Merck have partnered with Fox Hollow Technologies, which has made the Silver Port device. Silver Port goes down into the femoral blood vessel and roots out the plaque (“to give you a nice pretty picture,” laughs Ford Hutchinson).

And when you have collected the plaque? “We have developed ways of very quickly isolating RNA out of this plaque, so we can now do molecular profiling on it. Then you can correlate that with imaging,” says Ford Hutchinson. “And we’re doing things like FDT Pep, which is where we’re looking for unstable plaque, because you’ve got a lot of inflammatory material that tends to light up. We can look at it histologically and correlate it with pharmacogenetics as well.”

Merck is trying a number of inflammatory mechanisms – some of which are programs that have been tried for other things, but failed. “We believe that they might work in atherosclerosis, based on animal models. We’re looking at several of these simultaneously, using this technology. We’re looking for the ones that really quieten the inflammatory plaque down. A whole load of inflammatory biomarkers is indicative of what’s going on in there. And then, by doing a relatively short-term study, we can decide which one’s worth really investing in for the big study.

“I think that's a really good example of how you use these things, rather than do what Pfizer did, which was to invest in a massive outcome study, only to have it fail.”

All of these studies and technologies create data (according to Ford Hutchinson, Merck is storing “whatever is beyond terabytes of data”). And data creates a need for better, faster processing. Does he see an end to the cycle? “Well, you always have to keep on expanding your capacity, I guess. We keep on generating more data, so we have to expand the storage capacity.”

That’s as maybe, but I get the impression that for as long as Merck creates data, so a new generation of researchers will have the chance to make a name for themselves just as their predecessors did many years ago. The systems are in place, after all.