In a blog published by Harvard Business School, Scott Anthony discussed Novartis’ R&D strategy as an example of “disruptive innovation”.
Scott Anthony is president of Innosight, an innovation consulting, training, and investment firm. Innosight’s founder, Harvard Business School professor Clayton Christensen, is the originator of the concept of “disruptive innovation”. A disruptive innovation is an innovation that improves a product or service in ways that the market does not expect. An example is desktop publishing versus traditional publishing, or the automobile versus the horse and buggy.
In his blog post (dated June 18, 2009), Mr. Anthony cites the focus of Big Pharma on developing blockbuster drugs that target the largest disease conditions. This strategy has become increasingly ineffective, due to efficacy and safety failures despite every-larger R&D budgets. In contrast, he states that Novartis is attempting to develop the most effective drugs via an understanding of the mechanisms of a disease condition, no matter how small. These effective drugs can then be tested against larger indications, and may eventually become blockbusters.
We also discuss Novartis’ R&D strategy, in our new book-length report on improving the productivity of drug development, Approaches to Reducing Phase II Attrition, published in May by Cambridge Healthtech Institute.
Novartis’ drug discovery and development strategy is based on biochemical pathways. For example, Novartis researchers note that in many cases rare familial diseases are caused by disruptions of pathways that are also involved in more common, complex diseases. The researchers therefore develop drugs that target these pathways, and obtain proof-of-concept (POC) for these drugs by first testing them in small populations of patients with the genetic disease. Drugs that have achieved POC may later be tested in larger indications that involve the same pathway.
The first drug that Novartis has been developing using this strategy is the interleukin-1β inhibitor Ilaris (canakinumab). The company conducted its first clinical trials in patients with cryopyrin-associated periodic syndromes, (CAPS), a group of rare inherited auto-inflammatory conditions that are characterized by overproduction of IL-1β. In June 2009, the FDA approved Ilaris for treatment of CAPS. Novartis is currently testing Ilaris in more common diseases in which the IL-1β pathway is thought to play a major role, including rheumatoid arthritis.
In our report, we discuss Novartis’ strategy as part of a more general discussion of biology-driven drug discovery (i.e., drug discovery based on understanding of disease mechanisms), and of other strategies to reduce pipeline attrition.
Despite Mr. Anthony’s identification of Novartis’ strategy as an example of a novel “disruptive innovation”, biology-driven drug discovery and even pathway-based drug discovery is not a new strategy. For example, most biologics (mainly developed by biotech companies, with Genentech being the best example) have been developed via biology-driven R&D. Kinase inhibitors for treatment of cancer have been developed via pathway-based strategies, often utilizing years or decades of academic research on signaling pathways in normal and cancer cells. Novartis’ Gleevec (imatinib) is an example of such a kinase inhibitor—it was the example of Gleevec that led Novartis to adopt its pathway-based strategy in the first place.
Biology-driven drug discovery and development, whether practiced by Novartis or by other companies such as Genentech, is aimed at developing effective drugs as Mr. Anthony says. Moreover, leading biologics (e.g., Avastin, Humira, Rituxan, Enbrel, Herceptin) are now on track to be the biggest-selling drugs in 2014, according to the market research firm Evaluate Pharma.
Thus biology-driven drug discovery and development has become a commercial success for many companies, not just for Novartis.
We at Haberman Associates have been advocates of biology-driven drug R&D for over a decade, long before anyone labeled it a “disruptive strategy”. Rather than being a novel, disruptive strategy, it is a fairly old strategy that most large pharmaceutical companies bypassed in favor of industrialized drug R&D based on genomics and high-throughput screening. However, the latter strategy has been generally ineffective, and Big Pharma has had to turn increasingly to biology-driven biotech companies as sources of innovative drugs. Now Novartis’ pathway-based strategy is showing considerable success in building that company’s pipeline, and Roche is integrating itself with Genentech to become a biotech company that is a member of the Biotechnology Industry Organization (BIO) rather than the Pharmaceuticals Research and Manufacturers of America (PhRMA).
The case of biology-driven drug R&D is an example of how a largely overlooked older strategy may become disruptive, when applied in the right way. Are there overlooked strategies and technologies that might become the basis of your company’s R&D success?