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Fig. 2.33. PPM Analyses: Risk, Pipeline Gap Analysis

Fig. 2.31. PPM Analysis: Pipeline Revenue Forecasts

Fig. 2.33. PPM Analyses: Risk, Pipeline Gap Analysis specialized companies, or create strategic research alliances with biotechnology companies in areas new to the company. In this example, gaps appear also in late-stage clinical phases (phase 3 trials) near regulatory submissions, or it could be that NDAs are not being approved by the regulatory authorities. A reason may be poor molecules are advancing into late-stage research that should have been killed at an earlier time frame, such that process changes in decision making need to be entertained for the company.

A risk assessment in the early discovery phase of research is a bubble graph of the novelty of the chemical entity and mechanism of action of the molecules, as shown in Fig. 2.34. The projected market size is added by altering the size of the bubbles commensurate with potential market. Although the molecules are over 5 years away from the market and without any clinical data, markets are estimated based on assumptions, which need to be plausible to both research and marketing management. Assumptions can be any existing product utilization, growth in markets over time, novelty of mechanism or chemical entity (competitive advantage), growth in number of addressable treatable patients with such a novel product proposed product profile of such a molecule, and price of such a product. Company senior management needs to decide on how much risk they desire to take.

In this sample graph, molecule no. 3 has high risk with an unproven chemical entity and speculative MOA, but the market potential is huge. Perhaps, existing drugs work poorly, many patients go untreated, and the medical community is very hungry for a novel product. In this case, it may very well be worth forging ahead with such a high-risk, high-reward molecule. A research group with this molecule especially needs to nail down the novelty of the MOA for the product to reach its full medical benefits and financial gain. Conversely, molecule no. 6 has the least risk but a small market that may not be worth spending the vast amount of resources for little financial gain. Along with this analysis, the research group needs good feedback from medical and marketing groups about the disease opportunity to make good research decisions on choosing molecules to advance out of the laboratory. The challenge is to make sure the vision is not a hallucination, vis-à-vis, balancing a product champion's view with marketing reality. The gap analysis for basic research (discovery) can look also at process issues to improve productivity, as suggested by one analyst, with a survey of 20 questions to examine discovery. Always, a process is needed to take the gap findings to management, communicate them to appropriate managers, have them identify corrective action, and implement changes [41, 42].

The probability of success for molecules to move through the stages of research and development can be estimated for a company and compared with industry standards. Figure 2.35 presents some summary statistics for the probabilities of advancing a product candidate through the clinical research stages. Twelve pharmaceutical companies were surveyed in this 2003 assessment; the median value and the low and high values were included. Phase 1 involving a safety assessment and some pharmacokinetics has a relatively high success rate, but phase 2 studying a product's activity in disease patients is much lower. Proof of pharmacologic principle in real patients is almost always a major and commonly unpredictable challenge for a new product. Animal models often are helpful and required to be done before introduction to humans, but they are vicarious predictors of drug activity in disease in people, related to species, genomic, disease, and metabolic variations, to name a few. Most products that have good activity in phase 2 will proceed to phase 3 and be fairly successful (73%), but 27% still fail to advance because of safety concerns, lack of sufficient efficacy, pharmaconomic deficits (efficacy exists but insufficient to garner enough market share). Probabilities can be calculated for preclinical success rates of molecules, but this data source did not have them. Termination in preclinical stage occurs because of tissue or organ toxicity, no product activity, excess metabolism, high drug interaction potential, and formulation difficulties compared with existing products and disease needs. A failure to advance after NDA submission relates to

PPM Analysis: Discovery Risk Assessment

What is the Discovery Risk Profile with Market size?

Has company made estimates for success for all products?

Chemical entity:

Novel Unproven vs. Proven

Chemical entity:

Novel Unproven vs. Proven

Medium risk 4

1|

Proven vs. Speculative Mechanism of Action:

Fig. 2.34. PPM Analysis: Discovery Risk Assessment

Has company made estimates for success for all products?

Stage of Development

High %

Industry median %

Low %

Preclinical

?

?

?

Phase 1

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