Summary
I have been in the life science industry for about 20 years, and I am fortunate to work with a variety of companies and institutions ranging from academia, research institutions and start-ups to regional/global pharmaceutical companies. In my view, the pharmaceutical industry needs innovation more than ever. To promote innovation, I propose that companies in the industry establish a budget policy to allocate a certain percentage of funds to long-term innovative projects. These projects should be directly under the CEO. The industry needs an open innovation platform to close the gap of information asymmetry among players.
Current situation
The pharmaceutical industry is facing challenges. First, unmet medical needs exist in disease areas where developing drug candidates is difficult and expensive. In the past, many pharmaceutical companies generated drugs in chronic disease areas such as metabolic or infectious disease areas, and satisfaction of patients in these disease areas improved. Current unmet needs lie more in rare and difficult disease areas or personalized treatments where the development of drugs is difficult from both scientific and business perspectives with the small number of patients. This also leads to the issue of expensive drug pricing.
Second, to tackle these unmet medical needs, new modality is needed. Over the last two decades, the modality of pharmaceutical drugs migrated from the dominance of small molecules to the emergence of large molecules, nucleic acid drugs, cell therapies, gene therapies, regenerative medicines, and recently even smartphone apps.
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We create a bridge between a company that wants to derive and publish its own drug discovery assets and a company that wants to take over and develop it
Third, innovation is apparently needed in this environment. If companies develop apps to treat diseases such as central nervous system (CNS) related diseases, they need to have knowledge and capabilities of IT, while, in the past, this was not necessary. Also, if companies collect patients’ data directly from individuals, they need data scientists and IT infrastructures. Furthermore, the boundaries come to overlap between medical treatment and pharmaceutical drugs. Thus there is need for innovation in the industry.
Challenges for innovation
During the course of my business at Gemseki to support licensing and partnering in the industry to generate innovation, I hear much about the difficulties of innovation management at pharmaceutical companies.
One difficulty is risk acceptance level. Some companies cannot take many risks, so they cannot buy or in-license early-stage assets and look for only late-stage assets with proven human data. This also applies to internal projects. These companies only give a good amount of funds to very promising research and not necessarily to innovative projects. I understand the result-oriented culture, but if they maintain this strategy, innovation will not be realized. This will result in the loss of competition. The level of risk acceptance varies depending on the stage of each company. If the company is a start-up, it might take risks and grow.
But if the company is well-established and needs to constantly generate results for shareholders, it might have a tendency to avert risks.
