Outsourcing Experience at BioDuro

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Outsourcing Experience at BioDuro
September 2009
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Research Trends - China
Key Challenge Creating a passion-filled
research environment that enables problem solving
and out-of-the-box thinking
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BioDuro was Set Up with a Different Vision

• Passionate, entrepreneurial, western research
  culture that collaborates to perform
  high-quality, integrated discovery services
• By
• Attracting, retaining, and exciting the best
  people
• Creating entrepreneurial, research culture
• Maintaining high ratio of overseas PhDs
  experienced staff
• Institutionalizing learning as a key value

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BioDuro is an Example of the Next Wave of CROs
Goal Collaborative Research Organization
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What is Required to Overcome Challenges Create
Western Research?

• Entrepreneurial, research culture
• Innovation
• Problem-solving
• Initiative
• Exceeding expectations
• Nurturing/education of team
• Treatment of team member as valued part of team
• Team-building activities
• Training courses for both scientists and managers
• Number of scientists worked abroad at client site

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Integrated Programs Require Functional Excellence
Integrated Programs
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True Discovery Collaborations
Biology
Chemistry

• Have completed or are engaged in nearly 20
  programs
• Projects utilize BioDuro chemistry, biology,
  pharmacology, DMPK, and safety
• BioDuro has the ability to lead programs or
  collaboratively serve as a strong 2 or
  co-pilot

DMPK
Pharmacology
Safety

• Collaborative spirit - frequent, open
  communication with clients
• Intellectual input and decision making driven by
  BioDuro

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Integrated ProgramsModels

• Functional Services Only
• Requires excellence in each area
• Management critical no drug discovery experience
  needed
• Client drives, BioDuro assists
• Junior drug discovery/project management leader
  needed at BioDuro
• BioDuro drives, client assists
• Senior leadership required at BioDuro
• Extensive drug discovery experience required
• BioDuro drives
• Strategic leadership needed at BioDuro
• BioDuro typically assumes limited risk-sharing

Increasing BioDuro Intellectual Input
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Program Selection
HTS/Hit ID
H2L
LO
PCD
Target Selection
IND

• Client selects the target(s) and files IND
• Starting point defined by program needs
• Hits from Client HTS screens
• Secondary scaffolds/historical data
• End point defined by program, client desires, and
  the Joint Steering Committee

BioDuro
Client
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Experience with Integrated Programs

• Majority from Medium to Big Pharma
• Setting up validated, target to IND filing drug
  discovery system at a CRO takes significant
  effort and time
• Most clients approach outsourcing in a step-wise
  fashion to allow CROs time to develop core
  strengths

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BioDuro Experience with Chemistry Metrics

• Negatively dependent on
• Scale
• Number of steps
• Difficulty of chemistry
• Team size changes

• Positively dependent on
• Stable goals
• Backlog of projects
• Precedented chemistry

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Metrics are not the Best Measure for Integrated
Programs

• Metrics are easy to collect and analyse
• However, they do not accurately measure the
  effectiveness of integrated programs
• They can also encourage the wrong behaviour
  (i.e., CRO resistance to stop synthesis early due
  to new data)
• Customer satisfaction and project progression are
  better measures

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Industry Best Practice Sharing Opportunities

• Share clearly defined project goals with CRO
• Motivational for CRO scientists
• CRO understands roles and needs of project better
• Project starts more quickly
• Take advantage of intellectual abilities of CROs
• Reduced burden on client
• Decisions can be taken at CRO
• Another set of minds contributing to the science
• Enhanced engagement reduces team churn
• Face-to-face team building meetings
• Builds strong project team across the globe
• Higher trust, better communication

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Industry Best Practice Sharing Opportunities

• Input into the project strategy establish
  regular oversight meetings
• Allows big picture understanding and input from
  both teams
• Able to spot and address structural issues
• Less formal reporting, more as needed reporting
• Conferences
• Reports
• Phone calls/e-mails
• Peer-to-peer communication
• Electronic notebook and tracking systems
• Reduce the amount of time needed to manage
  projects
• Less errors

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Intellectual Property Protection

• CROs are now being exposed to, and generating
  sensitive data
• Factors that lower the risk of data leaks
• No internal discovery programs
• Long-term commitment to outsourcing
• Understanding of importance of IP protection
• Low employee turnover
• Internal security very important
• Physical security
• Electronic security
• Frequent training and reminders are necessary
• Monitoring and enforcement systems are needed

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Client Liability

• Many clients recognise liability at a CRO if
  lower standards are used
• Following items are audited for compliance with
  global client policy
• Safety
• Waste handling
• Environmental protection
• Animal care
• Licensing, handling and storage of dangerous or
  restricted chemicals

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Business Structures

• Attractive Pricing
• Most people outsource to Asia because of
  financial advantages
• Structures
• Integrated Service Offering (ISO)
• Flexible team of FTEs Ability to change mix/size
  as program dictates, typically 13 PhD-non PhD
  ratio
• Some shared risk possible
• Full Time Equivalent (FTE)
• Project Based Fee for Service (FFS)

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Business Considerations Lessons Learned

• Leadership does client want?
• True leader to drive
• Or, strong 2 to input execute
• Experienced drug discovery leadership is
  expensive, so ensure that maximum value is
  recognised
• Structures
• Risk sharing pros
• Helps align incentives clarify goals up-front
• Reduces cost
• Risk sharing cons
• Complications arise for pharmas to release IP to
  which they have contributed
• Unrelated business issues that stop programs must
  be dealt with
• Straight FTE may fit better for programs that are
  likely to change

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Program Management

• Key features of good CRO management
• Detailed up-front planning with agreed upon
  delivery timelines
• Careful, realistic resource allocation
• Frequent communication with clients
• Tendency for CROs not to communicate openly when
  there are issues

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Important that Client sees an Integrated Team at
the CRO, not just Separate Functions
Biology
Chemistry
DMPK/ Safety
Project Leader
Tendency for functions to interact directly
with client
Project leader roles at client and CRO critical
CLIENT
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Communication Issues

• Different time zones, languages and cultures
• Growing number of returnees help bridge these
  gaps
• Clients are also employing nationals of the CRO
  country
• Placing client project managers at CRO and CRO
  managers at clients increasing in popularity

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Summary

• Asian CROs offer reduced costs
• Capabilities growing rapidly
• Resource allocation is very flexible
• Growing track record of successful integrated
  collaborations in Asia
• Determining the right team structure and business
  model is key to success and building a long-term
  relationship