PROCESS DEVELOPMENT
structures and libraries of compounds provides a key starting point when screening new target assays for lead molecules. Co- location of library design and synthesis capabilities in India allows AMRI to offer high- quality integrated discovery services with an Indian cost structure, without customers having to compromise. AMRI is planning to further improve its offerings and capabilities by continuing to invest in new or expanded capabilities in the coming years. The further investment in medicinal chemistry, computational chemistry and custom library synthesis resources at Hyderabad is one step in that direction.
Evaluating R&D strategies Over the past couple of years, pharma has invested considerable effort at evaluating R&D strategies, recognising that the practices of the past decade or so have failed to fill pipelines in order to compensate for a number of key patent expiries of the recent past or near future. This introspection has resulted in a number of programme rationalisations, facility closures and massive layoffs of scientific R&D staff. As a result, the overall universe of opportunities for outsourcing companies is less than it used to be. In addition, an increasing focus on biopharmaceuticals means that R&D budget dollars (or euros) for traditional small-molecule discovery and development are even less. At the same time, the process of strategy evaluation and staff reductions mentioned above has resulted in the stated intention of some companies to increase their utilisation of outsourcing. Several companies have publicly announced a strategy to focus on more strategic relationships and consider outsourcing partners differently than they might have done in the recent past, where often the lowest price was a key deciding factor in the award of a contract. Although the size of the universe of R&D spending on small-molecule discovery and development may be smaller than in the recent past, and an increased focus on biopharmaceuticals may affect overall industry demand, AMRI emphatically believes that the company is well-positioned to benefit from new trends emerging from the tough times of the past couple of years.
Pharmaceutical companies are redefining their strategies and reorganizing their programmes, facilities and resources, with many companies beginning to contemplate a
18 sp2 Inter-Active September/October 2012
greater reliance on outsourcing. With substantial lay-offs within Big Pharma in the USA and Europe, many experienced discovery and development scientists are taking positions in the CRO industry. As a result, over time the balance of expertise is beginning to shift from customers to suppliers.
Responding to industry changes The ability of providers to adapt and respond to industry changes is going to play a vital role in improving the success rate and outcomes at all stages of the drug discovery and development pipeline. The development of new business models will be driven by the needs of customers within the industry, which include the services being delivered on time and within budget; the need for collaborative advice; the need to ease the burdens of project management; and the need for more flexibility, adaptability and quality. Although R&D spending in 2011 was lower than in 2010, Frost & Sullivan analysts predict that the CMO market will grow at a compound annual growth rate (CAGR) of 8.3 per cent to 2016. The CRO outsourcing market is also showing signs of growth, as biotech and large pharma companies outsource more early- stage discovery projects. Although this is positive news for CROs and CMOs, recent reorganisation and turmoil within the pharmaceutical industry have resulted in fundamental changes.
CROs and CMOs need to evolve to find new ways of serving the industry’s changing needs. For example, new startups are being created as more virtual organisations, with most R&D functions outsourced. In addition, many pharma companies are eliminating key functions, staff and facilities and focusing on increased outsourcing to accomplish many of their R&D objectives. To meet these changing needs, outsourcing providers need to have the expertise and capability to fill these gaps which might have been served internally before. The willing or unwilling migration of a number of experienced scientists out of their former pharma environment is providing a resource of talent to outsourcing providers that they can use to meet the evolving needs of customers.
The strategic use of outsourcing is a more innovative approach to R&D initiatives. It is likely that some of the reasons for the poor productivity of the recent past in pharma have to do with a failure of leadership and accountability within these large
organisations. If an outsourcing provider is not meeting the needs of its client, the relationship is going to end, the client will find someone else, and the reputation of the
Meet Thomas E. D’Ambra of AMRI
Thomas E. D’Ambra, PhD, chairman, president and CEO, co-founded Albany Molecular Research in 1991. Dr D’Ambra began his career at Sterling Drug Inc. in medicinal chemistry during the 1980s. In 1989, he co-founded Coromed, Inc, a clinical research organisation where he established the chemistry and biology departments and served as vice president, chemistry. Dr D’Ambra received a Bachelor’s Degree in Chemistry from the College of the Holy Cross and a Doctorate in Organic Chemistry from the Massachusetts Institute of Technology.
outsourcing provider is going to suffer. The Darwinian nature of this accountability is a great catalyst to drive performance and delivery. The strong survive and continue to gain market share and the beneficiaries of this are the pharmas and biotechs that make choices based on which outsourcing provider has the resources, talent and capabilities to best help them succeed without compromise.
Further information Dr Gareth Jenkins Director of Projects AMRI European Headquarters Mostyn Road Holywell Flintshire CH8 9DN United Kingdom Tel: +44 1352-717114
Internet links Email:
gareth.jenkins@
amriglobal.com Web:
www.amriglobal.com
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