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Outsourcing
Tornos emphasised that Pfizer used this approach with low risk compounds where it owned the IP, and that any IP that was developed would be licensed by Pfizer. He said that Pfizer was not looking to apply crowd sourcing at late stage clinical but more at early synthesis, ‘as the IP is much more complicated’. Tornos noted that there will always be sensitivity about IP
Risk sharing allows faster collaboration as the CRO has a lot at stake
so Pfizer uses crowd sourcing on a case by case basis. ‘It will be interesting to see which part of the business grasps the opportunities,’ he said. Marra noted that if the crowd sourc-
ing challenges are open then the IP is complicated, but if closed, then no-one sees the other contribu- tions and the IP issues can be resolved. He added, however, that ‘the challenge must be set up the right way’ and the answers must be tested thoroughly. Marra also highlighted the issue of cyber secu- rity as crowd sourcing involves a lot more electronic activity of the internet. ‘Tapping into crowd sourcing requires a determina- tion of what you want to get out of it and this then
determines the
level of security that you require – you need to plan carefully,’ he emphasised.
A financial view
on crowd sourcing was offered from Wall Street, by Stefan
Loren, managing director of Westwicke Partners, who believes that it is great in theory and if only a couple of million dollars are needed, as for example, by some micro capitalised biotech firms, but for companies looking for larger amounts of funding, ’it is an accident waiting to happen’ and ‘fraught with danger’.
Balancing geography At the 2012 event (C&I, 2012, 11, 38), one of the main topics of discussion was ‘re-shoring’, the return of US outsourcing that had migrated to countries such as India and China. And M Bhupathy, executive director, therapeutic discovery research operations at Amgen, noted uin 2013 that the ratio of US to offshore outsourcing has changed. Although the driver has been cost, another is finding the right technology, but one of the major challenges has always been communications, although he believes that, in the long term, issues regarding communication disappear. Susan Billings, business development manager at CMO AMRI, confirmed that her company is seeing more work coming back to the US but also to Singapore, which is seen as a ‘western country’ by clients. She said that taking costs out, companies have to look at their overall strategy, for example, development in China as a driver, so in future it will come down to relationships and the available talent pool, which she believes will encourage on-shoring. She also believes there is also now more emphasis on timelines and capability in choosing locations and partners.
Another significant driver has been IP risk mitigation so companies are more judicious in their choice of CRO or CMO, although as Bhupathy pointed out: ‘There are good and bad companies all over the world.’ As David Zimmermann, ceo of US
medicinal chemistry, discover and development firm, Kalexsyn, pointed out skill levels are increasing in India and China, ‘but wages are going up’, although this was disputed by Bhupathy, who believes that this may be true in China, but not in India, ‘so costs are not increasing’.
In terms of the types of projects that
go off-shore, at Amgen, Bhupathy said that most medicinal chemistry is done in-house so the outsourcing tends to be for intermediates, ‘projects that the company wants to try out’. This view was
‘Downsizing has done a lot in making expertise available to CROs, as more difficult chemistry problems are being outsourced.’
Irini Zanze AbbVie
echoed by Brian Raudenbush, global sourcing manager – research services at Boehringer Ingelheim Pharmaceuticals in the US, who also added reference data as an area for his company’s outsourcing, however, Steven Wesolowski, director. Neuroscience iMed at AstraZeneca Neuroscience, pointed out that as a virtual group, everything is outsourced. ‘In the virtual model, we have relationships with suppliers, they are our team not just part of our team,’ he said. Wesolowski pointed out that for a
group like his, with no internal resources, everything has to be outsourced so the emphasis is not on the cost but rather the project itself. For him, having the supplier in the same time zone is advantageous, as good contact, especially personal communication, is more important than geographic location.
What of the future? Outsourcing moved from the developed markets of the US and Europe to the emerging markets of India and China to take advantage not just of the lower costs but also the developing expertise. As the difference in costs has increasingly disappeared, how will the outsourcing strategies change over the next few years? As Zimmermann expressed it: ‘As
margins shrink some other countries will step in with cost advantages – some entrepreneur will step up.’ But Bhupathy pointed out that chemical outsourcing has tended to follow IT outsourcing, which has recently begun to move out of India, for example, and into South America. ‘And manufacturing is following,’ he added. So will delegates at next year’s event be talking about South America in the same way that they have about India and China in the past?
Neil Eisberg is the editor of C&I Chemistry&Industry • November 2013 45
Downsizing has made a lot of expertise available to CROs
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