In Business Bitter Pills

Listen to Bitter Pills (09/12/2010)

It is 15 years since I suddenly discovered what has turned out to be an abiding interest in the activities of the pharmaceutical industry.

I had interviewed the head of what was then the newly merged Glaxo Wellcome company, Richard Sykes (now Sir Richard, who went on to be Rector of Imperial College London). He told me how he started work as a biochemist making the compounds which were the raw materials of drug research: "one scientist, one week, one compound" was the rate at which things were done in the 1950s and 60s.

He told me how things had changed, which is how my interest in the business began.

In 1995, Glaxo paid more than $500million for the American company Affymax, a big takeover dwarfed by the company's eventually successful £9 billion takeover bid for the venerable British company Wellcome which was made at the same time. This was a record breaking British takeover.

Glaxo Wellcome became for a time the biggest drugs company in the world. Newly acquired Affymax was a company applying technology to the process of drug discovery. It made a little robot laboratory which turned out hundreds if not thousands of chemical compounds a week.

The process was called combinatorial chemistry. It enabled drugs companies to assemble huge storehouses of their own compounds in which they could root around to find new chemicals that might fit a particular treatment or medical target.

At the time this appeared to be a revolution in the way drug discovery worked.

So I went off to see what Glaxo Wellcome was doing at the huge new medicine discovery centre it had erected in Stevenage, just north of London on the main railway line north.

It was pretty impressive. Glaxo had spent something like £800 million on this new laboratory complex ... in 1995 it was the biggest capital investment in Britain after the Channel Tunnel.


The company was enthusiastic about the brainpower and the firepower it was concentrating on the pursuit of new medical treatments. The little $500 million Affymax lab was turning out hundreds of chemicals. Huge squads of scientists and specialists were arrayed in separate wings of the building to speed up the discovery of new treatments.

The scientists I met on my visit promised great things from this new streamlining of medicine: three blockbuster drugs a year was what they said would be produced at Stevenage. This was the new model being pursued by the so-called Big Pharma companies.

Now promises are all very well, but it takes a decade, maybe longer, to get a new drug to the marketplace. First you need the right medical target, often defined through lonely work by dedicated specialists in university labs.

Then the drug company may get enough insights to start exploring the chemicals in its store of compounds, testing them in vast automated machines to see if any produce a useful reaction.

Then follows years of work to refine the compound, testing it in the human body and looking for adverse reactions, and then rolling it out through a series of phased tests on larger and larger monitored test populations round the world to garner the vital data necessary to convince the regulators that this treatment is both efficacious and safe.


The test stages, involving the recruitment of both patients and medical specialists in many centres, add hundreds of millions to the bill for any successful drug, especially when you add in the cost of testing the ones that eventually fail. Big Pharma claims a successful drug now costs $1 billion to get to market.

So it was only after some 10 years that it became clear that the production line drug discovery process did not really work ... the huge, new labs full of biologists and chemists working in separate large groups were not delivering the blockbusters that had been promised. In many Big Pharma companies, not just Glaxo Wellcome. One expert called it a lost decade.

In 2005, I interviewed Richard Sykes's successor at what was by then GlaxoSmithKline, the French-born J-P Garnier. A man with a short fuse, he told me how he was trying to address the low productivity of the big lab model by creating smaller groups of 400 scientists to work on individual projects, rather than the vast teamwork of the original Big Pharma idea.

J-P Garnier's pursuit of new drugs at GSK was based on the creation of what were called CEDDs: Centres of Excellence in Drug Discovery: mini institutes is how he described them to me. But he also said then: "The critical mass of discovery is the size of one human brain, and I really believe it".

Well, J-P Garnier retired from GSK in 2008 to be succeeded as chief executive by the company lifer Andrew Witty, a Yorkshireman like Richard Sykes.

And straight away he up-ended the J-P reorganisation by creating even smaller Discovery Performance Units, 38 of them. Each is a small team of 50 or 60 scientists of several disciplines, working alongside each other in pursuit of new drugs.

The idea is that they replicate the way that small start-up biotechnology companies work.

They win their franchise by pitching a sort of business plan to a GSK committee comprising company insiders and outsiders ... a pharmaceutical Dragons' Den.

They get the money for the project, and they get a three year operating window to achieve an agreed outcome ... not a drug on the market of course, for that takes a decade or more, but some clear signs that the project is worth continued backing at the end of the first three years.

In the Big Pharma era, projects on the research production line would often acquire a corporate momentum that made it difficult to kill off drugs that were not getting anywhere.


Back in the Stevenage centre the other day for the first time in 15 years, much of it still looked the same ... a big campus looming out of the countryside. But when I met the leader of one of the DPU teams, the neuroscientist Kevin Lee, he was wearing a jacket emblazoned not with GSK but with the name EpiNova.

This discovery unit is working on how changes to markers on the human DNA structure might play a role in the development of inflammatory diseases. (Inflammation plays a key role in many chronic conditions such as Crohn's disease and asthma, and also in auto-immune diseases such as lupus and rheumatoid arthritis).

The team decided it needed a name and a logo to symbolise its teamwork. The team members I heard from were enthusiastic about the new way of working.

I'm not surprised. I spent seven years following the HIV-AIDS treatment Celsentri through the development process at Glaxo's American rival Pfizer, and I never understood how a doctor or scientist could own a little part of the process intently for a few weeks or months, and then pass it on down the development chain.

They said then that most scientists in a big pharmaceutical company never worked on a successful drug, not in the whole of their lives. Surely that's a difficult thing to manage, psychologically?

Of course the jury is out and will remain out for years on whether Andrew Witty's reorganisation of the way GSK goes about finding new drugs will bring a rush in new treatments to the marketplace. It may be 10 years before interesting new drugs start reaching ordinary paying patients, and nobody talks about a stream of blockbusters any more.

But unlike most company leaders, Andrew Witty is very young, only 46 now. With a bit of luck, he could still be in charge in 10 years time, when we will know how effective his attempts to improve drug discovery inside a giant pharmaceutical company have been.

And this matters. Whatever you think about the profits drug companies make, new treatments can enhance and extend many lives, all over the world.

And the pharmaceutical industry is a great British success, and a very important competent of the total research and development spending in the UK, a big investment in the future.

That's why (15 years later) I'm still fascinated by the business of drug discovery ...

Listen to Bitter Pills (09/12/2010)

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