Success Factors for Building an Oncology Business (Part 1)

March 2013Success Factors forBuilding an OncologyBusiness (Part 1)By Wen Shi, PhD, and Rohit SoodWhen several companies are allgood at one thing, it is logical toassume that the organizations mayshare specific attributes that contributeto their success. By 2016,the top five oncology players byrevenue are expected to be Roche,Novartis, Celgene, Bristol-MyersSquibb, and Pfizer (Figure 1). Wesought to identify the specific successattributes that these fivecompanies share.Our analysis identified the followingnine key factors that mostof these companies have in commonfrom an organizationalperspective, a clinical developmentperspective, and a commercializationperspective:1. An independent oncology unit2. Multiple phase II and phase IIItrials conducted in parallel3. Engagement with outsidegroups in clinical development4. Biomarker capabilities throughoutdevelopment process5. Sourcing external innovations,both early- and late-stage6. First-to-market products7. Strong medical affairsorganizations8. Innovative engagement models9. Sophisticated oncology salesforcesPart one of this two-part serieswill explore the first four of thesenine success factors in moredetail in order to suggest bestpractices other oncology playersmay want to follow.An Independent Oncology UnitThe dynamics of the oncologymarket are different from thoseof any other therapeutic category.Therefore, it makes sense thatfour of the five companies predictedto be oncology leaders by 2016currently have an independent andnimble oncology unit in place tomake decisions specific to the therapeuticarea.Roche’s BioOncology group isone of eight specialty care businessunits within the organization. TheBioOncology business unit receivesits budget allocation annually andis free to conduct its own business.Novartis Oncology is a separatebusiness unit within Novartis’sPharmaceuticals Division thatis responsible for the globaldevelopment and marketing ofoncology products.1 Internal functionsare dedicated to oncology andnot shared with other therapeuticareas.Multiple Phase II and Phase III TrialsConducted in ParallelDeveloping successful oncologyagents typically requires a largenumber of clinical trials and multipleshots on goal. As oncologyclinical trials take a number ofyears to complete, companies donot have the luxury of patent lifeto target one indication at a time.Instead, successful oncology companiesconduct parallel phase IIand phase III trials even before afirst indication is approved. Eachof the 10 top-selling oncologyagents has benefited from between300 and 1,100 clinical studies conductedby companies as well asacademic and governmental bodies.Compared with other therapeuticareas, oncology trials tend tobe smaller in terms of number ofpatients. But at the same time,companies will need to place theirbets across multiple indications—studying, for example, a singleproduct for lung cancer, breast cancer,and head and neck cancer.While conducting parallel trialsinvolves risk, doing so increasesthe chance for approvals in multipleindications. In the case ofAfinitor®, for example, Novartisconducted numerous phase II andphase III trials in parallel, targetingMarch 2013 | OBRoncology.com 1

Success Factors for Building an Oncology Business (Part 1)no fewer than 10 different tumortypes, before the initial approval inrenal cell carcinoma (Figure 2). Thestrategy has paid off, as Afinitor iscurrently indicated for five differenttumor types, with a projectedrevenue potential of more than $2billion by 2018.Celgene’s Oncology and Hematologybusiness unit reports to an SVPgroup head. At Pfizer, Oncology isone of seven diverse business units,and each business unit is led by anexecutive with clear accountabilityfor results, from product developmentpost-proof of concept to theend of the product’s life cycle.Bristol-Myers Squibb is the soleoutlier, possessing an oncologybusiness that is integrated withother therapeutic areas.While an independent oncologybusiness unit is not necessarilyappropriate for every organization,it is important to organize theoncology business for success, payingattention to the special needsof this therapeutic area. This successfactor is especially relevant tolarger, more established companiesas well as those making an initialforay into oncology.Engagementwith Outside Groups in ClinicalDevelopmentConducting numerous trialssimultaneously is extremelychallenging for a company to doon its own. In order to targetadditional tumor types, patientpopulations, and drug-drug combinations,company-sponsoredtrials need to be supplementedwith external collaborations withthe National Institutes of Health(NIH), co-operative groups, andother academic institutions.Engaging with cooperativegroups and academic institutionsin clinical development is$27$26$25$9$8$7$6$5$4$3$2$1$02012 (E)Oncology Market Analyst Sales Forecast ($B)*(2012–2016 Forecasted Sales)*Sales do not include supportive care productsSource: Evaluate Pharma. Worldwide Oncology Revenues by company.Accessed February 2012; Campbell Alliance analysis.a common practice among theleading oncology companies.Doing so broadens a company’sreach, helping greatly in thepatient recruitment process and2013 (E) 2014 (E) 2015 (E) 2016 (E)RocheNovartisCelgenePfizerBristol-MyersSquibbEli LillyJohnson& JohnsonAstraZenecaSanofiTakedaMerck & CoFigure 1. Based on estimated sales, Roche, Novartis, Celgene, Bristol-MyersSquibb, and Pfizer are expected to be the top oncology players in 2016.

in obtaining access to the leadinginvestigators. It also helps toraise awareness of a drug threeor four years before the productreaches the market, growingthe pool of key opinion leaders(KOLs) who can advocate for theproduct.Though company-sponsoredtrials allow for more control,co-op groups are essentialcontributors to successful oncologyclinical development. Theyhave access to large numbers ofpatients and contribute to significantaccruals of patients forboth early- and late-stage clinicaltrials. In addition, the NIHsponsors the Cancer TherapyEvaluation Program (CTEP),which collaborates with pharmaceuticalcompanies to evaluatenovel anti-cancer agents in phaseI and phase II studies.Biomarker Capabilities ThroughoutDevelopment ProcessThe oncology market leadersare tapping the potential ofbiomarkers to increase the probabilityof success and to reduce thesize, length, and cost of clinicaltrials. Biomarkers can be usedto identify patients most likely tobenefit from therapy and predictresponse to therapy before thehard endpoints are reached.Every drug being developed atRoche has a biomarker programassociated with it, and the biomarkerprograms benefit fromthe diagnostics expertise ofRoche Diagnostics. At Novartis,the identification of biomarkersis a mandatory part of proposalsfor all new drug targets.Meanwhile, biomarkers are usedin most of the first-in-humanstudies conducted by Bristol-Myers Squibb.Pfizer is using biomarkers in80% to 90% of its early clinicalstudies. A proactive approach toidentifying biomarkers resultedin the development of Pfizer’sXalkori®, which was approvedfor a small subpopulation ofnon-small cell lung cancers afteronly three years of development.Within the biomarker-identifiedpatient population, Xalkoriachieved high response rates inTimeline Between Phase II, Phase III, and Registration/LaunchIndicationsGI Stromal-GISTNeuroendocrineCancerBreast Cancer(ER+ and ER-)Renal CancerProstateCancerColorectalCancerHepatocellularCarcinomaAstrocytomaGastric CancerNon-Hodgkin'sLymphomaHead and NeckCancerHodgkin'sDiseaseTotal #Trials2*11*20*195*652*265111/0201/0503/0505/0508/0510/0606/06 05/11 +10/06 03/09 +05/0610/0612/0608/07Phase II clinical trials Phase III clinical trials Discontinued*Including one terminated study‘02-’05 2006 2007 2008 2009 2010 2011 201206/0911/08 10/10 + 03/1206/0908/08 07/0907/0911/09+ Registration/LaunchNotes: Other cancer types are not shown in the graph. The number of trials includes phase IIand III clinical trials. The dates indicate start dates.Source: www.clinicaltrials.gov. Accessed March 2012; Campbell Alliance analysis.Figure 2. Novartis has conducted numerous phase II and phase III trials inparallel for Afinitor.March 2013 | OBRoncology.com 3

Success Factors for Building an Oncology Business (Part 1)two single-arm studies of approximately250 patients, leading toregulatory approval. The approvalof Xalkori may herald a new eraof clinical trial design based onbiomarkers.ConclusionIn part two of this series, wewill look at two more attributesthe top oncology players sharefrom a clinical development perspective:the external sourcingof early and late-stage assetsand a focus on first-to-marketproducts. We will then examinethe common attributes on thecommercialization side, includingthe presence of a strongmedical affairs organization,innovative engagement models,and a sophisticated oncologysales force.How these factors could best beintegrated into any one company’sbusiness model would needto be examined on a case-by-casebasis that weighs such elementsas the breadth of therapeuticareas in which the company operates,the broader portfolio ofproducts, available resources fordevelopment and/or in-licensing,available resources for buildingmedical and commercial organizations,and so on.The attributes described aboveare not a prerequisite to successin the oncology space, nor do theyprovide a guarantee of success.However, because these attributesare shared by the leadingplayers in the market, they areworthy of consideration for othercompanies looking to build orexpand their oncology businesses.WS RSFootnote1. Novartis 2011 Annual ReportAbout the ContributorsWen Shi, PhD, is a director at CampbellAlliance. He can be reached at wshi@campbellalliance.com. Rohit Sood is avice president with Campbell Alliance.He can be reached at rsood@campbellalliance.com.Campbell Alliance (campbellalliance.com) is the consulting business segmentof inVentiv Health, and is the leadingmanagement consulting firm specializingin the pharmaceutical and biotechnologyindustry.March 2013 | OBRoncology.com 4