Meet Peter Calcott
As President of Calcott Consulting, Peter Calcott specializes in tactical solutions, and strategic planning and execution, for small tolarge-sized pharmaceutical and biotechnology companies. Dr. Calcott serves the firm as a broad-based consultant with experience insupply chain, quality, clinical development, regulatory affairs, corporate compliance, government affairs, corporate strategy andenterprise e-solutions.
Recession-related Attitudes of Small Pharma and Biotech Firms
Logipi's Dustin Mattison spent an hour chatting with Calcott Consulting's Dr. Peter Calcott on the subject of recession and supply chain.During the conversation, Dustin found that recession-related attitudes of small pharmaceutical and biotech firms mirror the attitudes ofmany other sectors.Regarding supply chain risk, for example, Dr. Calcott said,
From a conservative point of view, they are very interested in reducing risk.So, I
ve seen some clients moving away from suppliers which they perceive to be more risky. For instance, they are beginning toscrutinize Chinese or Indian active pharmaceutical ingredient (API) suppliers much more rigorously than they did in the past for the very simple reason, they can
t afford mistakes."
On the other hand," Dr. Calcott continued, "in some cases, they
re being less conservative, and while they are moving away from certain types of suppliers they view as risky, they
re lesslikely to put pullback positions in place and really operating, as I call it, by the seat of your pants. That, of course, brings the cost down because you don
t have supplier number two or threefor a critical drug. They
re still doing some research on it, but not finding the contracts or making financial commitments.
An "active pharmaceutical ingredient," or "API,"it should be noted, is the active drug purchased by companies before they formulate it into the final drug product given to patients. In Dr.Calcott's words, " It could be formulating a powdered drug with excipients to make a tablet, or it could be dissolving it and aseptically putting it into a vial. So getting an API, which is veryreliable, high-quality, manufactured under compliance, is critical to these particular companies. It's really the cornerstone of a drug-development program.
Supply Chain Lessons Learned
According to Dr. Calcott, the recession has benefited his clients in terms of raising risk awareness. "They're beginning to realize that some of these suppliers could, in fact, leave them in thelurch if they run into production problems or, worse still, regulatory problems with agencies. So, therefore, I think they
re doing better due diligence, and they
re overseeing them, I would say,more diligently."In terms of innovative ideas spurred by the economic downturn, Dr. Calcott says he's seeing the same type of due diligence and oversight, but not in any new and creative ways. On thedownside, he seeing clients moving away from having a second supplier, particularly for an API, and that he says, "is risky business, and not at all positive."
Have We Seen the Bottom?
In terms of the economy, Dr. Calcott believes the pharmaceutical development business is moving in a positive direction, but also says, "jobs are being lost continuously," which means wemay still be a long way from what Dr. Calcott calls the "inflection point." In other words, he says, "Certain sectors we
re probably seeing that inflection upwards, but overall in the wholeeconomy, we
ve not quite maybe bottomed out fully.
The Status of Venture Capital Funds
"I think in the small molecule and biologic development area, funds from venture capital are really difficult to get, and, of course, a lot of this drives both the supply of drugs into the clinic, aswell as clinical development programs," said Dr. Calcott. "I
m beginning to see a little bit of a loosening, but we
re not back to the heyday of three, four years ago, when there was a lot ofactivity in that early development phase,
he added.With the economic shortening of the venture capital money supply, companies are becoming more critical when they perform due diligence. What that means is development programs thatwere easy to sell several years ago are becoming extremely difficult to sell. "With that," said Dr. Calcott, "the availability of funds to drive clinical programs is clearly a limiting factor, and I thinksmall companies have learned over the last six months to be very rigorous in their analysis and almost ruthless in stopping or delaying programs, indefinitely sometimes, so as to reallyfocus on their higher probability molecules. Of course, that helps the use of money in driving clinical programs and also the supply of drugs and the supply chain."
I think the one thing we
ve learned over the last year is with a shortness of money for development and collaboration," added Dr. Calcott, "we have to become more critical of our ownprograms, and I see this in a lot of clients of mine who are becoming very selective. Now, I hope when money frees itself up, we don
t revert to our old days of throwing money at projects andthat we retain some of the things we
ve learned about frugality in development. That
s my hope.
OCTOBER 23, 2009
RECESSION & SUPPLY CHAIN
Dr. Peter Calcott on Pharma and Biotech
The recession has changed everything, including the pharmaceutical development business
By Dr. PETER CALCOTT
Recession Impacts the ChainThe situation:
Small pharmaceutical andbiotechnology companies are faced with thesame problems experienced by other sectors.
Supply chain risk is increasing, jobare still being lost and new product funds are
What it means:
The industry needs to be veryselective, both in terms of developing productsand in choosing partners with which tocollaborate.
I think the one thing we?ve learned over the last year is with a shortness of money for development and collaboration," added Dr. Calcott, "we have to become more critical of our own programs, and I see this in a lot of clients of mine who are becoming very selective. Now, I hope when money frees itself up, we don't revert to our old days of throwing money at projects and that we retain some of the things we've learned about frugality in development. That's my hope." --- Dr. Peter Calcott on Logipi
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