Commercialization: From Bench to

Bedside
Robin D. Campbell, Ph.D.
President and CEO
Naryx Pharma, Inc.
April 2007
A Common Opinion of “Commercialization”…
 What is Commercialization?
 Default Definition: Sales & Marketing
• Missing:
 Tradeoffs between development decisions,
manufacturing, and sales forecast, e.g.
• Product positioning alternatives as a function of product
characteristics, such as formulation, delivery
alternatives, clinical plan, and labeling
• Target market alternatives and pricing
 Business model options
• Launch strategies
• Partnering alternatives
 Tradeoffs against fund-raising
 A Suggested Definition
 Commercialization in biotechnology is an
integrated business strategy that
optimizes potential profitability by
considering and balancing medical need,
scientific feasibility, commercial reality,
time to market, resource requirements,
and investor expectations in development
of a product.
 “Why integrate commercialization into
product development?”
 We already know it’s a big market

 We’ll ask marketing for a forecast with 3 scenarios-most

likely, best case, worst case

 At this stage, clinical, regulatory and manufacturing issues

drive value – marketing comes later, after those problems
are solved

 An exercise in futility – how can you know the market 5

years from now?

 We’re going to find a partner for sales and marketing

 The “better mousetrap” fallacy
 Unique products and science will virtually
sell themselves
• Certainly desirable, but:
 Nothing to model against
 Blazing new trails in preclinical, clinical, and launch
 “Inertia” may be the biggest barrier to adoption

• A truly unique product or therapeutic approach

may be more complex (i.e., expensive) to
commercialize, at least in the early stages
Why is this so important early in a
company’s/product’s lifecycle?
 Drug development takes time and big
money…
 Development of one drug can take up to
10 years (or more)

 Odds are not with you

• IND: 10% chance of approval
• Phase I: 20-30%
• Phase II: 40-50%
• Phase III: 70-80%
• NDA: 80-90%
 …and making the wrong decision is very
expensive
 Financial impact
• Early d/c in Phase I = $180 M

• Early d/c in Phase IIa = $240 M

• Late d/c in Phase IIb/III = $470 M

 Opportunity cost = Unacceptable

• Really late d/c in NDA = $500 M

 Opportunity cost = Catastrophic
Business model and portfolio decisions are
better informed…
 If going alone (for as long as possible):
• Less likely to underestimate capital needs
• Provides basis for better decision making
(tradeoffs and choices)

 If partnering:
• A better understanding of the true market
value
• Better prepared for a negotiation
 Sales Impact

Strategy Product A Product B

Integration Early on ??

FDA Approval Broad Narrow

Follow on Extensive Minimal

Studies
First year sales $219 MM $10 MM

Five year 90% 10%

market share
 Biotech “reality” intrudes…
Financial pressures in conducting clinical trials


• Fastest path to regulatory approval

(so that investors don’t get impatient for “results”)
• Lowest cost (smallest, fewest possible trials)
(so that you don’t have to go back to financial markets
too often and risk too much dilution)
• Highest probability of success
(so that negative clinical results don’t send the stock
spiraling)
• “Good science”
(so that investors perceive value creation even if they
don’t understand the specifics)

“Marketing” is not a priority



• Clinical development (and perhaps manufacturing)

are largely unproven and mission-critical
(“we’ll worry about marketing once we know we have a
product”)
 …but must be balanced by marketplace
reality
The decisions made early in clinical development - while
expeditious and perceived as critical to company survival -
may compromise the long-term market potential for the
product
• The easiest/fastest indication is often not the largest market
• A single indication focus may miss the broad positioning potential for
the product
• The easiest endpoints may not be the ones customers value most (or
will pay to achieve)
• “Good science” may not translate into real customer benefits (e.g.,
clinical outcomes, QOL, cost effectiveness, etc.)
By the time you reach Phase II, it may be too late to
optimize product positioning
• Clinical pathway is set - significant delays required to adjust
• Changing direction will scare investors
• Inertia
What you can deliver, and what the marketplace
needs, has to be balanced…
 Three main considerations for successful products

•Underserved patients
•Few alternative therapies
•Poor outcomes w/existing TX
Unmet Medical Need
•Compelling
preclinical science
•Logical biology
•Reasonable
development path

Scientific Feasibility Commercial Reality

•Competitive
landscape
•Delivery issues
•Reimbursement
considerations
 Companies that integrate their commercial and
development plans early are good at…

 Effective integration of product

development and unmet marketplace
needs

 Making the science important to external

audiences

 Dealing effectively with the FDA

 Positioning hierarchy
 
BASIC   
PROMISE Key differentiating attributes
 

 
SUPPORTING   
ARGUMENTS     Believable arguments
   

  Available or 
  Realistically Obtainable
Data Requirements Scientific Data

The optimal market positioning is the set of differentiating attributes with the greatest positive 
impact on physician preference share while still having believable supporting arguments 
based on available or realistically obtainable scientific data
 Positioning degrees of freedom
Ultimate positioning for the product is largely
determined by “scientific” decisions
• Product development decisions
 Mode of administration

 Formulation

 Dosing

 Packaging

• Clinical development decisions

 Indications

 Patient inclusion/exclusion criteria

 Endpoints, outcomes

 Comparators

 Treatment settings

 Physician specialties

 Specific investigators

• Labeling
 Effective integration
 An “ideal” package insert as a blueprint

 Product development plans that integrate

clinical, operations, and marketplace
considerations

 A follow-on plan to increase addressable

patients
 Ideal package insert
 Create early (sometimes as a statement of
commercial interest)
 Scientifically rational, but optimistic
 Reflects desired commercial positioning
 Can help guide clinical development
 Can clarify follow-on study needs
 Provides the blueprint of a negotiation
with the FDA
Market research has to be “real” to be useful…
 Various techniques for market analysis

 Early stage market opportunity

• Secondary research for incidence, prevalence,
treatment options, competition, etc.
• Thought leader attitudes and awareness
(magnitude of medical need)
• Quantitative research and conjoint analysis
(“ideal” product characteristics)
 Later stage
• Health economics
• Channel strategy
• Message testing
Applying early research to target indications

 Trade-offs abound
• Fast vs. broad indication
 Cost and time
 Scientific “sexiness”
 Unmet need
• Dosage and administration
 Stability
 Ease of use (utilization barriers)
 Reimbursement barriers
Follow-on plan/lifecycle management should
be considered relatively early
 Indicates commitment to the field
• Attracts key opinion leaders
• Attracts talent
 Keeps product fresh and newsworthy
 Expands indications and usage (thus
growth)
 Creates competitive barriers
 Costs/resource needs can be managed
 Make the science important
 Appropriate communications with various
audiences
• Investigators
• Healthcare providers
• Wall Street
• General public
 Benefits if done well
• Builds excitement about potential therapies
• Builds allies in the medical community
• Builds credibility on Wall Street
 Necessary components for effective early
communications
 A clear corporate vision
• Values
• Commitment
• Expertise
• Reality-based (underpromise & overdeliver)
 Clear product positioning
• Signals the value to patients, providers, and
payers
• But not so much to signal strategy details to
competitors
 Dealing with the FDA
 Everything is a negotiation

 Knowing your commercialization goals will

guide you in your FDA discussions (and
filings)

 Early recognition that a a good P.I. is the

prize
• The Package Insert determines what you can
claim and promote
 What does it take to have a commercial
mindset?
 Mandate from the top
• Business plans that require integration
• Cross-functional teams with outstanding team
leaders

 Marketers and product developers willing

to work together (with clearly understood
and mutual goals)

 Patient benefit is the holy grail

 In summary
 Commercialization is broader than just sales and
marketing
 An integrated business strategy should start early
in product development
 Product development plans should integrate
medical need, commercial reality, and scientific
feasibility
 Effective corporate communications should be
part of any commercialization plan
 FDA communications and negotiations should be
informed by your commercial plan
Make sure the view is worth the climb…