Pharmaceutical Companies Stress Innovative Research For Success

Date : December 12, 1994 Sidebar: PHARMACEUTICAL INDUSTRY JOB STATISTICS As 1995 approaches, changing economic forces in the pharmaceutical industry are presenting its scientists with tough challenges, both professional and scientific, according to researchers, company officials, and other observers. Financial setbacks and shifting business dynamics, such as mergers and takeovers, have caused companies to drastically downsize their work force in recent years, they say, with more cuts anticipated. "There were some 40,000 layoffs through the entire industry in the last two to 21/2 years, and the industry will become leaner still in the years to come," predicts Robert Ruffolo, Jr., vice president and director of pharmacological sciences departments at Philadelphia-based SmithKline Beecham Laboratories. For scientists surviving the carnage, observers maintain, the pressure is on to focus on novel ideas and to increase efficiency in discovering and producing new drugs. "Innovation has to be part of everybody's job description," stresses Mary Graves, director of biotechnology of Hoffmann-La Roche Inc., Nutley, N.J. "We can't afford to do 'me-too' drugs any more," Ruffolo agrees, referring to times when companies worked on improving and refining existing drugs to make them most efficient. "In order for a company to invest research dollars into development," he explains, it "has to be a 'pioneer' drug the first to be able to bind to a novel target molecule." But so long as the focus is on novelty, many say, there is still plenty of opportunity for research within the industry. According to Michael Steinmetz, vice president of preclinical research and development for Hoffmann-La Roche, "Biotechnological innovations now allow us to understand mechanisms of disease, so that things are very different from 20 years ago, when we used blind approaches and random screening procedures for drug discovery." The Washington, D.C.-based Pharmaceutical Research and Manufacturers of America (PhRMA), an industry trade group, reports that about 10 percent of the total cuts in the industry are in research and development. Furthermore, PhRMA records show, the industry experienced the slowest rate of growth in R&D expenditure in 22 years. What this means, Steinmetz explains, is that "researchers are vulnerable" to layoffs within a company, and that as a whole the research departments will have to "learn to live with less funds." One way the pharmaceutical industry appears to be coping with financial troubles is by moving toward consolidation, several observers note. An example is the recent buyout of Palo Alto-based Syntex Corp. by Hoffmann-La Roche's parent company, the Roche Holding Company of Basel, Switzerland. Another Basel company, Ciba-Geigy Ltd., just initiated a $2.1 billion investment into Chiron Corp., a biotech company in Emeryville, Calif. "The advantage in consolidations both alliances and buyouts_is that it helps broaden the base of innovation," Steinmetz explains. "We have better access to the latest technologies in many different fields." Researchers, however, are feeling the brunt of the downside to these mergers, he says. "Such alliances can initiate another round of head-count reduction," he acknowledges, "so as to reduce duplications." "It's like merging a basketball team you can only have 12 men," remarks Richard Stevenson, assistant to the director of preclinical research and development at Hoffmann-LaRoche. "Therefore only the best get taken." "In a way, the large drug companies today are where the big oil companies were at 15 years ago," notes an academic researcher working with a major drug firm, speaking on condition of anonymity. "Rather than go out and dig wells themselves, it was cheaper to buy the smaller companies who had already struck oil," he elaborates, drawing a parallel to the current trend on the part of large pharmaceutical companies to invest in or take over smaller, biotechnology-based start-up firms. "No company is big enough to be completely self-sufficient," Ruffolo explains, "and we are increasingly going to the outside for new ideas. We need to make sure we are scanning the horizon thoroughly so that we can jump on an idea no matter where it occurs. "Science in the research community is advancing at such a rapid pace that it's critical to keep abreast of what's happening," and collaborations with smaller firms are one way to stay current, he says. Graves does not agree entirely with the oil-company analogy. While she concurs that "no one turns a blind eye to outside opportunities," she emphasizes that "most of these collaborations come about for the licensing of one particular product," with the larger company providing the financial backing for carrying an idea through development to production. "We will go and use [small] biotechnology companies," Graves says, "not to replace our own research programs, but rather where we have gaps in a therapeutic pipeline, or to strengthen what we already have." "It is important to realize that there is a lot of innovative work going on in-house, as well," Steinmetz points out. Despite a layoff of 5,000 employees worldwide and the recent termination of the Roche Institute of Molecular Biology in Nutley, Hoffmann-La Roche officials claim, the company is maintaining its commitment to research. In October, Hoffmann-La Roche opened its new Multidisciplinary Science Building, a $100 million facility, at its Nutley location. Eye On Innovation New research ideas still abound, drug industry researchers maintain. "There will always be a need for an innovative new medicine," Graves stresses. "We have to focus on important diseases that have unmet medical needs." For example, Ruffolo notes, "the race is on [throughout the drug industry] to find LTD4 antagonists." LTD4 is one of a class of molecules called leukotrienes that are released as part of an allergic reaction during an asthmatic attack. An antagonist, he explains, would counteract the molecule and may thus be developed as a drug to treat asthma. Other promising avenues of investigation, he enumerates, include the search for insulin sensitizers "drugs for treating type 2 diabetes, which poses a major health problem," and serotonin antagonists. "Serotonin seems to be involved in many brain disorders," and by studying it as a potential target molecule, researchers may be able to identify targets for conditions like Alzheimer's disease. At the Nutley location, investigations into therapies for inflammation, autoimmune diseases, cancer, and metabolic disorders are currently under way. "From the research perspective there are exciting times ahead," Graves says. "We have new tools and technologies for making significant discoveries." Ruffolo advises graduate students interested in entering the industry to focus on the molecular aspects of disease. "We now have the means to look into the workings of complex diseases and identify new targets at the molecular level," he points out. As the U.S. increasingly focuses on health-care issues, Steinmetz predicts, the current strained circumstances should abate. "As soon as people realize that the pharmaceutical industry is contributing to an overall cost-cutting in health care by keeping more people out of hospitals, they'll be willing to spend more money on research," he anticipates. "It's not going to happen now immediately but we should see some change over the next five to 10 years."

Pharmaceutical Companies Stress Innovative Research For Success

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