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James Samanen President James Samanen Consulting

Project Leader Authority in Pharmaceutical Discovery & Development is Inversely Proportional to Aggregate Project Risk. James Samanen President James Samanen Consulting. www. jamessamanenconsulting.com. Learning Objectives.

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James Samanen President James Samanen Consulting

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  1. Project Leader Authority in Pharmaceutical Discovery & Development is Inversely Proportional to Aggregate Project Risk James Samanen President James Samanen Consulting www. jamessamanenconsulting.com

  2. Learning Objectives • The differences between Discovery and Development Project Leadership come down to the Level of Aggregate Project Risk • Project Leadership is no less important in Discovery than it is in Development • It’s just different

  3. Pharmaceuti-cal R&D Where’s the Research? • Its all research whether it’s the discovery of- a new protein implicated in viral replication, or - a side effect in patients implicating a new potential indication. • To investors its all research prior to Phase III. • There is so much Research in Development, we call it Discovery & Development

  4. Target Selection Candidate Selection Product Differentiation Market Access Discovery vs. Development Discovery - early research leading to discovery of a biological target, first agents (leads) which interact with the target in the desired manner (agonist, antagonist, etc.), and clinical candidates through optimization of properties in subsequent analogs Development - the focus is on a single agent. Drug Discovery Drug Development Focus - Target Focus – Clinical Candidate Target Discovery Lead Discovery Lead Optimization Preclinical Evaluation POC Full Development Registration & Launch

  5. Attrition = 1/Success What Percent of Projects Move on to the Next Stage? • ~25% Target Discovery projects reach Candidate Selection, • 7% Candidates reach Launch • 2% success overall Regis- tration Launch Stage: Target Discovery Lead Discovery Lead Optimization Candidateto Clinic Phase1 Phase2 Phase 3 64% 57% 60% 83% 63% 61% 56% 44% % Success 1.8% Discovery Development 24.5% 7% Based on data from Brown, Drug Disc Today, 8, 23 2003 and “Can the pharmaceutical industry reduce attrition rates?” I. Khola and J. Landis, Nature Reviews / Drug Discovery 3, 711, 2004.

  6. How many projects provide 1 Launch? • Working backwards - 57 projects are needed for 1 launch • 75% of pipeline in Discovery (43), 25% in Development (14) • 10 year avg. cycle time from Target Discovery to Registration Regis- tration Launch Stage: Target Discovery Lead Discovery Lead Optimization Candidateto Clinic Phase1 Phase2 Phase 3 No. Projects For 1 Launch 22 14 2 1.2 57 36 8 4.5 1 64% 57% 60% 83% 63% 61% 56% 44% % Success 1.8% Pre- Clin Ph 1 - III Discovery Cycle Times 2 yrs 1.5 yrs 6.5 yrs Based on data from Brown, Drug Disc Today, 8, 23 2003 and “Can the pharmaceutical industry reduce attrition rates?” I. Khola and J. Landis, Nature Reviews / Drug Discovery 3, 711, 2004.

  7. Attrition-Based Pipeline is not scalable • If 4 launches are needed due to future patent expiration of marketed blockbusters, the company would need 200+ projects in Target Discovery- Does it have the capacity?? • Historically acquisitions made up the difference, - but reducing attrition and cost would have dramatic impact on profitability. - 10% improvement in attrition would save $100 million dollars per drug (a) 57 “All it takes is one good drug” • FDA white paper “Innovation or Stagnation” , 2004

  8. The one sure thing pays for the rest • Even the one good drug that got to launch, in the beginning was no “sure thing”. In Discovery, every project has the potential to be the next “blockbuster”. It’s the 10+ years of experimentation that prove it so.

  9. The one sure thing pays for the rest • Even the one good drug that got to launch, in the beginning was no “sure thing”. In Discovery, every project has the potential to be the next “blockbuster”. It’s the 10+ years of experimentation that prove it so. This drug pays for all of this

  10. The one sure thing pays for the rest • Even the one good drug that got to launch, in the beginning was no “sure thing”. In Discovery, every project has the potential to be the next “blockbuster”. It’s the 10+ years of experimentation that prove it so. This is why Discovery Project & Portfolio Management Is Important This drug pays for all of this

  11. D&D is the removal of Risk • At the start of a project, the risk that any aspect of it will succeed is unknown • All of the potential project risk is loaded at the beginning – Aggregate Project Risk • Every experiment is designed to answer one question about whether the target and related compounds will work against a disease. There is a risk that any experiment will fail. • If the experiment is a success, that particular risk is eliminated and the probability of success is increased. Risk POS

  12. Project Risk Mgmt – Increase POS • “Risk Management is the systematic process of identifying, analyzing, and responding to project risk. It includes maximizing the probability and consequences of positive events and minimizing the probability and consequences of adverse events to project objectives.” • Project Management Book of Knowledge (2000+) Risk POS

  13. Project Risk vs. POS, Cost • As the project team works to reduce Aggregate Project Risk, • The project POS increases, and • The total project Cost increases, Cost Risk POS

  14. Project Risk vs. POS, Cost, Value • As the project team works to reduce Aggregate Project Risk, • The project POS increases, and • The total project Cost increases, but • Because the POS increases, the “anticipated” value of the project increases, Value Cost Risk POS

  15. Project Risk vs. POS, Cost, Value and Commitment • As the project team works to reduce Aggregate Project Risk, • The project POS increases, and • The total project Cost increases, but • Because the POS increases, the “potential” value of the project increases, and • Corporate commitment increases. Commitment Value Cost Risk POS

  16. Target Selection Candidate Selection Product Differentiation Market Access Goal to Reduce Risk & Increase Value • At each stage of Discovery and Development, work is performed to reduce aggregate project risk and increase “potential” value. Drug Development Commitment Value Drug Discovery Cost Full Development Registration & Launch Target Discovery Lead Discovery Lead Optimization Preclinical Evaluation POC Risk POS

  17. Influence of Line Managers • Project leader authority is influenced by line managers Functional Weak Matrix Strong Matrix Projectized High Med. Influence of Line Managers on Project Low None Full-Time Project Leader Project Mgmt Office Autono- mous Team Management of Projects No Coordinator Part- time Coordinator Full-time Coordinator None Project Leader Authority High Section 1.9.1 in The Standard for Portfolio Management, 2nd Ed. P. 17, Project Management Institute, 2008. See also Section 2.4.2 “Organizational Structure”, p. 28-32, in A Guide to the Project Management Body of Knowledge, Project Management Institute, 4th Edition, 2008.

  18. Influence of Line Managers • Project leader authority can vary dramatically according to the impact of the project on the corporation Commitment Value Cost Risk POS Functional Weak Matrix Strong Matrix Projectized High Med. Influence of Line Managers on Project Low None Full-Time Project Leader Project Mgmt Office Autono- mous Team Management of Projects No Coordinator Part- time Coordinator Full-time Coordinator None Project Leader Authority High

  19. Influence of Line Managers • In Pharma, Project Leader authority and effectiveness tendsto increase from early Discovery to final Drug Development

  20. Influence of Line Managers • The lines tend to control resource in Discovery and early Development. In late Development the projects control resource

  21. The Triangular Relationship • There is a triangular relationship between line departments, the project leader and portfolio management, focused on the project team Line Functions Project Team Portfolio Management Project Leader

  22. Project Leaders as Matrix Managers • When there are many projects, each competes for resource from the various line departments

  23. The Triangular Relationship • Line managers not only impact project teams through the contribution of resource to the teams, • They also pick the project leaders and • They control much of the valuable project data needed by portfolio management Line Functions Project Teams Portfolio Management Project Leaders

  24. Some Differences Between Discovery & Development Discovery Project Leader Development Project Leader • Volunteer* from line departments • Averse to detailed project tracking & reporting – keep it simple (Gantt charts a tough sell) • Line managers needs to value this work • The PL will be beholden to the line managers for resource and delivery dates • Professional project leader • Appreciates the value of project tracking & reporting (Gantt charts a minimal necessity) • Line managers will be influential in early Development. • Project more important than line * The consequences of a volunteer scientist project leaders may include less training, less visibility and accountability (not sure of their role), more interest in exploring science than meeting timelines.

  25. Presentation Summary • The differences between Discovery and Development Project Leadership come down to the Level of Aggregate Project Risk • Project Leadership is no less important in Discovery than it is in Development • It’s just different • These differences are further elaborated atwww.projectleadersolutions.comwww.portfoliomanagementsolutions.com

  26. ContactInformation James Samanen Consulting610-983-9602 www.jamessamanenconsulting.com

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