Several drug development companies are implementing leaner business models, outsourcing nearly all stages of the drug development process in response to escalating development costs in a move that is proving increasingly popular within the industry.
That was the view of Karen Maubach, Clinical Development executive at drug development company BTG, who was speaking at the recent Pabord conference in London.
Maubach spoke of 'virtual' companies, which stand in stark contrast to 'traditional' companies, who outsource some functions such as clinical trials, but have invested heavily in headquarters and manufacturing infrastructure.
The virtual model refers to the business practice of outsourcing all stages of drug product life-cycle avoiding huge fixed costs and protecting against booms and busts caused by erratic pipelines.
Maubach spoke of the primary advantage of the virtual drug development model, citing time savings were the result of the flexibility by outsourcing companies to adapt to rapidly changing priorities.
"With the virtual model we are finding that bottle-necks are being worked through, clearing the backlog and further streamlining the overall drug discovery process," she said.
The presentation then focused on the expertise gained from this strategy, commenting on the inherent flexibility the model can incorporate.
"Internally, the model can focus on core competencies whilst maximising use of existing resources. There is no need to prioritise projects based on limited specialised resources," she commented.
"Externally, we can go further as there is scope to expand the skill base and resources. In addition, we can look into gaining the advice of independent experts and therefore gaining access to innovative ideas and exploiting emerging opportunities."
Other advantages include the ability to provide a smoother transition in response to the EU Clinical Trials directive by integrating advisors and experts with the necessary insight to navigate the new regulations.
The traditional model of drug development where the use of an extensive infrastructure with majority of functions in-house has always been the favoured set up. However, with the advent of innovative new technologies the face of pharmaceutical R&D is changing.
By allowing researchers to more effectively identify, select and exploit therapeutic targets, design more efficient drug development models and more quickly analyze the economic efficacy of pharmaceuticals, drug developers have realised that drawing on the expertise of the wider scientific community can bring new targets to market more effectively.
However, the virtual model is not without its disadvantages. Maubach spoke of the limitiations in some activities being difficult to out-source as well as the inevitable quality/audit/regulatory compliance issues.
"There is also the initial time consuming problem of identifying suitable partnerships and to develop constructive relationships," she said.
Perhaps the most important aspect is in order for the model to be cost-effective the leaders must take into consideration the timely development of good chemical leads and biological data to support the full development of the lead compounds. This too, can be a time-consuming process.