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New models for drug development, especially in big pharma, are being experimented by different companies. Eli Lilly (NYSE:LLY) and GlaxoSmithKline (NYSE:GSK) have two different models. These models do not throw out the old ones - but do offer additional routes going forward.

Lilly has a Phenotypic Drug Discover Initiative, (or PD2), launched in 2009. Lilly solicits compounds from other companies so long as they are in certain therapeutic areas (oncology, diabetes, osteoporosis, and Alzheimer's Disease). Compound structures are sent to Lilly electronically where they are evaluated using modeling and simulation. If the compound passes the screen, the physical compound is sent to Lilly for further testing. If the compound passes the physical test, the fun begins.

All testing by Lilly is free and IP remains with the originating company or institution. What Lilly gets in return is the first right to exclusively negotiate an agreement. If talks break down, the originator keeps all the data generated by Lilly.

Having had some personal experience through my biotechnology company (IMC Biotechnology), I think this is a very interesting approach. We submitted 9 compounds to Lilly and one of them went through the screening process. The software had some minor glitches but the Lilly representatives were very helpful in addressing those glitches.

I think this is a great way for Lilly to expand its repertoire of compounds beyond those invented by its chemists. Certainly one way of going beyond the NIH (not invented here) syndrome.

GSK has come up with an opposite approach where it is offering its library of compounds to researchers in a certain therapeutic area (under-served tropical diseases). For example, it is offering 13,500 compounds that appear to work in malaria.
GSK will let other scientists try to develop malaria drugs -- free from royalties or other payments to GSK. They were narrowed down from more than 2 million compounds.

More unusual is its open lab project. GSK plans to give up to 60 outside scientists from around the globe access to what it called the “Open Lab," at an existing company research lab in Spain. Researchers from universities, foundations, etc will be able to use the facilities to try to develop new medicines for diseases plaguing poor countries.

GSK is to start a foundation to fund research and idea sharing, kicking in $8 million initially. It also plans to work with the Emory Institute for Drug Discovery. I have worked a bit with the Emory Institute of Drug Discovery and know they have an excellent drug development team, but have not learnt anything from them about what their exact role in this project is going to be.

While a small fraction of overall R&D efforts, it nevertheless is a significant departure from business as usual. And while GSK does not expect to get royalties, the halo effect, especially with health care reform in the spotlight, cannot be neglected. One could criticize GSK in pointing out that the company does not have much to lose by sharing data in neglected diseases – and that it is not doing so in the more lucrative markets such as oncology. But I doubt that the millions of patients suffering from malaria and TB will support such criticism. New models for drug development, especially in big pharma, are being experimented by different companies. Eli Lilly and GlaxoSmithKline have two different models. These models do not throw out the old ones - but do offer additional routes going forward.

So the two companies have differing strategies that actually could be quite synergistic. Maybe it is time to pay the ultimate compliment and copy each other.


Disclosure: None

Source: Eli Lilly and GlaxoSmithKline: A Tale of Two Different Pharmas