science backed success - perspectives on the future growth of natural medicines

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Science Backed Success Perspectives on the Future Growth of Natural Medicines

Gabriel PereraGeneral Manager, [email protected]

University of OtagoThursday, 16th April 2009

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Our Agenda Today

Science Backed SuccessPerspectives on the Future Growth of Natural Medicines

• Natural Medicines – The Macro Environment

• A Bit About Blackmores – Our Research Activities and Support

• Future Growth – Part I: Key Trends to Consider

• Future Growth – Part II: Five Principles for Your Success

• Your Questions and / or My Case Studies

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• One aspect of complementary medicine that has changed dramatically in the last 10 years is the focus on

validation of products and their claims. This has been driven on all fronts – by regulatory bodies, health

professionals, consumers, and by complementary medicine companies seeking to gain a competitive edge.

• This drive to support traditional medicine claims with scientific underpinning is an enormous undertaking, often

frustrated by lack of Government funding and lack of available intellectual property protection.

• It is nevertheless an important undertaking, one finding resonance even within the scientific-academic community

judging by the ever-increasing number of publications on complementary medicine in the medical-scientific

literature.

• In Australia, the National Institute of Complementary Medicine (NICM) was established to provide leadership and

support for strategically directed research into complementary medicine and translation of evidence into clinical

practice and relevant policy to benefit the health of all Australians. The NICM initiative complements the

announcement in late 2006 of $5 million of National Health and Medical Research Council (NHMRC) Special

Initiative Research Grants for complementary medicine and the inclusion of complementary medicine in the 2007-

2009 NHMRC triennial strategic plan. The special initiative funding drew a strong response with 141 applications

from 37 institutions, demonstrating the high level of interest in complementary medicine research.

• Government support for the founding of NICM and other complementary medicine research initiatives is

consistent with international trends. The US government currently allocates approximately $120 (USD) million per

annum for complementary medicine research activities through the National Center for Complementary and

Alternative Medicine (one of the US National Institutes of Health (NIH)) and $300M per year is committed for CAM

research across all NIH centres.

The macro environment for natural medicines and related research has undergone 10 years of rapid international change.


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Our Agenda Today


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• Blackmores’ research focus is mainly on clinical research

rather than basic science research. We work with

universities, hospitals or research institutes within Australia

and New Zealand.

• Budgets and research trials are planned within Blackmores’

business planning cycle. The company’s research focus is to

support the medium- to long-term goals of business

development and marketing. This has not always been an

easy task given the multitude of products found within the

Blackmores range and the numerous number of new

candidate products.

• Blackmores is proud to sponsor complementary medicine

research within Australia and feels its role in this area has

encouraged other companies to engage in complementary

medicine research as well.

Blackmores currently supports clinical (and some scientific) research into natural medicines, with product and funding.


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Blackmores’ research and innovation program has four strategic aims.

1. Provide impetus and support for NPD programme, and develop, acquire and protect proprietary “new to market” Intellectual Property for Blackmores.

2. Provide supportive evidence for and enable “new to firm” brand differentiation of current Blackmores SKUs.

3. Develop and grow global strategic alliances with industry, government, academic institutions, researchers and clinicians to gain unique commercial access to and support for “new to market” innovation for Blackmores.

4. Generate, categorise and provide access to information of value to the business through Blackmores’ knowledge base.

Proprietary NPD

Improve Current

Products / Marketability /

Processing

Gain / Develop Strategic Alliances through Support

Generate Information of

Value to Blackmores’ Knowledge

Base

Weighting = +++ Weighting = ++ Weighting = + Weighting = +

Unique or exclusive licence on IP protected ingredient or finished product.

Strong consumer proposition, market attractiveness.

Delivery systems, formulation, bioavailability, stability (technology), ‘new to firm’ clinical & scientific studies on existing products.

External party led development with therapeutic target and finished product possibilities.

Positive PR and associations for product promotion.

Basic + research, sponsorship, capability development – contributes to body of knowledge on a subject – may assist Blackmores’ promotion of products.


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Our Agenda Today







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Despite challenges in the current economic climate, the long-term fundamentals for the natural medicines (VHMS) industry remain strong.

Growing acceptance of complementary medicines

Ageing population dynamicsContinued growth in healthcare expenditure

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Australia’s ageing population Australian healthcare expenditure

30,000

40,000

50,000

60,000

70,000

80,000

90,000

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95

-96

19

96

-97

19

97

-98

19

98

-99

19

99

-00

20

00

-01

20

01

-02

20

02

-03

20

03

-04

20

04

-05

20

05

-06

A$m

0.0%

1.0%2.0%

3.0%4.0%

5.0%

6.0%7.0%

8.0%9.0%

10.0%

(%)Total Health Expenditure (LHS)

Ratio of Health Expenditure to GDP (RHS)

0.1

1.1

2.1

3.1

4.1

5.1

6.1

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

20

22

20

24

20

26

20

28

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Number of people 65 years and over (RHS)

Percentage of people 65 years and over (LHS)

m

Source: ABN AMROScience Backed SuccessPerspectives on the Future Growth of Natural Medicines

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The problems of overweight, stress, lack of energy and digestive health rank in the top-four health concerns of consumers worldwide.

Source: Health Focus International

Other key trends include:

• Digestive Health

• Feel the Benefit

• Weight Management

• Energy

• Free-From / All-Natural

• Functional Foods

• Children’s Nutrition

• Healthy Snacking

• Targeting Ultra-Loyal Consumers

• “Premiumisation”

Consider: could you create a trend / establish a “new” need?


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Our Agenda Today







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The future growth of natural medicines will be science-backed. If you intend to succeed, consider five key principles.

1. Good IP is hard to find - Truly valuable IP can be hard to come by – considerations around “inventive step” and international landscape FTO must be understood early. Unique compounds and / or research are highly desirable, but…not always. Protect your work before opening dialogue.

2. Maximise Bang for Buck - speed to market of natural medicine Co c.f. MNC budget, proliferation and growth – is your discovery a natural medicine, or are you better to target biotech / pharmaceuticals with a drug candidate? If you have limited money and time, this principle is very important!

3. Turn-Key is Best – Market and business-ready is (generally) critical for success – package and shape your work – if you don’t know how, get some help! Your network and contacts can be very useful in helping shape your thinking – but keep your wits about you. What is your financing model, what is your revenue model, how much cash will you require to get to turn-key readiness?

4. Translate to Proliferate – Who is your customer and who is your customer’s customer (there’s a difference!) Where is the customer need, where is the consumer need? How are you satisfying these needs in a better, faster, cheaper, smarter way than current market precedents? To be understood, you must first seek to understand.

5. Prove It! - A good idea is not enough – be honest with yourself - if you have no real IP (or even if you do) demonstrate consumer need / scientific / clinical validation.


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Our Agenda Today







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Your Questions: Three (Optional) Short Case Studies

• Evogen®

• Evolution Q10™

• Macu-Vision®


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Appendices


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Example for illustration purposes only.

Prospective projects are evaluated on strategic, commercial & technical considerations and given a pass or fail “R&D Score”.



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Projects that “pass” proceed to a detailed R&D Project Brief. Those that “fail” are captured in our R&D Idea Vault for future reference.

Opportunity identified - internal

/ external

Opportunity identified - internal

/ external

CDA / MOU signedResearch collectionCDA / MOU signedResearch collection

Research Pack provided to R&D

WIP Group

Research Pack provided to R&D

WIP Group

R&D WIP Group completes R&D Score

on new opportunity

R&D WIP Group completes R&D Score

on new opportunity

PASSPASS FAILFAIL

Allow 2 weeksAllow 2 weeks

Project and materials logged R&D Idea Vault

Project and materials logged R&D Idea Vault

Allow 1 weekAllow 1 week

Project Sponsor appointed by

R&D WIP Group

Project Sponsor appointed by

R&D WIP Group

Cross-Functional Team

Designed

Cross-Functional Team

Designed

Project Brief Completed

Project Brief Completed

Project Brief reviewed and

authorised

Project Brief reviewed and

authorised

PASSPASS FAILFAIL

Allow 1 - 2 weeks

Allow 1 - 2 weeks

Allow 1 - 2 weeks

Allow 1 - 2 weeks

Max Time Elapsed 4 - 5 weeks

(25 days)

Max Time Elapsed 4 - 5 weeks

(25 days)



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The R&D Project Brief ‘short-cuts’ the NPD approval process, provides input for a business case and moderates hit-and-miss on projects.

The Project Brief covers: Strategic Theme / Fit Project Sponsor / Project Manager R&D Score R&D Recommended Course of Action R&D Investment Summary Primary and Secondary Project Objectives Preliminary Market Attractiveness Assessment Consumer Proposition Channels Project Rationale Project Scope – what’s in, what’s out IP Assessment Partnership and / or Commercial Terms (if any) Technical and Regulatory Assessment Supply Chain Assessment Financial Reward vs. Risks – high level analysis Project Plan / Timelines – high level analysis



science backed success - perspectives on the future growth of natural medicines

Documents

complementary

complementary

research activities

natural medicine

key trends

natural medicines

idea vault

macro environment