session 4400 - rapid commercialization strategies for pharmaceutical and biotech companies -...

CHUCK WEBBER[ASUG INSTALLATION MEMBER MEMBER SINCE:2008

MALCOM POULIN[ASUG ASSOCIATE MEMBER MEMBER SINCE:1998

DENISE MISSONAK[SAP POINT OF CONTACT MEMBER SINCE: 1998

Rapid Commercialization Strategies for Pharmaceutical and Biotech

Companies

James Chi & Jeff Clark - Grom Associates, Inc.Ed Sullivan - EnteGreat, Inc.

Real Experience. Real Advantage. •

Copyright © 2008 Grom Associates, Inc. and EnteGreat, Inc. All rights reserved.

Key Learning Points

Understand the business drivers for rapid commercialization in life science

Understand the benefits which rapid commercialization provides for life science companies

Develop insight into the challenges of achieving rapid commercialization

Understand the proven pre-configured solutions which Grom and Entegreat have built to accelerate rapid commercialization


Introduction

Business Context and Success Strategies for R&D / Commercialization

Rapid Commercialization Solution Overview

Integrated Portfolio and Project Management (IPPM)

Rapid Compliant Commercialization

Questions

Agenda

Copyright © 2008 Grom Associates, Inc. and EnteGreat Inc. All rights reserved.



Founded in 2000 - Mgmt team has been working together since 1982Privately heldLeading provider of supply chain & manufacturing systems consulting and solution integration services

Extensive experience integrating SAP with plant environments since 1994

Fortune 500 customers in life sciences, consumer products, pulp & paper, and specialty chemicalsActive roles in industry groups such as: ISA, MESA, Supply Chain Council, World Batch Forum, and APICSSAP NetWeaver certificationIndependent and Unbiased

EnteGreat

Founded in 1982Privately heldLeading provider of strategy, integration, operation, and support services for complex business software solutions

Full off-shore capabilitiesFortune 2000 customers in life sciences & healthcare, consumer products, aerospace & defense, discrete manufacturing, and technology servicesSAP National Partner since 1994Other competencies include Oracle, Peoplesoft, JD Edwards, and Siebel.~350+ consultantsIndependent and Unbiased

GROM

Company Overviews




Rapid CommercializationBusiness Context



The pharmaceutical environment is becoming more and more challenging. Pharmaceutical companies are pressured to

deliver revenue and earnings growth under tough conditions.

Rising commercialization costs. The average cost of developing a new drug is over $800MM.Declining R&D productivity. Number of FDA approvals have remained flat over past decade.Shorter product exclusivity due to increased competition from other branded and generic drugs.Increased regulatory stringency

Internal Industry Pressures

Ageing population will drive up utilization. The number of citizens over age 65 is expected to double over the next 40 years.Chronic diseases, such as diabetes, are projected to become more prevalent.Increasing payer Influence and role of government.Diminishing willingness to pay premium prices for branded pharmaceuticals. The share of generic drugs have tripled over the past two decades.

External Market Dynamics

The Pharmaceutical Industry is Under a Great Deal of Pressure




Exciting scientific advances offer greater potential than ever before for discovering new, more effective ways to fight disease Wave of scientific advances and new technologies have begun to change how medicines are discovered.Growing knowledge of how diseases work at the genetic and molecular levels has opened up new drug targetsTreatments based on an individual’s genetic make-up show great promise to improve health care

Pharmaceutical Research and Manufacturers of America,Pharmaceutical Industry Profile 2007 (Washington, DC: PhRMA, March 2007)

Creating Safe and Effective New Medicines The Potential Has Never Been Greater

“…The next ten years will be seen as a signal point of transition in health care. Medicine will be transformed from an instinctive art of alleviating

symptoms to a science of personalized health care. The next

decade will be viewed by future generations as the time when

treatments became preventative, predictive, and personalized…”

Michael LeavittSecretary of Health and

Human Services

For Pharmaceutical R&D, These are Bittersweet Times




For Pharmaceutical R&D, These are Bittersweet Times (Continued)




Source: innovation.org

For Pharmaceutical R&D, These are Bittersweet Times (Continued)




Focus on key therapeutic

areas

Financial

Customer

Internal Process

Capabilities

People & Culture

Growrevenue

Develop the capabilities to win

Patients

Develop transformational leaders

Create high performance culture

Sample Big Pharma Corporate Strategy MapMaximize shareholder value

Optimize cost Grow earnings Develop R&D pipeline value

Become the Leader in delivering value to customers

Payers Physicians BusinessPartners

Policy Stakeholders

Build effective and efficient business modelRethink the way we research and

develop new drugs

Rethink the way we commercialize

new drugs

Establish a efficient and adaptive

business model

Create a high performing organization

= Direct contribution by R&D= Indirect contribution by R&D

= Focus of today’s presentation

Big Pharmaceutical Companies Are Undergoing Significant Changes to Adapt




“…Drugs developed by the fastest companies enjoyed as much as a 17-month speed advantage over average performers and a 28.5 monthmedian development cycle and a 7.1 month regulatory cycle advantage over those of the slowest companies…”

“…Fastest companies focus and prioritize resources better and kill projects sooner…Fastest companies terminated 56% of discontinued projects in Phase I versus 36% for slowest companies…” Tufts Center for the Study of Drug Development (CSDD),

Impact Report, Volume 8, Number 5, September/October 2006

Rapid Development & CommercializationBottom Line Contributions




“…A one-day advantage typically saves $37,000 in out-of-pocket development costs and nets an additional $1.1 million in daily prescription revenue for an average performing drug…”

“…Drugs developed by the fastest companies saved $30 million in out-of-pocket development costs and gained $1.1 billion in incremental prescription revenue each, compared to those of the slowest companies…”

Tufts Center for the Study of Drug Development (CSDD), Impact Report, Volume 8, Number 5, September/October 2006

Rapid Development & CommercializationBottom Line Contributions (Continued)




Rapid CommercializationSolution Overview



Bas

e G

EM

Met

hodo

logy

Indu

stry

Spe

cifi

cT

hrea

ds

Indu

stry

Sol

utio

ns

Validation and Quality Assurance

Regulatory Compliance

Data Migration and Data Governance

ChannelManagement

Marketing &Field Sales

CompliantManufacturing

Lean ManufacturingSupply ChainOptimization

RapidCommercialization

GROM Solution Portfolio for Life Sciences




Com

pone

nts

Val

ue L

ever

sS

olut

ion

R&D ProjectManagement

Rapid Commercialization

QualityManagement

SpecificationManagement

RecipeManagement

PortfolioManagement

ManufacturingPerformance

Analysis

IntegratedProductionPlanning

ManufacturingExecution

Inventory And Warehouse

Management

= Areas with accelerated solutions

Increased PersonnelProductivity

FasterTime-to-Market

Lower NPDICosts Increased Revenue Lower IT Costs

Improved PlantUtilization

Improved CapitalPlanning andInvestment

Established Process & Change

Control

Increased MarketShare

ArchitectureSimplification

ElectronicBatch Record

ProductDevelopment

InternalProductionRamp-up

Contract Mfg.ProductionRamp-up

ElectronicFiling

Clinical TrialSupply Chain

Solution Overview – Rapid Commercialization




Integrated Portfolio and Project Management


Solutions Featured in Today’s Presentation




Solution Review:Integrated Portfolio and

Project Management (IPPM)



“…The industry is stepping up its use of global outsourcing practicesto speed development and reduce associated costs...”“…Growing clinical trials volume and

scope, are prompting drug sponsors to increase their reliance on foreign based investigators and patients…”“…Many top pharmaceutical

companies project that, within two to three years, up to 65% of their FDA-regulated clinical trials will be conducted abroad…”“…Demand for CRO services is

expected to grow by 16% annually over the next five years…”

Tufts CSDD Outlook 2007 Report on Globalization & Outsourcing

Managing R&D activities across diverse and widely dispersed teams is becoming an exceptionally difficult proposition…

Portfolio And Project Management:Why This Is An Important Topic




According to a benchmark conducted by the Aberdeen Group, Best-in-Class performers enjoy significant performance advantages over their competitors, including:

28% more likely to meet product development cost targets than the Industry Average and over three-times as likely as Laggard companies

52% more likely to hit target launch dates than the Industry Average and 3.3-times as likely as Laggards to hit these targets

…But when well executed, it can provide a significant competitive advantage

Portfolio And Project ManagementCompetitive Advantages To be Gained




Before a company can expect the full benefits of globalization and outsourcing, it must develop the

necessary capabilities to enable global R&D collaboration.

Integrated project, program, and resource management toolsReal-time, web-enabled, interactive collaboration toolsProduct Lifecycle Management (PLM) Product Data Management (PDM)

Key Technology Enablers

Standardized processes across global R&D chain for both internal and external resourcesCentralized and secure access to development data Formal project and program management methodologies Formal review process that includes external parties throughout development processDesign performance / metrics formally measured across global R&D chain

Key Business Capabilities

Portfolio And Project Management Needed Capabilities and Enablers




IPPMMaturity

Level

Time

CONTROL

MANAGE AND COLLABORATE

OPTIMIZE

Project SystemActivity &

Milestone Mgt

DocumentManagement

CapacityEvaluation

MaterialPlanning

ProcurementActivities

ProductionActivities

FinancialPlanning

TimeRecording

BudgetControl

PLM

cProjects cFolders RecipeManagement

xRPMPortfolio

ManagementPortfolio

EvaluationsResource

Management

Pre-ConfiguredSolutionOffering

Integrated Portfolio & Project Mgt.Solution Roadmap




Standardized R&D project WBS templateLabor activity processing – time entry through CATSExperimental manufacturing activity processing –integrated with existing planning processesConsumption & procurement activity processing

MaterialsContract services

Document processing (with e-signature approval)Cost Allocation

Automatic postingsManually apportioned

Financial analysisBudget controlCapacity evaluation & leveling

Project System Solution for R&DIntegrated Business Processes

Please refer to the “supplementary reference materials” section towards the back of this presentation for additional details




Pre-defined R&D project WBS templateIntegrated process design with materials management, procurement, manufacturing, and financePre-defined work centers rolesBaseline PS Module ConfigurationBaseline SAP DMS Configuration (with e-signature activation)Baseline SAP CATS ConfigurationBaseline SAP PP Configuration (work center capacity management)Pre-defined SAP security profilesPre-Configured Solution Project Documentation

Business process flowsUser / functional requirements specificationsBusiness process proceduresUnit / integration test scriptsEnd-user training materialsOur pre-configured R&D project system solution can save a

typical project up to 3 months in design and implementation

Pre-Configured R&D Project System Solution




Solution Review: Rapid Compliant

Commercialization



• Shorten the time and reduce the cost to move from clinical supply manufacturing to scaled-up commercial manufacturing

• Eliminate the “toss it over the wall” syndrome after approval

R&DEarly

ClinicalSupply

LateClinicalSupply

ImprovedCommercialSupply

EarlyCommercialSupply

Over The Wall

?

Rapid Compliant Commercialization Overall Business Objective



Accelerate

http://www.google.com/imgres?imgurl=http://www.3dmd.net/gallery/albums/textures/walls/brick/BrownBrickWall_tileable.jpg&imgrefurl=http://keeleyblackstock.blogspot.com/2007/09/building-brick-wall.html&h=131&w=131&sz=66&tbnid=pcOlbQvzYgcJ:&tbnh=131&tbnw=131&sa=X&oi=image_result&resnum=1&ct=image&cd=1



According to a cross-industry analysis performed by the Aberdeen Group*, the characteristics of a winning formula-

based product development strategy include:

Integrated Product Data Architecture - To support both production scaling and regulatory requirements

Detailed Audit Trail – Throughout the entire material flow

Integration with Value Chain Participants – To enable quick and complete reporting on all product and ingredient sourcing and distribution data

Demonstrated Regulatory Compliance – Proactive management brand integrity and risks, fines, and fees associated with non-compliance. Inspire confidence with regulatory agencies and speed up regulatory review cycles.

Speed and Access to all Relevant Product Data – Provide direct and immediate access to regulatory compliance information to both production and product development personnel.

Key Business Capabilities

* = “Formula-Based Product Development: Recipes for Compliance and Success”, Aberdeen Group, Nov. 2004

Rapid Compliant Commercialization Capability Requirements




IMPROVEMENT AREA BEST-IN-CLASS

Reduction in Product Costs 17.5%

Reduction in Engineering Change Orders Cycle Time 75%

Reduction in Design Cycles 25% - 35%

Reduction in Time-to-Volume Cycles 10% - 15%

Reduce Search Times / Improve Engineering Productivity

15% - 20%

New Product Revenue as a % of Total Revenue 28%

Counterfeiting, Grey Market Cost Reduction 31%

New Product Costs as a % of Planned Product Costs 69%

Source: “The Design for Compliance Benchmark Report”, AberdeenGroup, September 2004

Areas of Average Business Improvement Across Maturities

Rapid Compliant Commercialization The Business Benefits are Quantifiable




Program Maturity & Coverage

Time

STANDARDIZE

REALIZE ANDSTABILIZE

DEPLOYPROGRAM

Implement PLM & ERP Solution Pilot

ISA-88 RecipeManagement

Integrated Planning and

Analytics Electronic

Product Data

Establish FoundationalCapabilities

Enforced ManufacturingCompliance

ISA-88-based Recipe

Modeling

Leverage Infrastructureand Accelerate Process

StandardSolution

Architecture

Integrated Supply Chain Execution & Visibility

ElectronicBatch Record

ISA-95-based Interoperability

Internal Mfg.ArchitectureAssessment

External Mfg. Architecture Assessment

AutomatedComplianceProcesses

CAPA / NCRManagement

Modular & ConfigurableSolution Offering

Late Stage Clinical Mfg. Site

DeploymentContract Mfg.

SiteDeployment

Inline Mfg. Site

Deployment

Rapid Compliant Commercialization Solution Roadmap




mySAP PLM

SAP ERP

SAP ERP

NetWeaverPortal

SAP xMII

SAP ERP

NetWeaverPortal

3rd PartyApplications

Shop FloorSystems

Definition (in Late Stage Clinical & Commercialization)

MaterialRequirements

WorkProcedures

Sequence ofOperations

EquipmentRequirements

PersonnelRequirements

Execution (in Late Stage Clinical & Commercialization)

MaterialQualification

PersonnelQualification

EquipmentQualification

SequenceEnforcement

ElectronicWork

Instructions

DocumentationElectronic

Batch Record

Optimization

KPIsProcess Analytics

Rapid Compliant Commercialization Solution Architecture Overview




mySAP PLM

SAP ERP

SAP ERP

NetWeaverPortal

SAP xMII

SAP ERP

NetWeaverPortal


Shop FloorSystems



WorkProcedures








SequenceEnforcement

ElectronicWork

InstructionsSegmentation Of Manufacturing Resource and Activity Models Into Standard Formats Enables Application of

Uniform Policies and Procedures

Manufacturing Assets& Procedures Models

Using ISA-88

Rapid Compliant Commercialization Conceptual Architecture



Batch Record

Optimization




mySAP PLM

SAP ERP



WorkProcedures








SequenceEnforcement

ElectronicWork

Instructions

21 CFR 58(Labs)

21 CFR 211(Pharmaceutical)

21 CFR 600/610(Biological)

SAP ERP

NetWeaverPortal

SAP xMII

SAP ERP

NetWeaverPortal


Shop FloorSystems


Batch Record

Optimization


The Regulator’s Motivation and Intent As Expressed inLaw, Additional Guidance, and

Actual Assessments and Judgments

Rapid Compliant Commercialization Conceptual Architecture




SAP NetWeaverPLM APO

ERP

HR QM PM MM PP-PIEBR

BI

XI xMII

3rd PartyHR

3rd PartyEAM

3rd PartyLIMS

3rd PartyMES

Historian / SCADA

DCS / Batch

ISA-95 Documents (B2MML + Evolving Part 4) OPC

ODA

Rapid Compliant Commercialization Solution Architecture




Simply stated…Compliant Manufacturing Framework® is a library of proven best practices accelerators for executing regulated manufacturing using SAP

Proven templates for defining manufacturing objects and activities in a cGMP environment using industry standards such as ISA-88 and ISA-95

Proven templates and examples for configuring and implementing cGMP manufacturing applications

Proven content for US FDA/GAMP CSV documentation

Proven content for training and system documentation

CMF® provides materials that accelerate the development of an SAP-based cGMP shop floor manufacturing execution environment

What is EnteGreat’s ?




Seamless transition for manufacturing systemsInstant integration into the supply chainEliminates re-engineering or revalidationReady to begin compliance work in commercial productionCSVs and most documentation already in placeFacilitates efficient processing of post-approval changesIncreases clinical supply manufacturing efficiencyRapid access to data for bi-directional exchange, analysis, and continuous improvement

By using the same Compliant Manufacturing Framework for late stage clinical supply manufacturing that supports commercial

manufacturing, companies can achieve these added benefits:

Accelerated Solution for Rapid Compliant Commercialization – Benefits of using CMF®




Typical Project Timeline Without CMF-based Prototyping

Proof Of Concept

Pilot

InitialImplementation

Deployment / Roll-Out

Schedule Acceleration: The Advantage




Proof Of Concept



Pilot

Typical Project Timeline Without CMF-based Prototyping

Schedule Compression Opportunities





Proof Of Concept



Pilot

Overall Schedule Reduction and Quicker Payback


Project Timeline With CMF-based Prototyping




Improved New Product Development & Introduction• Faster product-to-market• Standardized mechanism for product definition / data architecture

from Development to CommercializationImproved Supply Chain Performance

• Increased responsiveness and flexibility• Improved manufacturing reliability and performance against plan

Reduced Labor (Operations & Quality)• Reduced effort to transform Clinical product definition data for

CommercializationImproved Batch Review / Dispositioning & Product Release

• Elimination of “clerical” batch record errors via Electronic Batch Record

• Exception-based electronic batch record reviewImproved Quality and Compliance

• Compliant First-Time• Supports top-down quality management (QSIT)

Drives Continuous Improvement • Timely access to accurate, current, and complete mfg data• Feedback from Commercialization to Development• Direct bi-directional transfer of product / production data

Rapid Compliant Commercialization Business Benefits




Questions

We’ll gladly take additional questions after today’s session.

Just stop by booth 1787 !!



[

Thank you for participating

SESSION CODE: 4400

Please remember to complete and return your evaluation form following this session.

For ongoing education on this area of focus, visit the Year-Round Community page at www.asug.com/yrc

James ChiGrom Associates

908-483-2000 [email protected]

Jeff Clark908-483-2000 [email protected]

Edward SullivanEnteGreat, Inc.412-523-2723

[email protected]


mailto:[email protected]





Supplementary ReferenceMaterials:

Pre-Configured PS SolutionIn Details







Financial analysisBudget control




Pre-Configured PS Solution for R&D Standardized R&D Project WBS Template




Project Structure Area

Details Area

Work list and Template Area




Gantt Chart

Tabular View



Planned Work DelayRemaining

WorkActual Work

Pre-Configured PS Solution for R&D Progress Analysis Report



Pre-Configured PS Solution for R&D Progress Analysis Report – Export to Excel



Pre-Configured PS Solution for R&D Labor Activity ProcessingLabor Assignment & Planning

Personnel assignment



Actual Work (Time)

Pre-Configured PS Solution for R&D Labor Activity ProcessingTime Entry Through CATS



Pre-Configured PS Solution for R&D Labor Activity ProcessingTime Entry Approval

Approved Work Hours



Approved Work Hours Transferred to Project

Pre-Configured PS Solution for R&D Labor Activity ProcessingBooking of Actual Labor Hours to Project



R&D Personnel assigned to

Internal Activity

Costs

PlanActual

Pre-Configured PS Solution for R&D Labor Activity ProcessingPlan vs Actual Labor Hour & Cost Reporting



BOM assigned to Project Activity

Experimental Manufacturing Activity Processing BOM Assigned To Project Activity



MRP result

Convert Planned Order to Process Order

Experimental Manufacturing Activity Processing Planned Order to Process Order Conversion



Process Order

Costs

Plan Actual Variance

Experimental Manufacturing Activity Processing Assignment of WBS Number to Process Order



Material

Quantity

Reservation

Consumption & Procurement Activity ProcessingMaterial Planning



Consumption & Procurement Activity ProcessingMaterial Consumption



Costs


Consumption & Procurement Activity ProcessingBooking of Material Costs to Project



CostsActual Plan Variance

For All Selected Project

Raw Material Consumption

PROJECT

Consumption & Procurement Activity ProcessingPlanned vs Actual Material Cost AnalysisAcross Projects



Service Activity

Purchase Requisition

Consumption & Procurement Activity ProcessingExternal Service Order Planning



Consumption & Procurement Activity ProcessingService Acceptance Through Entry Sheets



Costs


Consumption & Procurement Activity ProcessingBooking of External Services to Project



Status Indicator

Consumption & Procurement Activity ProcessingExternal Services Analysis



Document Status

Digital Signature

Document ProcessingWith e-Signature Approval



Document attached to Project Activity

Document ProcessingWith e-Signature Approval



‘R&D Generics’Cost Center

‘Travel & Enter…’Cost Element -

612000

Project Root WBS Element

Amount

Cost AllocationManual Cost Apportionment to Project




612000 – Travel & Entertainment

Cost Allocation Booking of Apportioned Costs to Project



CostsPlan Actual Variance

Financial AnalysisPlanned vs Actual Costs AnalysisHierarchical View




For Selected Project

Financial AnalysisPlanned vs Actual Costs AnalysisCost Element View



Planned Costs of Project

Budget allocatedWBS Element

Budget ControlAllocation of Budget to ProjectWBS Element View



Planned Costs of Project

Budget allocated

Period

Budget ControlAllocation of Budget to ProjectFiscal Period View



Control Message When Project Costs Exceeds Allocated Budget

Budget ControlMessage When Budget is Exceeded



For Selected Project

CostsBudget Actual Variance

Summary – Year wise

Budget ControlBudget vs Actual Cost Analysis



Capacity Evaluation

Capacity Planning

Overload

Capacity Evaluation & LevelingResource Capacity Analysis

session 4400 - rapid commercialization strategies for pharmaceutical and biotech companies -...

Documents

real advantage

pharmaceutical rd

ed sullivan entegreat

unbiasedreal experience

orgreal experience

pharmaceutical environment

pharmaceutical companies

life sap