IDA Ireland / PharmaChemical Ireland Symposium Integrated D + M + Q = Dream or Reality?

1. IDA Ireland / PharmaChemical Ireland Symposium Integrated D + M + Q = Dream or Reality? Integrated technical operations in the bio. & pharmaceutical industry Graham Symcox September 23rd 2009

2. Short Bio • Trained as an engineer • Business recovery - instead of an MBA • Pharma Technical Integration assignments in 1990‘s • Set up own consultancy network in 1996 • 25 specialists; focus in Development, manufacturing & Quality • PharmaPhorum & BioPhorum industry clubs • Married with three children - & Pasha..

3. Contents • I Strategic Background • II Integrated technical operations • III The next ten years for Ireland.... • IV Appendix

4. Externally competitive - Drive Business Strategy Externally Supportive - Customer Service Advantage Internally Supportive - Cost Advantage Internally Neutral - Cause No Problems Internally Negative - Quality/Delivery Problems Technical operations – increasingly strategic… • Making technical operations competitive • The Steven Wheelwright* Model of Competitivity The traditional role of technical operations requires fundamental re-appraisal to ensure that it makes an increasingly strategic contribution. It will no longer suffice to be "Internally Neutral“ we must become at least “Internally supportive" and where possible "Externally Competitive".

5. $ M M M D e v e l o p f o r 4 0 0 B e n e f i t s C u s t o m r w n t e a s 3 5 0 P a t e n t P a t e n t 3 0 0 f i l i n g L a u n c h E x p i r y 2 5 0 S p e e d u p 2 0 0 D e v e l o p m e n t 1 5 0 1 0 0 0 5 10 15 20 25 30 5 0 T i m e i n Y e a r s f r o m 0 t e n t F i l i n g P a - 5 0 A c c e l e r a t e V a l i d a t i o n - 1 0 0 C o n t r i b u t e T h e S t r a t e g i c c o n t r i b u t i o n o f Tech O p e r a t i o n s i s i n t h e d e v e l o p m e n t , m a n u f a c t u r i n g a n d a r e t i n r Externally supportive – role of Technical Operations A n n u a l n e t I n c r e a s e d Tech O p e r a t i o n s C o n t r i b u t i o n c a s h f l o w U S C o n t i n u e D e v e l o p m e n t t o a d d V a l u e t o P r o f i t a b i l i t y I m p r o v e S & M E f f e c t i v e n e s s quality processes Tech Operations: Development, Manufacturing & Quality

6. Becoming - Internally Supportive Looked at in ‘text book’ terms, this means focusing on Three core Business processes:- New product development, registration and launch Product compliance and process performance through-out the development & supply chain End of patent life reformulation and patent extension activities.

7. Becoming - Externally Supportive Looked at in strategic business terms, this means :- Accelerating product development, registration and launch – 1000 days? Enhancing Product compliance and process performance through- out the development & supply chain – QBD/PAT Undertaking End of patent life reformulation and patent extension activities – 2nd generation synthesis/formulation/device development Why not… do all of the above on a commercial site in an integrated manner…. …….in Ireland?

8. Contents • I Strategic Background • II Integrated technical operations • III The next 10 years for Ireland .... • IV Appendix

9. Research, Development & Manufacturing (RDM) • Requirements for increased levels of ‘pipeline productivity’ are driving industry wide restructuring of the R, D & M processes. • This is resulting in the phase I,II,III development model transitioning into an early development and late development model. (ED – LD) POC /Phase IIb Emphasis on innovation Emphasis on velocity & commercialisation Discovery EarlyDevelopment Life Cycle Supply LateDevelopment Research Phase I Phase II Phase III Registration Launch & Supply File IND Submission Approval Increasingly the Late stage Development activities are being combined with commercial supply – resulting in Pilot plant investments co-locating with existing supply sites.

10. Research Phase I Phase II Phase III Registration Launch & Supply • File IND • Approval • Submission POC /Phase IIb Emphasis on innovation Emphasis on velocity & commercialisation Discovery EarlyDevelopment Life Cycle Supply LateDevelopment Basic Model Hand over ‘window’ 2008 Pharma Phorum – Shared & compared company models 2009 Pharma Phorum – Discuss how you make it happen

11. Research Phase I Phase II Phase III Registration Launch & Supply • File IND • Approval • Submission POC /Phase IIb Emphasis on innovation Emphasis on velocity & commercialisation Discovery EarlyDevelopment Life Cycle Supply LateDevelopment Basic Model Small Molecule – Development Accountability Research Ireland M + D Site R&D Dev. R&D Ireland M + D site Development Research Ireland M + D Site R&D Research Ireland M + D site Research Ireland M + D Site

12. D&M Integrated API & Formulation Early Phase Clinical Supply Process Development (1st/2nd generation) Regulatory service Process Optimisation Clinical supply Scale up, Tech Transfer & Launch Tech Transfer & Launch Process Improvement M Manufacturing 1. Site specific D&M plans • A pathway of stepwise activities is common to most sites • There is a continuum of company situations from ‘too early’ to first development projects to fully endorsed site D&M strategies • Key levers include • Utilising manufacturing equipment and facilitates for phase III supply • Maximising development tax credits & IP tax arrangements • Avoiding / delaying capacity expansion / investments • Utilising specific site experience

13. Contents • I Strategic Background • II Integrated technical operations • III The next 10 years for Ireland .... • IV Appendix

14. Challenges in implementing the new model • High Attrition Rate with New Products • Capacity & Cost Management challenges • Integration of Dev. activity within Commercial Supply Facility: • Phase appropriate Management Systems (Quality, SCM, etc) • Facility design & Capital Investment challenges • Production Schedule uncertainty • Site Management Challenges: • Organisational development • KPI’s are typically Manufacturing vs Development oriented • Tax related benefits do not typically flow to Supply Chain management

15. 6. Re-branding of Ireland – “change the message” • Industry needs for commercialisation are obviously far more complex than for manufacturing alone • Recognising and meeting these needs will require messages that appeal to development, regulatory, commercial and manufacturing executives • Communicating & re-branding Ireland should increasingly include:- • Level of development activities in Ireland • Number of products being developed in Ireland • Number of products being launched in Ireland • Speed & success of registrations • Key process innovations etc • This branding needs to convey all aspects of commercialisation – manufacturing, development, regulatory, time to market, project management such that Ireland is recognised as the top location in the world from which to commercialise pharmaceuticals • ‘Bring a molecule that works in the clinic to Ireland & we will supply product to the world’

16. The new challenge – the next ten years • Will we continue to invest in separate development facilities, pilot plants and production supply centres? • Will conventional functional structures, highly controlled business processes and sequential interfaces meet the needs of the future? • Will the industry be able to manage integrated operations and where will these new capabilities be developed? • Will Ireland become the global, technical operations centre for the Pharmaceutical Industry, both small & Large Molecule? • We are planning to show case what we are all doing in Ireland in 2010 with our 3rd Pharma Phorum hosted by Lilly & Merck with support from IDA.

17. Questions? 17

18. Contact Graham Symcox, CEO Bio & Pharma Consulting Ltd, Graham.symcox@bioandpharma.com +44 7785 983 277