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Virtual Biotech Part 1: What We Learned About Effectively Outsourcing a Drug Discovery Program

Submitted by on July 28, 2011 – 12:04 pm

virtual drug discovery SDBN EventThe first in our Virtual Biotech series, our July 19th event was a success.  Thanks to our participants – some of San Diego’s leading virtual drug discovery scientists and CROs – for sharing their valuable insights and advice for scientists managing or considering how to manage an outsourced drug discovery project.

We’ve compiled some of the key tips and highlights of the night including:

  • What activities should you outsource?
  • Finding the right CRO for your objectives
  • Managing your CRO relationship successfully every time
  • Virtual tools to help manage and build your CRO network
  • Finding the funding and resources you need for your virtual drug discovery projects

What Activities Should You Outsource?

Our panelist Scott Struthers, Founder & CSO of Crinetics Pharmaceuticals, summed up this topic with a simple, “…what you’re good at, you do in-house; what you can afford you do in-house.”

Struthers’ team looks to outsourcing when dealing with capital- or labor-intensive projects and this was the consensus among panel members.  By focusing on the activities your team does best, your efficiency and productivity are maximized – all else can be outsourced.

Finding a CRO to Become Part of Your R&D Network

Finding a CRO you can trust is critical.  Here are some tips and practices from our panelists for finding the perfect CRO for your project:

  1. Seek recommendations from colleagues and friends.  Whether referrals are from scientists within your long-term network or a colleague in your current company, peer reviews are incredibly valuable for obvious reasons.  These recommendations can also help you distill your initial CRO options down to a few, making the search more manageable.
  2. Leslie Hickle, VP Business Development at BioAtla, LLC, identified the following three key areas to consider when determining if a CRO will be a fit for your project:
    • Quality – Do they have referrals?
    • Cost – Are their services cost-effective for this project?
    • Speed – Do they deliver on time?

    Hickle also notes that you will need to clearly determine your own expectations for each of these categories so you can easily compare CROs.

  3. Once a CRO is a fit, never, ever, ever – ever – let them go.  They are now part of your Virtual R&D Network.

Managing Successful CRO Relationships

While several elements comprise a successful strategy when managing a CRO, this statement truly sums up the hallmark characteristic of successful, long-term CRO relationships:

“…the really successful projects are the ones where we become like an extension of the project team, where we’re looked on as collaborators.”

- Panelist Diana Wetmore, Vice President of Business Development at Emerald BioStructures

Manage your CRO relationship as if it were another branch of your existing team. Speakers note that this extends to all areas of a project.  To successfully manage a CRO relationship, a strategy is required that consists of:

  • Partnership – Viewing your CRO as a member of your team will optimize your project’s productivity and overall success; CROs will give you input and documentation to help you with your budget, your strategy, and many other areas of your project.
  • Communication -
    • High frequency especially at the beginning of a project is important
    • Milestones and goals are clearly identified so no grey area exists
    • Virtual tools are extremely helpful throughout the entire project, and online video tools were identified as especially useful when establishing a new relationship
    • Problems or issues are communicated and handled as team
  • Dedicated Management – A dedicated person who manages the virtual meeting and collaboration process is essential.  This person leads and organizes the virtual meeting space, including: communications, coordinating attendee schedules, managing the call itself, gathering and sharing any relevant documents, following up with attendees, tracking the project and managing online communication platforms for team
  • Alignment – Be On the Same Page: To achieve success, both the CRO and the client need to be on the same page.  Know what you want and expect, and have the conversations early to establish the foundation for your relationship and ensure consistent successes.

Global or Local?

Resoundingly, the quality of the relationship, not where the CRO was located, seemed to be the most important ingredient.  However, here are some pros and cons of global vs. local CROs listed by our participants:

Global Pros 

  • Expanded CRO options
  • Virtual tools go a long way to reduce the barriers to leveraging global CRO options
  • Reduced cost
Global Cons 

  • Time differences can impede access to CRO team when you need them – establish the CRO’s availability early to ensure you choose one that meets your needs
  • IP protection may be less secure
  • Takes more time to build trust if a new relationship
Local Pros 

  • IP protection more secure
  • Easier to establish a relationship with the CRO
  • Time zone is not as big of an issue – availability when you need it
  • Easier to locate specialty CROs
  • Referrals are easier to find
  • Prices can be comparable to international rates
Local Cons 

  • May be more expensive
  • Limiting your CRO options

 

Best Virtual Tool to Help Manage Outsourcing

Participants appreciated the abundance of online tools and resources available to help build their global networks of outsourced R&D.  Useful tools included:

  • Virtual meeting spaces – Online video and audio programs allow easy, inexpensive, and (most importantly) frequent communication.
  • Virtual file-sharing spaces -  Sharing content quickly and securely helps to increase efficiency

How to Find Funding and Resources

Our participant, Jim Hauske, President and Founder of Sensor Pharma, notes four key questions that need to be answered to obtain funding, or the possibility of funding:

  1. Who owns the company?
  2. What is the therapeutic, or technology focus?
  3. What, if anything, has been accomplished?
  4. What is the IP estate?

And where to find that funding?

  • VCs
  • Pharma
  • SBIR grants (Small Business Innovation Research) – low hurdle for startups
  • Disease organizations
  • Patient Advocacy groups
  • High net worth individuals and their non-profit organizations
  • Self funded
  • Micro-funding (individuals, small private groups)

Resources: In addition to finding funding, resources are available for virtual drug discovery companies, such as San Diego Entrepreneur’s Exchange.  SDEE is a virtual incubator and social networking tool for San Diego startups.  This site allows scientist’s access to resources such as equipment and lab space and helps teams find other scientists with which to collaborate and potentially partner.

How are “risk sharing” deals really structured?

CROs can help to shoulder some of the risk involved with a project.  For example, Diana Wetmore explained that her CRO may determine the structure of a risk-sharing deal by assessing a project, then binning into one of three levels – low- , mid- , and high-risk projects.  Varying levels of commitment are proposed by the CRO, according to perceived probability of success.

In an extreme example of sharing the risk burden Richard Lin, moderator and President and CEO of Explora BioLabs, emphasized flexibility and creativity when assessing a risk-sharing deal.  He explained that his CRO performed an entire project for no fee, and received double the normal payment when the client achieved Phase I funding – a risk, but a clear win for both sides.

Bottom Line

You and your CRO are on the same team.  Utilize your network and online tools to find your CRO.  Then build a successful relationship by defining your expectations, communicating frequently, and including your CRO partner in all processes along the way.

We hope these tips and practices will help you to effectively manage your Drug Discovery outsourcing.

If all of your questions weren’t answered here, stay tuned for more in our Virtual Biotech series or leave a question or comment below.

Or, are you a CRO or virtual drug discovery scientist with some insights our community could use?  We’d love to hear from you!

Thanks to Our Virtual Drug Discovery Participants:

Jim Hauske, President and Founder,Sensor Pharma (Bio)

Virtual Drug Discovery panelists:

Leslie Hickle,VP, Business Development, BioAtla, LLC (LinkedIn)

Daniel Holsworth,Co-founder/Board of Directors, ODIN Therapeutics AS(LinkedIn)

Richard Lin (Moderator), President and CEO, Explora BioLabs (LinkedIn)

Ajay Madan, Senior Director of Development, Neurocrine Biosciences (LinkedIn)

Scott Struthers, Founder & CSO,Crinetics Pharmaceuticals (LinkedIn)

Diana Wetmore, Vice President of Business Development, Emerald BioStructures (Bio)

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