Roche: Deals, Agreements, and Emerging Technology




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Video title: Roche: Deals, Agreements, and Emerging Technology
Released on: February 23, 2010. © PharmaVentures Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks with Dan Zabrowski, Head of Pharma Partnering at Roche. Filmed at BioBusiness 2010 in London, England, they discuss:

• Roche’s deal making model

• The company’s deal with Galapagos

• Later stage assets

• Chugai and the rheumatoid arthritis drug, Actemra

• The latest on Roche’s integration with Genentech through their collaboration model

• 2009 as a record year for agreements signed

• Emerging technologies and innovation

• Relations with venture capitalists
The company's deal with Galapagos
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BioBusiness in London. On this show I have Dan Zabrowski, who is Global Head of Pharma Partnering at Roche based in Basel, welcome to the show.
Dan Zabrowski:
Thank you very much for having me.
Fintan Walton:
Dan, you've talked before about the activities of Roche, what I want to do today is cover some of the recent events that are happening within Roche, your general strategy for partnering, but also look at again looking at some of the integration issues that we've talked about before potentially that could come about as a result of the Genentech acquisition. So to start of with I suppose one of the sort of typical type of things you are doing at the moment is this there is a recent deal that you've announced with Galapagos, so what is Roche doing with Galapagos [PharmaDeals ID = 34558]?
Dan Zabrowski:
Well we actually signed a deal with Galapagos to study or first of all discover and validate new targets in COPD using their SilenceSelect technology. We think the technology platform is the right platform to really go after a difficult disease area like COPD in addition to their discovery validation work on the target they also will be responsible for identifying small molecules and amongst those targets and Roche has the option to use those targets to develop antibodies against the targets. We are happy with the deal, we think it's a very creative deal, it's a typical deal in regards to our research collaboration where normally a large company would pay for FTE's in this case we pay for success. And we also like the deal given the fact that our organization, our research organization in Palo Alto has moved out to Nutley they are still in the process of settling and it gives us an opportunity to work with a very good and interesting partner in the area of discovery biology.
Fintan Walton:
So but in saying that there is still an upfront payment to Galapagos?
Dan Zabrowski:
Yes.
Fintan Walton:
And it's like 6 million Euros?
Dan Zabrowski:
Yes.
Fintan Walton:
So it's important that actually all the work is done essentially by people at Galapagos as you said, because some also some collaboration with some of the people at Nutley?
Dan Zabrowski:
Yes our research scientist will be responsible for helping develop animal models to test some of those small molecules that would be identified by Galapagos.
Fintan Walton:
So what's important here also is the term option, because you talk about an option and that is an option where by if they do discover interesting molecules that have been tested in at in preclinical or in animal models then you will take an option to take those forward, is that correct?
Dan Zabrowski:
Well no actually the licensing agreement gives us the rights to the small molecules that they discover. The option that I discussed is actually our option to take the target and for us to do internal antibody development against that target.
Roche's deal making model
Fintan Walton:
Okay. Are these the sort of deals that you are tending to do these days that it tend to be earlier stage working with organizations that have patent internal capability to take the science further themselves internally and then share that with you later is that the model that you prefer to take these days?
Dan Zabrowski:
Well actually I think we've been known in Roche has been a company that's always thought about deal making and from a perspective of win-win. And you know we are not wedded to one particular deal structure, the deal between Roche and Galapagos was sensible deal for us at the time and a sensible deal for Galapagos. I would say that you know our tendency is to look at technology platforms to help discover new differentiated medicines with a mid-term, but we are also very actively looking at clinical candidates as well not only in Phase I but also later stage assets.
Chugai and the rheumatoid arthritis drug, Actemra
Fintan Walton:
So let's just talk about later stage assets, I mean one particular important product that's made it's way through your clinical trial program it's an antibody to IL-6 in the area of rheumatoid arthritis, that product has just been approved that's Actemra which has been approved by the FDA. People say it's going to a blockbuster why should it be a blockbuster?
Dan Zabrowski:
Well first of all I have to give the credit to the originator of Actemra it was actually Chugai [PharmaDeals ID = 12708]. And we were very pleased with the fact that we have now secured approval in the United States. And as you mentioned it is a compound an antibody that works against a very different pathway in rheumatoid arthritis and it really does give patients who frankly are under served in this disease area another option, another very powerful option in the treatment of their disease. For us at Roche it is a kind of a significant market forward in the past that most of our antibodies have been used to treat cancers for the most part. We have Rituxan and MabThera for rheumatoid arthritis as well which is also in the pathway, but Actemra is really the first molecule that's the first antibody that we are bringing forward that does not have an oncology indication. For us we also are very pleased that it's a significant milestone in our relation with Chugai. You know we are majority shareholder in Chugai and you know they have done a tremendous job for us in Japan in introducing the global portfolio products into their market and this really marks the first time that we're able to bring Chugai innovation into the rest of the world.
Fintan Walton:
So just going back to the original question Dan, why should this be a blockbuster, what differentiates it from the existing therapies that are out there?
Dan Zabrowski:
Well it does work it does work in a completely different way through as you mentioned through the IL-6 pathway and as you know about rheumatoid arthritis patients there is a lot of switching, there is a lot of dissatisfaction in this particular disease area. We think that the IL-6 pathway is going to be a pathway that's going to be very powerful in treatment of disease and we have (indiscernable) information of patients who literally get out of wheel chairs and are able to resume a normal life as a result of taking our drug. And so from our standpoint we think as physicians become more comfortable using the drug you know based on the label indications around the world they will be more comfortable in treating a greater percent of their patients that they see with Actemra.
The latest on Roche's integration with Genentech through their collaboration model
Fintan Walton:
Then we move on to we are still with antibodies and when we do think about antibodies and obviously referred to Genentech earlier, one of the key things that happened during 2009 was the ultimate acquisition of Genentech [PharmaDeals ID = 30853] and then the integration back in May of last year we had an interview with you and Joe McCracken about that integration, one of the aims that you had was, one of the statements you, one of the objectives you had was to have a proper integration, a full integration by the end of 2009, one of the key things there was once Genentech became part of a large organization like Roche would it lose its entrepreneurialism, would it lose it's would it lose people, what's happened?
Dan Zabrowski:
Well let me start with our partnering organization Joe and I met with you in BIO as you said and one of the things we talked about was the establishment of a collaboration model where we choose to communicate, collaborate with one another and not necessarily compete in the external marketplace and I am happy to report that we've embedded the collaboration model within both organizations and it's been widely accepted in both R&D organizations as well. The other important feature of our integration in 2009 was the establishment of the Genentech research in early development organizations led by Richard Scheller. And I think what was very unique in our integration approach was that Richard's organization was put together literally within weeks after the deal had closed under Richard's leadership they report to the group CEO Severin Schwan and they are allowed to move forward independently and pursue the targets and innovation that they think are appropriate and so they where in essence able to just get on with their business very early on after the deal closure. You know so we've been watching you know how the Genentech's scientist would react to the privatization of the company and we are happy to report that as of today we have low turn over of our scientist. And also I think most importantly you know we've recently have conducted an employee satisfaction survey at the south San Francisco site and the employees satisfaction scores from the Genentech scientist were as high as they were prior to the privatization, so we are feeling pretty good that so you know that things are on the right track and I think if Richard was here he would tell you that Roche has lived up to their word.
2009 as a record year for agreements signed
Fintan Walton:
Now, it comes back down to the original acquisition, the original stake of Genentech and then ultimate acquisition, we are talking about how important Genentech was and has been to Roche without any doubt it has been a power house and you know hopefully then Genentech will continue to be a power house to the Roche group, but in the end you still need to access the right technologies to spot the winners early on, so how does a company like Roche make sure that momentum and may be some people look back and say was a high risk of a type taking an acquisition in Genentech because we still you know it hadn't been it was back in the 1990 it was still you know an emerging biotech company had a couple of products in the market but it was still very much an emerging field, so how does a company like Roche under your leadership which is getting access to this technology how you gonna do this for 2010 and onwards?
Dan Zabrowski:
Well it was interesting because when we met with you again in BIO I think one of the points that Joe and I made was that business as usual for us that we were still in very much in the deal making phase and I am happy to report that 2009 was a record year for us again in terms of agreements signed. I think if you add up the total number of agreements that were signed between the two partnering organizations it was in excess of a 100. So we're you know we feel that we've been to keep that momentum. And now as we move forward you know as we talked about earlier we'll continue to license products, we'll continue to access technology platforms that have had some proof of concept, but the other area that we are starting to look at is how do we compensate for potentially the lack of venture capital funding earlier in the innovation life cycle. And in that end we've now taking on responsibility in my group for what we refer to as emerging technologies, technologies that are very early in their development many times innovations that's coming straight out of academia. And we've gladly last year we signed a deal with a company venture capitalist in Israel called Pontifax where they have two incubators and through that arrangement they work on our behalf to bring innovation into their incubators, we help to fund that the early work and we have a certain right to that the innovation that comes out of those incubators.
Emerging technologies and innovation
Fintan Walton:
So it's that the type of are we looking for new, are you looking for new type, types of arrangements, I mean you are looking for novel ways because in the past it's not just specific to Roche, but large pharmaceutical companies trying to build relationships with organizations at very early stage technologies particularly universities, research institutes it's been tough, it's not been an easy ride. So again are you looking at models that can improve that relationship like the one you've mentioned is it important that you have a relationship with another with a venture capitalist that is creating the incubator, what would from your perspective would be the preferable arrangement which for a company like yours to access that early stage technology?
Dan Zabrowski:
I think the most important criteria for success in this area is the interest level of our scientist. And it's a different mind set, because normally when we bring our scientist opportunities that are later in the innovation cycle there are lot of data, there is a lot of precedents that they can fall back on to be able to say yes we think this is a high quality opportunity or no we should probably let that, we should monitor that a little bit longer. In these particular situations it's really ideas and so in large part we really are only interested in bringing that innovation out of academia that really strikes a fancy with our scientist, because it's that engagement between our scientist and the new start-ups which we think are going to help shape that innovation and hopefully become a differentiated medicine for patients late in this decade.
Fintan Walton:
Dan Zabrowski, thank you very much indeed for coming on the show.
Dan Zabrowski:
Thank you for having me.
Dan Zabrowski
Head of Pharma Partnering
Dan Zabrowski has been the Head of Pharma Partnering since July 2007. His team is dedicated to finding the best external innovation to strengthen the Roche R&D portfolio.
Roche
At Roche we focus on developing medicines and diagnostics that will help patients live longer, better lives. We strive to address unmet medical needs through excellence in science from early detection and prevention of diseases to diagnosis, treatment and treatment monitoring.