Roche, Dan Zabrowski talks about changes in the industry as Roche celebrates 10 years of Roche Pharma Partnering




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Video title: Roche, Dan Zabrowski talks about changes in the industry as Roche celebrates 10 years of Roche Pharma Partnering
Released on: August 24, 2011. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, filmed at BIO 2011, Fintan Walton talks to Dan Zabrowski, Head of Partnering at Roche.
Acquisition deal of Marcadia
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BIO 2011 in Washington DC. On this show I have Daniel Zabrowski, who is Global Head of Roche Partnering, welcome to the show.
Daniel Zabrowski:
Thank you very much for having me.
Fintan Walton:
It's good to have you again Dan on this show. As you know the world changes even in a year things have continued to move for the pharmaceutical industry as well as the biotech industry, how much have things changed from Roche's point of view in terms of the number of deals that you are doing, the types of pursuits that you are engaged in right now?
Daniel Zabrowski:
Well actually I think a lot of this could be traced back to the 2008 financial collapse where you know at that point there were two things that we saw from the pharma side of business development, number one was that there was a significant less there was a significant less available funding for the existing biotech companies which resulted in a decrease of the biotech community, and secondly there was I think a less of an appetite for venture capital that continued to invest in early technology, and so for us at Roche we've had to become even more creative in our financial deal structures, we are finding deals such as options deals or deals where the biotech investors are taking on more risk or becoming more prominent as well as earlier acquisitions so that the venture capitalist can get an exit and a good example of that was our acquisition of Marcadia [PharmaDeals ID = 38681] last year where we started that particular discussion around our licensing opportunity and that turned into the acquisition of Marcadia.
Fintan Walton:
And when you make that decision what's the driver for that, I mean you could still obviously just done a licensing deal, so what was the thing that triggered the actual acquisition itself?
Daniel Zabrowski:
Well at Roche you know we sit down with all of our potential partners they try to understand what does win-win look like from our partners standpoint and we become rather agnostic if you will to the deal structure because for us it's most important that we develop and start with a win-win relationship and in that particular situation I think if we'd have held firm that we wanted to do only a licensing deal with Marcadia I really don't think we would have done the deal, so for us we were comfortable in the end you know moving from a licensing discussion to an acquisition discussion.
Roche's program on extending innovation network
Fintan Walton:
Right, now the other thing that people may perceive is that and have at least some of the data that we have at PharmaVentures and PharmaDeals is that the number of deals are actually have gone down, we are seeing a slight increase again in the number of deals happening from Roche's point of view are you seeing a change in the pipeline of deals that you are doing compared to say last year?
Daniel Zabrowski:
Well interestingly in 2009 which was the year after of the financial collapse we did the larger number of deals ever in the history of our partnering organization, last year we actually saw that number go down slightly, but still we did over 50 deals and I would say that if I look at our potential deal pipeline today versus a year ago our potential deal pipeline is much fuller than where we were just a year ago.
Fintan Walton:
Okay, lets just go back to the biotech landscape because that obviously is the landscape which you have to work within and you've mentioned already that the financing of biotech companies have been tough over the last few years, that landscape has meant that as you've already indicated that the number of early stage products coming through have been reduced there is a number of start-ups and so forth does Roche need to outreach more to academia now than it did before is that another feature of Roche's activities?
Daniel Zabrowski:
Yes actually, we started a program called extending the innovation network and it's exactly that where we first enter into umbrella agreements with various institutions there some of them are academic institutions, but they could be also be government agencies, they could be venture capitalist with incubators and where we pre negotiate a series of terms based on the success and then what we do is we actually look for opportunities which would be considered at the seed stage of the innovation life cycle and we contribute funding for 18 to 24 months for a lab or a group of people to develop their innovation to a certain spot and to see whether you know we have then opportunity to make that innovation become more of a reality and become a medicine.
Fintan Walton:
Right, but of course when technology is inside an academic lab it's different to when it's in a biotech lab simply because academics want to express tell the world how wonderful their inventions are and so forth there tends to be a conflict, how does Roche handle that and also does it in the end mean that you would prefer to see that technology at a very early stage going into a spin out company, so what's Roche's preference when it comes to that very close interface between academic research and innovation going into a potential opportunity for Roche?
Daniel Zabrowski:
Well in our umbrella arrangements the most important thing that we need to solve with that lab and the institution that host that lab its IP rights. Once we've been able to solve that then really we let the science file take us where it needs to go in some cases there after 24 months we stop the project, we have the opportunity to bring that innovation into Roche directly but more likely which is the scenario that you've brought up is a fact that these this innovation now needs to become professionalized into a biotech company and this is why having these others partners really help, because in Roche we don't have that experience to be able to you know form biotech companies we need that expertise whether it's venture capital, government, technology transfer offices of universities to really help be able to enable that and as a matter of fact our earliest collaboration was that collaboration that was done in Israel with a venture capitalist called Pontifax where they have an incubator system in Israel we are now getting to the stage where some of the early companies that we funded are now reaching that series A funding and are right now looking for investments in addition to the Roche Venture Fund.
Relationship with venture capitalist
Fintan Walton:
Right, and in terms of again this changed environmental relationships that you have to change probably and improve on is the relationship with VC's and has that changed, I mean are you guys now closer to the venture capital community than may be you were four, five-years ago?
Daniel Zabrowski:
Absolutely for us we see the venture capitalist community as the investors the boards if you will of our potential partners and so we took a conscious decision roughly three-years ago to start spending more time with venture capital, exchanging ideas with venture capitalist in terms of ways that we could partner together creatively which allows the venture capitalist to get a significant return on their investments and at the same time allows Roche an opportunity to get access to innovation that may be we wouldn't have been able to under different circumstances.
Relationship with Genentech
Fintan Walton:
Sure and the other thing which we've talked about in previous interviews is the Genentech part of the Roche family, quick update how is that going? Is that working to plan?
Daniel Zabrowski:
It is, James as you know James Sabry took over for Joe McCracken and James really has embraced the collaboration model that was developed with Joe in the early days after the acquisition. We continue to have a very close interaction between the two groups and as a matter of fact we had our annual dinner on Monday night with the two groups and there is a good chemistry there, so now we still are very conscious to make sure that we are not out competing for deals with potential biotech partners.
Growth of Roche Partnering over the past 10 years
Fintan Walton:
Right, indeed. Now the other thing talking about celebrations, its 10-years I believe that Roche Partnering started in its current guise, what's different between that 10-years ago and now, now that you look back over those 10-years?
Daniel Zabrowski:
Let me tell you what's different and let me tell you what's the same. So what's different is we have evolved from a clinical in-licensing organization that company that's bringing clinical candidates into R&D pipeline to really a broad business development, corporate development organization and I think case in point is you know the recently announced collaboration that we have with Merck [PharmaDeals ID = 40819], [PharmaDeals ID = 42013] in the area of Hepatitis C, I am not so sure three or four-years ago that we would have been able to have the type of integration that we have today to be able to actually execute on such an agreement and particularly such a broad collaboration. What's interesting what's not changed is two things, number one is our business process of one to find get managed has remained the same for 10-years we have not changed it we've looked at it repeatedly and at the end we always conclude it's still right. And the second thing that hasn't changed is our emphasis and priority on gaining access to external innovation, if you look over those 10-years the number of compounds in our R&D pipeline that come from partnerships is still in that 30 to 40% range and we don't see that changing going forward either.
Daniel Zabrowski's perspective on future developments in deal making in biotech industry
Fintan Walton:
Okay, so just then what's gonna happen in the next 10-years?
Daniel Zabrowski:
Good question, I think you are going to find, I think in the industry I think you are going to continue to find much more creative deal making, I believe that this trend of doing earlier deals with between pharma and biotech is going to continue to happen where will have much earlier deals but at the same time still allow the investors of the biotech company to still profit on success later in the R&D or commercial life cycle, and I think frankly it's right, I mean when you look at the importance of personalized healthcare and if you look at the fact that by selecting the right patient population you can get a very early signal on whether a drug in a certain patient population is going to be a medicine the need for biotech and pharma to work more aggressively together to make sure that the technical development is done, that the companion diagnostic development is done, that the development and registration of those compounds are accelerated I think really speaks very, very closely to the need for that earlier collaboration.
Fintan Walton:
Sure and of course innovation doesn't all happen in one place it's happens all over the place and you've got to reach all of those various elements. Daniel Zabrowski, thank you very much indeed for coming on the show.
Daniel Zabrowski:
Thank you very much for having me.
Fintan Walton:
Pleasure.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Daniel Zabrowski
Head
Daniel Zabrowski Ph.D. serves as Head of Roche Partnering at Chugai Pharmaceutical Co. Ltd. Mr. Daniel Zabrowski has been Head of Roche Partnering at Roche Holding AG since January 1, 2010. Mr. Zabrowski has been Global Head of Roche Pharma Partnering at Hoffmann-La Roche Inc. Since July 1, 2007. Mr. Zabrowski served as Head of Pharma Partnering at Roche Holding AG. He served as Head, Global Regulatory Affairs at Roche. He joined Roche in 1995 following the acquisition of Syntex, Inc., where he held a variety of positions in Regulatory Affairs. Before Syntex, Mr. Daniel Zabrowski led Regulatory Affairs in North America for Fujisawa Pharmaceutical Company. He serves as a Director of Chugai Pharmaceutical Co. Ltd. He began his career as a Researcher at G.D. Searle Pharmaceuticals. Mr. Zabrowski received Ph D in Organic Chemistry from Indiana University in 1987.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
Roche
Roche, Headquartered in Basel, Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world's largest biotech company with truly differentiated medicines in oncology, virology, inflammation, metabolism and CNS. Roche is also the world leader in in-vitro diagnostics, tissue-based cancer diagnostics and a pioneer in diabetes management. Roche's personalized healthcare strategy aims at providing medicines and diagnostic tools that enable tangible improvements in the health, quality of life and survival of patients. In 2010, Roche had over 80'000 employees worldwide and invested over 9 billion Swiss francs in R&D. The Group posted sales of 47.5 billion Swiss francs. Genentech, United States, is a wholly owned member of the Roche. Roche has a majority stake in Chugai Pharmaceutical, Japan.