“The idea is to work together,” said Pascal Touchon, VP for Scientific Cooperation and Business Development at Servier. “We are licensing in and licensing out products, but I don’t always like these two terms. Our goal is to truly partner, to de-risk and further develop a product that will create value for patients and doctors.”
In this interview, Touchon also brings precision to the word innovation, which he acknowledges is a much-overused term in the industry, yet is the key requirement for partnering for his 17-strong business development group. And he brings into sharp focus the company and its strategy for strengthening a portfolio across five therapeutic areas.
The leading independent French pharmaceutical company with a 2014 turnover of EUR 4.0 billion, Servier’s products are available in 147 countries with therapeutic products to treat diabetes, cardiovascular disease, CNS disorders, oncology and rheumatology. Each year more than 25% of Servier’s revenue is invested in research and development.
Pascal Touchon, VP for Scientific Cooperation and Business Development at Servier
partneringNEWS (pN): What is the leading quality of Servier that participants at BIO-Europe Spring® should keep in mind?
Pascal Touchon (PT): We are increasingly known as a partner of choice. What needs to be clear is that though we are a midsized pharma company, we are so committed to innovation in our areas of interest that we could well be the partner of choice, even ahead of very large companies. We bring a different style and different advantages to the partnership than a large pharma. We are oriented to the long term and ready to take risks for the long term. Also, people within Servier are very loyal to the company, such that dealing with Servier, it is highly likely that going out three years, five years or even 10 years, they will still be working with the same people.
Today we are very much a global company commercializing our drugs in 147 countries with Servier operations present in 90 countries. Yet there are two major markets where we do not commercialize our products, which are the United States and Japan. This is a unique position that means we may leave these rights for a partner, which creates a different dynamic for a biotech. With Servier they continue to be part of the program, rather than feeling like they have been pushed aside, as may be the case with a big pharma company that takes everything, leaving them with no ownership in their idea, the product they have developed for so many years at such risk. With Servier they keep responsibility in rights to major markets, and will share more in the development than if they sell the rights worldwide.
pN: In other words staying out of these two markets is a strategy rather than an oversight?
PT: It does seem ironic that we are absent from two of the top markets for innovation. Yet it allows us to propose a deal for partners for co-development where we bring financing as well as expertise and staff, while leaving for this partner the rights to the US and Japan. This in turn allows them to retain more value before even deciding whether they want to establish themselves a commercial organization, or to license out these rights at a later stage when greater value as been created. And signing a deal with Servier does not preclude the possibility for being acquired at a later stage. We have examples among our current partnerships for each of these value-creation possibilities showing that our proposal for a biotech is, indeed, a reality.
pN : You are also a European leader for a generous spend in R&D of around 25% of annual revenues.
PT: This is another unique feature of Servier. We are a pharmaceutical company with EUR 4 billion in sales, yet we do not have shareholders to whom we need to pay dividends. We are not only independent and private, but we are controlled by a nonprofit foundation, which means we do not have to distribute profit outside of the company. It allows us to invest a lot in R&D, on average 25%, though last year it was 28%. This investment is drawn from our sales of EUR 3 billion in innovative products, excluding revenues of EUR 1 billion from high-quality generics and biosimilars, where the R&D spend is more like 8% or 9%. So our R&D spend for innovation is around EUR 800 million.
pN: The word innovation has become shopworn by overuse in the biotech and pharma industry. When you say Servier is committed to innovation, what does it really mean?
PT: It is certainly a misused word today. What we are looking for is a drug that is able to change the therapeutic approach to a disease that will bring unseen benefits to patients. Benefit being efficacy and/or safety, but above all it means we are looking for an answer to an unmet medical need. To illustrate what I mean, among the compounds we hold today, we have 17 new molecular entities in clinical development. And out of these 17 more than 12 are first-in-class. First and foremost this is what innovation means for Servier, trying new ways of tackling a disease with modes that have never been tried before. In the other cases we are bringing forward compounds that may not exist today where we intend to show superiority to the current standard of care, whether in efficacy, safety or an efficacy/safety ratio, a real superiority that makes sense for the patients and doctors.
pN: In 2014 you announced five more deals, three of them in oncology. Is this the strategic priority?
PT: We have been busy over the past few years, not only in oncology but also in areas and activities that are linked to very specific features of Servier as a company. We work in five domains and we don’t go outside of these domains because these are the areas where we believe we have a unique understanding, and may even be a leading expert. We now have something like 30 different alliances underway. We have created a team of professional alliance managers to be able to follow our partnerships beyond the project aspects to assure their success. It shows how serious we are about this.
pN: Yet there remains a heavy emphasis on oncology programs. Are you content with the oncology portfolio?
PT: We are still hungry. Our portfolio covers different modalities with innovative approaches, it mixes novel therapies and is balanced, but there remain some things we do not have that we would like to have, for example, products in a more advanced stage of development. We have not yet established a true commercial organization in oncology. We are building one right now after licensing a few months ago pixantrone from CTI Biopharma that has a conditional approval in Europe in NHL 3rd line and will allow Servier to build capabilities for market access in many countries. We are now looking for other late stage compounds with new partnerships to deliver products for the commercial organization.
pN: Servier also maintains a significant commitment to internal R&D at a time when others have dramatically reduced their in-house group. What explains this?
PT: There is a great value in having an internal R&D group. These people have a deep knowledge and experience in various disease areas, in discovery research, in preclinical development, in how to set up clinical research protocols that can deliver clear answers, and clinical development protocols that can carry an asset through regulatory stages to market. Having in-house people from different domains becomes important in designing clinical strategies. At the same time, it gives us people on the ground, more than 500 people all over the world in clinical operations conducting, monitoring and managing clinical studies. Through them we gain key knowledge about various investigator centers, about which ones meet quality standards and the efficiency needed, and those centers who can partner with us for innovative development.
pN: How do you combine this internal resource with your expanding hunt for external innovation?
PT: From the point of view of internal research in oncology we have pursued two types of programs for many years, one in the field of kinases inhibitors and the other in apoptosis, with a particular target called the BH3 family, which are inhibitors to types of proteins that are protecting cancer cells from apoptosis. This effort has really paid off over the last two years with compounds reaching the clinical stage. They have also served as a construct for Servier in discovering and developing drugs in oncology.
Yet we realized it would not be sufficient to rely upon these two programs to develop a full scale activity in oncology. We wanted to add further innovation to this internal research that would take us outside our zone of expertise to be able to bring compounds to the market for different types of cancer and to add external capabilities for research that we do not have internally.
For example, we sought a partner in monoclonal antibodies because we did not have this particular know-how and expertise. We partnered with Macrogenics to accompany them over the clinical development of various compounds able to harness the immune system in a different way such as new antibodies engineered to target immune checkpoints to amplify the immune reaction or bispecific antibodies, being able to target not only the cancerous cells but also the immune cells to initiate a specific and well-targeted immune reaction.
In the same manner, we were interested in seeking truly innovative ways to treat cancer with new modalities. Here we partnered with a biotech called Cellectis, the leading company in the world for allogeneic cell therapy. There has been a lot of excitement, even hype, about the great results in the US for an approach with autologous therapies, but all of those therapies create burdens and constraints that we are trying to tackle with the development of an allogeneic therapy for the same type of targets. Here we are taking cells from one healthy donor to make hundreds, maybe thousands of treatments for patients and that is available whenever the patient needs it, as opposed to the autologous method where cells are extracted from an individual, modified and then reinjected into the same patient. The innovation here is to go in the same direction but in a very different way that is easier to use, less costly and hopefully more affordable.
pN: Meanwhile, doesn’t your internal R&D group deliver assets for partnering?
PT: That’s right, it gives us a balance against assets coming from external partners, and it gives us assets that we may be interested in partnering as well. As we are not in the US or Japan, we would look for partners in those markets, we would look for co-development partners. A good example last year was the deal we signed with Novatris in oncology. They were very interested in our portfolio of apoptosis drugs, and we thought it was important for Servier to align itself with a well-known and well-performing company in the field of oncology, to be able to develop rapidly and efficiently these compounds that often are used in combination with other oncology therapies that a company like Novartis holds with its excellent oncology portfolio, and to better compete with other companies.
pN: What will you be looking for in meeting requests for BIO-Europe Spring in Paris?
PT: We are very specific about our areas of interest, so when I receive an invitation in areas outside of these, I realize these people have not even read what we have put on our website. That would be a first filter. Then I will look for a summary in the first few lines of what kinds of compounds are being presented and at what stage they are in development. After that I need to see that we are going to talk about something that is first-in-class, that is very innovative, or where they are trying to improve an existing type of therapy. In the latter case, it is difficult to prove superiority at a preclinical level. It will be clinical results that will show a true difference and the potential to create a best-in-class compound or show value that will justify a full investment in development.
When a company has entered a new path that has not been fully explored, we will be interested, even where there have been failures in the past. We have worked for so long in various fields that we know very well it is not because a first-in-class compound has failed that another one cannot succeed. There may be some specific aspect where the hypothesis has not been fully tested by others. We would need to see some truly differentiating aspect from the beginning that will convince us this program could succeed and we have examples of such cases in our portfolio where larger pharma companies tried and then stopped their development . Servier is not going to say we are not interested in a program where we see an opportunity that is truly different.
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