Molly B. Schmid

5.25.2010

Professor Schmid's research is a true hybrid - she has research projects in both the business and science aspects of drug discovery.

Managing New Product Development in the Pharmaceutical Industry

The pharmaceutical industry is facing enormous pressure to produce new drug products, in order to replace those that will lose patent protection within the next decade. Over the past 60 years, the rate of obtaining FDA approval for new molecular entities (NME's) in the US has remained essentially flat, despite substantial increases in research and development spending by pharmaceutical companies over the same time period. Professor Schmid's research efforts aim to better understand the lack of research productivity in the pharmaceutical industry. Because the pharmaceutical R&D timeline is typically 10-15 years, research efforts that occur today will not have impact on revenue for many years. Nonetheless, there are telltale signs of research productivity that can be discerned from information available in the scientific and patent literature. Professor Schmid has created methods allowing the identification and characterization of failed discovery-stage pharmaceutical projects, a subject that is typically difficult to measure and not often discussed. This information, which Professor Schmid refers to as "innovation litter," provides a measure of early stage research activities occurring in pharmaceutical companies. Professor Schmid is using the concept of "innovation litter" to assess the key bottleneck points in the pipelines of pharmaceutical companies, and to assess project management decision-making during the lengthy, failure-prone pharmaceutical R&D process.

Bottlenecks in Pharmaceutical New Product Development

Despite increases in R&D spending and despite the increased sizes of companies gained through mergers and acquisitions, the number of NME's approved by the FDA has remained constant on a per-company basis over the past 60 years. This surprising finding suggests that there are unrecognized limitations in pharmaceutical organizations, which diminish R&D productivity despite the increased resources.

There are several aspects of pharmaceutical research and development that have been blamed for the less than expected productivity. Some have argued that changes in the technological aspects of the new drug discovery process are to blame. Such arguments are varied, and include the past discovery of "low hanging fruit" (i.e., easy-to-discover drugs), the focus on target-based approaches, the reliance on high throughput screening, combinatorial libraries, or even the genomic approaches that have caused lower than anticipated productivity. Others argue that clinical development is the primary bottleneck, and that increased pressure on the FDA and other regulatory agencies has resulted in higher hurdles, longer timelines and higher expenses as the main cause of decreased pharmaceutical efficiency in converting R&D efforts into products.

Professor Schmid is using "innovation litter" metrics to identify the R&D bottlenecks limiting pharmaceutical productivity. By examining the rates of failures that occur at different points in the discovery and development process, the location of bottlenecks should be revealed.

Fail Early-Fail Fast Decisions in Pharmaceutical New Product Development

(collaboration with J. Darroch, Ito & Drucker School of Management, Claremont Graduate University)

The discovery and development of pharmaceuticals for human health is a long, expensive and risky process that poses unique challenges for effective project management. A successful drug discovery and development program may take 12-15 years and cost an estimated $1.3B. In addition, the drug discovery and development process is complex and risky - the Pharmaceutical Research and Manufacturers of America estimates that for every 10,000 compounds that are synthesized in the lead optimization process, only one will succeed to commercialization. Thus, failures represent substantial costs in terms of both dollars and time, and are the subject of much concern and discussion.

Early attrition of projects, described by the "fail early, fail fast/fail cheap" (FEFF) axiom, often guides project management in both drug discovery and drug development. The FEFF principle aims to rapidly terminate projects with a perceived limited potential for success. By terminating potentially unsuccessful projects, resources can be reallocated to projects where the potential for success is perceived as higher, thereby optimizing the number of new drugs launched onto the market.

However, FEFF may not improve the efficiency and effectiveness of resource utilization nor optimize the number of new drugs launched onto the market. While the FEFF axiom makes intuitive sense, its validity relies on "perfect information" in which the ultimate outcome for the new drug is known. In reality, "perfect information" is seldom available during the drug discovery and development process and so managers are unable to make "perfect" decisions. In fact, over the course of the drug discovery process, new information frequently becomes available, which might influence managers' judgments of the likely success of a new drug. Therefore, the practice of FEFF may result in a high number of Type I errors, in which a project with the potential for success is terminated prematurely based on information available at the time a decision is made.

Professor Schmid has created a method to measure pharmaceutical failure rates by measuring "innovation litter," and is developing and applying metrics to measure FEFF decision-making and to determine the shape of the drug discovery and development pipeline. By applying these methods, pharmaceutical discovery managers may better allocate R&D resources for optimum effectiveness.

Professor Schmid's focus in this project is on the drug discovery stage of the pharmaceutical R&D pipeline, a stage that represents nearly 40 percent of the time spent in bringing a drug to market. This stage is not regulated by the Center for Drug Evaluation and Research (CDER) branch of the US Food and Drug Administration (FDA), and thus, management practices are fully under the control of an individual pharmaceutical company. Efficiencies adopted by companies in this stage of the pharmaceutical new drug development process may provide an enormous opportunity for achieving a competitive advantage for the innovating firm.

•1. Schmid, M.B. and J. Darroch (2009) "Managing Fail Early-Fail Fast Decisions in New Product Development". Product Development Management Association, Academic Research Forum.

Antimicrobial Drug Discovery: A Race Against Time

Since the introduction of antibiotics in the 1940s, infectious diseases caused by bacteria have been considered essentially vanquished. This idea is a misconception, however, since bacterial infections are still a leading cause of death both worldwide and in the United States. Recent statistics published by the Centers for Disease Control and Prevention indicate that 70% of bacteria causing nosocomial or hospital-acquired infections (of which 90,000 people in the U.S. die each year) are resistant to at least one commonly used antibiotic and several of these bacterial strains are resistant to multiple antibiotics. Selection for bacterial resistance has been accelerated by overuse or inappropriate use of antibioticsand there have even been predictions that the world may re-enter an age of susceptibility to infections similar to that seen before World War II.

Professor Molly Schmid's lab at KGI is combining old and new approaches to the search for promising lead compounds that can enter the antimicrobial drug development pipeline. She is partnering with academic and industrial collaborators in the US and Canada to identify and characterize novel molecules that have potential to be new antimicrobial agents. Her approaches combine new methods in structure-guided drug discovery, with genetic and genomic methods for target identification and validation.

Professor Schmid pioneered many aspects of using bacterial genomics and libraries of protein structures for new antibiotic discovery in two startup companies (Microcide Pharmaceuticals and Affinium Pharmaceuticals). She is now applying her rich experience in drug discovery to new antibiotic drug discovery projects at KGI, while providing students with first-hand knowledge about the process of drug discovery, from idea to IND.

Professor Schmid, in a recent review that appeared in Nature Biotechnology, expressed optimism that even a limited number of new antimicrobial drug targets is sufficient for stimulating the development of new generations of antibiotics. Since drug targets can be attacked by more than one class of chemical compound, a single validated target can give rise to dozens of new antibiotics. She also suggests that the pool of valid drug targets can be expanded by moving away from the concept of broad spectrum antibiotics, and instead move toward identifying targets that are shared among key species for specific clinical indications. These "specific spectrum agents" may be more readily discovered than broad spectrum agents.

A further reason for Professor Schmid's optimism about antimicrobial drug discovery includes the increasing repertoire of high resolution protein structures. Professor Schmid believes that a structure-guided discovery process is a more efficient lead optimization process than the traditional trial and error process that has been used in the past.

The necessity for continual development of antimicrobial drugs is a good example of how Keck Graduate Institute fulfills its mission of beneficial applied research. Professor Schmid's research in this area is not only translating basic knowledge into useful applications, it is also generating new knowledge about bacterial biochemistry, physiology and genetics. With a rich combination of industry and academic experience, Professor Schmid exemplifies the KGI ideal of bridging the gap between basic knowledge and applied research.

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