Wyeth R&D Pipeline Is 75% NMEs; Two Launches Per Year Will Start In 2006

Three-quarters of the projects in Wyeth's research and development pipeline are new molecular entities, Wyeth Research President Robert Ruffolo, PhD, said during the company's R&D day in New York June 2.

"We made a decision nearly four years ago that...life cycle management shouldn't be more than 20%-25%, and over the years we've reduced our dependence on lifecycle management," Ruffolo told investors.

Wyeth has achieved its internal goal; the company estimates that 77% of its pipeline projects are new molecular entities, up from 55% in 2001. At the same time, the number of drugs in development has increased from 49 to 68, he said.

The focus on discovering and developing new molecular entities is part of a retooled R&D program through which Wyeth hopes to begin launching two NMEs per year beginning in 2006 (¹ (Also see "Wyeth R&D Shifts Focus To New Products, Away From Lifecycle Management" - Pink Sheet, 15 Apr, 2002.), p. 24).

"In the last three years, we have quadrupled the number of novel compounds discovered and moved into development" and nearly tripled the number of drugs entering Phase II and Phase III, CEO Robert Essner told investors.

"These and other improvements in productivity have given us the confidence to say that we expect to launch two NMEs per year beginning in 2006 and for many years thereafter."

Wyeth expects to file one NDA per year in 2004 and 2005: the antibiotic Tygacil (tigecycline) and bazedoxifene for osteoporosis prevention.

In 2006, Wyeth intends to file four NMEs: DVS-233 for depression and vasomotor symptoms; bifeprunox for schizophrenia; temsirolimus for renal cell carcinoma, mantle cell lymphoma and breast cancer; and the oral contraceptive tanaproget.

The exec mapped out a program based on average industry R&D success rates to demonstrate how the company would achieve its two NME a year objective.

Wyeth estimates it needs to discover 12 compounds per annum, of which eight would reach the IND stage. Three to four of those projects would reach Phase III, with two drugs ultimately filed for approval.

Wyeth began rethinking its approach to R&D three years ago, around the time the company hired Robert Ruffolo, PhD, to head up the department (² , p. 35). Ruffolo is senior VP at Wyeth and president of Wyeth research.

"The challenge we faced was this: how to adopt our R&D strategy to a world where innovation, the industry's most precious asset, is hard to foster and all too easy to stifle," Essner said.

"First, we had to create an environment that truly supports and sustains, cherishes and recognizes scientific innovation, an environment where scientists clearly understand that their job is to make great drugs not just through good science."

One step Wyeth took was to directly link part of its scientists' compensation packages to meeting quantifiable goals, such as discovering a certain number of compounds per year.

"We did put our scientists' skin in the game. We hold them accountable and linked a portion of their compensation to performance against pre-specified objectives," Ruffolo told investors.

To avoid the potential pitfall of simply pushing molecules through the pipeline in order to meet company quotas, Ruffolo stressed that Wyeth's incentive program also includes quality objectives.

"We're not simply throwing drugs over the fence in an attempt to achieve numbers," he declared. "In innovation management, quality matters. Quality standards have been defined for every drug at every stage and they have to be hit."

Under the new R&D program, scientists are evaluated by an in-house development council consisting of members from various functions within Wyeth.

"We don't grade our own performance in R&D," Ruffolo said. "A group we call the development council, made up of R&D, executives, sales, marketing, legal and every part of the company, sits in judgment of how we perform against this model."

Wyeth also built a system that does not "screen out innovation even when its potential is hard to understand early on," Essner said. "On the inspiration side, we've raised the profile of our discovery scientists dramatically."

The exec suggested that Wyeth does not consider how an innovation fits within the company's current portfolio and capabilities. Rather, he said, it allows discovery scientists to be "real strategic planners."

"Our discovery scientists are our real strategic planners. What they create, more than any other single factor, determines where, and how far we go, in the future," Essner said.

"At Wyeth, we go one step farther because we have lowered the barriers that can keep great scientific ideas from becoming great medicines," he declared.

"We have upped the weight we place on real medical innovation and lowered the weight we used to place -and I believe many of our competitors still place - on existing market size and fit" with the company's current capabilities.

Wyeth began reconstructing its R&D processes at each stage of the discovery and development process.

"We started by basically redefining discovery and aligning all of the discovery sites to one set of standards, one common set of processes. We then moved on to the preclinical development sites the next year," Ruffolo said.

"Then, the Phase I clinical unit the year after," Ruffolo said. We "took it all apart and put it back together. Then, last year, we redesigned all of our clinical Phase II and Phase III efforts so that we can handle the increase in productivity."

Wyeth's positive R&D outlook comes at a time when the company has gained significant attention from its ongoing diet drug litigation and manufacturing and supply problems associated with the pnuemococcal conjugate vaccine Prevnar .

Wyeth maintains it is turning a corner on Prevnar; the company shipped 3 mil. doses of the vaccine over the past five weeks, up from 715,000 per month earlier this year.

The outlook for the diet drug litigation is less optimistic; Wyeth is challenging a May 25 U.S. Court of Appeals decision overturning a lower court ruling limiting the type of evidence admissible in "opt out" cases.