More than two centuries after Bayer’s first drug success – aspirin – Susan Birks reviews the group’s drug innovation strategy proposed by new board chairman Marijn Dekkers
The r&d spend of the German speciality chemicals group is predicted to have reached a record €3.1bn – an increase of 13% for 2010. But it will not be increased in 2011, as money is to be diverted into the marketing of its new drug products, said the new chairman of Bayer AG’s Board of Management, Dr Marijn Dekkers at the company’s recent Innovation seminar in Leverkusen.
The group’s healthcare business accounted for the lion’s share (67%) of the 2010 r&d expenditure and the majority of the spend is focused on projects undergoing Phase III clinical development.
Dekkers believes the company’s pipeline is well stocked, with some 50 projects in all clinical phases currently. However, he fired warning shots across the bows of the German drug flagship about the financial viability of the current drug business, particularly with regard to the large amount of investment required for r&d compared with the risk and potential returns.
Dekkers believes there are questions as to whether society is prepared to pay an appropriate price for innovations in the future. ‘Here it is not just costs and profits that are involved. Rather, it is also a matter of how much value a society places on the health – or longer life – of individuals,’ he stated. ‘We will only be able to successfully develop new products in the future if we find positive answers to these questions’.
‘We have to decide about significant capital expenditures today, but we do not see the success, if at all, until 10 years later. The more uncertain the long-term economic and political framework is, the harder such decisions are to make,’ he added.
Much of Bayer’s current r&d is focused on the anticoagulant Xarelto (rivaroxaban), an oral Factor Xa inhibitor. In addition to the already granted indication for the prophylaxis of venous thromboembolism following elective hip or knee joint replacement surgery in adults, a recently evaluated study (ROCKET-AF) on stroke prevention in atrial fibrillation demonstrated that Xarelto effectively reduces the risk of stroke better than the current standard therapy, warfarin.
This innovative pharmaceutical has peak annual sales potential of more than €2bn, according to Dr Wolfgang Plischke, Bayer’s Board of Management member responsible for Innovation, Technology and Environment.
A further active substance from Bayer’s cardiovascular research, riociguat, is currently in Phase III trials as a potential new oral treatment for pulmonary arterial hypertension and chronic thromboembolic pulmonary hypertension. In addition, the company is working on active substances that could potentially treat serious cardiovascular disorders such as anemia in chronic kidney disease and worsening chronic cardiac insufficiency with kidney damage or diabetes.
In the field of oncology, Bayer has expanded its research activities. Alongside Nexavar, approved for the treatment of kidney and liver cancer and currently being investigated for use in treating other forms of cancer, the company is also carrying out trials on Alpharadin for therapy of bone metastases in hormone refractory prostate carcinoma and on regorafenib for treatment of colorectal cancer.
Bayer’s therapy, VEGF Trap-Eye, for the treatment of wet age-related macular degeneration also reached the set primary endpoint in its latest trials.
Despite these successes, Bayer says in-house research alone will not be able to provide the full measure of innovation that it requires. To address this, the company plans to be more open to external partnerships and collaborations. Some 22% of the research budget will go on ‘networking’ to supplement Bayer’s own competencies, Dekker said.
Plischke added that since launching its Grants4Targets programme in 2009 (in which ‘no strings’ grants are offered to small outfits carrying out innovative research), of the 280 applications so far, more than 40 have been accepted.
The company would give no details of the job cuts announced in November but said it planned to reallocate resource, putting more into r&d and marketing and cutting administration. It was also planning on creating more scientific ‘ambassadors’, based all over the world, whose job was to strengthen its relations with academia.
acceptance on the home front
According to Dekkers, a lack of acceptance for new technologies in Germany poses problems for German companies looking to expand. ‘These days, anyone in Germany intending to construct a new industrial facility or introduce a new technology to the market can expect to encounter considerable public resistance.
‘It is completely underestimated what this means for Germany as a base for industry and for the quality of life, and therefore ultimately for jobs,’ he warned.
The Green party has always been strong in Germany and many of the current voting generation do not see industrial growth as a sustainable future. In addition, technologies such as genetic engineering are not popular.
Dekkers said companies must do all in their power to dispel people’s reservations against industrial activity and new technologies, adding, that this also involves an obligation on the part of the politicians and the authorities to safeguard objectivity and transparency – as well as create technology-friendly framework conditions.
Only time will tell if the shrewd Dutchman can persuade the powers that be to act.