The Virtual Model
An interesting development over the past 10 years has been the evolution of how programs and products are described. For example, a molecule is no longer just a drug candidate but also an asset, a milestone is a value inflection point, and a product pipeline is a portfolio. These terms were once limited to financial descriptions. Now, however, they are used in development situations to facilitate new ways of looking at product advancement.
When a strategic plan involves developing an asset that currently has been evaluated in preclinical efficacy models to proof of concept, it is much easier to describe the challenges, risks, and potential exit. The challenges may include conducting GLP toxicology studies, filing an IND, and conducting a Phase I study, while the risks are primarily related to the animal testing and preliminary safety results in humans. The exit can be considered as a decision to move to Phase II in the context of new funding, a partnership, or an outright sale of the asset.
If a company can focus on a particular asset, i.e., a drug candidate at a particular phase, it will be able to more specifically define the skills needed for development as well as how long they are required and thereby more accurately gauge costs. It stands to reason that the owner of the asset would not hire a senior toxicologist with 10 technicians to run an animal lab, a vp of regulatory affairs with three employees to write an IND, and a CMO with five clinical professionals if at a successful exit, all those people would become expendable.
If the exit is something other than developing into a fully integrated development company, it makes little business sense to hire full-time personnel. It would be difficult to predict the level of involvement needed from the new hires within these specific areas while also ensuring sufficient bandwidth to deal with inevitable challenges of a development program. Yet many companies make this mistake and unnecessarily hire specialty expertise or bring them in too early, resulting in a loss of time and money.
If this asset were paired with several other assets in a similar stage of development, it is easy to see how a virtual team could be constructed with experts who do not require full-time employment but can be dedicated to the firm for some period of time. It becomes easier to make decisions on each asset based on data rather than tied into the context of a company’s survival or long-term stability.
It is easy to imagine how a virtual team constructed around this concept could improve program efficiency and considerably reduce development costs. Such gains in efficiency could lead to more sophisticated financial models with which to manage risk across product portfolios while helping promising therapies reach patients more quickly.