In this series of articles, we’ve been diving into the exciting world of clinical-stage biotech companies as they begin the journey towards commercialization. At this critical point, an emerging biotech company must juggle multiple priorities, which may span advancing one or more assets through clinical development, laying the groundwork for future commercialization, and/or refining corporate direction with associated investments, partnerships, and fundraising.
As should be evident from our first few installments in this series, these priorities are inextricably linked, though leaders in emerging companies can underestimate the strength of those linkages. In this article, we will focus on how the “commercial perspective” – informed by insights and perspectives gathered from customers – should support decisions related to clinical development and broader corporate strategy.
Clinical Development Decisions
Emerging biotech companies focus most of their effort on clinical development, and these decisions will significantly impact a product’s (and company’s) success and overall value. For products in clinical development, there are three main types of decisions that can be informed by a commercial perspective:
- Lifecycle Planning
- Clinical Trial Design
- Manufacturing & Packaging
Lifecycle Planning
Lifecycle planning generally involves determining the sequence of indications to pursue over a product’s lifecycle. Example options for lifecycle approaches might include:
For first-in-class products –
- “Proof of Concept”: Start in a small indication with a high likelihood of success and then expand to larger indications
- “De-Risk”: Start with indications that require lower investment to create a positive halo that de-risks future investment and whets the appetite for potential licensees / acquirers
- “Go Big”: Start with the indication that has the largest potential opportunity
For second-in-class products or later –
- “Me Too”: Capture market share by replicating the successful trials of earlier entrants (generally for products with limited differentiation from existing therapies)
- “Me Better”: Displace the market leader by evaluating the product in head-to-head trials against it (for products with strong scientific rationale to be superior to existing therapies)
- “Leapfrog”: Treat first-movers as “proof of concept” and beat competitors to earlier lines of therapy or other indications
Clearly, a product’s scientific rationale and differentiators play an important role in these decisions. However, the above examples highlight the importance of making these decisions while considering the right commercial considerations and implications such as the size of the opportunity, perceived unmet need, and potential drivers and barriers for the product to realize that opportunity.
Developing a robust lifecycle strategy often involves assessing many potential indications, forcing companies to balance the breadth of indications to characterize vs. the depth to understand each indication. The two most common missteps we see in early lifecycle planning are generally a result of not pursuing enough depth: (1) mis-sizing the opportunity by not defining the potential indications specifically enough, and (2) overestimating how easy it is to capture that opportunity by missing critical drivers or barriers.
For the first misstep, imagine that a company is developing a novel therapy for chronic lymphocytic leukemia (CLL). That company would define a very different size of opportunity if they looked at all of CLL vs. relapsed or refractory disease vs. patients who have already been treated with a BTK inhibitor. To accurately assess the true size of the opportunity, the company needs to have a perspective on where their novel therapy will fit into the treatment paradigm. The company should also hypothesize the therapy’s potential fit in the future, which is even more critical to do in a fast-evolving disease area.
For the second misstep, companies are often overly optimistic about how much market share their product will capture and/or how quickly it will capture it. In these cases, companies may not give the appropriate weight to potential pressures from competition, access, or even just physician inertia to change current practices.
Failure to be specific enough on either of these counts can lead to overestimating the opportunity and/or underestimating the cost for one or more indications, which can have significant impact on how those indications are prioritized within the lifecycle strategy. To get the proper specificity, a company must do a good job addressing Factor 2 by gathering the right insights to understand the patient / treatment flow, unmet needs, competitive landscape, access landscape, and more.
Clinical Trial Design
Once a product is approved, HCPs and payers will need to decide how to incorporate it into their existing clinical practice, which usually involves a decision-making process such as, “I can use Product X in [patient type A] instead of [other treatment option B] because of [reasons C].”
In addition to answering clinical and scientific questions, a clinical trial—especially a registrational trial—will give HCPs and payers the information they need to make that decision. As a result, there are several key parts of a clinical trial’s design that can impact its commercial success. Each is summarized below.
Patient Population
Building on the above, defining the right patient population will provide clear direction to prescribers on “where” to use the product. A company will use the indication from the broader lifecycle strategy as a starting point to define more specific inclusion and exclusion criteria for patients in the trial. When defining these criteria, a company should consider how the patient population in their trial might be compared to both real-world practice and competitor trials. Common objections we hear from HCPs and payers include “The patients included in this trial don’t reflect the patients I see in my practice”, or “[Product X] looks to have better efficacy, but that’s likely because the trial enrolled younger, fitter patients.”
Trial Arms (comparators and combination partners)
Trial arms need to be designed in a way that help physicians understand “how” to use the product, including what to use the product in combination with (if anything), and what to use the product / regimen instead of. In one example of a misstep in this area: Product X was studied against a weak chemotherapy and demonstrated superior efficacy. However, oncologists didn’t use that chemotherapy in practice because it was weak. Therefore, they were unconvinced that Product X would produce the same magnitude of benefit if compared to their preferred stronger chemotherapeutic. Adoption of Product X at launch ended up being slow because oncologists were not convinced they had the right data to integrate Product X into their practice. Trial arms will also be important for payers (especially ex-US) who will want to see the relative value of the therapy to existing (and relevant) alternatives.
Endpoints
Trial endpoints can help tell the story of “why” a product should be used, and should therefore be designed so HCPs, payers, and patients can tangibly understand the therapy’s differentiated benefit. In some disease areas that are well-defined, this can be relatively straightforward, such as survival endpoints or duration of response in oncology. This can be more challenging in other therapeutic areas, especially those that don’t have many treatment options or clear ways to characterize the disease.
For example, many neurological diseases have their own measurement scales that aim to assess disease progression and/or patient quality of life, but the clinical data reported using these scales can be difficult to translate into tangible patient benefit. Companies may need to be innovative in defining or selecting endpoints that will clearly communicate the clinical value of the product to the right stakeholders.
The primary endpoint(s) of a pivotal trial will be the primary evidence—typically efficacy—that will support the clinical value of the product in the intended setting. When it comes to secondary endpoints, a company must determine whether (and which) endpoints demonstrate clinical and/or economic value to satisfy customer needs and merit the additional investment. It is often through secondary endpoints that a product can find innovative ways to establish differentiation from other options.
Dosing
In some cases, dosing can also be part of the story for why a product should be used. However, in all cases, companies should aim for dosing to be as easy and simple as possible (while still delivering the target efficacy and safety, of course). When companies only focus on achieving target efficacy and safety, they can miss the downstream logistical complexity that dosing can cause for patients and HCPs. Consider the following:
- Pill Burden: Clarify how many other medications the typical patient may be taking, and when the patient would take them. For some patients, taking too many pills will be a challenge; for others, the size of tablets or capsules may be a challenge. Some patients may want to take all pills at the same time (e.g., if all other medications are once daily with breakfast). Ideally, a company will design pill size and strength to fit with patient needs alongside other medications.
- Schedule: How does the schedule compare to other options (e.g., once daily vs. once monthly)? How does the schedule compare to other drugs the patient may be taking? Ideally, the dosing schedule is not only simple and straightforward but also fits in with any other drugs the patient may be taking.
- Titration: Is the product titrated up, down, or potentially both? How does the dose strength change at titration? Again, simplicity is key here – it’s best to aim for titrating only in one direction, and to have dose strengths that change in clear multiples to lead to easier manufacturing and administration (e.g., 50mg → 75mg → 100mg instead of 50mg → 80mg → 95mg).
Similar to lifecycle planning, a company must effectively gather the right customer insights to inform a clinical trial design that will help customers understand why, where, and how to use a new product.
Manufacturing and Packaging
While not truly a clinical decision, packaging decisions are often made when companies are still at a clinical stage, though this can have far-reaching implications to commercial success. Important considerations when deciding packaging include:
- Optimizing for safety and convenience: while much of this will be determined by dosing in the clinical trial, pill size and packaging should be designed in a way that is intuitive to optimize safety and convenience. For example, if an oral therapy is dosed in multiples of 50 mg, then it makes sense to have bottles of 50 mg tablets. On the other hand, if there are more complex dosing schedules or titration, then pre-filled blister packs might be an easier option for patients.
- Assessing access & reimbursement implications: In general, payers will not want to pay for product that could be wasted, such as when a patient only takes two tablets from a 30 tablet bottle before titrating to the next dose. When designing packaging—especially for complex dosing—it is important to understand likely payer management and reimbursement, as well as implications to pricing strategy
Corporate Strategy Decisions
Key decisions around corporate strategy can include:
- Portfolio strategy, which informs where to invest across therapeutic areas and products
- Product and company valuation, which can inform fundraising and/or BD strategies
- Organizational vision, mission, and capabilities, which informs which geographies to enter and the best business model for each (i.e., “go alone” vs. partner vs. out-license) – to be addressed in future articles
Similar to lifecycle planning above, both portfolio strategy and product / company valuation require an accurate understanding of the size of the opportunity and the drivers and barriers to realizing that opportunity to make informed decisions. However, the stakes are higher when investors and potential BD partners begin scrutinizing the assumptions that have gone into product or company valuation.
Pharma and biotech veterans will be ready to pressure test the indications and the true size of the opportunity in each, as well as the unmet need, competition, and access challenges that will need to be overcome in order to successfully launch a new product. Mischaracterizing any of this and taking an overly-simplistic or overly-optimistic view is an easy way to erode credibility and negotiating power with potential investors and BD partners.
Coming Next
In our next installment, we’ll address Factor 4: Knowing What It Will Take To Commercialize. Regardless of what a company ultimately decides to do with a product — whether that’s launching themselves, engaging in a partnership, or fully out-licensing — the company still needs to know what would be required to commercialize. We’ll explore best practices and common pitfalls of characterizing the capabilities, infrastructure, time, and resources needed to launch a company’s first product.
