Rogaine - lesson learned from innovation blunders

Here’s another great story with lessons learned from innovation blunders.

It’s an excerpt from Why (Smart Companies) Do Dumb Things by Calvin L. Hodock

In this series of case studies, Hodock shares insight on avoiding 8 common mistakes in new product development. 

In the case of Rogaine, it was mismatched positioning.

Fifty million American men experience male-pattern baldness. In 1996, they received some very good news.  The Food and Drug Administration cleared Rogaine, a topical 2 percent minoxidil solution, as an over-the-counter hair regrowth drug for men and women with common hair loss. Hallelujah! Men suffering from hair loss often experienced “anxiety, loss of self-confidence and even depression”. Rogaine gave hair-challenged men a dual benefit—a full head of hair and the restoration of self-esteem.

Rogaine had a natural contagion, because the preliminary buzz purported it to be nothing short of a miracle. As a result, it had an avalanche of positive publicity prior to its market introduction. Wall Street was especially euphoric about Rogaine’s prospects, and its parent company, Upjohn (now Johnson & Johnson), did nothing to temper the financial cheerfulness coming from the street. In this situation, Rogaine’s positive buzz turned out to be destructive rather than helpful. Here’s why.

Balding males naively believed their departed hair follicles would return instantly by rubbing Rogaine into their scalps twice a day for a month or so. Rogaine initially attracted the most extreme cases of male-pattern baldness, primarily older males in their fifties and sixties desperately grasping for their youth. Rogaine could not deliver for these extreme cases. There was a deep ravine between positioning expectations and product delivery. 

 

Rogaine is a complex product, as explained to me by a Pfizer marketing executive. It is only effective in about 40 percent of the cases. It can take eight months to see the best results. The product is not particularly effective in cases of frontal baldness or receding hairlines. Compliance is essential to see any results. It must be used twice a day. If treatment is stopped, reversal occurs, losing any benefits from treatment. The application process—rubbing it into the scalp twice a day—is awkward.  Rogaine later attempted to make it easier with an aerosol foam version.  

Since many of the initial users represented extreme cases and a desire for instant gratification, they dripped out; their perceived expectations—“where’s my new hair??—weren’t instantly achieved. The buzz-worthy product was still talked about, but the talk turned negative from a large segment of disappointed men, dampening Rogaine’s prospects for marketplace success. 

Rogaine currently does target younger men with a more forthright approach that the product works for a certain type of male-pattern baldness, but it is not a panacea for every conceivable case of male baldness.

                   

The makers of Rogaine made two major mistakes:

1. Rogaine made no attempt to dismantle the early perceptions that it was a miracle product. This set an unrealistic level of expectation with respect to its product performance with the brand’s early bird customers.
2. Rogaine required an extensive educational process to help men understand its strengths and limitations; this was never acted upon.

The net result was a wide gap between positioning expectations and product performance.

The product must be able to deliver on the positioning’s benefit promise, or there will be inevitable consumer backlash.  It’s hard to get the toothpaste back in the tube. That’s why marketers must get the positioning strategy right the first time out of the staring gate. 

Second chances are very rare. 

Rogaine never lived up to its potential, because the initial positioning and target segment were wrong from day one.

Motrin IB - lesson learned from innovation blunders

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Here’s a great story with lessons learned from innovation blunders.

It’s an excerpt from Why (Smart Companies) Do Dumb Things by Calvin L. Hodock 

In this series of case studies, Hodock shares insight on avoiding 8 common mistakes in new product development.

Johnson and Johnson still needed an ibuprofen brand in its product portfolio, and it obtained it by swapping brands with Upjohn.  Motrin IB acquired in the swap, became a companion brand to Tylenol. The brand was so reasonable successful, riding the coattails of Advil, which had established the ibuprofen beachhead. Upjohn did not want to continue playing the expressive, high-stakes marketing game, which was absolutely essential in order to survive the competitive over-the-counter pain reliever market.

Motrin IB was viewed as a potentially strong global brand within Johnson and Johnson, but there remained the same issue that confronted Medipren—how to position Mortin IB in a way that protected Tylenol’s flanks.  The company understandably wanted to keep the milk flowing from the cash cow. This time Johnson and Johnson did some very good homework.

A segmentation study of the pain relief market revealed a segment of women who medicated aggressively. Very importantly, Tylenol was not heavily represented in the segment. This became Motrin IB’s target segment, and its initial “kick butt” advertising campaign worked brilliantly with these aggressive mediators while minimizing Tylenol cannibalization. It is possible to “have your cake and eat it too” with smart positioning.

Score another one for David Ogilvy. Positioning is one of marketing’s most important decisions. It is always out there in the marketplace, ready to perform miracles.

4 pillars of successful drug development from Ross Weaver

Earlier this year, the Philadelphia Inquirer interviewed my business friend Ross Weaver about some challenges in clinical trials. 

Here’s what Ross had to say in “A Neglected Part Drug Development Gets New Attention”:

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At Goldman-Sachs' health care conference, Merck CEO Ken Frazier said that his company would stock a higher proportion of its late-stage pipeline with in-licensed and purchased compounds.

A business professor from the University of Michigan was moved by Frazier's remarks to comment, "Looking for late-stage deals is not a sign of confidence in the internal late-stage pipeline...Nothing is more expensive than a late-stage deal."

Frazier's comment and the reactions to it provide a capsule view of pharma's current condition. More than patent expirations, stingy, third-party payers or illegal and unethical promotions, the drug industry's current down cycle results from its reduced productivity at developing new drugs.

Signs are emerging, however, that the industry's leaders are at least starting to pay attention to this shortcoming. Analyst Tim Anderson at Sanford Bernstein finds it encouraging that pipelines may "improve as a result of the conscious effort by drug company management teams to try and fix” the complex  problems affecting drug development.

Ross Weaver makes the point that successful drug development rests on four pillars.

1. assessing the prospects that a particular compound will demonstrate sufficient efficacy and safety for inclusion in the standard of care.
2. new compounds must meet regulatory criteria for approval.
3. pharmas must demonstrate that their compounds provide a sufficient advantage over alternatives to permit the market access needed for commercial success. Specialists that work in this area, for example, try to forecast a compound's potential sales.
4. drug companies must successfully manage the "operational feasibility" of clinical trials to permit the adequate, timely enrollment of patients into clinical trials.

Weaver claims that, historically, pharmas have rigorously assessed and coordinated the first three elements while the challenges of recruiting patients have been shorted at the planning table. Clinical operations groups at pharma companies do assess the factors affecting recruitment and they typically model the approaches used by previously approved compounds in the pertinent classes. 

Nevertheless, Weaver claims that the heavy lifting of trial planning involves the first three pillars. Only after progress of a study has been delayed well beyond projections, typically as a result of slow recruitment, does attention turn obsessively to that factor. Too often, by then the stalled trials cause financial pressures that compromise one or more of the other three factors as companies scramble to enroll patients.

To prevent such "fire drill trial amendments," Weaver suggests a more rigorous effort at assessing feasibility and recruitment early in the planning process, taking into account the unique characteristics of the trial at hand. This involves such tasks as working collaboratively with nurse coordinators at appropriately selected trial sites to discern how patient candidates and referring physicians will react to a particular compound, its projected profile and overall trial design.

Factors that can hinder recruitment include things such as the number of times a patient must visit the clinic during the several weeks or months of a trial. Other influences can include the frequency of drawing blood samples from patients, the nature and severity of side effects, and the extent to which patients feel the test drug relieves their condition. The list of things that can affect recruitment remains quite long and can include considerations that are not easily predictable in advance.

Companies must then use this assessment of operational feasibility to modify the risk assessment, regulatory relations and commercial projections for each mid-to-late stage compound.

"The operational assessment," according to Weaver, "should receive the same strategic emphasis as the other three factors."

By his calculation, the money required to do this appears quite modest, compared to the costs for planning and carrying out the other functions. As a typical example, he claims it would mean, "spending $250,000 to inform an investment of $50 million."

Industries with long development times show a wide range of efficiencies at developing new products. Some of them, such as aerospace, have been notorious for getting away with cost overruns because they maintain captive customer markets, consisting of a few nations or airlines. By contrast pharma finds itself in a period where the incremental value of its new products fails to compel purchasing. Until such time as the science can restore pharma's growth prospects by creating new products that people want to buy, the industry must do a better job of managing the timing and costs of developing its drugs.

The fact that at least a few suppliers are proposing tactics for achieving this efficiency represents an encouraging sign.

(Ross Weaver is now partner of Clinical Trial Recovery Specialists, and president of DDI)

21% of new drugs approved from 1990-2007 involved PSRIs

It’s been about a year now since the New England Journal of Medicine published an article by AUTM President Ashley Stevens finding public-sector research had a more immediate effect on improving public health than was previously realized. (Stevens AJ, et al. N Engl J Med 2011;364:535-41)

Just about the same time, I was advising Bioscience Bridge on connections for university research from Boise State, Tulane, and Purdue.

This research article underscores the important role the universities play in improving healthcare.  And why Bioscience Bridge continues to create attention to commercialization of intellectual property.

In the introduction to the article, Stevens states that historically, “public-sector researchers have performed the upstream, basic research that elucidated the underlying mechanisms of disease and identified promising points of intervention.”

This is contrasted with corporate researchers who performed the downstream, applied research resulting in the discovery of drugs for the treatment of diseases – and who carried out development activities to bring them to market.

Today, however, the boundaries between the roles of the public and private sectors have shifted substantially since the dawn of the biotechnology era, and the public sector now has a much more direct role in the applied-research phase of drug discovery.

The authors (organized by Stevens, and including researchers from Boston University Schools of Medicine, Law and Management, the Radium Hospital, Oslo, along with collaborators from the National Institutes of Health led by Mark Rohrbaugh, Ph.D., J.D.) found that during the past 30 years, 153 new FDA-approved drugs, vaccines, or new indications for existing drugs were discovered through research carried out in public sector research institutions (PSRIs). These drugs included 93 small-molecule drugs, 36 biologics, 15 vaccines, 8 in-vivo diagnostic materials, and one over-the-counter drug.

Their conclusion:

“We believe that our study supports the concept that the emergence of biotechnology in the mid-1970s, combined with policy changes implemented in the early 1980s regarding the ownership and management of the intellectual property of PSRIs, allowed these institutions to play an important role in the downstream, applied phase of drug discovery.”

Specifically, the data show that PSRIs have contributed to the discovery of 9.3 to 21.2% of all drugs involved in new-drug applications approved during the period from 1990 through 2007. It also suggests that PSRIs tend to discover drugs that are expected to have a disproportionately important clinical effect.

9 best practices in technology licensing -- and the effects of patents in drug repositioning

This is the last of five posts this weekend on drug positioning -- trying to get a new drug genie out of the bottle.

And remember why it's of such interest:

Drug development is a long, complex, costly, and high-risk business. According to the Tufts Center for the Study of Drug Development, drug development from discovery to U.S. approval takes about 15 years on average and costs over $1 billion, and only 3 in 10 drugs on average make enough revenue to sustain R&D.

In order to get a return on investment, companies need to ensure that their repositioned drug will have at least some patent protection. 

Drug repositioning candidates that are still in development may have composition of matter patents, depending on how far into development they are and how long they have been on hold. Companies developing off patent drugs or drugs with patents close to expiry have to rely on data protection, method of use patents, or patents related to formulation technologies. 

Manufacturers launching drugs have some protection against generic competition through data exclusivity, which provides 3 to 11 years of data protection after launch, depending on the market.

Read more in “Getting The Drug Repositioning Genie Out Of The Bottle” at www.lifescienceleader.com

I’m working now with a small nanotechnology company in this area of Technology Licensing.

We work at ensuring best practices for success are being followed by both parties in the licensing process. This may include identifying target application areas, drafting communication documents, promoting technologies on-line and through direct personal contacts, and providing assistance in deal facilitation and in the negotiation process.

1. Non-disclosure agreements
2. Needs and objectives
3. Key elements of the term sheet
4. Positions on relevant issues
5. Negotiating schedule and deadlines
6. Progress reports
7. Documentation
8. Draft agreements
9. Legal counsel

The challenges in drug repositioning -- and application of B.E.A.M.S

In my weekend series of posts on drug repositioning, let's look at a number of challenges for companies repositioning drugs.  Some are unique to this process and others common to any form of drug development. 

In the development of a drug for a completely new indication, drug repositioning cannot avoid the potential risk that the drug will not be effective in late-stage clinical trials -- especially if it has not previously moved further forward than preclinical development.

Drug repositioning can be based on marketed drugs that are off patent. This means that the active ingredients are easily available. However, if the dose required is similar to the dose used for an existing indication, physicians may simply choose to use the generic form, which is likely to be cheaper than the newly available, and possibly higher cost, branded repositioned drug.

“Because of this, it is important for a repositioned drug to have a difference in presentation. This may be a difference in delivery system or formulation, or a significant difference in dose — for example, Merck & Co launched the 5-alpha reductase inhibitor finasteride as Proscar for benign prostatic hyperplasia and then relaunched it as Propecia, at a significantly reduced dose and under a new patent, for male pattern baldness,” says one major company executive.

Access to data can have an impact on drug repositioning timelines. Companies that are developing a compound that they have not originated will need access to a competitor’s data or will have to rely on public domain data. This dependence on publicly available data can have its pitfalls. “If the company relies wholly on using public databases for their in silico screening, then there is a risk that their discovery may be found simultaneously by others,” adds another industry expert.

It may be harder for drug repositioning companies to get funding, as some investors have been burned by project failures, and others may be more familiar with traditional drug development and so are unsure how to value repositioning projects, especially as existing financial models don’t work.

Read more in “Getting The Drug Repositioning Genie Out Of The Bottle” at www.lifescienceleader.com

When I have consulted with Bioscience Bridge, LLC, we worked with clients to classify and prioritize existing technology assets through the use of our proven process in the evaluation of a university’s bioscience IP portfolio.

The B.E.A.M.S. Evaluation Tool measures a technology’s:

• Breakthrough potential
• Ease of development
• Advantages over competitive technologies
• Marketability
• Sampling or prototyping for evaluation

3 benefits of drug repositioning – and the application of Strategic GPS®

A number of studies have shown that in the last 10 to 15 years, while R&D spending has steadily increased, the number of drugs making it to the market has not followed pace.  That’s why the advantages of drug positioning hold such allure.

The key advantage of the drug repositioning approach is that it reduces the time, cost, and risk compared with de novo development. As well as providing an advantage to companies, it also provides an advantage to patients, because it reduces the overall cost by rescuing the investment in failed drugs and makes safer and more effective drugs available. 

“Drug repositioning is a means of obtaining better health outcomes without the massive investments and long time frames associated with traditional drug development. As such, it is both commercially and socially attractive,” says Steven Flostrand, business development director, at Marco Polo Pharmaceuticals.

Take a closer look at 4 benefits of drug repositioning:

1. Recouping existing investments
Many pharma companies have drug libraries of well-characterized compounds that are gathering dust and losing value as assets, whether it’s through failures in development or a change in therapeutic focus.

2. Saving time and money
Drug repositioning is generally a faster process than de novo development because it can rely on existing data, including efficacy and toxicity studies. Developing an NCE (new chemical entity) can take 10 to 17 years, depending on indication. For a drug repositioning company, the development process from compound identification to launch can be around 3 to 12 years.  What’s more, development of a single compound to enter clinical trials will cost around $10 to $20 million. The cost of identifying a repositioning candidate that already has phase 1 data varies but could be as low as $2 to $3 million.

3. Reducing risk
Drug repositioning is a significantly lower risk than de novo development, certainly from a scientific or clinical perspective. Because it deals with compounds whose safety profiles are already known, it significantly reduces this risk of drug development.

For the improvements to existing marketed drugs, we know what needs to be changed and generally, how to make these improvements. Very few 505[b][2] projects fail due to a science issue — most are due to money or markets.

In classical drug development, everyone is chasing ‘first-in-class,’ which does provide a high reward, but is very high risk. It’s still possible to get a ‘first-in-class’ with drug repositioning, even with an old drug, because it may represent a new mechanism applied to a new indication.

Read more in “Getting The Drug Repositioning Genie Out Of The Bottle” at www.lifescienceleader.com

When working with early-stage technologies, I have used a proven process designed to configure the technologies’ “road map” called Strategic GPS^® Navigation Process. This process: 

• Identifies the key targets 
• Articulates the current situation (Where we are)
• Defines the desired objective (Where we want to be)
• Conveys the over-arching strategy
• Delineates the milestones 
• Outlines the key tactics 
• Bridges the science and the business in a comfortable atmosphere

2 experts answer "What are the opportunities for drug repositioning?"

Drug repositioning is a growing field, with many companies looking to exploit its potential.  

In today’s blog, we hear from two industry executives:

1. Ken Phelps, president and CEO, Camargo Pharmaceutical Services. Phelps founded Camargo in 2003 as a strategic partner in drug development, including drug repositioning.
   
   
2. Steven Flostrand, MBA, business development director, Marco Polo Pharmaceuticals. “From a commercial perspective, with the era of ‘easy’ discoveries seemingly over, it makes sense to revisit existing drugs to ensure that we are making the best possible use of them.” Marco Polo Pharmaceuticals, founded in 2008, specializes in geographic repositioning — developing existing drugs for new markets.

Phelps says, “Generic companies are aware that as pharma pipelines decline, there will be a fall in the number of molecules coming off patent, so they are using drug repositioning to create new markets. Pharmaceutical companies are using drug repositioning to extend the life cycles of marketed products, creating new patents and defending themselves against generic competition, and to salvage the investment in failed or failing drug candidates. Finally, entrepreneurs are creating new drug repositioning companies to provide a service.”

Flostrand comments, “Many older drugs and drug candidates in development have never been fully explored. These can be looked on as resources, as they already have stores of valuable preclinical and clinical data on toxicity, safety, and dosing.”

Read more in “Getting The Drug Repositioning Genie Out Of The Bottle” at www.lifescienceleader.com

4 kinds of candidates for drug repositioning

Because of the decline in drug launches, drug development companies are under increasing pressure to reduce costs and shorten development timelines through a range of different approaches.

These approaches include improving processes and protocols, moving more toward collaboration, and licensing and drug repositioning.

This weekend, I'll be posting a series of blogs on "drug repositioning.”  Also known as drug repurposing, drug reprofiling, or therapeutic switching, is the process of developing existing molecules for new indications.

Candidates for repositioning fall into four key groups, explains David Cavalla, Ph.D., founder of Numedicus:

1. marketed drugs that are still under patent or patents that have expired,
2. drugs that have moved through development and fallen at clinical or regulatory hurdles, and
3. stereoisomers or metabolites of existing compounds.
4. small change in the molecular structure — this provides stronger patent protection but still reduces the risk of failure.

Cavalla founded Numedicus in 2008 to provide collaborative services to companies seeking novel uses for existing drugs.

Read more in “Getting The Drug Repositioning Genie Out Of The Bottle” at www.lifescienceleader.com