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Companies that want to sell glaucoma products must start by building their own scientific expertise, said David E.I. Pyott, CBE, who was Allergan’s chief executive officer (CEO) and chairman of its board of directors from 1998 to 2015.
San Francisco-Companies that want to sell glaucoma products must start by building their own scientific expertise, said David E.I. Pyott, CBE, who was Allergan’s chief executive officer (CEO) and chairman of its board of directors from 1998 to 2015.
They “should be based on deep knowledge of the basic science and also pharmaceutical formulations, particularly in ophthalmology and dermatology,” said Pyott at the Glaucoma 360 New Horizons Forum.
Low interest rates have tempted some medical companies to focus on buying technologies from other patent holders.
David E.I. Pyott, CBE. Courtesy of Trish Tunney
But “the supposition that you can innovate purely by acquisition is highly questionable,” Pyott said. “Most acquisitions fail.”
Instead, successful companies must understand what patients really need, and how to measure whether medications or devices are meeting those needs, he said.
That does not mean working in isolation. Successful medical companies will also develop relationships with key investigators and practicing physicians, he added.
“Frankly, that’s the only way you run the checks that you’re really embarking on an endeavor that has a chance of really making a difference and being successful,” he said.
For many years during Pyott’s tenure, Allergan spent “double digits as a percentage of sales,” on research and development, Pyott said.
Its expertise led to the development of therapies, such as brimonidine tartrate/timolol maleate ophthalmic solution (Alphagan); brimonidine tartrate/timolol maleate ophthalmic solution (Combigan); bimatoprost ophthalmic solution (Lumigan); and bimatoprost and timolol maleate (Ganfort).
Allergan released some of these products with successively lower concentrations of active ingredients.
“We were achieving similar effectiveness because we understood the importance of how the drop actually got to the right tissues in the eye,” he said.
Once a company has developed internal expertise, it can successful license technologies from other patent holders, or even buy other companies, Pyott said.
He gave the example of Allergan’s product cyclosporine ophthalmic emulsion (Restasis), which he said has the biggest market value of any eye drop. Allergan scientists recognized the value of cyclosporine, which was well known as a drug to suppress rejection of heart transplants, as an ophthalmic drug.
In another example, Allergan licensed anti-infectives from Japanese patent holders.
Success also means taking risks, and inevitably facing some failures, Pyott said.
He cited the example of memantine, which Allergan licensed from Merz.
“We were in that for 7 years,” he recalled. “It probably cost us $140 million and unfortunately the data was inconclusive. But I take the view, provided that doesn’t kill the company, that’s okay to have something that is very limited. It could have been a multi-billion franchise.”
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Another key to success for a pharmaceutical company is finding the right scale, Pyott said. A start-up can concentrate only one product. A larger company must be able to invest heavily in a spectrum of research and development projects.
“Across the Allergan portfolio of ophthalmics we were spending $45 million a year,” he said.
By comparison, the entire budget of the National Eye Institute is about $700 million, he said. Allergan was also investing heavily in research and development during the same period, Pyott pointed out.
In addition to a strong bench of internal staff, the successful glaucoma company must have stable leadership, he said.
It can take 10 years from the time a company figures out that a product is safe and effective to the time it obtains regulatory approval. By contrast, a CEO might be in that position for only 4 years. One reason for Allergan’s success is that it bucked that trend: it only had three CEOs in 64 years, he said.
“And for a longtime that was the same case at Alcon,” he said.