Presentation on theme: "Commercializing the First Biotech Blockbuster drug"— Presentation transcript:
1 Commercializing the First Biotech Blockbuster drug Amgen Inc.’s _______EpogenCommercializing the First Biotech Blockbuster drugPresented by:Faryn KapalaOctober 26th, 2010What is their blockbuster drug? EpogenWhat does it do (in a few words)? AMGen (Applied Molecular Genetics)When was it founded? – 1980Amgen is the largest employer in Thousand Oaks and second only to the United States Navy in terms of number of people employed in Ventura County.
2 Brief History of Key Players What is Epogen? Uses? Who Discovered Epogen?How did they protect their IP?3 types of patentsLegal IssuesHow IT has changed business processesHow to do a patent searchIT DevelopmentsIT Department OrganizationPresentation Outline
3 EPO – Key Players Franklin “Pitch” Johnson BS in Mechanical Engineering from StanfordMBA from HarvardStanford Graduate School of Business Teacher (12+ yrs.)Independent Venture Capitalist since the early 1960’sOne of Amgen’s original founders
4 EPO – Key Players Bill Bowes B.A. in Economics from Stanford UniversityMBA from Harvard UniversityVenture CapitalistOne of Amgen’s original founders
5 EPO – Key Players George Rathmann “Golden Throat” Accepts position as CEO of Amgen in 1980Former director of research at Abbot LaboratoriesCame to CA to study Molecular Biology at UCLAUCLA professor impressed with his business background invited him to head AmgenIn the early years much of Amgen’s researchwas done through collaborations with UCLA and CIT.
6 Epogen’s Uses Chronic Renal Failure (CRF) – Kidney Failure Dialysis patientsCovered by MedicarePrior to surgeries that may involve heavy blood lossTreating anemia caused byHIV medicationsChemotherapyThe primary role of the kidneys is to filter the blood and to excrete metabolic side products, along with water, as urine. The body's entire blood volume passes through the kidneys every five minutes
7 What is Epogen (Epoetin Alfa)? Mimics a naturally occurring hormone erythropoietinProduced in the kidneysStimulates the production of RBC’s by the bone marrowRBC’s carry oxygen aroundour bodies
8 Who Discovered Epogen?The protein, erythropoietin, was discovered in 1976Eugene Goldwasser at the University of ChicagoThey did not patent it or try to synthesize itNIH-funded research at Columbia University invented a technique for synthesizing the protein and patented this.Amgen then licensed the technique from ColumbiaThe public pays twice?1st by supporting the research that discovered it2nd by paying for it through Medicare
9 So what did Amgen discover? Not the proteinNot the technique to synthesize the proteinThey isolated the gene (1983)2 year processFu-Kuen Lin & Chi-Hwei LinTransformed CHO cells to produce biologically active EPO (Feb. 1984)
10 Protecting Their Intellectual Property 3 requirements for a biotech patent:NOVELNobody ever made the product beforeNONOBVIOUS in light of prior artPrior Art: Publications, other patentsEx.) Pencil & EraserUTILITYIt has to somehow be usefulProduct or Process
11 3 Types of Patents Product Patent Process Patent Patent the Starting Materials
12 1.) Product Patent Best level of protection Excludes competitors from making, using, selling or importing the patented inventionDifficult to obtain in the biotech industry because many drugs are based on purified proteins that have previously been identified (naturally occurring)Any mention of their discovery or isolation in scientific literature can qualify as prior art
13 2.) Process Patent The next best level of protection Covers the method to make the final productWorded in general terms which often offered increased protection as it protected even unknown methods of achieving the outcome.Ex.) Alexander Bell – The Telephone“transmitting vocal sounds telegraphically by using electrical undulations”*His invention: Electromagnetism *Better invention: Variable ResistanceSAME PROCESS
14 Product vs. Process Dividing line between Product & Process is vague Product: “An apparatus for measuring activity of the autonomic nervous system of a patient…”Process: “A method of measuring activity of the autonomic nervous system of a patient…”
15 3.) Patent Starting Materials Genetically engineered cellsHost cell and vectors (usually a virus or bacteria)Even if an end product isn’t patentable because it lacks novelty the inventor can patent the starting materials
16 October Surprise!1.) Product Patent Denied! Epogen had already been patented! 2.) Process Patent Denied! This one was expected based on recent biotech laws… 3.) Starting Materials Granted!
17 Genetics Institute Founded by 2 Harvard scientists in 1981 Isolated EPO from human urine in 19845 months AFTER Amgen’s breakthroughUnable to produce it in significant quantities because they didn’t know what gene produced itNot feasible to isolate it from urine6 million gallons of urine to treat one patient for a year
18 Legal StalemateGenetics Institute asks for a cross-patent which would allow them to use Amgen’s starting materialsIn response, Amgen filed for patent infringementGenetics Institute would infringe on Amgen’s patent if they attempted to produce EPOGenetics Institute countersues claiming that Amgen infringed on their product patent for EPO
19 Who Wins? Dec. 1989 – Genetics Institute wins the lawsuit “GI’s patent covered EPO irrespective of how the drug was produced.”Amgen never deposited their cell line in a public cell bankGenetics Institute argued that they needed thisCourts declared that Amgen had provided sufficient description of the method they had used and a person skilled in the art would have no difficulty replicating Amgen’s procedure
20 Stalemate ContinuesNeither company was able to produce EPO without infringing the other’s rightsLegal bills were stacking upStock prices of both companies were droppingWhen did Amgen go public?
21 Amgen Wins! (1991)Court of Appeals for the Federal Circuit ruled that…Genetics Institute had not proved that it had isolated a protein with the biological characteristics described in the patent. As a result, Genetics Institute's claims were invalid.Amgen stock jumps from $12 to $113 overnight!
23 How has IT changed the business process? Patent Searching & ResearchMuch easier to do today then in 1980 (EPO years)TCP/IP came about in the mid 1980’sIn Amgen’s early days they had a modem connection to a service at USF through which they did sequence comparisonsPatent searches were done via mail, telephone, etc. and often sent out to patent search specialists to performAmgen also had a small (one room) on-site library with a librarian who assisted in patent searching.
26 IT Developments at Amgen They had a Zilog, with unbelievably small (by todays standards) amount of ram and disk spaceShared by all the scientistsSole purpose was for searching genetic sequences via modem
27 IT Developments at Amgen Amgen purchased a copy of GenBank and the programs to enable searching and analysisGenetics Computer Group (GCG)Subscriptions to DNA & Protein sequence databasesToday anyone can access GenBank for free at
28 IT Developments at Amgen Next, a VAX (VMS) machine was setup in Bldg 5 and a cable was ran through conduit back to Bldg 2 so that groups in both buildings (about a block apart) could use it.Each scientist had a terminal that connected to VAX, with all data stored centrally on it.
29 IT Developments at Amgen Next step is the installation of an onsite networkPrimarily to support sales and developmentIt took years for ‘terminals’ to be replaced by desktop computers (Macs) in the research departmentIn ~1996 Amgen switched from Macs to PC’s
30 Organizational Changes See Ch.2 – Page 65 in YOUR MIS BOOK! Amgen’s IT DepartmentOrganizational ChangesSee Ch.2 – Page 65 in YOUR MIS BOOK!
31 Early 1990’s Each department had their own IT group A centralized IT group oversaw telephones, network support, infastructure (cabling, switches, routers, etc.) and desktop supportQuite independent of each other
33 Early 1990’s Didn’t scale well as the company grew AdvantagesDisadvantagesEach department was an expert at their applicationsProblems often solved within minutesDidn’t scale well as the company grewDuplicated efforts & resourcesSome departments not operating at full capacity
34 Late 1990’s – Department Level IT Merged all of the IT departments into one big groupDatabase and application servers consolidatedCentralized IT Help DeskEach department still maintained a small group of application based IT personnel
35 B.) Separate IT departments under central control
36 C.) Represented in each division of a large company but under central control
37 Late 1990’s Scaled better Resources could be pooled and shared AdvantagesDisadvantagesScaled betterResources could be pooled and sharedEnd users received excellent supportCompatible systemsCentralized IT person may not understand intricacies of each departmentApplication support still neededCan take longer for the right person to be assigned
38 Amgen Today Central IT support is outsourced Maintains application experts and system architectsComputer installation, network support is outsourcedComputers are an integral part of everyone's jobHeavily reliant on and MS Office SuiteNumerous teleworkers
39 Amgen Today PC based Numerous rooms dedicated to video conferencing Windows Servers, Unix servers (LINUX and Solaris)Research has a few hefty parallel computers
40 Amgen Today Personal Electronic Library with it’s own IT support Online articles, databases, research, patents, etc.They still have a physical library but it is used less and lessAll business processes use IT ( Manufacturing, Sales & Marketing, Finance & Accounting, Human Resources, R&D, etc.)
41 Special Thanks To Jim Duliakas and Jody Simon Jim has been at Amgen since 1994 – Snr. TechnologistJody since the beginning!Started in ResearchLater moved to IT
42 ReferencesAmgen. (2010). Epogen. Retrieved October 24, 2010, fromAndrews, E. L. (1991, March 7). The New York Times. Retrieved October 26, 2010, from Amgen Wins Fight Over Drug:Business Week. (1998). How George Rathmann Mastered the Science of the Deal. Business Week.Fu-Kuen Lin, S. S.-H.-H. (1985). Cloning and Expression of the Human Erythropoietin Gene. Proceedings of the National Academy of Sciences of the USA,Jim Duliakas, J. S. (2010, October 25). An Interview with Two Current Amgen Employees. (F. Kapala, Interviewer)Lin, F.-K. (1987). Patent No. 4,703,008. United States Patent.Marcia Angell, M. (2005). The Truth About the Drug Companies: How they deceive us and what to do about it. New York: Random House, Inc.Warren, J. M. (2010). Patterns of Entrepreneurship Management. Hoboken: John Wiley & Sons, Inc.Wellsphere. (2009, November 16). Wellsphere. Retrieved October 24, 2010, from Kidney Failure Community - Anemia in Kidney Failure and Dialysis Patients:WikiInvest. (2009). WikiInvest. Retrieved October 24, 2010, from Stock: Amgen: