Presentation on theme: "Merck Overview Merck Research Laboratories Partnerships and Licensing"— Presentation transcript:
1Merck OverviewMerck Research LaboratoriesPartnerships and LicensingPolicy and other
2Mission of Merck Research Laboratories Merck’s PhilosophyOur philosophy is to bring medical excellence to the patient by being First in Class or Best in Class and Demonstrating the Value to Patient, Payor and ProviderMission of Merck Research LaboratoriesDiscover & Develop Breakthrough Medicines in Major Areas of Unmet Medical NeedSlide 9New RXs for VIOXX are almost equal to Celebrex now and we expect to exceed them. Merck believes that VIOXX is Best in Class and is truly a once-a-day, whereas Celebrex may require dosing twice-a-day.First in ClassMEVACOR®; HMG - CoARI in cholesterol loweringCOZAAR®/HYZAAR®; Angiotensin II antagonist in hypertensionFOSAMAX®; bisphosphonate in osteoporosisPROSCAR®; Type 2 5a-reductase inhibitor for BPHBest in ClassZOCOR® introduced after MEVACOR®VASOTEC® introduced after Capoten®VIOXX® introduced after CelebrexThe Mission of Merck Research Laboratories
3J&J•Merck Consumer Pharmaceuticals Merck and Schering-Plough JVs Merck-MedcoManaged CareMerck ResearchLaboratories (MRL)Independently Operatedand ManagedManufacturingDivisionJ&J•Merck Consumer PharmaceuticalsHuman HealthDivisionIf you discuss Merck-Medco, stress that while it is owned by Merck, it is managed independently.J&J•Merck and Merial are joint ventures in which Merck has a 50% interest in each. J&J•Merck primarily sells OTC products including Pepcid AC. Merial is an animal health joint venture with Rhone-Poulenc (now Aventis). Merck contributed its AgVet business to the JV..The new Merck/Schering-Plough JV’s are related to ezetimibe and respiratory deals. The cholesterol JV is called Merck/Scheing-Plough pharmaceuticals and the respiratory JV is called Schering-Plough/ Merck pharmaceuticals.The Merck side of this organization chart just identifies the major operating groups.Merial LimitedThe AmericasEurope/Middle East/AfricaAsia PacificMerck and Schering-Plough JVsVaccineDivisionAventis Pasteur MSD
4Sales by Therapeutic Class 2001 Human Health Sales $21.3 BillionSlide 5Most notable difference is growth of Arthritis category due to the success of Vioxx.Does not include Merck-Medco sales which are sales of non-Merck prescription drugs or benefit services. They are not disclosed on a therapeutic basis.Elevated Cholesterol - Zocor and MevacorOphthalmolgicals - Primarily Trusopt/Cosopt and TimopticVaccines/Biologicals - Primarily Recombivax HB (HepB), MMRII (Measles, Mumps, rubella), and Varivax (chickenpox)HIV - Crixivan (protease inhibitor) and Stocrin (non-nucleoside reverse transcriptase inhibitor)Osteoporosis - FosamaxAntibiotics - Primaxin, Noroxin, MefoxinHypertension/Heart Failure - Vasotec/Vaseretic, Cozaar/Hyzaar and Prinivil/PrinizideArthritis - VioxxAsthma - SingulairAnti-ulcerents - PepcidOther Merck - everything else (the 32% of Prilosec sales are included in this number)2 of the top 5 products werediscovered in the Montreal Lab of MRLVIOXX* and SINGULAIR*
5Merck Research Laboratories andProduct Development
6Merck Research Laboratories R&D $2.9bil 2002 (+16% ; CAGR 12% ‘85-’01) 11,900 research employees (over 2000 doctorals) with advanced degrees at MRL MontrealSeveral thousand publications per year (including joint)patent applications per yearGlobal R&D efforts in a range of therapeutic classesOver 100 NDAs approved since 1963(Regulatory)MF Canada:Approximately 300 researchers with advanced degreesPh.D., M.Sc., B.Sc.Chemistry, BiochemistryMolecular Biology, MedicinePharmacology, PharmacyComputer Science“Merck is the most impressive company in this analysis The regulatory team at Merck is clearly one of Merck’s most valuable assets”
7Merck Research Laboratories Locations Includes multi-billion dollar capital building campaign in West Point, Pa and New JerseyMontreal, CanadaRahway, N.J.IRBM, ItalyRespiratory, Asthma, Allergy, Inflammation, OsteoporosisMetabolic disordersAtherosclerosisInfectious DiseasesInflammationEndocrine/MetabolicAnimal SciencesVirologyOncologyBoston, MA*Coming in 2004Madrid, Spain CIBESan Diego, CA*ScreeningNeurosciences - SibiaBanyu Res. Labs, JapanWest Point , PARosetta Inpharmatics, WA*CardiovascularInfectious DiseasesEndocrine/MetabolicCardiovascularOphthalmicsBone BiologyVaccines & AntiviralsOncologyNeurosciencesResearch interestsAsthma & AllergiesBiology of leukotrienesPDE4 inhibitorsInflammationBiology of prostaglandinsBiology of apoptosisOsteoporosisCatK inhibitorsMulti-billion dollar capital building program (Rahway and West Point)Sibia acquisition (San Diego)Rosetta acquisitionBoston siteGenomicsTerlings Park, UKPlus Clinical ResearchWorldwide and RegulatoryNeurosciencesChibret Lab, FranceSafety Assessment
8Merck Frosst Centre for Therapeutic Research Research interestsAsthma & AllergiesBiology of leukotrienesPDE4 inhibitorsInflammationBiology of prostaglandinsBiology of apoptosisOsteoporosisCatK inhibitors
9Research Project Selection Development Costlysuccessful new drug costs up to $800 MMMost Projects turn out to be flawedpathophysiology of many human diseases is complex in etiology & poorly understoodPicking the right project is the key to successand the hardest if you want to be an innovator!easy if you are a follower!
10Research Project Selection Is there a medical need?what is the size of the population involved?how serious is the problem?what are the available therapies?Is there a rational scientific approach?is there a genetic or biochemical insight?is there a specific target or pathway?is there “proof of concept” available?can it be an early goal of MRL Research?
11Research Project Selection Is it chemically feasible?Some targets are difficult to approach with small moleculesWhat is the long-term perspective?takes > 10 years to discover and develop a drug.What is the competitive environment?can we be first to develop an innovative productDo we have in-house expertise?If not, how can we develop it; can we collaborate?
12Guiding Compounds Through Development Project teams (Merck and joint with partners) - implement drug development; project teams are little companies within a large companyCommercialization-type teams - are charged with assuring that all company areas are aligned to make the product candidate a success (clinical research/ manufacturing/regulatory/ marketing)Other Committees – cross-divisional Senior Management oversight and approvalsLarge Clinical Outcomes Studies - Demonstrate the Value of Merck ProductsZOCOR®Scandinavian Simvastatin Survival Study (4S)Heart Protection Study (HPS)VIOXX®Vioxx Gastrointestinal Outcomes Research (VIGOR)COZAAR®Losartan Intervention for Endpoint Reduction in Hypertension (LIFE)RENAALOPTIMALFOSAMAX®Fracture Intervention Trial (FIT)SINGULAIR®Several ongoing outcomes studies
142001 Merck Human Health Sales $21.3 Billion Licenses played an important to critical role in 7 of the 17 new product approvals since 1995About one-third of Human Health Sales are attributed to licensed products, patents or formulationsIncluding:COZAAR / HYZAARFOSAMAXPEPCIDPRILOSECRECOMBIVAX HBVARIVAXMAXALT RPD FormulationOthersLicensed Products, Patents and Formulations~ 32%Merck has been involved in many licensing arrangements and alliances since the early 1980s. We have numerous successes in achieving the ultimate goal -- getting a product to the worldwide market in an efficient and effective way. From this slide, you can see that currently over 1/3 of Merck’s human health sales are attributed to external relationships - some in fields where we are world renown (cardiovascular products, for example) and others in areas where we have created the market worldwide and set the standard for this therapeutic area. (such as osteoporosis)2001 Merck Human Health Sales $21.3 Billion
15Merck’s Licensing Arrangements Important Therapeutic Areas 1999 – 2001 Complementing Current AreasAntibacterialsElitraOsteoporosisAxysOphthalmicsCole Eye InstituteCholesterolSchering PloughRespiratoryHIVCATCrucellCytRxExpanding Into New, Large AreasDiabetesISISKyorinNeuroscienceNeuroTargetsSIBIAInfluenzaBiodiemHCVISIS
17Preclinical/Clinical Our Network of Relationships*AstraZenecaINVANZ®Yamanouchi / J&JPEPCID®/PEPCID AC®/PEPCID COMPLETE®BMS (formerly Dupont Pharma)COZAAR®/HYZAAR®GentiliFOSAMAX®KyorinNOROXIN®Osaka Univ. / BikenVARIVAX®Biogen/Chiron/GenentechU. Cal/U. Wash/Inst. PasteurHep B vaccine/COMVAX®Preclinical/ClinicalDevelopmentSchering-PloughVicalIsisKyorinCSLBiodiemCAT ProBioGen Elitra Celera KaroBio IsisCole Eye Institute NeuroTargets NeoGenesisCMMTBasic ResearchCollaborationsCHOP/Wistar InstituteElan/Nanosystems RP Scherer Flamel CytRx SymyxFormulation and DeliveryTechnologiesCelltechEnabling/PlatformTechnologiesArray Exelixis AuroraCellomics Incyte ProteomeDoubleTwist Lexicon CrucellChembridge LifeSpan HarvardAlbany Molecular SangamoChromagen AmershamGenzyme Evotec DeltagenDiscovery Partners AffymetrixBuild 1: (existing partners)Over the years, we have developed a broad network of relationships, in various areas -including collaborations on compounds in preclinical and clinical development, basic research collaborations leading to compound discovery and development, numerous enabling and platform technologies, many in chemistry and genomics, and finally a variety of delivery technologies to enhance current products.Build 2: (overlay of licensed products that have been marketed)Now you see as well those products resulting from licensing that have been successfully commercialized. We believe we are very successful at arriving at this ultimate objective - to market products on a worldwide basis and optimize their commercial potential. We undertake global clinical development programs with a high degree of speed and accuracy to obtain the broadest claim structure possible. Then we support our products throughout their life cycle with additional claims as well as to demonstrate their economic value to payers, providers, and patients worldwide.*Disclosed agreements
18Merck is a Flexible, Experienced, and Committed Partner Merck is Constantly and Proactively Seeking New External OpportunitiesEach external relationship receives high priority at all levels of Merck,Compounds resulting from external arrangements are fully integrated into the Merck drug development process with the same level of rigor and resources as internally discovered product candidatesOnce we execute the agreement, we pride ourselves on giving each external relationship high priority at all levels of Merck, regardless of whether the agreement is in discovery research, development or marketing.Compounds that come from external relationships are fully integrated into the Merck drug development process with the same level of rigor and resources as internally discovered product candidates.Merck is Constantly and Proactively Seeking New External OpportunitiesKeen awareness and constant review of the discoveries and developments across the entire drug discovery and development communityFormal review and response for every opportunityA well established and efficient processAn expert group focused on the scientific and commercial aspects of each opportunityExternal Research Team mobilizes senior management from various disciplinesHighly skilled personnel in the negotiation, structure and management of alliances
19Review and Licensing Committees 17 Review and Licensing Committees targeting Therapeutic Areas & TechnologiesMolecular ProfilingNeuroscienceNew Vaccine TechnologyOphthalmicResearch TechnologyRespiratoryUrology/DermatologyWomen's/Men's EndocrinologyAnti-InfectivesAntiviralBiologics and AntibodiesCancerCardiovascularDiabetes, Obesity and AtherosclerosisDrug DeliveryGastrointestinalImmunology and RheumatologyOur process is well defined and clear. We focus on a constant review of all discoveries and developments across the entire drug discovery and development community.All opportunities are reviewed by 17 Review and Licensing Committees targeting all major therapeutic areas and technologies, including genomics and gene therapy.We formally review and respond to each and every opportunity.Once we select an opportunity to move forward on, we have very senior level personnel on both the scientific side and commercial side to move the negotiations forward quickly and efficiently to completion. We also have the full and focused attention of Senior Management to arrangements being brought forward.
20Expertise to bring the best in science to Merck Worldwide Licensing & External ResearchExpertise to bring the best in science to MerckMr. Richard Kender Vice Pres. Corporate & Business DevelopmentDr. Bennett M. Shapiro Executive Vice Pres Worldwide Licensing & External ResearchMs. Barbara YanniDr. Greg Wiederrecht Executive Director External Scientific AffairsInformation GroupChief Licensing OfficerNCEs and New BiologicalsTransaction Leaders• Project Lead/NegotiatorResearch TechnologiesRelationship Management• Relationship Development and ManagementPlatform Research Technologies• Chemistry, Screening, PharmacogeneticsTransaction ServicesDr. Lewis R. Mandel Emeritus Academic Programs• Project/Company/Analysts
21Some other comments Premier scientific research organization Excellence in translating cutting-edge science into break-through medicinesConferences, scientific meetings- two wayJournals, abstractsGraduate school and post doc contacts importantRegulatory and access environmentResearch a companies interestsWe pride ourselves on being a preferred partner, with major benefits to offer. Our premier scientific research organization has great success in translating cutting edge science into breakthrough medicines, our industry leading product development group offers great efficiencies and an excellent track record with regulatory authorities around the world, we offer an extensive manufacturing infrastructure, and demonstrated worldwide and world class marketing capabilities (recently demonstrated by the launch of VIOXX).Finally, we’re an extremely stable partner with a dedicated focus on products, not mergers!
22External Relationships Will Continue To Be Essential To Merck’s Success Alliances at all stages of the discovery and development process will complement a robust and therapeutically diverse pipeline that will be a key driver to Merck’s successTo sum up, external relationships will continue to be essential to Merck’s success, as they have been in the past. We believe the recent internal changes only further strengthen Merck’s commitment to partnering.
23“We try never to forget that medicine is for the people “We try never to forget that medicine is for the people. It is not for the profit. The profit follows, and if we have remembered that, they have never failed to appear”George E. Merck
24For more about Merck & Co. and Merck Frosst Canada Ltd merckfrosstlab.camerckfrosst.camerck.comPatrick LauzonManager of Corporate AffairsMerck Frosst Canada Ltd11131 Hammersmith GateRichmond BC V7A 5E6(604)
26Intellectual Property Protection Quality of R&D and R&D Infrastructure Policy Goal Stimulate Economic DevelopmentFEDERAL FACTORSIntellectual Property ProtectionRegulatory ApprovalReasonable PricingPROVINCIAL FACTORSQuality of R&D and R&D InfrastructureMarket AccessTalentPublic $ SupportTax IncentivesListingRecognize InnovationGovernments must consider health and economic development policy goals simultaneously. They cannot ignore the fact that health policy can have a negative effect on economic development. As much as possible, win-win situations should be encouraged.In competing for R&D investment, international companies consider many factors when determining where to put limited investment dollars. There are a number of factors that are in the federal government arena: internationally competitive IPP, an effective and efficient regulatory process and reasonable pricing.Provincially, the research infrastructure and market access for innovative products are the two key areas examined when making investment decisions.BC has an excellent infrastructure for research and development and outstanding scientists. However, market access is a concern. The RDP creates a negative investment climate for biomedical research in BC as it treats innovative products as commodities, thereby not recognizing the value of innovation.
27RDP - BC Investment Performance Policy Goal Stimulate Economic DevelopmentRDP - BC Investment Performance22.214.171.124.3Since the introduction of the RDP British Columbia has lagged behind the other Western Provinces in the amount of Rx&D investments received. Alberta has increased its share of R&D investment, at the expense of BC.Even though BC has a larger population base there has been a cumulative investment gap between Alberta and British Columbia (PMPRB)= $82.3 million= $60.6 million (since introduction of RDP)BC receives the lowest per capita investment dollars of the Western provinces.PMPRB 2001
28Merck Research Laboratories 2002 R&D Spending - Approx. US$2.9 BillionR&D 12% CAGR8 (9) Basic Research Facilities Worldwide>7000 Employees (>1600 doctoral)Basic Research - >750 PhD-level ScientistsGlobal R&D Efforts Covering the Full Spectrum of Human Disease
29($ in billions except EPS) Financial Highlights($ in billions except EPS)
30Merck Frosst Centre for Therapeutic Research Research interestsAsthma & AllergiesBiology of leukotrienesPDE4 inhibitorsInflammationBiology of prostaglandinsBiology of apoptosisOsteoporosisCatK inhibitors
31Is Drug Discovery hard? 15 Years Introduction Product Surveillance 15IntroductionRegistrationDevelopmentBasicResearch122-555,000Substances?????Product SurveillanceClinical Tests(Human)Preclinical Tests(Animal)SynthesisExamination &ScreeningPhaseIVIIIIIPhase ISource: PhRMAYears
32InderalTagametCapotenSeldaneAZTMevacorProzacDiflucanRecombinateInviraseLopressorZantacVasotecHismanalVidex (ddl)PravacholZoloftSporanoxKogenateNorvirInnovative Drug/Year of IntroductionFollower Drug
33The Mission of Merck Research Laboratories Discover & DevelopBreakthrough MedicinesinMajor Areas ofUnmet Medical Need
34Alliances – A Critical Role What’s going to happen over the next several years? As you can see, 7 out of the 11 products in Merck’s late stage pipeline have resulted from licensing initiatives, once again demonstrating the ongoing importance of external relationships to Merck’s continued success.Resulting from alliance/licenses