Excellence by Design (EbD) The Case for Change Melissa B. Herkt President & COO, PlantWeb Solutions Group Emerson Process Management May 12, 2010

The Productivity Challenge Industry Performance Table Roger Benson – ISPE Manchester 2003 Source: Gold Sheet Jan % 96% 85-95% 92% 74% 30% hrs 48 hrs 720 hrs World Class Pharm Best Pharm Norm OTHER METRICSLife SciencesWorld Class Production Lead Time days1-7 days Finished Goods Inventory60-90 days10-40 days Annual Productivity Improvement1-3%5-15% Right-first-time Production Overall Equipment Effectiveness Stock Turns Cycle Time

Where are the Opportunities? Follow the Money 50% 25% 15% 10%

How Does Pharma Compare to Others? Industry Oil Refining Bulk Chemicals Fine Chemicals Pharmaceuticals Mass Productivity, Kg Product/Kg Total ex H 2 O >90% 20 – 50% 2 – 20% 1 – 4% Source: Raymond H Scherzer, Senior Vice President, Engineering, Technology & Capital Management GSK

What Industry Leaders Have Said About OpX / PAT ? Before you can achieve a high level of operational excellence, youve got to nail down predictability. Dr. P. Yang, EVP Product Ops, Genentech Modeling is an extremely important part of the plan … predict what will work in manufacturing, rather than learning the hard (and expensive) way, through wasteful practicing. P. McKenzie, former BMS executive On top level support for PAT – Weve been lucky to have leaders who believe you should question the status quo in manufacturing and that recent philosophies coming from the FDA have some credence. S. Hammond, PAT leader, Pfizer

Lets Talk About Business From molecule to medicine, the Life Science company reason for the journey is sales and profits. Factors guiding the journey are: –Speed … nimble, resilient, being first –Productivity … more NDAs per dollar of R&D investment –Predictability … right the first time, all the time –Quality by Design (QbD) … Excellence by Design (EbD) –Risk Management / Mitigation –Disruptive Events … early detection and move toward prevention –Best Cost Producer … once the realm of generic manufacturers, now a must for all companies Since PAT and QbD implementation produce measurable business results, everyone will adopt and deploy … Right?

The Case for Change to EbD Market dynamics and global economic conditions challenge companies performance … industry pressures: –Government run Healthcare –Patent expiration … $140 B by 2012 … generics –Few blockbusters…..personalized medicine –Higher costs for discovery / development / manufacturing –Competition –Quality Regulators supporting the opportunity for change but uptake is slow Companies must not just survive, they must prosper … for shareholders and patients EXCELLENCE BY DESIGN (EbD)

VisionResourcesSkills Action Plan No Change ResourcesSkillsIncentives Action Plan Confusion VisionResourcesIncentives Action Plan Anxiety VisionResourcesSkillsIncentives False Start VisionSkillsIncentives Action Plan Frustration Steps To Successful Change VisionResourcesSkillsIncentives Action Plan Change

The Vision - Progress FDA issues Pharmaceutical cGMPs for the 21 st Century – A Risk Based Approach ASTM E55 formed (290+ members) FDA issues PAT – a Framework for Innovative Pharmaceutical Development, Manufacturing, and Quality Assurance ISPE Annual Meeting – QbD Operational Excellence (OpX) Congress – Improve manufacturing and R&D performance / productivity Draft Validation Guidance (PAT flavor) August September 2004 November 2005 January 2006 In Progress VisionResourcesSkillsIncentives Change Action Plan

Difficulty connecting the dots … components are available but no single right way FDA communications are guidance rather than regulation … companies are risk intolerant Push – Pull dilemma … industry should demand rather than have suppliers set the direction Organizational change requires inspirational leadership … a champion for change … missing in many Life Science companies Who in your company has the passion, power, patience to Git-R-Done? The Vision - Challenges VisionResourcesSkillsIncentives Change Action Plan

The Vision – Addressing the Challenges Emerson and Life Sciences Emerson serves 25 of the top 25 Life Sciences companies globally –50% ask what do you plan? or what do you have? –15% have a stated strategy for PAT –10% are trying to influence our direction (Emerson does R&D too!) In addition to new products, Emerson invests by: –Developing solutions that are easy to use and implement –Establishing strategic PAT partnerships –Creating operational readiness VisionResourcesSkillsIncentives Change Action Plan

Resources - Progress FDA encouraging industry to adopt QbD and PAT constantly and consistently Attendance at PAT industry events now have business leadership attendance in addition to scientists Business cards now have PAT in titles, particularly at a Corporate level To date, some NDAs have been submitted incorporating PAT technologies ASTM E55 committee active and writing standards Suppliers beginning to offer technologies to enable QbD and PAT and continue to invest in technology development VisionResourcesSkillsIncentives Change Action Plan

Resources - Challenges Some inward focus by industry leadership … suppliers seeking advice / input / push to direct our R&D PAT has not been broadly embraced by employees throughout companies, outside of the core PAT groups … fear of failure? Companies are embracing PAT but dont have the staff to implement programs (Pharmaceutical Manufacturing, April 2010) VisionResourcesSkillsIncentives Change Action Plan

Resources – Addressing the Challenges Emerson and Life Sciences Hosted FDA speakers at the Life Sciences Industry Forum at Emerson Exchange 2009 Active member of ASTM E55 University program funding to help bridge the gap Offer training for internal and customer personnel VisionResourcesSkillsIncentives Change Action Plan

Skills - Progress FDA is actively training personnel and investing in marketing to convince industry to embrace QbD and PAT DeltaV & synTQ used to train FDA Inspectors on PAT at Duquesne University – secondary processes Life Sciences companies now hiring PAT experts from other industries like Food & Beverage and Chemical Life Science companies beginning to use process engineering expertise and PAT principles during the research and development process. Industry consortiums jointly developing mindshare VisionResourcesSkillsIncentives Change Action Plan

Skills - Challenges R&D uses different tools in development than those that will be used in manufacturing … costly / barriers to make changes later Scientists have tried / proven methods in the lab … can auto-gathered / generated data be trusted? Companies often do not use process and automation engineering knowledge early enough in the product development Companies often do not use scientists far enough along into the manufacturing process … some beginning to adopt a holistic approach VisionResourcesSkillsIncentives Change Action Plan

Skills – Addressing the Challenges Emerson and Life Sciences Market technology choices early Use PAT to do QbD i.e. – new disposable bioreactor with wireless technology Making it easier to use technology to improve operations Use of enabling technologies to collect knowledge for development and scale up VisionResourcesSkillsIncentives Change Action Plan

Incentives - Progress FDA is facilitating change with guidance but not dictating with regulations. Business must engage and drive the change WHAT INCENTIVE HAS YOUR COMPANY TO DRIVE CHANGE? VisionResourcesSkillsIncentives Change Action Plan

Research Development Pilot / Clinical Manufacturing Bulk Manufacturing Final Dose Risk? Challenges Knowledge Transfer … Quality … Regulatory Compliance … Commercialization Risk? Risks on the Path from Molecules to Medicine Incentives - Challenges VisionResourcesSkillsIncentives Change Action Plan

Reaction, Repeatability, Scale Up, Knowledge Transfer Reaction, Repeatability, Scale Up, Manufacturability, Knowledge Transfer, Purification Process, Formulation Reaction, Repeatability, Scale Up, Manufacturability, Knowledge Transfer, Purification Process, Critical Process Parameters, Best Cost Producer Development Research Pilot / Clinical Manufacturing Development Bulk Manufacturing Pilot / Clinical Manufacturing Final Dose Pilot / Clinical Manufacturing Formulation, Repeatability, Scale Up, Manufacturability, Knowledge Transfer, Critical Process Parameters, Best Cost Producer Risks increase and change over time Risks on the Path from Molecules to Medicine Incentives - Challenges VisionResourcesSkillsIncentives Change Action Plan

Incentives - Challenges Without defined goals, metrics, and incentives to drive organizational and individual change, slow uptake of PAT will continue Targeted programs to drive new technology and select methods to achieve vision without increasing risks must be implemented Scientists and engineers need organizational support and incentives to embrace and drive change VisionResourcesSkillsIncentives Change Action Plan

Incentives – Addressing the Challenges Emerson and Life Sciences Growing our customer base in Life Sciences Creating a Win-Win for customers and Emerson Enabling customers to get more from existing investments in technology and facilities Providing solutions! VisionResourcesSkillsIncentives Change Action Plan

Action Plan - Progress Two thirds of biomanufacturing companies have budgeted plans to implement QbD / PAT (Pharmaceutical Manufacturing, April 2010) Increased NDA submissions with PAT components Industry implementing on a small scale basis A small number of companies are driving solution development VisionResourcesSkillsIncentives Change Action Plan

Action Plan - Challenges Is your company defining / demanding innovation from technology providers? Have you engaged the FDA as a partner to drive change? Has your company made progress? WHATS NEXT? VisionResourcesSkillsIncentives Change Action Plan

Action Plan – Addressing the Challenges Emerson and Life Sciences Through technology and expertise, Emerson can help formulate your Action Plan: –Predict end of batch quality –Alarm when a deviation occurs –Provide an operator-friendly mechanism to identify probable cause for deviations –Verify reason for deviation and enable appropriate action –Proactive impact on quality and safety! VisionResourcesSkillsIncentives Change Action Plan

Process engineer develops a statistical model to predict quality –Operator improves control with predicted values Process engineer develops statistical model for fault detection –When quality prediction is bad, fault detection indicates which inputs are causing problems –Operator improves quality and is able to troubleshoot problems without experts Operator becomes more effective –On-line quality predictions and fault detection prevent quality incidents and downtime Quality Parameter Prediction Root Cause Fault Detection Action Plan – Addressing the Challenges Emerson and Life Sciences VisionResourcesSkillsIncentives Change Action Plan

VisionResourcesSkills Action Plan No Change ResourcesSkillsIncentives Action Plan Confusion VisionResourcesIncentives Action Plan Anxiety VisionResourcesSkillsIncentives False Start VisionSkillsIncentives Action Plan Frustration Steps To Successful Change VisionResourcesSkillsIncentives Action Plan Change Will We Change???

Summary Embrace EbD … accept nothing less! 5 key elements to successful change … identify and address missing elements PAT adoption must be driven by Life Science companies FDA is facilitating and encouraging PAT adoption Technology providers like Emerson can and have contributed to the PAT initiative and are willing to invest in R&D to meet Life Science company needs … please DO influence and define industry needs VisionResourcesSkillsIncentives Action Plan Change