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Originally published in Ashton Tweed Connection, Summer 2012
As the former President and CEO of Prism Pharmaceuticals, Dr. Warren Cooper led the King of Prussia, PA-based company from inception through product development and FDA approval until it was acquired by Baxter Healthcare in 2011. Prism was a big success not only in terms of clinical achievement, but also financially for investors. During an interview with Ashton Tweed, Warren shared his insights from this experience, along with some key strategies needed for successful new drug development in today’s market.
Founded in 2004, Prism Pharmaceuticals was a specialty pharmaceutical company that developed and received FDA approval for multiple formulations of the antiarrhythmic agent Nexterone (amiodarone HCl). Amiodarone was a lifesaving drug that had been around for decades, according to Warren. To get the drug into its original soluble, injectable form, however, required toxic solvents that had associated adverse effects.
Warren and his colleagues at Prism Pharmaceuticals licensed a novel technology that could formulate amiodarone without these toxic solvents. Observations they made in early studies also showed that this new formulation was much more stable than anticipated and that led them to develop Nexterone in ready-to-use, premixed intravenous bag formulations. “In the acute setting of a cardiac arrest, seconds count,” Warren explains. “So having this lifesaving drug available as ready-to-use was transformational to the market.”
According to Warren, the essence of starting a new pharmaceutical company is to solve a problem – either an existing problem with a drug currently on the market or with a new drug to solve problems that other drugs can’t. “The clinical need comes first,” says Warren, adding, “It should always come first.” But he asserts that just having a clinical need is not enough in this market and going forward. Any new drug must also have significant advantages over the current drugs it’s going to compete with or replace; and the definition of what is significant must be made by the customers for the product. “Incrementalism is dead,” Warren observes. “In other words, small improvements in a drug won’t excite the market.”
As an example, consider the market for new drugs to treat high blood pressure. Among all the drugs currently available, Warren notes, approximately 80% of prescriptions are now filled with generics. So a company developing a new drug to control high blood pressure must prove its value is meaningfully better, in the eyes of the customer, than the drugs that are already out there to have any chance of succeeding commercially in the market.
Within weeks prior to launching Nexterone, Prism Pharmaceuticals was acquired by Baxter Healthcare. “This is very reflective of where the market is today,” Warren observes. “It’s a buyer’s market – buyers can now afford to wait.” So when it comes to launching a new pharmaceutical company, Warren recommends, “You have to think about the end game up front.” In other words, you have to look at it from an investor’s point of view: If I invest in this company, who will buy it and when?
While the people building new pharmaceutical companies are primarily focused on the clinical needs of the market, investors – who are managing other people’s money – are concerned with tracking the company’s performance towards an exit. The individuals who are building new drug companies and those who are investing in the companies have different roles, Warren points out, yet they both need each other to succeed.
To help ensure success, Warren advises focusing on the commercial value of a new drug early on by talking with relevant stakeholders in the market. These stakeholders include the physicians who will be prescribing the drug, as well as the healthcare payers who will be footing the bill. Warren’s experience with Prism Pharmaceuticals provides a perfect example. From the start, the company sought input from their “customers” as they planned to use new technology to remove the toxic solvents from the soluble form of the drug. Then, when Warren and his colleagues realized the new product was stable, they considered marketing it in ready-to-use formulations – which got a “wow reaction” from the customers they talked to. On a scale of 1 to 10, he exemplifies, the clinical aspects of the new drug got a 5. The ready-to-use formulations, however, got a “12 out of 10.”
So the strategy shifted to developing Nexterone in ready-to-use formulations. Warren admits that he and his colleagues at Prism might not have realized the potential impact of the ready-to-use formulations if they hadn’t been “constantly checking in” with their customers, which in this instance were primarily hospital pharmacists in addition to physicians. “It’s important to keep in mind that academic, thought leading physicians are not always a good substitute for people who are actually preparing the drug or responsible for its reimbursement,” Warren observes.
As he currently works on a new venture in the cardiovascular market, Warren is applying the lessons he garnered from his experience with Prism Pharmaceuticals. He plans to set up the company again on a similar scale, or maybe even smaller – there were about 10 core team members at Prism’s peak of employment, and the clinical and manufacturing operations were outsourced. And this time, he’s being even more diligent about taking the commercial view up front in product development.
Ashton Tweed would like to thank Dr. Warren Cooper for this interview. If your company needs help from members of the Ashton Tweed Life Sciences Executive Talent Bank, we can supply that assistance either on an interim or a permanent basis. Additionally, if you are among the many life sciences professionals affected by the changes in the industry, Ashton Tweed can help you find the right placement opportunity — from product discovery through commercialization at leading life sciences companies — including interim executive positions and full-time placements. In either case, please email Ashton Tweed or call us at 610-725-0290. Ashton Tweed is pleased to continue to present insightful articles of interest to the industry.