Sun Pharma buys Ranbaxy to create generics giant

Sun Pharma will buy Ranbaxy in an all-stock deal valued at $3.2 billion, Daiichi Sankyo will become Sun’s second-largest shareholder.

Sun Pharmaceutical Industries Ltd, India’s biggest drug maker by market value, has agreed to acquire Ranbaxy Laboratories Ltd, controlled by Japan’s Daiichi Sankyo Co. Ltd, in an all-stock deal worth $3.2 billion that will create the world’s fifth largest generics (or off-patent) drugs company by revenue and India’s largest pharma firm by market share.

The deal, which will also see Sun assume $800 million of debt on Ranbaxy’s books, needs shareholder and regulatory clearances.

For Daiichi, the deal is a continuation of its bet on the Indian generics market, one it has been unable to translate into profits, with Ranbaxy, in which it holds a 68% stake, running into trouble with the US Food and Drug Administration (FDA). The US regulator has banned imports from all of Ranbaxy’s manufacturing plants into the US.

Sun too has run into some trouble with FDA (imports from one of its plants in Gujarat to the US have been banned), but the impact of this is marginal.

Under the transaction, expected to be completed by this year’s end, shareholders of Ranbaxy will receive four shares of Sun Pharma for every five they hold. Daiichi will become the second-largest shareholder in Sun Pharma with around 8.9% stake.

The share-swap ratio values Ranbaxy at Rs.457 per share, a premium of 18% to the company’s 30-day volume-weighted average share price and an increase of 24.3% to its 60-day volume-weighted average share price as on Friday, 4 April.

On Monday, Sun Pharma shares gained 2.68% to Rs.587.25 on the BSE while Ranbaxy shares dropped 3.12% to Rs.445.20 on a day the benchmark Sensex ended little changed at 22,343.45 points. Last week, Ranbaxy shares gained 26%, the biggest rise since August, indicating that the market suspected a deal was in the works.

Daiichi Sankyo paid 61% more for Ranbaxy five years ago at Rs.737 rupees a share.

Citigroup Inc. advised Sun Pharma on the transaction and ICICI Securities Ltd was the adviser to Daiichi Sankyo. EY, the consulting firm formerly known as Ernst and Young, did the valuation.

The acquisition, the 14th since 1997 for Sun Pharma, controlled by billionaire Dilip Shanghvi, will allow the company to expand in countries where it hasn’t ventured so far and give it access to Ranbaxy’s product pipeline in the US and large distribution network in India.

“Ranbaxy has a significant presence in the Indian pharma market and in the US where it offers a broad portfolio of Andas (abbreviated new drug applications) and first-to-file opportunities,” said Shanghvi in a call with analysts.

“It provides a strong platform, which is highly complementary to Sun Pharma’s strengths. We see tremendous growth opportunities and are excited with the prospects to create lasting value for both our shareholders through a successful combination of our franchises,” he added.

The combination of Sun Pharma and Ranbaxy will have operations in 65 countries, 47 manufacturing facilities across five continents, and a significant platform of specialty and generic products marketed globally, including 629 new generic drug approvals in the US.

The combined entity’s revenues are estimated at $4.2 billion with an operating profit of $1.2 billion for the 12 months ended 31 December 2013.

“While we will be able to grow stronger in the US and Indian markets, Ranbaxy will also allow us to venture into high growth emerging markets like South Africa, Malaysia, Romania and Ukraine,” Shanghvi said.

Sun will stand to benefit from Ranbaxy’s distribution network as well.

“Our distribution network is not as strong as Ranbaxy’s which has a strong reach in the rural markets. We can leverage their distribution network and their strengths in over-the-counter drugs, chronic therapy and hospitalization products,” said Shanghvi.

The deal has been approved by the boards of both the companies and Daiichi Sankyo.

Sun Pharma said it has to obtain approvals for the deal from the central government, state governments, high courts of Gujarat, Punjab and Haryana, the Competition Commission of India and antitrust bodies in the US.

Genisphere and MultiCell Partner to Deliver miRNA Therapeutic using Dendrimers

Genisphere and MultiCell Technologies established a collaboration through which they will  investigate the use of Genisphere’s patented 3DNA® Dendrimer nanoparticle drug delivery technology to enable the targeted delivery of MultiCell’s MCT-485 candidate to liver tumours. MCT-485 is a noncoding double stranded micro RNA (miRNA) that has demonstrated oncolytic and immune stimulating activity in in vitro models of hepatocellular carcinoma.

Genisphere’s 3DNA® Dendrimers are made from systematically assembled DNA strands. The firm is exploiting the technology to improve sensitivity in immunoassay and nucleic acid detection platforms, as well as to deliver therapeutics in a highly specific manner.

Clinical-stage biopharma Multicell’s lead drug candidate, MCT-125, is an oral small molecule drug combination which targets the noradrenaline-adrenaline neurotransmitter pathway for the treatment of primary multiple sclerosis-related fatigue (PMSF).  MCT-125 has demonstrated efficacy in a 138 patient Phase IIa clinical trial for the treatment of PMSF.

MCT-485 is cytotoxic agent, and the first in a family of cancer therapeutic candidates based on MultiCell’s TLR3 signalling technology.  The candidate acts by directly inducing tumour cell death, and triggering production of TNF-alpha by cancer cells, amplifying  both apoptotic effects and triggering a localized immune reaction that has the potential to generalize and curb progression of metastatic cancer, the firm claims.

MCT-485, along with MCT-465 and MCT-475 and are based on MultiCell’s therapeutic antibody and synthetic dsRNA technologies. The immune enhancer MCT-465  is indicated as an cancer adjuvant therapy alone or combined with currently available or novel therapies. MCT-465 can also be used with our MCT-475 antibody therapeutic for the treatment of cancers including breast carcinoma. MCT-485  is a novel synthetic dsRNA with therapeutic properties distinct from those of MCT-465, and is indicated for the treatment of certain cancers. MCT-465 is in early-stage preclinical development, and MCT-475 and MCT-485 are in the discovery optimization stage of development.

High-Fidelity PCR Reagents Continue to Propel DNA Research with Unparalleled Accuracy and Speed

New proprietary tracking dyes within high-fidelity DNA polymerase and qPCR master mixes facilitate easier, more accurate PCR set-up for researchers.  The Thermo Scientific Phusion Green High-Fidelity DNA Polymerase and Luminaris Color qPCR master mixes utilize proprietary tracking dyes to speed up the pipetting process. By providing a visual confirmation, the mixes are designed to vastly reduce the chance of human error, while also decreasing the number of procedural steps required. Most importantly, the dyes have been engineered not to interfere with the reaction or any downstream applications.

These new Phusion and Luminaris products form the latest additions to the renowned Thermo Scientific Phusion High-Fidelity DNA Polymerase family. First launched a decade ago, the Phusion High-Fidelity DNA Polymerase was the first DNA polymerase, developed using fusion protein technology to provide a combination of accuracy and speed previously unattainable using conventional enzymes.  Known for performance with all major PCR applications, the Phusion technology has played a central role in helping researchers accomplish an array of key scientific achievements, including the creation of the first functional synthetic genome.

“Phusion Polymerase technology has dramatically increased the productivity of labs running PCR,” says Margarita Leckiene, Director of Nucleic Acid Detection & Molecular Tools for Thermo Fisher Scientific. “Our philosophy is to simplify customer workflows further and increase the reproducibility of results. We are constantly working to further advance the accuracy and robustness of Phusion polymerase including the most recent innovation of special enzyme formulations that are optimized for NGS applications, offering equal amplification efficiency across entire genomes.”

This technology, coupled with Thermo Scientific PCR instruments and accessories such as theThermo Scientific Arktik Thermal Cycler and Thermo Scientific Piko Plate Illuminator, provides an efficient integrated solution that delivers

• DNA amplification with extreme accuracy
• Enhanced visual control
• Significantly shorter protocol times.

To recognize the impact of the original Phusion polymerase and a subsequent decade of innovation in this area, Thermo Fisher has launched Phusion Fest, an interactive campaign celebrating the importance of PCR in the laboratory. Phusion Fest encompasses a fun, scientific trivia game, special offers across a variety of molecular biology products and free samples of selected Phusion products.  More information on Phusion Polymerases and the Phusion Fest can be found by visitingwww.thermoscientific.com/phusion.

The Future of Drug Discovery: Two Required Supplements to Current Practices

A massive restructuring is currently taking place within pharmaceutical industry drug discovery sector.  Consequently, we suggest that phenotypic screening and drug repositioning will need to be increasingly utilized to uncover new therapeutics.

A convergence of forces in the pharmaceutical/biopharmaceutical industry continues to drive rapid rates of business restructuring in 2013. Although US regulatory policy issues, healthcare costs, globalization and other forces all contribute to this morphogenesis, the patent cliff that we are working through now has been a tremendous contributor as roughly $100 billion in sales have or will go off patent from 2010 to 2014. This massive loss in pharmaceutical companies’ top line is naturally flowing down to an array of cost-cutting measures in the industry, but drug discovery R&D is the true “canary in the coal mine.”

Since 2000, the pharmaceutical industry has eliminated about 300,000 jobs — as many people as currently work at the three largest drug makers (Pfizer, Merck and GSK) — combined.1 A significant portion of these are chemists, biologists and other scientists who participated in drug discovery. Large portions of R&D process have been outsourced to third-party, offshore contractors, raising criticism that true innovation, vital for drug discovery, is being significantly compromised.2 And although some have argued that drug discovery will increasingly shift into small to mid-sized biotechnology companies, and even academia, these sectors are also reeling from disruptions in the venture capital markets and pressures on the federal budget.

Phenotypic Screening

These disruptions and the restructuring of drug discovery across the industry have not significantly affected later stage, clinical programmes, as observed in rates of new drug application (NDA) fillings and new drug approvals, which have remained relatively stable (and even improved) in the last few years. It seems, however, quite likely that a day of reckoning is lurking on the horizon when opportunities for new drug candidates may begin to dry up. As a consequence, the industry has become very pragmatic about cost-effective strategies to drug discovery. Our experience indicates that strategic approaches such as phenotypic screening and drug repositioning will continue to be increasingly adopted in this new cost-effectiveness driven era of drug discovery.

The first of these strategies, phenotypic screening, can be viewed either as a departure or a complement to our existing standard paradigm for drug discovery — the target-based medicinal chemistry approach that runs central to all pharma R&D operations and has done since the 1980s and 1990s. The current approach, in a reductionist way of thinking, relies on our current understanding about biochemical pathways and their relationship to disease processes.

Literature Occurrences of Phenotypic Screening

Hypotheses are developed as to what enzyme or receptor should be modulated (inhibited or activated) to effect a positive outcome on a disease process. By contrast, phenotypic screening is, by its nature, not hypothesis-based, but instead is an empirical approach that relies upon observations of drug candidate activity in a system, such as an animal model of a disease process, independent of any initial hypothesis of why or how that candidate may be therapeutic towards the disease. One can make the argument, as have many pundits who have commented on the productivity gap in the pharmaceutical industry, that given the extreme complexity of biochemical pathways within intact higher organisms, that our hypotheses are too often wrong and the cost of testing them is too expensive leading to higher and higher R&D investments without concomitant productivity.3–5

The seminal publication by Swinney and Anthony showed, that despite an industry essentially focused on new drug discovery using the target-based approach, most first-in-class small molecule drugs were discovered by phenotypic screening.6 A possible criticism of phenotypic screening is that it will discover off-target effects that then need to be followed-up through additional hypothesis-based research. Based on our own mechanism of agnostic phenotypic screening of more than 200 drugs, we strongly believe that most (75–90%) of new biology uncovered by phenotypic screening is driven by on-target effects.7 An unbiased phenotypic screen is far more likely to uncover unexpected biology for a known mechanism than it is to discover new biology because of an off-target effect. Some companies such as Eli Lilly have been pursuing phenotypic drugs for close to a decade as a complement to mechanism/target-based drug discovery. Nevertheless, in our opinion, there is considerable opportunity to incorporate an increased balance of phenotypic to mechanistic screening in drug discovery. The barriers to increased phenotypic screening are partially the cultural familiarity with the mechanistic approach and in the case of cell-based assays the technical challenges of incorporating high-density data readouts into higher throughput assays.

Drug Repositioning

The second strategic element that is increasingly being adopted to increase cost-effective drug discovery is drug repositioning. It turns out that the famous words of Sir James Black: “The most fruitful basis for the discovery of a new drug is to start with an old drug” has a sound biological rationale that Black could not have fully appreciated at the time. From the point of view of molecular evolution, we now know that nature ‘recycles’ protein motifs again and again, and for this reason the chemical universe of biologically active compounds is characterized by dense spaces of hotspots with vast amounts of chemistry space that is biologically empty.8

Literature Occurences of Drug Repositioning

Although this finding is useful for medicinal chemists seeking to design new chemical entities, it also has a corollary, namely that compounds designed for one therapeutic area often have therapeutic benefit in other areas. In fact, it turns out that about 30% of approved drugs are labelled for indications other than the indication for which they were originally developed.9  Moreover a Thomson-Reuters Integrity database analysis shows that a drug in development for a single indication is the exception and that pursuit of multiple indications is the rule.10

Identifying new drug candidates from within the existing pharmacopeia (drug repositioning) has the well-recognized benefits of short cutting development, and thereby significantly reducing costs, by virtue of utilizing pre-existing preclinical and clinical drug development data. In most cases the first clinical studies for a new candidate can be in disease patients thereby obviating the time, expense and risk associated with Phase I studies. Although composition-of-matter patents typically are unavailable to provide exclusivity for repositioned candidates chosen from previously studied drugs, method-of-use patents, in many contexts, can be as rigorous (for compounds that have never had market approval). Also, with the lower costs to market it can be the case with many therapeutic product opportunities that the required commercialization thresholds may be met with the 5 years of data exclusivity available in the US and 10 years available in Europe through Trade-Related Aspects of Intellectual Property Rights (TRIPs) (again applies to compounds that have never had market approval).11 At a recent Washington DC drug repositioning conference there was audience unanimity that increasing the data exclusivity period was the single event most likely to enhance the drug repositioning field.

Has Digital Finally Come of Age for Pharma?

Pharma can’t really afford not to go digital. With ever-increasing healthcare practitioner (HCP) and patient usage of digital technology, the ‘norm’ for marketing and communications must completely change. Digital should take the lead role, argues John Hackney.

The proliferation of mobile device and computer usage by HCPs and patients, and therefore the need for pharma to leverage digital channels, is growing exponentially. Manhattan Research recently found that 26% of European doctors own an iPad, and they spend more than a quarter of their professional online time on that device. The same research also found that iPad-owning doctors use desktop and laptop computers for 55% of their professional Internet use, and smartphones 18% of the time. By the time you read this, the data will have increased even more!

Pharma brands and companies have adopted some types of technology and digital communications, largely in a tactical way. For the most part, pharma hasn’t kept up with its users’ needs. Digital communications are still under-used for HCP campaigns, patient disease awareness and patient compliance. Digital is still secondary, or ‘in addition to,’ rather than ‘instead of,’ offline marketing.

The Digital Reality

Customer needs, digital communications, social networks, media channels, targeting, and opportunities for pharma brands have developed sufficiently in recent times so that a brand can be launched, built, repositioned, and sustained almost entirely using digital channels. Non-digital communications would have a minor supporting sales collateral role.

Before I receive an onslaught of comments along the lines of “yes but regulations means our hands are tied when it comes to digital,” of course there will always be regulations challenges. Approvals take time, and you need to plan accordingly, but they’re not insurmountable. Bring in your legal and medical teams from the outset of any communications programme development, so they become active stakeholders. Get everyone to agree the ‘rules of engagement.’ Plus you can use the time it takes for approvals to your benefit. Your media planner and buyer has time to become a master in creating great relationships and deals with digital media owners in the run up to your campaign going live.

Can pharma really afford not to do go digital? Reaching HCPs and patients online can be around 10% of the cost of doing it non-digitally, from a cost per thousand impressions perspective. Plus high quality open source content management system (CMS) platforms and other software/production techniques mean you don’t have to spend lots of cash building stuff. Instead you can spend money where it counts — reaching and engaging with your audience.

Not only can you move virtually all of your marketing communications online, you’ve also got the potential to do most of your sales support online. Closed loop marketing (CLM) continues to make leaps and bounds from a technological perspective. Your sales force becomes more effective when in front of customers and, more importantly, when they aren’t. It allows customers to engage with the company or brand when they want, accessing what they feel they need. Self (remote) detailing, co-browsing, web-ex, dynamic (intelligent) CMS — all mean that the relationship between customer and company can be rich, fulfilling and one‑to‑one, even on a remote basis.

Digital is virtually limitless in how it can and will be used. For example, we’re developing apps for patient tracking, dosage converters, and other tasks to support and encourage patient compliance. Creating virtual circles between patient disease awareness and HCP education through digital channels is also a growing trend. You tell patients what to look out for, they go to their doctor, you make sure that the doctor is armed with all the information that they need to answer patient questions, and to provide better diagnosis and patient care. Still unconvinced? Here are a few examples of recent campaigns run almost entirely online.

Blockbuster Loss of Exclusivity Campaign

A category-leading blockbuster brand nearing loss of exclusivity (LOE) needed to maintain prescribing behaviour amongst frontline GPs and specialists. Switching from an almost exclusively offline approach, the lion’s share of marketing activity was put behind a multimarket digital marketing programme aimed at relevant HCPs. The aims? To ensure they were fully aware of the benefits of this brand versus future generics on an ongoing basis, and to keep existing prescribers post LOE.

The campaign included a website ‘destination’ with pertinent ‘hooks’ and hard-hitting promotional messages to encourage site exploration and return visits; more detailed content for those that required greater substantiation; highly targeted and adaptable regional and local drive-to-site banner ad campaigns featuring interactive surveys and games, and the use of quick response (QR) codes. The digital media buying strategy meant messages were constantly put in front of the right HCPs for a sustained period of time. Those that wanted to know more were directed to an engaging, content-rich website, giving them the power to access as much information as they felt they needed.

This £1.5-million campaign, including media buying, resulted in a phenomenal 0.5% click through rate via more than 120 banners in nine languages across 11 European countries — that’s around 16 million online impressions during 6 months. The average targeted HCP was exposed to the messaging around 340 times throughout the campaign. The website also had an incredibly low 60% bounce rate.

Now take a moment to consider the creative and media buying cost implications to have such a targeted, yet widespread reach. Can you imagine the cost of 120+ ads in nine languages across 11 countries if they were done as print ads? And how many HCPs would have really paid attention to print ads? Not to mention the fact there’s really no way to measure print ads’ response rate and then revise your campaign messaging and media ‘on the fly’ — a critical aspect of the digital campaign.

Patient Education Campaign Goes Digital

A major pharma company is completely replacing its pan-European television and press patient education advertising campaign with an online marketing and communications programme. The programme is aimed at consumers and is entirely educational — designed to get people who have regularly tried and failed to quit smoking to go to their GPs for help.

Going digital means they can have a proper, highly targeted customer relationship management (CRM) programme for the first time. For example, targeting people via Facebook who are coming up to their thirtieth or fortieth birthdays, people who have just got married, who are changing jobs, or in a new relationship. All of these are considered to be ‘smoking cessation’ triggers.

Then relevant messages are put in front of these people, driving them to a dynamic CRM website, which users ‘opt in’ to. By tracking signed up users, they can regularly send personalized emails based on what people do or don’t do on the site. Ultimately, this is about taking people on a whole journey, from initial awareness through to setting a doctor’s appointment.

This digital programme enables the pharma company to set key performance indicators and benchmarks, and then track and manage the performance of the campaign and messaging in real time to ensure that the objectives are being met. They can weed out messages that don’t work well, or refine site content and the user experience to optimize the programme.

Now consider an offline campaign. This would need to play out in its entirety before you’re able to gauge how well it’s performed. Not only this, but you’re severely limited in the type of tracking that can be done.

Fishing Where the Fish Are

This isn’t about a prescription drug, but it’s an interesting healthcare brand story. SASMAR’s Conceive Plus is a vaginal fertility lubricant designed to assist the path to getting pregnant naturally.

The brand is currently undergoing a complete relaunch to raise awareness amongst a broader target audience in the UK, and it is all being done digitally. SASMAR knows that its prospective customers are highly active in the digital world, visiting online sources of information to improve their knowledge. So logic dictates a focus on digital.

The campaign includes a new content-rich website, with drive-to-site and viral media campaigns aimed at women and couples who are trying to conceive, via search, display, and online PR. Forming the cornerstone of an important social media presence, a Facebook page sends out relevant news and content, and engages in two-way conversation with users. The result is an integrated and enhanced online presence that connects with target customers, guides them through the decision-making process, creates awareness, comprehension, and desire, stimulates and facilitates brand purchase, and engenders brand advocates to spread the message and virally generate incremental sales. SASMAR is able to target all women who potentially want to try to improve their chances of getting pregnant because they’re both reachable and identifiable in the digital world.

There are very few things that pharma companies and brands cannot achieve online in a sales, marketing, or marketing communications sense. Clearly you have to work within the regulations, use digital channels appropriately and understand how to protect yourself from adverse event reporting. But from CLM through to patient compliance and education, there’s virtually no part of a marketing communications campaign that can’t be run on a digital basis these days.

Inspiring Passionate Innovation in Pharma R&D

Transforming the efficiency of their research and development teams is crucial for big pharmaceutical companies these days and they are not alone. Businesses across the board, from banks to supermarkets to telcos, are looking at how their creative engines can deliver more for less. Matt Kingdon and Jon Platt from ?What If! suggest how Big Pharma can learn from their example.

Pharmaceutical R&D teams are facing urgent challenges. Their big brands are tumbling over the ‘patent cliff,’ and the increasing burden of costs on governments and individuals to pay for the

Too often the chosen remedy is a contradictory mix of cost cutting and exhortations to up the output of successful new drugs. This may be painful to hear, but most R&D teams we’ve worked with are comprised of people who are risk averse and analytical, not entrepreneurs. It’s unsurprising to find low morale lurking in these organizations.health care of an ageing generation is hobbling the launch of new drugs. Forced to stretch their budgets across the demands of older populations, health services and regulators are demanding greater differentiation in new products. It’s no longer enough for a new drug to be marginally more effective. It must offer entirely different benefits or radically better results to win approval and command a price premium, and very few can meet the standard.

The crisis has promoted radical new ways of developing drugs, such as GSK’s Discovery Performance Units, which kept innovation in-house but inspired employees to think like entrepreneurs by regularly making them seek funding. But radical solutions take time to take hold. The good news is that many complex, regulated businesses outside of healthcare have increased the efficiency of their innovation engines, and many have implemented hundreds of subtle, inexpensive changes that aggregate to a wholesale change in culture. If pharma R&D teams take a look at these practices and experiment with how they work,

The single most important driver of innovation is passion. It’s a desire to do a great job, to make your customer happy, or to right a wrong. A small team joined with a similar passion is awesome to behold. Sadly, many of us don’t get enough of that at work. Here are three strategies for developing passion in pharma R&D teams.they too can become more agile and productive, even with fewer people and resources.

The Whites of Their Eyes

In the 90s, many packaged goods companies got the insight bug. What had been called market research, a paper-heavy desk exercise, was replaced with hands-on executives who swapped PowerPoint for notepads, got out of the office, and saw how and why their consumers did what they did. They were shopping, eating, and even clubbing with their customers. This adventurous approach to seeing the whites of customers’ eyes was not restricted to marketing. Scientists and technicians left the lab for the living room, too. We have found this approach to be highly effective.

Here’s an example. A major, global pharmaceutical client of ours had received bad news. Its antidepressant drug had failed its stage-two clinical trials, a development with potentially fatal implications for share price. But what did ‘fail’ mean? Digging into the target product profile (TPP) revealed ambitious performance goals across key dimensions of efficacy, side effects, and tolerability. To be successful, this had to be a wonder drug. The scientists had been stuck in the lab too long. They were struggling to connect with the emotions that patients and their caregivers were experiencing.

We travelled across the US to meet people suffering from a wide range of depression. We met a musician whose guitars were covered with dust, a man who hadn’t been outdoors for years, and a painter who was hearing voices as we spoke to her. We met people who were young, old, who had care, and who had no one to turn to. This experience was moving, even for scientists who had studied depression for years.

What the scientists took away from their trip was how crippling the side effects of antidepressants could be. They had read about this, but not witnessed it. One teenage sufferer had told them that full remission wasn’t worth it if she gained weight, stopped sleeping and sweated all day. The TPP demanded efficacy above all else. Patients wanted a more balanced approach.

The scientists went back to the lab and amended the TPP. They rebalanced what they were looking for: a drug with a slightly lower performance measure and less intrusive side effects. And guess what? They already had the molecules to deliver against that TPP. The road trip paid off. The scientists didn’t have to start from scratch, slashing development time by several years—a turn of events predicted to save the company more than $1billion.

Stop Being Sensible and Serious

Most people in business apply an abundance of analysis, objectivity, and skepticism to new ideas. We call these ‘reductive’ behaviours. Because their cultures are based on the scientific discipline of clinical trials, pharma companies are thronged with reductive thinking ninjas. In innovation, reductive thinking is vital when applying commercial judgments to emerging solutions. But without ‘expansive’ thinking, those new solutions will be strangled at birth.

Expansive thinking is what a child does when you give him or her a gift in a box, and they spend the next week ignoring the gift and turning the box into a car or a house. It’s thinking that seeks multiple possibilities rather than one right answer. It’s based on playfulness and positivity: an agreement to build on each others’ ideas rather than knock them down. Since we were all children once, we can rediscover how to think expansively with a bit of practice.

The trick to expansive and reductive thinking (and, therein, the secret to effective collaboration) is to make sure that, when solving a problem, your team knows it’s either thinking expansively and generating solutions or that it’s time to think reductively and move into choosing mode. You’re avoiding situations where these behaviours get mixed up. We’ve all been in meetings where somebody has suggested an idea, and five helpful souls have told him what’s wrong with it in the same moment. And we’ve all been in meetings where you’re trying to make a choice, but others want to open up the discussion to new ideas.

A term called ‘signalling’ is used in our innovation training. It means acquiring the habit of letting those around you know if you need expansive or reductive thinking at that point. Consider a typical exchange:

Scientist A: ‘Hey, why don’t we create a website and release our challenges and data for the world to work on – an open innovation programme.’

Scientist B (raises eyes to heaven): ‘Hmm, we tried that, and it didn’t work.’

This isn’t a healthy dialogue. Now let’s ‘signal’:

Scientist A: ‘Hey, I’ve got an idea, but it’s only half-formed. Can you help me build it? Why don’t we create a website and release our challenges and data for the world to work on – an open innovation programme.’

Scientist B (realising an expansive response has been requested): ‘OK, let’s explore. We could do that, but we’ve not had a lot of luck. Your idea makes me think we should hold a conference and invite a small number of leading researchers to collaborate. Now there’s an idea I hadn’t thought of!’

Introducing planned expansive and reductive thinking to pharma R&D teams, managed with clear signaling, transforms a team’s ability to collaborate and innovate.

Science Fiction, Not Science Fact

One of the biggest challenges facing pharma R&D leaders is knowing where to place strategic bets that won’t pay off for 10 to 20 years. Smart organizations are learning that approaches they used to rely on for future-scenario development don’t work anymore. They have to think like science fiction writers, not rational analysts, and develop scenarios to place bets that are leaps ahead of what the competition is seeing.

To ensure the bets they place are smart, we developed an approach called ‘foresight.’ It marries future certainties, such as demographic change, with collaborative imagining events to produce scenarios with a 10-20-year horizon.

Recently we used this approach for a major fuels and lubricants manufacturer. We sought to broaden the question beyond current paradigms, engaging experts and academics outside the category. In this case, the usual question might have been, ‘What’s the future of lubricating oils?’ But asking that question ensures that answers remain inside the current business model. So we asked, ‘What’s the future of mobility?’ We gathered anyone who had anything to say on the future of mobility. Our R&D scientists heard from travel writers, airline stewards, chauffeurs, people with restricted mobility, road planners, and even someone who claimed to have invented a teleportation device. Immersing themselves in a future world of possibilities in which their product or brand may play a role stretched the team’s thinking. The company is now allocating multi-million dollar investments in future mobility worlds that were not obvious at the outset.

We’ve mirrored this approach with other pharma R&D teams. In a recent exercise looking at compliance in respiratory medication, we flipped the challenge from ‘how to comply’ to ‘how to create desire.’ We introduced scientists to fashion and perfume houses, and they realised that the formulation development of, say, inhalers was less important than the aesthetics. This prompted a shift in investment away from formulation research and toward the development of cool-looking devices, which had shorter lead times and fewer regulatory hurdles.

Seeing the whites of patients’ eyes, signaling intent, and swapping sci-fact for sci-fi are simple, low cost, and even fun tools for injecting passion – and impact – into innovation.