Rapid Commercialization Strategies in Life Sciences

James Chi & Jeff Clark - Grom Associates, Inc.
Ed Sullivan - EnteGreat, Inc.
Rapid Commercialization Strategies
for Pharmaceutical and Biotech
Companies

[ DENISE MISSONAK
SAP POINT OF CONTACT
MEMBER SINCE: 1998

[ CHUCK WEBBER
ASUG INSTALLATION MEMBER
MEMBER SINCE:2008

[ MALCOM POULIN
ASUG ASSOCIATE MEMBER
MEMBER SINCE:1998

Key Learning Points

Understand the business drivers for
rapid commercialization in life science
Understand the benefits which rapid
commercialization provides for life
science companies
Develop insight into the challenges of
achieving rapid commercialization
Understand the proven pre-configured
solutions which Grom and Entegreat
have built to accelerate rapid
commercialization
Real Experience.
Real Advantage. •
Copyright © 2008 Grom Associates, Inc. and EnteGreat, Inc. All rights reserved.

Agenda

Introduction
Business Context and Success
Strategies for R&D / Commercialization
Rapid Commercialization Solution
Overview
Integrated Portfolio and Project
Management (IPPM)
Rapid Compliant Commercialization
Questions

Real Experience.
Real Advantage. •
Copyright © 2008 Grom Associates, Inc. and EnteGreat Inc. All rights reserved.

Company Overviews
GROM EnteGreat

Founded in 1982 Founded in 2000 - Mgmt team has
Privately held been working together since 1982
Leading provider of strategy, Privately held
integration, operation, and support Leading provider of supply chain &
services for complex business manufacturing systems consulting and
software solutions solution integration services
Full off-shore capabilities Extensive experience integrating
Fortune 2000 customers in life SAP with plant environments since
sciences & healthcare, consumer 1994
products, aerospace & defense, Fortune 500 customers in life
discrete manufacturing, and sciences, consumer products, pulp &
technology services paper, and specialty chemicals
SAP National Partner since 1994 Active roles in industry groups such
Other competencies include Oracle, as: ISA, MESA, Supply Chain Council,
Peoplesoft, JD Edwards, and Siebel. World Batch Forum, and APICS
~350+ consultants SAP NetWeaver certification
Independent and Unbiased Independent and Unbiased

Real Experience.
Real Advantage. •
EnteGreat, Inc. All rights reserved.

Rapid Commercialization
Business Context

Real Experience.
Real Advantage. •

The Pharmaceutical Industry is Under a Great
Deal of Pressure
The pharmaceutical environment is becoming more and more
challenging. Pharmaceutical companies are pressured to
deliver revenue and earnings growth under tough conditions.

External Market Dynamics Internal Industry Pressures
Ageing population will drive up Rising commercialization costs. The
utilization. The number of citizens over average cost of developing a new drug
age 65 is expected to double over the is over $800MM.
next 40 years. Declining R&D productivity. Number of
Chronic diseases, such as diabetes, are FDA approvals have remained flat over
projected to become more prevalent. past decade.
Increasing payer Influence and role of Shorter product exclusivity due to
government. increased competition from other
Diminishing willingness to pay premium branded and generic drugs.
prices for branded pharmaceuticals. Increased regulatory stringency
The share of generic drugs have tripled
over the past two decades.

Real Experience.
Real Advantage. •

For Pharmaceutical R&D, These are Bittersweet
Times
Creating Safe and Effective New Medicines
The Potential Has Never Been Greater
Exciting scientific advances offer greater
potential than ever before for discovering “…The next ten years will be seen as
a signal point of transition in health
new, more effective ways to fight disease care. Medicine will be transformed
from an instinctive art of alleviating
Wave of scientific advances and new symptoms to a science of
technologies have begun to change how personalized health care. The next
decade will be viewed by future
medicines are discovered. generations as the time when
treatments became preventative,
Growing knowledge of how diseases work predictive, and personalized…”
at the genetic and molecular levels has
opened up new drug targets Michael Leavitt
Secretary of Health and
Treatments based on an individual’s Human Services
genetic make-up show great promise to
improve health care
Pharmaceutical Research and Manufacturers of America,
Pharmaceutical Industry Profile 2007 (Washington, DC: PhRMA, March 2007)
Real Experience.
Real Advantage. •

Times (Continued)

Real Experience.
Real Advantage. •

Times (Continued)
Source: innovation.org

Real Experience.
Real Advantage. •

Big Pharmaceutical Companies Are Undergoing
Significant Changes to Adapt
Sample Big Pharma Corporate Strategy Map
Maximize shareholder value
Grow Develop R&D
Optimize cost Grow earnings
Financial revenue pipeline value

Become the Leader in delivering value to customers
Business Policy
Patients Payers Physicians
Customer Partners Stakeholders

Build effective and efficient business model
Internal Focus on key Rethink the way Rethink the way Establish a efficient
Process therapeutic we research and we commercialize and adaptive
Capabilities areas develop new drugs new drugs business model

Create a high performing organization
People &
Create high performance Develop transformational Develop the
Culture culture leaders capabilities to win

= Direct contribution by R&D = Focus of today’s
= Indirect contribution by R&D presentation
Real Experience.
Real Advantage. •

Rapid Development & Commercialization
Bottom Line Contributions
“…Drugs developed by the
fastest companies enjoyed as
much as a 17-month speed
advantage over average
performers and a 28.5 month
median development cycle and
a 7.1 month regulatory cycle
advantage over those of the
slowest companies…”
“…Fastest companies focus and
prioritize resources better and kill
projects sooner…Fastest
companies terminated 56% of
discontinued projects in Phase I
versus 36% for slowest
companies…” Tufts Center for the Study of Drug Development (CSDD),
Impact Report, Volume 8, Number 5, September/October 2006
Real Experience.
Real Advantage. •

Rapid Development & Commercialization
Bottom Line Contributions (Continued)

“…A one-day advantage
typically saves $37,000 in out-of-
pocket development costs and
nets an additional $1.1 million in
daily prescription revenue for an
average performing drug…”
“…Drugs developed by the
fastest companies saved $30
million in out-of-pocket
development costs and gained
$1.1 billion in incremental
prescription revenue each,
Tufts Center for the Study of Drug Development (CSDD),
compared to those of the slowest Impact Report, Volume 8, Number 5, September/October 2006

companies…”

Real Experience.
Real Advantage. •

Solution Overview

Real Experience.
Real Advantage. •

GROM Solution Portfolio for Life Sciences

Marketing & Rapid Compliant
Solutions
Industry

Field Sales Commercialization Manufacturing

Channel Supply Chain
Lean Manufacturing
Management Optimization

Validation and Quality Assurance
Industry

Threads
Specific

Regulatory Compliance

Data Migration and Data Governance
Methodology
Base GEM

Real Experience.
Real Advantage. •

Solution Overview – Rapid Commercialization
Solution


Portfolio R&D Project Specification Recipe Electronic
Management Management Management Management Filing
Components

Integrated Inventory And Internal
Product Manufacturing
Production Warehouse Production
Development Execution
Planning Management Ramp-up

Manufacturing Contract Mfg.
Clinical Trial Electronic Quality
Performance Production
Supply Chain Batch Record Management
Analysis Ramp-up
Value Levers

Faster Increased Personnel Lower NPDI
Increased Revenue Lower IT Costs
Time-to-Market Productivity Costs

Improved Capital Established
Improved Plant Increased Market Architecture
Planning and Process & Change
Utilization Share Simplification
Investment Control

= Areas with accelerated solutions

Real Experience.
Real Advantage. •

Solutions Featured in Today’s Presentation

Integrated Portfolio and Project Management

Rapid Compliant
Commercialization

Real Experience.
Real Advantage. •

Solution Review:
Integrated Portfolio and
Project Management (IPPM)

Real Experience.
Real Advantage. •

Portfolio And Project Management:
Why This Is An Important Topic
Tufts CSDD Outlook 2007 Report on Globalization & Outsourcing
“…The industry is stepping up its
use of global outsourcing practices
to speed development and reduce
associated costs...”
“…Growing clinical trials volume and
scope, are prompting drug sponsors to
increase their reliance on foreign
based investigators and patients…”
“…Many top pharmaceutical
companies project that, within two to
three years, up to 65% of their FDA-
regulated clinical trials will be
conducted abroad…”
“…Demand for CRO services is
expected to grow by 16% annually
over the next five years…”

Managing R&D activities across diverse and widely dispersed
teams is becoming an exceptionally difficult proposition…
Real Experience.
Real Advantage. •

Portfolio And Project Management
Competitive Advantages To be Gained
According to a benchmark
conducted by the Aberdeen
Group, Best-in-Class
performers enjoy significant
performance advantages
over their competitors,
including:
28% more likely to meet
product development cost
targets than the Industry
Average and over three-times
as likely as Laggard
companies
52% more likely to hit target
launch dates than the
Industry Average and 3.3- executed, it can provide
…But when well
times as likely asa Laggards competitive advantage
significant to
hit these targets
Real Experience.
Real Advantage. •

Portfolio And Project Management
Needed Capabilities and Enablers
Before a company can expect the full benefits of
globalization and outsourcing, it must develop the
necessary capabilities to enable global R&D collaboration.

Key Business Capabilities Key Technology Enablers
Standardized processes across global Integrated project, program, and
R&D chain for both internal and external resource management tools
resources Real-time, web-enabled, interactive
Centralized and secure access to collaboration tools
development data Product Lifecycle Management (PLM)
Formal project and program Product Data Management (PDM)
management methodologies
Formal review process that includes
external parties throughout development
process
Design performance / metrics formally
measured across global R&D chain

Real Experience.
Real Advantage. •

Integrated Portfolio & Project Mgt.
Solution Roadmap
IPPM
Maturity
Level

xRPM
OPTIMIZE Portfolio Portfolio Resource
Management Evaluations Management

PLM
MANAGE AND
COLLABORATE Recipe
cProjects cFolders
Management

Project System
Activity & Material Financial
Milestone Mgt Planning Planning Pre-Configured
Solution
Document Procurement Time
Management Activities Recording Offering
CONTROL
Capacity Production Budget
Evaluation Activities Control

Real Experience.
Real Advantage. •
Time

Project System Solution for R&D
Integrated Business Processes
Standardized R&D project WBS template
Labor activity processing – time entry through CATS
Experimental manufacturing activity processing –
integrated with existing planning processes
Consumption & procurement activity processing
Materials
Contract services
Document processing (with e-signature approval)
Cost Allocation
Automatic postings
Manually apportioned
Financial analysis
Budget control
Capacity evaluation & leveling
Please refer to the “supplementary reference materials” section
Real Experience.
Real Advantage. •
towards the back of this presentation for additional details

Pre-Configured R&D Project System Solution
Pre-defined R&D project WBS template
Integrated process design with materials management,
procurement, manufacturing, and finance
Pre-defined work centers roles
Baseline PS Module Configuration
Baseline SAP DMS Configuration (with e-signature activation)
Baseline SAP CATS Configuration
Baseline SAP PP Configuration (work center capacity
management)
Pre-defined SAP security profiles
Pre-Configured Solution Project Documentation
Business process flows
User / functional requirements specifications
Business process procedures
Unit / integration test scripts
End-user training materialssystem solution can save a
Our pre-configured R&D project
Real Experience. typical project up to 3 months in design and implementation
Real Advantage. •

Solution Review:
Rapid Compliant
Commercialization

Real Experience.
Real Advantage. •

Overall Business Objective
• Shorten the time and reduce the cost to move from clinical supply
manufacturing to scaled-up commercial manufacturing

Rapid Compliant
Commercialization
Accelerate

• Eliminate the “toss it over the wall” syndrome after approval

Early Late Over Early Improved
R&D Clinical Clinical The Commercial Commercial
Supply Supply Wall Supply Supply
?
Real Experience.
Real Advantage. •

Capability Requirements
According to a cross-industry analysis performed by the
Aberdeen Group*, the characteristics of a winning formula-
based product development strategy include:

Key Business Capabilities
Integrated Product Data Architecture - To support both production scaling and
regulatory requirements
Detailed Audit Trail – Throughout the entire material flow
Integration with Value Chain Participants – To enable quick and complete
reporting on all product and ingredient sourcing and distribution data
Demonstrated Regulatory Compliance – Proactive management brand integrity
and risks, fines, and fees associated with non-compliance. Inspire confidence with
regulatory agencies and speed up regulatory review cycles.
Speed and Access to all Relevant Product Data – Provide direct and immediate
access to regulatory compliance information to both production and product
development personnel.

Real Experience. * = “Formula-Based Product Development: Recipes for Compliance and Success”, Aberdeen Group, Nov. 2004
Real Advantage. •

The Business Benefits are Quantifiable

Areas of Average Business Improvement Across Maturities

IMPROVEMENT AREA BEST-IN-CLASS
Reduction in Product Costs 17.5%

Reduction in Engineering Change Orders Cycle Time 75%

Reduction in Design Cycles 25% - 35%

Reduction in Time-to-Volume Cycles 10% - 15%

Reduce Search Times / Improve Engineering 15% - 20%
Productivity
New Product Revenue as a % of Total Revenue 28%

Counterfeiting, Grey Market Cost Reduction 31%

New Product Costs as a % of Planned Product Costs 69%
Source: “The Design for Compliance Benchmark Report”, AberdeenGroup, September 2004

Real Experience.
Real Advantage. •

Solution Roadmap
Program Maturity
& Coverage

Leverage Infrastructure
DEPLOY and Accelerate Process
PROGRAM
Late Stage Inline Mfg. Contract Mfg.
Clinical Mfg. Site Site Site
Deployment Deployment Deployment
Integrated Supply
Chain Execution & Visibility

Implement PLM &
REALIZE AND ERP Solution Pilot
STABILIZE
ISA-88 Recipe Electronic Enforced
Manufacturing
Management Batch Record Compliance
Electronic Integrated CAPA / NCR
Planning and
Product Data Analytics Management

STANDARDIZE Establish Foundational
Capabilities Modular & Configurable
ISA-88-based Automated Solution Offering
Recipe ISA-95-based Compliance
Modeling Interoperability Processes
Standard Internal Mfg. External Mfg.
Solution Architecture Architecture
Architecture Assessment Assessment

Real Experience.
Time
Real Advantage. •

Solution Architecture Overview

mySAP PLM
Definition (in Late Stage Clinical & Commercialization)
SAP ERP Material Personnel Equipment Sequence of Work
Requirements Requirements Requirements Operations Procedures

SAP ERP 3rd Party Execution (in Late Stage Clinical & Commercialization)
Applications
Electronic
Shop Floor Material Personnel Equipment Sequence
NetWeaver Work
Systems Qualification Qualification Qualification Enforcement
Portal Instructions

SAP ERP

Documentation Optimization
NetWeaver
Portal Electronic Process Analytics KPIs
SAP xMII Batch Record
Real Experience.
Real Advantage. •

Conceptual Architecture

mySAP PLM

Manufacturing Assets
& Procedures Models
Using ISA-88

Applications
Electronic
Shop Floor Material Personnel Equipment Sequence
NetWeaver Work
Systems Qualification Qualification Qualification Enforcement
Portal Instructions
Segmentation Of Manufacturing Resource and Activity
Models Into Standard Formats Enables Application of
Uniform Policies and Procedures
SAP ERP

NetWeaver
Portal Electronic Process Analytics KPIs
Real Experience.
Real Advantage. •

Conceptual Architecture

mySAP PLM

21 CFR 211 21 CFR 58 21 CFR 600/610
(Pharmaceutical) (Labs) (Biological)

Applications
The Regulator’s Motivation and Intent As Expressed in
Electronic
NetWeaver Shop Floor Law, Additional Guidance, andSequence
Material Personnel Equipment
Work
Qualification Qualification Qualification Enforcement
Portal Systems Actual Assessments and Judgments Instructions

SAP ERP

NetWeaver Electronic
Portal Process Analytics KPIs
Real Experience.
Real Advantage. •

Solution Architecture

SAP NetWeaver
PLM APO BI

HR QM PM MM PP-PI
EBR
ERP

XI xMII ODA

ISA-95 Documents (B2MML + Evolving Part 4) OPC

3rd Party 3rd Party 3rd Party 3rd Party DCS / Historian /
HR LIMS EAM MES Batch SCADA

Real Experience.
Real Advantage. •

What is EnteGreat’s ?

Simply stated…
Compliant Manufacturing Framework® is a library of
proven best practices accelerators for executing
regulated manufacturing using SAP
Proven templates for defining manufacturing objects and
activities in a cGMP environment using industry standards
such as ISA-88 and ISA-95
Proven templates and examples for configuring and
implementing cGMP manufacturing applications
Proven content for US FDA/GAMP CSV documentation
Proven content for training and system documentation

CMF® provides materials that accelerate the development of an SAP-
based cGMP shop floor manufacturing execution environment
Real Experience.
Real Advantage. •

Accelerated Solution for Rapid Compliant
Commercialization – Benefits of using CMF®
By using the same Compliant Manufacturing Framework for late stage
clinical supply manufacturing that supports commercial
manufacturing, companies can achieve these added benefits:
Seamless transition for manufacturing systems
Instant integration into the supply chain
Eliminates re-engineering or revalidation
Ready to begin compliance work in commercial
production
CSVs and most documentation already in place
Facilitates efficient processing of post-approval
changes
Increases clinical supply manufacturing
efficiency
Rapid access to data for bi-directional exchange,
analysis, and continuous improvement
Real Experience.
Real Advantage. •

Schedule Acceleration: The Advantage

Typical Project Timeline Without CMF-based Prototyping

Proof Of
Concept

Pilot

Initial
Implementation

Deployment / Roll-Out

Real Experience.
Real Advantage. •


Typical Project Timeline Without CMF-based Prototyping

Proof Of
Concept
Schedule
Pilot
Compression
Opportunities
Initial
Implementation


Real Experience.
Real Advantage. •


Project Timeline With CMF-based Prototyping

Proof Of
Concept

Overall Schedule
Pilot Reduction and
Quicker Payback
Initial
Implementation


Real Experience.
Real Advantage. •

Business Benefits
Improved New Product Development & Introduction
• Faster product-to-market
• Standardized mechanism for product definition / data architecture
from Development to Commercialization
Improved Supply Chain Performance
• Increased responsiveness and flexibility
• Improved manufacturing reliability and performance against plan
Reduced Labor (Operations & Quality)
• Reduced effort to transform Clinical product definition data for
Commercialization
Improved Batch Review / Dispositioning & Product Release
• Elimination of “clerical” batch record errors via Electronic Batch
Record
• Exception-based electronic batch record review
Improved Quality and Compliance
• Compliant First-Time
• Supports top-down quality management (QSIT)
Drives Continuous Improvement
• Timely access to accurate, current, and complete mfg data
• Feedback from Commercialization to Development
• Direct bi-directional transfer of product / production data
Real Experience.
Real Advantage. •

Questions

We’ll gladly take additional questions
after today’s session.
Just stop by booth 1787 !!

Real Experience.
Real Advantage. •

Thank you for participating
Please remember to complete and return your
evaluation form following this session.
For ongoing education on this area of focus, visit the
Year-Round Community page at www.asug.com/yrc
James Chi
Grom Associates
908-483-2000 x253
jchi@grom.com

Jeff Clark
908-483-2000 x256
[SESSION CODE: 4400

jclark@grom.com

Edward Sullivan
EnteGreat, Inc.
412-523-2723
ed_sullivan@entegreat.com

Real Experience.
Real Advantage. •

Supplementary Reference
Materials:
Pre-Configured PS Solution
In Details

Real Experience.
Real Advantage. •

Project System Solution for R&D
Integrated Business Processes
Standardized R&D project WBS template
Labor activity processing – time entry through
CATS
Experimental manufacturing activity processing –
integrated with existing planning processes
Consumption & procurement activity processing
Materials
Contract services
Document processing (with e-signature
approval)
Cost Allocation
Automatic postings
Manually apportioned
Financial analysis
Real Experience.
Real Advantage. • Budget control

Pre-Configured PS Solution for R&D
Standardized R&D Project WBS Template

Real Experience.
Real Advantage. •


Project Structure Area

Details Area

Work list and
Template Area

Real Experience.
Real Advantage. •


Tabular View
Gantt Chart

Real Experience.
Real Advantage. •

Progress Analysis Report

Actual Remaining Planned
Delay
Work Work Work

Real Experience.
Real Advantage. •

Progress Analysis Report – Export to Excel

Real Experience.
Real Advantage. •

Labor Activity Processing
Labor Assignment & Planning

Personnel assignment

Real Experience.
Real Advantage. •

Time Entry Through CATS

Actual Work (Time)

Real Experience.
Real Advantage. •

Time Entry Approval

Approved Work Hours

Real Experience.
Real Advantage. •

Booking of Actual Labor Hours to Project

Approved Work Hours
Transferred to Project

Real Experience.
Real Advantage. •

Plan vs Actual Labor Hour & Cost Reporting
Costs

R&D Personnel Actual Plan
assigned to
Internal Activity

Real Experience.
Real Advantage. •

Experimental Manufacturing Activity Processing
BOM Assigned To Project Activity

BOM assigned to
Project Activity

Real Experience.
Real Advantage. •

Planned Order to Process Order Conversion

MRP result

Convert Planned Order
to Process Order

Real Experience.
Real Advantage. •

Assignment of WBS Number to Process Order

Costs
Plan Actual Variance

Process Order

Real Experience.
Real Advantage. •

Consumption & Procurement Activity Processing
Material Planning

Reservation
Material

Quantity

Real Experience.
Real Advantage. •

Material Consumption

Real Experience.
Real Advantage. •

Booking of Material Costs to Project

Costs

Real Experience.
Real Advantage. •

Planned vs Actual Material Cost Analysis
Across Projects
For All
Selected Project
Costs
Actual Plan Variance

P
R
O
J
E Raw Material Consumption
C
T

Real Experience.
Real Advantage. •

External Service Order Planning

Purchase
Requisition
Service Activity

Real Experience.
Real Advantage. •

Service Acceptance Through Entry Sheets

Real Experience.
Real Advantage. •

Booking of External Services to Project

Costs

Real Experience.
Real Advantage. •

External Services Analysis

Status Indicator

Real Experience.
Real Advantage. •

Document Processing
With e-Signature Approval

Document Status

Digital Signature

Real Experience.
Real Advantage. •

Document Processing
With e-Signature Approval

Document attached to
Project Activity

Real Experience.
Real Advantage. •

Cost Allocation
Manual Cost Apportionment to Project

Amount

‘R&D Generics’ ‘Travel & Enter…’ Project Root WBS
Cost Center Cost Element - Element
612000

Real Experience.
Real Advantage. •

Cost Allocation
Booking of Apportioned Costs to Project

Costs

612000 – Travel & Entertainment

Real Experience.
Real Advantage. •

Financial Analysis
Planned vs Actual Costs Analysis
Hierarchical View

Costs

Real Experience.
Real Advantage. •

Financial Analysis
Planned vs Actual Costs Analysis
Cost Element View

For Selected Project

Costs

Real Experience.
Real Advantage. •

Budget Control
Allocation of Budget to Project
WBS Element View

Planned Costs of Project

Budget allocated
WBS Element

Real Experience.
Real Advantage. •

Budget Control
Allocation of Budget to Project
Fiscal Period View

Budget allocated

Period Planned Costs of
Project

Real Experience.
Real Advantage. •

Budget Control
Message When Budget is Exceeded

Control Message When Project
Costs Exceeds Allocated Budget

Real Experience.
Real Advantage. •

Budget Control
Budget vs Actual Cost Analysis

Costs
Budget Actual Variance
For Selected
Project

Summary
– Year wise

Real Experience.
Real Advantage. •

Capacity Evaluation & Leveling
Resource Capacity Analysis
Capacity Planning

Overload

Capacity Evaluation

Real Experience.
Real Advantage. •

Rapid Commercialization Strategies in Life Sciences

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