BioPharma: Clinical Shift

To get a tactile sense of what will be required of biopharmaceutical leaders and enterprises over the next five years, IQ spoke with Catherine Owen Adams, who is the new CEO of Acadia pharmaceuticals, serves on the boards at several leading life science organizations, including AssistRX, and Agios Pharmaceuticals, and previously on the Executive committee of BIO—the world’s largest biotechnology organization, providing advocacy, business development and communications services for more than 1,200 members worldwide.  Ms. Owen Adams has over 25 years of global leadership in the pharmaceutical industry at Bristol Myers Squibb, Johnson & Johnson, and AstraZeneca. She has been recognized as a “Groundbreaking Woman” by MAKER, consecutively recognized as Next Gen FORTUNE Most Powerful Woman, honored as a Luminary for J&J at the Healthcare Businesswomen’s Association, and acknowledged as one of the Top 100 Executive Women by INvolve HERoes.

IQ: From your perspective, what are the top challenges biopharma executives and enterprises must contend with over the next five years, and why?

Ms. Owen Adams: I’d say there are three major challenges, although you could argue for more. The first one is health system reform. Globally, healthcare has long been a significant part of government spending, making up a large percentage of GDP. Since COVID, the focus on controlling healthcare costs has intensified. Governments worldwide are under pressure to manage spending after the financial strain caused by the pandemic, leading to new and unique measures.

In the U.S., for example, the Inflation Reduction Act is a big deal. For the first time, the government will negotiate prices for Medicare, starting with ten products whose prices have already been set, and continuing to focus on more each year. This will have a major impact moving forward. In Europe, the proposed Pharmaceutical Strategy will require companies to launch in all 27 EU member states within two years of the first launch. If they don’t, their exclusivity window will shrink from 10 years to eight. This creates a lot of pressure, especially in countries where launching and obtaining reimbursement is more difficult. On top of that, individual governments like Germany and Italy are revisiting their drug pricing policies, and countries like Japan and China are also tightening their regulations. So, there’s enormous pressure on global pharmaceutical pricing, tied closely with health system reform.

The second challenge is the personalization of medicine and communication. With the rise of digital technology, customers including physicians, payers and patients expect information from the pharma industry to be highly relevant and tailored to their specific needs. The old, broad-brush approach of simply reaching out to doctors with the same message is over. Now, engagement needs to be personalized, timely and relevant. In addition, medical treatments are becoming more personalized as well. For example, in fields like oncology, hematology, and immunology, we can now tailor treatments to individual patients. A good example is CAR T-cell therapy, where a patient’s cells are engineered to fight their specific cancer. Genomic testing ensures the right tumor variant is being targeted, and mRNA technology, as we saw with COVID-19 vaccines, is leading to more personalized approaches in medicine.

The third challenge, which is related to the first, but broader than that is the increasing cost pressures across the industry. With personalized treatments and new innovations, our entire business model needs to evolve. We’re now focused on working faster, to deliver medicines more efficiently. In research and development, we’re trying to accelerate patient recruitment for clinical trials, streamline those trials, and use AI to speed up the early stages of development.

In our commercial functions we are looking at tailored, highly segmented marketing communications driven by digital AI and analytics.. It used to take 15 to 20 years to get a product to market, but with the current pressures, we can’t accept that timeline anymore. Everything is accelerating as we strive to deliver innovation and life saving medication to the healthcare system.

IQ: One of the main drivers in healthcare reform is a push to control spending—yet the market is also moving toward personalized medicine and treatments, which seem expensive. From a biopharma perspective, are these two goals at odds? What does the right balance look like?

Ms. Owen Adams: That’s a great question, and in many ways, they do seem at odds. Personalized medicine typically involves biologic products that are more expensive to develop and manufacture. So, yes, the cost per treatment is higher. However, the benefit is that we can now better identify the patients who will actually benefit from these treatments.

In the past, we might have treated 100 patients with a drug that worked for only 60%, based on clinical trial results. With personalized medicine, we can focus on the patients who are most likely to respond, which reduces waste. So, while individual treatments may cost more, the overall expense to the healthcare system could actually decrease because we’re not spending money on ineffective treatments for the wrong patients.

At the same time, there are still broad treatments, like GLP-1 drugs for obesity, which aren’t personalized but have a wide-reaching societal impact. We’re balancing two approaches: one focused on new, broad treatments for widespread conditions and the other on highly targeted, personalized care.

IQ: When it comes to adapting strategies around healthcare reform, can you explain how budget reduction and spending control are impacting the industry?

Ms. Owen Adams: It’s difficult to pinpoint exactly where all the effects are because reforms like the Inflation Reduction Act (IRA) are having a huge impact across the entire U.S. healthcare system. As part of my previous involvement with BIO, representing a mix of small and large biotech companies lobbying in D.C., we’re trying to help legislators understand that pricing pressures can lead to profound unintended changes in R&D decisions, that adversely affect patients. R&D already takes years to bring a product through clinical trials and to market. With the government now setting prices for small molecules after nine years and large molecules after 13 years, companies are reevaluating which drugs to develop and prioritize. For example, suppose you have a lot of small molecules in early development. In that case, you might drop some of them because, especially in chronic diseases where uptake is generally slower, the window to get a return on investment is too short.

This is concerning in areas with high unmet medical needs. Small molecules, for instance, can cross the blood-brain barrier, which large molecules can’t. This makes small molecules crucial for potentially treating conditions like Alzheimer’s, Parkinson’s, and depression. Unfortunately, these new IRA driven time and pricing pressures are leading companies to rethink their development plans for these kinds of drugs, which is not the intended outcome of the policy. This could have profound impact on patients and future innovations.

It’s a tough situation, and big decisions are being made about how much time, effort, and money to invest in different programs. We’re also working to speed up development using AI and big data to make processes more efficient. However, overall, the pricing pressures and the shortened window to recoup investments are driving these changes in innovation strategy.

IQ: Is there a game-changer on the horizon that could transform the industry in the next five years?

Ms. Owen Adams: Absolutely. From a medical perspective, GLP-1s have been a great example of large population innovation, and similarly there’s lot of hope for Alzheimer’s treatments in the coming years. Several companies have promising Alzheimer’s drugs that could make a real difference for millions of patients.

In cardiovascular disease, there’s exciting progress, especially around a molecule called lipoprotein (a) which is linked to early cardiovascular deaths; here there are two or three treatments in development that could significantly reduce those risks.

Neurology and CNS are particularly exciting, beyond Alzheimers with Parkinson’s disease, schizophrenia and depression being major focuses for new mechanisms of action. Its gratifying to see major innovations in more rare disease and precision therapeutics, including gene therapy, biomarker driven oncology treatments and CAR-T therapies.

So, I feel very hopeful about future advancements coming, especially in areas with high unmet medical needs.

On the business side, the industry is evolving too. Companies are becoming more nimble and agile in how they develop products and go to market. Instead of large field teams, we’re seeing smaller, more targeted roles, with specialized roles providing personalized information to healthcare providers. This shift is making businesses leaner, more efficient, and likely more effective. So, while the pressures are real, they’re also driving positive change.

Another exciting area is the globalization of data. Being able to work with large healthcare systems to analyze their data, not just for the industry but for population health management, is incredibly powerful. Some countries, like those in the Nordics, are already using comprehensive medical records to track population health trends and develop solutions. While there are privacy concerns, this approach offers huge potential. The U.S. is a bit behind due to its fragmented healthcare system and inconsistent use of electronic medical records, but once that gap closes, the possibilities are exciting.

IQ: From a leadership perspective, what will be required of biotech executives over the next five years? How will they need to evolve their skills to meet upcoming challenges?

Ms. Owen Adams: You have to love and embrace change—there’s no way around it. There’s been a big shift in mindset.

Instead of resisting change, leaders now realize they need to move with it and evolve. The most successful leaders will be those ahead of the curve and able to adapt quickly. Leaders who are agile, intellectually curious, and not afraid to fail will thrive. I’d put that in the “fast-fail” category—try new things, and if they don’t work, learn quickly and move on. Positive failure is essential because the way we do business is evolving.

Resilience is also critical, especially in biotech. It can take years to bring a drug to market, so leaders need to stay committed, ensure proper funding, and be prepared for setbacks along the way. When things don’t go as planned, quick decision-making is key. So, overall, embracing change, seeing failure as a learning opportunity, staying resilient, and maintaining a positive outlook is crucial.

Most importantly, leaders need to inspire a positive vision of the future. While some of the challenges we face may seem daunting, there’s always a different way to approach them. Leaders who can turn headwinds into tailwinds and create a positive narrative around the changes we’re driving in healthcare will be successful. The old “command and control” style isn’t effective anymore. Now, more than ever, it’s about being a servant leader—staying positive, being in the trenches with your team during tough times, and leading from the front when needed. IQ

With over 25 years of pharmaceutical industry experience, James Mackay, PhD, is the founder and CEO of Kateran Consulting and is an independent board Member at ImmunoBrain, Privo Technologies, Curadh MTR, MatriSys Bioscience, CorHepta Pharmaceuticas and Venquis Therapeutics. Mr. Mackay’s expertise in the pharmaceutical industry including six drug product approvals across multiple therapeutic areas. Prior to Kateran Consulting, Mr. Mackay served as founder, president and CEO of Aristea Therapeutics. Additionallly, he served as president and CEO of Ardea Biosciences, Inc., following the company’s acquisition by AstraZeneca in 2012. Dr. Mackay was instrumental to setting up an innovative model for Ardea Biosciences that retained the biotech’s independence and accountability for the development of the gout franchise while also developing a synergistic and collaborative relationship with the parent company, AstraZeneca.

IQ: From your vantagepoint as a board director, what are the top challenges that you forsee biopharma companies having to contend with over the next five years?

Dr. Mackay: There are definitely some big shifts coming for the industry. First, I think artificial intelligence will have a major impact, and to be honest, I don’t think most of us are fully prepared to handle or even understand the changes it will bring. I’m happy to dive into that more because I have some thoughts on what we might need to focus on.

Secondly, the digitalization of clinical trials and drug delivery is another huge shift. I don’t believe we’re fully equipped yet to grasp the full impact of this either, and that could present challenges in terms of our ability to adapt and thrive over the next few years.

Third, having the right talent and leadership is going to be crucial. This has always been important, but with the rapid changes ahead—some of which we can’t even foresee right now—it becomes even more vital. Ensuring we have the right people in place to navigate those changes is key.

Finally, I’d highlight the geopolitical environment. While we can’t control it, we need to be aware of how it affects investor confidence. Over the past few years, we’ve seen how global events can make investors hesitant to fund biotech. We can’t force them to invest, but we can adapt, cut costs where needed, and act quickly to ensure our companies survive during those tough periods of reduced investment.

IQ: You mentioned investor confidence being an ongoing issue. What concerns do investors have?

Dr. Mackay: Well, I think we’re in a cycle that we’ve seen before. Investors got a bit too eager and poured money into companies, including some that probably weren’t ready to go public. That created a bubble, and when it burst, people lost money. On top of that, we’ve had high inflation and interest rates, which make investors more cautious. They know they can get a decent return in other ways, so they’re less willing to take risks in biotech.

That said, I believe the fundamentals in healthcare are still strong. Innovation in developing new drugs remains impressive, and with an aging population, the demand for treatments will only grow. Despite the economic challenges and pricing pressures, I think we’ll see investors returning to this space—it’s just going to take some time. Interest rate cuts will help, and we have just seen second of likely multiple cuts of the next few months.

Once investors start coming back, they’ll see the returns and be encouraged to invest more. But when it comes to geopolitical issues, that’s something we can’t control. We just have to be ready to adapt quickly when those challenges arise.

IQ: On the topic of AI, is it seen more as a tool to unlock innovation, or is it about driving efficiency and cutting costs? Or is it a mix of both?

Dr. Mackay: In the discovery space, AI is already being used to rapidly identify and screen molecules, which makes sense, and some companies are doing this really well.For example, I chair the Therapeutic Advisory Board for Enveda Bio, which uses AI to identify drugs from natural plant products. I’ve been impressed by how quickly they’re moving through the discovery phase—faster than I’ve ever seen before.

However, where we haven’t fully grasped AI’s potential yet is in drug development. I believe AI will completely transform how we conduct clinical trials, though I’m not entirely sure what that will look like. I expect AI to disrupt the entire trial process, with contract research organizations (CROs) likely leading this shift. AI will make trials faster and more efficient, and we’ll probably see more digital tools, such as wearables and ingestible sensors, collecting real-time data from inside the patient—something that seemed like science fiction when I was a kid.

AI and nanotechnology are on the verge of major breakthroughs, and they’re poised to create much more efficient ways to run clinical trials. The challenge for biotech leaders will be figuring out how to prepare for these changes and move beyond the traditional trial methods we’ve used for decades.

IQ: You serve on the boards of several biopharma and lifescience organizations. Can you share how companies within this space are adapting their corporate strategies to manage and mitigate risks and threats over the next five years?

Dr. Mackay: There’s a wide range of strategies in play. Interestingly, this is a topic I frequently discuss with peers throughout the industry. Some leaders are entirely focused on immediate challenges, such as securing funding to keep their companies afloat, and aren’t addressing these larger issues at all. On the other end, there are companies that are more forward-thinking and already planning for the future.The reality is that every company will eventually need to confront these concerns.

It won’t happen automatically as they grow; it will require boards and CEOs to invest significant time and effort into identifying both risks and opportunities. Those companies that take a proactive approach will be the ones that thrive, while those that wait too long may struggle to survive.

IQ: From a leadership perspective, what qualities will be required of board directors and corporate governors to support their organizations as they navigate the challenges ahead?

Dr. Mackay: The ability to embrace and adapt to change will be essential for board members. They need to work closely with their CEO to ensure their companies keep pace with evolving trends and innovations. It’s about understanding the shifts happening in the industry and moving with them. Boards that don’t actively engage with these changes will likely struggle to keep their organizations viable in the coming years.

Another important factor is that board members will need to grasp concepts that may be unfamiliar today—like artificial intelligence. I’ll admit, I don’t believe many people fully understand the potential impacts and results of AI-integrated platforms yet, but I know we need to. While most of us have a general understanding, it’s critical to dig deeper into its potential and risks. This requires ongoing effort and a willingness to welcome a new generation of leaders who can help guide us through these technological advancements. At the same time, we can share our experience with them, creating a two-way learning process that ensures AI is used both effectively and responsibly. IQ