How Do You Propel a Big, Complex Oncology Alliance Forward at Breakneck Speed? Very Carefully

Posted By Jon Lavietes, Friday, September 25, 2020

Lou Gerstner once asked, 'Who says elephants can't dance?' For the past year and a half AstraZeneca and Daiichi Sankyo have been making their pachyderm sprint like a cheetah. Last week, at the 2020 ASAP BioPharma Conference, Jonathan Bell, director of alliance and integration management at AstraZeneca, and Kenji Shigeta, vice president of DS-8201 strategy in the Global Brand Strategy Unit of Daiichi Sankyo, shared the story of their companies’ fast-moving collaboration around the cancer drug Enhertu (aka DS-8201) in a presentation titled “Executing the Biggest, Most Complex Oncology Alliance in Recent History—Learnings from the First 18 Months Together.”

The partnership has amassed impressive milestones to date. In what Shigeta termed a “speed marriage,” the two organizations announced their partnership in the spring of 2019, a mere five weeks after negotiations began in February. Shigeta also claimed that the $1.35 billion upfront payment and the subsequent $5.5 billion in milestones and other transactions represented the largest pharma deal for a single compound that has not been approved yet. The collaboration, which began with 17 programs, consisted of 43 initiatives by the time Shigeta spoke to ASAP members last week—“2.5 times larger in one year,” he said, highlighting the rapidly growing scale of the alliance.

High Response Rate: Powerful Early Results Drive Stakeholder Engagement

To move a collaboration of this magnitude forward in such a short timeframe, experienced pharma-industry observers might guess that the asset at the center could be truly special. They would be correct. Enhertu has demonstrated unprecedented efficacy in treating breast, lung, colorectal, and gastric cancers, and has already garnered national recognition in the United States—Shigeta told the audience that interviews with patients who attended the 2019 San Antonio Breast Cancer Symposium (SABCS) were syndicated over several CBS stations last December.

The win-win for both companies is clear. Daiichi Sankyo is relying on AstraZeneca to help commercialize the drug outside of Japan, particularly in the United States, United Kingdom, and China. AstraZeneca gets a cut of the profits of a “best-in-class therapy,” said Shigeta. As is often the case in pharma, stakeholders on both sides of the alliance are highly motivated by Enhertu’s promise. Shigeta relayed an anecdote detailing how the alliance team received 80 responses to a survey it issued to a mix of 100 employees from both companies. He joked that the “response rate is higher than what we saw in Enhertu efficacy.” He then said that, kidding aside, this eagerness to participate in the survey illustrated a “pattern of high-level engagement and dedication” in the alliance.

“Good Collaborative Attitude” Sets the Right Tone for the Partnership

Governance, always a critical part of any partnership, takes on even greater import when an alliance of this size and magnitude moves at breakneck speed. With a little trial and error, AstraZeneca and Daiichi Sankyo came up with a model that is arguably worthy of a business school or ASAP Handbook of Alliance Management case study. A Joint Executive Committee (JEC) sat at the top of the governance chain. Five individual committees dedicated to development, medical affairs, finance, supply chain, and commercialization, respectively, reported directly to the JEC. Underneath the Joint Commercialization Committee (JCC) sat three regional committees, one each for affairs pertaining to the United States, European Union, and all other geographies.

The first meeting of the eight senior leaders—four from each company—that made up the JEC was a fruitful one. The committee developed a joint vision statement: “Our obligation to patients is beyond what one company can achieve alone.” After the kickoff meeting, the companies communicated this vision statement, strategy, and goals of the alliance to new patients. Shigeta praised the JEC for setting the right tone for the alliance, and for creating a culture that allowed stakeholders on both sides to thrive, calling them “solution-oriented leaders” that have a “good collaboration attitude.”

“We are quite lucky to work with those exceptional leaders,” he added.

Collectively, the alliance team never stops. When employees start their day in Japan, they can take handoffs from workers in America who are wrapping up their activities for the evening. Toward the end of the Japanese workday, European stakeholders start their mornings and eventually overlap with US alliance colleagues in the afternoon and early evening.

Bogged Down: Top-Heavy Decision Making Stalls Out the Alliance Engine

When Bell took the virtual podium, he dove deeper into the machinations of the governance operation. He told the audience that the alliance had a few things going for it immediately after the launch, at least on the surface. First, the oncology lead of Sankyo’s R&D unit used to work at AstraZeneca and was thus familiar with the partner’s inner workings. In addition, both companies utilized similar cross-functional Global Project Teams (GPTs). With similar working structures, the companies initially figured they could get away with relatively simple rules of engagement—why overcomplicate governance if you don’t have to? Although well intentioned, this directive backfired to a degree. The lower committees felt they had to defer all decisions to senior management, “so what should have been relatively easy, high-level discussions at the JEC got bogged down into hours of negotiation about clinical design. It simply wasn’t working at the pace we needed to go,” said Bell.

AstraZeneca and Daiichi Sankyo decided to hold a two-day workshop under the guidance of an external agency aimed at developing course corrections. The companies administered a health check and the agency conducted one-on-one interviews prior to the event. On the first day, the joint development teams analyzed the findings and surfaced difficulties faced by stakeholders in both companies. The second day was spent driving home the idea that “a contract is not an instruction manual or a recipe book,” said Bell, making the point that beyond the JEC, the characteristics of which were spelled out in the contract, the underlying governance represented a “gray space” that could be treated as a “sandbox” for devising a structure that best fit the needs of the collaboration.

Alliance Tax Break Pays Off in Efficient Development Operation

The result was a new look for joint drug development procedures. The companies formalized the role of Joint Leadership Teams (JLTs) that sat beneath the Joint Development Committee (JDC). The JLTs and JDC were to agree upon all of the finer details before presenting initiatives to the JEC for final approval.

The new configuration had the desired effect. Loaded with relatively senior personnel, empowered to obtain approvals underneath the JEC, and now meeting weekly, the JLTs moved development items through the chain of command efficiently—fully vetted proposals were approved by the JEC 100 percent of the time after the workshop. The alliance now expects to approve as many as 15 late-stage study registrations this year. Bell said the “alliance tax bill” is much lower thanks to this expediency.

Bell concluded by imparting four lessons to BioPharma Conference attendees. First, he credited a thorough download session conducted by Daiichi Sankyo that brought alliance stakeholders up to speed on Enhertu for setting a precedent of transparency and trust. Second, kickoff meetings are especially important in an alliance of this magnitude. Partners must agree on ways of doing things early, remain flexible during the first tests of the initial configuration, and make changes wherever necessary. Third, he recommended building “workflow archetypes”— that is, alliance managers should explore incorporating internal processes into a plan. Finally, leverage experience from other alliances. To this last point, Bell said he was fortunate to have worked on other “Goliath-Goliath” alliances in the past, such as AstraZeneca’s collaboration with Merck.

The Reward for an $18 Million Q1? The Alliance Teams Get to Do It Again

The work has paid off. On Dec. 20, 2019, the two companies received accelerated approval by the FDA two months after filing. Enhertu then amassed $18 million in US sales in this year’s first quarter. Shigeta said the clinicians are reporting exceptional responses to the drug in patients thus far.

“We cannot achieve this without fantastic and tight collaboration by two companies,” he said.

Buoyed by the success of their first year and a half working together, the joint teams entered into another major alliance initiative this past summer centered around a compound known currently as DS-1062.

In the Q&A that followed, the presenters were asked how they specifically aligned on governance before the deal was signed. Bell explained that a lot of this was covered in the five weeks of negotiations. The negotiators outlined a development plan and approved a joint business plan for US operations. Shigeta said the compressed timeframe actually spurred the teams to prioritize matters effectively.

“We had a clear goal in front of us—to launch the product within 12 months,” he said, adding that this focus was a “driving engine” for the partnership’s first year.

Asked if any executives served on both the JLT and JDC committees, Shigeta estimated a 20 to 30 percent overlap, which helped bridge the cross-functional JLT teams and the JDC when the latter had to make recommendations to the JEC. Bell added that it was important for the people serving on both committees to have a certain amount of authority if the lower committees were to obtain alignment under the JEC.

Another viewer asked if this approach is translatable to a biotech-pharma alliance of two large organizations.

Bell felt it could be, provided that the organizations, particularly the big pharma company, weren’t entrenched in their way of doing things. A 50-50 alliance suggests no hierarchy and calls for each player to remain flexible. Shigeta noted that resource allocations may not be 50-50 in another collaboration, but that doesn’t have to derail a collaborative spirit. The companies just have to tailor a structure to their needs if the AstraZeneca–Daiichi Sankyo model doesn’t fit.

We captured all of the other live sessions from last week’s events on this blog, and we will be bringing recaps of several more prerecorded on-demand presentations over the course of the next month. However, if you registered for the BioPharma Conference, we strongly urge you to check out the full recordings on the conference portal. Our blog posts capture only a fraction of the great insights in each session, so don’t miss out on any of the great wisdom that has been shared during the livestream and on-demand portions of the event.