the probability of success of this pipeline. In order to do that, we need to validate targets, and de-risk targets. Before we inject three years and, Lord only knows how many chemists and support people, to make a small molecule, we better be sure the target is the right target. Before we build a new medicine for diabetes, for example, we want to be sure it doesn’t raise LDL cholesterol. Because it may be great for glucose control, but if it has a liability like [raising] LDL, it would be a cardiovascular risk.
So target validation and target de-risking are approachable using RNA as a tool. Not a therapeutic, but a tool. In a correct non-human primate model, you can really rapidly validate and de-risk targets. That’s the major advance for us. It’s about realizing the value of the acquisition partially by increasing the [odds] in our pipeline with RNA. That was not available to Merck before. Previously, you’d have to make a drug. But by time you get to the primate, you’ve already made a multi-year investment. With RNA, going from when the gene is named to the primate, it’s just 9 to 12 months.
X: OK, so this is not the kind of typical value creation that the external world, Wall Street or whoever, can look at and say ‘Oh, you’ve de-risked a target.’ They aren’t going to value that. But you’re saying that within Merck, this is proving something to say you can have a batch of candidates with a higher probability of success.
AS: Exactly. If we move that little bar of POS [probability of success] by 10 percent—and Ian can get exact numbers—but it comes down to a savings of something like $125 million per program. Because the cost of failure is what makes drug development a $1.3 or $1.4 billion investment. It’s all in the failure. By changing the rate of failure, a little bit, by percentages, the aggregate savings to the company are huge.
X: But you won’t really know the answer to whether you’ve done that for another 10 years or so, right, as the clinical trials play out?
AS: This is why only a large company can afford to invest in an early technology that has a payout that valuable for discovery and development, not just for the commercial products that will come from it. When people look at RNA therapeutics, all the excitement is in making the drug. We know how hard it will be to commercialize these medicines, because with the delivery space there are issues around safety. Less so with the RNA itself. But still, it’s a new modality. The $1.15 billion was not meant to be recovered by a commercial product within five years. It’s meant
