a mutant form of the Her-2 gene. But, says Genentech’s executive vice president of research administration, Richard Scheller, the success of the product didn’t spawn a boom in developing diagnostics that could be paired with new drugs. That was partly because of the big differences in product development timelines, budgets, and priorities that have often made it tough for therapeutic and diagnostic companies to work hand-in-glove. “Even though Herceptin made the benefits of personalized healthcare obvious to everyone, it just didn’t catch on,” Scheller says.
These days, Genentech is working hard to find ways to better coordinate therapeutic and diagnostic teams inside Roche. Each drug development team at Genentech has a diagnostics sub-committee, Scheller says. And there is a liaison who makes sure Genentech’s scientists are matched up with the right diagnostics experts on the Roche side of the company. “We’d like about 40 percent of [drugs in early development] to come with a diagnostic,” Clark says. “It’s a high bar, but we’re achieving it.”
Clark points to Genentech’s new melanoma product vemurafenib (Zelboraf) an example. The drug, which is targeted to patients with a specific genetic mutation, is paired with a diagnostic developed by Roche. “It is a relatively small market, but the drug wouldn’t have been approvable without the diagnostic,” he says.
Unifying Roche and Genentech has also streamlined the process of bringing in good science from the outside. Genentech in particular has formed a number of deals with biotech startups in the last year—each structured in a way that might have been challenging when Roche was a majority owner of Genentech, says James Sabry, vice president of Genentech partnering. “I think this opened up an ease of thinking about different types of structures for deals that we didn’t have before,” he says. “It’s allowed us to use our creativity on the business side.”
For example, last June, Genentech paid an undisclosed sum to Cambridge, MA-based Forma Therapeutics for rights to develop a drug that targets cancer cell metabolism. The unusual twist is that the deal allows Genentech to buy the drug outright, at a pre-determined price, if it meets certain development goals, without the need to further split the profits with Forma, or acquire Forma. Then, in January, Genentech formed a $95 million deal with Cambridge-based epigenetics company Constellation Pharmaceuticals that allows Genentech to buy the entire company at some point in the future if certain pre-determined milestones are met. And this morning, Genentech formed a drug-discovery pact with Cambridge-based Ensemble Therapeutics to use a new class of synthetic compounds Ensemble developed to hit protein targets that have been difficult to address with traditional biotech drugs.
Roche engages in its own efforts to license in good science from the outside—an arrangement that raises the risk that it and Genentech will inadvertently end up competing for the same deal. So shortly after the merger, the company put in place an infrastructure that lessens that probability. For each disease area, McCracken explains, there is a “single point of contact” (referred to internally as a SPOC) at both Genentech and Roche. The SPOCs know all the deals that are in the works, and they collaborate with each other to determine which arm of the company should be put in charge of a deal, should both Genentech and Roche be interested in it.
If an agreement can’t be reached among the SPOCs, Scheller and Sabry are brought in to mediate. If that doesn’t work, the dispute is escalated
