Mind to Market

Monday, September 17, 2007

Systems Biology Overview

In the cover story for the September issue of Bio-IT World John Russell has written on the current state of Systems Biology; Systems Biology's Awkward Adolescence. As the title implies, systems biology may not be fully cooked. Russell is a diehard SB advocate which causes him to ponder the slow rate of adoption of SB in the life-science industry. He has rounded up the usual cast of SB players to comment on current state of SB and its obstacles to adoption.

Consensus seems to point to the lack of any big wins for SB in pharma; although there are some successes they are primarily based on SB's ability to pick potential failures rather than predict winners. Gosh, sounds kind of like a disruptive technology doesn't it? Early versions are often low quality but they usually have some new market niche that sustains them. Maybe this is what Russell means by "awkward adolescence?"

So what is the new market niche that will lift SB? Pharmacogenomics, toxicity, pharmacodynamics? SB is gaining some ground in these and in other areas, it is not clear that it is indispensable for those areas. What will render SB indispensable is a healthy return on investment, and that is not yet proven.

A few big pharmas, Pfizer and Lilly to name two, have invested in internal SB initiatives. On the other hand, some early adopting pharmas have curtailed their internal initiatives; either to outsource them or take a different approach. But at least one smaller pharma, Merrimack Pharmaceuticals, is taking an SB centered approach to developing their own drugs. Perhaps dismayed by the lack of a market for SB tools, or the realization that there is greater return in developing the drugs, Merrimack feels that applying SB technology to the development of in-licensed compounds is a more viable business model.

Adoption of SB in big pharma may suffer from those factors that typically prevent adoption of disruptive technologies; entrenched systems that are threatened by the new technology. As Clayton Christensen has observed, the only way disruptive technologies can be nurtured by a large corporation is by removing the development group from the mainstream organization. Hence Lilly's establishment of their SB group in Singapore.

An alternative method for developing a disruptive technology by large corporations is to partner with independent companies, as may be the case with Merrimack. Although Merrimack does not disclose who their investors are, it would make sense that a large pharma would back them in order to gauge the effectiveness of SB. If and when Merrimack does prove to be successful, the large pharma would have access not only to their drug pipeline but to their development platform.

Having access to an SB drug development methodology does not mean ready adoption however. In fact SB may not achieve optimum value unless integrated throughout the drug development process, a daunting objective for a large pharma. This could indicate yet another case for outsourcing more drug development to smaller companies with large pharma in-licensing the results.

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