Competiveness through Innovation in Pharma Manufacturing Liam Tully

October 31st 2012

Competiveness

2

Manufacturing Process

Wages

Electricity &Gas

Engineering / Depreciation Rates

Water

Waste

Competiveness through InnovationThe Manufacturing Process

Proposition: In Ireland the biggest impact on competiveness is the

3

Manufacturing Process

Wages (per kg)

BuildingRequirement /

Rates(per kg)

Electricity &Gas Usage

(per kg)

WaterConsumption

(per kg)

Waste(per kg)

Engineering / Depreciation

Requirements(per kg)

Competiveness through Innovation

4

Manufacturing Process

Waste

Water

Rates

Sustain-ability?

AddedValue?

NewProducts?

MoreProducts?

Engineering / Depreciation

Electricity& Gas

Wages

More than just cost

New Business Opportunities

New way to Differentiate

More than just cost

New Business Opportunities

New way to Differentiate

Competiveness through InnovationThe Manufacturing Process

5

Many Irish Pharma do not have the

Manufacturing Process at thecentre of their

Competiveness Strategy

The Manufacturing Process has the

biggest impact on Competiveness –

Cost & New Opportunities

Competitiveness Scales

Less process burden

More competitive

Manufacturing Process & Competiveness Strategy

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Its risky & we don’t have a

mandate

Strategy is incremental year on year

saving

Our regulatory group wont let

us change

Change would only be a

distraction

This isn’tour core skill

Ourcompetiveness

strategy is focusedon cost only

Perception that re-filings with EU, FDA, ROW is too difficult

Why would the Mfg Process not be at the

centre of Competiveness

Strategy?

Competitiveness through Innovationin Pharma

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Focus on Manufacturing Process – the “How”

<20% of any organisation are natural innovators

Given the right system and tools this could rise by anadditional 60%

When 80% of the organisation is innovative, tackling the Manufacturing Process isless daunting

<20% of any organisation are natural innovators

Given the right system and tools this could rise by anadditional 60%

When 80% of the organisation is innovative, tackling the Manufacturing Process isless daunting

A good formal

innovation program

can be very effective

A good formal

innovation program

can be very effective

Case StudyGlobal Process Development Centre (PDC) – Pfizer

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<30% of site chemists time spent on optimisation

5% Improvements in annual cost

Incremental improvement inside Regulatory Filing

<30% of site chemists time spent on optimisation

5% Improvements in annual cost

Incremental improvement inside Regulatory Filing

New global resource to explore bigger improvements

Cork won the tender and PDC assembled

New global resource to explore bigger improvements

Cork won the tender and PDC assembled

Delivered new commercial route to manufacture an existing blockbuster

Headcount and budget increased

Delivered new commercial route to manufacture an existing blockbuster

Headcount and budget increased

New Kilo Technology lab opened

New Kilo Technology lab opened

2001 2002 2006 2009

Accumulated value >$2B to 2016

Transformational impact on Pfizer manufacturing

Process redesign is at the core of Pfizer manufacturing competiveness strategy

Accumulated value >$2B to 2016

Transformational impact on Pfizer manufacturing

Process redesign is at the core of Pfizer manufacturing competiveness strategy

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Case StudyGlobal Process Development Centre (PDC)– Pfizer

6 Worldwide refilling’s complete on priority blockbuster products

Average cost reduction >50%

Average footprint reduction 40%

New technology

biocatalysis

continuous processing

advanced process output control

modeling

new chemistry

5 Processes currently underfull redesign

6 Worldwide refilling’s complete on priority blockbuster products

Average cost reduction >50%

Average footprint reduction 40%

New technology

biocatalysis

continuous processing

advanced process output control

modeling

new chemistry

5 Processes currently underfull redesign

2012 Snapshot Today

PDC Example

Investigated biocatalysis technology and new downstream chemistry

Enzyme was readily available – for washing machines!

Cancelled capital investment plans on the basis of lab results

Completed process development and had plant scale batches running in 6 months from project start

Regulatory filing complete, approvals obtained and commercialisation 22 months from project start

No product stockout

Investigated biocatalysis technology and new downstream chemistry

Enzyme was readily available – for washing machines!

Cancelled capital investment plans on the basis of lab results

Completed process development and had plant scale batches running in 6 months from project start

Regulatory filing complete, approvals obtained and commercialisation 22 months from project start

No product stockout

What Happened

Invest in new capacity (estimated $100M–$200M)

Change the processes:

Focus on capacity efficiency – a “Must”

Lower API cost would also be good

Invest in new capacity (estimated $100M–$200M)

Change the processes:

Focus on capacity efficiency – a “Must”

Lower API cost would also be good

Options Evaluated

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2001 - 2004 Rapid increase in demand 2001 - 2004 Rapid increase in demandProduct A

PDC Example - continued

Output more than doubled in same equipment

Capital investment negligible

Spare capacity generated currently used for 3 other processes

Output more than doubled in same equipment

Capital investment negligible

Spare capacity generated currently used for 3 other processes

Capacity

Material cost – 80% reduction

Labor and overhead – over 60% reduction

Full cost reduced by 74%

Greener process

Material cost – 80% reduction

Labor and overhead – over 60% reduction

Full cost reduced by 74%

Greener process

Costs Dramatically Lowered

Biocatalysis step run continuously in CSTR’s (Continuous Stirred Tank Reactors)

Best quality & performance at optimal cost

Biocatalysis step run continuously in CSTR’s (Continuous Stirred Tank Reactors)

Best quality & performance at optimal costToday

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Learning’s from the PDC

04/10/2312

KeyLearning’s

Target setting is key - 30 – 80% cost reduction - Generic Cost

Seek additional ideas and skills internally and externally

Innovation is key - implemented formal programme

Systematic interrogation of processes is essential - formal programme - BRITEST

Leadership support is vital - a business imperative

Learning’s from the PDC

04/10/2313

KeyLearning’s

Team Assembly - Challenging - ACE Model - Career Ladder

Government Support Vital - Research Centres (SFI) - PMTC (EI / IDA) - HEA - R&D Tax credit

Skills Shortage - Ph.D Chemists - MSc/Ph.D Analyst’s - Msc/Ph.D Engineer’s

Academia – Industry - Agencies - Cluster model - SSPC - Unique design – a treasure - Collaboration delivering cutting edge science - Delivers spinout companies - Delivers Ph.D’s with the targeted skills - It works : Can it grow?

Conclusion

Manufacturing Processes are the engines in our plants and key to competitiveness

A competitive strategy that fixes or replaces these engines will deliver cost savings and new opportunity value

Manufacturing process redesign requires innovation in abundance – same skillset for R&D work

Innovation can be taught and optimal conditions for Innovation can be put in place

Leadership is needed to set ambitious targets and state the business imperative

Make the Manufacturing Process competitive early in the lifecycle to maximise the benefits

Cutting edge science and technology can be an every day activity in the manufacturing environment with good external support

Ongoing support form Academia and Government critically important

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Conclusion

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The Proposition

The Manufacturing Process has the biggest impact on competitiveness in Pharma Manufacturing

The Challenge

What would it take for each of our companies to be the premier facilities for Manufacturing Process Innovation as we target to maximise competitiveness