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CASE STUDYCan Knowledge Management Systems Help Pfizer?

Pharmaceutical companies are amongthe most intensive users of knowl-edge management systems, and youcan easily see why. The drug discoveryprocess is long and arduous.Researchers must first identify a bio-logical target such as an enzyme orgene that appears related to a dis-ease; fling hundreds of thousands ofcompounds at the target to see whichinteract with it; and conduct animalstudies of toxicity, absorption, and theproperties of the most promising mol-ecules. If all still looks good, theywould then test one of the com-pounds on humans.

Only one new chemical entity in10,000 makes it through the U.S.Food and Drug Administration (FDA)approval process, and only half thedrugs approved make it to market.The complete process costs $500 mil-lion to $700 million per drug, andeach day of delay in a seven-year test-ing cycle for a hot new drug can cost$2.5 million.

Today the stakes are higher thanever. There are very few new drugs inthe pipelines of major pharmaceuticalcompanies. Despite steadily increas-ing expenditures on research anddevelopment, which now totals morethan $25 billion annually in theUnited States alone, the U.S. FDA sta-tistics show a steady decline in theapproval of new drugs, or “new mole-cular entities.”

The pharmaceutical companiesare doing everything they can todevelop new products and come upwith new ideas—promoting a moreinnovative corporate culture, forgingcollaborative ties with universityresearchers, and acquiring youngpharmaceutical and biotechnologyfirms to obtain new sources ofexpertise. Any knowledge from anysource that can bring a new drug tomarket or expedite the drug devel-opment process is obviously veryvaluable.

Let us look at the role of knowl-edge management at one of thesecompanies. Pfizer is the world’s

largest research-based pharmaceuti-cal firm. Its best-known productsinclude Celebrex, Zoloft, Lipitor, andViagra. In addition to prescriptiondrugs, the firm makes over-the-counter remedies such as Bengay,Listerine, Benedryl, Visine, and animalhealth products. Pfizer is divided intothree major business segments: phar-maceutical, health care, and animalhealth, with the pharmaceutical seg-ment accounting for 88 percent ofPfizer’s total revenue.

Among Pfizer’s 122,000 employ-ees, over 12,500 are scientists whowork in research labs around theworld. Pfizer Global Research andDevelopment is the industry’s largestpharmaceutical R&D organization,with a $7.1 billion budget for R&D in2003. Pfizer’s search for new drugsencompasses hundreds of researchprojects across 18 therapeutic areas—more than any other company. Thecompany maintains links with morethan 250 partners in academia andindustry.

Like other major pharmaceuticalcompanies, Pfizer relies heavily onknowledge management systems todrive its research and developmentwork. It has systems to manage allof the documents and pieces ofdata involved in developing a newdrug; expertise location systems toidentify scientists and knowledgeleaders within the company andoutside experts who are involved indrug research and development;and searchable databases of infor-mation collected during clinical tri-als. Pfizer has Web-based portals tomanage all of the documents andother pieces of knowledge associ-ated with the product life cycledevelopment process, includingonline discussions. A discussion listcapability keeps track of discussionthreads.

Pfizer’s Global Research Divisionintranet has many dozens of appli-cations organized both geographi-cally and functionally for virtuallyevery area and division of the com-

pany. They include an internal tele-phone directory, access to scientificpublications, and sharing of researchfindings across international bordersand time zones. Pfizer linked itsintranet with an extranet for manag-ing some 500 strategic alliances so its global teams can access legacy data and collaborate onprojects more quickly. Researcherscan link from the Pfizer intranet to the U.S. Food and DrugAdministration Internet site. A toolcalled E-sub enables the company to access historical data to expeditepreparation of the laborious newdrug applications (NDAs) requiredby the FDA.

The company is moving toward aglobal approach to informationmanagement. In the past, each R&Dlibrary would look first in its owncollection to locate requested arti-cles. If the articles were not foundthere, public libraries and resourceswould be searched. If a requestedarticle was still not found, an out-side firm was commissioned tolocate the article. Now Pfizer scien-tists can search the journal collec-tions of each major Pfizer libraryfrom a single master list.

Pfizer adopted Oracle’s Clinicalapplication, which is designed to helppharmaceutical companies bringproducts to market faster. The soft-ware establishes standards and com-mon working practices. Oracle Clinicalhas a capability for tracking whoaccesses each piece of data and howand why changes were made. Itincludes a subsystem for managingdata definitions and can flag any dataentered during a study that it cannotvalidate, so researchers can quicklyidentify problems with the data or theproduct under development.Definitions and amendments areautomatically propagated to alllocations.

Pfizer was one of the pioneers inusing advanced information technol-ogy for combinatorial chemistry andhigh-throughput screening.

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Combinatorial chemistry enablescompanies to design, screen, and testcompounds very rapidly by usingchemistry, molecular biology, andinformation technology to create andtest thousands of chemical combina-tions at once. Previously, pharmaceu-tical companies had to evaluate thou-sands of compounds individuallybefore finding one possible candidatefor further development.

Combinatorial chemistry and high-throughput screening became popu-lar in the early to mid-1990s as a wayto accelerate this process. Rather thanhave chemists cook up each type ofmolecule by hand, which could takeweeks, machines would create thou-sands of chemicals in a day by mixingand matching common buildingblocks. Then robots would drop bitsof each chemical into tiny vials con-taining samples of a bodily substanceinvolved in a disease, such as the pro-tein that triggers cholesterol produc-tion. A “hit” occurred when the sub-stance and the chemical produced adesired reaction. (The testing processis called high-throughput screening.)

Virtually all the major pharmaceuti-cal companies embraced combinator-ial chemistry and high-throughputscreening, spending tens of millionsof dollars forming alliances withsmaller companies that specialized inthis technology. Between 1995 and2000, Pfizer entered into 36 allianceswith 29 different companies in com-binatorial chemistry alone, and thenumber rises to 50 if you includePfizer’s acquisitions of Warner-Lambert and Agouron.

Intelligent machines churned outchemical after chemical, but almostnone produced useful results. Oftenthe machines threw so many ingredi-ents together that the resultingchemicals were too “large” from amolecular standpoint. They wouldwork in a test tube but would get bro-ken down too easily in the humanstomach. In one case a drug that pre-vented infection showed promisingresults in a test tube, but could notdissolve in water, which is requiredfor intravenous drips. When chemicalswere made individually, chemists usu-ally dealt with such issues during theinitial stages of development.

According to Carl Decicco, head ofdiscovery chemistry at Bristol-Myers,many chemists became fixated oncreating thousands or millions ofchemicals for testing without thinkingabout whether any of them had anyreal use. “You end up making thingsthat you can make, rather than whatyou should make,” he says. Countlesscombinations of potential druglikechemicals are theoretically possible,but most of these combinations arereally useless to humans. Pfizer seniorresearch fellow Carl Lipinski, whoretired in 2002, compiled a list ofcomplex technical traits that oftenmake chemicals difficult for humansto absorb and persuaded Pfizer toreprogram its computers so chemistswould be warned if chemicals vio-lated the “Lipinski rule.”

Critics of combinatorial chemistryand high-throughput screening pointout that these methods lack humaninsight, intuition, and intellectualcreativity. Opponents believe thesemethods eliminate opportunities forserendipitous discovery. For example,in 1991 Schering-Plough scientistswere looking for a drug to block acertain cholesterol-producing enzymein the body. During a test on ham-sters, they noticed that one moleculefailed to block the enzyme but never-theless lowered cholesterol. Someadditional hand-tweaking bychemists turned the molecule intothe cholesterol-lowering drug Zetia,which was approved by the FDA in2002. If a robot had tested the mole-cule in a test tube, it would havenoted the failure but would havemissed its serendipitous side effect.

Because robot screeners can workonly with liquids, the huge chemicallibraries created by combinatorialchemistry and high-throughputscreening are often placed indimethyl sulfoxide, a standard solu-tion for storing chemicals. In somecases the chemicals settle as a solidat the bottom of the solution or thesolution containing the chemicalbreaks down. The drug-testing robotreaching into such mixtures may onlycome up with a drop of useless soup.Traditional labs avoid this problem bystoring chemicals that might breakdown in dimethyl sulfoxide as pow-

ders, which are put into solution justbefore screening.

Pfizer and the other major pharma-ceutical companies are trying to rec-tify these problems. Pfizer spent over$600 million at labs around the worldto ensure that the chemicals in itslibraries are more druglike anddiverse. It is using techniques otherthan combinatorial chemistry andmaking sure each chemical can meetLipinski’s test. Martin Mackay, a seniorvice president at Pfizer’s researchlabs, reports that a higher percentageof compounds at Pfizer are now mak-ing it through each stage of testingbut that it will take 10 years to tellwhether efforts to improve the tech-nology are working. “We’re very confi-dent,” he says.

Other scientists echo his beliefthat the industry has solved its earlyproblems with combinatorial chem-istry and high-throughput screeningand that the pipelines will be filledwith new drugs created by thesemethods a decade from now. “Ittook a while to learn how to use allthese new technologies,” saysRichard Gregg, vice president of clin-ical discovery at Bristol-Myersresearch labs.

A study led by David Newman ofthe National Cancer Institute con-cluded that combinatorial chemistryand high-throughput screening hadfailed to create a single FDA-approveddrug through the end of 2002. Aseparate study of 350 cancer drugsnow in human trials found only onethat had been created with thesemethods, although the technology didhelp improve some drugs that werecreated by more traditional means.

Some observers believe that phar-maceutical firms’ widespread use ofcombinatorial chemistry and high-throughput screening is one reasonwhy there is such a dearth of newdrugs today. The number of newdrugs approved by the FDA each yearhas declined since 1996. In 2003, theFDA approved only 21 new drugs (ofwhich one was produced by Pfizerand one by Agouron), compared to56 in 1996.

Sources: Peter Landers, “Drug Industry’s

Big Push into Technology Falls Short,” WallStreet Journal, February 24, 2004;

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Madanmohan Rao, “Leveraging

Pharmaceutical Knowledge,” KnowledgeManagement, March 2003;

www.pfizer.com, accessed June 10, 2004;

Kim Ann Zimmermann, “In Search of

Experts: Pharmaceuticals Enter Next Phase

of KM,” KWorld, January 2003; Helene S.

Gidley, “Hand in Hand,” PM Network,August 2003; and Stephen S. Hall,

“Revitalizing Drug Discovery,” TechnologyReview, October 2003.

CASE STUDY QUESTIONS

1. Analyze Pfizer’s business strategyusing the competitive forces andvalue chain models.

2. How important are knowledgemanagement systems at Pfizer?How do they provide value to thecompany? How do they supportthe company’s business strategy?

3. Evaluate Pfizer’s use of com-binatorial chemistry and high-throughput screening in itsbusiness strategy? How effectivehas it been?

4. How successful do you think Pfizerwill be in using its current knowl-edge management systems in thefuture?

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