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Pharmaceutical Industry Pivot Examples - Technology
Two examples of technology pivots in the pharmaceutical industry include Novartis and GlaxoSmithKline. Both implemented new technologies with the main aim of improving the discovery, development, manufacturing, and performance of their drugs. Below are the detailed findings on the request.
Novartis
- Novartis is the largest pharmaceutical company in Switzerland, and the seventh-largest biopharmaceutical giant by revenue, worldwide. The company manufactures an array of prominent commercial drugs, and its estimated revenue is about $52 billion.
Why the Company Pivoted
- According to the company CEO, Vasant Narasimhan, the company had to pivot because of the intense competition from other large branded biopharmaceuticals and emerging of the value-based care models.
- Therefore, to keep up with the trend and stay competitive, the company laid off 2,200 employees in September 2018 (this was when the company began pivoting), as a part of the ongoing restructuring plan through 2022.
- The restructuring plans are to move the company from a traditional high-volume blockbuster model to more precision-targeted medicines representing higher-value markets. To achieve this, Novartis is using new technology platforms to generate transformational drugs.
The Original Idea
- Novartis' original focus was on consumer health, eye-care devices and contact lenses, traditional oral, and small-molecule generics drugs. Hence, to pivot, the company had to exit all these healthcare segments and invest in new technology platforms to transform its operating model and reduce the period of discovering and developing new and more effective drugs.
How the Company Pivoted
- The company pivoted by launching an innovation lab (The Biome), using digital technology under the hood, and acquiring companies that have advanced technology.
- The Biome was launched by the company so that it can keep up with the fast-moving technology and digital health ecosystem. The lab also helps Novartis to partner with other companies to create the most effective digital health solutions of tomorrow.
- To enhance its drug development efforts, clinical trial, and operations, Novartis is incorporating a lot of digital technology under the hood to achieve successful transformation. For example, the company is using a data analytics engine, Nerve, to generate data, make decisions, improve its operations, and achieve results faster than before.
- Novartis is using FocalView application in its ophthalmology programs to perform eye treatments and care. Also, it has partnered with Medidata, Shyft Analytics, and PathAl to use Al technology to improve breast cancer detection.
- Novartis acquired the Endocyte company in October 2018, which uses the drug conjugation technology of two platforms, Radioligand Therapy (RLT) and CAR-T, to accelerate the treatment of cancer.
- Novartis also acquired AveXis and Advanced Accelerator Applications technologies to boost its gene therapy and oncology business, respectively. However, these two companies were acquired before September 2018.
- Novartis CEO stated that this technology pivot would increase the company's sales by 20% before 2023.
GlaxoSmithKline (GSK)
- GlaxoSmithKline is a global healthcare company that specializes in developing, manufacturing, and marketing of pharmaceuticals drugs. The company's drugs focus on six areas, namely, oncology, respiratory diseases, Immuno-inflammation, rare diseases, vaccines, and human immunodeficiency virus (HIV)/infectious diseases.
Why the Company Pivoted
- The plan of Karenann Terrell, GSK’s first chief digital and technology officer, is to digitize the company. Therefore, she is responsible for the company’s digital, data, and analytics strategies.
- Upon her appointment in September 2017 (this was when the company began pivoting), she was given an opportunity by GSK to invent and introduce new technologies to be used by the company.
- The main aim of inventing new technologies by the company is to improve the discovery, development, manufacturing, and performance of drugs.
The Original Idea
- The process of developing drugs is long, complicated, and very expensive. It takes companies years of research before they can try them on a human being.
- The original technology of GSK took an average of 5.5 years and over $2.25 billion to develop a drug; however, the company wanted to reduce this period to just one year. Hence, GSK introduced new technologies that could help in achieving this one-year duration.
How the Company Pivoted
- To reduce the cost and time involved in drug manufacturing and implementation, GSK signed a $43 million deal with a deep learning company, Exscientia, to use its supercomputers to develop new drugs. This process can find the potential treatment and cure at a much lesser cost and time compared to the older method.
- The company is also investing in in-silico methods, machine learning, and innovating its R&D to streamline and improve its medicine discovery and development strategies. Karenann also explains that using these methods leads to the development of drugs more quickly and with higher precision and quality compared to older technology.
Research Strategy
To provide examples of technology pivots in the pharmaceutical industry, we began our search by going pharmaceutical industry reports such as Pharmaceutical Manufacturing, Pharmacy Times, Pharma Times, Mobi Health News, among others. We also went through third-party sources such as Ai Business, Forbes, CNBC, Trial Site News, and others. From these sources, we could find all the relevant information needed to answer the research criteria.