Can sustainability practices bring about better patient care?
By Lavinia Weissman
The Sanofi Aventis bid of $69 per share for Genzyme expires on December 10, 2010. Genzyme responded to this bid, claiming a share value of perceived $89.
Part of the Genzyme valuation was based on projected sales for Campath, a drug that has just cleared five years of clinical trials with multiple sclerosis (MS) patients.
By November 22, 2010, Genzyme had begun internal discussion about structuring a ”contingent value right” (CVR), based on future benchmarks, as a possible gesture indicating they may accept less than $89 per share. Filing of a CVR insures shareholders can receive benefit from future achieved sales and regulatory targets that exceed expectations at the time of a merger.
Fan of Nassim Nicholas Taleb’s Black Swan could easily mark out an explanation of why nine Wall Street financial analysis of sales projections for Campath were inaccurate. These nine analysis also included predictions by Sanofi’s of $700M and Genzyme’s of $3.5B in annual sales in the range of $350M and $1M offered by other analysts. I perceived one critical loophole in this analysis, which is pivotal to authoring a sustainable merger acquisition strategy:
Has Sanofi or Genzyme consulted with MS patients regarding their needs?
According to the World Health Organization, there are over 2.5M people globally diagnosed with MS. The United States population is the largest country population, now estimated at 1.5M patients. Every hour someone is diagnosed with MS.
MS symptoms occur as result of symptoms to a patient’s myelin sheath. When the myelin sheath is attacked by autoimmune disorders, the patients central nervous system is compromised and the patients nervous system stops communicating clear signals. Autoimmune disorders can be activated by al toxins or genetic defects due to the same. MS patients then find themselves living with pain, muscle spasms, speech impairment, bladder control problems and increased susceptibility to allergens.
The rapid increase in frequency of occurrence of this disease is related in part to increased number of cases and an improved capability in diagnosing the disease, which was first diagnosed 150 years ago. It is not clear how many cases in the past year were undiagnosed. There is no cure for MS; drug treatments focus on treatment of the symptoms and can result in the development of more symptoms or potential harm to circulation, kidney and liver functioning and more.
There is no drug to cure or prevent this illness. It is estimated it would take a $1B+ investment to find a cure. In the past the growth economy claimed it was hard enough for high-mid cap firms to raise those kind of funds without a 60X rate of return. In the emerging eco-growth economy, it is not possible for one biopharm company to raise this kind of investment.
What are patient views of experience with MS and what kind of unmet need now exists for these patients?
Emmy award winner, Montel Williams is one of the most well-known MS patients to date that has articulated the situation and need of his co-patients. Williams was diagnosed with MS over 10 years ago, when someone threatened to make this information public. In response to this threat, Williams (a talk show host and actor) arranged to be interviewed by Dr. Mehmet Oz on the Oprah Show to make his diagnosis and experience public.
Montel has made known the challenges of depression and suicidal tendencies that patients may experience as a result of learning to come to grips with two major threats:
- the potential of losing ones ability to be independent and a breadwinner;
- the fear that you meet every morning that you may wake up and not be able to walk.
Since this first appearance on Oprah, Montel has dedicated a significant amount of time to advocate for MS patients. He also educates patients about new treatments involving alternative medicine and use of medical devices. As a former Naval Intelligence Officer, he advocates and visits with veterans who suffer from MS and other injuries and illnesses that result in the need for myelin repair.
Montel established a foundation to raise money for MS medical research. He recognized as a result of his experience how critical it has become to raise money for more holistic research, which is the only way research will be conducted for prevention and cure.
What is the agenda for myelin repair?
Scott Johnson, an Ernst and Young Awarded Entrepreneur was diagnosed at age 20 with MS. In 2002, using his skills as a Silicon Valley entrepreneur and business person, Scott established the Myelin Repair Foundation (MRF).
By 2004, through Scott’s leadership, MRF established as a goal to license the first myelin repair therapeutic target for commercial development within five years. To achieve this, Scott authored the Accelerated Collaborative Research™ (ARC) methodology. By constructing a collaboration with four principle investigators, MRF and team have:
- identified over 150 novel potential targets;
- developed 24 new research tools for broad application to other neurological disease;
- filed two US patents and applied for 16 more;
- published 50 peer review articles;
- begun broad collaboration with pharma companies;
- extended this research base for benefit to 70 other disease categories.
Has Sanofi Aventis or Genzyme talked to MRF?
When I began investigating the practice of sustainability and its relevance to pharma, I was moved to do so after listening to a speech by Matthew Emmens, CEO of Vertex Pharmaceuticals, about his perceived future for pharma in today’s economy. Emmens has established a mission for Vertex to “seek treatment for a profound change in serious disease.” The index to the Vertex website draws a pattern of strategy, action and methods on how every stakeholder tied to this company works toward that mission.
It would appear if the basis for acceptance of any Sanofi Aventis bid for Genzyme depends on an understanding of the what the implications of the drug Campath to the MS market, that it is incumbent on both companies to form a working group and open the conversation to a much wider group of stakeholders. This form of stakeholder engagement may represent a new format because of the complexity of issues entailed in creating profound change in serious disease.
The stakeholder map and landscape is far more complex than an industry-based view of supply chain, consumers and distributors in a product-based market. The stakeholders include patients, medical research think tanks, drug companies, clinicians who treat patient of all kinds, insurance companies, benefit administrators, human resource employees, disability experts and more.
This certainly could result in authoring a collaborative, intelligent and quality sustainability business practice for pharma.
About Lavinia Weissman
Lavinia Weissman (@workecology) is a Sustainability Leadership Coach and Social Media Practitioner. Her practice is dedicated to embedding into projects the education (briefing, visioning and application) of values CSR and sustainability principles. Her personal passion as a former health care program manager and educator is to make possible the impossible advancements for improving the health of all people who are chronically ill.
Talkback Readers: What do you think – can this potential merger lead to greater sustainability in the biopharm industry, and help patients?