The Boardroom Series: Interview with CSO Mark McHale, Part 3 Asia




Asia

Pharma IQ: Looking to Asia,  what big developments do you see emerging in Asia between now and 2020?

Mark McHale: China is the big one to watch and what’s going to happen with the regulatory authorities in China. That’s a huge thing because at the moment it’s very hard to get a novel compound into phase one in China. People say it’ll be eight, nine months but I’ve heard a lot of stories about it being 18 months and longer in pharma and there’s not that appetite at the moment to take compounds into patients for the first time there. I think that will change and when it does, that’s going to have a huge impact.

But as well as that changing, obviously, the scale in China is incredibly impressive, in terms of the number of patients and hospitals you can have access to. Maintaining quality when you do studies there, I think, is the key thing and obviously there are a few key centres that you would deal with in, say, oncology. But there are many more hospitals that you can deal with but having that same quality of GCP stamped on the other hospitals around and across China as a standard is really important.
 
When the two come together, when there’s an appetite from the SFDA and the authorities to take in new compounds and to maintain a standard of GCP, then China’s going to be a powerhouse, just incredible. At the moment, there’s still a lot of appetite in the market for generic drugs so a lot of companies you go to are simply making generics flat-out.
 
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Pharma IQ: What changes are on the horizon for the Asian market?
 
Mark McHale: The challenges, I would say; at the moment is the quality of places. Places that have made real investments in clinical studies like Singapore, Taiwan and South Korea –the hospitals there are amazing, absolutely stunning. I can see that being replicated more across Asia so more centres like that in Indonesia, Cambodia, Vietnam will all come on line.
 
I can’t really comment on India because we haven’t done studies there.
We’ve talked to companies in India but we haven’t made that step in terms
of doing clinical studies. We’ve worked with Shasun on an API and talked to the manufacturing side of India but not clinical yet but we are open to that.
 
But I think you’ll see more of the second tier of smaller Asian nations coming online and modernising and then suddenly, because two-thirds of the world’s population is sitting there to do clinical research with, that’ll have an effect that will just ripple around the world. Also, when you combine that with the fact that pharma will be making more money in China than you are in America, the world will change.
 
Pharma IQ: Do you predict a lot more organisations like ASLAN setting up?
Mark McHale: Yes, definitely. We always felt, if we set Aslan up in 2010 – as we did, we’d be ahead of the wave. We described it as the wave because we felt it was coming and I think we’ll see that.
 
China’s pushing entrepreneurs more and more, particularly in the biotech area. If you look at Taiwan, the appetite for biotech is enormous there, particularly biotechs that do IPOs and go public, it’s huge. So the pull to do that is coming and that’ll just increase and I welcome it. I want to see more companies in this space. You get to know everybody in the end and we talk to people who are thinking of setting up these companies and give them advice.
 
Pharma IQ: What challenges are you hearing about most in Clinical Trial Outsourcing?
 
Mark McHale: I think one thing that’s interesting is a lot of the bigger CROs are thinking more about risk-share models and how you do that. So, for example, let’s say – because we’ve got three compounds but many more than three studies planned with these compounds – so for example if we gave all our business to one CRO on each project, could it be that if the data is negative we get a discount on it, if it’s positive they get a little upside? That kind of idea is becoming more prevalent and I think you’re going to see more of that as well. Some companies have done some of that with pharma, some of the big companies like Quintiles, etc. I think you see more of that, particularly in the mid range.
 
I’ve seen some of the mid-range players merging together and getting bigger.But, I like to see a pool of smaller companies all competing so I wouldn’t want to see too much more merging, I think it’s dangerous.
 
Pharma IQ: So is merging something you would consider in the future?
 
Mark McHale: Anything could happen. I think it’d have to be the right fit, the right company.
 
Pharma IQ: So what would it take to go public or how would that change your business model?
 
Mark McHale: Obviously if you’re public, you spend a lot of time and effort managing public market sentiment. I think if we were public I would worry there’d be a pressure we could get too big.
 
Pharma IQ: I guess Mark, we can compare the possible restructuring of Pharma to that of the banking industry - it’s a shake-up of the industry, was it needed?
 
Mark McHale: Yes, it needed it. One thing we haven’t seen fully yet is the profit margin being squeezed by governments because pharma has a big profit margin. I think Tom McKillop was once interviewed – he was one of the CEOs of AstraZeneca and a reporter asked him how much does it cost you to make a dose of Nexium? He said, “The first dose cost $1 billion but it got considerably cheaper after that.” I think that’s a fantastic reply and it’s true but can you make it less than $1 billion, do you have to spend all that money to launch it as well? If you’re in a space where you’re targeting particular tumour types in gastric cancer, do you need a massive sales organisation to do that, do you really?
 
The business has changed and we’re hearing more about personalised medicine. I think high-throughput sequencing, hitting the population will have a massive impact. Sequencing now has been described where computing was in the 70s and I think now, a human genome takes a day, day-and-a-half or something? It’s going to get down to minutes. So if  we’re going to do a 300-patient study and suddenly we  can genotype all these patients for a few dollars,  should we do it? What are you going to do
with that information if you do it? What are you going to compare it to, what’s the reference population that you can say you’re going to compare to?
 
I think dealing with that  is going to have a huge impact on pharma. Combining that with proteomic approaches as well, so seeing what the changes are in a tumour, a particular tumour cell type within what was called erroneously ‘gastric cancer’ or ‘castrate-resistant prostate cancer’ or ‘breast cancer’. It could actually turn out to be12 diseases, it’s not one and I think that is where the young people and the children that are coming on now who will lead the pharma business, that’s where they’ll be focussed, where they’ll be putting their money.
 
I don’t think this model of billion-dollar drugs is going to work quite the same way for this new model of disease so pharma does have to evolve. I think it’s going to be an amazing period so I used the term renaissance because I think there will be a renaissance in pharma.
 
Dr Mark McHale is Chief Scientific Officer and Founder of ASLAN Pharmaceuticals. Previously, Mark was the Head of Molecular Sciences at AstraZeneca Respiratory & Inflammation and in this role supported small molecule and therapeutic antibody projects from target identification to phase IIa. Mark was a core member of the respiratory strategy team for the research area (comprising 720 staff across 3 sites) for half a decade and personally lead all new target identification in asthma. In 2006, he led a $136M investment in the AZ/Dynavax collaboration to produce inhaled TLR9 agonists for the treatment of asthma and led the ongoing preclinical / phase I projects.
 
Prior to 2001, Mark worked for 7 years at SmithKline Beecham, where he supported lead optimisation projects in serotonin and dopamine receptors as well as working on Leptin and the PPAR gamma agonist Avandia with Dr Steve Smith. In 1994, he transferred to the Neuroscience Department working with Dr Jackie Hunter, during which time he set up two new molecular science laboratories and formed a successful team to support molecular analysis of stroke and pain in order to characterise disease and identify new targets from a large strategic collaboration SmithKline had initiated with Human Genome Sciences. 
 
Interview by Niamh Madigan, Online Editor, Pharma IQ