When Cavan Redmond talks about robust partnering and M&A activity, he points to the blurring distinction between biotech and large pharma. That's something he should know a thing or two about that.

Redmond, executive vice president and general manager for the biopharma business unit for Wyeth, lives on the fading edge of that distinction.

"We're seeing an amazing blurring of the line between biotechnology and large pharma," he said. "How those two areas merge together is going to be not just fascinating, it's also going to be enabling, if it is done right, for certain technologies."

By its own count, the Madison, N.J.-based pharmaceutical company ranks 9th in the industry based on 2006 revenue, with such top selling drugs as the $3.7-billion depression treatment Effexor. Its pneumonia vaccine Provenar, the first vaccine to break the billion-dollar mark, is the world's top-selling vaccine with 2006 sales of $1.5 billion. But it also counts itself as the fourth largest biotechnology company based on a ranking of sales of biotechnology products, with such offerings as its $4.7-billion arthritis therapeutic Enbrel.

In fact, biotechnology products account for about a third of Wyeth's pipeline and 35 percent of its $20.3 billion in revenue in 2006, up from about just 14 percent in 2000. And, in the past 24 months, it's entered into 30 alliances with biotechnology partners.

Like other big pharma companies, Wyeth once operated with its small molecule, biotechnology and vaccines staff in their own silos. Each group operated independently and competed for resources and management attention. But Wyeth has revamped its drug discovery and development process in recent years. It's torn down walls that existed between its different technology platforms and taken steps to overhaul its process to make it faster and more productive.

As such, Wyeth's transformation offers a glimpse at what the pharmaceutical industry might look like in the future as the clearly drawn lines between what a pharmaceutical company and what a biotech nology disappear.

"Patients care more about what does for them than if it is biotech, a vaccine or a small molecule," said Redmond. He said instead of people working on a specific technology platform and seeking out targets to apply their technology, Wyeth found it was better to select the most compelling targets and then see what its various technology platforms could offer around those targets was a better approach to drug development.

A Sophisticated Model
Peter Thompson, CEO of Seattle-based Trubion Pharmaceuticals, which is involved with Wyeth in a potential $800-million drug development and commercialization alliance around its technology for developing protein therapeutics, said Wyeth is in not unique among big pharma in its biotechnology exposure. But Thompson argues they are much more sophisticated about it because of their history of working in the area.

"Others can and will make that claim to you—more as we go forward because large-cap pharma is becoming increasingly interested in biologics," he said. "For Wyeth, that's not a new interest. They have a longstanding commitment. They not only talk the talk, but they have the internal research and development capabilities already up and running and integrated with their overall operations that allows them to executive in a fashion that is differentiated from many of their large-cap competitors."

Wyeth's move into biotechnology dates back to 1997 with its acquisition of Genetics Institute and its alliance around Enbrel with Immunex entered into during that same year. But it was with the arrival of Robert Ruffolo, Jr. in 2000 that Wyeth began its real transformation. Ruffolo, who joined the company as executive vice president of pharmaceutical R&D for Wyeth Research had come from GlaxoSmithKline, where he headed cardiovascular research. Ruffolo, who has since become senior vice president of Wyeth and president of Wyeth Research, wasted no time beginning a dramatic reorganization of research and development at Wyeth.

He began by mandating a 400 percent increase in productivity in discovery, which had to produce 12 molecules (since raised to 15) identified as clinical candidates. That was up from the three a year the company produced. To achieve that, the discovery process was revamped with a roadmap for scientist to determine milestones for discovering drugs and benchmarks to progress a project.

Eye-Opening Discoveries
Wyeth made some eye-opening discoveries when it began a self-examination of its discovery process. It turns out the company was putting more resources into projects that didn't progress than ones that did. What's worse, those projects tended to be the lower priority ones.

With that realization, the company allocated resources to focusing on things that worked rather than things that didn't. At the same time, it set criteria for compounds to determine when to advance compounds from animal models to the clinic. Previously, there was a fair bit of tweaking that went on as scientists sought perfection.

"To prove we haven't been just chucking stuff over the fence from discovery into development, we not only are pretty much the most productive, but we also have the lowest attrition rate among our peer group," said Steve Projan, vice president and head of biological technology for Wyeth Research.

Drug development generally occurs in a serial manner with a compound identified and then progressed through the pre-clinical and clinical development stages. Wyeth, instead, decided to focus on targets of interest and simultaneously attack that target with all of its platforms—small molecule, protein therapeutics and vaccines—and to move them simultaneously forward.

As its revamped process evolved, about two years ago the company introduced its "Learn and Confirm" approach, an effort to address the high cost of drug development and the high failure rate that helps drive that costs. The approach ditched the traditional practice of focusing on the regulatory phases of development, where a team ushered a compound through early-, mid- and late-stage clinical trials. Instead, in the "Learn" phase, a team works on multiple candidates across technologies and moves them through simultaneously.

Killing Failures Earlier
The aim is not only to determine dosing, but also such things as identifying biomarkers, understanding therapeutic windows and the benefits of any combinations. The focus is on getting multiple candidates into the clinic, killing off the failures earlier and finding the best ones to advance. The confirm phase is where late-stage clinical trials are done. It is handled by a separate team with depth in large-scale, international trials.

Under this approach, Wyeth might develop small molecule drugs, protein therapeutics and vaccines aimed at the same target or the same disease. Consider the company's work in Alzheimer's, a neurodegenerative disease that afflicts 4.5 million people in the United States and 18 million worldwide. A total of 350 researchers at Wyeth are currently working on 23 projects around Alzheimer's, including small molecules, protein therapeutics and vaccines. Eight of those projects are in the clinic, including a monoclonal antibody the company is preparing to advance into late-stage clinical trials with its partner Elan.

As a contrast to its approach, Wyeth Research's Projan points to Pfizer's promising cholesterol drug candidate Torcetrapib, which had produced encouraging data through mid-stage clinical trials. Pfizer terminated work on the drug at the end of last year when late-stage trials showed elevated mortality with people using the drug in a clinical trial.

"In the Wyeth model we would have had multiple platforms addressing that particular target," said Projan. "Perhaps they would have been small molecules, but we would also have aggressively pursued backup and follow-on molecules, even if it's a small molecule program. We might have crapped out with Torcetrapib, but I guarantee we would have had other small molecules right behind it in the development pipeline."

Approach Still Unproven
But while Projan and others say their approach to drug discovery and development is showing early signs of success, they also acknowledge it will be years before they can say for sure it's a better way to operate.

"Given the long timeline we've got, it's probably going to be a decade before we can dispassionately evaluate the success of this business approach," he said. "It is certainly working at putting more compounds in the pipeline and achieving more positive proof of concepts in shorter time frames. Does this actually translate into phase III successes and commercial successes? It will take ten more years to figure this out."