ROXRO Pharma: How to Score Big as the (Really) Little Guy
Last week I attended a Pharmaceutical Executive web conference called “A Better Way to Conduct Alliance Management”. The conference was somewhat interesting, but in reality, it was more of an hour long advertisement for Intralinks, the conference sponsor. However, one of the speakers at the conference intrigued me: Gayle Mills, Executive Vice President of Business Operations at ROXRO Pharma. Gayle’s role at the conference was to discuss alliance management from the perspective of a small company. ROXRO’s lead compound, ROX-888, has completed Phase III trials for the treatment of acute pain, including post-operative pain. ROXRO expects to file a New Drug Application with the FDA this year for approval to market ROX-888.
The kicker is that ROXRO has only six employees. Six employees?!?! Did I hear that correctly? How does a company with six employees get a drug through Phase III trials and on the doorstep of marketing approval? Doesn’t it take a small army of people to get a drug to market in the United States of America? I decided to dig a little deeper and find out how they do it.
ROXRO states that it was one of the first pharmaceutical start-ups built upon the “virtual company” business model. They operate under a highly experienced senior management team with little to no administrative or professional staff. Since they have only a small number of employees, there are almost no infrastructure costs. There’s no need for a HR department, or an IT team or a Finance division. There’s no need for a company headquarters. Communication is done through cell phone and email. Documents are shared via an online file storage site.
OK, but what about the drug development process? How do they do it with six executives? First of all, ROXRO is not in the business of trying out thousands of compounds in order to discover a new chemical entity. They leave that type of work to the big pharmas. Instead, ROXRO in-licenses promising drug candidates for rapid development in acute medical conditions. They engage their scientific advisors and a global network of external experts in academia and other small pharmas or biotechs to find and acquire discarded or failed drugs that still have marketing potential. Then, they figure out how to tweak the product so that it can be successful.
In the case of ROX-888, ROXRO took Ketolorac, a well-known molecule for the treatment of acute pain, investigated why it didn’t work in an oral dosage, and saw the potential for it to be successful in an intranasal form. Then, they outsourced the drug development, manufacturing and clinical trial programs to external vendors.
Of course, ROXRO needed money to do all of this. Investors were willing to invest for a number of reasons: ROXRO’s experienced management team and network of experts in the therapeutic area (pain management), their low overhead costs due to their virtual model and the ability to keep their risk profile low by acquiring known - albeit failed - drugs for a more rapid progression through the clinical process.
The final piece of the puzzle is to find a partner (or buyer) in big pharma that has the pocket book and the resources (e.g. employees) to get the drug to market and keep it there. ROXRO’s plan is to stay small and let the partner handle the resource-intensive operations such as sales & marketing, regulatory affairs, pharmacovigilance, manufacturing, legal, etc. At present time, ROXRO is seeking U.S. partners for ROX-888.
So, that’s how it’s done. If you are a scientist with a great drug product idea but think that you do not have the means to get your product to market, perhaps you should think again. Start up a virtual pharmaceutical company with a few of your experienced and motivated colleagues, get some venture capital, outsource the development and clinical trials, find a big pharma partner, and the next thing you know, you’ve got a product in the game. Piece of cake, right?
