Haapalinna antti 2nd annual r&d process excellence summit 22nd october15-handouts

Performance

Management of R&D

Orion Pharma R&D 2015

Antti Haapalinna,

Ph.D., Adjunct Professor, eMBA

Vice President, Research, R&D,

Orion Corporation ORION PHARMA

2nd Annual R&D Process Excellence Summit

Berlin 22nd October 2015


Background

1) Orion Corporation background information

Some theoretical basis on performance management...

3. General process, prinsibles in goal setting

4. Motivation & creativity

What we have done in R&D

R&D effectivity before (2007) ... and After

3. Self-Diagnosis and a New Strategic Direction

4. Starting with Culture Change

5. Culture Change enables New Ways of Working

6. Organizational Outcomes

Agenda

2

Orion Corporation

background

information

Background and context

3 Orion Pharma R&D 2015

Specialty Products

(Gx + OTC)

Orion today – building well-being since 1917

Net sales ~mEUR 1,000

Personnel ~3,500

R&D expenses ~11% of

net sales

Six production sites in

Finland

Sales organisation in

>20 European

countries Proprietary Products

Animal Health

Fermion (API production)

Contract Manufacturing

Orion Diagnostica

4

€373mn

Figures are 2014 sales by segment

€427mn €70mn

€57mn

€34mn

€56mn


29 %

13 %

35 %

10 %

13 %

Geographical sales split in 2014

Finland Scandinavia

Other Europe North America

Other countries

Steady growth and good profitability

20%

22%

24%

26%

28%

30%

32%

0

200

400

600

800

1000

12002007

2008

2009

2010

2011

2012

2013

2014

EU

R m

illion

Net sales

Operating profit

Operating profit, % of net sales


Performance

Management

A few theoretical principles

Generic Model for Performance Management

Process

7

Figure from Pulakos, E. D. 2009. Performance Management:

A New Approach for Driving Business Results, Wiley-Blackwell.

http://ihabsarieddine.com/wp-content/uploads/2013/05/PM-Model.jpg

Achievement SMART goals

8

Creativity is a competitive advantage

Expertise Creative

thinking skills

Motivation

Creativity

Knowledge

-technical,

-procedural

-intellectual

How problems and

solutions are approached.

Capacity to put existing

ideas together in new

combinations

An inner passion to solve the problem. This

“intrinsic motivation” can be most immediately influenced

by the work environment

"R&D: The Voice of Science and the Patient"

Innovation

What motivates us ?

• Autonomy and self directed actions towards the

goals

– What, when, who and how (techniques)

• Mastery, optimal experiences for the challenges

we face. Is a mindset to see our capabilities not

as finite, but as infinitely improvable.

• Purpose, a cause greater and more enduring

than ourselves

10

(Modifed from Daniel H. Pink, DRIVE, the surprising truth about what

motivates us 2009)


http://www.youtube.com/watch?v=rrkrvAUbU9Y



11

VALUES

VISION

MISSION

CORPORATE STRATEGY

BUSINESS UNIT STRATEGY

GOAL SETTING

COMMUNICATION AND

TRANSPARENCY

FORMAL REVIEW

BEHAVIOUR AND ACTIONS

TOOLS AND CONTINUOUS

DEVELOPMENT

MEASUREMENT AND RESULTS

REWARDING & TALENT

MANAGEMENT

Performance Management Ecosystem

Important to

link values,

vision, mission

and strategy

Employees

needs to

understand

what is

expected

Importance

also HOW

goals are

achieved

CONTINUOUS FEEDBACK

R&D before (2007)

... and After

Background and context



History of new molecules (7) and proprietary

product platforms (2) over two decades

Human Health

• Toremifene (Fareston®), 1988 breast cancer

• Easyhaler® family of proprietary dry powder

inhalers, 1992, asthma/COPD

• Entacapone (Comtess®/Comtan®), 1998,

Parkinson’s

• Dexmedetomidine (Precedex®), 1999,

intensive care sedation

• Levosimendan (Simdax®), 2000, acute

decompensated heart failure

• Carbidopa/levodopa/entacapone fixed dose

combination (Stalevo®), 2003, Parkinson’s

Animal Health

• Detomidine

(Domosedan®), 1983,

animal sedation

• Medetomidine

(Domitor®), 1987,

animal sedation

• Atipamezole

(Antisedan®), 1989,

animal sedation

antagonist

13

Molecule (Brand) or Proprietary Product invented by Orion

Pharma with date of first launch and first indication

Orion Pharma R&D 2015 30

Active-To-Hit Hit-To-Lead Lead Optimization

CNS B

CNS C

Cardiovascular

Urology

CNS A

Candidate Precandidate

Oncology A

But by the beginning of 2007, our Research

pipeline was thin ...

CTA

14

Research Pipeline at the end of 2006


... And our Clinical pipeline was also weak

15

Clinical Development Pipeline at the start of 2007




By the spring of 2012, our Research pipeline had

tripled and was continuing to expand ...

CNS D

CNS B

CNS A

Oncology C

CNS B

Oncology A

Oncology D

CNS C

Collaboration projects in oncology 4x

Oncology B

CNS G

CNS F

CNS E

CNS H Super generic

Oncology spin out for new indication

HIT Finding

CTA Snapshot from Orion pre-clinical research projects on May 2012

16




Research projects 2013 (16)

17

CNS D

CNS A

Oncology D

CNS B

Oncology B

CNS C

Oncology A

Oncology C

CNS G

CNS F

CNS E

CNS H Super generic

Collaboration (Biologic) for new indication

HIT Finding

CTA

CNS H

CNS I

CNS J


... And today in 2015, our Clinical pipeline

is very healthy

18

Project Indication PHASE Registration

Bufomix Easyhaler® (budesonide-formoterol) Asthma, COPD I II III

Easyhaler® salmeterol-fluticasone Asthma, COPD I II III

ODM-201 (androgen receptor inhibitor) Prostate cancer I II III

Levosimendan Low Cardiac Output

Syndrome I II III

ORM-12741 (alpha-2c adrenoceptor antagonist) Alzheimer’s disease I IIa

Dexmedetomidine (intranasal) Treatment of pain I IIb

ODM-109 ALS I II

ODM-104 (more effective COMT inhibitor) Parkinson’s disease I

ODM-203 (targeted FGFR+VEGFR inhibitor) Solid tumours I

ODM-204 (CYP17 enzyme and androgen receptor inhibitor) Prostate cancer I

ODM-106 (GABA-B receptor positive allosteric modulator) Essential tremor I

ODM-108 (negative allosteric modulator of TRPA1 ion channel) Neuropathic pain I

= Phase completed

= Phase ongoing

More information at: http://www.orion.fi/en/rd/orion-rd/pipeline/

http://www.orion.fi/en/rd/orion-rd/pipeline/




Before having that we had to push the “change

button”!

19

Self-Diagnosis conducted and a New

Strategic Direction developed in 2007

Comprehensive R&D organization-

wide Change Process initiated in

2007-08


Starting point At 2007, Orion R&D already had many pockets of world-class scientific and technical

competence. The people were committed and loyal. But there had not been much success

(low productivity) for some years, downsizing was needed and emotional state was

consequently low. In addition, R&D had a hierarchical working style and inward-looking

culture, with entrenched functional silos. And historical level of outsourcing and external

partnering was lower than our peers.

Aim More "open R&D" model, emphasizing transparency in all R&D work, creating seamless

links and alignment to business operations, building up external collaborations and

adopting a strategic approach to outsourcing, while focusing R&D’s internal operations on

core therapeutic and scientific domains. Most importantly, several practical initiatives

focused on creating an R&D culture of productivity, openness and enthusiasm - i.e.

changing the mindset of people.

Best R&D journey so far


Key transformation sprints and renewal of

organisation structures 2007 2008 2009 2010 2011 2012 2013 2014

Best Structure

Best Leadership

Best Strategy

Smart to POC • Smart planning

• Capabilities (Project ecosystem)

Best Image

Make it stick

Major reorganisation and

redundances

3 R&D processes

Reorganisation – Project

centric process driven

matrix and activity based

model in GD-PLM

Reorganisation

IND-PLM part of

SC

Guiding team and sponsors of the sprints: R&D management team

PM and

MedA join

R&D



Best Strategy –how do we implement it?

• Balanced portfolio and Research Portfolio Management Team

• Process performance metrix

• R&D Therapy Area Teams

• Proof of idea – productivity

Best leadership is a key for success in matrix

• R&D steerings

• Clarity of roles

• R&D culture

• CrossFun

• R&D rules

• Training days

• Cross functional superior collaboration

• SuperDay



With our company values as a foundation ...

The values of Orion indicate our common goals, helping us choose our direction

in the changing world. They bond us together in the work we do for producing

products and services that promote our customers’ well-being and health.

Mutual trust and respect

Customer focus

Innovation

Achievement

Quality, reliability and safety

23

R&D Vision ”R&D in Orion – The Voice of Science and the Patient”



We defined bottom-up our Desired R&D Culture in 2008

24

Our guiding stars are a results orientation and a happy

enthusiasm in all that we do. The atmosphere is

relaxed, inspiring, encouraging and fosters

discussion. Our two-way communication is effective.

People are led professionally and with fairness – all have

appropriate challenges and possibilities to influence.

We are willing to give feedback and show appreciation.

We trust each other and want to be trustworthy. We give

and accept responsibility. Diversity and internationality

are our assets. We are outward-looking and we use the

whole world as help in our work.



Very strong indicators for results-oriented teamwork,

personal leadership and happiness at work

25

From an R&D-wide employee survey conducted in February 2013

Statement “Agree” or

“Strongly

Agree”

Our guiding star is results orientation 83%

I continually keep myself up-to-date in my work 73%

I clarify issues with those who can influence or solve them 91%

I actively make improvement suggestions which are related to my work 65%

I do not get hurt if my suggestions do not get implemented 80%

I do not give up if I make mistakes; instead I learn from them 83%

I continuously want to educate myself 88%

I ask if something is unclear 91%

I am able to focus on the main priorities of my work 76%



More details of this case study recently published in

a peer-reviewed journal

26

Thong, R. and Lotta, T. (2015) “Creating a Culture of

Productivity and Collaborative Innovation: Orion's R&D

Transformation”, Research-Technology Management

(RTM) Journal May-June 2015 58(3): 41-50



Once the culture change was underway in 2008, we

began to upgrade our major processes to support an

Open R&D operating model ...

27

Outsourcing Concept

Therapy Area Teams, Portfolio Management

and External Collaborations

New Project Ideation and Screening

Project Management incl. Scientific Leaders

Processes Upgraded to Industry Standard 2008-09


... And reorganized into a matrix organization of

“Processes” and “Platforms” in early 2009


Chemistry

and Safety

Sciences

Platform

Pharma-

ceutical

Sciences

Platform

Project and

Portfolio

Manage-

ment and

Regulatory

Affairs

Platform

Medical

Affairs &

Pharmaco-

vigilance

Platform

Biostatistics

and Support

Functions

Platform

Innovative

Research

Process - CNS

- Oncology & Critical Care

Proprietary

Development

Process - CNS

- Oncology & Critical Care

- Easyhaler

Generics

Development

Process


(1) Proof-of-Concept Business Model

for proprietary drugs

Drug Discovery

Research

Pre-

Clinical

Confirmatory Development

and Regulatory Approval

Basic Research &

New Project Ideas

Candidate

Drug Start

Project

Clinical Proof-

of-Concept

• Focus in-house resources on middle of the R&D value chain

• Collaborate at earlier stages with academia and smaller

biopharma companies, and after proof-of-concept with large

pharma late-stage development and commercialization partners

• Generate a reliable stream of assets with clinical proof-of-concept

for a superior return on R&D investment – aim by 2017 to have

”more generated, faster and at lower cost per unit of funding,

than any other Pharma R&D organization”

Launch

Exploratory Clinical &

Technical Development

Orion’s New R&D Focus for Proprietary Drugs

First-

in-Man



Scientific

Competences - Universities

- Research Institutes

Drug Discovery

& Development

Competences - Small Biotechs

- Pharmas

- CROs

Orion

Networking

Collaboration

opportunity Collaboration

opportunity

Collaboration

opportunity

30

(2) Open R&D Operating Model

• Focus internal operations on

core scientific domains and

therapeutic areas

• Ramp up external scientific

collaborations. Adopt a more

strategic approach to

outsourcing non-core activity

• Increase flexibility as well as

transparency in all R&D

work, creating seamless

links and alignment to

internal business operations

and external collaborators



Collaboration

low

low

high

high Confidence/ trust

Defensive –

be afraid of win-lose situation

Respectful –

compromise solution

Synergistic –

looking for common good

Levels of communication (mutual trust and respect)



New ways of working also greatly appreciated by

external partners

32

“Over the past decade, we have collaborated with over a dozen

companies ... We regard Orion as amongst the best companies

we have collaborated with in our experience ... mutual respect

... trust ... high degree of personal interaction at all levels in

the team ... deep relationships with some of their key scientists”

– CEO of mid-sized discovery stage biotech

Quote from one of Orion’s R&D partners ...



(3) Project-centric Matrix Organization

• Matrix Organization

– Increasingly the norm across the industry

– Projects and therapy area skills along one dimension ...

– ... Common functional skills/disciplines (“platforms”) on the other

• Project-centric Mindset ... “Project is King”

– Project is center of gravity for both strategic and day-to-day operational

decision making

– Internal and external activities managed around project needs

33 "R&D: The Voice of Science and the Patient"


Organisational output


Measuring performance is often regarded as an instrument

for managers, but the primary aim should be

to give objective Feedback to and within an

organisation

Feedback is a major driver for Motivation

Motivation is a main driver of Creativity

Performance should be measured, but the detail of metrics should

be carefully considered not to compromise motivation and creativity.



Input Output

CTA

Timecon

CATS

SAP

eROOM

Gaia, ELN

Gaia PreMaS

Outcome ! MAA

New

Innovations

ELN

Where are we getting the metrics data?


http://av.rds.yahoo.com/_ylt=A0geunYKvY5IKjUANQvvSKMX;_ylu=X3oDMTBvMmFkM29rBHBndANhdl9pbWdfcmVzdWx0BHNlYwNzcg--/SIG=11su5qdeh/EXP=1217400458/**http:/socialsciences.people.hawaii.edu/

http://av.rds.yahoo.com/_ylt=A0geulwb7IZId3AACBvvSKMX;_ylu=X3oDMTBvMmFkM29rBHBndANhdl9pbWdfcmVzdWx0BHNlYwNzcg--/SIG=11o40fcu3/EXP=1216888219/**http:/euroconverter.htmlplanet.com/

http://av.rds.yahoo.com/_ylt=A0geulji3YZIXWUACk_vSKMX;_ylu=X3oDMTBvMmFkM29rBHBndANhdl9pbWdfcmVzdWx0BHNlYwNzcg--/SIG=14b53n4mg/EXP=1216884578/**http:/www.afacereamea.ro/d-hr-enc.php?P=art-view&code=d-HR-ENC-MKS&artID=d-HR-ENC-MKS-BRAINDRAINvsEUROPE

http://av.rds.yahoo.com/_ylt=A0geuls44IZIZ6cA7mbvSKMX;_ylu=X3oDMTBvMmFkM29rBHBndANhdl9pbWdfcmVzdWx0BHNlYwNzcg--/SIG=121teptn9/EXP=1216885176/**http:/www.epda.eu.com/medInfo/entacapone.asp

http://av.rds.yahoo.com/_ylt=A0geulrA4IZImVcAlRLvSKMX;_ylu=X3oDMTBvMmFkM29rBHBndANhdl9pbWdfcmVzdWx0BHNlYwNzcg--/SIG=11tsq5kef/EXP=1216885312/**http:/writersink.homestead.com/Wink.html

http://av.rds.yahoo.com/_ylt=A0geunk38YZI3AABQ1fvSKMX;_ylu=X3oDMTBvMmFkM29rBHBndANhdl9pbWdfcmVzdWx0BHNlYwNzcg--/SIG=12s1jpliu/EXP=1216889527/**http:/www.novusint.com/Public/Products/AlimetSwineOrganicAcidSource.asp

http://av.rds.yahoo.com/_ylt=A0geuniua41ILtkASU3vSKMX;_ylu=X3oDMTBvMmFkM29rBHBndANhdl9pbWdfcmVzdWx0BHNlYwNzcg--/SIG=12dlco3h2/EXP=1217314094/**http:/www.techlinkcenter.org/cgi-bin/techlink/00851.html

http://av.rds.yahoo.com/_ylt=A0geumEvvo5IGFYA_i_vSKMX;_ylu=X3oDMTBvMmFkM29rBHBndANhdl9pbWdfcmVzdWx0BHNlYwNzcg--/SIG=12b1djgbf/EXP=1217400751/**http:/www.bd.com/ds/productCenter/ES-Miscellaneous.asp


POI Hit to

Lead

Lead

Optimization

Development

for phase 1

TMP Lead

selection

Development

candidate

selection

I-ID I-XX-YY D-XX-YY

Timelines between phases to be recorded: 1) Hit to lead phase (from official start of the project to identification 1st lead structure)

2) identification of Lead molecule: (start of lead optimization process),

3) identification of Pre candidate (broader in vivo efficacy and safety testing) and

4) identification of Drug development candidate (start of the nonclinical developmental work for the CTA)

5) CTA ready

WBS-code logic:

all POIs Specific research project Specific development project

Pre-

candidate

selection

CTA

documentation

ready (Target Molecule Profile)

Guidance and logic in early R&D



Company goals, R&D goals, Process goals

and personal goals

• Corporation has goals for netsales and profitability

• R&D has perfomance goals

• Research Process has goals as part of R&D goals

• Every projects has ambituous goals

• Personals goals are combination of project goals

• For exempts maximum yearly bonus is 2 months salary

– 1 month is based on the performance of corporation

– 1 month maximum is based on achievement of R&D main goals

and of project goals



Example about the bonus system

• Corporation achived 80% of the goals set by BoD => personnel

is given 80% of 1 months salary

– Motivates personnel in R&D to think the current performance

of the corporation guides cost efficient actions

• R&D achived 90% of the goals set by CEO => maximum

personal part is 90% of 1 months salary

– Motivates to think that the all goals and projects are

important, not only those the person mainly participates in.

• Person participates 40 % in project A and 60 % in project B,

Project A achieved 70 % of the goals and project B 80 % of

the goals. Person has achieved (0.4 x 0.7 + 0.6 x 0.8) 76% of

personal goals and is given 68.4 % of 1 month salary

– Motivates for commitment on all projects, where one has a

role.

• In total 0.8 x monthly salary + 0.684 monthly salary = 1.484 x

39

example



Internal projects Collaboration projects

Time from the start of

the project to the

identification of

Precandidate

36.9 months 38.9 months

Internal FTEs used 39.3 6.1

Average extrenal costs 1 * X € 2.1 * X €

Average total costs 1 * X € 0.65 * X €

Comparison of internal and collaboration projects from

the start to the precandidate identification phase


example


Productivity of the Research process;

Input vs KPIs

Year FTE's (%)

External

costs

(%)

No of

Projects

No of

preC No of DC

FTEs/DC

(FTEs from

all projects)

Ext cost/

DC (costs

from all

projects)

CTAs

ready

2008 100 100 8 0 1 100 100 1

2009 114,8 201.1 10 2 2 57,4 100,5

2010 129,7 248,6 13 2 2 64,7 124,3 1

2011 145,1 247,3 20 5 3 48,4 82,4 2

2012 147,6 362 23 13 4 36,9 90,5 2

2013 143 339 22 3 5 28,6 67,8 3

preC = precandidaatti

DC = Development candidaatti


KPI KPI KPI KPI


Readiness and productivity, now and in the future

SYSTEM

- ORGANISATION

- STEERINGS

- FORMAL

PROCESSES !

- COMMON RULES

- GLP, GMP, GCP...

CHAOS

-INNOVATION &

CREATIVITY

- CHANGE

- DEVELOPMENT OF

NEW

TECHNOLOGIES

- TEACHING and

LEARNING

At the same time is needed:

* Goal directed actions * Cost effectiveness

* Creativity * Acceptance of changes

VALUES



“ Results & Achievements

=

Competencies x Wish ”

Dream it, Believe it, Achieve it

43

Goal setting is important but do

not underestimate the strenght of

winning culture


Thank You

Q & A ?

Acknowledgements

To various persons in Orion R&D, especially members of Research Process Management Team and R&D

managenement team (Reijo Salonen, Timo Lotta, Minna Ruotsalainen... )

as well as colleagues in Orion ”Peak Performance Team” (S. Häkkinen, N. Lindstedt,

J-P. Haapalahti, P. Åkerlund)


Date post:	11-Apr-2017
Category:	Leadership & Management
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Haapalinna antti 2nd annual r&d process excellence summit 22nd october15-handouts

Leadership & Management