The astounding speed by which the scientific community responded to the COVID-19 pandemic has energized researchers looking to uncover new ways of targeting the drivers of disease. Global biopharmaceutical company AstraZeneca is leveraging rapid advancements in science and technology to do just that but getting new types of therapies to patients is a complicated, lengthy process involving many departments, collaboration partners and technologies.
In hopes of shortening that cycle AstraZeneca is collaborating with Waters Corporation, a large global U.S.-based company developing analytical hardware and software, to optimize workflows in the drug development process that are necessary to produce new medicines. Experts from four departments at Waters have moved into the BioVentureHub at the heart of AstraZeneca’s R&D site in Sweden, effectively turning a supplier into an innovation partner.
“This has changed our whole perspective on how we innovate,” says Magnus Björsne, AstraZeneca BioVentureHub’s CEO. “We are developing things that will solve our needs five years from now,” he says. Thanks to the arrangement, tools “will be distributed to the industry much earlier and to us first. Getting rapid access to relevant technology through this arrangement puts us in the front seat.”
The shared lab program at the Gothenburg-based BioVentureHub, which involves co-location and co-creation between two large non-competing companies, has led to big benefits for both and could end up becoming a new blueprint for collaboration, say the companies.
“I believe this is the future of collaboration in any high-tech innovative environment,” says Cristina Lindved, General Manager for Northern Europe at Waters, a global provider of analytical instruments, supplies and software for scientists working in pharmaceuticals, food, environment and academia.
In just 12 months, the unique setup between the BioVentureHub and Waters has led to five new areas of collaboration. Both companies say they would like to replicate the arrangement with other partners.
The way the relationship has been structured holds some valuable lessons for corporations in just about every industry struggling with how to innovate. Culture clash with startups, a not-invented-here attitude and fear of anything that might change traditional business models and impact quarterly results are some of the reasons why large, incumbent firms rarely introduce radical product innovations. And the pharmaceutical industry, and life sciences in general, face additional challenges due to complex and uncertain development processes, regulatory issues, long lead times, large investments, huge financial risks, and high failure rates.
“My advice is to open up and see this as a journey into sustainability,” says Anders Holmén, AstraZeneca’s VP and Head of Pharmaceutical Sciences, R&D. Companies “need to evolve by adopting a sharing economy approach that allows for the use of collective resources in hardware, facilities, people and investments,” he says. “To me, there is a huge opportunity to create a more sustainable innovation ecosystem.”
OVERCOMING HURDLES
The BioVentureHub’s open innovation journey began in 2014 when Björsne set it up as a separate legal entity, placed it in the middle of the AstraZeneca Gothenburg campus, and encouraged close collaboration between AstraZeneca employees and entrepreneurs housed at the hub, with no strings attached on either side. The setup eased financial pressure by securing external funding to make the project cost neutral for the drug maker, allowing space for experimentation and failure.
One third of the cost of running the BioVentureHub is paid by the Swedish Innovation Agency (Vinnova), Region Västra Götaland and the city of Gothenburg, who collectively have invested 16.2 million SEK. Patricia Industries and Carl Bennet, principal shareholder and chairman of the global medtech company Getinge, have also provided funding. AstraZeneca’s contribution is to offer 40 million SEK of in-kind services and facilities. The private-public-partnership model is financed for ten years in total.
The idea is to catalyze collaborative innovation across Sweden’s biotech, diagnostics, med tech, and pharma industries, in order to strengthen the entire ecosystem.
The links between industries help AstraZeneca, in turn, with its goal of forging partnerships with young companies working on emerging communications and sensor technologies, to prepare for a shift in the health sector away from stand-alone products (i.e. medicines) to outcomes.
The BioVentureHub has led to 70 legal agreements between the hub companies and AstraZeneca, and more than 35 scientific publications. A team of 23 senior people from all over the globe, representing a cross-section of the drug maker’s divisions, serve as bridges between the hub and AstraZeneca. “If you go back a few years in the history of the company, the responsibility for innovation resided within R&D,” says Björsne. “Today, the responsibility to innovate is with everyone in the company.”
There have been some important learnings along the way. One was that culture change takes time. “I really don’t think we could have forced internal understanding and trust and confidence in the model,” says Björsne. “It’s one thing when it is a statement on paper. It is something else when people believe in it. The trust from management has allowed us to put culture into action.” Receiving external funding has helped create a balance between value creation, the Swedish government’s goal, and value capture, which is AstraZeneca’s objective. “When we have had to make decisions on the border between the two, we tell both parties we have to balance it and that has given us the freedom to move where we have to go,” says Björsne.
Another takeaway is that there needs to be a good match on business logic. “When we started to co-innovate with digital tech companies, we very soon realized that it is challenging because the business logic of the two industry verticals is so different,” says Björsne. The drug development process can take eight to ten years. This is a very long time frame in the world of digital tech companies. Instead, AstraZeneca now brings in complementary companies with different skills and works with them on a common problem.
That approach led to talks with Waters, which produces state-of-the-art instruments the entire pharmaceutical industry is dependent on. Waters and AstraZeneca already have a close collaboration when it comes to specialty measurement tools and technologies.
The co-location at the R&D Gothenburg site brings together Waters and AstraZeneca scientists in analytical science, software development and systems integration. The hope is that being based in the BioVentureHub will help promote the joint development of next generation instrumentation and data analysis tools and speed new drugs to market. “It’s a unique set-up for sure,” says Lindved, Waters’ general manager for Northern Europe. “We don’t have this kind of arrangement with any other kind of customer.”
The relationship needed some legal guardrails, says Lindved. And it required establishing a relationship of mutual trust. AstraZeneca is used to the idea of co-location and co-creating thanks to the BioVentureHub. For Waters it was a big leap.
“We needed strong support from leadership in the U.S. to be able to do something like this,” she says. Approval was given after Waters’ previous CEO visited the BioVentureHub site. However, Lindved cautions that making it work takes far more than a handshake on-site. “It needs to be funneled right into the heart of the development group,” she says. “ To allow other people to tell you what your blind spots are requires a lot of the leadership.”
It is a difficult but important step in moving forward, she says. “There is a realization that the larger you become as a company, the slower you become unless you are smart about collaboration,” says Lindved. “The pandemic has helped to transform the old ways of collaborating. Today, there is a different view on how you should allow yourself to accelerate your transformation.”
From Waters’ perspective, the open innovation arrangement “allows us to align our pipelines even closer and allows us as a company to get immediate feedback from our end users,” she says. An added advantage is that Waters has connected with some younger companies on the BioVentureHub campus that could end up as future customers, says Lindved.
Being complimentary has competitive advantages for both companies. Björsne says, “For us, it is an opportunity to influence the solutions we need for tomorrow. It has also resulted in new ways of working together we haven’t been able to do before. Proximity creates ideas. Many companies have swapped in digital meetings so now we joke that analog is the new premium. When it comes to creativity, being exposed – in person – to people with different perspectives and to things that are not planned is powerful.”
So why haven’t companies done more of this? “Whenever companies talk about collaborations, they tend to put them into templates,” says Björsne. “It’s like trying to develop a template for a successful marriage. Everyone realizes it won’t work. It’s personal every time.”
GREATER FREEDOM TO COLLABORATE
Waters typically sends service representatives to customers’ sites on demand, either to fix or maintain instruments. At the BioVentureHub it has teams on-site from areas such as instrumentation, informatics, chemistry and applications, along with service engineers.
Waters and AstraZeneca have a long history of product development on hardware, software and beta testing new instruments. “These three areas of collaboration were already happening but if we continued doing it the same way we always did, it would go at a much slower rate due to a number of legal bottlenecks and approval processes,” says Jayesh Kattla, who heads Waters’ on-site involvement with the BioVentureHub. “The creation of a universal umbrella non-disclosure agreement allows us to freely discuss anything with any user at AstraZeneca under this agreement, including software workflows or products in the pipeline years down the line.”
That new openness has been put to work in drug development. “AstraZeneca is working on several new modality drugs,” says Kattla. By interacting with the scientists working on this new class of drugs, Waters can develop data analytical workflows that fit into their drug development cycle. “It benefits AstraZeneca because these data analysis workflows can be tested with their own samples in-house and we refine the process together,” he says. “There is a huge benefit for us because it usually takes hundreds of man years to develop new liquid chromatography-mass spectrometry (LC-MS) software, but the resources are not sitting there freely. Every small feature/workflow change request after it is developed will take ages. By co-locating and exchanging information without any legal issues, we can develop a product that is fit for purpose from the start.”
Workflows are another area of stepped- up collaboration. Waters can advise AstraZeneca on shortcuts and other tricks of the trade that it has learned by working with clients in other sectors. “Knowing how to do things that save time is critical and we can pass this knowledge on,” Kattla says.
The arrangement also involves reducing the downtime of scientific instruments. Not only does Waters now have service engineers on-site, discussions are also underway about locating a supply center of spare parts at the BioVentureHub so when something breaks or needs replacement, all AstraZeneca employees have to do is scan the object’s barcode and sign it out.
AstraZeneca, Waters, and a third-party company are also due to jointly start working on a digital transformation project to harmonize AstraZeneca laboratory data and make it both accessible and shareable globally within AstraZeneca, says Kattla.
The collaboration also covers artificial intelligence. “Waters is exploring applications of AI in analytical science in order to drive products faster to market,” says Kattla. “We are jointly exploring with AstraZeneca chemists how this can be done: what sort of benchmark tests do we need to do to make sure the instruments are working as they should, and then how that data can get back to them and alert them.” The companies are also looking at how to automate system health checks to reduce downtime and at how systems analytics could be used by AI.
WHAT’s NEXT
Scaling BioVentureHub’s open innovation model is on AstraZeneca’s agenda. The drug company sold land adjacent to the BioVentureHub to a local real estate company, and the new owners have committed to developing a health innovation business park that can accommodate up to 7000 work spaces. “We want to build on the concept of openness,” says Björsne. “To infuse the ecosystem with energy and dynamism, we need a blend of large corporates, scale-ups and startups.”
That’s not all. AstraZeneca is also launching another innovation hub called HealthWorks, which will focus on developing human-centric wellness solutions with the help of patients. The new hub will be located on the AstraZeneca Gothenburg campus.
Sharing data between companies involved in the expanded health innovation hub is another option being explored. “What if all the tenants could share their data in a safe and compliant manner with each other?” asks Holmén. “If diagnostics companies share their data we would gain, and patients would gain.” To that end the drug company is in discussions with AI Sweden to explore areas such as swarm intelligence and federated learning that could help companies selectively and safely share data. “We have the foundation and the infrastructure to make things happen,” he says. “We have a lot of things going for us here. Companies have been operating in silos but that is changing. AstraZeneca is opening up and other companies are becoming more porous. We should absolutely be working with others.”
For its part, Waters says it is “actively looking” at replicating its BioVentureHub co-location and co-creation arrangement. “We see ourselves developing agreements with other parties at other sites,” says Lindved. “Senior leadership’s role should be to remove roadblocks and then let the smart people get on with it.”
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