Roche Global Head Of Partnering Sophie Kornowski-Bonnet On Finding Innovation In Asia (Part 2 of 2)

In an exclusive interview, Sophie Kornowski-Bonnet sits down with PharmAsia News to share her impressions of innovation in China and the company’s overall partnering strategy in China and emerging markets.

A pharmacist by training, Roche EVP and Global Partnering Head Sophie Kornowski-Bonnet, got her doctorate in Paris and her MBA from the University of Chicago. She spent 20 years on the business side, working in the U.S. for about nine years with Sanofi, Merck & Co. Inc. and Abbott Laboratories Inc. She opened an affiliate for Merck in Israel, buying it back from Teva Pharmaceutical Industries Ltd. After that, she spent five years as general manager of Roche in France.

“Business, I know really well. Running a big company for me is known ground,” she says in an interview with PharmAsia News in Shanghai along the sidelines of the PharmAsia Summit Shanghai Oct. 22. “Partnering is a whole different ballgame.”

She became Roche’s global head of partnering less than two years ago, and her team forged the deal with Chinese start up Ascletis Inc. to develop and commercialize Roche's investigational drug danoprevir (RG7227) in China for hepatitis C. Ascletis will fund and be responsible for the development, regulatory affairs and manufacturing in greater China, including Taiwan, Hong Kong and Macau (Also see "A Closer Look: Roche’s Move On Danoprevir Shines Light On Innovation Strategy In China" - Scrip, 22 Apr, 2013.).

Roche made a strategic decision to pursue approval of danoprevir only in emerging markets due to high competition with and lack of differentiation from other HCV drugs. People with the HCV genotype 1b subtype have been shown to be particularly responsive to danoprevir; and 60-70% of the estimated 14-40 million HCV patients in China express this genotype, according to a recent report from J.P. Morgan [See Deal].

The Ascletis deal marks the second time that Roche has out-licensed to a Chinese biopharma company in recent years. In 2011, Hua Medicine Ltd. gained rights to a group of Roche’s glucokinase activators including RO5305552 for type 2 diabetes (Also see "China’s Hua Medicine Licenses Worldwide Rights To Roche Diabetes Compound, More Deals On The Way" - Scrip, 20 Dec, 2011.).

Roche has done very well in China, reporting 27% growth in pharmaceutical sales in 2012 (Also see "Roche Sees Access Programs As Key To Growth In China, Brazil: Emerging Market Earnings Roundup (Part 1)" - Scrip, 18 Apr, 2013.). Given affordability challenges, Roche has emphasized its patient assistance program for Herceptin (trastuzumab), under which Chinese patients pay for the first six cycles of treatment, with Roche picking up remaining treatments, up to a maximum of eight cycles, free of charge. (Also see "Dynamic Markets Need Dynamic Pricing: Roche Explores Differential Pricing Strategies In Emerging Markets" - Scrip, 16 Feb, 2012.).

Roche’s persistence in pursuing innovation in emerging markets appears to be paying off. When most of the Big Pharma pack was gung ho for branded generics, Roche went off in a different direction, questioning the sustainability of a branded generics strategy given a push by China and other governments to cut prices on off-patent medicines and to encourage import substitution (Also see "Will Innovation Replace Branded Generics As Dominant Strategy For Big Pharma In Emerging Markets? (Part 2 of 2)" - Scrip, 7 Mar, 2011.).

The company has also been a pioneer in its partnering strategies with insurance companies in China to educate them about oncology treatment regimens and disease epidemiology. In essence, by educating insurance companies in China on how to structure benefits for oncology drugs, the company was able to grow its market share of oncology products like Herceptin (Also see "Roche Looks To Improve Market Access In China Through Patient Assistance Programs, Reinsurance" - Scrip, 12 Sep, 2012.).

On her second trip to China, Kornowski-Bonnet said that she believes China is now ripe for innovation, and is actively pursuing opportunities. For part one of this interview, see: (Also see "Roche Global Head Of Partnering Sophie Kornowski-Bonnet On Finding Innovation In Asia (Part 1 of 2)" - Scrip, 22 Jan, 2014.).

Sophie Kornowski-Bonnet

Source: Roche

PharmAsia News: Roche began its operations in China via a joint venture with Shanghai-based Sunve Pharmaceuticals, and now operates in China as Shanghai Roche Pharmaceutical Co. Ltd., or SRPL. Is this a preferred model for entering a new area, via a JV with a local partner?

Kornowski-Bonnet: That was done in '94, and those type of deals are most of the time driven by the strategic corporate level, probably similar to the fact that the deal we have with Chugai Pharmaceutical Co. Ltd. in Japan, where we have a majority stake into this outstanding innovative Japanese company, where we decide to work together for the best of both companies.

“If you walk around in a cancer center and you see the flood of people, the line outside, you understand that the potential is there.”

So I think this is our way to be local, where on the one hand, the best of Roche is available, but at the same time, we're very sensitive to the local ways of doing things and the local culture. And I think that has worked very nicely for SRPL; I have no question about it.

PharmAsia News: And you've taken a hands-off approach with those companies in that you've let them remain intact, more or less. Is that a model you prefer?

Kornowski-Bonnet: Well, I think for Chugai completely. We cross-fertilize, but Chugai makes its decisions. But we're relying on many things, because I think that much of our drugs for Chugai today are also fueled by the Roche pipeline, but they're doing very well also with their in-house products.

On SRPL, I think Roche is actively working, and most progress, I think, at least in China, has been discussed and seeded through Roche. But they're local because they’re in a local market like you said; they deal with insurance companies or some of the patient access programs that are very specific to the Chinese market. We try to walk the right line.

PharmAsia News: It's a tough one, because what I hear again and again from people on the ground here is that their biggest challenge is communicating to headquarters the importance of China. And there is a hesitance on the part of most big pharma headquarters.

Kornowski-Bonnet: And we want to have a global strategy, right? I think that's why I'm here today – to better understand the potential of this market, to better feel its growth. You know, if you walk around in a cancer center and you see the flood of people, the line outside, you understand that the potential is there. And then you have to say, okay, what type of resource do I invest there?

“In partnering, I will say my favorite deal is the next deal, because you want to be hungry. You want to be scouting.”

So you want to do what's right. I consider myself an ambassador of headquarters, but also someone who tries to understand really the local needs so I make the right decision. And again, since every single deal I make is approved and financed by the head of pharma or the head of the region, through the head of pharma, and the CEO, and the head of research, I'm able to be completely in line with the global strategy while also serving the needs of the local market. It's a challenging line.

I think companies go all the way with having local business people who do things locally, or completely headquartered people who will only do what's good for the group. I'm just trying to find the right middle ground. People like Darren [Ji, Roche’s global head of partnering, Asia and emerging markets] help me a lot. And hopefully, I'll be able to make a difference with my team.

PharmAsia News: Are there any favorite deals that you have in this region that you helped put together in either China or other markets?

Kornowski-Bonnet: I’ve only been here for a year now, but I'm a great fan of my Ascletis deal, more than of the out-licensing. Additionally, it's an experiment for us, and it's good for patients. We'll see how that works. It could be paving the way for more of those.

In partnering, I will say my favorite deal is the next deal, because you want to be hungry. You want to be scouting. So I'm here for a few days; I've had a lot of meetings with research teams. I'm hearing some very interesting research on targets. I believe the science here is starting to mature. We have a lot of returnees who are coming back, or Americans who are actually moving here. It's becoming very international with people who are very hungry for groundbreaking innovation, and they just want to be part of it.

PharmAsia News: Is this your first trip to China?

Kornowski-Bonnet: No, it's my second trip. But I think that it takes time to understand what is unfamiliar. So first, I came here and I saw and I understood. I met some of the local companies who had a lot of “me-betters” and then also biosimilars, I was thinking, “Is this good? Is this bad? How does it fit? Yes, no?” And now I'm here, meeting people who do innovation. First of all, I have someone now who is very experienced. Darren with his post education in the U.S., plus CEO experience, understands what good can look like. And I feel I'm getting it more, so I think I'm now at the stage where I'm more able to direct my teams to the right opportunities.

PharmAsia News: And then culturally, how is the partnering process different?

Kornowski-Bonnet: That, I cannot really tell you if partnering would be different here than in other places. We sell the expertise of the company. We have to feel the trust that is building, and you have to know that every time you talk to someone, a whole bunch of other pharmas are talking to them as well. Is it going to be different in China than in Israel than in the UK than in France? Probably. Then you just have to force it to be a little bit standardized, meaning that if it becomes extremely complicated – we had a deal [that became] an extremely convoluted conversation; eventually it collapsed. And the whole time we had this convoluted conversation, I was like, “well, maybe because of the country they're from maybe they think differently, or you know, in that language, maybe it means” ... but in fact, it was just the wrong relationship.

PharmAsia News: You need to listen to your gut sometimes, right?

Kornowski-Bonne: Exactly. Make it a little bit simpler. And so the few interactions that I've had with local companies here, I haven't really felt that this was really special. It takes more time to understand someone who is different from you. But then I always remember I'm different from most people in my business, so, you know, I give them a chance and I hope they give me a chance.

“The challenge in partnering is that you have the pressure to do deals, and this is the wrong incentive. You have to have the pressure to do the right deals.”

Generally it's not the deal structure that is a problem; it never is. It's sometimes the perception of the biotech, which has its own data; whereas, we see it very differently. They believe they're Phase II; we believe they're Phase I. That's a classic. If the biology isn't completely clear, even if the clinical data are good, we're very reluctant to go full-speed.

We can be misaligned on business case, but if the opportunity is really differentiated, most of the time, we're able to explain where we stand and come to an alignment. You know, price is not generally where we disagree, because there are comparables and you can price – actually, some people would pay anything to get something; we wouldn't. We just want to do the right deals. The challenge in partnering is that you have the pressure to do deals, and this is the wrong incentive. You have to have the pressure to do the right deals and let go of something that looked like such a fun deal to do, but was not making a lot of sense or too risky.

PharmAsia News: Can you share some lessons learned?

Kornowski-Bonnet: Yes, I have some lessons learned, which I think is a really good question. It can take you between three to four months, to eight to 14 months, to do a deal. And the lesson learned is when you're starting to pass the stage of five months, you have to really question: “Are you beating a dead horse? Or are you actually having the right conversation?” And oftentimes, people think they're aligned, but they're not. So being extremely connected internally in the company, making sure the right people have the right conversations, making sure my team is able to detect this, is critical. So yes, I've learned some lessons.

PharmAsia News: How do you know if you're aligned?

Kornowski-Bonnet: You just get the conversation going and you see immediately. I had an example last weekend. We had a conversation around a therapy area, and I just realized we were trying to push a deal and I realized that our own internal folks were not aligned, and I told my team. So my team would say: ”Well, they need to align,” but we need to facilitate that alignment.

So it's a very interesting role as an interface inside the company, and we're surrounded by extremely impressive people most of the time, so if you get the right discussion, you get to the right decision.

For partnering, you don't only partner to the outside; you partner to the inside. You have to convince people that what you're going to do is good for them, and they have to be convinced that they can believe what you say and they can believe the assessments. When you screen 2,500 opportunities and you end up signing between, I don't know, 40 to 60 deals or something like this, that means that there are a lot of kills on the way. So you have to look in the right spots and you have to spend your time adequately. So I'm on a very steep learning curve. I feel I'm learning every day. These past few days in China have been eye-opening in many ways. And I'm here to make a difference.