Oyler’s long game: Owning the process from clinical trials to manufacturing

BeiGene CEO discusses the early strategies that are now paying off on The BioCentury Show

Few CEOs have built a $20 billion biotech in under 15 years, as John Oyler has with BeiGene, managing to stay in that market cap band even through the downmarket. His strategy, to own clinical trials and manufacturing early on, looks particularly prescient in light of the cost and supply constraints threatening many biotechs today.

Oyler co-founded  BeiGene Ltd. (NASDAQ:BGNE; HKEX:6160; Shanghai:688235) in 2010, with the premise of making global and affordable medicines, which meant building clinical trial capabilities from the start, he told The BioCentury Show.

For most oncology medicines, he said, over 75% of the cost is driven by clinical trials, and that cost has dramatically increased over time. “When I talk to my peers, they say it’s $250,000 to $300,000 per patient enrolled on a clinical trial. So when we talk about a clinical trial that’s 500 patients, you can do that math real quickly. It adds up really, really fast,” said Oyler.

To change the program costs that play into the high drug prices, “we thought you have to rethink the way you do everything, but primarily clinical trials,” he said. 

Oyler outlined several factors BeiGene set out to address: Not involving enough centers in the U.S. and across the globe added to long enrollment times; a need for better technology to reduce manual entry and take information from the hospital EMR system into the clinical trial system; and the use of third party CROs which typically have a 30% markup and often don’t have an incentive structure to introduce efficiency as they are paid by task.

“We wanted to work on the technology. And we thought if we did those things, we could reduce the cost, aspirationally, half. And if it’s 75% of the cost and you reduce it in half, that’s more than reducing your costs by a third,” said Oyler. “We’re not there — we’re maybe two thirds of what we aspired, but that was part of the beginning realization,” he said.

Oyler said the company knew from the start the importance of the science and the clinical trial strategy, but underestimated the importance of the CMC and commercial team elements. “On the manufacturing side, we really learned the hard way,” he said, citing a manufacturing partnership for the PD-1 program that fell through because a major pharma locked up the site.

But the capacity the company has built in small molecule and antibody manufacturing has stood them in good stead to expand into adjacent modalities such as targeted protein degraders, bispecifics and antibody-drug conjugates (ADCs).

Oyler also discussed the journey to the current market cap, with some pivotal points in the earlier bear markets. “These times, they come and go, the money flows freely, and then it doesn’t.”

He said that in addition to conserving pennies, it takes clarity about whether you want to build a long-term sustainable company, and what capabilities you need if that is the goal. “Because your strategy is different — what you’re doing and what you’re building is different,” said Oyler.