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“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”
A large pharmaceutical company was considering a major investment in developing a marketed product for a new disease area. The question was whether the company could move forward with the information that they already had or they needed to invest in more information before moving forward with the decision to invest in full development. The full development phase could cost the company close to $200 million.
Decision Frame
The challenge here was in determining the optimal investment in time and money in collecting any additional information through Proof-of-Concept (POC) trials. The company had some data from previously conducted small-scale trials. The company also currently had a study that was ongoing in EU. Given this context, the company had several alternative strategies to consider before moving forward with the full development decision.
Decision Option
We facilitated a framing session to identify the strategic alternatives available to the company. The following key alternatives emerged:
Move forward using currently available information
Wait till additional information from ongoing trial becomes available - until results from half the patients are available. A delay of 1 year was involved.
Wait for the ongoing trial to be complete. A delay of 2 years was involved.
Undertake a new phase II trial before going ahead with this investment. A delay of 2.5 years was involved along with considerable additional cost.
Methodological Approach
We went through a rigorous Decision Analysis (DA) to fine-tune these alternatives, assess the risks of each of these alternatives, and develop integrated risk-adjusted evaluations to come up with the best recommendation. We facilitated team sessions to assess the current probability of success given no additional information and also assess the improved ability to correctly identify eventual success through additional evidence from ongoing studies (with half the patients as well as 100% of patients, and the new study). With each alternative for obtaining additional evidence, a Bayesian update of the existing probability of success was performed given trial outcome from these alternatives. The commercial value was modeled to reflect the appropriate trial costs and the delays associated with launch under different alternatives. The expected net present values (ENPV), productivity indices (PI) and the corresponding S-curves to show the risks of these alternatives were generated.
Recomemded Solution
While our analysis showed that the team should wait for partial data (50% of patients from ongoing study resulting in one year delay), we also conducted a sensitivity analysis to show how the optimal decision alternative depended on (a) the prior probability of success with no additional information (b) the commercial value of the indication given clinical and regulatory success. Value of Information assessment was central to this analysis in determining whether the team should invest in additional learning from Proof-of Concept, and if so how much.
An abbreviated decision tree with a partial set of alternatives was as follows:
