point
Menu
Magazines
Browse by year:
Pharma Software
Saturday, June 1, 2002

While most industries have embraced the use of software to automate their business processes, one major industry has been surprisingly slow to do so: the pharmaceutical industry. That may now be changing, and a Mountain View, Calif.-based startup is hoping to capitalize. Pharmquest has developed a workflow software platform that is designed to automate the drug-development process for both large and small pharmaceutical companies. While its software has only been on the market a little over a year, the company has already signed up an impressive list of customers that includes Eli Lilly, Abbott Laboratories, Pfizer, and Pharmacia.

Integrating Drug Development

Pharmquest was founded by the husband-and-wife team of Shankar Hemmady and Seema Handu. Both Hemmady and Handu attended graduate school at the University of Iowa and have spent considerable time helping IT and pharmaceutical corporations streamline their business processes. CEO Hemmady previously founded Guru Technologies, an EDA company, and has worked as a consultant for such high-profile companies as EDS, Citibank, and Hewlett Packard. Handu, who is the company’s VP of R&D, has a Ph.D. in pharmaceutics and worked as a drug development consultant prior to starting Pharmquest in 1999.


Pharmquest’s main product is a workflow system designed to integrate the different groups involved in the drug-development process and allow individuals to exchange information from the earliest stages. The system ties in the appropriate Food and Drug Administration (FDA) regulations at each step of the process. Handu says that while each company’s drug development processes are unique, a good 80 percent of the procedures are ones that all companies must adhere to. Pharmquest works with each of its customers to customize its standard system to a company’s particular needs. The company’s other products include systems designed to reduce the time it takes to develop drugs by identifying potential targets among lists of molecules.



Pain Points

It takes anywhere from 7 to 15 years to turn a molecule into an FDA-approved product. At the large pharmaceutical companies, the drug development process is highly fragmented, with one unfortunate group generally responsible for gathering all the necessary information and presenting it to the FDA. Since a drug can remain on the market for 20 years or more, pharmaceutical companies must store data over an extremely long period of time. Internal IT departments spend much of their time trying to support countless versions of Oracle and Windows, leaving little time to develop new IT solutions.


The result is an industry that is used to approaching new IT at glacial speed. Pharmquest’s ability to quickly make inroads with “Big Pharma” is largely a result of its own connections within the industry. Handu spent time developing drugs at Penederm before starting her own consulting business. The company also has a former FDA commissioner on its advisory board and counts Eli Lilly as a corporate investor. Perhaps most importantly, Pharmquest recently announced a relationship with the FDA whereby the company will work with FDA reviewers to develop a set of electronic standards for the drug-application process.



Betting the Pharm

The importance of properly managing the drug-development process cannot be overstated. An official filing with the FDA can increase a company’s value exponentially while, conversely, failing to get a drug to market can be devastating. One needs only to look at the recent struggles of drug-maker Imclone, which has been one of the higher-flying biotech stocks in recent years, thanks to its highly anticipated cancer drug Erbitux. But after the FDA rejected the company’s drug application in December, Imclone’s stock tanked as investors felt company executives misled them about Erbitux’s prospects for approval.

Handu is careful not to overstate what Pharmquest’s software can do. “We’re not claiming that we can solve all of the Imclone issues, but we could have potentially helped in that situation,” she says. “The FDA is becoming more and more proactive and we’re moving towards creating a more open and standardized environment.” Another trend that should benefit Pharmquest is the ongoing consolidation of the pharmaceutical industry. But merging pharma companies has proven to be extremely tricky. “It often takes five to 10 years to integrate because companies essentially speak different languages,” says Handu. She notes that according to most involved, the 1989 merger of Bristol Meyers and Squibb essentially happened in name only, and the new entity continues to act as two separate silos.

Taking it Slowly

To date, most pharmaceutical companies have relied on their own internal IT departments and outside consulting firms such as PricewaterhouseCoopers and Ernst & Young to manage their drug-development processes. CRM software from Siebel and SAP has typically only been used by the sales and marketing teams. Pharmquest has a relatively un-tapped market opportunity.


To date, the 20-person company has raised just $3.5 million, but it is hoping to be profitable later this year without any additional outside money. “We do not need to grow too fast,” notes Handu. “There’s no point in building an overly ambitious product because our customers aren’t ready. We want to grow with our customers.” As a generation of aging baby boomers searches for pills to cure its every ache and pain, the growth prospects for Parmquest’s customers looks good. But becoming the industry standard in software for the pharma industry is an ambitious task for the company.

Twitter
Share on LinkedIn
facebook