June 07, 2022

Corporate point of view: interview with MSD

Since 2019 Italian Angels for Growth, Italy's largest group of professional business angels, has opened its doors to national and international companies interested in researching and promoting innovation.

The goal is to foster cooperation between different players in the innovation ecosystem, offering companies services to support their open innovation activities, visibility on new technologies in development and opportunities for collaboration with innovative startups, innovation centers and academia.

Let's find out more with MSD, IAG Corporate Partner, which has created a strategic partnership with angels, finding the added value of IAG's scouting activity of more than 6,000 startups and expanding its business opportunities through collaboration with selected innovative companies.

We talk about this with Nicoletta Luppi, CEO MSD Italy.

MSD, known in the United States and Canada as Merck & Co., Inc. is a leading American multinational pharmaceutical company that has revolutionized therapeutic paradigms for dozens of diseases through the discovery of more than 200 innovative molecules. What made you want to interact with the startup ecosystem and engage in R&D and Open Innovation across the board?

Our mission, as MSD, is to Invent for Life, with the aspiration to become the world's first research-intensive biopharmaceutical company. This aspiration is concretely translated into the continuous search for innovative new drug therapies and vaccines, whether discovered and developed in our own research laboratories or the result of virtuous synergy with external players and partners. Generating innovation and being competitive in the market, ensuring highly effective and helpful solutions for the entire healthcare supply chain ecosystem, involves alea and risks and requires a continuous search for strategic partnerships to create a virtuous system of know-how exchange, enhancing the diversity and expertise of each player in the ecosystem.

Partnerships between companies and startups bring benefits to both parties, provided that positive contaminations are promoted between the entities involved. As MSD, we strongly believe in research that is based on the concept of partnerships and the idea of open innovation in networks, which are considered key elements of our success, because they enable faster access to innovation and guarantee added value for our Patients, making accessible new treatments that can save or improve their Lives or prevent diseases.
We also make alliances/acquisitions in the therapeutic areas where we have a greater focus: Oncology, Cardio-metabolic, Vaccines, Immunology, Neuroscience. And in 2021 MSD Italy invested as much as 26% of its turnover in R&D, and it is a commitment that it has been carrying on for many years now, in our country we invest about 54M€ per year through clinical trials and we count in Italy n.100 active clinical trials.

To best support this activity, we have a specific engagement model of the innovation ecosystem at a global level that, through the creation of co-located Hubs with dedicated research facilities, work to integrate MSD in the most important scientific communities to interact and collaborate with the academic, biotech, pharmaceutical and VC worlds and finalize agreements that allow the development of innovative therapies for the treatment of unmet medical need.

All this is translated at the local level through the activities of our different teams that through daily commitment and through the analysis of the objectives and trends to be achieved above, oversee finding the local realities that can best match the company vision.
We oversee implementing licensing opportunities with external partners on products in our pipeline, but for more than two years we have been involved, through specific programs, in open innovation projects, in the search outside for innovative solutions that can re-enter and develop our business

Therefore, we decided two years ago to become part of the IAG ecosystem, wanting to get in touch with all those realities that often, due to size or geographic origin get lost to our radar. Through the support of qualified partners, such as IAG, we do scout with periodic cadences of innovative and promising realities, with the concrete goal of being able to internationalize the project, scaling it to our colleagues in the research hubs by triggering a virtuous flywheel with the aim of creating value for patients and the health system in general.
For us today doing research and innovation means this, interacting with an innovative and fast-growing ecosystem, getting in touch with large and small realities to develop our business, because we strongly believe that as of today, we cannot and must not stop but must continuously look around to ensure high drug development and specialization for our patients and research that is of great excellence not only for us but for the whole health ecosystem.

Innovation is one of the key drivers for MSD, which invests more than $13 billion annually worldwide in internal R&D, and has recently invested heavily in startup research with the goal of enabling collaborations that can bring value to the entire industry. Therefore, in recent years you have supported various research and innovation activities such as the Open Innovation program, can you tell us more about this kind of activity?

Health and drug innovation is, for all intents and purposes, a priority of ours to ensure well-being in every country and for the whole population.
The pandemic has accelerated the use of technology and new design ideas in all areas of our lives, including that of Health, and has incontrovertibly highlighted what impact Health had on each of our lives and on the wealth and social stability of a nation. At the same time, it is clear to everyone how the way of doing innovation has changed and how progressively companies are moving towards an engagement model that pushes them to find solutions and opportunities outside their own walls. At MSD we believe in the great value of open innovation in networks, which is about the partnership between large companies and small startups to make new products and new technologies available to markets, which are also useful for other players, to create quality innovation and to bring value to the geographical areas in which we operate. It is a philosophy that is part of MSD's DNA that has led us to the discovery of scientific breakthroughs relevant to the health of humanity.

Streptomycin, for example, the first antibiotic effective against tuberculosis, is an example of open innovation ante litteram. The scientists who isolated the streptomycin molecule and then won the Nobel Prize succeeded because of:

o the instrumentation made available by MSD

o and the collaboration of the company's researchers and the governments of the time.

In return for this collaboration, MSD obtained exclusive manufacturing rights, which, moreover, it relinquished.
The fellowship and complementarity of expertise enabled innovation that changed the health of humanity, and this is the philosophy that guides us: it is the strategic lever to support innovative projects with great impact. Open Innovation projects such as Health & Biotech Accelerator represent a valuable tool to connect the different actors in the health supply chain. This accelerator project brings together health, biotech and life sciences innovation and is a pivotal link between small entities promoting innovative projects and the world of large private industry. The meeting point between these two worlds enables valuable partnerships to make a difference. In fact, innovation needs an ecosystem that encourages, incentivizes, supports, and rewards it, because generating innovation requires years of research, billions of euros of investment (which often fall on deaf ears) and an articulated and complex system of safeguards and incentives.

Each of us (the companies, small start-ups, institutions, and the scientific world) is indeed the bearer of distinctive know-how and value. Only together, through healthy and transparent collaboration, can we make a difference for People's Lives and Health.

This is key: innovation is not "just" a change from an existing situation, it is not "just" the discovery of something that did not exist before. We at MSD believe that innovation can be defined as such, and has value, exclusively if it generates, adds to, saves, or improves People's Lives.

The evolution of the industry is seeing an increasing role for Digital Health solutions: products or services that aim to bring more value to the patient, for example by simplifying the patient journey, enhancing diagnostic tools, or facilitating new drug discovery through digital tools. How can a pharmaceutical leader address this new challenge and how relevant is collaboration with smaller, innovative companies in this area?

At MSD, doing innovation is not just about Research. Discovering and making available innovative drugs and vaccines is certainly the first activity in which our ability to look to the future is made explicit; making them known, accessible and available to all is our vocation. However, scientific excellence and the ability to innovate are also expressed in the use of new multimedia channels, new technologies, and cutting-edge services to support physicians and patients capable of fostering interaction between them, and which also make it possible to bridge any situations of unequal access or discomfort, expressed by those patients for whom physical movement takes on a critical aspect, often resulting in the deterioration of the patient's own health due to the lack of timely checkups and preventive care. The pharmaceutical industry is an important player in this digital transformation, and a challenge that is being imposed on the entire Pharma Industry is the overcoming of the concept of Medication understood as a mere product. For this reason, it is necessary to approach a vision that does not focus only on the drug but puts the spotlight on the entire patient journey, to be ever closer to the patient and his or her needs. There is a desire to move more and more toward personalized medicine, and it will be possible to do so through greater integration of new technologies and data analysis (big data and analytics).

It is essential to do this while keeping up with the times; starting with our patients, their health status, and needs, which are evolving and transforming.
To the health sector, the world of Healthcare and Health more generally, today digital offers an extraordinary opportunity to make a further and necessary leap towards a more efficient, long-term sustainable and universal NHS, with the possibility of being accessible to everyone throughout the country.

To achieve these goals, it is necessary to review health care processes and services involved in various capacities in the digital transformation, redesigning governance, and roles in a new way than in the past.

Innovative Life Science Tools and Digital Health are opening new opportunities for all health stakeholders using artificial intelligence algorithms.
These tools bring us closer to People than ever before: communication channels suitable for correct information about diseases, risks and especially prevention; they allow the customer to have the correct information available, especially at a time when "fake news" is now rampant on these new communication channels. We want to combat this trend both with the physician who increasingly needs information, which he now searches almost exclusively online, and with the patient who wants to seek information or monitor his own health status more and more independently.

In fact, digitization of health care is a key factor in the better evolution of patient care management, and it is now important to integrate connected health solutions within patient care pathways also for the sake of greater economic sustainability of the health care system.
We are at the dawn of a new era where we will finally see the enablement of a connected health ecosystem that uses digital health applications as part of individualized patient care pathways and measures outcomes based on specific Real World Evidence data.
There can and should be no going back after experiencing this strong digital acceleration due to the pandemic; the diffusion of data analytics, and more generally of a data-driven approach, is now unavoidable for an increasingly personalized, sustainable, and equitable health offer, precisely because it is finally capillary, throughout the Italian territory.
Therefore, in order not to be left behind, one must not be afraid to change, and it is necessary to push oneself outside one's comfort zone with curiosity and open-mindedness, to intercept the trends of an ever-evolving ecosystem and to select the right partners with whom to make real innovation: partners with whom it is important to share objectives but who must necessarily be complementary in terms of skills. And often these partners are small companies with big ideas, such as those selected as part of the Health & Biotech Accelerator, which we decided to replicate this year by participating as a Corporate Partner in its second edition.

Health, which is a personal right enshrined in our constitution, has thus become more accessible and more personal at the same time.

The partnership with IAG began in 2020, and in recent years the two entities have collaborated on several fronts: from scouting innovative startups, to activating collaborations with selected companies, to participating in meetings with key Italian VC players and innovation centers on the ground. Based on the experience of these years of close collaboration, what is the added value of IAG as a radar and point of contact with the innovation ecosystem?

According to MSD, to do innovation and research nowadays, it is necessary to set aside the old mentality of in-house development and make room for business-to-business cooperation, collaboration, and partnerships, which can only be achieved if the parties involved approach such an endeavor by looking beyond their own interest, toward the interest of the community.

Therefore, as MSD we are oriented toward Open Innovation models in networks seen as virtuous circles in which the exchange of know-how, expertise and skills take place more effectively and quickly, uniting the world of research and innovation with the single market. This model of innovation, in fact, makes complementary use of internal ideas and resources, along with tools and expertise from outside, considering also alternative channels to one's own business, creating solid connections to the entire ecosystem. Through this model, innovative projects, by initiating new collaboration formulas, have the chance to increase their opportunities for innovation, increase their skills and experiment with new business models.
In this context and following this vision, which has been adopted by our company for several years now, valuable partners such as IAG become fundamental to our growth and research programs, they act as glue with realities of the highest level and specialization that would probably remain off our company's radar and evaluation, and this cannot possibly happen. Because often the right partners, the valuable projects come precisely from small entities with big ideas, such as those selected as part of the Health & Biotech Accelerator, of which Kither mentioned earlier and many other startups are part.

Projects such as accelerators, innovation clusters, and collaborations with VCs represent a valuable tool for MSD to connect the different players in the health supply chain.
Each of us (the companies, the small start-ups, the institutions, and the scientific world) is indeed the bearer of a distinctive know-how and value. Only together, through healthy and transparent collaboration, can we make a difference for People's Lives and Health.