Massachusetts Biotechnology Council
November 19, 2004
Cambridge, MA
Using Project Management
Information Systems (PMIS) To
Improve R&D Portfolio Decisions
Martin D. Hynes III, Ph.D.
Director, Operations & Quality,
Pharmaceutical Product Research & Development
Lilly Research Laboratories
A Division of Eli Lilly and Company
Lilly Corporate Center
Indianapolis, Indiana 46285 U.S.A.
www.lilly.com
Agenda
I.
Introduction
II.
Integrated Business Process for Portfolio
and Project Management
III. Portfolio Management
IV. Project Management
V.
Capacity Management
VI. Financial Management
VII. Conclusion
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
I. Introduction
The Challenges of Drug Development
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
We Are Confronted With
Increasing
Development time
Costs
Low probability of technical success
Hostile political environment
Global development organizations
Unmet medical needs
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
Drug Development Cycle Time
Time from First Pharmacological Testing to New
Drug Approval, 1963 - 1997
Years
1960s
1970s
1980s
1990s
3.8
1.9
4.4
2.4
4.3
5.2
2.1
5.6
5.6
2.8
6.7
0.0
5.0
2.0
10.0
15.0
Time (Years)
1st Pharm Testing to IND File
IND File to NDA Subm
NDA Subm to Approval
Source: Parexels Pharmaceutical R&D Statistical Sourcebook, 2002/2003
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
Dollars (Millions)
Rising Cost of New Drug
Development
900
800
700
600
500
400
300
200
100
0
1987
1990
1994
1996
2001
2002
Year
Cost
Represents a 250% increase from 1987 2002!
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
NMEs Approved 1990 - 2003
50
40
35
30
2003
12
2002
1999
10
2001
19
1998
16
17
2000
18
1997
13
14
18
1996
11
13
16
19
1995
1994
12
14
12
1993
15
11
1992
10
16
1991
20
30
1990
Number of Approvals
60
Years
Priority Review
Standard Review
www.FDA.gov
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
NMEs and BLAs Approved 1990 2003
50
40
30
20
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
10
1990
Number of Approvals
60
Years
New Molecular Entities
Biologics License Application
www.FDA.gov
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
Biologics License Applications (BLA)
Approved 1996 - 2004
Number of Approvals
5
4
3
5
2
1
2
1
2
1
1
0
1996 1997 1998 1999 2000 2001 2002 2003 2004*
Years
Approvals
www.FDA.gov
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
* As of April 2004
9
U.S. Pharmaceutical Industry
Adjusted R&D Expenditures and
NCE Approvals, 1963-2001
Source: Tufts CSDD Approved NCE Database; PhRMA
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
10
Indexed growth
(1991 = 100)
Trends in R&D Expenditure, Sales,
and Number of NMEs 1991 - 2005
200
175
150
125
100
75
50
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Year
R&D Expenditure
Sales
Number of NMEs
Source: News from CMR International, March 2002
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
11
Declining R&D Success Rates
Number of Compounds Entering Phase
Cumulative
%
Success Change
Rate
Historical
(1995 2000)
14%
Current
(2000 2002)
13
8%
Phase I
Phase II
Phase
III/File
Launch
Preclinical
43
Source: Windhovers In Vivo: The Business and Medicine Report, Bain Drug Economics
Model, 2003
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
12
Safety-Based Market Withdrawals
Post-Launch
Withdrawal Year
(Approval Year)
1998
1999
2000
2001
2002
2003
2004
Mibefradil
(1997)
Astemizole
(1988)
Alosetron*
(2000)
Cerivastatin
(1997)
Vioxx
(1999)
Bromfenac
(1997)
Grepafloxacin
(1997)
Cisapride
(1993)
Rapacuronium
(1999)
Seldane
(1985)
Troglitazone
(1997)
* Returned to market in 2002 with restricted distribution
www.FDA.gov
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
13
Recouping the Cost of Development
Only 3 out of every 10 drugs brought to
market generate enough revenue to recover
the average cost of its development
7 out of every 10 drugs brought to market
never generate enough revenue to recover the
average cost of development
H. Grabowski et.al. 2002
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
14
We Are Confronted With Unmet
Medical Needs
In the last 40 minutes there have been.
10 new victims of schizophrenia
132 U.S. cancer deaths
20 osteoporosis-related hip fractures
1,296 cases of anxiety disorder
1,523 procedures requiring pain treatment
72 U.S. deaths from cardiovascular disease
365 new cases of HIV/AIDS diagnosed
There continues to be challenges in medical science
Age-old ailments (cholera, pneumonia, malaria, dysentery,
tuberculosis)
Emerging pathogens (Legionnaires' disease, AIDS, Ebola,
SARS, West Nile Virus)
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
15
How Do We Respond to These
Challenges?
Total despair
Revamp the drug
development process
One project at a time
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
16
How Do We Respond to These
Challenges?
Total despair
Big Pharma sentiment shifts from pessimism to
hopelessness
Jami Rubin - Morgan Stanley
Not viable
Patients on a global basis
are depending upon us
Not necessary
Our industry is staffed with
bright and creative people
www.thestreet.com
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
17
How Do We Respond to These
Challenges?
Revamp the Drug Development Process?
Viable in the long term
The Critical Path to New Medical Products
On March 16, FDA released a report addressing the recent slowdown in innovative
medical therapies submitted to the FDA for approval, "Innovation/Stagnation:
Challenge and Opportunity on the Critical Path to New Medical Products." That
report describes the urgent need to modernize the medical product development
process -- the Critical Path -- to make product development more predictable and
less costly.
According to Acting FDA Commissioner Lester M. Crawford, "A new focus on
updating the tools currently used to assess the safety and efficacy of new medical
products will very likely bring tremendous public health benefits."
Source: www.FDA.gov
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
18
How Do We Respond to These
Challenges?
One project at a time
Viable approach in the near term
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
19
How Do We Respond to These
Challenges?
Better management of drug development
projects can lead to reductions in cost and
cycle time
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
20
How Do We Respond to These
Challenges?
There are interventions that will help, for
example:
Cutting development cycle times by 50%
would lower cost by 30%
Improving clinical success rate by 30% would
reduce cost by 22%
Cutting one year from phase III clinical trial
would save an average of $71 million USD
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
21
How Do We Respond to These
Challenges?
You cant manage what you cant measure
Hence, we need to be able to measure
Timelines
Cost
Probability of technical success
Value
for drug development projects as well as the portfolio of
projects
This data should be used to drive:
On time, on budget, and on scope performance
Improvements in the drug development process
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
22
Confronting the Challenges
Business processes and supporting tools are
needed that will allow us to:
Deliver:
on time
on budget
products that add value
Increase the probability of technical success
Allow for the rapid redeployment of
resources once a compound fails
Effectively manage global development
projects
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
23
II. Integrated Business Process for
Portfolio and Project Management
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
24
Business Process for Portfolio and
Project Management
How much
can we afford
to spend?
Financial
Financial
Process
Process
Portfolio
Portfolio
Mgmt
MgmtProcess
Process
Uncertainty
Attrition
Change
What resources
Capacity
Capacity
will it take in
Mgmt
MgmtProcess
Process
both people
and dollars?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
What
molecules
should we
work on?
Project
ProjectMgmt
Mgmt
Process
Process
What studies
will we have to
do to bring
these molecules
to market?
25
IT Tools for Portfolio and Project
Management
Portfolio
Portfolio
Optimizer
Optimizer
Portfolio Optimization
Tools provide the
organization with
"intelligent" options
SAP
SAP
SAP consolidates
project, resource, and
direct expense
information across the
Portfolio
MS Project
captures detail
critical path
timelines
Microsoft
Microsoft
Project
Project
November 19, 2004
Mass. Biotech. Council, MDH, acb
Local Capacity Tools
Local
Local
(STAR) provide
Capacity
Capacity
detailed resource
Tools
Tools(STAR)
(STAR)
estimates by
function by role
Company Confidential
Copyright 2004 Eli Lilly and Company
26
The Project Management Information
System
Net Present
Value
Probability
of Technical
Success
Portfolio Tool
Portfolio
Reports
Optimizer
Actual
Financial
LRL Global
Employees
Time Entry
SAP Portfolio
SAP
Data
Repository
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project
Management
Functional
Capacity
Planner
November 19, 2004
Mass. Biotech. Council, MDH, acb
STAR
STAR
Database
Database
Company Confidential
Copyright 2004 Eli Lilly and Company
Capacity
Reports
27
III. Portfolio Management
What Molecules Should We Work On?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
28
Business Process Integration
How much
can we afford
to spend?
Financial
Financial
Process
Process
Portfolio
Portfolio
Mgmt
MgmtProcess
Process
Uncertainty
Attrition
Change
What resources
Capacity
Capacity
will it take in
Mgmt
MgmtProcess
Process
both people and
dollars?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
What
molecules
should we
work on?
Project
ProjectMgmt
Mgmt
Process
Process
What studies
will we have to
do to bring
these molecules
to market?
29
Portfolio Management: R&D Model
Key question - How many projects need to be in
the pipeline to meet corporate growth targets?
FHD
To
FED
FED
To
FPD
FPD
To
FS
FS
To
Launch
MARKETED
PRODUCTS
Revenue $$
DRUG
DISCOVERY
FTD
To
FHD
2001
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
2002
2003
2004
2005
2006
2007
30
Governance: Review and Approval
Process Balancing Portfolio
Portfolio and Operational
Committees review workin-progress vs research
and development model
Buy-Ups
In-License
FTD
To
FHD
FHD
To
FED
FED
To
FPD
FPD
To
FS
FS
To
Launch
Consider Buy-Up
Proposals, Acceleration
Strategies, or In-License
Opportunities to fill critical
gaps
Acceleration
Trade-Offs, Park,
Out-License, Alliance
November 19, 2004
Mass. Biotech. Council, MDH, acb
Make Trade-Offs, Park,
Out-Licensing, or Alliance
Decisions to moderate
phases are over-capacity
Company Confidential
Copyright 2004 Eli Lilly and Company
31
Portfolio Governance: Portfolio
Review Process
All projects in the
portfolio are assessed
using the same
parameters and
methodologies
Senior Management
decides what project to
add to the portfolio
Project priorities are
then established
Market
Valuation
Probability
of Technical
Success
Portfolio
Prioritization
Resource
Intensity
Cycle
Time
Short term and
long term
capacity
requirements
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
32
Portfolio Inputs To Project
Management Information Systems
Net Present
Value
Portfolio Tool
Portfolio
Reports
Optimizer
Probability
of Technical
Success
Actual
Financial
Inputs to the
Portfolio
Resource intensity
Cycle time
LRL Global
Employees
Time Entry
SAP Portfolio
Data Repository
SAP
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project
Management
Functional
Capacity
Planner
STAR
STAR
Database
Database
Capacity
Reports
Probability of technical success
Market valuation
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
33
Portfolio Reporting From Project
Management Information Systems
Net Present
Value
Probability
of Technical
Success
Portfolio Tool
Portfolio
Reports
Optimizer
Actual
Financial
LRL Global
Employees
Time Entry
SAP Portfolio
Data Repository
SAP
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project
Management
Functional
Capacity
Planner
November 19, 2004
Mass. Biotech. Council, MDH, acb
STAR
STAR
Database
Database
Capacity
Reports
Company Confidential
Copyright 2004 Eli Lilly and Company
Examples of Portfolio
Reports
8Q Rolling Forecast
8Q Forecast Plan by
Project
Project Milestones, Cost,
and Revenues
Plan vs Actual Spend
34
Portfolio
Reporting
Net
Net Present
Present
Value
Value
Portfolio Tool
Optimizer
Probability
Probabilityof
of
Technical
Technical
Success
Success
Portfolio
Reports
Data from SAP
8 Quarter Rolling Forecast
$60
Do we have adequate
resources to deliver portfolio?
$50
How are we progressing
toward key milestones?
$40
Do we need to slow, stop or
accelerate any resource
utilization?
$30
Are we appropriately
resourcing our priorities?
$20
Do we have the capacity to add
new projects?
$10
What are the rate limiting
functional areas?
Example Portfolio Resource Forecast
$004Q1 04Q2 04Q3 04Q4 05Q1 05Q2 05Q3 05Q4
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
35
Net
Net Present
Present
Value
Value
Portfolio
Reporting
Portfolio Tool
Portfolio
Reports
Optimizer
Probability
Probabilityof
of
Technical
Technical
Success
Success
Data from SAP
8 Quarter Forecast: Plan By Project vs Functional Budget
Probabilized Spend Per Quarter
Cost ($$$)
Direct
People
Target
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
Cost ($$$)
Probabilized Spend Per Quarter
Direct
People
Target
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
Plan By Project (Demand)
exceeds Target (Supply)
Plan By Project (Demand) less
than Target (Supply)
Trade-offs necessary to meet
target
Consider additional Buy-Up
Opportunities
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
36
Portfolio Capacity Management
Project Demand vs Supply (On-Board Headcount)
Supply vs Demand
115%
Compare supply vs
demand over
periods of time
105%
Used to identify
chronic bottleneck
functions
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
Project Mgmt
Regulatory
Medical Affiliates
Medical Operations
Clinical Pharm
CT Materials
Product Dev
Process Dev
pK
ADME
Toxicology
Chemistry
85%
Biology
95%
Is the bottleneck
where you want it
to be?
Trade-off
decisions, strategic
hiring
37
IV. Project Management
What Studies to Get the Molecules to
Market?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
38
Business Process Integration
How much
can we afford
to spend?
Financial
Financial
Process
Process
What resources
will it take in
both people and
dollars?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Portfolio
Portfolio
Mgmt
MgmtProcess
Process
Uncertainty
Attrition
Change
Capacity
Capacity
Mgmt
MgmtProcess
Process
Company Confidential
Copyright 2004 Eli Lilly and Company
What
molecules
should we
work on?
Project
ProjectMgmt
Mgmt
Process
Process
What studies
will we have to
do to bring
these molecules
to market?
39
The Project Management Planning
Process
Discovery
Hit
To
Lead
Target
To
Hit
Target
Milestones Target
Hit
Hit
Lead
To
PgS
Lead
Lead
Early Development
Late Development
Launch
Lead
Optimization
Pre-Clinical
Development
Phase I
Phase 2
Global
Launch
Phase 3
Registration
PgS
PgS
CS
FTD
FHD
FHD
FED
FED
PD/RD
FPD
FS
FS
FA
FA
FL
FL
GL
Planning Horizon?
Level
of
Detail?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
40
Project Planning Process
Utilize Microsoft Project for
detailed project planning
(timelines)
Utilize SAP project systems
for timeline and cost
integration
Conduct critical path
analysis to optimize crossfunctional plan
Use rolling wave methodology across planning horizon
Use phase specific templates as starting point for each
phase of development
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
41
Project Inputs To Project
Management Information System
Net Present
Value
Portfolio Tool
Portfolio
Reports
Optimizer
Probability
of Technical
Success
Actual
Financial
LRL Global
Employees
Time Entry
SAP Portfolio
Data Repository
SAP
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project Management
Inputs
Project
Management
Functional
Capacity
Planner
STAR
STAR
Database
Database
Capacity
Reports
The project plan
Timeline/Milestones
Expenses
Direct
Indirect
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
42
Project Reporting From Project
Management Information Systems
Net Present
Value
Probability
of Technical
Success
Portfolio Tool
Portfolio
Reports
Optimizer
Actual
Financial
LRL Global
Employees
Time Entry
SAP Portfolio
Data Repository
SAP
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project
Management
Functional
Capacity
Planner
November 19, 2004
Mass. Biotech. Council, MDH, acb
STAR
STAR
Database
Database
Capacity
Reports
Company Confidential
Copyright 2004 Eli Lilly and Company
Example Reports
Planning Board
Capacity
Cost
Dollars
People (Project Hours)
43
Project
Reports
November 19, 2004
Mass. Biotech. Council, MDH, acb
Portfolio Tool
Optimizer
Actual
Financial
Time Entry
Company Confidential
Copyright 2004 Eli Lilly and Company
SAP Portfolio
Data
Repository
Project
Reports
44
V. Capacity Management
What Resources Will It Take?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
45
Business Process Integration
How much
can we afford
to spend?
Financial
Financial
Process
Process
What resources
will it take in
both people and
dollars?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Portfolio
Portfolio
Mgmt
MgmtProcess
Process
Uncertainty
Attrition
Change
Capacity
Capacity
Mgmt
MgmtProcess
Process
Company Confidential
Copyright 2004 Eli Lilly and Company
What
molecules
should we
work on?
Project
ProjectMgmt
Mgmt
Process
Process
What studies
will we have to
do to bring
these molecules
to market?
46
Functional Capacity
Management
There is a significant
amount of detail at
the functional level
that feeds the Project
Level information
This level of detail is
managed at the
functional level
Project Level Planning
High Level
Functional
Deliverable
Detailed
Activities
Roles
Skill Set
Capability
Training
Flexibility
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
Detailed
Activities
Physical
Plant
Facility
Equipment
Technology
Detailed
Activities
External
Capacity
Vendor Mgmt
Contract
Negotiation
Alliances
47
Capacity Management Inputs To Project
Management Information Systems
Net Present
Value
Portfolio Tool
Portfolio
Reports
Optimizer
Probability
of Technical
Success
Actual
Financial
LRL Global
Employees
Time Entry
SAP Portfolio
Data Repository
SAP
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project
Management
Functional
Capacity
Planner
STAR
STAR
Database
Database
Capacity
Reports
Functional Capacity Inputs
Project plans
Capacity plans
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
48
Capacity Management Reporting To
Project Management Information Systems
Net Present
Value
Probability
of Technical
Success
Portfolio Tool
Portfolio
Reports
Optimizer
Actual
Financial
LRL Global
Employees
Time Entry
SAP Portfolio
Data Repository
SAP
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project
Management
Functional
Capacity
Planner
November 19, 2004
Mass. Biotech. Council, MDH, acb
STAR
STAR
Database
Database
Capacity
Reports
Company Confidential
Copyright 2004 Eli Lilly and Company
Example Reports
Plan, Actual, and Forecast
for:
each project
the portfolio of projects
function
division
49
Capacity Reports
From PMIS
November 19, 2004
Mass. Biotech. Council, MDH, acb
Portfolio Tool
Optimizer
SAP Portfolio
Data Repository
Plan
Project Mgt.
Capacity Plan
Company Confidential
Copyright 2004 Eli Lilly and Company
STAR
Database
Capacity
Reports
50
VI. Financial Management
How Much Can We Afford to Spend?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
51
Business Process Integration
How much
can we afford
to spend?
Financial
Financial
Process
Process
Portfolio
Portfolio
Mgmt
MgmtProcess
Process
Uncertainty
Attrition
Change
What resources
Capacity
Capacity
will it take in
Mgmt
MgmtProcess
Process
both people and
dollars?
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
What
molecules
should we
work on?
Project
ProjectMgmt
Mgmt
Process
Process
What studies
will we have to
do to bring
these molecules
to market?
52
Financial Process
The corporate
budgeting process
defines the R&D budget
Fiscal process to
establish annual
budget for upcoming
year
Total Budget
R&D
R&D
Mfg
Mfg
Mrktg
Mrktg
$$$
$$$
$$$
8 quarter forecasting
process for refinement
throughout the year
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
53
Budget Reconciliation
Supply
(Budget)
Total
Project
Demand
The financial budgeting
process defines the
spending limit (Supply)
The total project
projection provides
the cost of the desired
work (Demand)
Reconciliation of Supply and
Demand through "Buy-Up"
and "Trade-Off" Processes
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
54
Financial Inputs
Net Present
Value
Portfolio Tool
Portfolio
Reports
Optimizer
Probability
of Technical
Success
Actual
Financial
LRL Global
Employees
Time Entry
SAP Portfolio
Data Repository
SAP
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project
Management
Functional
Capacity
Planner
STAR
STAR
Database
Database
Capacity
Reports
Inputs to Financial Process
The project plan
Time entry data
Global cost project data
Clinical trial data
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
55
Financial Reporting From Project
Management Information Systems
Net Present
Value
Probability
of Technical
Success
Portfolio Tool
Portfolio
Reports
Optimizer
Actual
Financial
LRL Global
Employees
Time Entry
SAP Portfolio
Data Repository
SAP
Business
Warehouse
Project
Reports
Web
mySAP.
com
Plan
Project
Management
Functional
Capacity
Planner
STAR
STAR
Database
Database
Capacity
Reports
Financial Reports Available
Plan vs Actual Expense
Direct
Indirect
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
56
Financial Reports
From PMIS
Portfolio Tool
Optimizer
Actual
Financial
SAP Portfolio
Data
Repository
Time Entry
Project
Reports
Top 20 Compounds by Spend
Total 2004
(Compound, % Total)
Drug Candidate 1
Drug Candidate 2
Drug Candidate 3
Drug Candidate 4
Drug Candidate 5
Drug Candidate 6
Drug Candidate 7
Drug Candidate 8
Drug Candidate 9
Drug Candidate 10
Top 10 ^
Drug Candidate 11
Drug Candidate 12
Drug Candidate 13
Lilly FTE $
Drug Candidate 14
Direct $
Drug Candidate 15
Drug Candidate 16
Drug Candidate 17
Drug Candidate 18
Drug Candidate 19
Drug Candidate 20
$ thousand
November 19, 2004
Mass. Biotech. Council, MDH, acb
500
1,000
1,500
2,000
Company Confidential
Copyright 2004 Eli Lilly and Company
2,500
3,000
3,500
57
Financial Reports
From PMIS
Portfolio Tool
Optimizer
Actual
Financial
Time Entry
SAP Portfolio
Data
Repository
2004 Plan
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
2004 Actual
Project
Reports
2005 Plan
58
VII. Conclusion
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
59
The Benefits of Project Management
Information Systems to the Project Manager
Consolidated source of project information:
More timely and consistent information for
controlling projects
Information more appropriate for cross project
comparison
Senior Management reporting
Fewer tools to maintain
Reduced risk of different data
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
60
The Benefits of Project Management
Information Systems to the Financial Process
Provides Project and Financial Manager with
integrated financial management tool:
Utilizing data provided by the function
Plan and Actuals tied to Project Plan
Cost and resource information more visible to:
Project Manager
Global Research Organization
Better, more current information for
controlling projects
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
61
Benefits of Project Management Information
Systems to the Portfolio Management Process
SAP Project Systems has provided more
accurate, comprehensive, and timely
information collected in a consistent manner
for decision makers.
Better data should lead to better decisions:
Decisions made by people
Dependent upon on the quality of the inputs
Facilitates the consideration of
Buy-ups and in-licenses
Trade-offs and out-licenses
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
62
Key Question
Can small companies benefit from this type
of approach?
Yes
Significant benefit is derived from
Project management tools
Business process
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
63
Project Management Tools
Can a small company afford the tools for
portfolio, project and capacity management?
Can you afford not to measure?
Probably not
Significant choice of tools at a variety of
costs
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
64
Project Management Tools
Types of tools available to small pharmaceutical and
biotech companies
Examples
Project management tools
Excel
Microsoft Project
Microsoft Project Server Edition
Artemis
Scitor
Primavera
Reporting/ Communication tools
PowerPoint
Web sites
Lotus Notes database
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
65
Business Process
Significant benefit can be derived from
Establishment of a business process for:
Project management
Portfolio management
Resource / capacity management
Project governance / gate reviews / project
charters / approvals
Establishment of a dictionary for key terms
Examples First Human Dose
Submission
Establish a common language
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
66
Business Process
Significant benefit can be derived from
Making data driven decisions
Projects
Portfolio
Function
Disciplined execution
Proactive risk management
Frequent communication
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
67
Conclusion
As an industry, we need to continue to adapt
by:
Reinventing the drug development process
FDAs Critical Path initiative
Controlling drug development cost and cycle
times
Project management
Capacity management
Resource management
November 19, 2004
Mass. Biotech. Council, MDH, acb
Company Confidential
Copyright 2004 Eli Lilly and Company
68
Massachusetts Biotechnology Council
November 19, 2004
Cambridge, MA
Thank You
Using Project Management Information Systems
(PMIS) To Improve R&D Portfolio Decisions
Martin D. Hynes III, Ph.D.
Director, Operations & Quality,
Pharmaceutical Product Research & Development
Lilly Research Laboratories
A Division of Eli Lilly and Company
Lilly Corporate Center
Indianapolis, Indiana 46285 U.S.A.
www.lilly.com
November 19, 2004
Mass. Biotech. Council, MDH, acb
