He 5X’ed AstraZeneca’s productivity from pre-clinical to phase III completion and transformed the company’s R&D strategy, culture and approach to innovation.

The more I researched Mene Pangalos and immersed myself in his interviews, the more I found myself inspired by his exceptional communication skills and his ability to unite people around a common vision.

10 key principles from Mene’s leadership playbook:

1. We Don’t Do Backups Anymore!

“When I joined in 2010 I tried to get everyone bought into reasons why we needed to change and learn from what we had done before. So, we looked at all of the projects that were run from 2005-2010. We were spending about $5B a year on R&D.

When we did the analysis, we found that if you measured us by the number of things that we were doing, i.e. the number of candidates that we were putting into the clinic or the number of IND’s that we were filing, we were the second most productive company in the industry. But if you measured us by the number of launches, we were the industry’s second least productive company.

There was a disconnect there. Our science was getting rewarded, but no medicines were coming out at the other end.

For example, we used to have so many backups in the pipeline… Backup #1,2,3,4,5,6… and then of course all those backups had exactly the same probability as the lead molecule!

It’s the quality of what you work on, not the quantity of what you do. We don’t do backups anymore.”

2. The 5R Framework.

“Based on the data that we analysed, we found five things that would improve the probability of running a successful programme.

The 5Rs may seem pretty obvious, pretty intuitive, yet actually quite difficult to execute on consistently.”

Right Target

• How well do you understand the biology of the target?

• How well do you understand the disease pathophysiology, how it connects/relates to path you’re trying to modulate?

• What genetic validation do you have in pre-clinical animal models or in human genetics?

Right Tissue

When you have a molecule, whether it’s a monoclonal antibody, a small molecule, or whatever the drug modality, demonstrate first of all in the preclinical models that you can engage the target and understand your PK/PD relationships.

“If you can’t demonstrate target engagement in a clinic, we have a big problem, because then if you fail you have no idea if your molecule is crap or if your hypothesis is wrong. So, a good failure is for me is one where I know have demonstrated target engagement but the molecule didn’t work, so biology is wrong.

We were running a number of Phase II where the molecules failed and you asked the question, ‘Okay, so it didn’t work, did we engage the target? Did the receptor antagonist get into the brain if it’s a schizophrenia program, and what you got was quizzical blank stares from everybody saying, we have no idea. We were not learning anything because we had no idea why we were failing. That doesn’t happen anymore.” — Mene Pangalos

Right Safety

Establish safety as far as possible in humanised systems before initiating clinical trials.

“Because our scientists were being rewarded for the number of candidates, they were remarkably good at lowering the doses to the minimum amount, where they now—because they’re not measuring target engagement—engage the target but they still get the candidate through.

And what we saw was that when you had early safety signals, they invariably came back to bite you somewhere during early development, or even worse, later stage development. So, waiting out your safety signals early, making sure you are working on the right series, on the right scaffolds, that you understand both your target-based toxicity and your molecule-based toxicity is really important.” — Mene Pangalos

Right Patient

Find the patient population in which your medicine is most likely to work, because if It doesn’t work in that patient population, it’s not going to work on a broader patient population.

“Again we were very good at going into broad patient populations. What we saw actually was that as the programme moved through the clinic, the commercial organisation went full steam ahead and wanted to go broader and bigger. Of course AstraZeneca was very much a primary cadre of an organization and so what we saw actually in the data was that the scientists were becoming less confident about their projects and the commercial folks were becoming more confident. But 100% of nothing is not a very big number.” — Mene Pangalos

Right Commercial

Why would anyone want to take or prescribe the medicine and why would anyone want to reimburse it?

“Understand what your comparators need to be, understand what the standard of care will be in the time frame that you are going to be launching.

It’s a very difficult thing to do, often 10-15 years ahead, but really challenge the teams to think about where that puck will be when the programme moves through the clinic or when it launches to make sure they are being ruthless about the comparisons they do. This now goes back to being outward-looking versus inward-looking. We used to be too inward-looking as an organisation.” — Mene Pangalos

3. Reward your Scientists for Killing Hypotheses.

“Are your scientists asking killer questions to try, not just to validate, but to invalidate your hypothesis? We celebrate good kills every day. We are passionate about it!

Failing early is important because it means you haven’t spent too much money and you don’t just keep on. Before, we were very good at finding ways of getting to the next hurdle just for the sake of getting the next hurdle, because that’s what we were being measured on…”

4. From Personal Best to World Records.

“If you think of what we do as a competitive sport… our view of innovation was more of personal best rather than world records. But innovation should mean you are cutting edge, you make discoveries rather than follow discoveries.

We were internally referenced versus externally referenced. We were getting better internally but when your benchmark is very low, you’re getting better on a very low benchmark; it isn’t getting you anywhere near where you need to be.

One of the big shifts in our culture was being much more outwardly focused, seeing what’s happening outside, where we should be pushing ourselves to be even better, who we should be working with, who’s going to help us achieve what we want to achieve.”

5. Double Down on Your Strengths.

“When Pascal Soriot joined the company as the CEO at the end of 2012 we focused down on the areas where we thought we could be globally competitive and set world records: oncology, cardiovascular, metabolic and respiratory diseases.

As we went deeper and more focused in those areas, we started to build a depth of knowledge and pipeline that made us competitive. The quality of our partnerships, the quality of the people we recruited, the decision making; it all got better”.

6. Mind the Incentives.

“We are quite careful about incentives because it can drive the wrong behaviour. It’s easy for people to start gaming whatever they’re given as a target, and scientists are brilliant at doing that!

The rewards for R&D come from good quality work, good kills, inventive things, innovative things, demonstrated proof of mechanism, demonstrated proof of concept, diagnostic strategies, launches, and phase III investment decisions.

This means I don’t get to decide what goes into Phase 3… Someone else has to put that through and so this way you can’t game the system.

We also do full three-year holding averages, so no one is ever pressured into doing something in one year and getting a number.”

7. When Discovery and Science Become One.

“I had an organisation of about 5000 people when I joined and we were publishing about 200 papers and one Nature or Science paper.

Today we are about 2500 people, and we’re publishing between 40-50 Nature Science papers a year. Now it’s part of our DNA to do both good discovery and science. It’s all the same thing for us.

As a consequence, people want to come and work with you, whether it’s an academic collaborator, a biotech or someone who actually wants to be a part of AstraZeneca.”

8. Don’t Keep your Ideas Top-Secret.

“We were incredibly closed. We didn’t want to share anything. Everything was proprietary. And to change that culture we had to do it in baby chunks… you chip away, you chip away, until eventually, people get comfortable.

I get irritated by people who hoard data or think that they can’t share things. If I ever have to choose, I always prefer to be too open rather than less open. The risks are relatively small and the upside is huge.”

9. Keep your Doors Open.

“We had this huge site that was half empty and I used to wander through the corridors going from one group to the other and there were those empty labs (we called them tumbleweed labs) where you could hear the winds rushing through; it was demoralising.

So one day we said, let’s collapse our footprint on the building and let’s bring biotechs in, and in contrast to other bioparks, let’s not have the biotechs partioned and walled off; let’s have them using our cafeteria, coffee shops, shared spaces, and equipment if they want to.

And really try and share our infrastructure, make ourselves good partners, help give them some regulatory advice, some clinical advice, when they need it, without asking for anything in return.

This encouraged biotechs to come in, it helped us to forge relationships with other companies, but most importantly, it filled the space up and made us feel vibrant, energetic and full.

We had a half-empty building in Boston that’s now packed and has a waiting list for biotechs.

The idea here is to treat people like grown-ups. When we first set up this culture people were like, ‘what do you mean they’re going to be wandering around?’

I mean… everyone signs a CDA, if they don’t follow what they should be doing they’ll get kicked off the side.

If we go in with the assumption that everybody is going to behave themselves and actually follow the appropriate principles, then you’re pretty safe. You don’t have to have barriers and passes and everything else.”

10. Move where the bright minds are.

“Moving to Cambridge was part of our cultural shift. Our new building is next to the Addenbrooke’s hospital, the Papworth hospital, and the MRC Laboratory for Microbiology that has more Nobel laureates than any other institution in the world.

In Cambridge, you go to a coffee shop and you bump into someone who happens to be a haematologist, and you start to talk about things that you couldn’t talk about when we were in Cheshire. It’s amazing how many collaborations have been initiated through these informal connections.

One of the things that I’ve been trying to do over the years is to try and generate as many opportunities for our scientists to have informal connections. You’re just making it easier for the serendipitous to happen, and then innovation can happen…”

ps: As I was wrapping up this post, Frank David at Pharmagellan shared a Nature article saying that AstraZeneca updated its 5R framework to include Right Digital Tools in clinical trials (patient-centric endpoints, digital biomarkers, remote patient monitoring, dose selection, event adjudication with AI, study design review with AI, digital recruitment, digital integrated clinical trial solutions, remote visits and telehealth, devices and sensors, etc.)

If I were to add an extra R, I’d go with this: “When we submitted the 5R paper for review, one of the reviewers said, if you do all this you need to add a 6th R, the Right Culture. Because this is all about transforming the culture of the company. She was right..” — Mene Pangalos