Accelerating Life Sciences Transformation

Accelerating Life Sciences Transformation

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

A Review of the 2013 FDA Approvals, Part 3: Are We Crawling Back From the Patent Cliff?

With 27 new approved drugs, 2013 was a return to normalcy after 2012 broke records with 39 approvals - with such large changes year-to-year, what can we anticipate for 2014? Part 1 of this series discussed the FDA approval pathway and part 2 examined therapeutic trends. This post will discuss potential tactical plans by pharmaceutical companies.

In 2013, five pharma and biotech organizations had two or more drugs approved by the FDA. Success was concentrated:  six companies together accounted for 52% of total approvals despite representing only 26% of companies with approvals (Exhibit 1).

 

Similarly, two of the three breakthrough approvals came from big pharma and biotech (J&J, Roche-Genentech). GSK was the clear winner of the year in terms of pure approval count. These approvals illustrated three R&D paths that industry leaders are currently pursuing:
 
-          Research and development of organically-developed compounds
-          Early stage collaboration on partnered products
-          Acquisition of late-stage assets through M&A
 
Back in 2011, the $11 billion purchase of Pharmasset by Gilead was seen as an audacious bet (with significant price premium attached to the deal) and by some as a risky approach to portfolio diversification. With Sovaldi approved as a breakthrough therapy in December 2013 and revenue projected to reach $2.5 billion in 2014 (source: Bloomberg News “M&A Boom Seen in 2014 as Drug Hunt Spurs Biotech Deals”, 2014), Gilead has thus far proved that sizable M&As can still fuel innovation through late-stage asset acquisition (Onyx’s acquisition by Amgen is another example).
 
What does the Future Hold?
Will 2014 be another year long known for innovation, advanced patient care, and bold acquisitions and investments? Only time will tell, but thus far the year is off to a promising start with approvals including Pharmacyclics’ Imbruvica (single agent for patients with Chronic Lymphocytic Leukemia who have received at least one prior therapy).          

The FDA continues to demonstrate willingness for expedited approvals, providing an avenue for pharma to make use of. Millions of patients will be waiting this year to see which treatments advance down this path, and bring life-changing opportunities to the forefront faster.

About the author

Priyanka Ramamurthy
Priyanka Ramamurthy
Priyanka Ramamurthy is a Senior Consultant in the Life Sciences practice of Capgemini Consulting. She is a core member of the Life Cycle Management team and has extensive experience in health economics. Priyanka can be reached at Priyanka.ramamurthy@capgemini.com.

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