Transcript New drug approvals vs.Pharmaceutical R&D expenditures

New drug approvals vs.Pharmaceutical
R&D expenditures
New drug approvals (dots), and pharmaceutical R&D expenditures (shaded area), in the United States from 1963 to 2008. R&D expenditures are presented in
terms of constant 2008 dollar value. The trend line is a 3-year moving average. The source of drug approval data is the Tufts Center for the Study of Drug
Development (CSDD). The source of R&D expenditure data is the Pharmaceutical Research and Manufacturers of America; Industry Profile 2009; conversion
of actual expenses to constant dollars was performed by Tufts CSDD. Only 3 in 10 new products generate revenues equal to or greater than average
industry R&D costs
The Pharmaceutical R&D Funnel
“No more low-hanging fruit”
Past: 500 Targets
Present: 5,000 Targets
Discovery
Marketed Drugs
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Huge influx of new targets from genomics
“Genomics Targets” incompletely validated
Lead Generation and Target Validation bottleneck – cost-effectiveness problem
Can cost $30-50 million to obtain POC
Personalized medicine is likely to fragment the market
High attrition accounts for high R&D costs: Failure consumes 75% of costs, and
most of the “cost of failure” occurs in the laboratory, before the drug gets into the
clinic
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Molecular Medicine changing the way
medicine is (and will be) practiced
Current
Symptoms
Diagnosis
Reactive
Inadequate disease
Advanced
sub-typing
Misdiagnosis of
complex diseases
disease
Asymptomatic
Baseline risk
Future
– Lifestyle
recommendation
– Pre-emptive action
Pre-symptomatic
detection
Pre-emptive action
Active monitoring
Prevention / Early Intervention
Courtesy Life Technologies, Inc.
Trial and error
– First / second / third
line treatments
– Dosing
Symptomatic
Early Risk
Assessment /
Screening
Predisposition
Treatment
Diagnosis
Targeted
differential
diagnosis
Therapy
Selection
Pharmacokinetics /
ADME
Adverse events
Predictive response
Disease /
Therapy
Monitoring
Disease
management
Better Treatment Outcomes
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FIPNet (fully integrated pharmaceutical
network) model of drug development
Shift from a fully integrated pharmaceutical company model of R&D, in which a sponsor “owns” the entire drug development process
from synthesis to marketing, toward a networked model of innovation, sometimes referred to as a fully integrated pharmaceutical
network, or FIPNet. FIPNets engage all the major stakeholders in the drug development process, melding the core competencies of
each component to leverage capabilities, enhance efficiency, and boost output
FROM: Deconstructing the Drug Development Process: The New Face of Innovation, 2010, KI Kaitin, Tufts Center for the Study of Drug Development, Tufts University, Boston, Massachusetts, USA.
Adapting to the New Exit Environment: the
“Back-End Problem”
High Risk
Long Timeframe
Intermediate Cost ~ $10 MM
Value
Recognition
Intermediate Risk
Short timeframe
Low Cost ~ $50 MM
The 90’s Model: Quickly
moving drugs to the clinic, led
to IPO and large increases in
value
Venture Fund
Focus
6-8 yrs
Discovery/Preclinical
2-4 yrs
Clinical POC/Phase III
Ready
15 yrs
Lower Risk
Intermediate time frame
High Cost > $100 MM
Today’s Reality: Public
markets reward late-stage
opportunities, while
Pharma reward Phase III
Ready packages.
5 yrs
Late Dev’t/Commercialization
(Adapted from Steve Mayer, Former CEO CoGenesys)
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