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Who are the most pro­duc­tive drug de­vel­op­ers in bio­phar­ma? Our top-20 list has lots of sur­pris­es

When you play the game of blockbusters, you win or you buy.

Now, let me explain what that means.

Mike Rea at IDEA Pharma tracked all the drugs approved from 2013 through 2017, adding their cumulative sales to find out which biopharma companies have had the greatest successes. There are always plenty of caveats in what you find with these numbers — not least of which is how some recent R&D successes at companies like Roche and AstraZeneca (painfully dead last among the majors below) are likely to vault them up the list.

I did some number crunching and drew some conclusions that might interest you. And there are some key takeaways that are impossible to ignore.

One comment: Big research spending doesn’t translate into big innovation or productivity. While 14 of the world’s top 15 R&D spenders in the industry dominate this list of 22 companies — with only Amgen absent in the tally, with PCSK9 still twisting in the headwinds — the amount they spent on research doesn’t necessarily reflect where they rank on this scale of commercial success. At times, you’ll see they can diverge wildly, raising some fresh questions about how some analysts come up with the average cost of developing a new drug.

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Top 10 pipeline blowups, set­backs and sna­fus in H1 2018

We’ve had no shortage of epic disasters in H1. Some of them are legendary. They all offer lessons about this industry we’d be wise to pay attention to, and will be talking about for years to come.

Looking over the rubble, we can see how one unicorn buyout led to painfully bad data, the Next Big Thing in cancer went pffft in one day and a once-confident industry leader was hobbled by a jarring mistake.

And that’s just a start.

To boil it all down to 10 forced me to overlook the extinction-level events that beset a string of small cap companies. Once the industry starts turning back to shell companies to get on the market, there should be no problem picking one up cheap.

And that day is certainly ahead of us. I just don’t know when, exactly. Hindsight is 20/20 vision, as they say, and the rearview mirror in biotech is always cluttered with snafus and fiascos.


1
Incyte
One moment Incyte had the next big thing in cancer therapy, and the next moment it didn’t

Based: Wilmington, DE
YTD: $INCY -31%
CEO: Hervé Hoppenot

The scoop: Everyone knew that the ECHO-301 readout came with high stakes. But few could have foretold the level of destruction its failure would bring in a matter of days. 

The study itself was a disaster, which Incyte was quick to acknowledge. Epacadostat combined with Keytruda failed to improve progression-free survival in metastatic melanoma, and there was virtually no chance of success for overall survival. So they scrapped it.

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12 top Chi­na VCs you need to know who are mak­ing a transpa­cif­ic splash (Part 2)

This is Part 2 of a two-part series on Fundraising in China. Check out Part 1 — 7 things you should know about raising biotech cash in China — here


Money is rushing into biotech at breakneck speed this year, and one part of the globe is accounting for much of the uptick: China.

VC deals were teeming with Chinese investors in the first half of the year, with China-based firms participating in US biotech investment rounds worth $5.1 billion, according to data from PitchBook. For some perspective, that beats 2017’s total figure of $4 billion — and we’re only six months into the year.

This is a trend that started last year, with Chinese investors participating in a third of all biotech funding rounds in 2017. Local investors teaming up with Chinese funds say the region has an insatiable appetite for biotech, with money flowing less and less to areas like real estate in favor of the returns in healthcare.

In a recent interview, Duane Kuang from China-based Qiming Ventures said biotech was the most exciting new area for investment.

“We had this phenomenal run in healthcare, from devices to targeted diagnostics and lately we’ve spent quite a bit of energy on biotech — on the more innovative drug discovery part of healthcare investment,” Kuang said. “That’s one area we continue to be excited about, and we’re likely to (dedicate) additional manpower to this area.”

Total biotech investment dollars are booming like we’ve never seen before. In the first half of the year, we’ve counted at least 12 mega-rounds totaling more than $100 million. That’s including massive rounds like Grail’s $300 million raise, which was studded with numerous Chinese investors and led by Hong Kong-based Ally Bridge Group alongside Hillhouse Capital Group and 6 Dimensions Capital.

With all this activity and interest from the region, we decided to track down the most important people you should know in China’s VC scene. We polled connections over to the globe to pare our list down to these 12 investors. Check out what we know about each below.

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The un­der-40s: How does the next gen­er­a­tion of bio­phar­ma ex­ec­u­tives view the fu­ture?

A group of outstanding up-and-coming biopharma professionals under 40 talk about their jobs, their plans and their dreams — and some of the things that just have to change about this industry.


The young standouts featured here have worked hard to get where they are, and they’re nowhere near finished. If you’re looking for a common theme, it’s about making a difference — in a big way — in how people will deal with disease in the future. Together, they are thinking about groups of millions that all have to be stripped down to one single case at a time.

Mentors figure prominently for many on the list, with gratitude for the help and positive guidance in mapping careers that have decades to run. And it’s influencing how they deal with the generation coming up from behind.

No one is denying the risks involved. They’re not keen on tradition. And they all like to surround themselves with smart, savvy colleagues.

But more than anything, this is a story about working to change biopharma for the better — both a revolution and an evolution. That may be about pushing new tech that can deliver dramatic improvements in R&D and development programs, new attitudes about work and life, or working toward the day when thorny issues like gender diversity are dealt with once and for all.

None of it will be easy. But they have decades to fulfill their dreams.

  • Yasir Al-Wakeel: CFO, Neon Therapeutics
  • Laura Deming: Founder & general partner, The Longevity Fund
  • Chris Gibson: Co-founder & CEO, Recursion Pharmaceuticals
  • David Giljohann: CEO, Exicure
  • Michael Gladstone: Principal, Atlas Venture
  • Arjun Goyal: Co-founder & managing director, Vida Ventures
  • Julie Papanek Grant: Partner, Canaan Ventures
  • Rachel Haurwitz: CEO, Caribou Biosciences
  • Christina Isacson: Chief business officer, Magenta Therapeutics
  • Cigall Kadoch: Co-founder, Foghorn Therapeutics; Associate professor, Dana-Farber Cancer Institute and Harvard Medical School; Member, Broad Institute
  • Samarth Kulkarni: CEO, CRISPR Therapeutics
  • Neil Kumar: CEO, BridgeBio
  • Timothy Lu: CEO, Senti Biosciences
  • Kush Parmar: Managing partner, 5AM Ventures
  • Armon Sharei: CEO, SQZ
  • Alok Tayi: Co-founder & CEO, TetraScience
  • Geoffrey von Maltzahn: Partner, Flagship Pioneering
  • Feng Zhang: Co-founder, Editas Medicines & Arbor Biotechnologies; Professor in neuroscience, McGovern Institute for Brain Research at MIT; Core member, Broad Institute

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Ele­phants can't jump? IDEA's Mike Rea says some Big Phar­ma play­ers are crush­ing old be­liefs

This is an in­dus­try that typ­i­cal­ly says ‘in­no­va­tion’ when what it means is ‘in­ven­tion.’ In­no­va­tion, as most purists will ar­gue, is about re­turn on in­ven­tion, an abil­i­ty to de­rive val­ue from pipeline. That is what our Phar­ma­ceu­ti­cal In­no­va­tion In­dex mea­sures — a com­pa­ny’s abil­i­ty to launch suc­cess­ful­ly, to add more val­ue to pipeline mol­e­cules than an­oth­er com­pa­ny would. It is ob­jec­tive, and about how well the past 5 years have gone, re­gard­less of how well the sto­ry has been spun.

12 block­busters: The surg­ing list of $1B-plus drugs rolling out on the mar­ket this year might sur­prise you

What ex­act­ly qual­i­fies as a suc­cess in drug R&D may be dis­cussed and dis­put­ed in many ways, but noth­ing lays an ar­gu­ment to rest quite as de­ci­sive­ly as the re­al pos­si­bil­i­ty of block­buster sta­tus.

The da­ta an­a­lysts at Clar­i­vate An­a­lyt­ics have just as­sem­bled their an­nu­al list of all the drugs that are rolling out on­to the mar­ket this year with a sol­id shot at break­ing the one bil­lion-dol­lar an­nu­al bar­ri­er by 2022, and their ros­ter — 12 like­ly block­busters which I’ve de­tailed be­low — pro­vides some in­ter­est­ing in­sights in­to the state of drug R&D to­day.

The good, the bad and the ug­ly for the top 15 spenders in the glob­al drug R&D busi­ness: 2018

As a general rule, the top 15 R&D groups in biopharma are known for keeping a very steady hand on spending. I’ve been following this group for more than a decade now, and it hasn’t been unusual seeing little year-to-year variations in the total spend.

But that’s no longer the case.

Four giant companies — J&J, Bristol-Myers Squibb, GlaxoSmithKline and Celgene — all increased R&D spending last year by more than a billion dollars each, according to their recent year-end tallies. That represents some big bets on late-stage efforts during an intense and growing rivalry to score bigger markets in oncology and other key disease focuses. And several will continue to wager fresh billions in the year to come, as analysts now keenly wait to see which of these big players — such as Amgen or Pfizer — pull off some new acquisitions in 2018.

The very biggest players, such as Basel-based Roche and Novartis, will likely keep hunting those bolt-ons they like best.

As we’ve been tracking in our ongoing survey of biotech execs, this is all playing out at a time that experimental drug valuations are at an all-time high, showing few signs of stagnating now. Bristol-Myers just helped prove that with its record pact to partner with Nektar.

Over the past year we’ve seen a continued pullback from brick-and-mortar ops in China, as GlaxoSmithKline helped illustrate with its retreat from Shanghai. But J&J is helping blaze a path toward new alliances with Chinese upstarts, just as Celgene did when it partnered with BeiGene on PD-1. China is becoming a huge new influence on drug development, and they have the scientific capability to make some stunning advances with the help of a reenergized CFDA making it easier to gain an approval there.

Along the way, Chinese biotechs are becoming so prolific that some categories could become commoditized by a slew of me-toos.

Reorganization never stops in Big Biopharma, either. That can mean increased spending at a company like GSK, which tore up its US ops several years ago to knit something new in the Philadelphia area. Lilly has made some deep cuts, presumably ahead of new dealmaking. Amgen keeps trimming staff. And Pfizer demonstrated its zeal for the ax when it cut off neurosciences in a brutal stab. Takeda has undergone a complete remake over the past two years, and like the rest of the pack, it’s building more externalization into the research structure.

The race for PD-1/L1 domination is far from over, even though a tsunami of experimental meds would seem to be setting up some cheaper alternatives. As a result, the leaders are distinguishing themselves with new combos that can top any single therapy. And we’ve moved from pioneering approvals in CAR-T to a race for CAR-T 2.0, with aggressive players like Gilead and Celgene stepping in to fight it out with a powerhouse team at Novartis.

In this field, scoring two or three significant new drug approvals in one year is good, maybe even great. But with old franchises fading fast, it’s the companies that can stay ahead with dominant late-stage pipelines that promise a steady stream of blockbuster OKs that earn the most respect. That requires round-the-clock vigilance, a keen ability to design and execute the right trials and one eye to look over your shoulder to see who’s catching up. All while the industry’s ROI for the giants continues to shrink.

Whew.

And without more ado, here are the top 15 companies by R&D budgets.


This is Endpoints News’ third annual look at the top 15 spenders in the global R&D business. Read the 2016 edition and 2017 follow-up here.

Get instant access to this report with a paid Endpoints News subscription. Includes a detailed analysis of each top spender and the players involved.

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Top 10 pipeline blowups, set­backs and sna­fus in H2 2017

No company I’ve ever featured on my semi-annual list of top setbacks in biopharma has ever managed to beat Juno Therapeutics at the disaster game. At least not yet. Its string of deaths, before and after an FDA hold, remains in the top spot for the mother of all clinical trial disasters in recent times.

But it didn’t kill the biotech. In fact, the intense focus shifted to their comeback program for JCAR017, which just inspired a $9 billion takeover by Celgene.

Juno offers the important lesson that failure doesn’t have to be a permanent condition. Next-gen drugs are put into the clinic to help increase the odds of success. And in a game like this, where the Phase I through Phase III failure rate runs somewhere around 90% to 95%, who doesn’t think about trying to improve the odds of success.

Nevertheless, my latest top 10 disaster rundown has all sorts of cautionary tales included, with plenty to learn from each. This round includes some regulars, such as:

— Researchers and biopharmas remain wed to drugs long after the data would indicate they should abandon them as losers.

— Even the top fields like I/O are seeing some stunning failures, underscoring that there’s still plenty to learn in a field that has attracted billions in research cash with a slate of approved drugs already on the market.

To see the entire list of snafus and analysis, please log-in to your Endpoints News account. This article is free for all registered subscribers.

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Video: How many PD-1/L1 drugs do we need? Where is im­munother­a­py head­ed? Watch Jay Brad­ner, Hervé Hop­penot, Ellen Si­gal, David Berman, Gideon Blu­men­thal, and Aiman Sha­l­abi dis­cuss with End­points at #JPM18

SAN FRAN­CIS­CO —  In front of a packed house on Tues­day at the End­points News break­fast pan­el dur­ing #JPM18, Aiman Sha­l­abi, CMO at the Can­cer Re­search In­sti­tute kicked pro­ceed­ings off with his re­search on the ex­plod­ing PD-1/L1 pipeline, con­tin­u­ing on through the num­ber of can­cer im­munother­a­py prod­ucts his group is track­ing.

That’s a lot of pos­si­ble re­dun­dan­cy and in­ef­fi­cien­cies, Sha­l­abi said. And just how can we har­ness all this ef­fort in the most ef­fi­cient man­ner?

The End­points 11: A group of dis­rup­tive up­starts on a do-or-die mis­sion to launch new meds

Over the last 15 years I’ve had the chance to help select about 200 private biotechs for up-and-coming awards like this. Looking over the rank and file of this disruptive crowd, I had my standouts, my OK borderline selections, and some truly dreadful, cringe-worthy choices.

Such is the game of judging private biotechs, where you always wind up making hunches based on an incomplete picture. But then that’s also much of the fun, right?

Everyone who does this sort of thing likes to pretend that they can pick which of these fledglings can shoot the rapids of drug development and come out of the white water doing high fives. But the reality is that we all have our good and bad ideas.

And you learn along the way.

With my first selection of the Endpoints 11 (complete with a neat logo conceptualized by our creative assistant editor Amber Tong), I’m getting started on generation 2.0 of my idea of top companies that just may be headed for greatness.

There are several key attributes that characterize each of the E11, and help me hedge my bets. Each represents an important trend in biotech creation.

Most have top teams that are well recognized for earlier successes. Experienced biotech execs these days can generally have their pick of the litter when it comes to new companies angling for a launch. So when you see a prominent biotech exec make the transition out of incubation and onto the stage — often alongside close associates that they have known and worked with for years — it may not guarantee a winner, but it sure is comforting when smart, successful people love the science behind a startup.

That will serve as my segue into technology. Me-too drugs have been discredited for years now. Payers may use them to pick the lock on lower prices, but it’s a woeful development strategy. Every company in this year’s maiden E11 is swinging for the fences, looking to drug the undruggable or race with ambitious rivals to achieve something remarkable.

So scientific ambition is key.

Enough money to get through to the next stage of human data is critical.

There is a healthy debate going on right now whether the 4-year tidal wave of investor cash coursing through the industry is essentially causing risky behavior that will squander cash. Given the inherent risks associated with drug development, and the groundbreaking nature of what they’re trying to achieve, a good chunk of that investment money is going up in flames — under the best of circumstances.

If anyone in the E11 fail, it likely won’t be because they were starved for cash. And this business isn’t cheap. Also, if any of these companies below go belly up, you will hear the explosion from halfway around the world.

The right partner can be everything in this business, helping make all the difference in picking up speed in the clinic and providing the kind of commercial clout needed to move markets. That’s another big factor in the list.

If there’s one overarching theme I’d like to highlight most, it’s that drug development is a global pursuit. The US may be where the money is in terms of windfall profits, and it may still drive the lion’s share of the development work as the industry feels the full flush of cash coursing through labs, but the science is international. So is much of the clinical work. These companies span three continents, from North America to Europe and Asia.

And Asia is coming on strong, with major implications for the industry as a whole.

Finally, just because this is the first E11 doesn’t mean I’m starting over. If you’ve already been highlighted in another annual award I once managed, your chances of a repeat here were reduced to nil. We need to share the spotlight.

I’ll be back in the fall with my picks of 2018. And if you have any recommendations along the way, send them my way as I manage the next short list. — John Carroll 

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