'Seeds of change' sprout in­to high­er pro­ject­ed re­turn on in­vest­ments for the bio­phar­ma in­dus­try, ac­cord­ing to De­loitte

Since 2010, De­loitte has been track­ing the re­turn on in­vest­ment that a hand­ful of top bio­phar­ma com­pa­nies might ex­pect to see from their late-stage as­sets. Last year, the com­pa­ny not­ed “seeds of change” fol­low­ing a six-year de­cline in av­er­age in­ter­nal rate of re­turns.

De­loitte’s lat­est re­port in­di­cates the trend has con­tin­ued this year, as pro­ject­ed R&D re­turns have risen from 2.7% to 7%, the largest an­nu­al in­crease since the study be­gan in 2010.

Son­al Shah

“We had ex­pect­ed an uptick in the IRR this year be­cause of the COVID vac­cines and ther­a­pies,” Son­al Shah, se­nior man­ag­er for the De­loitte Cen­ter for Health So­lu­tions, told End­points News. “But the fact that when you ac­tu­al­ly ex­clude them, you still see an in­crease, and we see this de­crease in R&D costs as well as a de­crease in cy­cle time was sur­pris­ing to me.”

When cal­cu­lat­ing IRR, De­loitte takes in­to ac­count a com­pa­ny’s to­tal R&D ex­pen­di­ture for bring­ing as­sets to launch, plus a fore­cast es­ti­mate of the fu­ture rev­enue that these as­sets could ex­pect to earn fol­low­ing launch.

From this year’s com­bined co­hort of 15 top-earn­ing com­pa­nies — which were not list­ed in De­loitte’s re­port — three achieved a fore­cast peak sales per as­set greater than $500 mil­lion in 2021, with six com­pa­nies im­prov­ing their pro­ject­ed peak sales per as­set com­pared to the year be­fore.

Along­side an in­crease in peak sales fore­casts, De­loitte not­ed that the cost to bring an as­set to mar­ket has de­clined over the last three years, which it at­trib­ut­es to “nov­el tri­al de­signs and im­prove­ments in ef­fi­cien­cy through the dig­i­tal­i­sa­tion of drug dis­cov­ery and de­vel­op­ment.” It’s al­so, in part, due to “very high” sales fore­casts for the com­pa­nies’ Covid-19 as­sets and one high-val­ue late-stage neu­ro­log­i­cal as­set.

How­ev­er, even if you ex­clude the Covid-19 re­lat­ed as­sets, the pro­ject­ed IRR for 2021 is still 3.2%, which is high­er than the 2.7% re­port­ed for 2020.

“This is a big re­ver­sal, af­ter al­most a decade-long de­cline in re­turns on in­no­va­tion. So the fact that that turn­around is hap­pen­ing in spite of Covid is re­al­ly ex­cit­ing,” Shah said.

While the av­er­age cost to de­vel­op an as­set, in­clud­ing cost of fail­ure, was at $2.376 bil­lion in 2020, that fig­ure de­creased slight­ly to $2.006 bil­lion in 2021, ac­cord­ing to De­loitte. How­ev­er, that de­crease is main­ly due to an in­crease in the num­ber of as­sets in the late-stage pipeline. And it’s still quite an in­crease from the av­er­age cost in 2013, which mea­sured in at $1.296 bil­lion.

De­loitte did note an in­crease in tri­al ef­fi­cien­cy, large­ly due to the rapid de­vel­op­ment of Covid can­di­dates. The com­pa­ny re­port­ed that Phase III tri­als for Covid as­sets were 3.7 times faster than non-Covid in­fec­tious dis­ease tri­als.

“Nev­er­the­less, de­spite the dip, the over­all cy­cle time for com­bined co­hort con­tin­ues to re­main above 2019 lev­els, re­in­forc­ing the need to op­ti­mise process­es or fun­da­men­tal­ly change the drug de­vel­op­ment par­a­digm,” the re­port states.

There was al­so an uptick in col­lab­o­ra­tion last year, with De­loitte not­ing that 46% of late-stage as­sets in 2021 were co-de­vel­oped, up from 32% in 2020. On­col­o­gy as­sets still dom­i­nate the group’s col­lec­tive pipeline, rep­re­sent­ing 35% of late-stage as­sets. As ex­pect­ed, the pro­por­tion of in­fec­tious dis­ease as­sets in­creased quite a bit in the last year, now oc­cu­py­ing 14% of late-stage pro­grams.

“We’re see­ing high­er-val­ue pro­grams, low­er ex­pense, and ul­ti­mate­ly more pro­duc­tiv­i­ty for the in­dus­try,” Shah said. “And a lot of that I’ll say re­flects the in­vest­ments the in­dus­try has been mak­ing over the last sev­er­al years in terms of dig­i­tal tech­nolo­gies, re­al­ly look­ing at de­cen­tral­ized tri­als and more ef­fec­tive­ly and ef­fi­cient­ly run­ning clin­i­cal tri­als.”

Big Phar­ma's Twit­ter ex­o­dus; Mer­ck wa­gers $1.35B on buy­out; $3.5M gene ther­a­py; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

As you start planning for #JPM23, we hope you will consider joining Endpoints News for our live and virtual events. For those who are celebrating Thanksgiving, we hope you are enjoying the long weekend with loved ones. And if you’re not — we’ll see you next week!

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 154,000+ biopharma pros reading Endpoints daily — and it's free.

Paul Perreault, CSL Behring CEO

CSL lands FDA ap­proval for he­mo­phil­ia B gene ther­a­py, sets $3.5M list price

The FDA has approved the world’s first gene therapy for hemophilia B, ushering into the market a treatment that’s historic in both what it promises to do and how much it will cost.

CSL will be marketing the drug, Hemgenix, at a list price of $3.5 million — which sets a new record for the most expensive single-use gene therapy in the US.

In a statement provided to Endpoints News, the Australian company noted that the current costs of treating people with moderate to severe hemophilia B can be significant over a lifetime. By some estimates, healthcare systems could spend more than $20 million per person.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 154,000+ biopharma pros reading Endpoints daily — and it's free.

Elon Musk (GDA via AP Images)

Biggest drug com­pa­nies halt­ed Twit­ter ad buys af­ter Lil­ly in­sulin spoof

Almost all of the drug industry’s biggest advertisers cut their spending on Twitter to zero or near-zero over the last two weeks amid worries about impersonation of their brands by pranksters and the future of the social media company.

Among 18 of the biggest pharmaceutical advertisers in the US market, 12 cut their Twitter ad spending to nothing for the week beginning Nov. 14, according to Pathmatics, which tracks data on prescription drug ad spending as well as general corporate advertising. The list of drugmakers cutting spending to zero includes Merck, AstraZeneca, Eli Lilly, Novartis, Pfizer and others.

Rob Davis, Merck CEO

Up­dat­ed: No Seagen here: 'Do more' means a small $1.35B pur­chase of Ima­go for Mer­ck

Merck is making an acquisition, the Big Pharma announced before Monday’s opening bell. No, Seagen is not entering the fold, as had been speculated for quarters.

Folding under Merck’s wings will be Pfizer-backed Imago BioSciences. For nearly a year, Merck CEO Rob Davis has been saying the pharma giant needs to “do more” on the business development front after its 2021 $11.5 billion acquisition of Acceleron.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 154,000+ biopharma pros reading Endpoints daily — and it's free.

Image: Shutterstock

MIT re­searchers re­veal DNA "Paste" tech be­hind lat­est gene edit­ing start­up

MIT scientists have developed a tool that they say can insert large gene sequences where they want in the genome.

In a paper published Thursday in Nature Biotechnology, MIT fellows Omar Abudayyeh, Jonathan Gootenberg and colleagues detail a technology they call PASTE, which they say can potentially be used to insert long strands of DNA and treat genetic diseases caused by many different mutations, such as cystic fibrosis and Leber congenital amaurosis, a rare eye disorder that causes blindness.

Dermavant Sciences' first consumer TV ad for its Vtama psoriasis med shows people ready for a new topical treatment.

Roivant’s Der­ma­vant de­buts first-ever TV com­mer­cial for pso­ri­a­sis cream Vta­ma

Dermavant Sciences has been marketing its first product, psoriasis med Vtama, to dermatologists for months, but on Tuesday it rolled out its first consumer campaign. The debut DTC effort including a streaming TV commercial encourages patients to a “Topical Uprising” in a nod to Vtama being a topical cream.

In the new commercial, a swell of people discards scarves and jacket coverings, gathering in the street to converge on a pharmacy to demand a steroid-free prescription. A moment of levity follows when a pharmacist says, “You know you can just talk to your doctor, right?” The gathered crowds collectively says, “Oh.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 154,000+ biopharma pros reading Endpoints daily — and it's free.

FDA preps for DMD drug gener­ics as Sarep­ta has yet to fin­ish its con­fir­ma­to­ry tri­al

The FDA typically releases guidance to help generic drug manufacturers develop new copycats of small molecule drugs, oftentimes in preparation for a brand name product’s patents or exclusivity to expire.

This week, FDA released such bioequivalence guidance for any generic drugmakers looking to take on Sarepta’s Duchenne muscular dystrophy (DMD) drug Exondys 51 (eteplirsen), even though the drug’s sponsor has yet to convert the accelerated approval to a full approval, showing clinical benefit.

Stanley Erck, Novavax CEO (Andrew Harnik/AP Images)

No­vavax pulls out of Covid-19 vac­cine al­liance with Gavi

Novavax is pulling out of its Covid-19 vaccine deal with Gavi, the Vaccine Alliance, a global partnership tasked with ensuring vaccine access in lower-income countries, following an alleged contract violation.

The Maryland-based company claimed on Friday that Gavi failed to purchase at least 350 million doses of its protein-based vaccine Nuvaxovid by the end of the year, per an advanced purchase agreement. Gavi, the World Health Organization and the Coalition for Epidemic Preparedness Innovations (CEPI) are co-leaders of COVAX, an effort to ensure that all participating countries, regardless of income levels, have access to vaccines.

Fu­ji­film to build $188M man­u­fac­tur­ing plant in North Car­oli­na’s re­search tri­an­gle

As the Japanese conglomerate Fujifilm continues to invest heavily in its CDMO arm, one of its manufacturing divisions is teeing up a major investment.

Fujifilm Irvine Scientific announced on Tuesday that parent Fujifilm is making a $188 million investment to build a cell culture media manufacturing site in the Research Triangle Park in North Carolina. The new site will mark Fujifilm Irvine’s fifth manufacturing site globally and its second in the US.