2023 Spot­light on the Fu­ture of Drug De­vel­op­ment for Small and Mid-Sized Biotechs

In the con­text of to­day’s glob­al eco­nom­ic en­vi­ron­ment, there is an in­creas­ing need to work smarter, faster and lean­er across all facets of the life sci­ences in­dus­try.  This is par­tic­u­lar­ly true for small and mid-sized biotech com­pa­nies, many of which are fac­ing de­clin­ing val­u­a­tions and com­pet­ing for in­creas­ing­ly lim­it­ed fund­ing to pro­pel their sci­ence for­ward.  It is im­por­tant to rec­og­nize that with­in this frame­work, many of these small­er com­pa­nies al­ready find them­selves re­source-chal­lenged to de­sign and man­age clin­i­cal stud­ies them­selves be­cause they don’t have large teams or in-house ex­perts in nav­i­gat­ing the var­i­ous as­pects of the drug de­vel­op­ment jour­ney. This can be par­tic­u­lar­ly chal­leng­ing for the most com­plex and dif­fi­cult to treat dis­eases where no pre­vi­ous path­way ex­ists and pa­tients are ur­gent­ly await­ing break­throughs.

No­tably, this en­vi­ron­ment comes at a time when there’s an un­prece­dent­ed amount of ground­break­ing sci­ence com­ing out of small­er biotechs.  In fact, of the near­ly 7,000 drugs in ac­tive de­vel­op­ment by biotech to­day, a record 77% are from small­er com­pa­nies.ⁱ

While to­day’s land­scape presents some sig­nif­i­cant chal­lenges, there is al­so much op­por­tu­ni­ty re­lat­ed to clin­i­cal de­vel­op­ment of these in­no­v­a­tive med­i­cines head­ing in­to 2023, that if re­al­ized, will bring im­mense val­ue to the biotech in­dus­try – and so­ci­ety over­all.  For ex­am­ple, de­spite decades of ef­fort and progress, there is still un­tapped op­por­tu­ni­ty to re­al­ize the im­pact that tech­nol­o­gy can have on the ef­fi­cien­cy and qual­i­ty of clin­i­cal re­search.  For in­stance, mod­el­ing and sim­u­la­tion is just one av­enue that of­fers sig­nif­i­cant po­ten­tial to im­prove drug de­vel­op­ment.  Fur­ther­more, the cur­rent so­cio-po­lit­i­cal en­vi­ron­ment com­bined with the dig­i­tal tools at our dis­pos­al to­day pro­vides fer­tile ground to re­al­ize the po­ten­tial of de­cen­tral­ized clin­i­cal tri­als – which can in­crease pa­tient ac­cess and di­ver­si­ty, ac­cel­er­ate de­vel­op­ment, and gen­er­ate stronger, more in­clu­sive, and bet­ter rep­re­sen­ta­tive da­ta.

As Mark A. Gold­berg, chair­man and chief ex­ec­u­tive of­fi­cer of Al­lu­cent ex­plains, “In the face of the glob­al, macro-eco­nom­ic chal­lenges en­dured through­out 2022, it is im­por­tant to fo­cus on the per­sis­tent need for in­no­va­tion and how we can help bring need­ed med­i­cines to pa­tients.  There’s much rea­son to be hope­ful based on the ground­break­ing sci­ence com­ing from small­er biotech com­pa­nies to­day and the for­ward-think­ing drug de­vel­op­ment ap­proach­es we can lever­age. That’s why we’re laser-fo­cused on think­ing big for small and mid-sized biotechs, and pro­vid­ing them with nim­ble, strate­gic so­lu­tions to help them suc­ceed – and it’s why I’m ex­treme­ly op­ti­mistic about what lies ahead for 2023 and be­yond.”

Small­er Biotechs Have Ex­pe­ri­enced a Tu­mul­tuous Year, and Weath­ered it Well

De­spite many up­heavals af­fect­ing glob­al busi­ness through­out 2022 – such the Covid-     19 pan­dem­ic and its af­ter­math, the war in Ukraine, and in­fla­tion – the out­look for small and mid-sized biotech com­pa­nies re­mains strong.  In fact, from a drug de­vel­op­ment stand­point, 6,918 clin­i­cal pro­grams were re­port­ed in 2022 – up 6.3% ver­sus 2021 – with 77% of them orig­i­nat­ing from small com­pa­nies.ⁱ

More­over, in 2022 an es­ti­mat­ed 70% of US FDA ap­provals for new treat­ments orig­i­nat­ed in small com­pa­nies, com­pared to 66% in 2021.ⁱ

The sci­en­tif­ic in­no­va­tion com­ing from small­er biotechs and the num­ber of clin­i­cal pro­grams be­ing put forth by these com­pa­nies po­si­tion the sec­tor well head­ing in­to the new year.  To re­al­ize the po­ten­tial; how­ev­er, a num­ber of chal­lenges will need to be ad­dressed.

Im­prov­ing Ef­fi­cien­cy and Qual­i­ty of Clin­i­cal Re­search Through Mod­el­ing & Sim­u­la­tion

The down-shift in in­vestor sen­ti­ment that biotech is now ex­pe­ri­enc­ing be­gan in late 2021, and is ex­pect­ed to con­tin­ue for some time.  As Bar­bara Ryan of Ernst & Young LLP ex­plains in the EY 2022 Biotech­nol­o­gy Re­port, “We are clear­ly liv­ing through an in­no­va­tion re­nais­sance, and the fun­da­men­tals of the in­dus­try are quite strong.  But from a stock mar­ket per­spec­tive, we are liv­ing through the deep­est and longest cor­rec­tion that we’ve seen in the biotech in­dex­es since their in­cep­tion.”ⁱⁱ

Giv­en this land­scape, small and mid-sized biotech com­pa­nies need to be par­tic­u­lar­ly in­ten­tion­al about their de­ci­sion-mak­ing process from the out­set to help pro­pel their sci­ence for­ward to­ward suc­cess.  The in­her­ent val­ue in these com­pa­nies is in the po­ten­tial of their pipelines, which may con­sist of just one or two com­pounds for small­er-sized com­pa­nies – mak­ing it im­per­a­tive to make the right de­ci­sions and get their drug de­vel­op­ment pro­grams off the ground on a strong foot­ing and keep those pro­grams mov­ing for­ward ef­fi­cient­ly and ef­fec­tive­ly.

One key les­son learned in the wake of the Covid-19 Pan­dem­ic is the need for the life sci­ences in­dus­try to em­ploy more ef­fec­tive use of tech­nol­o­gy and da­ta. From a drug de­vel­op­ment per­spec­tive, there are still many un­tapped op­por­tu­ni­ties to do just this.  To­day, tech­niques such as MIDD (Mod­el In­formed Drug De­vel­op­ment) can be used to im­pact crit­i­cal de­ci­sion-mak­ing and, in some cas­es, re­duce the need for cer­tain tri­als.

MIDD in­te­grates da­ta and mod­els from non-clin­i­cal and clin­i­cal pro­grams, as well as da­ta from oth­er rel­e­vant ex­ter­nal re­search, to in­crease the prob­a­bil­i­ty of suc­cess in de­vel­op­ing med­i­cines.  It lever­ages a range of quan­ti­ta­tive ap­proach­es to in­form de­ci­sion mak­ing, ex­trap­o­lat­ing da­ta from large pop­u­la­tions with sim­i­lar char­ac­ter­is­tics to pro­vide sup­port­ing ev­i­dence for safe­ty, ef­fec­tive­ness, and dos­ing.  These in­sights can be used to in­form clin­i­cal tri­al de­sign and pre­dict tri­al out­comes – lead­ing to more ef­fi­cient, less cost­ly, and more pre­cise re­search.  They can al­so help drug de­vel­op­ers se­lect ap­pro­pri­ate dos­es for first-in-hu­man (FIH) clin­i­cal tri­als and in spe­cial pop­u­la­tions, such as re­nal and he­pat­ic im­pair­ment or pe­di­atric pa­tients – a fun­da­men­tal step in min­i­miz­ing pa­tient risk and in­creas­ing suc­cess rates.

A Ripe En­vi­ron­ment to Im­prove Pa­tient Ac­cess and In­crease Di­ver­si­ty

An­oth­er key im­per­a­tive head­ing in­to 2023 is the press­ing need to im­prove pa­tient ac­cess and en­sure racial and eth­nic di­ver­si­ty in clin­i­cal re­search. The great­est chal­lenge in con­duct­ing clin­i­cal tri­als to­day re­mains re­cruit­ing and re­tain­ing pa­tients – and the vast ma­jor­i­ty of pa­tients who are re­cruit­ed and re­tained are Cau­casian.

Il­lus­trat­ing the dis­par­i­ties that ex­ist cur­rent­ly, the US Food and Drug Ad­min­is­tra­tion’s Cen­ter for Drug Eval­u­a­tion and Re­search re­leased a re­port in 2020 in­di­cat­ing 75% of en­rollees in clin­i­cal tri­als for nov­el ther­a­pies are white, with dis­pro­por­tion­ate­ly low re­cruit­ment among non-white eth­nic groups.ⁱⁱⁱ

Race and eth­nic­i­ty re­main among the most sig­nif­i­cant so­cial de­ter­mi­nants of health to­day.  So­cio-eco­nom­ic fac­tors play a sig­nif­i­cant role in af­fect­ing dif­fer­ent health out­comes among dif­fer­ent groups – but that is not the on­ly con­tribut­ing fac­tor.  It is well-known that there are im­por­tant dif­fer­ences in how peo­ple re­spond to drugs based on their race, eth­nic­i­ty and/or gen­der. To help en­sure that med­i­cines are proven both ef­fec­tive and safe for the peo­ple who need them, it is crit­i­cal that the race and eth­nic­i­ty of clin­i­cal tri­al pop­u­la­tions be aligned with the epi­demi­ol­o­gy of the dis­ease be­ing stud­ied.

To­ward this end, in April 2022 the U.S. Food and Drug Ad­min­is­tra­tion re­leased guide­lines for spon­sors de­vel­op­ing med­ical prod­ucts to cre­ate and sub­mit a “Race and Eth­nic­i­ty Di­ver­si­ty Plan” that out­lines their plans for en­rolling un­der­rep­re­sent­ed racial and eth­nic pop­u­la­tions in clin­i­cal tri­als – pro­vid­ing the first-ever spe­cif­ic ex­pec­ta­tion by the FDA that spon­sors de­vel­op di­ver­si­ty plans for their clin­i­cal re­search.

This is a high­ly-nec­es­sary and eth­i­cal en­deav­or.  The chal­lenge be­comes that many small and mid-sized biotechs don’t have the re­sources of larg­er phar­ma com­pa­nies to de­vel­op plans as out­lined by the FDA, and may there­fore ben­e­fit from ex­ter­nal ex­per­tise and guid­ance.

Find­ing ways to de­crease the bur­den on pa­tients and low­er bar­ri­ers to par­tic­i­pa­tion is es­sen­tial.  Al­lu­cent is a strong-be­liev­er in the role that de­cen­tral­ized tri­al de­signs can play in achiev­ing this goal.  De­cen­tral­ized and hy­brid ap­proach­es can re­duce or elim­i­nate bar­ri­ers to di­ver­si­ty and in­clu­sion, en­abling more rep­re­sen­ta­tive pa­tient ac­cess, and help ac­cel­er­ate clin­i­cal de­vel­op­ment and gen­er­ate stronger da­ta – all of which promise to ben­e­fit the in­dus­try as a whole and the pa­tients we all serve.

Rea­sons for Op­ti­mism

The break­through sci­ence com­ing from small and mid-sized biotechs to­day has the po­ten­tial to ad­dress many of the most com­plex and chal­leng­ing dis­eases of our time. By putting in place the right ex­perts, ef­fec­tive­ly em­ploy­ing the tech­nol­o­gy and da­ta cur­rent­ly at our dis­pos­al, and keep­ing pa­tients at the cen­ter through­out clin­i­cal de­vel­op­ment – small and mid-sized biotech com­pa­nies are well-po­si­tioned to face to­day’s drug de­vel­op­ment chal­lenges and de­liv­er nov­el ther­a­pies to pa­tients with un­met needs around the world.

Ref­er­ences: 

ⁱ Thomas, D. (2022, June). The State of Emerg­ing Ther­a­peu­tic Com­pa­nies. BIO. https://www.bio.org/sites/de­fault/files/2022-06/BIO%202022%20DTHOMAS%20v6-14-6.pdf
ⁱⁱ Ernst & Young. (2022). How do biotechs stay the course in un­chart­ed wa­ters? Be­yond bor­ders: EY biotech­nol­o­gy re­port 2022. https:///as­sets.ey.com/con­tent/dam/ey-sites/ey-com/en_us/top­ics/life-sci­ences/ey-be­yond-bor­ders-2022-re­port-v11-web-hires.pdf
ⁱⁱⁱ U.S. Food and Drug Ad­min­is­tra­tion Cen­ter for Drug Eval­u­a­tion and Re­search. (2021, Feb­ru­ary). 2020 Drug Tri­als Snap­shot Sum­ma­ry Re­port. https://www.fda.gov/me­dia/145718/down­load