Near-term strate­gies for biotech drug de­vel­op­ers fac­ing shift­ing health­care dy­nam­ics

A dy­nam­ic con­ver­gence of eco­nom­ic, leg­isla­tive, sci­en­tif­ic, and tech­no­log­i­cal in­flu­ences is mold­ing the fu­ture of the health­care in­dus­try – with im­pli­ca­tions for biotech com­pa­nies. Health­care en­vi­ron­ments are be­com­ing in­creas­ing­ly com­plex as drug de­vel­op­ers in­creas­ing­ly make the tran­si­tion to next-gen­er­a­tion ther­a­peu­tics dri­ving de­mand for clin­i­cal in­no­va­tion. Against this back­drop, the in­dus­try con­tin­ues to pi­o­neer new ap­proach­es to en­gag­ing with pa­tients, clin­i­cal tri­al teams, and health­care providers. Dur­ing a re­cent pan­el dis­cus­sion, Gold­man Sachs and Parex­el shared per­spec­tives on emerg­ing trends and high-lev­el de­vel­op­ments to help biotechs plan their short- and near-term strate­gies.

Pey­ton How­ell, Chief Op­er­at­ing and Growth Of­fi­cer, Parex­el (L) Jamie Mac­don­ald, CEO, Parex­el (R)

Eco­nom­ic in­flu­ences

The in­vest­ment land­scape in health­care is chang­ing sig­nif­i­cant­ly, char­ac­ter­ized by a strong move­ment to­ward the biotech­nol­o­gy, dig­i­tal health, and pre­ci­sion med­i­cine sec­tors. Parex­el CEO Jamie Mac­don­ald says, “At Parex­el, we are strate­gi­cal­ly aligned with this shift, form­ing part­ner­ships and al­liances with com­pa­nies and in­vestors in­no­vat­ing in these sec­tors. We place pri­ma­ry im­por­tance on those that aim to make a pos­i­tive so­cial or en­vi­ron­men­tal im­pact in ad­di­tion to gen­er­at­ing prof­it – work­ing in con­cert to re­duce the en­vi­ron­men­tal foot­print of clin­i­cal tri­als and fos­ter sus­tain­able prac­tices.” These al­liances will help us stay at the fore­front of in­no­va­tion while en­abling us to tack­le ma­jor glob­al health chal­lenges. Our over­ar­ch­ing goal is to en­sure that the end prod­ucts of re­search are af­ford­able and ac­ces­si­ble to those who need them.

We are al­so close­ly ob­serv­ing the en­vi­ron­ment for fund­ing. Af­ter the slow­down in 2022 and 2023, fund­ing has been gain­ing mo­men­tum, and it is ex­pect­ed that we will see high­er lev­els of biotech M&A, as ex­pressed by Jer­ry Lee, part­ner in In­vest­ment Bank­ing at Gold­man Sachs. Gold­man Sachs man­ag­ing di­rec­tor Ly­la Bibi added that it has been en­cour­ag­ing to see ear­ly signs of gen­er­al­ist in­vest­ment re­turn­ing to health­care.

Leg­isla­tive fac­tors

An­oth­er cen­tral dy­nam­ic is the In­fla­tion Re­duc­tion Act (IRA) in the U.S. All eyes are on the im­ple­men­ta­tion and up­com­ing time­lines for this leg­is­la­tion, which in part aims to low­er the cost of pre­scrip­tion drugs. At Parex­el, our pri­ma­ry con­cern is how the IRA might af­fect our abil­i­ty to fos­ter in­no­va­tion and pro­vide the best pos­si­ble pa­tient care. Re­duced gov­ern­ment spend­ing and tighter mon­e­tary pol­i­cy could af­fect fund­ing for biotech firms. Mac­don­ald added, “As the im­pact of the IRA be­comes clear­er, this might af­fect pri­or­i­ties for drugs in the pipeline. But in our es­ti­ma­tion, any slow­downs in a par­tic­u­lar ther­a­peu­tic area could face re­sis­tance from pa­tient ad­vo­ca­cy groups and lob­by­ists.”

Sci­en­tif­ic de­vel­op­ments

Every year brings more ex­cit­ing break­throughs in sci­en­tif­ic in­no­va­tion. In the re­cent past, the un­prece­dent­ed speed of de­vel­op­ment of the mR­NA vac­cines has got­ten the most at­ten­tion, de­served­ly so. Yet gene ther­a­pies are mov­ing in­to the neu­ro­sciences and even sick­le-cell dis­ease, which is “in­cred­i­bly im­por­tant,” ac­cord­ing to Dr. Amy Mc­K­ee, Chief Med­ical Of­fi­cer and Head of On­col­o­gy Cen­ter of Ex­cel­lence at Parex­el. In par­tic­u­lar, we are see­ing en­cour­ag­ing de­vel­op­ments in treat­ments for on­col­o­gy, rare dis­eases, in­flam­ma­tion, and im­munol­o­gy, with cor­re­lat­ing in­ter­est from cap­i­tal in­vestors. “Biotech com­pa­nies are bring­ing in the ba­sic sci­ence, which is help­ing to ad­vance cross-pol­li­na­tion – for ex­am­ple, from im­munol­o­gy across ther­a­peu­tic ar­eas,” she not­ed. “We are help­ing to ad­vance the in­cor­po­ra­tion of cross-pol­li­na­tion in drug de­vel­op­ment pro­grams.”

Tech­nol­o­gy ad­vance­ments

On the tech­nol­o­gy side, the in­dus­try is mak­ing great progress in us­ing tech­nol­o­gy in clin­i­cal tri­als for a more pa­tient-cen­tric ap­proach, bet­ter-qual­i­ty da­ta, and ac­cel­er­at­ed time­lines. Evolv­ing from a fo­cus on au­toma­tion, new tech­nolo­gies al­low us to con­tin­ue stream­lin­ing man­u­al, la­bor-in­ten­sive process­es such as da­ta col­lec­tion and analy­sis. “Ar­ti­fi­cial in­tel­li­gence (AI) has the po­ten­tial to rev­o­lu­tion­ize the clin­i­cal tri­al process,” said Mac­don­ald. “Ro­bot­ics, ma­chine learn­ing, and AI are be­ing de­ployed in safe­ty, sta­tis­tics, phar­ma­covig­i­lance, and da­ta man­age­ment to sup­port de­ci­sion-mak­ing that re­quires hu­man in­tel­li­gence. At Parex­el, we have been proac­tive in lever­ag­ing AI to tai­lor our ap­proach to bet­ter meet the needs and pref­er­ences of pa­tients.”

On that point, Mc­K­ee added, “Every­one needs to look very close­ly at pa­tient in­volve­ment in drug de­vel­op­ment be­cause that is the wave of the fu­ture. We have to make our pro­to­cols at­trac­tive for pa­tients and build re­la­tion­ships with them – with end­points that are mean­ing­ful enough that they will use the prod­uct af­ter ap­proval.”

In tan­dem with tremen­dous ad­vances in ge­nomics and da­ta an­a­lyt­ics, AI is al­so en­abling tai­lored treat­ments based on in­di­vid­ual ge­net­ics and dis­ease pro­files, paving the way for more tar­get­ed ther­a­pies. De­vel­op­ments in im­munother­a­py are help­ing com­bat var­i­ous can­cers and dis­eases be­yond on­col­o­gy; cell and gene ther­a­pies are trans­form­ing treat­ment par­a­digms for pre­vi­ous­ly in­cur­able dis­eases and ge­net­ic dis­or­ders.

Par­al­lel to this, Parex­el is tak­ing the lead in adap­tive tri­al de­signs and uti­liza­tion of re­al-world ev­i­dence to en­able more da­ta-dri­ven de­ci­sion-mak­ing. Dig­i­tal tech­nol­o­gy has al­so made enor­mous strides in eas­ing the pa­tient bur­den and in­creas­ing tri­al ac­ces­si­bil­i­ty. All of these ad­vance­ments are help­ing to op­ti­mize tri­al out­comes and in­crease the like­li­hood of suc­cess­ful drug de­vel­op­ment.

Gain more in­sights from us

Get more in­sights from our re­cent pan­el dis­cus­sion with Gold­man Sachs, en­ti­tled “De­cod­ing Health­care’s Fu­ture: A com­pre­hen­sive analy­sis of in­vest­ment, clin­i­cal re­search and reg­u­la­to­ry dy­nam­ics.” Watch full video here: https://www.parex­el.com/in­sights-gold­man-sachs-and-parex­el

Learn more about Parex­el’s so­lu­tions and in­sights or con­tact us here.

The views and opin­ions ex­pressed by the au­thors are their own and are for in­for­ma­tion­al pur­pos­es on­ly. They do not con­sti­tute a rec­om­men­da­tion by Gold­man Sachs, or Parex­el, for you to take any ac­tion.