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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Eli Lilly CEO David Ricks (Evan Vucci/AP Images)

A P val­ue of 0.38? NE­JM re­sults raise new ques­tions for Eli Lil­ly's vaunt­ed Covid an­ti­body

Generally, a P value of 0.38 means your drug failed and by a fair margin. Depending on the company, the compound and the trial, it might mean the end of the program. It could trigger layoffs.

For Eli Lilly, though, it was part of the key endpoint on a trial that landed them a $1.2 billion deal with the US government to supply up to nearly 1 million Covid-19 antibodies.

So what does one make of that? Was the endpoint not so important, as Lilly maintains? Or did the US government promise a princely sum for a pedestrian drug?

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Noubar Afeyan, Flagship founder and CEO (Victor Boyko/Getty Images)

UP­DAT­ED: Flag­ship launch­es Sen­da Bio­sciences with $88M in back­ing, look­ing to pi­o­neer the field of 'In­ter­sys­tems Bi­ol­o­gy'

Flagship Pioneering has a fresh company out this week, one that aims to lay the groundwork for a whole new discipline.

Senda Biosciences launched Wednesday with $88 million in Flagship cash. The goal? Gain insights into the molecular connections between people and coevolved nonhuman species like plants and bacteria, paving the way for “Intersystems Biology.”

Guillaume Pfefer has been tapped to run the show, a 25-year biotech veteran who comes from GSK after leading the development of the company’s shingles vaccine.

Daphne Koller, Getty

Bris­tol My­er­s' Richard Har­g­reaves pays $70M to launch a neu­rode­gen­er­a­tion al­liance with a star play­er in the ma­chine learn­ing world

Bristol Myers Squibb is turning to one of the star upstarts in the machine learning world to go back to the drawing board and come up with the disease models needed to find drugs that can work against two of the toughest targets in the neuro world.

Daphne Koller’s well-funded insitro is getting $70 million in cash and near-term milestones to use their machine learning platform to create induced pluripotent stem cell-derived disease models for ALS and frontotemporal dementia.

Eli Lilly CEO David Ricks at the Rose Garden, May 26, 2020 (Evan Vucci/AP Images)

Eli Lil­ly lines up a block­buster deal for Covid-19 an­ti­body, right af­ter it failed a NI­AID tri­al

Two days after Eli Lilly conceded that its antibody bamlanivimab was a flop in hospitalized Covid-19 patients, the US government is preparing to make it a blockbuster.

The pharma giant reported early Wednesday that it struck a deal to supply the feds with 300,000 vials of the drug at a cost of $375 million — once it gets an EUA stamp from the FDA. And once that 2-month supply deal is done, the government has an option on another 650,000 doses on the same terms — which could potentially add another $812 million.

CMO Merdad Parsey (Gilead)

Gilead hits the brakes on a tri­fec­ta of mid- and late-stage stud­ies for their trou­bled fil­go­tinib pro­gram. It's up to the FDA now

Gilead $GILD execs haven’t decided exactly what to do with filgotinib in the wake of the slapdown at the FDA on their rheumatoid arthritis application, but they’re taking a time out for a slate of studies until they can gain some clarity from the agency. And without encouraging guidance, this drug could clearly be axed from the pipeline.

In their Q3 report out Wednesday afternoon, the company says researchers have “paused” a Phase III study for psoriatic arthritis along with a pair of Phase II trials for ankylosing spondylitis and uveitis. Late-stage studies for ulcerative colitis and Crohn’s are continuing, but you can see for yourself how big a hole this leaves in the inflammatory disease pipeline, with obvious implications if the company abandons filgo altogether.

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Hal Barron, GSK R&D chief

GSK's Hal Bar­ron ax­es a once-prized drug from J&J, con­tin­u­ing shift away from res­pi­ra­to­ry

Hal Barron’s revamp of the GlaxoSmithKline pipeline continued yesterday, as the British pharma announced they axed an asthma drug they once promised over $200 million to acquire.

Then led by CEO Andrew Witty and R&D chief Patrick Vallance, GSK picked up the drug, known elegantly as GSK3772847, from J&J in 2016, hoping to expand on the beachhead in asthma they had established the year prior with Breo Ellipta. They promised up to $227 million in upfront payments and milestones.

Ar­cus and As­traZeneca part­ner on a high stakes an­ti-TIG­IT/PD-L1 PhI­II can­cer study, look­ing to im­prove on a stan­dard of care

For AstraZeneca, the PACIFIC trial in Stage III non-small cell lung cancer remains one of the big triumphs for AstraZeneca’s oncology R&D group. It not only made their PD-L1 Imfinzi a franchise player with a solid advance in a large niche of the lung cancer market, the study — which continues to offer data on the long-range efficacy of their drug — also helped salve the vicious sting of the failure of the CTLA-4 combo in the MYSTIC study.

Re­gen­eron posts sec­ond look on Covid-19 an­ti­body cock­tail, boost­ing its case for EUA — but what about symp­tom al­le­vi­a­tion?

Regeneron has revealed a second cut of data on its Covid-19 antibody cocktail in the outpatient setting — data that it has sent straight to the FDA to boost its emergency use authorization request.

The new results reinforce what’s reported from the same trial last month, Regeneron said, incorporating a total of 799 non-hospitalized patients with mild-to-moderate disease. REGN-COV2 reduced viral load and patient medical visits (anything ranging from hospitalizations, emergency room, urgent care visits to physician office and telemedicine visits), meeting all the key endpoints.

No­var­tis buys a new gene ther­a­py for vi­sion loss, and this is one pre­clin­i­cal ven­ture that did­n't come cheap

Cyrus Mozayeni got excited when he began to explore the academic work of Ehud Isacoff and John G. Flannery at UC Berkeley.

Together, they were engaged in finding a gene therapy approach to pan-genotypic vision restoration in patients with photoreceptor-based blindness, potentially restoring the vision of a broad group of patients. And they did it by using a vector to deliver the genetic sequence for light sensing proteins.

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