IQVIA informs of an important trends in clinical research and drug approvals. Between 2005 and 2012, out of the 188 novel therapeutic agents approved by the FDA, 74 (36.8%) were approved on the basis of a single pivotal clinical trial. The report titled “The Changing Landscape of Research and Development” evidences what we at TrialSite News have been observing for quite a while—a transforming drug development sector. 42% of novel drugs approved in 2018 were approved on the basis of only one clinical trial! The implications are considerable from costs to returns to patient choice to profit margins.
One out of 8 approvals relied on Phase 1 or 2 trials with no Phase 3 studies at all. The studies relying on just one trial were primarily new orphan and cancer drugs—classes of treatments that can represent significant return on investment.
The IQVIA report summarizes some of the transforming elements clinical research. Back in 1997 the FDA changed the requirements allowing more flexibility with passage of the Food and Drug Administration Modernization Act.
In 2018, 59 new active substances (NAS) were launched—the highest in five years. Of this total, 12 were medicines that stratify patient selection based on predictive biomarkers and 4 were approved with a companion diagnostic while 16 were oncology medicines. IQVIA summarized that 46% of approved NAS enrolled under 500 patients.
Showcasing the rapid transformation of the biopharma industry, emerging biopharma sponsors now represent over 70% of total late stage R&D pipeline. This data point leads us to ponder that small to mid-sized biotech ventures are driving a good deal of the innovation versus the traditional multinational biopharmaceutical company. This is especially noticeable in the rapidly growing specialty areas of oncology and orphan drugs where there is less dependency on partnership or acquisition (with incentives and les need for multiple clinical trials the drugs can be approved more economically).
IQVIA reported that active R&D compounds have increased by 37% since 2013 and they project that this will likely equate to more commercialization among this dynamic sector (e.g. the small to midsized biotech and related ventures). But undoubtedly there will be periods of intensive merger and acquisition activity as larger multinationals or national players seek to buy innovation. However as we have covered in other writings, private equity could offer other options.
Multinationals will need to do a lot of deal making to remain competitive. In 2018, the emerging biotech venture originated 64% of the 59 NASs launched in 2018! Not that long ago the smaller commercial sponsor would license or sell prior to commercialization. That is changing. In 2018 47% of NASs were launched by emerging biotech ventures in the United States.
Private equity now may accelerate this process. As TrialSite News covered recently, private equity is muscling in to drive financings. Some of the biggest investment groups are building life science divisions (hiring doctors, pharma clinical operations executives, etc.). With oncology and orphan models, a larger multinational isn’t necessarily required to go all the way to commercialization.
The formula for change: flexible capital sources and tailored financings plus changes in the law (e.g. FDA); not to mention market demands for specialized treatments ( which come with the incentives) and importantly and not systematically studied–the intensifying entrepreneurial energies detected in university and scientific circles—rich fertile environments for the “emerging biopharma” to produce the kinds of numbers IQVIA just reported on for 2018.