Biopharma’s Ascendent Supply Chain Reveals its Present Potential and Future Promise

According to PhRMA, (general) research and development spending by its members grew from $2 billion in 1980 to an estimated $51.6 billion in 2013. The percentage of sales that went to R&D in 2013 reached 23.4% of domestic sales. Clearly a lot of that R&D money will continue to be spent in developing pipelines in the biopharmaceutical sector.1

Of the billions of dollars spent on R&D each year for clinical research, roughly 90% is spent on clinical trials of medicines and devices in the U.S. In 2013, PhRMA states that the biopharmaceutical industry sponsored an impressive 6,199 clinical trials involving more than 1.1 million people. Investing in biotech R&D has yielded better returns than the pharma-industry average, note McKinsey & Co. analysts. The current biologics development pipeline supports an outlook of continued healthy growth. According to McKinsey, the number of biotech patents applied for has been growing at 25% annually since 1995 and there are currently more than 1,500 biomolecules undergoing clinical trials.2

The success of the clinical pipeline will lead to an unprecedented number of new molecule launches, rising from a handful a few years ago to 10 to 15 annually in the coming years. A further steep increase is to be expected as multiple players begin to receive approvals to produce biosimilars after 2015.

One recently approved biologic is making headlines and offers the industry a case history of biopharmaceutical R&D success. In December 2015, the Washington Post reported that President Jimmy Carter had advanced melanoma and was beginning radiation therapy.3 The report said Carter would also be receiving an infusion of Keytruda, Merck’s first among a promising new class of immuno-oncology (I/O) drugs aimed at unleashing the human immune system to fight cancer cells. Keytruda was launched in the fourth quarter of 2014, and according to Merck, global sales in 2015 were approximately $566 million.4 Keytruda, as well as similar I/O therapies, works by allowing the body’s immune system to recognize and attack cancer cells as it would do to any other intruder.

Immune therapies are quickly becoming the fourth pillar of cancer treatment, say industry experts. These types of drugs are expensive — Keytruda is roughly $150,000 per year, but it has shown remarkable results in some patients, including Carter, who announced he was “cured” of his melanoma.

Promise of Immuno-Oncology Therapies

In early March, the Tufts Center for the Study of Drug Development (CSDD) announced findings of a new report on investments in research and development for new I/O drugs.5 Tufts says dramatic improvements in complete response rates in trials for new I/O therapies are helping to increase the number of alliances between pharmaceutical, biotech companies, universities and cancer centers. Thirteen universities and cancer centers in the U.S. have announced research alliances with pharma and biotech companies, and the number of I/O alliances between pharma/big biotech and small enterprises grew at a torrid pace, accounting for $39 billion in research commitments over three years.

Currently, more than 130 biotech and 20 pharma companies are developing I/O therapies, according to Tufts. That activity reflects — and is fueling — worldwide I/O product sales, explains Tufts, with annual revenues expected to reach $25 billion to $40 billion by 2020, up from $2.5 billion in 2015.

The biopharmaceutical industry’s recent successes have been fueled by massive commitments of private and public capital, as well as billions in corporate operational budgets and other resources. Success breeds success, and it’s clear that oncological therapies are going to attract even more investment. The following offers a review of the complexities of the biopharmaceutical supply chain and trends across a development ecosystem that is, by most accounts, effectively translating research dollars into highly successful treatments that save lives. To a great degree, contract service providers, including CROs and CDMOs, are becoming an integral part of the industry’s success and are fast becoming key contributors in this incredibly dynamic pharma sector.

references

  1. Pharmaceutical Research and Manufacturers of America (PhRMA), “2015 Biopharmaceutical Research Industry Profile.” Mar 2015. http://www.phrma.org/ sites/default/files/pdf/2015_phrma_profile.pdf
  2. Otto, R., Santagostino, A., Schrader, U., “Rapid growth in biopharma: Challenges and opportunities.” Dec, 2014. http://www.mckinsey.com/industries/pharmaceuticalsand-medical-products/our-insights/rapid-growth-in-biopharma
  3. “Good news from Jimmy Carter. He’s cancer-free,” Washington Post. Dec 06, 2015. https://www.washingtonpost.com/politics/good-news-from-jimmy-carter-hes-cancerfree/2015/12/06/ea56a120-9c65-11e5-a3c5-c77f2cc5a43c_story.html.
  4. Merck Press Release, “FDA Approves KEYTRUDA® (pembrolizumab) for the treatment of Patients with Metastatic Non-Small Cell Lung Cancer who Express PD-L1 with Disease Progression on or After Platinum-Containing Chemotherapy.” Oct 02, 2015. http://www.mercknewsroom.com/news-release/prescription-medicine-news/ fda-approves-keytruda-pembrolizumab-treatment-patients-metas.
  5. Tufts Center for the Study of Drug Development Press Release, “Promise of Immuno-Oncology Therapies Is Boosting R&D Funding and Alliances.” Mar 08, 2016. http://csdd.tufts.edu/news/complete_story/pr_ir_mar_apr_2016.
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