Life Science Leader, November 2015
In 2014, the FDA’s Center for Drug Evaluation and Research (CDER) approved 41 new molecular entities (NMEs) and new therapeutic biological products; it was an exciting year for the biopharmaceutical industry. These approvals set a record not seen since 1996, when 53 new NMEs were passed.
These 41 novel drugs were approved to treat a broad range of diseases. The three therapeutic areas that received the highest number of approvals were rare/orphan diseases, infectious diseases, and oncology. It is noteworthy that all eight novel cancer drugs were included in the FDA’s count for rare disease drugs. The momentum for innovative drugs has continued into 2015. As of October 6, 2015, the FDA has approved 28 NMEs, six of which are new oncology drugs.
According to Nice Insight’s Annual Pharmaceutical and Biotechnology Outsourcing Survey, oncology has consistently been a therapeutic focus for drug pipeline development since 2012. Despite a slight drop in overall focus on oncology from 38 percent in 2014 to 32 percent in 2015, specialty pharmaceutical companies and emerging, niche, or start-up companies are demonstrating a strong interest in developing cancer drugs. For example, in 2014 only 12 percent of emerging, niche, or start-up companies focused on oncology. This number increased to 27 percent in 2015. Meanwhile, 30 percent of specialty pharmaceutical companies have a focus on oncology, up 8 percent from its 2014 level. A slight increase (3 percent) was observed in Big Pharma companies, which rose to 38 percent in 2015.
In the race to develop novel oncologydrugs, Big Pharma and biotechnology companies are leading the competition. As seen in 2014, seven of the eight approved new cancer drugs were developed by the global top-25 pharma companies (Table 1). To date in 2015, three of six approved new cancer drugs were developed by Big Pharma companies, and two of those three were sponsored by Novartis (Table 2). This Swiss multinational company has the most robust oncology pipeline with multifold NMEs. Recently, its oncology portfolio has been further expanded by completing the acquisition of GSK’s entire oncology business.
One prominent trend in drug discovery is the shift of focus from small molecule to large molecule biologics. This shift is clearly reflected in drug approvals and especially evident in the oncology field. In 2014, 11 new biologic license applications (BLAs) were approved, representing 24 percent of novel drug approvals. Of those 11, four BLAs were for marketing cancer drugs — monoclonal antibodies, representing 36 percent of total BLAs issued or 50 percent of approved new cancer drugs. Two new biologic oncology drugs, Blincyto and Keytruda, are identified as first-in-class for their innovative nature in activating patients’ immune systems to kill cancer cells. In the fight against cancer, the debut of new oncology biologics indicates a promising future for cancer immuno-therapeutics. Additionally, among the top eight best-selling drugs of 2014, seven were biologics, and three of them (Rituxan, Avastin, Herceptin) are for cancer treatment.
The increased interest in biologic product development is also demonstrated in Nice Insight’s Annual Pharmaceutical and Biotechnology Outsourcing Survey. The percentage of respondents whose business is engaged in the development of biologic-based therapeutics continues to increase — up 9 percent from 73 percent in 2014 to 82 percent in 2015. There is also a slight increase (1 percent) in their annual R&D expenditure on biologic development from 57 percent in 2014 to 58 percent in 2015. The increase in biologics investment offers enormous opportunities for contract service providers with expertise in developing and manufacturing biological products. In addition, the industry recognizes a shortage of specialty CMOs for biomanufacturing at a global scale.
However, the profit margin for CMOs may be limited in the space of oncology. According to Nice Insight’s annual survey, the overall annual outsourcing expenditure was increasing as more businesses were moved from the lowest-spending category — less than $10 million (16 percent in 2015 vs. 29 percent in 2014) — to mid-level between $10M and $50M (62 percent in 2015 vs. 47 percent in 2014). The fraction in top-level spending — more than $50M — remained steady (23 percent in 2015 vs. 24 percent in 2014). In contrast, those businesses whose therapeutic area of focus is oncology were cutting their toplevel (> $50M) outsourcing expenditure: 29 percent in 2015 vs. 34 percent in 2014. This trend may lead to decreased outsource spending in oncology.
In addition, Nice Insight’s 2015 survey of 2,300 pharmaceutical and biotechnology executives involved with outsourcing shows that 30 percent of sponsors in North America and 25 percent in Europe outsource biomanufacturing. Of those that outsource biomanufacturing, 53 percent in North America and 56 percent in Europe will outsource mammalian cell line-based biomanufacturing, while 74 percent in North America and 83 percent in Europe will outsource microbial-based manufacturing.
Survey Methodology
The Nice Insight Pharmaceutical and Biotechnology Survey is deployed to outsourcing-facing pharmaceutical and biotechnology executives on an annual basis. The 2014-2015 report includes responses from 2,303 participants. The survey is comprised of 240+ questions and randomly presents ~35 questions to each respondent in order to collect baseline information with respect to customer awareness and customer perceptions of the top ~125 CMOs and ~75 CROs servicing the drug development cycle. Five levels of awareness, from “I’ve never heard of them” to “I’ve worked with them,” factor into the overall customer awareness score. The customer perception score is based on six drivers in outsourcing: Quality, Innovation, Regulatory Track Record, Affordability, Productivity, and Reliability. In addition to measuring customer awareness and perception information on specifi c companies, the survey collects data on general outsourcing practices and preferences as well as barriers to strategic partnerships among buyers of outsourced services.