The Biotechnology Industry Organization (BIO) and BioMedTracker, an institutional research service, released results of a study this week that examined the success rate of drugs moving through clinical development during the last seven years. What did the study show? Key findings showed lower success rates in early-stage clinical development compared with previous years and greater success rates for large-molecule drugs compared with small-molecule drugs, two important considerations as pharmaceutical companies re-think their research and development (R&D) models.
The BIO/BioMedTracker study showed that the overall success rate for drugs moving through clinical trials to FDA approval from late 2003 to the end of 2010 is nearly 1 in 10; historical data had showed the rate of drug approvals to be 1 in 5 or 1 in 6. The study covered more than 4000 drugs from large and small bio/pharmaceutical companies, both publicly and privately traded, for companies conducting development on drugs for approval in the US to examine the recent probability of success by treatment type, phase of development, and therapeutic area. The study found that overall success rates from Phase I to FDA approval is nearly 9%. This number is comprised of lead and secondary indications. When separated, lead indications have close to a 1 in 7 rate of approval, and secondary indications have a success rate of 1 in 30; the study also showed that clinical trials that address secondary indications tend to be far less successful on average as shown in all phases of clinical development as well as in all disease areas. Also, the study showed that large-molecule drugs are twice as successful in gaining approval than small-molecule drugs.
So what are the implications for drug research and related strategy? In short, the study further underscores the well-chronicled need for the pharmaceutical industry to improve R&D productivity. Re-inventing the drug R&D engine is a challenge faced by the pharmaceutical industry as a whole and particularly by the large pharmaceutical companies, many of which are facing strong generic-drug incursion. We see companies trying to improve R&D productivity not only scientifically, such as through intensification of biopharmaceutical development, but by creating innovative business models.
As a case in point, Eli Lilly reported this week on its approach in directing venture capital, both internally and externally raised, to finance drug-development costs. The company issued a press release to explain the concept behind its Mirror Portfolio, which establishes investment funds for early-stage research. Lilly has committed to invest up to 20% of the capital for these funds, or a total of $150 million. In addition to financial resources, Lilly will offer to out-license molecules to these funds. For its investments of time and capital, Lilly will receive preferential access to molecules managed by the funds. Lilly retains the rights to purchase all molecules licensed from Lilly via the Mirror Portfolio as well as to evaluate and acquire a limited number of externally sourced compounds, all at fair market value.
The Mirror Portfolio will work with Lilly’s Chorus, a small, multidisciplinary drug-development group established by Lilly in 2002 that conducts early-stage development work using a virtual model in an effort to improve time and cost deliverables in drug development from candidate selection to clinical proof-of-concept. Using this approach, Lilly says Chorus has been able to reach decisions about 12 months earlier and at about half the cost of current industry models. To date, Chorus has delivered data on 17 molecules, six of which resulted in positive proof-of-concept clinical data. In its release, Lilly says it has “cloned” the original Chorus (now known as Chorus Premier) with the establishment of Chorus Resonance in Indianapolis, Chorus Europe in the United Kingdom, and Vanthys, a joint venture in India. Lilly will make these drug-development groups available to the funds as a fee-for-service offering, although other alternative drug-development organizations may be used.
It is said that necessity is the mother of invention. Let’s see if innovation in the business of pharmaceutical R&D will bear some of those fruits.