Approval applications for New Molecular Entities (NMEs) in the US and the European Union (EU) have maintained a “modest yet steady pace” this year, at an average of around three per quarter, says Fitch Ratings.
The US Food and Drug Administration (FDA) and the European Medicines Agency (EMA) each approved six NMEs during the third quarter of 2010, of which six were developed or licensed by Fitch Ratings-rated pharmaceutical developers, notes the agency's new Global Pharmaceutical R&D Pipeline report. In addition, Japan's Ministry of Health, Labor and Welfare (MHLW) cleared six new medicines developed by Fitch-rated pharmaceutical companies for sale in the region during the period.
To date, approximately one-half of the industry’s original 22 new therapeutics have been filed as planned in 2010, while there have been three drug project cancellations and six extensions to original filing goals, says the report. In the third quarter, the applications for four NMEs were filed to drug regulators in Europe or the US, keeping a modest yet steady pace throughout the year of around three per quarter, it notes.
Late-stage research programmes of drug developers rated by Fitch have expanded by 11 NMEs since the beginning of the third quarter, five of which have advanced from earlier-phase internal research programmes. The remaining six new drug candidates in late-stage pipelines have arisen from licensing agreements and smaller acquisitions which have been favored over major consolidation this year. However, in the same timeframe, 12 investigational drug projects were terminated, of which the vast majority failed to achieve primary endpoints set in late-stage clinical studies, the report shows.
The third quarter was “rather light” in terms of key drug patent expiries, with only two blockbuster products - Pfizer’s antidepressent Effexor-XR (venlafaxine) and Sanofi-Aventis’ anticoagulant Lovenox (enoxaparin sodium) - losing market exclusivity, Fitch comments. However, three significant products lost patent protection in the US during the fourth quarter - Sanofi-Aventis’ cancer treatment Taxotere (docetaxel), Eli Lilly’s Gemzar (gemcitabine) also for cancer and Eisai/Pfizer’s Aricept (donepezil) for the treatment of Alzheimer’s disease - and the latter two are now facing generic competition.
The patent cliff is currently modest for most drug developers but will accelerate in the coming year with the patent losses of Pfizer’s Lipitor cholesterol-reducer (atorvastatin) and Eli Lilly’s antipsychotic Zyprexa (olanzapine), notes the report, which adds that the drug portfolios with the highest exposure to patient expiries over the next three years are at Eli Lilly, Bristol-Myers Squibb, Amgen and Pfizer.
Turning to sales trends, the report says that the positive revenue growth seen throughout the earlier part of the year reversed in the third quarter, as Fitch-rated pharmaceutical companies mentioned in the report experienced a weighted average revenue decline of 1.5%, in contrast to the 6.2% and 1.5% growth seen in the first and second quarters, respectively. The sales figures are adjusted for currency changes and consolidation activities within the past 12 months involving Abbott Laboratories, Merck & Co, and Pfizer and, including these adjustments, only six of the 13 Fitch-covered drug developers saw revenue increases generated by their pharmaceutical portfolios in the quarter, of which three companies achieved very modest sales growth.
Overall, sales have been dampened by global health care reform efforts aimed at controlling and moderating government expenditures. Prominent among these have been the Medicare reimbursement cuts retroactive to the start of this year which were enacted in the US with the passage in March of the Patient Protection and Affordable Care Act, and austerity measures in a number of European countries which negatively affected sales performance in the third quarter, especially for European-based drug manufacturers. “As anticipated, these measures are pressuring revenues generated in European territories in the low to middle single digits,” says Fitch.