Pharma R&D activity surges even without COVID-19

While much of the world has been captivated by the remarkable success of the R&D activity focused on COVID-19 vaccines and therapeutics, other parts of the biopharmaceutical innovation eco-system also made great progress during 2020 – in spite of disruptions and reprioritisation of activity.

Research by the IQVIA Institute for Human Data Science and included in the recently published report Global Trends in R&D: Overview through 2020 focuses on the advances in clinical trial activity, clinical development productivity, the pipeline of innovative medicines in development, funding and strategic transactions and new drug approvals and launches. Key trends from the report include:

Clinical trial starts increased 8% for the full year of 2020, a similar growth as in the prior three years, and despite the significant drop in starts during the first quarter as the pandemic delayed and disrupted all parts of health systems globally. From mid-year, trial starts recovered to higher levels than in 2019 even without the surge in COVID-19-related trials of vaccines and therapeutics. This turnaround was partly enabled by the increased adoption of trial designs that incorporate decentralised elements, and the agility of sponsors, clinical research organisations (CROs), and regulators to adapt to the markedly changed environment. Specifically, in the case of oncology, the number of trial starts reached historically high levels (60% higher than in 2015), reflecting strong momentum in this area and especially in rare cancers, which now account for 63% of total oncology trials.

Biopharmaceutical R&D stakeholders are focused on improving clinical development productivity with increased use of data-driven approaches to reduce complexity and shorten the time for drugs to advance through the development cycle. The IQVIA Clinical Development Productivity Index, a composite metric of success rates, clinical trial complexity and trial duration, rose in 2020 for the first time in five years. This was partly due to trials being conducted across fewer countries and sites – likely a response to the pandemic – and success rates increased slightly though remained lower than the ten-year trendline in all classes except for vaccines and infectious diseases.

Across all therapy areas, the composite success rate – from Phase I to registration – was 9.8% in 2020, after adjusting for pandemic-related pauses and delays. That compares to an average of 12.9% over the past decade and reflects the continued high risk of biopharmaceutical development and the willingness of manufacturers to increase their level of scientific risk as operational risk declines.

This is seen particularly in oncology, which has had the lowest productivity across all disease areas during the past decade and contrasts with infectious diseases, which scored the highest productivity index in 2020, including the remarkable breakthroughs in COVID-19-related vaccines and therapeutics.

The industry’s reservoir of new molecules in development incorporates a growing number of oncology drugs – representing more than 40% of the early-stage (discovery/preclinical and Phase I) and 30% of the late-stage (Phase II and later) pipeline. Across all therapy areas, growth in the early-stage pipeline paused in 2020, and the number of total products fell to 2018 levels, the first reduction seen since 2014. In the late-stage pipeline, the number of products increased by 3%, bringing total expansion of the pipeline to 43% since 2015.

Pandemic-driven delays contributed to a pause in the expansion of the pipeline of next-generation biotherapeutics, which focus on gene editing, CAR-T and RNA therapies, after almost doubling in number in the prior two years. Intense interest and high levels of investment continue flowing to these rapidly advancing areas of science with the promise of breakthrough treatments not only for cancer, but also cardiovascular diseases, pain, and neurological disorders.

Funding for early and late stage R&D increased significantly in 2020, seemingly unaffected by the disruptions of COVID-19 and reflecting a strong focus on innovative pathways and approaches to the discovery and development of novel therapeutics. Venture capital flows into the life sciences sector rose by 50% in 2020 over the 2019 levels, as interest and valuations in early stage companies remained at all-time highs. At the same time, aggregate R&D expenditures by the 15 companies with the highest global pharmaceutical sales reached $123 billion, and exceeded 20% of their aggregate reported corporate sales for the first time.

This marks a 43% increase in expenditure since 2015, compared to a 23% increase in sales for these companies over the same period and reflects the strong commitment by these companies to a growth strategy underpinned by innovation and R&D investment. Strategic transactions – ranging from M&A through licensing and other forms of collaboration, often between large and small companies – also unfolded through 2020 at typical levels, buoyed by a significant amount of interest in COVID-19-related deals.

Emerging biopharma companies, those spending less than $200 million on R&D annually and generating less than $500 million in sales, have expanded their contribution to the R&D pipeline steadily over the past 15 years and in 2020, represent almost two-thirds of the late-stage pipeline. More than 3,000 emerging biopharma companies now have active research programmes, and while some are involved with collaborations, partnerships or co-development with larger companies, many are now choosing to pursue their clinical development programmes through to registration alone. The 15 large pharma companies, defined as those with greater than $10 billion in annual global sales, have seen their share of the late-stage pipeline fall from 34% in 2005 to a low-point of 24% in the case of the 2020 pipeline. While the absolute number of molecules controlled by these large companies has increased, it has not been at the same pace as the growth of smaller emerging companies.

The geographic location of the headquarters of companies with drugs or research platforms in the early-stage pipeline has shifted significantly over the past five years. The US is home to 42% of these companies, down from 45% in 2015, while Europe’s share of company headquarters has fallen from 33% to 22% over the same time.

Meanwhile, products from China-headquartered companies, which represented only 1% of the early-stage pipeline in 2005 and 3% in 2015, now account for 12% of the pipeline in 2020. This reflects the major innovation-focused initiatives that have been underway for some time to stimulate China’s biomedical innovation ecosystem.

The sustained investments and efforts to discover and develop innovative medicines by small and large companies yielded a record 66 new drugs globally in 2020 with particular success in oncology and treatments for rare diseases in addition to COVID-19 vaccines. This brings the total number of new active substances launched globally over the past 20 years to a total of 871. A notable gap has emerged over the past decade between the number of launches in the US and in the EU4+UK (Germany, France, Italy, Spain, United Kingdom), a reflection of the direct and indirect impact of differing regulatory and reimbursement approaches.

In all, the biopharmaceutical innovation ecosystem delivered remarkable results in 2020, capping a decade of progress in discovering and developing medicines to address unmet needs and including the vital contribution of COVID-19 vaccines. The industry also ends the first year of this new decade with a full pipeline of investigational drugs, funding for further development, and the commitment of thousands of scientists and stakeholders to contribute to the advancement of human health.

Murray Aitken is executive director at the IQVIA Institute for Human Data Science