Over the next five years, as they strive to maintain revenue growth, large pharmaceutical companies will increasingly seek to boost their clinical development and R&D productivity through the formation of partnerships with biotechnology companies, according to a panel of industry leaders convened by the Tufts Center for the Study of Drug Development (CSDD).

To achieve 5%-8% real revenue growth each year to 2012, Big Pharma companies will need to develop and introduce 12-50 new products between now and 2012, or about two to nine each year, says Tufts CSDD. However, the top 10 pharmaceutical firms have typically brought only around 0.6 new drug products to market each year during the last five years.

During 2001-4, US approvals of New Molecular Entities (NMEs) rose 29%, but Big Pharma’s share plummeted from 67% of total approvals to 29% in the period, the Center notes.

Success in new drug development rests to a large degree on determining, sooner rather than later, if a product is clinically meaningful, says Tufts CSDD director Kenneth Kaitin. And, as small and mid-tier pharmaceutical and biotechnology companies operate principally in the areas of Phase I and II development, they can feed NMEs efficiently to Big Pharma, he adds.

However, while these companies are helping to fill the product development gap, new and more complex products increase the costs of late-stage clinical failures for all developers. Biotechnology-derived medicines currently have greater overall clinical success rates than Big Pharma products, but they are more likely to fail in Phase III, the panel members have warned.

Their discussions also concluded that:

– deciding whether to outsource depends on a business decision which determines if such a move will add value to the business, above and beyond the cost savings resulting from negotiations with partners;

– a rapidly-maturing biotechnology industry needs to develop metrics that enable decisions to be made in real time, such as whether to kill unpromising compounds early, or adapt a clinical trial design; and

– proper deployment and use of information technology systems will help streamline clinical development and improve R&D productivity. The key here is to design the system not to cut costs or time but to reduce risk, as this will lead to savings in both costs and time.

R&D organisations which focus their resources on what they do best, outsourcing their non-core strengths, are those which are most likely to prosper, the panel have concluded. By Lynne Taylor