For months, it had been clear that 2018 would be a banner year for pharmaceutical innovation. The question was, by how much would it shatter the previous (1996) record of 50 approvals (excluding diagnostics and imaging agents)? We now know. It exceeded it by over 20 percent. Last year, U.S. regulators approved a total of 61 drugs – 59 by FDA’s Center for Drug Evaluation and Research (CDER), plus two recombinant therapies (Andexxa and Jivi) by its Center for Biologics Evaluation and Research (CBER). Yet, 2018 stands out not only for the sheer volume of new drug approvals, but also for their quality, and the affirmation of several important trends that make it a watershed. It is also another signal that the innovation crisis that caused so much pain in the first decade of this millennium is now solidly behind us. In 2015, I wrote about the dawn of a hyper-innovation age. It has become more tangible ever since, but perhaps in a different way than might have been expected back then.
Fifty three (53) companies shared 61 drug approvals
Figure 1 lists the 61 approvals in chronological order. Only six companies received multiple approvals: four for Pfizer and two each for Array, AstraZeneca, Lilly, Shionogi, and Shire. With 16 New Molecular Entities (NMEs) to its credit, the percentage of approvals obtained by Big Pharma dropped to 26%. This is a low figure when compared to the last 10 years, when it typically ranged between 35% and 40%. It is also surprising since the last five years have been among the most vigorous on record for the number and value of business development transactions. If all this activity had an impact, it may have favored the smaller companies which received 47 approvals, including 28 (60%) that went to firms that had never before received an approval. To add more context, ten years ago, it took nearly three years – from January 27, 2006 through December 2008 – to see 61 approvals, and Big Pharma’s share of these was 46%.
A change in the industry’s pecking order?
Figure 2 shows the companies that had at least 3 drugs approved in the last 10 years. As one might expect, the list is dominated by the largest companies – seven of them. Right below, however, we see smaller companies that are encroaching on what used to be the bottom half of the Big Pharma club. And many of them hardly had a commercial existence 20 years ago (Gilead, Biogen, Shire, Vertex). Does this foretell a changing of the guard in the industry? It is too early to tell, but it does suggest that scale is perhaps no longer as useful as it once was when it comes to innovation, and might become even less so in the future. Proprietary data and costly infrastructure have long been hallmarks of the industry and requirements for long-term success. Yet, as data becomes a commodity – thanks to “real-world data” and big science initiatives such as the growing number of very large patient cohorts (e.g., All of US) – the basis of competition is being redefined. Success increasingly hinges on the scientists’ ability to extract better knowledge from shared data, a skill that does not require much scale. Equally important, as science expands into new territory – CAR-T, CRISPR, RNA therapeutics, gene therapy, etc. – the translational challenges faced by drug developers have never been experienced before, and their solutions require ingenuity and a capacity for novel thinking, abilities that do not correlate with scale either.
Rare diseases capture 51% of the approvals
The long-expected splintering of the pharmaceutical market accelerated in 2018. A majority (31) of the new drugs targeted rare diseases, including 13 cancers, 5 metabolic diseases, 3 blood diseases, 3 nervous system disorders, and 3 infectious diseases (Fig 3). Since rare diseases are almost always synonymous with high unmet needs, these therapies collected a record number of coveted FDA designations, especially orphan drugs (31), priority reviews (26), fast-track (16), and breakthrough therapy (12). Once again, FDA has continued to do its part to speed promising drugs to market.
Outside rare diseases, a fairly conventional crop
Figure 4 profiles the class of 2018 against the three prior years. The share of new biological entities dropped for the second year in a row to 36% (from 45% and 55% in preceding years), while the percentage of first-in-class therapies stayed flat at 43%. Fast-track and accelerated approvals did not deviate much from their recent trends, but breakthrough therapy (23%) fell by almost half from 2017 (41%). Only orphan drugs (56%) and priority reviews (70%) shot up.
An industry beset with challenges, and exploding with opportunities
As encouraging as these numbers may be, they only tell part of the story. The rest comes to us every day through news reports that show a changing industry that is both beset with challenges and exploding with opportunities.
The last few years have seen stunning drugs being approved. We can now cure hepatitis C and leukemia; restore vision loss from congenital blindness; allow cystic fibrosis patients to run marathons; and prevent Ebola – all of which was science fiction not long ago. Yet, at many companies, the pipeline is even more promising. The tempo of breakthroughs is quickening and their breadth widening. Just in the last few months we have seen a dizzying series of announcements about a host of gene therapies, including for sickle cell disease and spinal muscular atrophy. Cancer treatment responses which, not long ago, were measured in weeks or months (PFS), are now eclipsed by investigational therapies with complete responses of 55%, 74%, and 80%. Given the rapid growth in shared public knowledge that underlies many of these breakthroughs, one can expect a continued supply of seminal discoveries that will be available for translation.
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