2012: A Year in review in the life science industry
2012 was a good year for the life science industry, with a 7% growth in R&D pipelines and 35 new drugs approved by the FDA, delivering some truly innovative, needed therapies. Challenges faced include the feared patent cliff as well as passing of the medical device tax set forward in 2010.
FDA Approvals
This year, the FDA approved 35 new drugs during the fiscal year, which ran from October 1, 2011 to September 30, 2012. The approval rate in 2012 matched that of 2011, both reaching higher rates than previously seen.
Many of these new drugs are successfully going through the review process as they are addressing unmet needs for deadly diseases. Additionally, the FDA met their deadlines 34 of 35 times, surpassing their PDUFA goal of 90%. Since the close of the fiscal year, no less than 3 new drugs have already been approved.
However, the Sequester may affect the FDA approval rates and goals. The Sequester, passed in August 2011 as part of the Budget Control Act (BCA), is a package of automatic spending cuts projected to total $1.2 trillion, scheduled to begin in 2013 and end in 2021. Part of these automatic spending cuts will be geared towards FDA budgets, which could be forced to slash jobs and thus lose some of its capacity to approve drugs for 2013.
Top Blockbusters
On the basis of third-quarter earnings, Ernst & Young estimates combined sales at the global top 13 drug companies dropped by close to 4% this year from about $557 billion in 2011.
With the patent cliff taking its toll on some of the best selling drugs ever known to our industry, the biggest blockbuster of 2012 is Humira from Abbott Laboratories, totaling $9.48B. Initially approved for the treatment of rheumatoid arthritis, the money maker is drawing on the expanded treatment of 5 additional indications. In total, the top 15 selling drugs generated $95.55B in revenue (and counting).
In addition, 6 companies found themselves in the Top 10 most charitable organizations over the last year. Taking the top spot was Pfizer with over $3.06B in cash and products donated. Merck (#3), Abbott Laboratories (#7), Johnson & Johnson (#8), Eliy Lilly (#9), and Bristol Meyers Squibb (#10) round out the list with all 6 companies donations totaling $6.9B.
The Patent Cliff
The patent cliff has taken a large effect this year, and by 2015 will have an estimated $250B in lost sales for the industry. The once mighty Lipitor has fallen from the top spot to number 10 this year, with a 42% sales drop in the first quarter of 2012. Four other best-sellers lost patent protection this year as well, affecting $22.8B worth of retail sales for 2012.
Capital Market and Merger And Acquisitions (M&As)
As of the third quarter 2012, 14 U.S. life sciences companies completed IPOs, raising almost $950 million. Twelve of the 14 U.S. companies are in drug discovery and development, and California companies account for half of the IPOs in 2012.
The $146B M&A market this year found some much watched participants, including the acquisition of Human Genome Sciences by GlaxoSmithKline. However, overall M&A fell by 35% in 2012, down $79B from last year. According to the 2013 Baybio 2013 California Biomedical annual report, As of November 2012, 53 M&A transactions were recorded of California companies of which 33 were biopharmaceutical, 18 diagnostics and two R&D companies. The top M&A deal was the acquisition of Amylin Pharmaceuticals for $10.6 billion by Bristol-Myers Squibb in collaboration with AstraZeneca.
According to sources, multi-billion-dollar acquisitions were outnumbered by more modest research pacts and partnerships in which drug companies acted to add promising compounds to their pipelines. The early weeks of 2012 brought a flurry of research pacts focused on oncology, typical of a more targeted approach. Takeda Pharmaceuticals, Merck & Co., Eli Lilly & Co., and AstraZeneca all gained access to compounds that biotech firms were developing for cancer.
Investments
Overall, U.S. life sciences (biotechnology and medical devices) investment for the first three quarters of 2012 is down 19 percent in dollars and 12 percent in deals from the same time period in 2011.
Investments in emerging markets increased by 65% this year, reaching a total of $20B, with China as leader of the pack. While the US will remain the largest market, China’s growth of 14 – 18% over the next 2 years will give it a firm place at #2.
Market presence is expanding to developing countries due to the need for higher medical demand, use of generics, and growing populations. Latin America, North Africa, and other parts of Asia are seeing increased attention from the industry while Brazil, Russia, India and China (BRIC) continue to grow.
Biggest Marketing Settlements
2012 saw 4 of the largest marketing settlements ever handed out to pharma. Not only did it see 4, but they ranked among the first 7, including the #1 spot, totaling $6.462B. The winners, or losers in this case, are GlaxoSmithKline ($3B), Abbott ($1.5B), Johnson & Johnson ($1.2B), and Amgen ($762M). All of the settlements shared a common thread of unlawful promotion with a few having kickbacks as reasons for judgment. The increase in penalties can be related to the Justice Departments continued outrage for misbehaving, going so far as suggest future penalties be given to executives for irresponsible corporate behavior or taking away patent rights.
This year also saw the banning of pay-for-delay deals, where brand name drug companies made deals for their generic competitors to delay the release of the competition. The Federal Trade Commission led this mission as these delays cost taxpayers $3.5B a year in higher drug prices, as well as violating trade laws.
Medical Device Tax
Effective January 1st, 2013, the Medical Device Excise Tax went into effect, generating an expected $29B in revenue over the next 10 years. Part of a 2010 healthcare law, 2012 saw the attempt, and fail, for repeal and has since become finalized by the IRS. The tax, applied to most tools used by medical professionals (including those used for humanitarian efforts), has garnered much criticism with some reflecting that the tax will prevent researchers from innovation, ultimately costing lives for patients who need these tools. As the tax will apply to all companies, regardless of profit, companies have to navigate the new arena for funding, R&D, and expansion. Some companies who will be hit hardest, such as Stryker, have already started reducing costs by reducing work force.
How the medical device tax will affect the industry remains to be seen, as well as the patent cliff. 2013 is projected to be another year of growth with a strong pipeline of potential new blockbusters under development. Will big companies look to acquisition as a way of bolstering their offerings? Will the rising stars, such as Onyx, be purchased by the industry giants? Will Alzheimer’s treatments catch a break? Only time will tell what the future holds.
References
- “Life Science Trends 2012”, Alexander, D., McMerty, B., Frey, K., Waddell, A., Carlyle & Conlan, 2012
- “FY 2012 Innovative Drug Approvals”, U.S. Food and Drug Administration, December 2012
- “Pharma R&D Annual Review 2012”, Llyod, I., citeline, 2012
- “The 15 Most Generous Companies Of The Past Year”, Sprung, S., Business Insider, July 26, 2012
- “The Best Drug Companies Of The Past 15 Years”, Herper, M., Forbes, February 9, 2012
- “Startups struggle with impending device tax”, Garde, D., www.fiercemedicaldevices.com, November 2, 2012
- “These are the top 10 payers of the medical device tax, says Moody’s”, Parmar, A., Med City News, March 8, 2012
- “Pharma’s Top 11 Marketing Settlements”, Staton, T., Palmer, E., www.fiercemedicaldevices.com, June 26, 2012
- “Beyond the Patent Cliff”, By Rick Mullin, December 10, 2012. http://cen.acs.org/articles/90/i50/Beyond-Patent-Cliff.html
- “The Sequester, explained”, By Suzy Khimm, September 14, 2012. http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/14/the-sequester-explained/
- “California Biomedical Industry 2013 Report”, By BayBio, CHI and PWC, January 7, 2013. www.CaliforniaBiomedReport.com
- “A Banner Year for New Drugs”, The 2012 Burill Report, http://www.burrillreport.com/article-a_banner_year_for_new_drugs.html
- “Big pharmas eyeing innovative targets”, October 25, 2012. http://www.acquisitionsdaily.com/2012/10/25/big-pharmas-eyeing-innovative-targets/
Contact Information
Sophie McCallum
Marketing Manager at Clinovo
408-773-6258
sophie.mccallum@clinovo.com
Joshua Elvert
Associate, Business Development
408-940-3934
joshua.elvert@clinovo.com
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Appendix
Extract from the 2013 California Biomedical Industry Report A BayBioreport, in collaboration with CHI and PwC: http://www.californiabiomedreport.com/
The 2013 report found California to be:
As the center of biomedical innovation in the U.S, California’s biomedical industry is a national treasure. But the pace of R&D productivity and its global leadership position hang on the availability of capital to fund future innovation and a regulatory framework that is based on consistency and innovative technologies.
The 2013 Biomedical Industry Report found:
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Dealing with the FDA today
The FDA’s mission is to protect public health by assuring “the safety, efficacy and security” of drugs. Indeed, the FDA has the tremendous challenge of ensuring sponsor companies deliver efficient treatments to patients while meeting the highest possible safety requirements. FDA reviewers always need to thoroughly weight risks versus benefits. This sometimes has dramatic consequences: The FDA admits that in the United States 100,000 people die every single year taking FDA-approved pharmaceutical drugs. In addition to that, two million people a year suffer from serious adverse events, which include stroke, heart attack, and permanent neurological damage.
The FDA is increasing efforts to improve patient safety and identify potential side effects. It is more and more demanding with healthcare companies, trying to ensure qualified processes are in place . Indeed, while the number of FDA approvals per 1,000 US-based clinical trials has declined from 7.5 in 2004 to 3.1 in 2010, industry experts are facing increased complexity and cost when managing clinical trials. A 2010 PhArma report argues that between 2000 and 2007, the median number of procedures per clinical trial increased by 49%.
For a drug or a medical device, everything starts or ends one day in the walls of the Food and Drug Administration. What make the difference between failure and success are your clinical data and the way you deal with the FDA. This article intends to help you understand the secrets behind a successful FDA submission.
Provide regulatory compliant data
One of the new FDA expectations includes using standard format for clinical data for their submission. The FDA is thus gradually implementing CDISC standards. CDISC® (Clinical Data Interchange Standards Consortium) established these data standards to speed up data-review and improve clinical data exchange, storage and archival. CDISC standards have been acknowledged as recognized standards by the FDA for years now. They are gaining momentum and undoubtedly are an asset to accelerate the FDA review process. By 2016, CDISC standards are expected to be mandatory for any drug submission.
Understand and follow the FDA’s transformation
Staying up-to-date on any new initiatives is fundamental in order to always anticipate FDA expectations. The FDA is adapting to therapeutic-based clinical trials or personalized medicine. On the same note, the rise of orphan drugs forces the FDA to develop specific and shortened review processes. The FDA is continuously adapting to these life sciences developments. Christine Conroy, Vice President of Regulatory Affairs and GCP compliance at Affymax, points out that with the growing number of very particular compounds and patient-specific therapies, it has become sometimes difficult to provide data the FDA asks. The FDA sometimes lack experience in new fields such as biomarkers. Indeed, there is no reference point as everything is new, so it happens that the FDA brings up issues not always relevant in that field.
Find creative study design strategies to meet your endpoint
Small companies often lack financial or human resources to oversee CRO activities and analyze the quality of the data. This can be overcome by being more creative in the sponsors’ design strategy to reach the endpoints. Sponsors can for instance rely on open source based eClinical Systems (such as CDISC Express or ClinCapture marketed by Clinovo) in order to avoid expensive licensing fees and meet tight budget requirements.
Partner with the FDA
Transparency is an absolute pre-requisite in partnering efficiently with the FDA. It is critical to be detail-oriented and to think upfront to provide and anticipate the information the FDA will need and require. Having internal checking prior to the actual FDA submission is critical because “if you have questions or doubt about your data, the FDA will too”, explains Sandra Nino-Siddens, Executive Director of Regulatory Affairs at Geron Corporation.
Sandra Nino-Siddens claims that “sponsors should be straightforward in presenting rationale and steps followed to develop a safe product.” She outlines the importance of building good relationships with the FDA from the beginning and to keep forth-coming interactions with them. Sandra Nino-Siddens states that “the FDA should be seen as a as a long-term partner, and not be seen as the police, nor as a consulting company.”
Olivier Roth, Marketing & Communication Coordinator at Clinovo
If you liked this article, we recommend you to read: What is the prescription drug user fee act in a nutshell
What is the Prescription Drug User Fee Act: In a Nutshell
This article was reposted from Pharmaspective, a blog from Porzio Pharmaceutical Services’ (PPS)
The Prescription Drug User Fee Act (PDUFA) was originally enacted in 1992, and authorizes the federal Food and Drug Administration (FDA) to collect fees from pharmaceutical companies seeking FDA approval of new drugs and biologics. In return for collecting fees, the PDUFA requires the FDA to meet performance benchmarks with the overall intention of making the New Drug Application review process more efficient. Since 1992, user fees collected by the FDA under the PDUFA have permitted the agency to expand its NDA review staff and considerably reduce a product’s review time while still assuring the safety of human drugs. Congress is required to reauthorize the PDUFA every 5 years by September 30th in order to ensure the continuity of the user fee programs.
A New Way to Collect Data: CDASH by Anayansi Gamboa
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Posted under: Best Practices, Best-Practices, Business Best Practices, CDISC, Clinical Data Management, Menu, Tips & Techniques
There is a general consensus that the old paper-based data management tools and processes were inefficient and should be optimized. Electronic Data Capture has transformed the process of clinical trials data collection from a paper-based Case Report Form (CRF) process (paper-based) to an electronic-based CRF process (edc process).
In an attempt to optimize the process of collecting and cleaning clinical data, the Clinical Data Interchange Standards Consortium (CDISC), has developed standards that span the research spectrum from preclinical through postmarketing studies, including regulatory submission. These standards primarily focus on definitions of electronic data, the mechanisms for transmitting them, and, to a limited degree, related documents, such as the protocol. Read more »
CDISC Releases New Protocol Representation Toolkit
Austin, TX – 18 April 2012 – The Clinical Data Interchange Standards Consortium (CDISC) is pleased to announce today at the CDISC European Interchange Conference in Stockholm, Sweden, the release of the first iteration of a Protocol Representation “Toolkit” for clinical research. The purpose is to make it easy for authors of the research plan or protocol to reap the benefits of the Protocol Representation Model (PRM), which has been developed over the past decade by global clinical research experts from academia, industry and government. Using such a model can save time and resources for research studies by enabling electronic re-use of protocol information for other purposes such as clinical trial registration, study tracking, regulatory information and study reports. The current release of the “Toolkit” includes a standard Study Outline Template in MS Word format, a standard list of Study Outline Concepts, and a complete mapping of the Study Outline Concepts to both the Biomedical Research Integrated Domain Group (BRIDG) model and the CDISC Study Data Tabulation Model (SDTM) Trial Summary (TS) Domain. Read more »
Interview of Ale Gicqueau, President & CEO at Clinovo
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Discover an interview of Ale Gicqueau, President & CEO at Clinovo, and learn more about our services and our vision in the CRO industry. This video was broadcasted by Sy Truong at the last Wuss Conference in San Francisco.
How CDISC standards streamline clinical trials
On March 7th 2012, Clinovo hosted the third Silicon Valley Biotalks, hosted by SNR Denton in their Palo Alto offices. The event welcomed over 60 professionals from the biotechnology and pharmaceuticals industry. The panel was composed of top-tier CDISC experts:
- John Brega (PharmaStat) CDISC Implementation and eCTD Submissions
- Carey Smoak (Roche Molecular) Senior Manager, SAS Programming and CDISC Device Team Leader
- Dave Borbas (Jazz Pharmaceuticals) Senior Director, Data Management
- Ale Gicqueau (Clinovo) President & CEO
- Carey Smoak made the point that the medical device world is on the move to implement CDISC standards. One has to be aware that the simple fact in putting data in an electronic database is quite new for some medical devices companies. Combination products in which medical device interact with a drug is favorable to the implementation of CDISC standards. Indeed, the medical device world is learning from the experience of the drug industry on CDISC standards.
- John Brega mentioned that 60% of FDA submissions are already done in CDISC standards. He also stated that smaller pharma companies adopt CDISC standards faster. Indeed, a lot of the bigger companies have already developed in-house standards and even though they see the benefits of CDISC standards, it takes money and time to transform their processes and change their habits. On the other hand, smaller players that have no or few standards in place are more prone to start using FDA approved CDISC standards.
- One of the advantages of CDISC standards is that it holds the clinical data to a greater level of readability and compliancy in regards of FDA requirements. A submission without SDTM can have a review period twice as long as one under SDTM standards. CDISC conversion allows submitters to find out problems or discrepancies even before the FDA does, which gives more data consistency and confidence for the FDA submission. It saves time and frustration on both sides.
- Carey Smoak said that the earlier the CDISC standards were utilized, the better. The best timing to implement CDISC standards is the database built. There is a real challenge to push CDISC standards upfront in the clinical trial process. He recommended to hire people with expertise on CDISC standards. One should educate themselves on this hot topic and only hire real experts and approved service providers.
- Dave Borbas mentioned existing CDISC conversion tools, such as the open CDSIC validator software, recognized by the FDA and freely available. He talked about CDISC Express, Clinovo’s free SAS-based SDTM mapping tool. Carey Smoak mentioned the development of new softwares, and that applications on smartphones are also mushrooming, but stated that quality, validation and compliancy were very tricky in this case and an upcoming challenge.
- Dave Borbas said that the FDA is getting more and more involved into CDISC standards. FDA calls it “their” standards now, which is new and great signal to the CDISC community.
Do you want to learn more on CDISC conversion?
Register for free for our next Webinar on March 28th at 9am:
CDISC® SDTM Conversion Made Easy with CDISC Express
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Adaptive Clinical Trials – Silicon Valley BioTalks Recap, by Chris Clancy
Clinovo hosted a truly informative panel discussion on the topic of adaptive clinical trials in Palo Alto,CA on November 2. It was a great forum to hear some very experienced clinical trial professionals share their experiences with a standing-room-only audience. In addition, it was a friendly environment to network with Bay Area colleagues before and after the panel discussion. The event was impressive enough to make me want to embark on my first visit to the blogosphere. Here goes…
During the panel session, the first thing that struck me was when the panelists explained that while the phrase “adaptive clinical trial” is a somewhat new bit of bio-pharma jargon, we all have been running trials for decades that fit this moniker – we just didn’t know it. It is also clear that these trials are increasing in number, and are helping to save millions for the biopharmaceutical industry.
From the FDA’s Draft Guidance: Adaptive Design Clinical Trials for Drugs and Biologics – February 2010
- (Page 6) Definition and Concept of an Adaptive Design Clinical Trial
- For the purposes of this guidance, an adaptive design clinical study is defined as a study that includes a prospectively planned opportunity for modification of one or more specified aspects of the study design and hypotheses based on analysis of data (usually interim data) from subjects in the study.
- Analyses of the accumulating study data are performed at prospectively planned timepoints within the study, can be performed in a fully blinded manner or in an unblinded manner, and can occur with or without formal statistical hypothesis testing.
As a member of the eClinical community myself, I was also pleased to hear a common theme throughout the discussion, which was how great an impact technology was making on the ability to achieve the goals of adaptive trials. All of the panelists explained how EDC made it possible to have access to their data in a way that facilitated the type of decisions critical to adaptive studies. It was clear that ‘in the old days with paper’, it was very difficult, or impossible to make the type of mid-stream analysis and decisions which we now take for granted.
I was pleased to hear Oranee Daniels from Theravance mention that she could look at her ePRO data every morning if needed, and always know that she was looking at the most up-to-date information for making the crucial decisions associated with the adaptive design.
Don Kellerman from Map Pharmaceuticals also explained his experience with killing studies by determining futility through adaptive trial design. Don had a great sense of humor; he warned about giving him a compound to evaluate, since he has a proven track record for quickly finding futility.
All in all, I felt the event was a great success. I would certainly attend future sessions of the Silicon Valley BioTalk series. Kudos to Clinovo for putting it together and generating the interest for such a great turn out on a Wednesday evening. It attracted participants from all over the Bay Area, and beyond.
Article written by Chris Clancy, Director of Business Development at CRF Health
How open source technologies help streamline the clinical trial process
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Clinical trials have become increasingly complex and, as a result, costly. Only 333 drugs and biologics have been approved between 2000 and 2010 due to stricter regulatory procedures while spending has increase by 15 in the same period of time.
The need for innovation is critical in the pharmaceutical and biotechnology industry. Life science companies and service providers are looking for innovative solutions to improve study performance and minimize their risks.
This article demonstrates how open source technology presents an innovative solution to this challenging environment, and ultimately helps bring medical innovations faster to patients.
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