Good afternoon, readers.
Big pharma companies are in an ROI rut. But that doesn’t mean drug developers at large are grappling with a midlife crisis. In fact, the young guns of the industry—upstart biotechs—aren’t doing too shabby, according to a new Iqvia Institute report.
There have been a few notable shifts in drug development culture as legacy, big-name biopharmas struggle to maintain their ROI of old. Leaner, meaner biotechs have climbed the investor hype ladder while attracting buyout offers from the industry titans (see: any of the deals for startup gene therapy and cancer immunotherapy treatments in just the past few years).
“Emerging biopharma companies (EBP) are defined as companies that are estimated to spend less than $200 million annually on R&D and have less than $500 million in revenue,” wrote the study authors. And these companies accounted for “72% of the total [drug] R&D pipeline in 2018, compared with 61% in 2008… Large pharma companies—those with more than $10 billion in annual pharmaceutical sales—have seen their share drop from 31% to 20% over the same period.”
Let’s put an even finer point on the issue: “Emerging biopharma companies were the originator of 38 of the [new active drug compounds] launched in 2018, or 64% of them.”
This isn’t to say the mainstays of the drug industry have nothing to offer anymore—after all, they can douse the up-and-coming biotechs with cash to help them conduct clinical trials and commercialize their products. But their central roles as the original innovators in this admittedly risky space has clearly diminished. And that may foretell even greater shifts in the pharma business landscape.
Read on for the day’s news.
The coming health care cybersecurity boom. With massive health care data breaches come massive cybersecurity business opportunities. Frost and Sullivan researchers say that, while the demand for health IT and cybersecurity programs haven’t quite kept pace with the underlying threat, the market is growing nonetheless. That means more money (to a projected tune of some $8.7 billion in investments by 2023) and more emphasis on technologies such as cloud-based computing services. (Healthcare IT News)
There is now a criminal case over the opioid crisis. Federal prosecutors have filed the first criminal charges related to the opioid addiction epidemic, alleging that drug distributor Rochester Drug Cooperative (and two former company executives) failed to report fishy orders for powerful painkillers such as fentanyl and oxycodone. RDC issued a mea culpa of sorts on the matter. “We made mistakes,” said company spokesperson Jeff Eller in a statement. “RDC understands that these mistakes, directed by former management, have serious consequences.” (ABC News)
A cluster for Teva’s headache med. In a headache for Teva, the generic drug giant is shutting down a late-stage clinical trial of its migraine drug Ajovy (part of a new class of such medications) as a cluster headache treatment. A number of companies including Teva and Eli Lilly are pursuing this class of treatments, known as CGRP inhibitors, and Teva’s failure could open up an additional lane for Lilly. (BioPharma Dive)
THE BIG PICTURE
The Tobacco 21 movement is gaining steam. Senate Majority Leader Mitch McConnell recently announced he’ll be introducing legislation to raise the legal smoking age to 21 (following on the footsteps of several states and aggressive anti-tobacco actions by former FDA commissioner Scott Gottlieb). Now, some of the country’s biggest drug chains are following suit. Walgreens and Rite Aid will soon sell tobacco to only those who are 21 and over, citing a recent spike e-cigarette use and smoking among American teens. (Reuters)
Congress Weighs New Banking Laws That Could Light Up the Pot Business, by Rey Mashayekhi
What It Means to Be White, by Ellen McGirt
The Best Places to Work in Consulting and Professional Services, by Fortune Editors
|Produced by Sy Mukherjee|