Therapeutic Product R&D—Market Trends

Since the late 1990s, pharmaceutical industry analysts have tried to predict the market and scientific changes that will occur prior to 2020. Looking back at the first two decades of the 21st century, some of those predictions have materialized, such as the increasing importance of biology, genetics, web-based technologies, and big data in therapeutic product development. New approaches to therapeutic product development, such as translational research and development (R&D) and adaptive clinical trials, have changed the way studies are conducted from bench to clinic and contributed to the successful development of new therapeutics to treat complex diseases. The industry has also become increasingly global in terms of pharmaceutical sales as well as R&D. (1, 2)

R&D trends overview

Spending on pharmaceutical R&D remains strong and consistent. For several decades, the pharmaceutical industry has spent on average approximately 16% of its annual revenues on R&D. In 2016, it spent approximately 19.8%, the highest percentage of revenues since the Pharmaceutical Research and Manufacturers of America (PhRMA) trade group began tracking it in 1980 (3, 4). This year, approximately $157 billion will be spent on pharmaceutical R&D by public and private companies alone, with an expected growth of 3% annually for the next three years (see Figure 1). Government, academia, and other entities will likely contribute another $20 billion to research spending in 2017 that eventually translates into new therapies.

Steady investments in R&D have produced strong results in regulatory approvals the past four years. Since 2013, FDA has approved a record 169 new molecular entities (NMEs) and biologics license applications (BLAs), the strongest four-year performance in the new millennium. Improvements in R&D productivity are global, with similar success reported by the European Medicines Agency.

One of the key growth areas in pharmaceutical research is in the study of biologics; the percentage of large molecules in the pipeline has grown from 30% in 2010 to 42% today (see Figure 2). A large portion of new biologics are being developed in oncology, which has become the leading therapeutic area of drug development (see Figure 3). Such research is being driven by the success of new biological products in meeting unmet clinical needs. Total revenues from the sale of biologics have increased from 17% of all prescription drugs in 2010 to 26% in 2017, and the figures are expected to reach 30% by 2022 (5).

Meanwhile, the total number of molecules in development has grown consistently in recent years, with the largest growth seen in preclinical development (see Figure 4). The increase in preclinical development is mainly attributed to strong and steady financing of biotech companies (many of which have early stage molecules) over the past few years, looming patent expirations, and pharmaceutical companies’ needs to strengthen clinical development pipelines to address the demand for new medicines to treat cancer, diabetes, and other illnesses responsible for a large portion of global healthcare spending.

To assist in their efforts to bring new therapies to market, biotechs and pharmaceutical companies have increasingly turned to contract research organizations (CROs) as strategic partners. While outsourcing to CROs has been present for many decades, the levels of outsourcing has grown significantly since the 1990s. As the volume has grown, so too has the nature of the relationship-from “tactical” to “strategic.” As opposed to tactical outsourcing that involves employing CROs on single studies and using a variety of CROs for different drug development services, strategic outsourcing involves forming stronger, deeper relationships with large global CROs that offer a variety of services and have the experience to provide consultation on a range of issues including study design, protocol development, study implementation, and scientific data interpretation, as well as regulatory interactions and submissions. Strategic outsourcing also often involves higher levels of integration of the CRO and study sponsor’s teams, as well as governance structures and metrics that assure quality service and science. In short, the trend of strategic outsourcing has reached a mature stage in which research sponsors and CROs are consistently partnering to improve R&D productivity (6).

Scientific and technological trends in drug development

Biopharmaceuticals are experiencing continued growth. In 2016, one third of all new FDA approvals were classed as a new biological entity (NBE). In the same year, EMA authorized 27 new active substances with twelve (44%) being a biopharmaceutical (7, 8). Oncology and hematology along with neurology and infectious disease continue to be the main therapeutic areas of growth in biopharmaceuticals.

New therapies which use the patients’ own immune systems to fight cancer, for instance advanced therapies such as chimeric antigen receptor (CAR) T cells and monoclonal antibodies (mAb) targeting check-point molecules continue to progress through clinical development. This year AstraZeneca’s durvalumab (anti-PD-L1 mAb) became the fourth FDA approved antagonist targeting the PD-1 pathway, joining the ranks of Merck and Genentech by gaining approval for treatment of advanced urothelial carcinoma. There are currently more than a hundred clinical trials with check-point inhibitor molecules (9). Many of these are combination therapies studies with checkpoint inhibitors (CPIs) being delivered alongside of “gold standard” treatments such as chemotherapy or antibody-drug conjugates (ADCs). These game-changing drugs are quickly becoming a leading standard of care for oncology indications (10, 11). With more than 15 checkpoint molecules being identified (12), the immuno-oncology field is expected to continue to grow with multi-specific modalities becoming the main focus. CRO laboratories are already experiencing a significant increase in requests for preclinical safety studies with such molecules. The research routinely requires bespoke study designs and protocols, which can include strategies to increase drug target expression in the test system of choice, with toxicity and pharmacodynamic endpoints being of equal importance.

The advanced therapy field is also gaining momentum with therapies such as Novartis’ tisagenlecleucel (CAR-T therapy) being granted breakthrough designation for treatment of patients with diffuse large B-cell lymphoma. Similarly, GSK’s gene therapy Strimvelis (ex vivo genetically modified stem cells for treatment of severe combined immunodeficiency) has become the third EMA-approved gene therapy (13). It is expected that the area will continue to flourish with the adoption of novel synthetic vectors and gene-editing technologies such as clustered regularly interspaced short palindromic repeats (CRISPR) associated nuclease 9 (CRISPR Cas9), zinc finger nucleases (ZNFs), or transcription activator-like nucleases (TALENS). Several therapies using these techniques have recently entered clinical trials for treatment of aggressive lung cancer (14), human immune-deficiency virus (HIV) (15, 16) and B cell leukemia (17). However, challenges such as delivery efficiency, gene repair effectiveness, and most importantly, off-target effects need to be addressed before these technologies have wide clinical application.

With several blockbuster biopharmaceutical products coming off patent, it is likely biosimilars will take a significant market share by 2020 (18–19). However, successful development of a biosimilar may not always be as straightforward as expected. Recent setbacks experienced by Sandoz with its biosimilar Neulasta exemplify the importance of regulated manufacturing process and careful profiling of the biosimilar drug versus the reference material. Furthermore, EMA and FDA have differing regulatory opinions on the extent of preclinical in-vivo testing for biosimilar products. This is especially the case in biosimilar mAbs, with many companies choosing to include preclinical safety studies in their regulatory submissions. There is a regulatory expectation for biosimilar monoclonal molecules to be rigorously assessed for their biophysical properties (including in vitro potency), with in vivo safety assessment being either bypassed or limited to small studies in a single species.

The mAbs, antibody fragments, and protein scaffolds remain constant in the development pipelines of biotech and pharmaceutical companies alike. Multifunctional molecules (bi and tri-specifics) are becoming more commonplace, which, if found safe and efficacious in clinical trials, may circumvent the need for combination therapies. The successful development of such molecules depends greatly on detailed understanding of the underlying biological processes as well their pharmacological action. Therefore, researchers are applying predictive biomarkers of pharmacological action routinely not only during clinical development but also in the preclinical studies. As the mechanism of action of the drug becomes more complex, the pharmacodynamic endpoints and biomarkers are no longer “nice to have” extras on non-clinical safety studies but pivotal for non-clinical safety data interpretation and the design of clinical studies.

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