ramarketing review: highlights, insights & spotlights - January
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We bring you insights from stories hitting the headlines across the life sciences sector in the past month.
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Introducing January’s sector expert…
Joao Incio has over 15 years of experience in the biomedical sector in the US, the UK and Europe. He is a former medical doctor and a Harvard-trained scientist, with a Ph.D. in molecular medicine and oncology. Joao previously worked in the life sciences practice of L.E.K. Consulting and he was the Associate Medical Director for Global Strategy at Vertex Pharmaceuticals.
Differing views on the impact of pharmaceutical regulation in Europe
In April 2023, the European Commission (EC) announced proposed changes to EU pharmaceutical legislation that seek to ensure timely and equitable access to medicines for patients across the EU, for instance through provisions to encourage pan-EU launches. Proposed revisions by the European Parliament (EP) late last year attempted to alleviate concerns about the feasibility of a pan-EU launch and further improve the attractiveness of the market to originators.
A critical point of these legislative changes centers around intellectual property protection for new medicines, specifically the proposed reduction of regulatory data protection (RDP). The EC suggests reducing unconditional data protection from eight to six years with possible extensions, whereas the EP seeks to extend it to nine years. In both proposals, RDP would be coupled with two years of market exclusivity.
The pharmaceutical industry has expressed concerns about the EC proposal’s potential negative impact on research and development of new medicines. There are worries about a potential outflow of innovation investments from Europe. Presently, approximately 47% of new treatments originate from the US while 25% come from Europe, and an industry-commissioned study suggests that the EC proposal could result in the loss of 50 out of 225 products relying on RDP anticipated to be developed between 2020 and 2035. This could potentially adversely affect the launch of medicines in EU member states, impacting accessibility.
Some, like the Czech Deputy Health Minister Jakub Dvořáček, perceive the situation differently. He points out that the gap in research and development investment between the EU and the US has significantly widened over the past 15 years, despite Europe’s high level of protection granted to pharmaceutical companies. Dvořáček attributes this gap to a lack of business angels and venture capital supporting innovation in the EU.
Another potential consequence of adopting EP revisions is that originators may see increased commercial value of non-orphan drugs, whereas orphan drugs could become less profitable and more risky investments.
In the face of these proposed legislative changes, biopharma companies must stay informed and adapt their strategies to navigate the evolving landscape of EU pharmaceutical regulations in the coming years.
Discussions on the environmental impact of medicines
In addition to addressing access to medicines, the proposed 2023 changes to EU pharmaceutical legislation by the EC also set out to reinforce the existing environmental requirements. These considerations are becoming increasingly crucial in the pharmaceutical industry, reflecting a growing awareness of the ecological impact of drug development and manufacturing processes.
However, the revisions proposed by the EP have introduced a certain degree of leniency in the enforcement of environmental compliance. Notably, negative impact on environmental standards will no longer automatically result in the refusal of marketing authorization. This shift introduces a more nuanced approach, where the regulatory response may consider a broader range of factors before deciding.
This alteration of environmental enforcement is likely to influence the decision-making processes of pharmaceutical companies seeking marketing authorization within the EU. For biopharmaceutical companies, staying abreast of these changes is imperative. As they navigate the ever-changing landscape of EU pharmaceutical legislation, they must not only consider the amendments related to access and intellectual property but also factor in the adjusted environmental compliance requirements.
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Early signs of recovery for the biotech industry
In 2024, the biotechnology industry is navigating a dynamic and transformative landscape shaped by a myriad of trends. Patent expirations pose a substantial concern, with over 20 products — accounting for nearly $200 billion in annual sales — set to lose patent protection by 2030. Regulatory pressures add another layer of complexity, encompassing increased scrutiny of M&A activities by the Federal Trade Commission (FTC), pricing pressures in the US associated with the individual retirement account (IRA) and the introduction of new EU pharmaceutical regulations.
The industry is also contending with FDA approval fluctuations, marked by staffing shortages. 2023 saw a recovery, with a notable 50% increase in FDA approvals, and the landscape remains dynamic, with high-profile therapies like Eli Lilly’s obesity drug Zepbound, and Eisai and Biogen’s Alzheimer’s treatment Leqembi making noteworthy strides.
Financing struggles have also impacted biotech companies and exits. However, the landscape is evolving, with M&A activities gaining momentum, notably with BMS and AbbVie dropping billions on neuropsychiatry biotechs and IPOs poised for recovery. The S&P Biotech ETF (XBI), serving as a key performance indicator, saw a substantial 7.6% rise in 2023, indicating a discernible shift in market dynamics and investor sentiment within the biotechnology sector. The latter is exemplified by a recent $75M Series B financing of Comanche Biopharma by a top-tier syndicate of VCs and corporate VCs, adding to the Board of Directors the likes of Scott Gottlieb, the former FDA Commissioner. Comanche will leverage this fresh capital to run a clinical study with its lead siRNA drug candidate in pregnant preeclamptic patients.
Even though the industry is still coming to terms with challenges such as investment fluctuations and regulatory hurdles, there’s a sense of positive momentum. Across pharmaceuticals and broader biomedical research, artificial intelligence has catalyzed significant changes in the realm of what can now be achieved. Interest rate cuts, the increase in FDA approvals and potential revival in the IPO market indicate a recovering industry that’s getting back on track. M&A activities are expected to play a significant role, reflecting a strategic shift toward innovation and growth. And let’s not forget the remarkable growth trajectory of the global biotech market, which soared to $1.22 trillion in 2023 and is anticipated to further expand to a staggering $3.21 trillion by 2030. This exponential growth underscores the industry’s pivotal role in shaping the future of healthcare and innovation.
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Sources and further reading
Regulatory
Funding
M&A
Advances in drug development/trends
Founder of the #CreativeDisruption & #AgileLeaders Forums & #BiotechBuddies and #CoffeeBuddies Events
11moNice article Joao Incio, M.D. Ph.D., let's catch up again soon.
Business Owner at TKT home made mosla products
11moThanks for sharing