R&D productivity needs to assess quality, not just quantity

Source EP Vantage
Company Vertex PharmaceuticalsJohnson & JohnsonBayerAstraZenecaClinical DataTakedaHuman Genome SciencesIncyteBoehringer IngelheimGilead SciencesBristol-Myers Squibb 
Tags Analysis, Free Content, USA, Full Approval
Date March 10, 2011

Counting annual FDA approvals is widely-used to assess R&D productivity; a big decline last year caused 2010 to be labelled disappointing. But this measure focuses entirely on quantity - looking at the quality of new products paints a very different picture.

Although the 26 new products approved in 2010 equals the lowest rate in the last ten years, the potential value of these products is a significant improvement on 2009. On the basis of cumulative US sales five years after approval, the class of 2010 look set to become the best on record since the stellar graduates of 2004, with combined fifth-year sales of $11.6bn. This improvement in quality should continue this year with 28 novel agents expected to gain FDA approval, generating $12.9bn in US sales, an analysis reveals (see tables below).

Year  No. of NMEs Approved  No. of Biologicals Approved (CDER + CBER)  Total NMEs + Biologicals  Chg in total new products  USA Sales 5th Year Post Approval ($bn)  Chg in value added 
2011 (estimates)  23  5  28  +8%  12.9  +11% 
             
2010  15  11  26  -24%  11.6  +81% 
2009  19  15  34  +10%  6.4  +25% 
2008  21  10  31  +19%  5.1  -2% 
2007  16  10  26  -10%  5.2  -37% 
2006  18  11  29  +4%  8.3  +26% 
2005  18  10  28  -26%  6.6  -55% 
2004  31  38  +9%  14.8  +63% 
2003  21  14  35  +35%  9.1  -28% 
2002  17  26  -19%  12.7  +48% 
2001  24  32  -3%  8.6  +13% 
2000  27  33  -18%  7.6  +7% 
             
Ten year average (00 - 09)  21  10  31    8.4   
             
Current 5yr average (06-10)  18  11  29    7.3   
Previous 5yr average (01-05)  22  10  32    10.4   

Source: EvaluatePharma

The table above shows the importance of focusing on the quality of new products, in terms of sales value, over the simple count of products approved. For example, comparing 2003 with 2002, the number of new products approved rose significantly to 35 from 26, yet the value added by these same products fell by more than a quarter, to $9.1bn from $12.7bn.

Conversely, the following year in 2004, the number of new products approved remained fairly constant with 2003, but the value surged 63% to $14.8bn. New drugs approved in 2004 included mega blockbusters like AvastinSpiriva and  Lyrica; three of seven US blockbusters approved that year.

Decent showing driven by biologics

The class of 2010 stack up pretty well, with five potential US blockbusters approved. This conclusion requires using the complete analysis of last year's approvals, including the novel biologics approved by the FDA’s Center for Biologics Evaluation and Research (CBER) division, such as Provenge and  Prevnar 13, which are regularly overlooked (FDA approval counts missing a key ingredient, March 9, 2011).

Emphasising the importance of including CBER approvals in any assessment of R&D productivity rates, of the $36.6bn in sales added by new products over the last five years, $7.5bn, or 20%, is derived from novel biologics approved by CBER. Aside from Prevnar 13 and  Provenge, the biggest CBER approvals in recent years include: MenveoCinryzeGardasilCervarixZostavaxRotaTeq and  Rotarix.

Novel biologics, whether approved by CDER or CBER, again appear responsible for the increase in value of new products, building on the improvement in quality seen in 2009 (Biologics drive improvement in quality of NMEs in 2009, April 12, 2010).

It is worth mentioning however that this data is based on current analyst assumptions on market sizes, prescription rates and pricing, all of which are subject to change. For example, estimates a year ago for the performance of new products approved in 2009 have been downgraded - the current fifth-year US sales of $6.4bn is 15% lower than the $7.5bn predicted a year ago, mainly due to sluggish launches of MultaqOnglyza and  Effient.

Quality could be returning

While the quality of products approved in 2010 and 2009 has certainly been an improvement, this compares with some pretty lean years in 2007 and 2008.

As such there is still a way to go before the quality of products matches those consistently produced in the first half of the decade, but the signs are encouraging if predictions for 2011 are anything to go by.

So far this year six novel agents have received FDA approval, the sanctioning of Benlysta yesterday marking the most valuable new drug slated for 2011; current US sales forecasts of $2.2bn by 2016 could rise further following a relatively clean label and decent price point (Benlysta sets high standard for lupus treatment, March 10, 2011).

The table below shows the top ten of the 28 novel agents that could gain FDA approval this year. In Benlysta a novel biologic will once again top the list, but the bulk of new approvals will still be small molecule drugs.

Another four potential blockbusters on US sales alone could reach the market, with telaprevirXarelto and  Brilinta all massively important to the prospects of  Vertex PharmaceuticalsJohnson & Johnson/Bayer and  AstraZeneca, respectively.

Intriguingly, two other notable approvals so far this year, for Clinical Data’s Viibryd and  Takeda’s Edarbi, have been granted for ‘me-too’ products and without the almost standard delay to approval time targets. This goes slightly against the perception that the regulator is sceptical of follow-on products. 

Of course, predictions of a bumper crop of approvals this year should be viewed with caution. Approval rates for new products fell to the lowest level in five years in 2010, with only 50% of submissions getting a green light in 2010, compared to 61% in 2005, according to a recent analysis conducted by Bernstein Research. Positive recommendations from advisory committees fell to a three-year low of 60%, they calculated. They count new products as NMEs, innovative combinations, significantly different indications and re-submissions. 

As such, it is highly unlikely that all of this year’s hopefuls will reach the market without further delay, but as long as a critical mass of the most valuable products make it, 2011 could be another quality year.

Top 10 potential new product approvals in 2011 
#  Product  Generic Name  Therapeutic Subcategory  Pharmacological Class  Company  USA sales in 2016 ($m) 
Benlysta  belimumab  Immunosuppressants  Anti-B lymphocyte stimulator (BLyS) MAb  Human Genome Sciences  2,176 
Telaprevir  telaprevir  Anti-virals  Hepatitis C protease inhibitor  Vertex Pharmaceuticals  1,935 
Xarelto  rivaroxaban  Anti-coagulants  Factor Xa inhibitor  Johnson & Johnson  1,129 
Brilinta  ticagrelor  Platelet aggregation inhibitors  P2Y12 antagonist  AstraZeneca  996 
Viibryd  vilazodone hydrochloride  Anti-depressants  SSRI & 5-HT1A (serotonin) partial agonist  Clinical Data  934 
Ruxolitinib (INC424 ruxolitinib  Other cytostatics  Janus kinase-1/2 (JAK-1/2) inhibitor  Incyte  764 
Ondero  linagliptin  Anti-diabetics  Dipeptidyl peptidase IV (DPP-IV) inhibitor  Boehringer Ingelheim  595 
TMC278 +  Truvada  emtricitabinerilpivirine &  tenofovir disoproxil fumarate  Anti-virals  NNRTI & NRTI  Gilead Sciences  499 
Dapagliflozin  dapagliflozin  Anti-diabetics  Sodium-glucose cotransporter-2 (SGLT2) inhibitor  Bristol-Myers Squibb  482 
10  Yervoy  ipilimumab  Anti-neoplastic MAbs  Anti-CTLA4 MAb  Bristol-Myers Squibb  475 
             
Other 18 candidates  2,911 
Total  12,897 

Source: EvaluatePharma
For the full list of potential new product approvals in 2011, contact news@epvantage.com

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