R&D investment increasing, but industry needs to use its cash more wisely
Financial services firm EY says in its annual assessment of the global biotechnology sector that the industry is performing strongly, but needs to focus on using its R&D resources more efficiently to ‘unlock value’.
Revenues, R&D spending and companies’ ability to raise capital funding all increased in 2013 compared to 2012. But the report highlights a need for the industry to be smarter about how it spends that cash. Particularly, EY decries the high failure rate of expensive Phase III clinical trials. While this observation will not surprise anyone in the industry, the report draws on case studies from across the industry to suggest some strategies that might improve efficiency.
Chief among these is not skimping on earlier trials, and designing trials to be adaptive, so they can test multiple hypotheses and reach more definitive conclusions. Other recommendations reinforce trends that are already beginning to take hold within the pharmaceutical industry: using biomarker-based diagnostics to target products more effectively at populations where they will have greatest effect, and collaborating early and often, particularly on pre-competitive problems that affect the whole sector.