COVID-19 has been the ultimate big pharma catalyst, as well as the biggest thing to hit biopharmaceutical news pages in decades. On the industry side, however, investors and observers remain mindful of non-COVID-related trends in biopharma. More accurately, trends well underway in January still deserve attention.
2020 Biopharma Trends to Keep an Eye On
These trends can have a significant impact on corporate strategies and clinical operations this year. Let’s examine some of the biggest biopharma trends this year.
Mergers and Acquisitions
According to Genetic Engineering & Biotechnology News and several other sources, mergers and acquisitions (M&A) will continue to be a prominent component of ongoing biopharma trends in 2020. There were 242 M&A deals with a combined value of $195 billion during the first three quarters of 2019. More than 70% of the combined value came from just two deals. In November of 2019, Bristol-Myers Squibb acquired Celgene for $74 billion. In April 2020, AbbVie agreed to buy Allergan for $63 billion.
Dan Chancellor, a principal analyst at Informa Pharma Intelligence, explains, “There’s always going to be a baseline of M&A. It’s just part of doing business in the biopharma industry. . . There’s nothing to suggest that the baseline is going to decrease during next year. Drug spend continues to rise. We had tax reform passed in the U.S. at the end of 2017, so you get better value now with repatriating foreign cash, and companies spending that on M&A star deals is a good way of doing that.”
Specialty Sector Growth
Specialty sectors are expected to drive many of the M&A deals on the horizon in 2020, according to Chancellor. Many companies’ strategic plans now focus on sectors. Some of these sectors are likely to include oncology, gene therapy, and, of course, pandemic preparedness.
“Expect oncology to be a fundamental driver for a lot of deal-making activity, as it encompasses over one-third of both pipeline assets and clinical trials,” Chancellor said in a recent interview.
“Gene therapy was clearly evident in 2019 deal-making trends and it is not yet too late for newcomers to be making moves in gene therapy manufacturing and discovery, despite the sky-high valuations. It is a trade-off between being first-in-class versus sitting on the sidelines and potentially identifying the best-in-class technologies and most suitable clinical opportunities.”
Chancellor went on to say that we may also see more deals materialize with digital health components such as real-world data, AI-ML, and digital therapeutics. To date, biopharma companies have predominantly been partnering to add these capabilities to their own operations, “but having internal expertise may allow the industry to better face the encroaching threats of large tech companies entering the health care space.”
New Treatments & Modalities
Jeremy Drummond, senior VP of business development at MedPharm, maintains that the ongoing rise in new treatments is likely going to generate increasing interest in innovative forms of drug delivery and new program planning and execution goals.
“The major trend of new biological treatments is undoubtedly going to continue into 2020,” he says.
“These will be focused on major and severe disease states and challenges of delivery of these complex molecules/systems will still hinder progress. With the increasing demand for higher health standards across all populations, there is likely to be a growing realization that the treatment of moderate conditions using more conventional patient-centric dosages (oral, topical) will remain an attractive market. Particularly in the niche area of topicals, with changes in the industry and new guidance, the need for reliable manufacturing of complex semi-solids can be expected to increase.”
Cancer and Gene Therapy
Cancer drugs are poised to dominate pharma growth in 2020, with four of eight new drugs expected to add $1 billion or more in new sales being anti-cancer agents. Industry observers cite the ability for manufacturers to charge relatively high prices in oncological drugs will help these products feature prominently, even though several of them are novel compounds.
Finally, while the controversy, hype, and debate around gene-based treatments are likely to continue for the foreseeable future, gene therapies are finally becoming a viable commercial proposition.
The market entry of several new gene therapies in 2020 indicates that this treatment modality will ultimately hold their own in the market. Biogen’s release of Spinraza® (Nusinersen) to treat spinal muscular atrophy in 2017 was heralded as the first major offering in this sector. By the end of 2019, more than a half dozen new therapies were being offered by companies like Gilead and Novartis, with more on the way this year.
The Elephant in the Room: Pandemic Preparedness
One trend that did not exist at the beginning of the year was pandemic preparedness. While the WHO and CDC have been mindful of and refining protocols to combat emerging diseases for quite some time, the practical and economic imperatives for pandemic preparedness simply didn’t exist before March of this year.
Since pandemics occur infrequently, planning and preparing for one is important to ensure an effective response. Because pandemics do occur infrequently, however, drug manufacturers, like public health officials, health care professionals, researchers, and scientists, were caught off-guard when COVID-19 emerged.
Consequently, organizations providing biopharma services have pivoted dramatically toward future preparedness. Despite the infrequency in pandemics (excepting annual influenza outbreaks, of course), the gravity of the coronavirus pandemic has brought home the imperative for preparedness in this area.
In response to the Senate Health Committee’s white paper on preparing for future pandemics, the American Association for Clinical Chemistry (AACC) recently sent a letter to committee leadership detailing four key steps the government should take to ready the U.S. for the next outbreak. In the future, we can expect that pharmaceutical manufacturers will have established departments dedicated to pandemic preparedness, and many have.
2020 has brought many unanticipated biopharma risks and challenges, but it has also brought some of the biggest opportunities to date. Pharmaceutical companies are seeing a year of growth, new problems to solve, and innovation. If you’d like to discuss your own R&D strategy, contact us today.