Our series of annual reports on Measuring the return from pharmaceutical innovation has provided insights into the state of biopharma R&D since 2010. We have expanded the analysis over time and our data set now covers the top 20 pharma companies by R&D spend. This year’s analysis demonstrates the step change we anticipated, in our 2021 report Nurturing growth, is yet to be realised.
Our latest report looks at the current state of R&D returns for 20 leading biopharma companies as well as their pipeline composition and sources of innovation. What is clear is that revitalising today's clinical trials for a healthier tomorrow entails thoughtful digitalisation of clinical trial processes to create a seamless experience for patients and staff which could drastically improve trial efficiency, enhance scientific rigor, and expand health equity.
Last year we witnessed a notable rise in IRR to 6.8 per cent IRR, driven by high forecasted value COVID-19 assets (including vaccines and treatments) and one high-value late-stage neurological asset which has subsequently underperformed post launch and is no longer seeking approval beyond the FDA. As some of these assets have moved into the commercial portfolio, the IRR has declined to 1.2 per cent. This is driven by the successful approvals of high-value forecast assets which have been commercialised and therefore left the scope of our analysis.
The average cost to develop an asset from discovery to launch has increased while peak sales forecasts decline
The average cost to develop an asset in our 2022 analysis was $2,284 million, an increase of $298 million from 2021. Additionally, average forecast peak sales per pipeline asset for the combined cohort decreased from $500 million in 2021 to $389 million in 2022. However, the 2022 value is almost identical to the forecast peak sales of 2020. This decline in average forecast peak sale per asset is driven by the increasing length of cycle times and the number of high-value forecasted assets which have left our pipeline this year.
There has been a large uptick in the proportion of forecast revenue from self-originated assets
After witnessing a continuous decline for five years, there has been a significant increase in the proportion of forecast revenue of self-originated assets from 29 per cent in 2021 to 51 per cent in 2022. Therefore, over half of the forecast revenue from the late-stage pipleine is now being generated in-house. This notable increase in the share of self-originated assets can be partly attributed to the addition of five new blockbuster assets, including a high-forecast COVID-19 therapeutic.
Clinical trials of tomorrow will be tailored to the convenience, medical, and behavioural needs of diverse patient populations impacted by diseases
With trial decentralisation as the new norm, the virtual clinical trial of the future will place a low-burden on patients, be data-rich due to the high frequency of measurement and reduce the environmental impact due to decreased travel, fewer research centres and minimised patient non-adherence and dropouts. Such clinical trials will fundamentally transform drug development and cut development timelines through the implementation of digital innovations. These investments will enable companies to innovate and create a seamless clinical trial experience for patients and digitalise workflows for investigators and trial staff.
Access previous versions of the report:
2021: Nurturing growth: Download the report
2020: Seeds of change: Download the report
2019: Ten years on: Download the report
2018: Unlocking R&D productivity: Download the report
2017: A new future for R&D: Download the report
2016: Balancing the R&D equation: Download the report
2015: Transforming R&D returns: Download the report
2014: Turning a corner? Download the report