The Class of 2014: Both Large and Innovative 
Posted by Carlos on Feb 02, 2015

Big, smart class

Lisa Jarvis has prepared a handy overview of the new drug approvals in 2014:

For the pharmaceutical industry, 2014 was one for the record books: sky-high merger and acquisition activity, unprecedented levels of financing, and, last but not least, a peak in new drug approvals. The Food & Drug Administration’s green light for 41 new molecular entities—the biggest crop in nearly two decades—signaled a return to innovation for an industry that just five years ago seemed stagnant.

A few things stand out from this list:

Born in ca. 2004 – Let’s keep in mind that today’s approval was actually born 10 years ago…maybe longer. So kudos to the scientists and investors who, a decade or more ago, started working and investing in some of the molecules we see in this table.

Lots of New Stuff – There is a heck of a lot of innovation here. Seventeen of the 42 NMEs approved possess a novel mechanism of action. Many of these will never be blockbusters, but patients and their physicians won’t care about that, so long as they are now available.

L&M&A = R&D – It’s quite interesting to see that “…roughly 65% of the new drugs approved were licensed from another firm or came into a company’s fold through an acquisition.” There is no question that Licensing and M&A are integral parts of a company’s asset development and commercialization. This bodes well for new biotechs and their early-stage investors, obviously. But this will depend on the indication/therapeutic area, which in turn drives the amount of investment required to advance these assets. Some assets will bounce around from company to company for years until an investment in the asset is made (or until the remaining patent life is minimal). In other words, the straight lines from internal discovery through internal development through internal commercialization are fading fast, as drug candidates have now become quite fungible.

At a Price – Innovation is great, but it ain’t cheap. Approvals are great as long as companies are able to achieve their pricing and volume goals. Don’t be surprised if companies continue to apply the oncology or orphan drug pricing models (high price/low volume) in other therapeutic areas beyond infectious disease.

The Class of 2015? – The article ends on a bullish note, and we agree that the trend or approvals over the past 10 years is positive. Who knows if we’ll hit 41 NME approvals in 2015. Stay tuned!

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