RE:RE:RE:RE:RE:RE:Big pharma is set to keep signing bigger deals in 2024Earlier this month, Joerg Tritschler, a partner in Simon-Kucher’s life sciences division, explored the two major strategies big pharma companies are employing amid current macro challenges and efforts to offset looming patent losses to blockbuster brands.
Tritschler’s comments focused on Big Pharma’s need to adapt their strategies in life cycle management and product development in the face of looming patent cliff headwinds.
https://www.pharmaceuticalcommerce.com/view/-cliff-countdown-balancing-internal-and-external-growth Tritschler: This adaption in lifecycle management and portfolio development by large pharmaceutical companies is currently top of mind and a key priority for many leaders in the pharmaceutical industry. The 2030 patent cliff is a real thing. We’ll see nearly 200 drug products losing their patents over the upcoming years, with 69 of them being blockbusters. Over time, it could be one of the biggest patent cliffs that we’ll observe in the market.
Overall, we can observe two major strategies by biopharmaceutical companies in this area (navigating and absorbing looming patent losses). The first one is an increased focus on making internal development faster, more agile, and less costly. So, therefore, also increasing the ROI on your internal R&D. [ However this message board has shown that Big Pharma internal R&D is not as effective at developing innovative and novel drugs as small biotechs are capable of accomplishing].The next strategy, as we’ve seen in the last few years, is using M&A, external deals, and licensing as further fuel for growth of the market.
Looking at the key blockbusters and doing an analysis, 72% of these products have been developed by smaller companies and then purchased by mostly bigger ones. Therefore, this trend that we’ve observed in last few years will also further prevail, and will have a strong focus on external deals that will continue. That is also backed by the comments we heard at the JP Morgan conference [in January]. For instance, the CEO of Eli Lilly saying we're open to business, and also having a very focused approach in purchasing new assets or companies; but then keeping these companies outside of the Eli Lilly universe in order to also have some additional external/internal R&D.
Other executives, too, from Novo Nordisk, J&J, and others made clear statements that external growth will be a key part of their strategy and they have a key focus on doing BD&L activities, especially in the areas where the company already has a strong foothold and expertise. And then further building this out with these external deals with especially smaller- and mid-sized biotechs.