Who is in the driver’s seat of our industry?

A recent analysis from Pharma Intelligence | Informa 2021 highlights the current trends of pipeline products (top panel). We have subsequently surveyed Sunstone’s incoming deal flow for the same period and noted the correlation for the top 3 categories with oncology as a clear lead.

A 2019 report from World Health Organization categorizes the world’s leading causes of death, with ischaemic heart disease coming first and lung cancer as 6th on the list. Additionally, US Centers for Disease Control and Prevention ranked the healthcare costs for society, with diabetes and Alzheimer’s disease on the top (327B and 259B USD respectively) and with cancer being 4th with 174B USD. In either case, oncology is not on top of the list!

Could it be argued that patients’ needs and public healthcare costs are not steering our industry? 

It is well established that most new drugs originate from small biotech companies. STAT reported that only 23% and 11%, respectively, of Pfizer’s and J&J’s 2019 top selling drugs originated from their own R&D. It would therefore be plausible to assume that the companies financed by VCs are of importance to where biotech is headed!

If so, are VC’s responding to a demand from the industry or to an oversupply of excellent science in oncology?

Data from the Australian National Health and Medical Research Council (NHMRC) suggests that oncology research funding is at the top of the list and thereby supports that VC’s could be responding to excellent science. Are we simply getting more products in a field that we are spending more taxpayers’ money to research!? 

Maybe! But as is also evident from the Australian data, neurology research funding surpasses cancer research funding.

Alternatively, could it be that translation of cancer research to final product is easier relative to other diseases? Not at all! Studies show that clinical success rates are among the lowest in cancer.

Some characteristics of cancer R&D are clinical trials of manageable sizes with tangible and relatable endpoints. Those characteristics translate to opportunities with a good match to Venture Capital.

Are VC’s in the driver’s seat of the industry? Are we creating an overemphasis on oncology?

If so, what could be done about it? Should payers significantly subsidize early clinical trials to support other important disease areas?

What do you think?

#Sunstonelifescience #lifescience #venturecapital

*Note: “Biotechnology” is a category used by Pharma Intelligence | Informa to highlight biotechnology derived drugs, i.e., the category overlaps the therapeutic areas, but it is not a therapeutic area as in itself, therefore we did not include it in our analysis.

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