Pharmaceutical manufacturers find themselves at a critical juncture. In the past 30 years, pharma has seen some significant shifts. Consider the expanding range of drug therapies, once confined almost exclusively to small molecule drugs. Biologics now comprise a substantial share of the market, and novel treatments such as cell and gene therapies are rapidly gaining traction. Another major trend is the rise of outsourced manufacturing, primarily for small molecule drugs.
Pharmaceutical industry trends
Pharmaceutical companies are increasingly outsourcing their R&D activities, including early-stage research programs, to third party organizations -- academic institutions, biotech startups, and private contract research organizations (CROs) -- as a means to stay competitive, flexible, and profitable against all odds.
Economically, there are factors such as increasing downward pressure on drug pricing by governments, an impending “patent cliff” threatening $198 billion worth of sales during 2019-2024), and downturns in income due to the increasing competition from generics and biosimilars.
From the innovation's point of view, there is a boom in life sciences, stimulating the emergence of novel biological targets, therapeutic modalities, and even whole new areas of drug discovery -- adding opportunities, but also complexity and uncertainty to research programs. In fact, according to Deloitte’s report, return on late-stage pipelines dropped for the top 12 pharma companies from 10.1% in 2010 down to 3.7% in 2016.
Technologically, there is an unfolding “digital revolution”, bringing even further complexity and investment cost to the table -- in a form of artificial intelligence (AI), data mining and big data technologies, data-driven diagnostics, and digital health.
Finally, the rise of the personalized medicine paradigm forces companies to rethink their research pipelines and “one-size-fits-all” product development programs, as well as reconsider their market strategies.
Computer-aided drug design (CADD) is a central part of so-called “rational drug design”, pioneered in the last century by companies like Vertex. Over the last decades, CADD had great influence on the way new therapeutics are discovered, however, it also showed limitations due to modest accuracy of computational tools.
The majority of software tools used for computational chemistry and biology rely on molecular mechanics -- a simplified representation of molecules, essentially reducing them down to “balls and sticks”: atoms and bonds between them. In this way it is easier to compute, but accuracy suffers greatly.
In order to gain adequate accuracy, one has to account for the electronic behavior of atoms and molecules, i.e. consider subatomic particles -- electrons and protons. This is what quantum mechanical (QM) methods are all about -- and the theory is not new, dating back to the early decades of the 20th century.
The Annual Summit on Drug Discovery Chemistry primarily works on the theme “Scientific Congress on pursuit of wisdom in Drug Discovery Chemistry”. The main outcomes of the conference are sharing the insights, experiences and strategies of experts in drug discovery, discover the latest trends in drug chemistry, know the growing demand for drug discovery and pharmaceutical chemistry, find out how progress is being made in scientific formulation in practice and discover the tried and tested bio availability routes.
Pharmaceutical companies are increasingly outsourcing research activities to academic and private contract research organizations (CROs) as a strategy to stay competitive and flexible in a world of exponentially growing knowledge, increasingly sophisticated technologies and an unstable economic environment.
The R&D tasks that firms choose to outsource include a wide spectrum of activities from basic research to late-stage development: genetic engineering, target validation, assay development, hit exploration and lead optimization (hit candidates-as-a-service), safety and efficacy tests in animal models, and clinical trials involving humans.
According to a report by Clearwater International (autumn 2019), the global CRO market will potentially rise to a $45 billion industry by 2022, as compared to an estimated $30 billion valuation (by Objective Capital Partners), exhibiting the current rate of market growth of around 10% CAGR with projected acceleration up to 12%. This is in line with Vantage’s alliance benchmarking study, revealing that over 80% of bio-pharma respondents reported increased alliance activity compared to previous periods. Getting ideas and expertise from external sources is a well-established practice in the pharmaceutical industry with about one-third of all drugs in the pipelines of the top ten pharmaceutical companies initially developed elsewhere, according to a 2014 WSJ article by Jonathan D. Rockoff.