"I just want to say one word to you: biologics"
Less biologics-based were AstraZeneca, Pfizer and Novartis -- three of the top five pharmas by both US and global sales last year, according to IMS Health.
Anderson cited data from analytics firm KMR, which, using numbers from members of the Pharmacy Benchmark Forum, determined that.
• 12% of Phase II molecules will make it to market
• 70% of large molecules make it to the registration phase
• 85% of small molecules make it to the registration phase
According to Anderson (whose terminology differs slightly from KMR's), one out of 44 small molecule candidates get approved in the preclinical stage, while 1 in 9 large molecule compounds do so. He noted that biologics generally have a higher retail price, and that the biosimiliars market doesn't pose the same threat to biologics as generics do to large molecule drugs.
Data from a 2011 IMS Health report indicates that the US biologics market hit $138 billion two years ago, and that the category accounts for 16% of global pharmaceutical expenditures. IMS also concluded in its December report that the category will continue to be strong and expects it to “continue to out-perform the global market as more innovative products deliver new treatment options for a growing range of indications.”
IMS said some biologics are perceived as better than others, and highlighted healthcare professionals with autoimmune patients as unlikely to be early adopters of biosimilars unless patients fail on a branded treatment regimen. IMS wrote that the easier sell would be among established classes, like the red-cell booster erythropoietin, also known as EPO.
Anderson's takeaway is that looking at the pipeline and assessing the biologics mix can help investors assess a drug company's potential, yet he also cautioned not to go overboard, since drug approval is one thing and market success is another. He also said the potential of biologics also needs to be put in perspective, since “biologics may be ‘overkill'" for some diseases, and patients can still benefit from broad-spectrum therapies, be it in terms of effectiveness or even convenience.