Words by EMJ GOLD newsdesk
The biopharmaceutical industry’s return on investment in innovation is on an upward trajectory, according to a new report from Deloitte. The 15th annual ‘Measuring the Return from Pharmaceutical Innovation’ study reveals that the forecast internal rate of return (IRR) for the top 20 biopharma companies has increased to 5.9%, continuing the positive trend observed last year.
This uptick is primarily driven by new high-value products entering late-stage pipelines, including GLP-1s for diabetes and weight loss, as well as increased commercial forecasts for assets with impressive trial results. The report highlights a resurgence in potential blockbusters, with 29 new assets forecasted to achieve peak sales over $1bn entering the late-stage pipeline this year.
However, the industry continues to grapple with rising R&D costs. The average cost to develop a drug from discovery to launch has increased to $2.23bn, reflecting the growing complexity of research, clinical trial challenges and high attrition rates. Cycle times for drug development have also extended, now exceeding 100 months from Phase 1 through to filing, with Phase 3 trials experiencing the most significant increase.
Despite these challenges, the report suggests that strategic diversification and early adoption of promising technologies could enhance R&D efficiency. In the foreword, the authors from Deloitte, Colin Terry, Partner, and Kevin Dondarski, Principal, emphasise the need for a bolder approach to pipeline development, stating: “By understanding these dynamics and embracing bold action, we can collectively drive sustainable growth and deliver impactful therapies to patients worldwide.”
The report urges pharmaceutical leaders to prioritise areas of high unmet medical need, pursue novel mechanisms of action and embrace cutting-edge technologies like AI and gene editing across R&D. As the industry navigates this complex landscape, the ability to balance innovation with cost management will be crucial for sustained growth and improved patient outcomes.
