Top 10 pharmaceutical companies in terms of R&D expenses

What do pharmaceutical companies spend their income on?

Weekly Pharmacy www.apteka.uaOver the past few years, there has been talk that in order to increase the effectiveness of R&D, it is necessary to completely change the paradigm of conducting research in the field of creating new medicines.

For many of the world's leading pharmaceutical companies, such as GlaxoSmithKline, Sanofi and Pfizer, the time has come to collect the stones — the patent protection period for their business-forming products has already expired or is coming to an end, and the R&D departments have not offered an adequate replacement. Thus, the issue of increasing the efficiency of research and development in the biopharmaceutical field has become more acute than ever. The cost of drug development remains at a very high level, while the number of new drugs approved by US regulatory authorities continues to decrease, not to mention the launch of real mega-blockbusters.

However, not everything is so hopeless, last year pharmaceutical companies gave reason to talk about improving the situation, thanks to a certain increase in the number of drugs approved by US regulatory authorities. But despite the fact that quite a lot of time has passed since the launch of campaigns aimed at increasing the cost-effectiveness and efficiency of R&D, the costs of creating new medicines continue to grow.

In 2011, the costs of creating new drugs of the top 10 global pharmaceutical companies in terms of R&D costs amounted to more than $ 70 billion. US$, which is slightly higher than the same indicator at the end of 2010 (table).

Top 10 pharmaceutical companies in terms of R&D spendingCompany

The American pharmaceutical company Pfizer has carried out a reduction in almost all areas of research in the amount of $ 1.5 billion, and its management promises that this trend will continue. The top management of AstraZeneca, faced with unsatisfactory results in the field of R&D, started talking about the upcoming significant budget cuts. Thus, in 2012, the trend towards rising costs in this area can still be reversed and this will become the work of the "big ten" — the world's pharmaceutical companies with the highest R&D costs. But for every company that reduces costs in this area, there is also a company whose costs remained unchanged or increased in 2011. These include Novartis, Eli Lilly and Merck & Co, whose management does not even stutter about reducing R&D costs. However, this year at least two of them will have to face an insufficient number of impressive research results and either accept it or start changing their strategy in this area.

Next, the achievements of the top 10 pharmaceutical companies in terms of R&D expenditures in the development of innovative medicines will be considered.

«Novartis»The structure of the company's R&D expenses looks like this: $ 7.2 billion.

Novartis itself was allocated for the development of medicines, another $892 million. the subsidiary company "Alcon" got $640 million — "Sandoz", $ 523 million was spent on the creation of vaccines and $ 296 million on the development of health products

These expenses allowed the company to take the first position in this rating, ensured the development of 130 projects according to the data at the end of 2011, which became the pride of Novartis. Some of these developments have prospects of becoming blockbusters. An important role in achieving success for this company is played by the ability to maximize profits in the case of successful drug development.

The company's research team has developed its own approaches and proven methods of project development. An example of such a successful strategy is the drug Afinitor® / Afinitor (everolimus), for which research data were presented in the IV quarter of last year, indicating the prospects of its use for the treatment of breast cancer. Thus, the company's management remained true to its strategy: to carry out the launch of the drug with a minimum list of indications for use, and then expand it, and with it — increase the number of potential patients who can take advantage of the Afinitor® drug. Also, positive results were obtained during the final phases of the study of candidates for Ilaris (kanakinumab) drugs for the treatment of arthritis, and ACZ885, created on the basis of monoclonal antibodies. The drug candidate INC424, developed by Novartis in collaboration with Incyte, was recently recommended for approval by the Advisory Committee of the European Medicines Agency (EMA) for the treatment of myelofibrosis.

In April 2011, the EMA approved the first drug in the EU for the treatment of multiple sclerosis in the form of tablets — Gilenya™ (fingolimod) from Novartis. At the same time, according to research results, Gilenya™ reduces the number of relapses in patients with multiple sclerosis by 52% compared to Avonex® (interferon β-1a) of Biogen Idec. Earlier (in September 2010), the drug was approved by the U.S. Food and Drug Administration (FDA).

Of course, no one can boast of 100% success in such an unpredictable field as R&D. The positive results of phase II studies of the Novartis drug candidate DEB025, intended for the treatment of hepatitis C, turned into disappointment when data appeared that some patients who took this drug were diagnosed with pancreatitis, and 1 case of death was recorded. As a result of these events, the company had to abandon further research on the effectiveness of DEB025.

In early April 2012, Novartis representatives reported positive results of Phase III studies of a candidate for QVA149 drugs, which has every chance of becoming the company's new blockbuster. It is intended for the treatment of chronic obstructive pulmonary disease.

In addition, it has been shown that the combination of indacaterol and NVA237 is more effective for increasing the endurance of patients with chronic obstructive pulmonary disease during exercise compared to placebo, as well as with each of these components separately.

In the context of vaccine development, the meningococcal vaccine Bexsero has shown promising results.

The pharmaceutical company plans to take a leading position in the market of biosimilar drugs, which may become possible thanks to its experience in the development and marketing promotion of new products.

Bernard Munos, an analyst at InnoThink, noted that Novartis' costs based on the development of a single drug are among the lowest among the top 10 pharmaceutical companies in terms of R&D expenses, which indicates that the largest research budget is invested very efficiently.

«Pfizer»More than a year ago, the company announced its intention to reduce drug development costs by $1.5 billion.

— up to 6.5–7 billion dollars. Its leadership resolutely set about implementing this decision, while closing many key research areas.

The Pfizer Research Center in Sandwich (UK) was initially planned to be closed, while laying off 2.4 thousand people. However, after some thought, it was decided to leave the center functioning, while significantly reducing the amount of research conducted. A similar fate befell the R&D centers in Groton (Connecticut, USA). Research in the field of neurology, RNA interference, etc. was stopped. In addition, in April 2011, the company sold its Capsugel division, which produces medicines in the form of tablets, to the investment company Kohlberg Kravis Roberts. The transaction amount was about $2.4 billion. This decision was made during the audit of Pfizer's divisions, conducted in order to reduce the company's total expenses from $67 billion to $35-40 billion per year.

At the same time, a bet was placed on the Asian region, in particular, in March 2011, the Chinese company "King Pharmaceuticals, Inc." was acquired, thanks to innovative products and technologies of which Pfizer was able to expand its product portfolio with medicines for pain relief. In addition, the company obtained the rights to EpiPen® — automatic syringes for the administration of medicines in non-standard conditions.

Total R&D expenses in 2011 decreased by 3% compared to the same indicator in 2010, and their decrease in the fourth quarter of 2011 reached 7%. This indicates the company's determination to reduce the costs of developing new medicines, which means that this trend is likely to continue in 2012.

In order to achieve this goal, Pfizer's management will have to reduce R&D costs by more than $1 billion this year.

At the same time, although the company will not leave the top 10 pharmaceutical companies with the highest R&D expenses, it will cease to be a member of the "big three".

Along with reducing costs by curtailing the activities of research centers, the company is also opening new ones, which are distinguished by their territorial proximity to academic institutions operating in the same field, for example in Boston, San Francisco and New York.

The issue of increasing the productivity of R&D developments for Pfizer is particularly acute due to the expiration of the patent protection of the blockbuster Lipitor®/Liprimar/Lipitor (atorvastatin). According to the head of Pfizer's R&D division, the company's joint development with Johnson & Johnson - bapineuzumab, intended for the treatment of Alzheimer's disease, is promising.

The drug tofacitinib, intended for the treatment of rheumatoid arthritis, the application for approval of which is under consideration by US regulatory authorities, also promises to be a successful investment. But the approval of Eliquis® (apixaban) in the USA may take a long time. In the EU, this drug, which is a joint development of Pfizer Inc. and Bristol-Myers Squibb Co., is already being marketed. Eliquis®(apixaban) is approved as a prophylactic to prevent thrombosis during surgical interventions on the lower extremities. It is predicted that global sales of this drug may begin to bring companies revenue at the level of $ 2.5 billion per year by 2015.

«Roche»In 2011, Roche invested 7.2 billion Swiss francs (7.5 billion dollars) in the development of new medicines and another 981 million francs (1019 million dollars) in the creation of new diagnostic methods.

In 2011, Roche introduced the drug Zelboraf (vemurafenib) to the list of its most promising products. The drug intended for drug therapy of melanoma was developed in cooperation with the company "Plexxikon", part of the "Daiichi Sankyo Group".

This year, it's time for T-DM1, a candidate for breast cancer drugs, whose research has reached the finish line. Another promising drug for use in malignant neoplasms — pertuzumab — showed positive results during a study in conjunction with Herceptin®/Herceptin (trastuzumab) in breast cancer. It is predicted that the sales volume of pertuzumab may reach $2 billion per year.

Jean-Jacques Garaud, head of the R&D division of Roche, noted that, despite the ambiguous history of the study of CETP inhibitors (cholesterol transfer protein - a protein carrier of cholesterol esters), his company has high hopes for a drug candidate dalcetrapib belonging to this group and designed to control the level of high-density lipoproteins. It is expected that the sales volume of this drug can reach $ 10 billion per year.

Roche, like some other multinational pharmaceutical companies, is actively investing in China, seeking to increase its presence in this huge market.

Severin Schwan, CEO of Roche, noted that for the successful operation of the pharmaceutical company, it is necessary to constantly maintain a high level of innovation of its products and create drugs in which both patients and payers will be interested.

"Merck&Co."Kenneth Fraser, CEO of Merck & Co., faced the same problems as most executives of large pharmaceutical companies.

Investors insisted on reducing R&D costs, but K. Fraser defended his strategy for the development of the company and thus postponed this event.

In 2011, investments in the development of medicines were justified by the approval by the US regulatory authorities of the drug Victrelis (boceprevir) for the treatment of hepatitis C. However, the joy of this event did not last long — after 10 days Incivek (telaprevir, Vertex Pharmaceuticals, Johnson& Johnson) was also approved for hepatitis C. Boceprevir and telaprevir They belong to the class of protease inhibitors that block the enzyme that ensures the process of creating copies of the hepatitis C virus.

The company's management had high hopes for Deforolimus (ridaforolimus), intended for the treatment of sarcoma, but they never came true — the advisory committee at the FDA did not recommend it for approval.

Another development of the company is anacetrapib, designed to control cholesterol levels in the blood and has shown quite convincing positive results in numerous studies. However, despite this, the approval of this drug is still far away — the process may take 2-3 years.

Candidates for the drugs suvorexant, used for insomnia, and Bridion (sugammadex), the rights to which the company received as a result of the acquisition of Schering-Plough, can boast of a less illusory prospect of approval. In addition, the V503 vaccine against human papillomavirus is in the final stages of development.

However, when the company's management published its optimistic forecasts for these drugs, they were severely criticized by analysts working in the pharmaceutical field, who suggested that bringing these products to the market would not have the expected effect, and Merck &Co. would be forced to reconsider its R&D strategy and possibly, even resort to acquiring rights to other promising medicines. And so it happened — the company's management announced the acquisition from Endocyte of the rights to the drug vintafolid, intended for the treatment of malignant neoplasms. It is in the final stage of development. In addition, within the framework of the agreement concluded between the companies, Endocyte will also develop a diagnostic method aimed at determining patients' sensitivity to this drug. According to the management of Endocyte, the drug vintafolid will be approved by European regulatory authorities within a few months.

In addition, Merck &Co. has entered into an agreement with Flagship Ventures, the purpose of which is to search for new promising molecules.

Despite the small number of promising drugs that are in the final stages of research at the end of 2011, Merck & Co. does not change its strategy, but at the same time actively works on the distribution of R &D risks, acquiring promising medicines.

«Johnson&Johnson»Johnson & Johnson has a consistent and successful policy in the field of drug development.

In addition, the company has signed several successful agreements on the acquisition of rights to a number of promising medicines, having done so at the initial stages of development. In 2011, Johnson & Johnson received regulatory approval for marketing 3 of its drugs.

FDA representatives, commenting on the approval of Zytiga (abiraterone), noted that this drug is an example of when the regulatory authority accelerates the application review process due to the availability of a large amount of data on the effectiveness and safety profile of the drug. Johnson & Johnson acquired the rights to this product when it acquired it for $1 billion. the company "Cougar Biotechnology", having proved himself an expert in identifying promising developments at the early stages of research.

Johnson & Johnson also actively cooperates with other companies. In July, she signed an agreement with the biotech company Gilead Sciences Inc. on the joint development of a combination drug for HIV therapy. In addition, there is an opportunity to continue cooperation in the field of creating new medicines used for AIDS. The companies plan to develop a drug that is a combination of Prezista™ (darunavir, Johnson & Johnson) and cobicistat (Gilead).

Last fall, Xarelto™/Xarelto™ (rivaroxaban) was approved for the prevention of stroke in patients with atrial fibrillation. This opened up a market for the future blockbuster, which has more than 2 million patients. In 2011, approval was obtained in the USA and the EU for the drug Incivek, developed jointly with Vertex Pharmaceuticals.

Johnson &Johnson plans to further develop the R&D direction. Thus, it is predicted that by the end of 2015, the company will have 11 new promising drug candidates in its assets. In addition, new indications for use will be developed for another 30 already approved medicines.

According to Mike Weinstein, an analyst from JPMorgan, the main drivers of the expansion of Johnson & Johnson's product portfolio were the successful acquisition of licenses for promising medicines carried out over the past 3-5 years, and an increase in the potential of its own R&D developments. The continuation of this strategy was the acquisition of Pharmacyclics from the company for $ 975 million. the rights to an antitumor drug.

As for its own developments, Johnson & Johnson is actively working in this direction. Janssen, a subsidiary of Johnson & Johnson, has opened a new research center in San Diego (USA). The company has also joined cooperation with GlaxoSmithKline and Index Venture to develop new drugs.

«GlaxoSmithKline»According to the results of 2011, GlaxoSmithKline received marketing permits for 3 medicines.

In addition, 6 more promising drugs are in the final stages of the company's development: Relovair™ (fluticasone furoate); LABA/LAMA (vilanterol+ GSK573719) for the treatment of chronic obstructive pulmonary disease; albiglutide; dabrafenib and trametinib for the treatment of malignant neoplasms; dolutegravir, intended for the treatment of pitchforks; Mosquirix antimalarial vaccine. Approval was given to Horizonant (gabapentin enatsarbil), developed in collaboration with Xenoport. The companies decided to continue such productive joint work. Another breakthrough in 2011 for GlaxoSmithKline was the approval of Benlysta™ (belimumab) for the treatment of lupus, developed jointly with Human Genome Sciences.

The recent takeover offer of Human Genome Sciences indicates GlaxoSmithKline's plans to replenish its product portfolio with biologics.

However, as part of the reorganization of the division engaged in the development of medicines in the field of neurobiology, in May 2011, GlaxoSmithKline plc ceased cooperation with the biotech company Targacept Inc. Recall that a cooperation agreement was signed between them in July 2007 with the aim of developing new drugs for relieving pain, combating smoking, drug addiction, obesity, as well as for the treatment of Parkinson's disease. All rights to joint development were transferred to a biotech company.

As for its own developments, the company relies on small research centers. Changes in the strategy in the field of R&D have led to the completion of some projects and the launch of new ones (for example, a direction related to traditional Chinese medicine has been developed).

Today, there are 30 research programs at the development stage. The goal set by the management of GlaxoSmithKline is to fill the product portfolio with innovative means without increasing costs. The amount of R&D expenses at the level of $ 6 billion. is acceptable to the company.

«Sanofi»Chris Viehbacher, CEO of Sanofi, answering a question about the productivity of the R&D direction, noted that 70 cents are returned from every dollar invested.

In this regard, he announced his intention to radically reform the company's research division. The announced changes in 2011 led to an increase in R&D expenses. However, it should be noted that the company's management intends to increase the productivity of R&D rather by increasing the number of approved medicines than by reducing research costs. At the end of 2011, representatives of the company reported on the submission of applications for approval of 5 drugs, including Zaltrap (aflibercept) for the treatment of colorectal cancer. And in February 2012, the company announced plans to prepare 18 more drug candidates for approval by the end of 2015. The expiration of the terms of patent protection of the company's business-forming medicines may adversely affect the company's profits. It is for this reason that Sanofi especially needs the launch of a large number of new drugs that can become blockbusters. This will compensate for the decline in revenue caused by competition from generic medicines.

Currently, a candidate for PCSK9 inhibitor drugs, developed by the company in collaboration with Regeneron Pharmaceuticals and designed to reduce cholesterol levels associated with low—density lipoproteins, is in phase II research. It is expected that statins will continue to accumulate the lion's share of the market, but this drug may be in demand among patients with very high cholesterol levels associated with low-density lipoproteins, which allows developers to hope for the successful promotion of the above-mentioned drug.

In addition, the company's management was able to replenish the product portfolio with several purchased drugs. In particular, it received the rights to market the drug Lemtrada™ (alemtuzumab) for the treatment of multiple sclerosis, as well as Cerezyme®/Cerezyme® (imiglucerase) and Fabrazyme® (agalsidase) as a result of the acquisition of Genzyme for $ 20 billion. BG-12 from Biogen Idec and Gilenya™ (fingolimod) from Novartis can compete with this drug. And as a result of the acquisition of Acambis, the rights to the vaccine used for dengue fever were obtained. In April 2011, Sanofi acquired the rights to the experimental drug GBR500 based on monoclonal antibodies developed by the Indian company Glenmark for the treatment of Crohn's disease — chronic nonspecific inflammation of the digestive tract, as well as other autoimmune diseases. The transaction amount amounted to $ 613 million. It is expected that the launch of this drug will take place in 2017.

Speaking about the developments of the company "Sanofi", it is impossible to ignore such drugs as Lyxumia (lixisenatide) for the treatment of diabetes mellitus, Aubagio (teriflunomide) — multiple sclerosis, and the inhibitor JAK-2 SAR302503 — myelofibrosis. In addition to its own developments, Sanofi also participates in various joint projects (for example, it cooperates with Warp Drive Bio).

«AstraZeneca»AstraZeneca's R&D expenses decreased slightly in 2011 compared to the previous year.

David Brennan, the new CEO of AstraZeneca, presenting the results of the company's work for 2011, shared his plans for restructuring the R&D direction, in particular by reducing costs for it. During the restructuring, 7 thousand jobs were cut, of which 2.2 thousand were in the R&D division.

In addition, as part of the restructuring of the business, the company's management intends to abandon some areas and focus on the development of innovative medicines, which is especially important in light of the expiration of patent protection of 2 of the company's drugs: Seroquel/Seroquel (quetiapine fumarate) for the treatment of psychosis and Nexium/Nexium (esomeprazole) — from heartburn. In June 2011, AstraZeneca sold the Astra Tech division (a Swedish manufacturer of dental implants and dental equipment) to Dentsply International Inc. for $1.8 billion.

D. Brennan took over a company with a rather weakened R&D direction. In the course of solving this problem, it is planned to introduce new technologies and develop innovative projects. One of the first steps on this path was the conclusion of an agreement with Amgen on the development of drugs based on monoclonal antibodies. In addition, representatives of AstraZeneca announced the acquisition of Ardea Biosciences for $ 1.26 billion, which will provide access to a candidate for drugs for the treatment of gout (is in the final stage of development).

However, even cooperation with biotech companies does not always guarantee success. So, recently the company was forced to stop the research of a drug against depression, conducted jointly with Targacept. The reason for this was the negative results obtained during the final stage of research.

«Eli Lilly»"Eli Lilly" began 2011 with a promising collaboration with "Boehringer Ingelheim", which was aimed at the development of medicines used in diabetes mellitus.

However, after a year, the company's management faced a significant increase in R&D costs.

The key event for Eli Lilly in the previous year was the expiration of the patent protection of the business-forming drug Zyprexa™/Ziprexa™ (olanzapine). Competitive pressure from generic medicines led to a decrease in the company's profit in the fourth quarter of 2011. This made the problem of the fastest launch of new promising drugs especially relevant.

In this light, the disappointment for the management of Eli Lilly was the completion of cooperation with Amylin Pharmaceuticals with the transfer of all rights to the drug Bydureon (exenatide) to the latter shortly after its approval by the US regulatory authorities.

Despite the slow progress in the development of the company's R&D direction, John Lechleiter, CEO of Eli Lilly, is very optimistic. Thus, the company intends to invest in the development of its biotechnology business. It is planned to invest several million dollars in research and development of drugs, each of which will have 2 or more mechanisms of action, which will significantly increase the effectiveness and safety profile of therapy. Employees of the company's R&D divisions located in Indianapolis and San Diego (USA) were additionally invited to develop this direction. He noted that as of the end of 2011, the company had 11 candidates for drugs at the final stages of the study.

Among the Eli Lilly projects in phase III of the study, solanezumab attracts attention — the company's second attempt to develop a method for treating Alzheimer's disease. The drug semagacestat is an earlier development. His clinical studies have yielded unsatisfactory results. Therefore, great hopes are pinned on solanezumab, because in the absence of a drug for the treatment of Alzheimer's disease, a drug that can provide at least a slight improvement in the condition of patients will be doomed to success. In addition, Eli Lilly acquired Avid Radiopharmaceuticals, a company that develops tests for the diagnosis of Alzheimer's disease. The transaction amount amounted to $ 800 million.

«Bristol-Myers Squibb»It should be noted that 2011 in the context of R&D was extremely successful for Bristol-Myers Squibb.

Despite the relatively small R&D budget, the company was able to present much more successful projects than the giants of this field.

In 2011, Bristol-Myers Squibb made 2 important acquisitions: 1) the company "Amira" is one of the top 15 biological companies and specializes in the development of medicines used for fibrosis; 2) "Inhibitex" is engaged in the creation of drugs for the treatment of hepatitis C.

The latter company was acquired for $2.5 billion. and this allowed Bristol-Myers Squibb to obtain the rights to daclatazvir for the treatment of hepatitis C. It was added to the program in which a candidate for BMS-986094 drugs was developed. It should be noted that the use of BMS-986094 in combination with a drug developed by Gilead showed good results.

This acquisition and its own developments allowed Bristol-Myers Squibb to become a leader in the development of oral interferon-free drugs for the treatment of hepatitis C.

In 2011, the US regulatory authorities approved Yervoy (ipilimumab) — for the treatment of skin cancer and Nujolix (belatacept) — to prevent kidney rejection after transplantation. In addition, the application for approval of Eliquis® (apixaban), developed in partnership with Pfizer, is already under consideration by US regulatory authorities.

However, few people manage to avoid failures in the R&D sphere. So, in 2011, phase III studies of brivanib, a drug intended for the treatment of malignant neoplasms, did not bring the expected results, and the application for approval of the drug dapagliflozin for use in diabetes mellitus was rejected by the FDA.

These 2 drugs were among the top 5 most promising projects of the company in 2011. Despite some difficulties, the management of Bristol-Myers Squibb assumes that in 2012 the growth rate of R&D expenses will be characterized by single-digit indicators. It should also be noted that about a third of the company's total R&D expenses are for research in phase III.

Thus, investing in the development of medicines continues to be one of the most long-term and unreliable investments in the field of high technology, which, with a successful combination of circumstances, promises unprecedented financial success. The search for a reasonable balance between the effectiveness of developments and their costs is a topic that, apparently, will not lose its relevance and will always excite the minds of the heads of the world's leading pharmaceutical companies.

Portal "Eternal youth" http://vechnayamolodost.ru28.06.2012