Glaxo leads big pharma in NME approval rates while Lilly trails

Analysis

The complete response letter for Boehringer Ingelheim’s new type 2 diabetes medicine is a disappointment for the German drug developer, which has struggled to keep up with some of its big pharma peers in the past few years' novel drug approvals.

The news also represents a setback for its partner Lilly, which has an even poorer track record, in terms of both the number of new drugs it has generated and their commercial value. Meanwhile, GlaxoSmithKline, helped in no small part by its vaccines unit, is leading the pack by a long way. However, this analysis confirms that efforts to improve the R&D productivity of several of these companies have yet to generate results (see tables below).

NME approval analysis – 2008-13
NMEs approved by FDA  As % of all NMEs approved 2018e NME sales ($bn) Contribution of NMEs to 2018 Rx sales 
GlaxoSmithKline 20 10% 11.7 29%
Novartis 13 6% 8.4 17%
Johnson & Johnson 9 4% 13.1 36%
Bayer 7 3% 6.0 25%
Sanofi 6 3% 2.3 5%
Pfizer 6 3% 12.0 27%
Roche 6 3% 10.0 19%
Bristol-Myers Squibb 5 2% 4.6 24%
Boehringer Ingelheim 3 1% n/a* n/a
Merck & Co 3 1% 0.7 2%
AstraZeneca 2 1% 1.4 24%
Eli Lilly 2 1% 0.5 3%
*No forecasts available for Boehringer Ingelheim as it is private

Because manufacturing deficiencies form the basis of the complete response letter for empagliflozin it seems likely that the FDA will eventually approve it. The project was developed under a venture with Lilly but was originated by the German company, so in the analysis above it would count as an approval for Boehringer.

EvaluatePharma data reveal that the private company has brought only three new products to the market since 2008, although this is a slightly better performance than Lilly, with only two novel approvals since 2008 that have yet to demonstrate significant commercial value. As such, the US company has much riding on regulatory decisions due this year for two late-stage molecules – another diabetes drug, the GLP-1 agonist dulaglutide and cancer antibody ramucirumab.

Upping quality

The travails of Lilly and the other laggards in this analysis, AstraZeneca and Merck, are well known and their management teams are under intense pressure to improve productivity rates.

Many investors and sellside analysts are growing increasingly confident that they will deliver. Only today, two analysts published bullish notes on AstraZeneca. UBS hiked its price target on the stock from £41.50 to £46.00, pointing to its “under-appreciated” pipeline. And Leerink highlighted data due at the cancer conference AACR next month, and said the second quarter would yield a lot of important information about some key pipeline projects.

But this analysis makes it clear that these companies not only have to work on bringing more new products to market, they have to increase the commercial quality of these medicines too. For example Sanofi, despite winning a respectable six novel drug approvals since 2008, is only expected to generate $2.5bn in new sales from them by 2018.

The French drug maker’s crop of novel products include the atrial fibrillation drug Multaq and chemotherapy Jevtana, which have both disappointed. Establishing a market for novel products is becoming almost as hard as getting them there in the first place, and new drug launches will be scrutinised ever more closely in the future.

Doing it right

GlaxoSmithKline sits head and shoulders above rest. Analyses of new drug approvals frequently exclude vaccines, as not all companies are strong in this area, and their market – the tenders and contracts awarded by state-funded healthcare systems – looks very different. However, they undeniably represent a real contributor to innovation in healthcare, and to the toplines of several big pharma names, so they have been included in this cut of the data.

Vaccines represent seven of Glaxo’s novel drug approvals since 2008: three flu vaccines, three infant vaccines and its cervical cancer vaccine Cervarix. Even if these were excluded it is clear that the UK pharma giant has been doing something right.

Novartis has similarly been boosted by its vaccines arm – which contributed five of its approvals – although the Swiss group is rumoured to be considering selling this unit.

Finally, the achievements of both Johnson & Johnson and Bayer are notable, considering that these are conglomerates without a laser-sharp focus on pharmaceuticals, particularly so in Bayer’s case. And both manage to feature in the list below of the most successful new molecules from big pharma over the past six years – J&J has an impressive three molecules in the top 10.

In another demonstration of how Bayer is competing effectively within this peer group, it is only one of two companies to have a product in this list that it invented in its own labs – the rest were acquired or licensed in.

Of course, at the end of the day investors do not care where a drug was invented, only that it lives up to the frequently high expectations built by these companies and their management teams. Creating realistic expectations is another area in which big pharma could arguably improve.

Big pharma's biggest NME successes of the past six years
Product Company FDA approval date Pharmacology Originator 2018 sales ($bn) Strategy
Prevnar 13 Pfizer 2010 Pneumococcal vaccine Wyeth 5.7 Company acquisition
Kadcyla Roche 2013 Anti-cancer antibody-drug conjugate Genentech 3.2 Company acquisition
Afinitor Novartis 2009 Anti-cancer mTOR inhibitor Sandoz 3.1 Organic
Stelara Johnson & Johnson 2009 Psoriasis antibody  Centocor 3.0 Company acquisition
Gilenya Novartis 2010 Oral MS therapy  Yoshitomi Pharmaceutical 3.0 In-licensed
Zytiga Johnson & Johnson 2011 Prostate cancer therapy The Institute of Cancer Research 2.9 Company acquisition
Perjeta Roche 2012 Anti-cancer antibody Genentech 2.7 Company acquisition
Xarelto Bayer 2011 Oral anti-coagulant Bayer 2.7 Organic
Eliquis Bristol-Myers Squibb 2012 Oral anti-coagulant DuPont Pharmaceuticals 2.5 Company acquisition
Simponi Johnson & Johnson 2009 Anti-TNF RA antibody Centocor 2.2 Company acquisition
Tivicay GlaxoSmithKline 2013 HIV integrase inhibitor Shionogi 2.1 In-licensed

To contact the writer of this story email Amy Brown in London at AmyB@epvantage.com or follow @AmyEPVantage on Twitter

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