Unmet need and early-stage deals continue to interest big pharma

At one of the first partnering conferences of 2011, BioBusiness in London this week, big pharma executives confirmed that a couple of trends are likely to prevail this year: an appetite for earlier stage deals and the hunt for unmet medical need.

The conference also set the stage for another year of intense focus on emerging markets. Executives from Bayer boasted that these fast growing regions already account for 15% of the company’s revenues, and the approaching big pharma annual results season is likely to contain many a presentation highlighting double digit growth rates from newly enhanced overseas divisions. New year, same stories?

Future areas of growth

Ask business development executives from a handful of the world’s biggest drugmakers what they are looking for over the next five years, as a panel session at the conference did, and the answers unsurprisingly contain buzzwords like “innovation” and “unmet need".

While unmet need brings to mind rare diseases, it is clear big pharma still sees opportunity in seemingly well served therapy areas.

For example Lars Wille, vice president of business development for Novo Nordisk, said the Danish giant will continue to focus on diabetes, saying much work is still needed in an area set to double its cases over the next two decades.

Boehringer Ingelheim’s Roger Hill, executive director of global licensing and business development, said the company would be moving into cardiometabolic and chronic immune disorders, which would include diabetic complications.

He predicted diabetes will feature heavily in pharma pipelines as a disease of aging, as well as frailty, such as osteoporosis, and said Boehringer is interested in talking to early-stage developers in these areas.

“In the last couple of months we’ve seen the first baby-boomer turn 65, and so we know there is a large bolus of retirees coming…that need medicines that address diseases of the aging,” said Mr Hill.

Magnus Bjorsne, global business development director for AstraZeneca, agreed, predicting neurological and diabetic disorders associated with older age will generate opportunities.

Innovation

One translation of innovation is earliier stage deals, which have become notably more popular over the last couple of years and a trend which seems set to continue. Indeed, the panel expressed a need for open-mindedness to a wide range of novel technologies and unchartered therapeutic areas.

Big pharma does appear to be recognising the value of novel technologies it would have never previously considered. Large companies have taken kid steps into risky areas like microRNA, gene therapy and stem cells. Meanwhile deal terms are changing, with earn out options and first right of refusal clauses on the rise.

Bayer Schering Pharma’s Nils Debus, senior director of Bayer’s Office of Technology, an arm dedicated to partnering only early-stage drug candidates and discovery technologies, said the German company is taking a two-pronged approach. Firstly looking for external platforms that can augment its own research, while seeking innovative projects that compliment its business units. A prime example is Bayer’s move into cancer stem cell technology with OncoMed, a deal the two parties closed last June (Bayer takes early stage gamble on OncoMed’s cancer stem cell treatment, June 17, 2010).

Meanwhile, Bristol-Myers Squibb's Lubor Gaal, executive director of the company’s strategic transactions group, said it is unlikely pharma companies would consider licensing a platform without a fully human biomarker, another trend becoming more widespread; AstraZeneca's chief executive, David Brennan, has gone on record saying pipeline candidates, particularly within oncology, are likely to be scrapped if an associated biomarker cannot be identified. 

Emerging once again

The quest for rocketing growth rates in emerging markets is far from over, and big pharma's progress on this measure and the challenges it throws up will continue to be in focus this year.

Monika Vnuk, Pfizer's senior director of business development, said China, for example, has around 5,000 pharmaceutical companies. "Significant resources are devoted to finding the right partner," she said, highlighting local knowledge and co-operation with local authorities as other important factors.

With emerging markets joining unmet need and early-stage innovation as continuing pre-occupations for big pharma, progress on these fronts will be closely watched this year.

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