Biotech Values

[DewDiligence]

Success Rate for US Drug Development Is 9%

[The 9% figure comes from a new BIO study incorporating 4,500 drugs, 8,000 drug-indication pairs, and 59,000 drug-indication-outcome data points for clinical trials during the period from 2004 through 2010. Thus, it would seem that drug development for the US market is even harder than what was depicted in the graphic in #msg-37325683 (from a 2006 US government report), which had 20% of new drugs making it from the start of phase-1 to FDA approval.

Some of the subset data from the new BIO report are illuminating. For instance, the initial indication for a given drug is successful 14% of the time (measured from the start of phase-1), but secondary indications are successful only 3% of the time. A disparity between these success rates makes sense insofar as the indication for which a drug is best suited is likely to be the first one tested, but I would not have expected the magnitude of the disparity (14% vs 3%) to be so wide.

The subset data for the different areas of medicine are also illuminating. Drugs for infectious diseases had the highest success rate (12%) while cancer drugs had the lowest success rate (4.7%). This, too, makes sense insofar as the MoA for antiviral drugs is generally well understood and efficacy in impeding viral replication can often be established as early as phase-1. Cancer drugs, where MoA tends to be poorly understood, are the polar opposite. (I’ve posted on many occasions that most biotech companies focused on cancer are a sucker bet, and I hardly ever invest in them.)

For companies focused on biologics (and FoB’s), BIO’s study contains a dose of encouragement insofar as the success rate was 15% for biologics vs 7% for small-molecule drugs.

BIO’s own PR on the study is at: http://finance.yahoo.com/news/New-Study-Shows-the-Rate-of-bw-1674778157.html?x=0&.v=1 .]

http://www.reuters.com/article/2011/02/14/pharmaceuticals-success-idUSN1121064320110214

›Mon Feb 14, 2011 8:00am EST
By Bill Berkrot

NEW YORK, Feb 14 (Reuters) - The success rate in bringing new medicines to market in recent years is only about half of what it had been previously, but biotech drugs are twice as likely to gain U.S. approval than more traditional chemical drugs, according to a new study released on Monday.

And while oncology has been one of the hottest and most active therapeutic areas for drug development, drugmakers may want to take note of a finding that new cancer drugs have proven far more difficult to gain approval than medicines for infectious and autoimmune diseases.

Drugmakers have been complaining about the difficulty of bringing new products to market in a regulatory climate that has become increasingly unpredictable and more likely to err on the side of safety in deciding risk/benefit ratios of experimental medicines.

Data from this new study appears to bear that out.

"It ain't getting any easier to develop new therapies." said Alan Eisenberg, head of emerging companies and business development for the biotech trade group Biotechnology Industry Organization (BIO), putting the findings succinctly.

"Knowing more about the magnitude of risk can lead to smarter drug development as well as smarter investing," he said.

The study, covering 2004 through 2010, found the overall success rate for drugs moving from early stage Phase I clinical trials to FDA approval is about one in 10, down from one in five to one in six seen in reports involving earlier years [#msg-37325683].

The study, conducted by BIO and BioMedTracker, which collects data on drugs in development, reviewed more than 4,000 drugs from companies large and small and both publicly traded and private. It was released in conjunction with the annual BioCEO and Investor conference in New York.

Adding weight to the desire by major pharmaceutical companies to become increasingly involved in biotechnology was a finding that biologics had a 15 percent chance of going from Phase I through to FDA approval, compared with a 7 percent success rate for traditional small-molecule chemical drugs.

When broken down by therapeutic categories, the highest overall success rate from Phase 1 through likelihood of approval was infectious diseases, such as hepatitis and HIV drugs, at 12 percent, followed by endocrine system drugs, featuring diabetes treatments, at 10.4 percent, and autoimmune diseases, such as rheumatoid arthritis, at 9.4 percent, the study found.

John Craighead, BIO's managing director for investor relations, said clinical trial goals and the approval pathways for infectious diseases and diabetes drugs are clear and very well-established.

"The Phase II results are very predictive of the Phase III outcomes and very predictive of approval," he said.

"The overall success rate in oncology was the lowest of the therapeutic areas that we looked at," he said, noting that cancer studies vary dramatically in design and extending survival sets a high bar for approval.

The cancer drug success rate was a mere 4.7 percent, with cardiovascular drugs second-worst at 5.7 percent, as regulators are increasingly demanding proof that heart drugs reduce heart attacks and strokes rather than just lower a risk factor, such as cholesterol levels.

The largest dropout rate along the clinical pathway came in advancing drugs from midstage Phase II studies to late-stage Phase III testing. [This is exactly what one would expect.]

Some 63 percent of drugs in Phase I testing advanced to Phase II, but only 33 percent of Phase II drugs made it to Phase III, which requires a commitment to larger and much more expensive clinical trials. Phase III is typically the final stage of human testing before a new drug is submitted to regulators for an approval decision.

Not surprisingly, the numbers increase after that as the drugs had already shown success in the clinic.

Approval applications were filed for 55 percent of the drugs that made it to Phase III testing, and 80 percent of those gained eventual approval, although only about half were approved on their initial FDA review.

The 80 percent approval rate, while seemingly high, is down from 93 percent seen in studies of earlier years.‹