A good bed time story for tonight:
Deloitte 2018 Global Life Sciences Outlook both report and info-graphic below:
Qutoes:
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Orphan drugs
The orphan drug market is expected to almost double in the next five years, reaching US$209 billion in 2022. It’s expected that these high-cost, specialized drugs have and will continue to face pricing scrutiny by policymakers. Of the top 100 drugs in the United States, the average cost
per patient per year for an orphan drug was US$140,443 in 2016, compared to US$27,756 for a non-orphan.
According to the US Food & Drug Administration (FDA), 75 orphan drugs were approved in the United States in 2017, compared to a total of 27 in 2016 and 56 in 2015.
The 50 highest-selling orphan drugs each averaged approximately US$637 million in sales. While only about 600 treatments are approved, 7,000 conditions are designated as rare in the United States.
Major scientific advances will lead to even more rare diseases being identified and even more drugs seeking approval despite pricing pressures.
The passage of the new US tax law reduces the orphan-drug credits that biopharma
companies can claim by effectively 40 percent.However, the reduction is not likely to change life sciences companies’ strategies. The orphan drug market is a strategic market that solves unmet needs. The key benefits are not just the tax credit, but the other important aspects such as the seven-year market exclusivity, faster FDA review and waived fees, and exception from the ACA branded drug pharma fee for orphan-only drugs.
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Therapeutic focus trends
Oncology leads therapy areas in sales (Figure 4) and is likely to account for 17.5 percent of prescription drug and OTC sales by 2022, more than the next three highest therapy areas combined.
In addition to oncology, the largest CAGR growth in the top 15 therapy categories will come from
immunosuppressants, dermatologicals, and anti-coagulants.
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Personalized medicine
The global personalized medicine market is forecast to reach $2.4 trillion in 2022 at a CAGR of 11.8 percent, more than double the projected 5.2 percent annual growth for the overall health care sector.
Growth will be driven by advancements in technology and targeted therapies that are more efficient, and can provide more value. The focus is on prevention and early intervention, rather than advanced disease. More than 40 percent of all compounds and 70 percent of oncology compounds have the potential to be personalized medicines.
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M&A investment trends
Life sciences
2017 saw a further decline in deal value from 2016, resulting from global economic and political uncertainty. Large deals that were announced in 2017 tended to be focused on traditional acquisitions that were within the core competencies of the acquirer. According to Thomson Reuters data, the largest deal through Q3 2017 is Becton Dickinson & Co. acquiring CR Bard in April, in a deal worth $24.2 billion. In biotech, Gilead Sciences Inc. acquired Kite Pharma Inc. for
$11.1 billion. In pharmaceuticals, Thermo Fisher Scientific, Inc. acquired Patheon NV (99.0066 percent interest) for $7.2 billion.
We believe 2018 will see an uptick in deal volume as well as value, and an increase in mega deals, for a number of reasons:
• The passage of tax reform in the US, the progress of the Brexit negotiations, and the maturation of policy with respect to outbound deal-making from China clears up some of the uncertainty that was constraining M&A in 201 7 . US tax reform offers some incentives to repatriating monies back to the United States, which could spur additional high value M&A transactions.
• Capital markets remain strong. A weak M&A deal environment across industries in 2016 has resulted in pent-up demand to create value through M&A transactions going forward.
• The life sciences sector remains fragmented. Additional value can be captured via further industry consolidation. Non-traditional, technology-oriented adjacencies represent an important aspect of M&A strategy for life sciences companies in 2018. The convergence of tech with other sectors has been, to this point, largely driven by tech industry players themselves. However,we are now seeing consumer health,health plan,medical technology, and pharmaceutical sector participants pursuing M&A transactions that either directly or indirectly respond to tech
advances and tech investment.
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Gene therapy
Gene therapy may disrupt the sector by offering customized, targeted patient treatment, including newly approved CAR-T therapies (Figure 7). While adoption is still low due to availability, insights from human genetics and precision medicine have transformed health care, bringing value through innovative biotechnology.
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Regulatory partnerships
Strong partnerships with regulators are fundamental to creating sustainable innovation, ensuring new products progress efficiently through the pipeline. For the past decade, most life sciences and health care companies have highlighted that a risk averse approach to regulation has impeded
adoption of innovation.
The evidence today and predictions for tomorrow illustrate that this is changing. For example, the FDA’s new early approval process for CAR-T cancer treatments reflects efforts by the new cross-cutting Oncology Center for Excellence to implement a more collaborative review model for innovative medicines.
The FDA’s 21st Century Cures Act offers another opportunity to be proactive and take advantage of the agency’s flexibility by discussing novel approaches to drug development and medical device
innovation.
Greater harmonization between regulators is increasingly seen as a key enabler in maintaining compliance while securing supply to markets. By building engagement with regulators into their innovation models, new regulations for innovative treatments, such as 3D printing of drugs or gene editing, can be developed contemporaneously rather than retrospectively using enhanced regulatory pathways.
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