October 2013

In-Licensing and Acquisition: The Changing Landscape of Product Development

Report Authors
Patrick Flight, Ph.D.

Introduction:

The biopharmaceutical industry showed anemic growth in 2012 as global sales increased by only 0.6%. The innovation required to bring greater returns comes with enormous investment in R&D.  Widely cited estimates of the costs of bringing a new drug to market range from $1 billion to $1.3 billion, and there is no question that companies are focused on improving R&D efficiency. In striving for this efficiency, pharma has increasingly relied on in-licensing investigational products to reduce the licensees’ financial risk.

In this report, we examine the changing composition of marketed portfolios and pipelines in terms of the way in which innovation is sourced. As expected, we find that in-licensing has become a more common method of development and that partnering has accelerated since the mid 2000s. We also analyze deal-making trends across the industry and find that the most active therapy areas for partnerships have a combination of a large market size and significant potential for growth. With trying economic circumstances across the industry, companies are turning to licensing in an attempt to deliver new revenue quickly. While externally sourced products can provide more immediate revenue, the long-term impacts of the shift away from in-house R&D on profits remains to be seen.

Questions Answered in This Report:

  *   The paths to market vary by therapy area, treatment type, and geography, but the rise in in-licensing and acquisition has mirrored the decline in in-house launches across the industry. What sectors of the industry and which companies rely most heavily on in-licensing and acquisition for product development?

  *   Partnerships in the pharma industry are designed to maximize product development efficiency. As the industry increasingly looks toward deal-making for innovation, what are the dynamics of the deals market?

Scope:

Markets covered: United States, Europe, Japan.

Development origins (in-house/acquired/licensed) of products launched by top pharmaceutical companies and at what stage of development (pre- or post-launch); sales by business development origin and therapeutic area, 2012; percentage of compounds by business development origin (in-licensed/acquired) by region and pharmaceutical company type.

Deal abundance and value by development stage and year (2008-2012); percentage of deals and median deal values by development stage; number of deals by therapy area (2008-2012); percentage of deals and median deal values by technology type; mean and median values of licensing deals for products (2008-2012).

Ranking of Large Pharma companies by R&D spend and deal-making activity.

R&D spend for Large Pharma companies as % of 2012 ethical sales.


Search Reports

Mentioned in this report:

  • - Abbott
  • - Actavis
  • - Allergan
  • - Almirall
  • - Amgen
  • - Astellas Pharma
  • - AstraZeneca
  • - Bayer
  • - Biogen Idec
  • - Boehringer Ingelheim
  • - Bristol-Myers Squibb
  • - Celgene
  • - Daiichi Sankyo
  • - Dainippon Sumitomo
  • - Eisai
  • - Elan
  • - Eli Lilly
  • - Endo Health Solutions
  • - Forest
  • - Gedeon Richter
  • - Gilead
  • - GlaxoSmithKline
  • - Ipsen
  • - Johnson & Johnson
  • - Kyowa Hakko Kirin
  • - Lundbeck
  • - Meda
  • - Merck & Co.
  • - Merck KGaA
  • - Mitsubishi Tanabe Pharma
  • - Novartis
  • - Novo Nordisk
  • - Ono
  • - Otsuka
  • - Pfizer
  • - Recordati
  • - Roche
  • - Sanofi
  • - Shionogi
  • - Shire
  • - Taisho
  • - Takeda
  • - Teva
  • - UCB
  • - Valeant
  • - Vertex
  • - Warner Chilcott
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