In-Licensing in Pharma
INDEX
Introduction…………………………………………………………………….2
The development of a qualitative model Rationale………………………………………………………………8 The qualitative model………………………………………………...9 Strategic fit……………………………………………………………11 Market definition…………………………………………………….12 Customer definition…………………………………………………14 Product opportunity…………………………………………………15
Summary…………………………………………………………………….22
Bibliography…………………………………………………………………23
1
INTRODUCTION
The process of bringing a new drug to market is an extremely expensive one, often costing above $200 million. This enormous cost can be explained by the fact that a very small fraction of molecules in research and development ultimately become pharmaceutical products. However, the rewards of a successful new product can be tremendous generating, depending on the therapeutic areas in which the product will be used and the disease it will directed to, from millions to billions of dollars of sales annually worldwide. Many pharmaceutical companies are facing a pipeline gap because of the increasing economic burden and uncertainty associated with internal research and development programs designed to develop new pharmaceutical products. The need for large pharmaceutical companies to constantly replenish the supply of potential blockbusters requires a consistent and dedicated approach to drug R&D. However no longer is inhouse research expertise sufficient.
2
Chart 1 Decreased R&D Productivity (source: FDA - PhRMA 2007)
Pharma R&D Investments (Billion USD) 120
New medicines Approved by FDA
60
100
50
80
40
60
30
40
20
20
10
0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YEAR
0
To fill this pipeline gap, pharmaceutical companies are increasingly relying on in-licensing opportunities. Business development and licensing department identifies new pharmaceuticals that satisfy unmet needs and are a good strategic fit for the company, completes valuation models and forecasts,
Introduction…………………………………………………………………….2
The development of a qualitative model Rationale………………………………………………………………8 The qualitative model………………………………………………...9 Strategic fit……………………………………………………………11 Market definition…………………………………………………….12 Customer definition…………………………………………………14 Product opportunity…………………………………………………15
Summary…………………………………………………………………….22
Bibliography…………………………………………………………………23
1
INTRODUCTION
The process of bringing a new drug to market is an extremely expensive one, often costing above $200 million. This enormous cost can be explained by the fact that a very small fraction of molecules in research and development ultimately become pharmaceutical products. However, the rewards of a successful new product can be tremendous generating, depending on the therapeutic areas in which the product will be used and the disease it will directed to, from millions to billions of dollars of sales annually worldwide. Many pharmaceutical companies are facing a pipeline gap because of the increasing economic burden and uncertainty associated with internal research and development programs designed to develop new pharmaceutical products. The need for large pharmaceutical companies to constantly replenish the supply of potential blockbusters requires a consistent and dedicated approach to drug R&D. However no longer is inhouse research expertise sufficient.
2
Chart 1 Decreased R&D Productivity (source: FDA - PhRMA 2007)
Pharma R&D Investments (Billion USD) 120
New medicines Approved by FDA
60
100
50
80
40
60
30
40
20
20
10
0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YEAR
0
To fill this pipeline gap, pharmaceutical companies are increasingly relying on in-licensing opportunities. Business development and licensing department identifies new pharmaceuticals that satisfy unmet needs and are a good strategic fit for the company, completes valuation models and forecasts,
Bibliography: 2 Chart 1 Decreased R&D Productivity (source: FDA - PhRMA 2007)