Externally sourced compounds are more likely to fail
Data from CMR International suggests that pharma in-licensing strategies must be improved in order to maximise return on investment from externally sourced innovation.
Analysis of CMR International R&D performance data investigates the "productivity crisis" facing pharma, providing important insight into in-licensing strategies. An extract of this analysis appeared in the Financial Times on 8th March 2010.
Companies across the pharmaceutical industry have sought to strengthen pipelines through licensing external innovation, with many top tier company pipelines now consisting of 20 to 50 per cent in-licensed products. Dependence on externally sourced compounds is likely to increase as R&D organizations become less internally focussed.
In light of this, we examined success rates derived from 2008 CMR pipeline data for the major company cohort (2008 R&D spend greater or equal to USD2billion), for self-originated and in-licensed active substances. For these major companies, in-licensed products are more likely to fail, in particular at phase III and submission. At phase III the success rate for self-originated compounds is 17 percentage points greater than for in-licensed compounds.
Companies clearly need to continue to look externally as well as internally for the most innovative science and promising therapies. Our results suggest, however, that externalization strategies are sub-optimal: major companies must continue to focus on improving due diligence and early development decision making in order to maximise return on investment from externally sourced innovation.
Further information
View the Financial Times article (free registration required)
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Additional information
View the Financial Times article (free registration required)