The challenges and obstacles to bringing novel drugs from the laboratory bench to the patient are immense, with inherent scientific risk and exorbitant capital expenditures. Recent reports from Pharma Intelligence suggest that the overall likelihood of achieving approval from Phase I for all developmental candidates over 2011-2020 was a mere 7.9%, and Phase II remains the largest hurdle in drug development, with just 28.9% of candidates proceeding to Phase III. Furthermore, development of a drug that will eventually reach the market often entails a decade or more of R&D expenditure at a cost ranging from $1bn to more than $2bn. These dynamics force pharmaceutical and biotechnology companies to seek inorganic growth in an effort to rein in cost and risk, as well as replenish their pipelines by gaining access to innovation.
About The Authors
Nicholas M. Frame, PhD, is senior associate and Oded Ben-Joseph, PhD, is managing director at Outcome Capital LLC, 99 High Str., Suite 2900, Boston MA. Outcome Capital, a specialized life sciences advisory and investment banking group, monitors the market dynamics and transactional activity in the biopharma industry.
Emerging drug companies (annual revenues of < $500m) now account for more than 70% of the nearly 3,000 drugs in...
