Report: Pharmaceutical companies to focus on first-in-class treatments to earn higher revenues and maximise growth options

23rd June 2016 (Last Updated June 23rd, 2016 18:30)

First-in-class treatments will dominate the pharmaceutical industry with more companies shifting focus towards developing novel products, says a report by GBI Research.

First-in-class treatments will dominate the pharmaceutical industry with more companies shifting focus towards developing novel products, says a report by GBI Research.

The cost of launching a novel drug is expected to reach $2.6bn by last year, leading pharmaceutical companies to perceive first-in-class treatments as a measure to capture the market and maximise revenues.

Titled 'Innovation Tracking Factbook 2016 - An Assessment of the Pharmaceutical Pipeline', the report details the various factors such as limited lifecycle of patented drugs and high research and development (R&D) costs that are shifting the focus towards the inclusion of first-in-class pipeline products in a pipeline portfolio. Pharmaceutical companies have to resort to decreasing product development costs, increasing annual product revenue and restricting the entry of generics in the market to deal with these factors.

A rise in the number of unsuccessful clinical trials, along with competition from comparator drugs in technology assessments, has led to the increase in the R&D costs in the industry. The growing awareness of payers has also contributed to this rise in cost as customers are now seeking more cost-effective drugs.

"When 2015 FDA approvals are analysed, first-in-class products have far higher average projected sales than non-first-in-class products, indicating that this trend is set to continue in the future."

A significant 37.9% of pharmaceutical pipeline products are represented by the 4,964 first-in-class products in their development phase with a disclosed molecular target. The programmes associated with innovative first-in-class products are of high risk and have yielded some of the most well known clinically and commercially successful products.

The report further states that the presence of 'me-too' drugs in the market has also proved to be successful as they possess a very similar structure to the established drugs. With a lower associated risk, these drugs provide an impetus for promising product developments.

GBI Research managing analyst Dominic Trewartha concludes: "Some of the most successful products of the previous ten years have been first-in-class therapies, including Avastin (bevacizumab), Rituxan (rituximab), Herceptin (trastuzumab) and Gleevec (imatinib). Additionally, when 2015 FDA approvals are analysed, first-in-class products have far higher average projected sales than non-first-in-class products, indicating that this trend is set to continue in the future.

"GBI Research believes that despite the high risks involved in developing first-in-class products, pharmaceutical companies stand to earn high rewards through innovative development strategies."