The biotechnology and pharmaceutical landscape has faced unprecedented disruption in the last five years, and the future remains uncertain. Shifting global currents have transformed how advantages for biotechs are distributed between different regions, with the Asia-Pacific (APAC) region presenting unique opportunities for growth. In an ever-changing environment, companies that can identify today’s biggest opportunities can unlock previously untapped potential.
A recent study by GlobalData, in partnership with Asia-Pacific biotech specialist CRO Novotech, presents an in-depth analysis of the global biotech and pharma landscape over the past five years, a period which includes the impact of the COVID-19 pandemic. The paper also considers the future outlook, accounting for geopolitical disruption. Across a number of metrics, the Asia-Pacific (APAC) region emerges as a unique proposition for clinical investment and growth. We examine the key trends the analysis reveals.
Trend 1: Global growth
Since 2017, clinical trials have grown globally at a compound annual growth rate (CAGR) of 5.3%, with almost 27,000 trials initiated across the world in 2021. Biotechs and pharma companies are working to develop more treatments for growing patient numbers and an ageing global population.
APAC has been a hub of this growth, with a regional year-on-year growth rate of 9.8% between 2017 and 2020, and a pre-COVID rate of 12.1%. It outstrips Europe, the second fastest growing, with a growth of 2.9% over five years.
Trend 2: Early-stage trials
Early-stage clinical trials provide initial data on how a treatment works in a population. Over the five-year period, Phase II clinical trials accounted for the majority of growth in APAC, the US and the EU.
APAC has dominated the early-stage trial landscape overall, spearheading some of the newest innovations. About 60% of the Phase I trials initiated in H1 of 2022 were found in APAC. Of Phase II trials, 50% were initiated in APAC, 18% in the US and 20% in the EU. APAC also accounts for 36% of Phase III trials.
Trend 3: Multinational trials
Conducting a trial across different countries means reaching more diverse populations, and can provide a range of benefits for sites, sponsors and patients alike. It also presents barriers, including regulatory burdens.
In Western markets, the majority of Phase III trials are multinational, with 66% of Phase III US trials having sites in other countries in 2021. In APAC and the rest of the world, only 29% of Phase III trials were multinational trials.
As the number of clinical trials in APAC increases, multi-country trials are growing slowly compared to single-country trials. This may be driven by the Chinese market, since Chinese multi-country trials have grown by 68% since 2017, while single-country trials have surged by 128%. The fact that APAC currently has a strong domestic skew creates opportunities for biotechs to drive growth in multinational trials.
Trend 4: Macro currents
Biotech investment may be under threat in the coming years. An impending recession, driven in part by geopolitical instability, is forecast by some economists. During the last global recession in 2008, the equity value of biotech offerings decreased by 62%. An equivalent loss in 2023 would represent USD 100bn in lost equity offering. The good news is that biotech has historically performed better than other industries during economic crises so may be largely insulated from the effects of a recession.
In the US, the Inflation Reduction Act, implemented in August 2022, may further disincentivise future biotech and pharma innovation. By restructuring Medicare drug coverage and giving the government the ability to negotiate certain drug prices, the University of Chicago anticipates that the Act would cause a 18.5% reduction in R&D funding through 2039, leading to 135 fewer drugs reaching market and ultimately 331.5 million years of life lost.
Trend 5: Trial site saturation
Trial site density is a vital metric for clinical developers as it indicates the scope of opportunity available in any geography. In the US, there are 29.5 trial sites per million population, in the EU there are 22.2, and in APAC 3.1. This indicates enormous growth capacity in APAC.
When growth figures and trial site density are considered side by side, APAC outperforms the US, the EU and the rest of the world. This region is home to a mostly treatment naïve, urbanised population, and figures show that the market is still largely untapped. Many APAC countries have been historically supportive of biotech R&D, with continued investment by the Chinese government and incentive schemes in Australia.
APAC has the potential to be the site of next-generation clinical techniques and more trials than ever, becoming the primary trial hub of the future.