Pharma vs Biotech: FDA-Approval Rates

By bmartin on March 11, 2008 10:43 AM | | Comments (1)

Yesterday, industry chemist Derek Lowe (In the Pipeline) directed attention to a study in the latest issue of Nature Reviews Drug Discovery, which assessed drug-development approval and failure rates. This information relates directly to a recent mini-investigatory post here at the Pathophilia blog describing the success rates of phase 3 drug trials.

The article's authors (from Bear Stearns Health Innoventures [yeesh, hate the portmanteau]) present the FDA-approval and phase-3-failure rates of drugs during a 2-year period (from January 2006 to December 2007) for biotechs, pharma, biotech-pharma alliances, and pharma acquisitions as percentages of the total approvals and failures, respectively.

However, I agree with Lowe and find the numbers more informative when the data are sliced to examine the ratio of FDA approvals to phase 3 failures. Following Lowe's lead, I've manipulated the data a tiny bit further to provide the phase 3 success rates (meaning the percentage of phase 3 trials that lead to FDA approval) by industry type:

Source

Phase 3 Successes

Biotech (n = 113)

42%

Biotech–pharma (n = 34)

47%

Acquisitions/licenses by pharma (n = 4)

100%

Pharma (n = 41)

88%

Total (n = 192)

54%

In this respect, pharma alone clearly leads biotech* but doesn't seem to bring much to the party when partnering up. However, if you're thinking that pharma has advantages because it is less likely than biotech to submit approval applications for new chemical entities (NCEs), here's a surpising table showing the success rates for biotech, pharma, and their alliances, depending on approval type:

Source

Phase 3 Successes

NCE

 

   Biotech (n = 51)

18%

   Biotech–Pharma (n = 10)

50%

   Pharma (n = 21)

81%

Line extension

 

   Biotech (n = 27)

67%

   Biotech–Pharma (n = 13)

38%

   Pharma (n = 8)

100%

Me-too

 

   Biotech (n = 37)

54%

   Biotech–Pharma (n = 11)

55%

   Pharma (n = 16)

94%

Here, pharma maintains its solid lead in all approval categories and does appear to provide advantages to biotech with respect to the approval of NCEs; yet there's a definite disadvantage when biotech teams up with pharma for line extensions and no advantage for me-toos. These mixed approval results argue against pharma lending a more experienced hand to biotech when applying for approvals across the board. 

Another curious finding: biotech (as it is defined by the authors) seems to be trying a whole lot harder, with more than twice the number of late-phase trials as pharma in all approval types.

*The perfect batting average for pharma-acquired or -licensed drugs probably has a lot to do with the low n value (4) and the fact that pharma may be pretty good at picking winning molecules that are further along in development.

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1 Comments

Brendan said:

Do you have any idea what percentage of biotech companies get approved by the FDA each year? and where i could find data to support that?

July 4, 2008 9:36 PM

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