Research and Development Costs of New Drugs

Dominguez, Luis W.; Willis, Justin

doi:10.1001/jama.2020.8645

Cited by 6 publications

(6 citation statements)

References 3 publications

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“…Drug development has traditionally been a time-consuming, intricate and capital-intensive process [ 1 ]. Taking a drug from discovery to market often spans over a decade and requires billions of dollar in investments [ 2 ]. This complex journey is significantly hampered by inefficiencies in primary screening, the intricacies of biological tests and the unpredictability of clinical trials [ 3 ].…”

Section: Introductionmentioning

confidence: 99%

Attention is all you need: utilizing attention in AI-enabled drug discovery

Zhang,

Liu,

Liu

et al. 2023

Briefings in Bioinformatics

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Recently, attention mechanism and derived models have gained significant traction in drug development due to their outstanding performance and interpretability in handling complex data structures. This review offers an in-depth exploration of the principles underlying attention-based models and their advantages in drug discovery. We further elaborate on their applications in various aspects of drug development, from molecular screening and target binding to property prediction and molecule generation. Finally, we discuss the current challenges faced in the application of attention mechanisms and Artificial Intelligence technologies, including data quality, model interpretability and computational resource constraints, along with future directions for research. Given the accelerating pace of technological advancement, we believe that attention-based models will have an increasingly prominent role in future drug discovery. We anticipate that these models will usher in revolutionary breakthroughs in the pharmaceutical domain, significantly accelerating the pace of drug development.

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Section: Introductionmentioning

confidence: 99%

Attention is all you need: utilizing attention in AI-enabled drug discovery

Zhang,

Liu,

Liu

et al. 2023

Briefings in Bioinformatics

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“…However, more than half of new drug approvals are developed externally by start-ups or research institutes [ 1 ]. While previously published literature focuses on the costs and timelines of the internal research and development (R&D) process [ 2 ], in this article, we concentrate on the dynamics of the external drug development process.…”

Section: Introductionmentioning

confidence: 99%

Valuation and Returns of Drug Development Companies: Lessons for Bioentrepreneurs and Investors

Michaeli

Yagmur

Achmadeev

et al. 2022

Ther Innov Regul Sci

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Objectives This study evaluates the association of Biopharma company valuation with the lead drug’s development stage, orphan status, number of indications, and disease area. We also estimated annual returns Bioentrepreneurs and investors can expect from founding and investing in drug development ventures. Methods SDC Thomson Reuter and S&P Capital IQ were screened for majority acquisitions of US and EU Biopharma companies developing new molecular entities for prescription use (SIC code: 2834). Acquisition data were complemented with drug characteristics extracted from clinicaltrials.gov, the US Food and Drug Administration (FDA), and deal announcements. Thereafter, company valuations were combined with previously published clinical development periods alongside orphan-, indication-, and disease-specific success rates to estimate annual returns for investments in drug developing companies. Results Based on a sample of 311 Biopharma acquisitions from 2005 to 2020, companies developing orphan, multi-indication, and oncology drugs were valued significantly higher than their peers during later development stages (p < 0.05). We also estimated significantly higher returns for shareholders of companies with orphan relative to non-orphan-designated lead drugs from Phase 1 to FDA approval (46% vs. 12%, p < 0.001). Drugs developed across multiple indications also provided higher returns than single-indication agents from Pre-Clinic to FDA approval (21% vs. 11%, p < 0.001). Returns for oncology drugs exceeded other disease areas (26% vs. 8%, p < 0.001). Conclusions Clinical and economic conditions surrounding orphan-designated drugs translate to a favorable financial risk-return profile for Bioentrepreneurs and investors. Bioentrepreneurs must be aware of the upside real option value their multi-indication drug could offer when negotiating acquisition or licensing agreements.

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“…Rising drug prices recently sparked controversy about high profit margins of pharmaceutical companies [1,2]. Crucial to this dispute are the costs associated with developing new drugs [3]. While scholars previously estimated research and development (R&D) costs of the internal drug development process [4][5][6], little is known about the value and costs associated with externally developed therapeutics [7].…”

Section: Introductionmentioning

confidence: 99%

Value drivers of development stage biopharma companies

et al. 2022

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Objective Scholars previously estimated research and development (R&D) costs of the internal drug development process. However, little is known about the costs and value arising from externally acquired therapeutics. This study identifies and estimates the magnitude of factors associated with Biopharma acquisition value. Methods SDC Thomson Reuter and S&P Capital IQ were screened for majority acquisitions of US and EU Biopharma companies developing new molecular entities for prescription use (SIC code: 2834) from 2005 to 2020. Financial acquisition data were complemented with variables characterizing the target’s product portfolio extracted from clinicaltrials.gov, Drugs@FDA database, US SEC filings, and transaction announcements. A multivariate regression assesses the association of firm value with extracted variables. Results 311 acquisitions of companies developing prescription drugs were identified over the study period. Acquirers paid 37% (p < 0.05) more for companies with biologics and gene therapeutics than small-molecule lead drugs. Multi-indication products were acquired for a 12% premium per additional indication (p < 0.01). No significant valuation difference between companies developing orphan and non-orphan designated lead products was observed (18%, p = 0.223). Acquisition value positively correlated with the total number of further products, headquarter location in the US, underlying market conditions, and acquirer market capitalization (p < 0.05). Conclusions Internal and external drug development consumes many financial and human resources, yet it is important for entrepreneurs, regulators, and payers to understand their precise magnitude and value drivers. This information permits the design of targeted pricing and industrial policies that incentivize the development of novel drugs in areas with high unmet needs.

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Research and Development Costs of New Drugs

Cited by 6 publications

References 3 publications

Attention is all you need: utilizing attention in AI-enabled drug discovery

Attention is all you need: utilizing attention in AI-enabled drug discovery

Valuation and Returns of Drug Development Companies: Lessons for Bioentrepreneurs and Investors

Value drivers of development stage biopharma companies

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