AstraZeneca rethinks its drug R&D process
Will the framework yield better results--and at what cost?
For many years, the pharmaceutical industry has estimated the average costs associated with developing a new drug to be around $1 billion, but that number may be outdated. In fact, after evaluating the 15-year research and development costs of 100 pharmaceutical companies, Forbes staff writer Matthew Harper estimates that the average cost of drug development is roughly $5 billion per drug.
Based on Harper’s analysis, it turns out that the more drugs a company launches, the higher the cost per drug. The median cost of launching three drugs is $4.2 billion per drug, compared with a cost of $5.3 billion per drug when launching four new drugs. However, each drug represents substantial upside.
AstraZeneca’s confidence, Pfizer’s prowess
In light of the recent discussion of a possible takeover of AstraZeneca by Pfizer, one issue that has come up is the need for AstraZeneca to successfully bring more drugs to market. To that point, one reason that AstraZeneca has cited for rejecting Pfizer’s offer is its confidence in its drug development pipeline. Based on the strength of its pipeline, AstraZeneca predicts revenues of $45 billion by 2023, up from $26 billion in 2013.
According to Harper’s analysis, in the last 10 years, AstraZeneca has spent $38.2 billion on R&D and launched four new drugs, at an average cost of $9.56 billion per drug. Compare that to Pfizer, which during the same time frame, has spent $77 billion on research and development and launched 10 new drugs, at an average cost of $7.77 billion per drug.
What Drives R&D Failure?
AstraZeneca is focused on improving their R&D success rate. In May 2014, an article examining the company’s small-molecule development efforts between 2005 and 2010 was published in Nature Reviews Drug Discovery. During that time, AstraZeneca had 142 active projects in phases ranging from the completion of clinical development to the end of clinical testing in Phase II. At the end of the 5-year period in question, 94 of the projects had closed, while 50 remained active.
Although phase I success rates were higher than overall industry standards during this period (59% versus 48%), they were lower during phase II (15% versus 29%) and phase III (60% versus 67%). All told, AstraZeneca’s success rate in bringing drugs to market between 2005 and 2010 was lower than the industry average (2% versus 6%).
Why were so many projects failing? The most important reason for failure in more than half of the cases was unacceptable safety, mainly in the form of organ toxicity. During phase 1, 62% of all failures were safety related. However, while failure due to safety is not unusual during the early stages of development, 35% of phase IIa projects failed and 12% of phase IIb projects failed---meaning that the projects had progressed to a point at which significant investments had already been made. The takeaway lesson here was that AstraZeneca’s R&D teams need to pay attention to safety signals at the preclinical phase and apply more robust criteria so that unsuitable candidates are not be as likely to progress through the development process.
The next highest cause of failure was lack of efficacy. A total of 65% of projects failed during phase II due to lack of efficacy, in many cases because of a poor understanding of the target. Researchers found that when there was greater confidence in target validation, especially with a genetic tie-in, projects were less likely to fail.
The researchers determined that “during every phase of early R&D, it is crucial for scientists and clinicians to gain an understanding of, and confidence in, the disease biology, the relationship of the target to the disease indication, and the proposed mechanism of action of a potential drug in the context of the right patient.”
A framework for success
Given the knowledge gleaned from large-scale analysis of their R&D productivity, AstraZeneca has adapted the 5R Framework, which focuses on ensuring that the following are part of the equation when developing a new molecule:
- Right target
- Right tissue
- Right safety
- Right patients
- Right commercial potential
Though implementation of this framework is started relatively recently, AstraZeneca continues to focus on maximizing its R&D spending and bringing more drugs to market---and working to make these drugs successful. The ability to do so will be one factor that may help this company retain its independence.