R&D in 2023 sees focus return to oncology

After the rush of research to find solutions to the pandemic, a recent report has found that pharma R&D has returned to its usual rhythms. Ben Hargreaves outlines that, as well as oncology, there has been a surge of investment into AI and a rush of clinical trials into weight loss treatments.

The R&D landscape of the pharmaceutical industry was turned upside down by the events of the pandemic. Suddenly, the priority was to develop COVID-19 vaccines and treatments as rapidly as possible. Clinical trials themselves had to be adapted to maintain pipeline development, which saw an increase in decentralised trials, but also a fall in non-COVID-19 related trials in Europe and the US. Overall, R&D expenditure hit record levels, as the industry raced to develop solutions.

Like many aspects of normal life, the uncertainty that marked this period has now tapered off, and the industry’s focus shifted to new areas of research. IQVIA recently published its annual breakdown of R&D trends during 2023, which paints a picture of an industry adapting to some of the major breakout treatment areas in the industry, such as weight loss treatments, and to those from outside, like increased investment into AI. The major focus of R&D has, unsurprisingly, swung away from COVID-19 and back into the dominant area for research over the last decade – oncology.

Back to normal

The major takeaway from IQVIA’s report is that the R&D activity of the industry has returned to levels seen before the pandemic. This was seen across various metrics assessed by the report’s authors. Biopharma R&D funding rose to $72 billion, after falling in 2022 to $61 billion and record highs during the 2020-2021 pandemic years. M&A activity increased substantially to $140 billion, which represented a jump from $78 billion in 2022, and marked a move towards the higher levels seen prior to the pandemic.

Clinical trial activity also returned towards the baseline set before the pandemic, as the rush of trial starts sparked by the need to find treatments and vaccines faded; clinical trial starts declined by 15% in 2023 compared to the previous year. The top disease areas covered by these trials were oncology, immunology, metabolic/endocrinology, and neurology – cumulatively representing 79% of all trial starts.

Similar signs were seen in new drug approvals and launches, with a total of 69 novel active substances launched in 2023. This was an increase of six from the prior year and represented a return to levels seen before COVID-19. Geographically, there was a disparity between launches seen in the US and other regions. In the US, there were 267 products launched; China was the second largest region for launches with 192, followed by the EU, combined with the UK, at 182.

One area of success that the report authors noted was the rise in clinical development productivity, which was seen to rise from historic lows in 2018 to record highs in 2023. This was attributed to an increase in ‘success rate’ – trials with positive outcomes with endpoints met – that rose to 10.8% in 2023. Productivity was also increased as trial durations were found to have declined.

Cancer remains in sights

Oncology has long been the focus area for R&D and investment for the pharma industry due to the return on investment possible, with this being particularly the case for the new wave of precision medicine. This is reflected in the investments pharma companies were prepared to spend on bolstering oncology pipelines; of the ‘leading’ (greater than $2 billion in value) M&A deals in 2023, 55% of the value was taken up by purchases for oncology assets. A good proportion of this was contributed by Pfizer’s acquisition of Seagen, but the total value of just 12 of the largest deals was $109.6 billion.

A major trend for 2023 was the emergence of antibody-drug conjugates (ADCs) as the investment focus for big pharma. Six of these 12 deals were focused on this therapeutic class, including the top four most valuable deals. One of which was not even a buyout, but a collaboration agreement for three ADC drug candidates, which was agreed between Merck and Daiichi Sankyo. Already in 2024, there are signs that this shift in focus towards ADC buyouts will continue, as Johnson & Johnson also moved to acquire Ambrx Biopharma.

This focus on ADCs is part of a broader movement, with the report finding that there was a greater shift towards investing in R&D on such novel oncology mechanisms, also including multi-specific antibodies, and cell and gene therapies. As a result, clinical trials investigating these next-generation therapeutics make up 25% of oncology trials. Cell and gene therapies trials alone have tripled over the last decade, with CAR-T therapies making up 39% of trials in the area.

Growing interest in AI

An area that applies to the pharma industry, but which has also become a major part of public discourse, is the ability of AI to disrupt the way many industries work. AI in pharma has often been discussed as having the potential to transform the R&D process – making it more efficient and less costly.

However, few success stories have emerged from the hype, which had made spending in the area hesitant. This seems to have changed in 2023, as IQVIA’s report found that life sciences deals with AI, machine learning, or advanced analytics at their centre had more than doubled compared to previous years. In 2023, nearly $13 billion was invested in the area, significantly more than the $5.3 billion seen in 2022. For scale, 2023’s spend was also nine times higher than in 2019, reflecting the rapidly growing interest in the area.

As yet, there have been no approved treatments developed by AI, but the number of assets created using the technology moving through trials is increasing all the time. Due to the emergence of a greater number of AI-developed drugs, the FDA put out a statement on its plans to adopt a ‘flexible risk-based regulatory framework’. It also noted that it had received more than 100 submissions in 2021 alone for drug applications that used AI or machine learning.

Weight loss revolution

Another major breakthrough for 2023 was the emergence of a class of weight loss treatments, from Novo Nordisk and Eli Lilly. Both the companies’ treatments managed to generate huge revenues and this has sparked something of an arms race for obesity assets.

This was reflected in IQVIA’s report, with the authors noting that obesity-focused clinical trials were up by 68% in 2023 on just the previous year alone. The main focus of the pipeline is centred on GIP/GLP glucagon receptor agonists, such as the treatment currently approved, with this representing 35% of drugs in development. In a sign of the push for the next generation of weight loss treatments, 46% of the drugs being developed are potential oral treatments. With a potential $60 billion in sales from such treatments expected in the next decade, it is likely that future years will see a continued growth of R&D investment in the area.