Despite some very notable successes, the global biotech industry has fallen short of expectations, failing to reduce the risk in developing new commercial medicines. To survive, PwC’s new Biotech Reinvented report says the industry must now adopt a more collaborative business model among biotechs and pharma companies.
Working together would help biotechs discover and develop new medicines faster, and in turn, would help to reduce costs. According to PwC research, given average development costs and lead times, a 5% increase in success rates for each phase transition and a 5% reduction in development times could cut R&D costs by about $160 million and accelerate market launch by nearly five months.
Recent years have seen the boundaries between biotech and pharma blur with more biotech companies positioning themselves as biopharmaceutical companies and a growing number of pharma companies making strategic investments in biotech. Despite this shift, however, the biotech industry is still struggling to produce cost-effective medicines that go to market quickly—a trend found both in Canada and globally.
“Based on our bi-annual Canadian Life Science Forecast, we know most Canadian stakeholders believe that collaborative networks will play a key role in the success of the industry’s future,” says Gord Jans, national pharmaceutical and life sciences leader, PwC. “To move to this model, the Canadian industry will need to overcome a reluctance in collaborating in key areas such as learning best practices, increasing innovation and accessing new skills or scarce talent.”
Moving to a more collaborative model requires significant changes to the industry’s business and investment models. Biotech and pharma organizations need to share knowledge that they have previously kept to themselves, be more willing to take risks, and work with third parties and assets that they don’t own. Investors will need to take a longer term view on rates of return and change the funding model since current poor rates of return have dried up many investments in the sector.
The report also found the global biotech industry is under increased pressure by governments that are struggling to meet the changing healthcare demands of their population. More effective and economical medicines are now more important than ever, so figuring out how the industry can work together is paramount.
“Although hurdles exist, there are significant rewards greater collaboration can bring to biotechs,” says Jans. “Those that adapt the quickest will have more chance of success in meeting the healthcare demands of today’s society.”
For more information or to download the full report, please visit [Editor’s note: the report is free but you must register]: www.pwc.com/biotechreinvented
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For further information:
Jessica Draker, PwC
Tel: 416 869 8723
email: [email protected]