A recent biopharmaceutical industry analysis by David Thomas and Chad Wessel (Emerging Therapeutic Company Investment and Deal Trends, June 2015) reveals that for the past decade oncology garners more investment than any other disease. How much more? In the United States for example, oncology collected 26 percent of every U.S. venture, IPO, and follow-on public offering (FOPO) dollar. Globally, 27 percent of all acquisition and licensing deals over the past 10 years involve oncology. This is analogous to placing 25 cents out of every healthcare investment dollar on finding cures for cancer, while divvying up the remaining 75 cents on the 100,000+ other diseases. Does this ratio make sense? If we were investing our therapeutic development dollars according to one of the drivers most often expressed by biopharmaceutical industry executives (i.e., meeting unmet medical need), would or should oncology still be number one?
According to WHO’s most recent rankings of the world’s deadliest diseases, the top five (annual mortality estimates in millions) are coronary artery disease (CAD) (7.4M); stroke (6.7M); COPD (3.1M); lower respiratory infections (3.1M); and trachea, bronchus, and lung cancers (1.6M). If this is the reality, why then does cardiovascular (CV), get about a nickel of every world disease’s investment dollar? In fact, according to the BIO report, out of the past 10 years, 2014 was the absolute worst for CV in terms of both dollars and number of companies (only $52 million to 12 companies) for U.S. venture capital investment. Further, the report indicates that last year there were only three U.S. cardiovascular IPOs, four global CV licensing deals, and worldwide only one CV company acquisition. We know that 70 percent of our industry’s clinical pipeline is attributed to small, emerging company development. And while entrepreneurship 101 would advocate that the reason most small companies are formed is to fill a gap not being met, if CAD is the scourge and unmet medical need that the WHO says it is, then why is there a total of only 129 clinical CV programs being conducted among our industry’s innovation engine?
The CDC’s 2015 most recent estimates seem to dispute the WHO, noting that of the 14 million people who will be diagnosed with cancer annually, 8 million will die. It is this number, along with the fact that the category of oncology comprises some 100 different subtypes of cancers (many of which with causes that remain truly unknown) that seems to justify oncology’s definitive investment dominance. But does this really justify emerging company oncology clinical pipelines being tenfold greater (1,234 programs) than those for CV?
One of the biopharma buzzwords being used with increased frequency — “value” — often accompanies an industry spokesperson expressing the rationale behind their R&D programs as being driven by addressing an unmet medical need. I have heard executives express the desire to bring greater economic value to payers, add value to providers, and provide better value to patients. An April 2015 Motley Fool article suggests yet another value behind the cancer drugs that will be the biggest drivers of future pharmaceutical industry sales growth — profits. I don’t have a problem with this. After all, who wouldn’t be willing to pay for a cure for something like breast cancer? But the dominance of oncology investments makes you wonder if government and regulatory agencies need to reevaluate aligning drug development incentives with true unmet medical need. Though I understand the allure to invest in cancer cures, what “value” does that bring in a world where $3 out of every $4 spent on healthcare goes toward the treatment of chronic diseases (e.g., heart disease, diabetes), not oncology?