The Biotech Boost
The ‘biotech boost’ came not simply a result of more rare diseases drugs. Orphans’ share of the approvals tally, at just over half the total, remained largely similar as in prior years. Instead, several of the year’s most prominent new drugs, in valuable disease areas, were sponsored by biotechs. Vertex’s latest cystic fibrosis combo Alyftrek (the “vanza triple”) is one of Evaluate’s top ten most valuable launches of 2024, with forecast annual 2030 sales of over $8 billion. (See Evaluate World Preview report). But far smaller, less established biotechs are also taking their assets to market alone.
The first treatment for metabolic dysfunction-associated steatohepatitis (MASH), a market forecast to reach almost $10 billion by 2030, came not from a Lilly or a Merck, but from 15-year-old Madrigal Pharmaceuticals, which is now marketing Rezdiffra (resmetirom) single-handedly. UK-founded Verona Pharma is, similarly, tackling the COPD market alone with its first marketed asset Ohtuvayre (ensifentrine). In schizophrenia, another giant unmet need, Karuna got Cobenfy (xanomeline-trospium) to regulatory submission in late 2023, just before BMS scooped up both asset and sponsor. (The above totals count Cobenfy as a Big Pharma asset.)
Other examples involve more conventionally niche products: IntraBio and Zevra Therapeutics, for instance, will market their respective new treatments for rare genetic disorder Niemann-Pick disease type C, approved weeks apart. Ionis Pharmaceuticals will launch freshly approved Tryngolza, the first treatment for a rare metabolic condition called familial chylomicronemia syndrome.
Partly because they can: biotechs in the winners’ camp - those with late-stage or approved assets – are attracting bigger funding rounds and can attract appropriate regulatory and commercial expertise. Meanwhile, all diseases – even big diseases - are becoming more narrowly defined by science and by spendthrift payers segmenting patients into smaller groups. Most capabilities – from sales forces to health technology assessment analysts and marketing campaigns - are now available to contract-in, and digital channels provide more accessible ways for even small drug sponsors to reach patients and physicians directly.
Still, some of these go-it-alone efforts may be short-lived. Analysts expect healthy M&A this year thanks to a supposedly more business-friendly environment under President Trump; sure enough, Johnson & Johnson in January announced its $14.6 billion acquisition of CNS-focused Intra-Cellular, complete with a marketed bipolar depression drug. Several Big Pharma still have patent expiry gaps to fill and are more sensitive to risk than to price. In other words, some of these new-to-market assets may be acquired.
Not all, though. Big Pharma’s love-affair with rare diseases is largely over; now the obsession is with blockbuster pipeline-in-a-product drugs. Those firms without a semaglutide (Ozempic/Wegovy), Darzalex (J&J), Skyrizi (AbbVie) want one. Few if any of 2024’s cohort meet the size mark.
The exception may be Madrigal’s MASH pioneer Rezdiffra. But this drug is just the opening shot in a field whose potential has yet to be realized. Buyers are waiting. MASH is challenging to diagnose - the early stages of liver damage are silent. And as awareness of the condition grows, the GLP-1 agonists threaten to swamp the market: Novo’s semaglutide and Lilly’s tirzepatide, with giant head-starts in diabetes and obesity, are, respectively, in late- and mid-stage MASH clinical trials. Meanwhile, other potentially more effective new mechanisms are reaching the finish line: 89Bio and Akero Therapeutics’ human fibroblast growth factor 21 (FGF-21) analogs, for instance. Viking Therapeutics is chasing Madrigal with another thyroid hormone beta receptor agonist.
The biotech dream of full-integration – to take the fruits of their R&D all the way to patients – is as old as the sector itself. And it raises lots of questions. Does going commercial blunt the R&D edge? Does churning out assets for licensing in fact generate better returns for biotech investors that fighting budget-tightening payers? We’ll be addressing some of these questions, and more besides, throughout the year.
Big Pharma’s love-affair with rare diseases is largely over; now the obsession is with blockbuster pipeline-in-a-product drugs.
