Mergers & Acquisitions: what are the current key trends for the pharmaceutical industry? – KP


2014 was spectacular and fascinating with a lot of deals… What’s next?

Tremendous amount of reports have been produced (some of them, a selection from the bests, are at the bottom of this post). Rumors are sometimes saying it’s the end on Monday, it’s just the beginning on Tuesday and sky is the limit on Wednesday…

Internet serendipity is great! Indeed, I came across a very interesting website offering free reports on the pharmaceutical industry: Kurmann Partners. Just have a look! They are M&A consultants for several industries (I do not work for or is paid by them).

They put online another useful tool which will be a good starting point to look at M&A multiples: a visualization tool offering several types of charts to monitor the M&A activity over the years from different standpoints and for private companies: Multiples. Below is an example of a chart you could find.


2015 – What happened up to now and what’s ahead?

The trend seems here to stay as there is still a need to replenish pipelines and build a competitive advantage in specific therapeutic areas. I suppose that some domains will attract more buyers than others like immuno-oncology (a very hot topic today), antibiotics (as the governements are trying to incentivize companies). More generally, all therapies that could stand out from the crowd by being innovative (and not “me-too“-improved version of already existing drugs) will attract opportunity hunters.


Additional resources:

2015 Global life sciences Outlook – 2015 – Deloitte – Starting on page 8, you have a overview of the deals that happened in 2014 and some thoughts on what could happen next

Royalty Rates and Deal Making Survey – 2015 – IMS – This short report gives a very good overview of a large survey (that can be bought) realized by IMS on royalty rates and deals during the first months of 2015. Access it here: 2015_RoyaltyRateDealmakingSurveyOverview

Global M&A report – Pharma/Biotech 2015 – 2015 – IMAP

Firepower fireworks drive record M&A in 2014. What’s ahead for 2015? – 2015 – Ernst & Young

HBM Pharma/Biotech M&A Report 2014 – 2015 – HBM Bioventures – It is a very interesting overview with a perfect coverage of the topic, from an global overview to some detailled analysis of the deals done by public as well as private companies. It is a MUST-HAVE.


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None Better than One? (A Brief Note on VC in Smaller Hubs)

The Next Element

Biotech venture funding metrics continue at historic highs, highlighting that the robust financing environment in the public markets continues to fuel the private markets as well.

 – Bruce Booth, partner Atlas Venture in Data Snapshot: Venture-Backed Biotech Financing Riding High, April 2015

Here in Madison, Wisconsin, you might not know that was true if you didn’t read the news. The equity funding environment in smaller hubs (e.g. Madison) is different that in major centers of biotech (e.g. Boston, San Francisco). There are both old and new dynamics that make building the next big thing (quickly) a significant challenge outside the coasts. Today I wanted to look at one of the old dynamics that remains true today.

When out looking for venture funding, one of the early questions a biotech company located in a smaller hub will get is about their local VC – are they in on the deal?…

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The $2.6 Billion Pill — What’s behind this number – NEJM


Scrutinizing the numbers

Experts are putting into question the number released as well as the methodology used by researchers at the Tufts Center for the Study of Drug Development. Actually the Tufts announced last November it had calculated the cost of developing a new drug: USD 2.6 billion.

Jerry Avorn is not the first person suspicious about this figure. Several years ago in BioSocieties, the journal of the London School of Economics and Political Science, Donald Light and Rebecca Warburton dissected the high costs of drug development in an article: “Demythologizing the high costs of pharmaceutical research“.

Along the same line of thought, Jerry Avorn is making some thought-provoking points about the Tufts number in a NEJM Perspective article. I summarized them below:

limited analysis to “10 unnamed drug makers provided on 106 unnamed investigational compounds that they had self-originated.”

transparency issue: “numbers on which the analysis is based are not available for transparent review.”

capital costs were not updated to take into account the current interest rates: “capital costs were assessed at 10.6% per year, compounded — despite the fact that bonds issued by drug companies often pay only 1 to 5%.”

lack of consideration for “large public subsidies provided to pharmaceutical companies in the form of research-and-development tax credits or substantial payments received from the federal government for pediatric clinical activities.”

no acknowledgment for “drug-development costs borne by the public for the large number of medications that are based on external research that elucidated the disease mechanisms they address.”

opportunism by industry players as “some of the most important recent new medications were not developed by large drug manufacturers but were acquired through purchase of the biotech firms that discovered them. These, in turn, are often spinoffs based on the discoveries of NIH-funded university research laboratories.”

Beyond these methodological issues, there are two interesting points taken from the Tufts analysis:

1. The time to get the regulatory green light has been shortened allowing drugs to be quickly available for marketing (theoretically because market access hurdles remain).

2. “The most expensive weakest link points to the limits of companies’ ability to efficiently choose compounds for development and to identify adverse effects or limited efficacy earlier in the development process”. There is a clear need for better productivity processes and improved decision-making at the core of Big Pharma R&D centers.


Jerry Avorn is asking for more transparency and accuracy in the determination of the costs linked to the development of a new drug as it will lead to a better understanding on what are the key drivers and what could be done to support the most useful R&D efforts.

This will definitely help the society to contain healthcare costs and give patients a real value added as well as improved outcomes.


NEJM Article (free)

Biosocieties Article (free)


More resources on Drug Development Costs

The Real Cost of “High-Priced” Drugs – 2014 – Harvard Business Review

The Ugly Cost Of Developing New Drugs — Can We Make It Prettier? – 2014 – Forbes

Does it really cost $2.6 billion to develop a new drug? – 2014 – Washington Post

The Cost Of Creating A New Drug Now $5 Billion, Pushing Big Pharma To Change – 2013 – Forbes



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A first big step toward mapping the human brain – Wired


The human brain has always been a secret black box but it could change…

Understanding the human brain is close to reach a first milestone: DATABASE. “When it’s complete, the database will be the first in the world to collect information from individual cells along four basic but crucial variables: cell shape, gene expression, position in the brain, and electrical activity.” (Wired Article quote)

Several institutions are working to increase the knowledge about our most important organ: Human Brain Project (Europe), BRAIN Initiative (US).

“The big plan is to try to understand how the brain works,” says Lydia Ng, director of technology for the database. “Cell types are one of the building blocks of the brain, and by making a big model of how they’re put together, we can understand all the activity that goes into perceiving something and creating an action based on that perception.” (Wired Article quote)

We are just at the beginning of a fascinating journey in our brain. Up to now, researchers only have been able to have a big picture about the functioning of the cells together. It is still unclear how billions of neurons act together resulting in patterns of behavior and activation.

Wired Article

More on human brain research:

TED Videos on Brain – From brain plasticity to the understanding of consciousnes through the paradox of choice among others… Intriguing topics around the brain!

Brain Basics: Know Your Brain – 2015

Human Brain: Facts, Anatomy & Mapping Project – 2015

Brain & Nervous System Health Center – WebMD – 2014

8 Things We Simply Don’t Understand About the Human Brain – io9

Introduction: The Human Brain – 2006


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Defining Digital Medicine – Nature Biotechnology

Notes from the AppsWorld Europe 2013 panel "The Internet of Things Revolution - Functional, Usable, Wearable" with Tamara Roukaerts, Saverio Romeo, Paul Lee, Ben Moir and Mike Barlow.

Notes from the AppsWorld Europe 2013 panel “The Internet of Things Revolution – Functional, Usable, Wearable” with Tamara Roukaerts, Saverio Romeo, Paul Lee, Ben Moir and Mike Barlow.

Healthcare transformation ahead

In this excellent article from Nature Biotechnology written by people at PureTech, we have the chance to get an overview of this new exciting field: Digital Medicine.

This convergence of technology and health will lead to several transformations: disease management, research, clinical trials, medical practice,… A new era is beginning!

However, opportunities are doubled by challenges. We need to tackle the lasts to profit from the firsts.


Why do we use digital medicine instead of digital health? According to the authors, digital health is too broad as it also includes apps and products not medically validated but simply focused to enhance people’s wellness and wellbeing.

Digital medicine is defined by “technology and products that are undergoing rigorous clinical validation and/or that ultimately will have a direct impact on diagnosing, preventing, monitoring or treating a disease, condition or syndrome.” (quote from the article p. 457)

Digital medicine themes

1. Continuous and remote monitoring. A tool to detect disease earlier leading to lower healthcare costs.

2. Digital phenotype. A additional layer of information enabling the construction of more accurate disease models in order to better understand them.

3. Remote disease management. Chronic disease management will be nearly effortless and the lack of data gap will allow doctors to improve their medical follow-up of patients.

4. The connected patient. The empowered patient. The engaged and sharing patient. Communities of patients.

5. Interpreting the data torrent. The challenge of integrating large and heterogenous datasets could be solved one day with powerful algorithms and machine Learning.

6. Security and privacy. The obtention of the patient’s consent is crucial and should be much simpler than today.

7. Opportunities and challenges. Increased scientific evidence but reimbursement issues, new field of research based on wearables, changes to patient-doctor interactions, integration of patient-specific data by the doctor.


Digital medicine is unavoidable and doctors will have to integrate this trend in order to optimize their relationships with their patients by empowering them and maintaining a two-way discussion toward a unique goal: better patient outcomes.

Nature Biotechnology Article (free)

More on Digital Medicine

Have a look at my posts on this topic.

Why Digital Health Has Not (Yet) Transformed Pharmaceutical Drug Development – 2015 – Forbes

Rock Health Founder On The Future Of Digital Medicine – 2015 – TechCrunch (Video)

Top 20 Technologies that Will Change our Lives: Next Up – Digital Medicine – 2014 – Forbes

How Digital Medicine Will Soon Save Your Life – 2014 – WSJ

Medicine goes digital – 2009 – The Economist

Digital Medicine – Implication for Healthcare Leaders – 2003 – (a nice document from 2003, projecting the reader in 2013… with futuristic visions sometimes…)

What is digital medicine? – 2002 – D. W. Shaffer (the first article on the subject)


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What if we prescribed video games, and not Ritalin, to treat ADHD? – Medium


How digital games can inspire and motivate children — and result in better learning outcomes

An extremely interesting article on gaming and its impact on children learning skills will maybe lead to the prescription of game sessions in the treatment of psychological ailments.

We are entering in an emerging field called therapeutic neurogaming.

“It’s built on two basic ideas: First, that the brain is “plastic” for far longer than scientists once believed, so healing can be achieved in schoolchildren of all ages without drugs, through basic neurofeedback therapy. Second, that therapy doesn’t just happen — it requires work and patience and a regular dose of practice.” (Quote from Medium Article)

I’m a strong believer that games will be fully part of our lives and not only part of our hobbies in the near future.

Three years ago I read a book written by Jane McGonigal, an expert in gaming and gamification: Reality is broken. I have only one word: brilliant. She walks you through the gaming universe explaining you all the type of games and how they can be used to improve life, well-being, relationships,… She is about to publish another book in September 2015: SuperBetter: A Revolutionary Approach to Getting Stronger, Happier, Braver and More Resilient–Powered by the Science of Games. I’m really looking forward to it.

It is a real trend we have to count on. The nice fact: it is not a boring trend… it is fun!! and there is probably more to come!!

Medium Article

More on the benefits of gaming:

The Game Believes in You: How Digital Play Can Make Our Kids Smarter – 2015 – Greg Toppo

Cognitive Benefits of Playing Video Games – 2015 – Psychology Today

The Benefits of Playing Video Games – 2014 – American Psychologist

The DeanBeat: Neurogaming is a nascent market fueled by brain games and sensors – 2013 – Venture Beat

Reality Is Broken: Why Games Make Us Better and How They Can Change the World – 2011 – Jane McGonigal + her TED Talk

Gamification to improve our world – 2011 – Yu Kai Chu – TEDxLausanne

Companies or Institutions developing therapeutic neurogaming:

Gazzaley Lab (Neuroracer)

Akili Interactive Lab (Project: EVO)

PlayNice Institute (MindLight)

PuzzleBox (Orbit Helicopter)

Emotiv (EEG for game control)


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Obesity as a “Brain Disease”, a Driver for New Therapies – Medscape


We all know that obesity is an unstoppable epidemic of this century. New analysis of this disease could maybe lead to solutions

Obesity is not only an issue in itself; it drives the emergence of other diseases, like cancer for example. Obesity is a complex multifactorial disease that should actually be viewed as a brain disease, bariatric surgeon Carel Le Roux, MBChB, PhD, of University College Dublin, Ireland, argues.

Saying obesity is a brain disease could allow us to better understand it and help us develop new treatments with this paradigm shift.

External factors (stress, sleep deprivation, depression,…) and internal factors (hormone levels and disruptions) could have their say in obesity. Each individual will have different factors influencing his/her condition as well as different reactions to the treaments prescribed. A personalized approach is crucial in this disease.

Beyond treatment, prevention is equally important. More should be done in collaboration with food producers and agribusinesses.

Medscape Article

More on obesity:

Impact of the Obesity Epidemic on Cancer – 2015 – Annual Review of Médicine (subscription required)

Ending Childhood Obesity – 2015 – WHO

USA – The State of Obesity – 2014 – Trust for America’s Health


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Blood: Underappreciated Resource in the Health/Disease? – The Next Element


Very well written and insightful post about the use of blood in medicine. Worth a look!

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The Next Element

Alternative title: Pitching a VC on Disruption of Blood Testing

You may have seen some recent editorials about the necessary frequency of blood tests for healthy individuals, many of them prompted by a series of tweets from Mark Cuban:

MarkCubanTwitter BloodTests

Although there are certainly potential dangers in expecting any and all test results to be immediately informative and/or actionable, there are benefits in disrupting the status quo of how and when we collect information. A potential parallel is the “wearables” market, which has seeped from the “enthusiasts” (so-called quantified self-ers) to being used in trials of new drugs as well as disease research.

Blood Testing: Cost

One significant area of potential benefit to increased attention is cost. Generally when your physician prescribes a drug, you are asked what pharmacy to send the prescription. When told to get blood tests or imaging services, patients (in my experience) are sent to the affiliated…

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How can we improve patient access to experimental drugs? – WSJ


New approaches are needed for terminally-ill patients

In this article published in the Wall Street Journal by J. D. Rockoff a very important issue is raised: how can we give some hope to terminally-ill patients that could benefit from unregistered experimental drugs?

Johnson & Johnson has found a way with the set-up of an independent panel which will review requests from seriously ill patients. A committee of doctors, bioethicists and patient representatives will be organized and managed by the New York University School of Medicine in order to give a quick and relevant answer to all these requests.

The current law prohibits companies to give out unapproved drugs but the FDA has a “compassionate use” exception where companies can give medicines to patients with serious conditions and who are not participating in clinical trials. Over 1’800 requests reached the FDA in 2014.


From the article: “Amrit Ray, chief medical officer of J&J’s Janssen pharmaceuticals unit, said “the setup should be easier for patients because the company is establishing a single website and toll-free hotline for requests, rather than the current patchwork of entry points across the company and its drug trials”. Dr. Ray expects the committee could issue recommendations within days for urgent requests.”

WSJ Article


More on compassionate use and programs:

FDA Expanded Access Program

Compassionate use of medicinal products in Europe: current status and perspectives

Compassionate use of medicines in the European Union

Navigating the landscape of compassionate use (how to manage expanded access from an industry point of view)

Expanded access programmes: patient interests versus clinical trial integrity – 2015 – The Lancet Oncology (subscription required)

From 100 Hours to 1: FDA Dramatically Simplifies its Compassionate Use Process – 2015 – RAPS


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Global Oncology Trend Report 2015 – IMS Institute for Healthcare Informatics


A must-have in oncology market analysis

A new report has been published by IMS Institute for Healthcare Informatics about trends in oncology.

It is really informative (stats, charts, visuals…) and insightful. An outstanding overview of what are the main trends (biomarkers, complexity…), the challenges (financial burden, expenditures…) and the opportunities (improved survival, new approaches…) in oncology today.

Key points

biomarkers are more widely used in treatment selection, especially for tumor types with low survival rates and few treatment options;

– new complexity for doctors, payers and patients;

– rising expenditures dedicated to cancer care linked to earlier diagnosis, longer treatment duration as well as increased effectiveness of drug therapies;

USD 100 billion of cancer expenditures registered for 2014 (CAGR 2009-2014: 6.5%);

– increasing financial burden faced by patients (patient access varies widely by country);

– growth in the use of social media by patients in order to find support to cope with their disease;

rise in 5-year survival rates for major cancers;

– promising new approaches in immuno-oncology.

The report

Global Oncology Trend Report 2015: IIHI_Oncology_Trend_Report_2015


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Analysis of Clinical Trial Length – Nature Drug Discovery


How can we explain the duration of clinical trials?

A recent Nature Drug Discovery article written by L. Pregelj & her colleagues from the University of Queensland (Australia) found a solution with a multiple-regression model partially explaining the variation in clinical trial length. The controlling factors included trial primary purpose, end point classification, trial size, therapeutic class, geographic location, type of sponsoring organization.

Sample characteristics: trials started between 2005 and 2009, registered at by February 2013. Total number of trials analyzed: 14’319 (Phase I, II or III)

A first view on the trials shows that:

– the numbers of individual trials registered each year rose;

– the length of these trials initially decreased across all phases.

But more details are needed to have better view of the real factors impacting the duration of clinical trials.

The authors built a model to assess whether the changes in clinical trial length depend on trial design specificities (primary purpose, phase, size, allocation,…), therapeutic class (anti-infectives, cancer drugs, cardiovascular medicines, CNS products, metabolics,…), geographic location, type of sponsoring organization (Government vs. Industry) or a combination of some of these factors

The results:

– overall mean length (unweighted): 21.6 months.

2 key factors influencing clinical trial length: type of sponsoring organization and therapeutic class. The trend for length is flat for the pharma industry meaning greater experience and knowledge enabled the companies to build efficiencies but further improvements will be difficult to achieve with standard trial design. The trend is decreasing for US Federal sponsored trials suggesting that best practices began to diffuse beyond the industry itself.

– despite the fact that the stage of the trial (Phase I, II or III) was not one of the two major factors contribution to the length of a clinical trial, the influence of this factor increased significantly in the recent years.

These results are surprising somehow as you would anticipate to have the stage of the trial as a major contributor to its length but the therapeutic class and the sponsor are far more important.

Nature Drug Discovery Article (Subscription required)

Nature Drug Discovery Supplementary Material

More resources:

Better Clinical Trial Designs Could Lower Development Costs And Yield More New Drugs – 2014- Forbes

Understanding Clinical Trials – 2013- An overview provided by Roche

An Overview of Bayesian Adaptive Clinical Trial Design – 2012 – Berry Consultants

Adaptive design clinical trials: Methodology, challenges and prospect – 2010 – Indian Journal of Pharmacology


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