Biopharma’s Untapped Value: The Quest to Reverse First-Launch Failure Trends

It’s not hyperbole to suggest that emerging biopharma companies (EBPs) hold the keys to the success of the entire healthcare ecosystem. According to the IQVIA Institute for Human Data Science, the research and analysis arm of IQVIA, EBPs represent 65% of the total drug development pipeline, which is currently nearly 4,000 drugs, more than double the number in 2016. Additionally, 7% of the pipeline is being developed by EBPs in partnership with larger firms, so 72% of all drugs in the development pipeline have an EBP’s stamp on it.¹ EBPs represent 78% of the active pipeline in the small but critical area of cell and gene therapies, which will play a substantial role in driving revenue in the coming years. EBPs are little fish in a very big pond, but they are integral to the pharmaceutical ecosystem.

Quality of innovation from EBPs and large pharma

Pharm Exec reached out to Bill McClellan, center of excellence lead for launch at IQVIA, to further understand the EBP role. McClellan leads a team responsible for developing thought leadership to provide innovative approaches for launching a brand. The research focuses on patient acquisition and prescriber adoption and productivity, and the findings have fueled offerings focused on launch strategy, commercialization tactics, and performance monitoring.

Bill McClellan

By McClellan’s count, there have been 275 branded products launched by EBPs, in the US, in the past 10 years, with 75% of them opting to go it alone and launch the asset themselves. The remainder represent the companies or assets that get purchased or engage in some type of partnership—any time you engage in a partnership, the size of your share shrinks. Is it wise to go it alone? “The question from there really becomes: what’s the quality of the product that’s being developed in terms of innovation for both EBPs and large pharma?” asks McClellan. “We score innovation via different attributes that new products would bring over standard of care such as relative improvements in efficacy, dosing, and tolerability improvements, as well as administration or convenience factors. And the numbers for EBPs and large pharma are almost identical.”

IQVIA data on innovation shows that 43% of all assets developed by EBPs are classified as innovative compared to large pharma’s rate which lands at approximately 45%. So, in terms of innovation, they’re on a virtually even playing field —arriving at the commercialization stage with similarly attractive products.

Are EBPs successful when they commercialize?

Many companies make decisions based on forecasts, including pricing, size of salesforce, and approach to market. And they often gauge success based on forecast achievement, but that’s a bit problematic because most forecasts are wrong, and often overstated. Forty percent of worldwide drug launches between 2009 and 2017 failed to meet their two-year sales forecasts.²

McClellan’s IQVIA team defines commercialization success via four factors: the ability to generate revenue; the ability to generate market share; competitive rank, which is similar to market share but gauges the competitive intensity within the market that brands are entering; and, most telling when it comes to commercialization, promotional responsibility—are the companies spending to promote, and is it efficient?

“This is where the variance starts to become apparent,” notes McClellan. “Fifty-seven percent of large pharma’s assets are what we deem as successful. EBP companies, on the other hand are significantly lower—we see that success rate is at 39%. So, there’s a significant gap—why is that? And is it cause or effect?”

The crux: Deep pockets and digital

Typically, large pharma companies have significantly deeper pockets than EBPs. And when you consider the average promotion of an asset developed by an EBP vs. one developed by large pharma, McClellan revealed that, on average, across the last 10 years, large pharma tends to have double the amount of investment in promotion that EBPs have. And when you compare promotion to average sales, and determine ROI, large pharma historically got $2.5 back for every dollar spent on promotion, while EBPs are getting $1.5 back for every dollar spent.

That’s a rather significant difference; that said, in the past two years, with the pandemic-forced embracement of digital, the gap is beginning to close. The commercialization game has morphed via forced virtualization. It’s not all about the size of the traditional tip-of-the-arrow salesforce anymore—it’s widely known that rep access to healthcare professionals (HCPs) has dropped off dramatically, especially in-person, with doctors preferring a more hybrid approach depending on the therapeutic area. And frequency, or the number of touchpoints with HCPs, has also fallen off a cliff, so it’s important companies provide real, personalized value to the HCPs in the minimal interactions afforded.

Overall, the approach has shifted to a mix of in-person and hybrid, and a great deal more of an omnichannel/digital approach. This go-to-market model likely benefits the leaner EBPs. Biohaven and its migraine medication, Nurtec ODT, is one example. The company was small, lean, and almost entirely virtual even before the pandemic hit. So, while most postponed launches early in 2020 at the onset, they engaged employing a range of whip-smart digital techniques and leaning into a few other key avenues.

What are some of those keys? The attention (and cash) applied to market access, awareness, and the overall go-to-market strategy are three that lead to success or failure as posited by IQVIA’s McClellan.

Market access for success

Market access is critical—it can make or break a newly launched product, and company for that matter. According to Dan Sontupe, industry veteran and associate partner, managing director at The Bloc Value Builders: “If you’re the chief pharmacy officer at an Aetna, Cigna, or Caremark, they aren’t going to take a meeting from a small biopharma unless it’s new, differentiated, and it has a really significant impact on outcomes. Most importantly, it needs to be something that’s going to save them money.”

So, the EBPs that manage this well have a strong clinical and economic proposition for payers and patients, experienced teams to negotiate with healthcare access stakeholders, and display the ability to deliver an affordable product and associated support to the appropriate patients. Simply put, large pharma has a lot more leverage due to stature, experience and success, prior relationships, and a great deal of inherent awareness.

Awareness

“It’s a little more difficult for EBP companies because not only are they launching a brand, but they’re also often launching a company,” McClellan tells Pharm Exec. “What we’re seeing is that brands that do well are brands that really establish a strong awareness, pre-launch.”

EBPs can spread awareness by highlighting their scientific platform and building credibility, which is usually accomplished through a strong publication strategy early in the process, conference education, and a medical science liaison (MSL) strategy.

Raghu Reddy, chief administrative officer at the SurgCenter of Western Maryland, LLC, an ambulatory surgical center, stresses the importance of conferences. “If there’s a new drug that’s wonderful and isn’t a ‘me-too’ product, it will draw a lot of attention no matter which method of advertising is employed,” he says. “But I really think what gets the most attention is the presentation on a particular product at a conference, even with the marketing piece removed and presented in an unbiased way.”

There are many options to consider when launching a commercial product for the first time. Do you partner with a large pharma? It instantly provides cash, and, as noted, might increase the probability of success. However, the partnership decreases the share an EBP takes away from the venture. In addition to cash and probability of success, the partnership with large pharma immediately inserts experience in the form of technical expertise and resources, as well as awareness. It opens many doors for an EBP’s product and company to help drive commercialization and mitigate risk. And there’s a much higher chance of a liquidity event such as an M&A or IPO.

Perhaps it’s a good idea to go the partnership route for the first drug launched in a pipeline to serve as a crash course to prepare for subsequent launches. EBPs should pursue these alliances in parallel to their fundraising efforts and understand that these collaborations provide a much-needed risk-reduction measure and a higher probability of a liquidity event.

Go-to-market goals

In the end, a company’s go-to-market strategy must provide a clear road across all channels, with key players well considered and designated, and it must be on point and ready to tackle all challenges the market has to offer. Consider this early when deciding how to approach that first foray into drug development and launch. According to Deloitte, “Most new drugs continue with the revenue trajectory set at launch. About 70% of products that miss expectations at launch continue doing so in subsequent years, and around 80% of products that meet or beat expectations continue to do so afterward.”³ A failure to have a strong launch leads to poor results and ultimately a failure of both product and company. There’s a lot on the line with that first product.

Fran Pollaro is a senior editor for Pharmaceutical Executive and can be reached at fpollaro@mjhlifesciences.com.

References

1. https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/emerging-biopharma-contribution-to-innovation/iqvia-institute-emerging-biopharmas-contribution-to-innovation-forweb.pdf?_=1668541637100
2. https://www.mckinsey.com/industries/life-sciences/our-insights/ready-for-launch-reshaping-pharmas-strategy-in-the-next-normal
3. https://www2.deloitte.com/us/en/insights/industry/life-sciences/successful-drug-launch-strategy.html