Size matters as does therapy area focus and external assets have higher sales potential

Measuring the return from pharmaceutical innovation 2014 Turning a corner?

Companies that focus on fewer therapy areas (TAs) are delivering higher R&D returns

8.5%

under 4 TAs

7.5%

5 TAs

4.4%

6 TAs

4.2%

7 TAs

6.5%

over 8 TAs

Number of assets progressed and launched since 2010

143 products launched with projected lifetime revenues of

$955bn

Late stage pipeline 2010-14

236 assets progressed

with projected lifetime revenues of

$1,171bn

For the first time since 2010, R&D returns for the cohort have improved

Key findings from 2014 versus 2013

2010 2011 2012 2013 2014

10.1% 7.6% 7.6% 5.1% 5.5%

Cost to bring a product to market continues to increase: $1,348m $1,401m

$96bn $90bn

22 44

For every $5 gained through asset launch, $2 are lost through failure:

Assets have higher sales potential:

Projected peak sales per asset

Lifetime projected sales of failed assets

Lifetime projected sales per asset

Number of failed assets

$466m $471m

$2.2bn $2.4bn

20142013

Total value of the cohort’s late stage pipeline has increased for the first time since 2010:

Total projected lifetime sales of assets

Number of assets

$913bn

194

$966bn

181

Smaller companies

appear to be developing assets

more cost effectively

and with better returns

Projected peak sales for externally sourced assets are higher:

+6% for all externally sourced assets

+20% for breakthrough assets

+54% for orphan drugs

www.deloitte.co.uk/measuringrndreturns2014