To succeed in this tougher, more restrictive environment, companies will need to find ways to operate more efficiently, demonstrate the value of their innovations and be prepared to meet regulatory demands. In 2023 and beyond, several trends will gain momentum.
Finding investors
In a highly challenging fundraising climate, attracting investors is proving to be more difficult. With the International Monetary Fund forecasting slower growth in the year ahead, many investors are more resistant to investing in new technologies.1
Smaller companies hoping to raise funds for unproven or less well-defined drug or diagnostic targets will face more barriers.
In this tougher environment, companies must rethink their strategies to continue to attract angel investors or venture capitalists. That means ensuring their exciting science has a clear development roadmap and can provide value to patients and the healthcare community.
It means understanding how druggable their target is, what the plan is to take the product through preclinical and clinical development — either to market or to acquisition — and what expertise they will need to manage those processes.
Investors today expect data that demonstrates the feasibility of the development strategy to move a product forward. So, companies need to balance ongoing scientific exploration with a clear focus on drug development activities and demonstrate an understanding of what patients, regulators and healthcare providers are looking for.
For the foreseeable future, in addition to a clear demonstration of value, investors want to see product differentiation and a fast and efficient development path to market.
Virtualisation and outsourcing
Typically, small companies may lack the resources or expertise to manage many of the R&D activities needed to bring products to market. The virtualisation of drug development — when companies focus on strategic business execution augmented by external providers — allows companies with fewer internal resources to take advantage of the expertise of outsourcing partners.
However, traditional outsourcing models have been transactional in nature, often lacking the insights necessary to execute efficiently. Furthermore, with the focus on deliverables based on timelines and budget, providers are often not engaged in the vision for the product.
Best practice outsourcing for 2023 and beyond means innovator companies should consider forming long-term strategic partnerships with external providers, in which both parties are engaged in shaping the outcomes and strategies to deliver.
This will not only support virtualisation, but will also be helpful when trying to attract funding; having access to relevant expertise and implementing smart development practices will resonate with investors.
Go global but be prepared
Increasingly, companies are looking to markets beyond their own borders to market their products. However, many companies may not have fully considered what is required for global development and approval beyond first market entry. There is often an assumption that the development programme and data package that supported approval in one country or region will meet requirements in others.
Regional or country specific differences in regulatory guidelines, local requirements and standards of care may impact the ability to gain approval in a secondary market.
In tandem with efforts to globalise, there is also a trend to repurpose established products for new indications or reformulation … again without a clear understanding of the regulatory challenges.
One company reformulated two long-established and approved drugs to be coadministered, hoping to rely entirely on published literature that suggested that the two drugs, when administered in combination, yielded better patient outcomes.
It was assumed that the development path could be significantly streamlined and, although regulatory authorities were agreeable to streamlining the non-clinical data needed, independent controlled clinical trials were still deemed necessary to evaluate dose and dose regimens carefully. This example highlights that each development programme has its own unique considerations that can impact the path to approval.
In an era of heightened competition and cost constraints, companies will need to consider their development strategies carefully, work closely with partners and ensure a deeper understanding of the global regulatory environment.
Reference
- www.weforum.org/agenda/2023/01/global-recession-economic-outlook-2023/.
For more information
Mark Lane, PhD
Vice President
Development Consulting and Scientific Affairs
Rami Scharf, DSc
Senior Director
Development Consulting and Scientific Affairs