Biotech firms eager to push drug candidates through clinical trials prompted an overall increase in R&D expenditure of 20 per cent in just a year, states research and consulting firm GlobalData.
GlobalData’s new report, which compares the competitive position of 15 innovative mid-cap biotech companies on 20 financial metrics, states that the peer group R&D spend for Q3 2012 reached $746.8 million, climbing from $621.1 million in Q3 2011.
“Oncology is the main focus of biotech R&D activities,” says Adam Dion, Analyst, GlobalData covering Healthcare Industry Dynamics, “which is driving peer group R&D expenses higher.”
Regeneron was the firm with the highest R&D expenditure for Q3 2012, with an outlay of $158 million. According to the report, Regeneron’s R&D spend has increased steadily each quarter since Q3 2011, when the total stood at $128 million.
“Biotech companies are becoming increasingly more successful at developing innovative therapies,” says Dion. “However, our research has found that the high cost of bringing these therapies to market continues to erode corporate profitability.”
In terms of percentages, ViroPharma displayed the biggest year-to-year drop in R&D expenditure. The company’s R&D spending plummeted 28 per cent year-to-year, from $22.9 million in Q3 2011 to $16.5 million in Q3 2012.The decrease in ViroPharma’s R&D spend was caused by the Food and Drug Administration’s suspension of the company’s clinical trials of its flagship product Cinryze due to safety concerns.
“The FDA put a hold on two of the company’s Phase-II clinical studies when trials revealed elevated antibody levels detected in the treatment arm of the study,” explains Dion. “These concerns have since been addressed and, with FDA approval, the firm resumed the trials in September of last year.”
As defined by a proprietary ratings system based on a number of financial metrics including revenue, sales growth and cost containment, GlobalData identified Regeneron as the peer group benchmark leader in the third quarter, overtaking the Q2 2012 number one, Alexion.
EP News Bureau – Mumbai
