The “Global Trends in R&D 2024” report outlines the current state and future directions of biomedical research and development, underlining the resilience and adaptability of the sector in the face of the COVID-19 pandemic. It emphasizes the continued investment in healthcare innovations, showcasing a robust commitment from both industry stakeholders and investors towards advancing human biology and disease understanding, therapeutic discovery and development, and demonstrating clinical value.
Research and development funding saw a significant recovery in 2023, reaching $72 billion, up from $61 billion in 2022, although not yet matching the peak pandemic years of 2020/21. M&A activity surged to $140 billion from $78 billion in 2022, despite a decrease in the number of deals and median deal values. A shift in investment patterns is noted, with a notable reduction in IPO activity but a substantial increase in follow-on funding, particularly in the U.S. The biopharma sector in China and Europe experienced more pronounced slowdowns compared to the U.S.
M&A deal values increased significantly in 2023, driven by high-value transactions despite a reduction in the median deal value and a slight uptick in the number of deals. High-profile acquisitions focused on oncology, particularly antibody-drug conjugates (ADCs). Deals involving emerging biopharma companies (EBPs) slightly decreased in 2023, reflecting a changing landscape of company interactions and deal structures. Notably, EBPs have been increasingly involved in launching novel drugs independently.
There was a keen focus on China in 2023, with numerous high-profile deals, especially in oncology. These deals include significant inward and outward investments, highlighting China’s growing role in the global R&D ecosystem. Over $12 billion in deals related to AI, machine learning, or advanced analytics were announced in 2023, showcasing a double investment in these technologies for life sciences applications, particularly in drug discovery and patient cohort identification. Large pharmaceutical corporations reported a record $161 billion in research and development spending in 2023, marking a nearly 50% increase since 2018. This increase is partly attributed to the inclusion of acquired research and development expenses and a broader application of AI and advanced analytics in research and development processes.
Shifting Paradigms in Global Biopharmaceutical Research and Development: Trends, Trials, and Technological Advances in 2023
The report highlights a dynamic and evolving research and development landscape, marked by significant funding and strategic deal-making, alongside a growing emphasis on novel technologies and approaches to accelerate drug development and enhance clinical outcomes. Clinical trial activity in 2023 experienced a significant slowdown, decreasing by 15% compared to the previous year and 22% from the 2021 peak of COVID-19-related trials. The reduction in trial starts can be partly attributed to decreased COVID-19 activity and a shift in research priorities.
Emerging biopharma companies initiated 416 fewer non-COVID-19 trials, and larger companies started 524 fewer trials compared to 2021. Emerging biopharma companies experienced a greater impact from the slowdown, particularly in COVID-19 trial starts, which decreased by 66% for EBPs and 80% for larger companies. China-headquartered companies now account for 28% of trial starts, a significant increase from 3% a decade ago. This rise includes an increase in international trial activity by Chinese companies.
Trial starts in the top four disease areas — oncology, immunology, metabolic/endocrinology, and neurology — declined less than in other diseases, accounting for 79% of total trial starts. Rare disease trial activity remained high, particularly in oncology. Novel oncology mechanisms, such as cell and gene therapies, ADCs, and multi-specific antibodies, have risen to 25% of oncology trials. Industry-sponsored cell and gene therapy trials have more than tripled over the last decade. Obesity clinical trials saw a 68% increase from 2022, with a focus on GIP/GLP glucagon receptor agonists and oral formulations.
Neurology research continues to focus on Alzheimer’s, Parkinson’s, and epilepsy, among other diseases. Depression trial starts were 25% lower than pre-pandemic levels, with psychedelics being tested in nearly 40% of the 2023 trial starts. Trial activity for infectious diseases slowed to below pre-pandemic levels, both for COVID-19 trials and other infectious diseases, with a noted reduction in trials for antibacterial agents.
The overall decrease in clinical trial starts reflects both the aftermath of the COVID-19 pandemic and changing priorities within the research community, with significant implications for emerging biopharma companies, international collaboration, and the focus on novel therapeutic mechanisms. In 2023, the pharmaceutical industry experienced significant developments in new drug approvals and launches, with a noticeable impact on clinical development productivity. A total of 69 novel active substances (NASs) were launched globally in 2023, indicating a return to pre-COVID-19 trends. Over the past five years, 362 NASs have been launched, bringing the 20-year total to 942. This reflects a growing disparity in access to these novel medicines across different countries, with the U.S., China, and the EU4+UK being notable examples.
Global Drug Launch Dynamics, Enhanced Clinical Productivity, and Trial Transformation
There’s an increasing gap between the number of drugs launched in the U.S. and those available in the largest European countries. China has become the second-largest market for NAS launches, partly due to domestic industry growth and regulatory incentives. A significant portion of new launches were first-in-class, including six-cell and gene therapies in 2023. Emerging biopharma companies originated 56% of all new drugs, showcasing their critical role in innovation.
The Clinical Development Productivity Index, which measures success rates, trial complexity, and duration, showed an increase in 2023. This was primarily due to better success rates across all therapy areas, with oncology and rare diseases seeing significant improvements. While trial complexity returned to 2020 levels, efforts to manage this and trial durations have shown mixed results. The number of clinical trial subjects dropped to 1.5 million in 2023, influenced by a decline in COVID-19 enrollment. The composite success rate across all therapy areas rose to 10.8% in 2023, driven by increases in Phase I, Phase III, and regulatory success rates.
In 2023, the pharmaceutical industry witnessed varied trends in clinical trial success rates, increased complexity, and shifts in trial strategies across different disease areas. The composite success rate for clinical trials was 10.8% in 2023, with significant increases noted in oncology and rare diseases. However, this success rate was lower than the 10-year trendline for several other disease areas including neurology, immunology, and cardiovascular among others. Despite the pandemic, research areas like oncology, rare diseases, and neurology saw substantial increases in success rates, breaking a trend of stagnation or decline in recent years.
Clinical trial complexity returned to 2020 levels in 2023, driven by an increase in the number of trial subjects and slightly higher overall trial requirements. Despite a decrease in the number of countries per trial, the complexity index increased, indicating more intricate trial designs and eligibility criteria. A significant decrease in the number of countries per trial was observed, especially in Phase II and III trials, indicating a trend towards more localized studies. Emerging biopharma companies conducted more single-country trials than larger pharmaceutical companies, with Chinese trials notably driving this trend.
The total number of clinical trial subjects dropped to 1.5 million in 2023, primarily due to a decline in COVID-19 enrollment. Despite this, cardiovascular and rare diseases saw an increase in the number of subjects. Trial durations have slightly increased over the past decade, with Phase III trials being a significant contributor to this increase. However, oncology and rare diseases have seen a decline in trial durations, balancing the overall increase in development timelines. The industry is adapting to therapeutic and regulatory shifts with various productivity-enabling strategies. Regulatory agencies across different geographies are making efforts towards simplification and transparency to facilitate clinical development.
The 2023 Shift Towards Novel Trials, AI Integration, and Enhanced Regulatory Strategies
The use of novel trial designs, real-world evidence (RWE), and artificial intelligence (AI) in drug discovery are among the innovations being pursued to enhance clinical trial productivity. The year 2023 highlighted the pharmaceutical industry’s resilience and adaptability, with significant improvements in success rates for certain disease areas and an increase in trial complexity. Efforts to streamline clinical trials and leverage innovative technologies and trial designs are ongoing, aiming to address the challenges of increasing complexity and enhance overall productivity. Regulatory environments continue to evolve, with a focus on enabling faster and more efficient drug development processes.
The pharmaceutical industry is witnessing significant trends in clinical trial design and execution, particularly among emerging biopharma companies compared to larger pharmaceutical firms. EBPs typically conduct trials with smaller subject, site, and country footprints than larger pharmaceutical companies across all phases. This is partly due to therapeutic focus, funding constraints, or strategic decisions aimed at enhancing productivity. The average number of countries used per trial has decreased, with EBPs showing a more significant reduction compared to larger companies. This trend contributes to overall industry pipeline productivity gains.
In 2023, a significant portion (83%) of NASs launched included trials with fewer than 1,000 subjects, indicating a trend towards smaller, more focused trials, especially for those with expedited review. Despite efforts to improve diversity in clinical trials, representation of Black/African American and Hispanic patients has not reached U.S. demographic levels, with a notable decline observed in recent years. This underrepresentation is more pronounced in oncology trials and varies across therapeutic areas.
The use of novel trial designs, such as umbrella and adaptive protocols, is increasing, particularly in oncology, indicating a shift towards more flexible and efficient clinical trial methodologies. Both sponsors and the FDA are placing a greater emphasis on incorporating RWE into regulatory decision-making, highlighting its growing importance in the clinical development landscape. The adoption of remote, virtual, or decentralized trial methods continues, focusing on diseases like COVID-19, neurology, and immunology. The pandemic has likely established a more permanent role for these methodologies in clinical trials. AI and machine learning (ML) technologies are making strides in drug discovery, with an increasing number of molecules discovered using AI/ML advancing to later stages of clinical development.
Emerging biopharma companies are receiving complete response letters from the FDA at a higher rate than larger companies, with a notable proportion related to clinical reasons. However, EBPs are more likely to resubmit their applications. Drugs with expedited development paths or approved based on single-arm trials tend to have shorter development durations, reflecting the impact of regulatory strategies and trial design on speeding up the drug development process.
Overall, these trends underscore the evolving landscape of clinical trials and drug research and development, highlighting the increasing role of emerging biopharma companies, the push for greater diversity in trial populations, and the adoption of innovative trial designs and technologies to enhance productivity and efficiency.
Resource: IQVIA, February 22, 2024
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