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Dondarski boils the turnaround mantra down to portfolio chops. “For this year specifically, I think there were two themes that were more prominent in the report,” he said. “They really revolved around portfolio choice.” In practice, that choice splits into two imperatives aligned with the report’s title:
Be bold: Pursue first-in-class science. The report urges companies to funnel capital into “areas of high unmet medical need,” pioneer novel mechanisms of action (MoAs), and lean on emerging enablers such as AI-driven discovery. While novel and fast-follower MoAs represent just 49% of late-stage assets, they account for 69% of its forecast value (See: Figure 9 from the report below). This underscores, as Dondarski emphasized, “the need to continuously invest in those exploratory new mechanisms of action as opposed to over-indexing on… more conservative line extensions or established MOAs.”
Source: Deloitte, “Be brave, be bold: Measuring the return from pharmaceutical innovation,” March 2025 (Analysis based on Evaluate Pharma data).
Be brave: Keep conviction where the crowd has gathered. The Deloitte report tells firms to stay “brave enough to innovate at the edges of the science to be first to find the next mega-blockbuster MoA.” even in therapy areas rife with competitors, such as oncology, infectious disease, immunology, and CNS. This requires having the “convictions in your organization to… pursue the areas where you feel like you have a more nuanced understanding” while simultaneously pruning lower-return bets through “rigorously evaluating existing pipeline candidates, using data-driven decision making… minimizing late-stage terminations.”
Source: Deloitte, “Be brave, be bold: Measuring the return from pharmaceutical innovation,” March 2025 (Analysis based on Evaluate Pharma data).
Together, the bold-and-brave playbook reframes R&D spending: fewer ‘me-too’ pursuits of hot indications, more targeted wagers where differentiated insight or genuinely new biology can still move the IRR needle.
“Consistently, if you look at the proportion of the pipeline and the proportion of the value … we see a higher weighting on the value side for those novel/fast follower MoAs,” Dondarski noted. The pattern “showcases that there’s still a market, and the market still values innovation and true impact on patients.” Yet only 32% of biopharma executives surveyed say they plan to prioritize transformative science over me-too drugs, a gap the report frames as an open goal for companies willing to be genuinely bold.
Oncology: Crowded house, shrinking payoff
Cancer-targeting drugs still hog the industry’s attention; 37% of all late-stage assets sit in cancer programs and 90% of the top 20 companies are in the game (See Figure 6 above). The report warns that such pile-ons create “intense competition for suitable trial sites and participants,” stretching timelines and raising costs. Such hyper-competition can cut into long-term profits. If an organization is chasing a third, fourth or fifth entrant in an already treated tumor type, that “begs the question: is that really the best place to be investing?”
GLP-1s: The payoff for going where others weren’t
The success of GLP-1s in diabetes and obesity and beyond shows the upside of breaking ranks. Stripping GLP-1 assets out of Deloitte’s model would have knocked the cohort’s 2024 IRR from 5.9% down to 3.8% and clipped average peak-sales forecasts per asset from $510 million to $370 million. Revenue mix tells the same story: obesity rocketed from 1% of forecast sales in 2022 to 16% in 2024, while oncology’s share slipped from 32% to 26%.
Source: Deloitte, “Be brave, be bold: Measuring the return from pharmaceutical innovation,” March 2025 (Analysis based on Evaluate Pharma data).
Pendulum swings toward fresher white space
After half a decade of piling into cancer, the industry’s center of gravity is starting to drift. The report flags where that swing might be headed. Within the cohort’s late-stage pipelines, late-stage pipelines now list nine Alzheimer’s drugs, six stroke-prevention candidates and two multiple-sclerosis assets (see page 12 of the report): small in number yet big on unmet need and IRR-lifting potential. Outside neurology, Dondarski sees “a lot of optimism” around antibody drug conjugates and renewed interest in immunology, where companies are targeting fresh inflammatory pathways.
Cost per launch hovering around $2.23 billion
While the path hasn’t been strictly linear, the long-term challenge of rising R&D costs persists. Deloitte pegs the average cost to shepherd a drug from discovery to market at $2.229 billion for 2024, up again from the prior year and higher at 12 of the 20 companies tracked. Attrition is the single-biggest sinkhole: the cohort burned $7.7 billion on clinical trials for assets ultimately terminated in this cycle.
Complexity, longer timelines, and inflation contribute to the costs. Total development time now exceeds 100 months from phase 1 to filing, a 7.5% increase over five years, while specialized labor and material costs are rising faster than headline CPI. The takeaway: being “brave” is about smarter capital allocation that anticipates late-stage failure, trims cycle time, and combats inflationary leakages before they crater the IRR.
Portfolio discipline: ring-fence curiosity, prune the deadwood
The Deloitte report’s translation of “brave and bold” into spreadsheet terms is simple: keep a standing budget line for genuine moon-shots, and bring the axe to line extensions that won’t cover their cost of capital. Companies should “ensure there’s some bare minimum of capital” for exploratory science, Dondarski said. The report calls for pipeline resources to be “consciously” allocated so a slice is always chasing novel MoAs while the rest works established ground. On the flip side, Deloitte urges that teams to “rigorously” review existing candidates with data-driven kill criteria to minimize late-stage terminations. In short, bravery still needs a budget but prudence decides who gets to keep theirs.
Blockbusters: still the extra-zero workhorses
Deloitte counts 111 late-stage assets with over $1 billion peak-sales forecasts in 2024, up slightly from 106 a year ago. This net gain reflects significant churn: 29 new blockbusters entered the late-stage pipeline and 34 existing assets gained blockbuster status. In addition, 19 blockbusters graduated to full approval (exiting the analysis), two were terminated after trial failures, and 37 assets lost their blockbuster standing owing to factors including forecast reductions.
Source: Deloitte, “Be brave, be bold: Measuring the return from pharmaceutical innovation,” March 2025 (Analysis based on Evaluate Pharma data).
Tech lever: AI is greasing the gears, not steering the ship, yet
Generative AI and advanced analytics are trimming fat in the back office and on trial ops, but they still haven’t dented the 100-month bench-to-filing slog. Deloitte notes that 42% of 150 global C-suite life-sciences executives surveyed by Deloitte US saw “moderate or significant” financial ROI from GenAI in the past year, mostly by automating grunt work and sharpening trial design and patient selection. Dondarski is bullish but cautious: “There’s a lot of promise … but the time to impact is still premature,” he said. In other words, AI can free up cash to fund bolder bets, but it won’t decide which bets to place; portfolio discipline still calls the plays.
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