Is it possible that pharmaceutical innovation has accelerated over the past two decades — with the novelty of small molecule and peptide drugs steadily increasing?
That’s the conclusion suggested by a recent study published in ACS Medicinal Chemistry Letters, which found roughly 65% of FDA-approved drugs in 2020 were structurally novel. Last year’s drug approvals even included at least one new molecular entity based on a novel molecular shape.
The finding flies in the face of the talk of an innovation crisis in the pharmaceutical industry. Before COVID-19 struck, pharma industry observers tended to chide the industry’s recent innovation track record. R&D costs per drug have increased significantly, while drug blockbusters have grown more scarce. Despite the pharma’s historically high-profit margins, the sector generally trailed the S&P 500 in the years leading up to the pandemic.
While the concept of molecular shape may be fundamental to chemistry, it hasn’t been widely used to assess pharmaceutical innovation, according to Todd Wills, managing director at the American Chemical Society’s CAS Services group and coauthor of the study. Wills thinks molecular shape can be a valuable tool when assessing new molecular entities (NMEs) approved by the FDA.
Accounting for novelty
While considering the average R&D spending per newly approved drug yields information on the efficiency of such spending, it does not account for novelty. One way to assess the novelty of a company’s R&D output is to “look at the portion of a company’s approved drugs or drug candidates in their discovery and development pipeline that are structurally novel,” Wills said. “This also allows you to indirectly assess R&D from an effectiveness perspective.”
While efficiency is focused on R&D investments, effectiveness is focused on impact. “The impact associated with a new drug is often assessed by looking at the clinical and commercial benefits associated with it,” Wills explained.
While it is a relatively simple matter to assess the commercial benefit of a new drug by gauging the revenue it drives after launch, “assessing the clinical impact can be a challenge,” Wills said.
Companies with a higher than average mix of structurally novel drugs or drug candidates in their portfolio are more likely to generate significant clinical and commercial value.
Colonists, settlers and pioneers
Wills breaks NMEs into three camps based on molecular structure. “Colonists” are NMEs whose shape and scaffold have been used in a drug previously approved by the FDA. “Settlers” have a shape that has been used in an approved medicine, but a new scaffold. “Pioneers” have a shape and scaffold that hasn’t been used in a previously approved drug.
A colonist drug is often a modification of an existing drug. As the Nobel Prize-winning Scottish pharmacologist Sir James Black said, “the most fruitful basis for the discovery of a new drug is to start with an old drug.”
But pioneer drugs are more than 2.5 times more likely to receive breakthrough drug designation from FDA, according to the research from Wills and his coauthor Alan H. Lipkus. The breakthrough therapy designation can be viewed as a proxy for the drug’s therapeutic value once it hits the market.
Structurally novel drugs are also more likely to achieve blockbuster status — that is, drive more than $1 billion in annual revenue within 5 years of launch.
David versus Goliath
Traditionally, Big Pharma companies have developed the majority of pioneer drugs. There are, however, nuances to keep in mind when assessing drug development. An organization involved in early drug development efforts won’t necessarily shepherd the drug through the FDA approval process. “A lot of people look at whose name was ultimately on the FDA approval letter, which often isn’t necessarily the company that discovered the drug,” Wills said.
But one trend that becomes apparent when analyzing who developed pioneer drugs is that Big Pharma companies are originating fewer of them as a percentage. “When you look at it from an absolute perspective, the number of pioneer drugs originated by Big Pharma is actually increasing. They’re just not keeping up the pace with the rest of the industry,” Wills said.
A company’s scale is no longer as much of a competitive advantage as it was a decade or two ago.
Better data tends to fuel innovation
As the pharmaceutical industry becomes more reliant on computational models for drug discovery, organizations with better data earlier on in the discovery process could have an advantage over peers.
Data can help pharma companies identify new drug candidates and new whitespace — areas of chemical space that aren’t occupied.
But it is too early to gauge the impact of data science and AI on drug discovery and development, Wills said. “The ultimate impact will not be seen for another decade or so.” While some of the fruits of AI use in recent years may become apparent in the relatively near future, “it will take more time for the ultimate impact from wider spread use to be seen,” Wills concluded.