New drug discovery has become increasingly rare for large independent pharmaceutical companies in recent times. Nearly 60% of new drugs are discovered through mergers and acquisitions and drug licensing. Today, researchers from Ritsumeikan University, Japan, shed light on recent trends in academia spin-outs and investments in the United States and Europe, foreshadowing a promising shift in deal networks industry organizations to improve research and development productivity in the future.

    Bringing a new drug to market is a daunting challenge, given the low probability of success during the research and development (R&D) phase and the high costs involved. In recent times, industry trends in external innovation for drug discovery are changing rapidly. With a better understanding of disease biology, decision-making can be simplified through the effective use of scientific information.

    In this quest, Japanese researchers led by Associate Professor Kota Kodama of Ritsumeikan University uncover how trends in interorganizational agreements in the pharmaceutical industry are changing to improve R&D productivity and drug discovery. “The structure of the innovation creation network in the pharmaceutical industry has changed with the increasing emergence of start-ups from universities and research institutes as actors at the source of innovation.“, explains Dr. Kodama, while discussing their investigations of these changing trends, the results of which were posted online on December 27, 2022 and published in volume 28 number 3 of the journal. Drug discovery today on March 1, 2023.

    Their research suggests that the knowledge needed for breakthrough innovation in drug discovery is most often obtained through networks of alliances. Over the past decade, large research-based pharmaceutical companies have used research collaborations, innovation incubators, academic centers of excellence, public-private partnerships, mergers and acquisitions (M&A), drug licensing and venture capital funds as typical methods of external innovation. . The researchers now aim to define the changes in the network structure and nature of these alliances that have occurred over the past decade in order to provide future strategic insights to industrial and academic actors involved in drug discovery.

    Using data from the Cortellis Competitive Intelligence database, researchers identified nearly 50,000 agreements of various types related to pharmaceutical R&D across pharmaceutical, digital health software, animal drug and device companies to discover trends in the creation of new medicines for human use. They also studied the trends of 13 of the largest pharmaceutical companies with annual revenues of more than US$10 billion, which saw an improvement in their CAGR (compound annual growth rate) since 2015. The researchers noticed that the CAGR rise was correlated with significant change. in M&A-related deals after 2015, indicating that M&A-related deals drive Big Pharma’s revenue growth.

    In addition, the number of organizations involved in inter-organizational agreements increased each year from 2012 to 2021. Although the number of organizations involved and the number of agreements may increase, the density of agreement networks decreases each year, which suggests that the networks are becoming more and more numerous. not cohesive. The concentration of business relationships between organizations in certain areas of the network turned into dispersion around 2015, and new networks linking different groups began to form after 2017. These trends are an important illustration of how the landscape of the industry is gradually moving away from the traditional network. in which the big pharmaceutical companies have stimulated the production of drug discovery. Today, inter-organizational agreements between more diverse players have become active and are driving R&D productivity for startups in biotechnology and pharmaceuticals.

    A sharp increase in the number of high-tech spin-outs owned by universities and expanding investment in start-ups is a positive sign. The emergence of new chemical modalities, such as biologics, oligonucleotides, and peptides that differ from traditional small molecule drug discovery, indicates remarkable changes that have taken place over the past two decades. The trend of increasing funding for start-up companies in the development of personalized drugs is beneficial for the creation of patents and will have a positive impact on the creation of innovations in the years to come. “The presence of universities to support the technologies of these start-ups becomes very important, and the support and public and private investments in this field stimulate innovation. Our study shows that such medium- and long-term support can ultimately benefit human health and well-being.“, concludes an optimistic Dr. Kodama.

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