Biopharma posts a chart-topping 41 new drug approvals in 2014

A burst of new drug approvals at the FDA just before Christmas pushed the total to 41 for 2014, the fastest pace in the past 18 years and a fresh sign that at least a few of the lead players have learned how to efficiently target new therapies for development.

Added together, 2014 marked the second highest year on record for the approval of new chemical entities, topped only by the 53 recorded at the FDA in 1996. The tally far exceeded last year's anemic pace of 29 new drug approvals, which in turn followed a spike of 39 new OKs in 2012. Last year's approval pace was also well ahead of the annual average of 24 new drug approvals for the first 10 years of the millennium and easily tops the 31-per-year average marked in the 1990s.

But while the FDA has also proved particularly eager to sanction new "breakthrough" drugs--9 for last year compared to just 3 in 2013--there's a caveat to the year's encouraging performance. A number of these new drugs were hurried along to fill a gap being left by blockbusters which either lost or will soon lose their patent protection. And they're arriving on the market as high prices have spurred a furious counterattack among private payers in the U.S., raising serious questions about the new generation's long-term commercial prospects. 

"It's the best year since 1996, which is encouraging," notes R&D consultant Bernard Munos in an end-of-the-year assessment for FierceBiotech. "Even more so are the cure rates and remission rates, and what is coming up in the pipeline (CAR T-cell, CRISPR, bioprinting, tissue engineering, etc). It suggests that this spike, unlike previous ones, is likely to be long-lived. Have we turned the corner? The firms that have had the foresight and the courage to stray from their comfort zones and embrace the translation of these breakthrough discoveries are certainly on a strong footing. The others will continue to struggle."

Not everyone got to share the wealth of NDAs this past year. Pfizer ($PFE), which carved several billion dollars out of its research budget in the past 4 years, was left out of the winners' circle. Its absence underscores a weak pipeline that can't be entirely camouflaged by the prospects of such promising therapies as palbociclib.

Some Big Pharma players managed to break a long drought in the clinic with some key approvals. Eli Lilly ($LLY) scored a few new OKs from the FDA, topping the lot with a green flag for dulaglutide. Merck ($MRK) got a pioneering OK for Keytruda but had a far less enthusiastic reception for suvorexant, its sleep drug that was approved at a far lower dosage than the company was looking for. And AstraZeneca scored 4 approvals, putting it on top and giving it boasting rights to a badly needed record of success after years of turmoil.

Gilead ($GILD) got its big break with Harvoni, the combo follow-up to Sovaldi, then AbbVie ($ABBV) came along with its own cocktail, Viekira Pak. Every big breakthrough in drug development--like new interferon-free cocktails for hepatitis C, or PD-1/PD-L1 in cancer or the GLP-1 diabetes drug class--attracts a host of competitors. Big Pharma has a habit of traveling in packs.

While Harvoni exemplifies the immediate market potential of a major new treatment, it also provides a cautionary tale for the industry. AbbVie may have a less convenient dosing regimen for its hep C drug, but payers' outrage over Gilead's handling of its steep price for Sovaldi and later Harvoni gave AbbVie an opening to trade a discount price in exchange for an exclusive place on the key formulary at Express Scripts. AbbVie's approval also marks the first major OK for the company in the past decade, with huge implications for the company as it faces the loss of patent protection on its flagship product, Humira.

Discount pricing is one trend that will only grow more pronounced in the coming years, as payers use all the leverage at their disposal to shave costs, and it will test some of those blockbuster peak sales estimates some analysts like to attach to new drugs. Eli Lilly, for example, delivered the group of NDAs it promised investors--after reneging on a vow to get started in 2013--but now has to prove that these new drugs can deliver major sales revenue. Approvals aren't enough to determine whether a pipeline strategy is successful or not.

GlaxoSmithKline ($GSK) faced that bitter truth after its batch of NDAs failed to deliver sufficient product sales to prevent a reorganization of its R&D division this year. Now AstraZeneca ($AZN) has to demonstrate if it can deliver and capitalize on new approvals--as CEO Pascal Soriot promised so elaborately in 2014--or leave investors disappointed by hard numbers. And Amgen ($AMGN) faces exactly the same task.

The flip side to more innovation, adds Munos, is more competition. "Viekira Pak is showing what that means for pricing," he writes. "It's not an isolated example. Lilly has cautioned that diabetes drug sales--the company's bright spot--are expected to slow next year due to new pricing pressure in the U.S.FiercePharma has identified eight therapeutic areas where price competition is likely to intensify. I would add asthma to the list. It means that companies will soon have to deal with a challenge they've tried to ignore, i.e., the enormous cost of their legacy structures. As a result of patent cliffs, Big Pharma has become big generic. Forty one percent ($123 billion) of the product sales ($300 billion) reported by Big Pharma in 2013 are no longer protected by patents. It still pays a lot of bills, but it's eroding, and it's not a good business. Someone must deal with this. The leaders will, but not every company has them."

Gilead (Harvoni and Zydelig), Bristol-Myers Squibb (Opdivo), Celgene (Otezla) and Biogen Idec (Plegridy), meanwhile, continued to prove how dominant biotechs with carefully focused pipelines can deliver major new approvals with significantly less spent on R&D.

For the record, Munos keeps a different count for what should be on the innovative new drug approvals for 2014. He adds Biogen's Alprolix and Eloctate, two hemophilia drugs that were licensed in, along with Baxter's Obizur for hemophilia, Salix's Ruconest as well as Trumenba, an rDNA vaccine to protect against Neisseria meningitidis Type B, for which Pfizer received a Breakthrough Therapy Designation. But he also subtracts the two imaging agents that are on the FDA's list.

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