Seize the digital momentum

Projected returns from innovation have declined this year

Last year we witnessed a notable rise in IRR to 6.8%, driven by forecasted high-value COVID-19 assets (including vaccines and treatments) and one high-value late-stage neurological asset that has subsequently underperformed post-launch and is no longer seeking approval beyond the FDA. As some of these assets have moved into the commercial portfolio, the IRR has declined to 1.2%. This is driven by the successful approvals of high-value forecasted assets that have been commercialized and therefore left the scope of our analysis.

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The average cost to develop an asset from discovery to launch has increased while peak sales forecasts have declined

The average cost to develop an asset in our 2022 analysis was $2.2 billion, an increase of $298 million from 2021. Additionally, average forecast peak sales per pipeline asset for the combined cohort decreased from $500 million in 2021 to $389 million in 2022. However, the 2022 value is almost identical to the forecast peak sales of 2020. This decline in average forecast peak sale per asset is driven by the increasing length of cycle times and the number of high-value forecasted assets that have left our pipeline this year.

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There has been a large uptick in the proportion of forecast revenue from self-originated assets

After witnessing a continuous decline for five years, there has been a significant increase in the proportion of forecast revenue of self-originated assets from 29% in 2021 to 51% in 2022. Therefore, more than half of the forecast revenue from the late-stage pipeline is now being generated in-house. This notable increase in the share of self-originated assets can be partly attributed to the addition of five new blockbuster assets, including a forecasted high-value COVID-19 therapeutic.

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Clinical trials of tomorrow will be tailored to the convenience, medical, and behavioral needs of diverse patient populations affected by diseases

With trial decentralization as the new norm, the virtual clinical trial of the future will place a low burden on patients, be data-rich due to the high frequency of measurement, and reduce the environmental impact due to decreased travel, fewer research centers and minimized patient non-adherence and dropouts. Such clinical trials will fundamentally transform drug development and cut development timelines through the implementation of digital innovations. These investments will enable companies to innovate and create a seamless clinical trial experience for patients and digitalize workflows for investigators and trial staff.