5 Pharmas Spending the Most to Develop Drugs

You’ve Got to Spend Money to Make Money• Companies can spend upwards of $5 billion per new

drug.• Most of the expenses come from failed drugs,

which account for 95% of drugs that enter the clinic.• Fortunately, with decent sales, approved drugs can

produce many times the average development cost over the life of the patents.

• Unfortunately, spending money on R&D doesn’t guarantee success.

• Revenue and R&D expenses peaked in 2011.• Company has decreased R&D expenses even more

than revenue to compensate• Unclear how that’ll affect long-term pipeline

development.

• Revenue has dropped with the loss of exclusivity on Seroquel IR, Atacand, Nexium, and Merrem in various parts of the world.

• R&D decreased a little, but skyrocketed as a percent of revenue.

• Company has 11 new molecular entities in Phase 3 or in front of regulators, almost double the previous year

• A few years ago, Roche bought Genentech, arguably the powerhouse of biotech R&D

• Revenue was up substantially in 2013. In a world of patent cliffs, can you really ask for more?

• Loss of exclusivity on Plavix hurt revenue.• Solid pipeline has encouraged Bristol-Myers to

continue to spend. (Six drugs in Phase 3, nine in phase 2, and 14 marketed products being tested in additional indications).

• Continued spending substantially increased R&D as a percent of revenue.

• Revenue decline due to loss of exclusivity on Cymbalta.

• Spending on R&D has continued to increase.• The combination resulted in a substantial increase

in R&D spending as a percent of revenue, leading the pharmaceutical pack.

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