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Big Pharma bets big on AI’s US$ 148 bn potential to revolutionize healthcare industry

Artificial intelligence (AI) is changing the world and bringing efficiencies across all industries. Pharmaceuticals is one of them. AI can accelerate drug discovery, streamline clinical trials, and personalize medicine. It holds the potential to revolutionize the pharma industry.It takes anywhere between 10 to 15 years and around US$ 3 billion to take a new drug from its discovery phase to the market. AI can drastically cut both the timespan and costs and bring life-saving yet affordable treatments to the market at a faster pace. The global AI market in healthcare was estimated to be about US$ 21 billion in 2024 and is expected to grow to over US$ 148 billion by 2029, compounding at an annual growth rate of 48.1 percent.Drugmakers are eager to ride the AI wave. Players like Bayer, Merck KGaA, Moderna, BMS, Roche, Astellas, Amgen, Eli Lilly, Sanofi, Novo Nordisk and Johnson & Johnson have announced collaborations, signed deals and entered into partnerships in the AI space. Many others, such as Exscientia, Insilico, Berg, Nimbus, Recursion, and Pharos iBio, are a step ahead and are holding clinical trials on drugs developed using AI.On its part, the US Food and Drug Administration (FDA) has recognized the increased use of AI and machine learning (ML) and has reiterated its commitment to ensure the safety and efficacy of drugs “while facilitating innovations in their development.” To this end, the US agency published a paper in March that lists out its approach towards the use of AI.Novo, Lilly turn to AI for drug discovery; AI-based firms sign multiple dealsWith increased adoption of wearable devices, e-health services and other technology-driven offerings in medicine and healthcare, there is valuable data out there that drugmakers can analyze to get more accurate predictions of a drug’s effects on the human body. Such an analysis speeds up drug development and reduces side effects of therapies. Ergo, several large drugmakers have signed crucial AI deals. For example, Novo Nordisk has inked a potential US$ 2.7 billion deal with Valo Health to discover and develop novel treatments for cardio-metabolic diseases. The collaboration between the two organizations will leverage the capabilities of Valo’s Opal Computational Platform, including access to real-world patient data, AI-enabled small molecule discovery and Biowire human tissue modeling platform designed to speed up the discovery and development process.Similarly, Eli Lilly has entered into a US$ 494 million deal with Fauna Bio to use the latter’s AI platform — Convergence — for preclinical drug discovery efforts in obesity. Convergence analyzes genomic data from 452 mammal species and various tissue types to create a comprehensive dataset. By integrating human data and information from animals with natural disease resistance, the platform can identify potential drug targets.AI-based pharma firms like Isomorphic Labs and Biolojic are also landing multiple deals. Isomorphic is owned by Google’s parent Alphabet. Along with Google DeepMind, it has created a new AI model that can accurately predict 76 percent of protein interactions with small molecules. In January, Isomorphic inked deals with Novartis and Lilly for a combined value of nearly US$ 3 billion.Biolojic Design uses computational biology and AI to transform antibodies into programmable, intelligent medicines. Earlier this month, it announced a multi-target drug discovery collaboration with Merck KGaA, which includes antibody-drug conjugates. Biolojic has also inked deals with Teva and Nektar recently.Amgen harnesses generative biology for protein-based drugs; Sanofi ties up with OpenAIFinding a good protein drug candidate is like finding a needle in a haystack. Drug developers typically start by looking at proteins in nature and then go through the painstaking process of shaping them into safe and effective drugs.Generative biology is a revolutionary approach to drug discovery and development that leverages ML and AI to design novel protein therapeutics. Amgen is using generative biology to innovate new protein-based drugs that have desired structures and properties based on existing protein data inputs. In fact, the California-based multinational has said it is “integrating AI across all operational levels.” It has collaborated with PostEra to advance up to five small molecule programs.Amgen is building AI models trained to analyze one of the world’s largest human datasets on an NVIDIA full-stack data center platform, known as DGX SuperPOD, that will be installed at Amgen’s deCODE genetics’ headquarters in Reykjavik, Iceland. This system will be used to build a human diversity atlas for drug target and disease-specific biomarker discovery, providing vital diagnostics for monitoring disease progression and regression.AI can analyze individual data like genetic makeup, lifestyle and medical history to come up with personalized therapies. Amgen is working on AI-driven precision medicines, and potentially individualized therapies, at its Iceland facility.Sanofi too has signed multiple deals in recent months. In May, the French drugmaker signed a collaboration with ChatGPT maker OpenAI and Formation Bio to build AI-powered software to accelerate drug development. Sanofi is also collaborating with BioMap in a deal that could be worth up to US$ 1 billion. The deal is expected to enable superior prediction from limited data in a range of therapeutic areas, including immunology, neurology, oncology, and rare diseases.AI tools can create control arms, digital twins and slash failure rate in clinical trialsTraditional ways of drug development are fraught with challenges, and 90 percent of drug candidates in clinical trials tend to fail. Major reasons behind this are poor patient cohort selection and recruiting mechanisms, and the inability to monitor patients effectively during trials. AI tools like Trial Pathfinder study real data obtained from patients’ electronic health records and simulate clinical trials for the drug with different eligibility criteria. Trial Pathfinder also calculates trial hazard ratios, a scientific term that compares the survival rates of those given and not given the drug.AI and synthetic data can also be used to create control arms in clinical trials, which can help speed up the process, reduce costs, and improve the quality of data. For example, FDA has supported the use of a Medidata Synthetic Control Arm in a phase 3 trial of Medicenna’s MDNA55 in recurrent glioblastoma.In addition to observing real-time patient data, researchers can also create digital twins, virtual replicas of cells, organs, or people, which they can use to simulate and predict various clinical outcomes during a trial.Our viewThe pharmaceutical industry is on the cusp of a revolution. In the coming years, we hope to see some tangible results of the efforts being put in by drugmakers, AI developers and regulatory agencies. The CPhI Annual Report 2023 has predicted that in 2030, over half of FDA-approved drugs will involve AI in their development and/or manufacturing. The winner, in our view, will be the end-user who will have cheaper, safer and more effective treatments, delivered at a faster pace.

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13 Jun 2024

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Pfizer’s buyout of Seagen, drugmakers suing US govt, obesity drugs make it to top 10 Phispers of 2023

Every week, PharmaCompass compiles important developments in the world of pharmaceuticals and brings a compilation to you in the form of Phispers. Of the hundreds of stories we carried in 2023, here are the top 10 stories, including some trends and updates.I. Pfizer buys Seagen for US$ 43 billion to bolster its oncology portfolioIn March, Pfizer said it is acquiring cancer treatment specialist Seagen for US$ 43 billion. Seagen is a pioneer in antibody-drug conjugates (ADCs), or drugs that work like “guided missiles” to destroy cancer cells while sparing healthy cells. Another important deal in the field of ADCs took place in December when AbbVie picked up ImmunoGen for US$ 10.1 billion, giving it access to Elahere (mirvetuximab soravtansine-gynx), an ADC approved for platinum-resistant ovarian cancer. Elahere is expected to achieve blockbuster status by 2030. II. Merck, BMS, trade bodies, sue US government over IRA negotiationsIn June, Merck filed a lawsuit against the US government seeking to block Medicare from negotiating lower prescription drug prices under the Inflation Reduction Act (IRA). Days later, the US Chamber of Commerce, one of the most influential trade groups in the US, filed a separate lawsuit, arguing that the negotiations violated drugmakers’ constitutional rights and granted excessive control over prices to the government. They were joined by Bristol Myers Squibb (BMS) and lobby group PhRMA. Drugmakers and the Biden administration appeared to be at each other’s throats. In December, the White House identified 48 drugs whose prices spiked faster than inflation in Q4. These drugs may be subject to rebates starting January 2024. Biden Administration also announced it is setting a new “march-in” policy that allows the government to seize medicine patents held by drugmakers for therapies whose development was taxpayer-funded, if it believes they are not “reasonably available and affordable.”III. US, UK approve Lilly’s Mounjaro for weight management; to be sold as ZepboundIn November, drug regulators in the US and the United Kingdom approved Eli Lilly's Mounjaro (tirzepatide) for weight management, to be sold under the brand name Zepbound. The drug will pose strong competition to Novo Nordisk’s Wegovy in a market that's expected to reach US$ 100 billion by the end of the decade.IV. Novo, Lilly plan capacity expansions for weight loss drugsBoth Novo Nordisk and Eli Lilly announced expanding their manufacturing capacities in order to capitalize on the burgeoning market for weight loss drugs. Novo is investing over DKK 42 billion (US$ 6 billion) in Kalundborg (Denmark), US$ 2.3 billion to expand its site in Chartres (France) and over € 2 billion (US$ 2.18 billion) in Dublin (Ireland) to boost production of its blockbuster diabetes and weight-loss drugs, including Ozempic and Wegovy (both semaglutide). Similarly, Eli Lilly had announced a US$ 2.5 billion manufacturing facility in Germany in November to address the demand for its new obesity and diabetes therapies.V. FDA finds violations at Global Pharma’s eye drops plant in India; issues Form 483In April, FDA found several violations in manufacturing processes and sterilization methods used by India-based Global Pharma for its EzriCare Artificial Tears Eye Drop, which has been linked to 68 cases of eye infection in the US, including eight cases of vision loss and three deaths.VI. ‘Intas India staff tore documents, threw acid to destroy evidence’, notes FDAIn January, FDA issued a Form 483 with 11 observations to Intas Pharma’s drug manufacturing facility in Ahmedabad (Gujarat, India). A team of three FDA drug regulators conducted an inspection of the manufacturing facility from November 22 to December 2, 2022. The 36-page report issued by the FDA has alleged that employees at the facility had destroyed documents related to manufacturing practices by tearing them into pieces and disposing them inside the quality control lab and scrap areas. Acid was used to destroy evidence, notes FDA.VII. GSK overtakes Pfizer in bagging first FDA approval for RSV vaccineIn May, FDA approved GSK’s respiratory syncytial virus (RSV) vaccine for people aged 60 and above. Arexvy is the first RSV vaccine to be approved in the US for the common condition that can be fatal for the elderly. Later that month, Pfizer’s RSV vaccine Abrysvo also got approved. In July, Sanofi-AstraZeneca’s RSV antibody therapy, Beyfortus (nirsevimab-alip), received approval from the FDA. It is a long-acting treatment that can be given once per season. The approval is specifically developed for newborns and infants.VIII. UK authorizes gene therapy Casgevy for blood disorders, US follows suit In November, Britain’s Medicines and Healthcare products Regulatory Agency was first off the block in authorizing CRISPR Therapeutics and Vertex Pharmaceuticals’ Casgevy, a therapy that seeks to cure two blood disorders — sickle-cell disease (SCD) and β-thalassemia. The therapy is based on gene editing technology that had won its scientists the Nobel Prize in Chemistry in 2020.Less than a month later, FDA not only approved Casgevy (exagamglogene autotemcel) for SCD, but also approved bluebird bio’s Lyfgenia (lovotibeglogene autotemcel) for the treatment of SCD in patients aged 12 and older who have a history of vaso-occlusive events (when tissues become deprived of oxygen).IX. Leqembi becomes first med to bag full approval to treat Alzheimer’sEisai and Biogen’s Alzheimer’s drug Leqembi (lecanemab) had won FDA’s accelerated approval in January. It treats patients who are in the earliest stages of the neurodegenerative disease. In July, it became the first treatment to receive full FDA approval to treat the condition.X. Bayer’s experimental anticoagulant fails late-stage trialOne of the biggest disappointments from clinical trials came when a major late-stage trial for Bayer’s experimental anticoagulant asundexian had to be discontinued due to its inadequate effectiveness. Bayer had expectations in excess of € 5 billion (US$ 5.5 billion) from this drug.

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18 Jan 2024

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Top 15 Pharmaceutical Companies by Drug Sales in 2016

In 2016, M&A deals fell drastically in both numbers and value. One key reason was the falling through of the Pfizer-Allergan mega merger due to America’s crack down on inversion deals. The year 2015 went down in history as a record year for mergers and acquisitions (M&As) in the pharmaceutical and biotech space, when deals worth US $ 300 billion were announced. The highlight of 2015 was the mega-merger announced between US drugmaker Pfizer and Ireland-based Allergan – the biggest-ever pharma transaction that was worth more than US$ 160 billion. 2016 saw Pfizer and Allergan walk away from their US$ 160 billion merger when the new US Treasury rules cracked down on inversion deals that were encouraging US companies to move overseas to cut taxes. The merger would have allowed New York-based Pfizer to cut its tax bill by an estimated US$ 1 billion annually by domiciling in Ireland, where tax rates are lower. M&A deals dip by 20 percent in 2016 Although the Pfizer-Allergan mega-merger did not go through, The Pharma Letter tracked transactions through the year and noted that although “worldwide merger and acquisition activity in the pharmaceutical and biotechnology sector in 2016 was plentiful”, the numbers and values were “well down” on those seen in the previous two years. The number of transactions announced in 2016 was 130, compared to 166 M&A deals in 2015 – which was a record year – and 137 in 2014, says The Pharma Letter. Values of the top 10 deals drop to a third The other crucial fact about M&A deals in 2016 was that transactions that exceeded the US$ 1 billion mark were down to just 23 in 2016, as against 30 in 2015 and 26 in 2014. The Pharma Letter quotes a KPMG report published earlier this year which notes that the total value of the top 10 completed deals in the first half of 2016 amounted to US $ 67.2 billion as opposed to US $190.4 billion in first-half 2015. Sanofi-Actelion — the deal that wasn’t Sanofi made headlines, not for the acquisitions it made, but for the ones it wasn’t able to close. Late last year, the French pharma giant was widely identified as the big player that managed to push Johnson & Johnson away from negotiations with Actelion only to lose its US$ 30 billion bid to J&J even though it would have delivered “approximately equivalent value to Actelion’s shareholders”. The Actelion loss came after Sanofi was out bid by Pfizer for Medivation. Pfizer agreed to buy the US cancer drug company for US$ 14 billion in cash, adding its blockbuster prostate cancer drug Xtandi to the company's growing oncology roster. Additionally, Pfizer acquired Anacor for US$ 5.2 billion to add an eczema gel to its portfolio. Bayer’s US$ 66 billion takeover The biggest deal announced in 2016 was Bayer’s US$ 66 billion takeover of the US seeds company Monsanto after months of wrangling. It was the German drug and crop-chemical company’s third offer that clinched the deal, which is also known to be the largest all-cash deal on record. This signature deal has disrupted the agribusiness sector, which in recent years has been involved in a consolidation race largely triggered by factors such as shifting weather patterns, intense competition in grain exports and a souring global farm economy. Top pharma companies by sales Bayer’s acquisition of Monsanto makes the ranking of top pharmaceutical companies consistently complicated since Bayer will generate more sales from its crop science and high-tech polymer division than from the sale of prescription drugs. Should divisions like diagnostics, animal health, vaccines, consumer health be counted while determining the size of a pharmaceutical company? In a volatile global world, where wild exchange rate fluctuations play their own major role in determining the size of organizations, this week PharmaCompass shares the revenues, as presented in the 2016 annual reports of top 15 companies, so that you can draw your own conclusions on the top drug companies of the world. Company Name Currency Pharma Consumer Health Medical Devices/ Diagnostics Vaccines Animal Health Other Revenues Total Sales 1 Pfizer USD 41,600 3,407 6,071 1,746 52,824 2 Novartis USD 48,518 48,518 3 Roche CHF 41,047 11,589 52,636 4 Merck & Co. USD 29,360 5,791 3,478 1,178 39,807 5 GlaxoSmithKline GBP 16,104 7,193 4,592 27,889 6 Johnson & Johnson USD 33,464 13,307 25,119 71,890 7 Sanofi EUR 22,932 3,330 4,577 2,708 274 33,821 8 Gilead USD 29,953 437 30,390 9 Abbvie USD 25,560 78 25,638 10 Bayer EUR 16,420 6,037 1,523 22,789 46,769 11 Amgen USD 21,892 1,099 22,991 12 Astrazeneca USD 21,319 1,683 23,002 13 Teva USD 20,664 1,239 21,903 14 Eli Lilly USD 18,064 3,158 21,222 15 Bristol-Myers Squibb USD 17,702 1,725 19,427 Sales figures are reported in millions. Currency exchange rate used CHF: 0.99 USD/ EUR: 1.06 USD / GBP: 1.25 USD Ranking methodology When it came to ranking companies, based on their total sales, we at PharmaCompass did not face any challenges while including the sales of prescription drugs along with those of vaccines. But matters got a little complicated when we got down to ranking consumer health divisions. For instance, while we have included consumer health divisions of companies like Sanofi, GSK and Bayer, which primarily sell OTC drug products (such as brands like Allegra, Voltaren and Aleve), we have excluded those of companies like Johnson & Johnson, given their focus on baby and beauty products. Such a demarcation — based on the focus of the company — will always be a matter of debate. Similarly, revenue generated from the sale of medical devices/diagnostics as well as revenues of animal health divisions were not included in our rankings. In the case of companies like Bayer, whose Covestro’s division has over US$ 10 billion in sales from customer industries such as automotive, construction, electrical and electronics, and furniture, such sales were accounted for in ‘other revenues’. Our table highlights the sales revenue of various divisions of companies in order to bring more clarity into the figures which were included in our rankings.

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02 Mar 2017

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Big Pharma bets big on AI’s US$ 148 bn potential to revolutionize healthcare industry

Pfizer’s buyout of Seagen, drugmakers suing US govt, obesity drugs make it to top 10 Phispers of 2023

Top 15 Pharmaceutical Companies by Drug Sales in 2016

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