Striking the delicate balance of externalizing biopharma R&D to maximize innovation: Strategies to buy vs. build

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Six of the top ten biggest selling biopharmaceuticals were acquired or in-licensed. In parallel, the R&D spend of the industry has remained at 16.8% (5.6-24.3%) of revenue over a long period of time. In parallel, evidence shows that more product candidates are entering Phase 1-2 stage of testing in the last decade than before. However, they are not necessarily resulting into de-risked, late-stage biopharma pipelines.
Another wave of loss of exclusivity estimated approximately $160B is quickly approaching creating the need to innovate fast. Given these dynamics, the sense of urgency to replenish the in-market assets could not be more acute. Thankfully, the high-risk high-reward nature of the industry has been benefiting from a healthy cash-flow which built a collective firepower estimated at $1.2T which can be deployed to acquisitions. To respond to the shortfall in the R&D productivity and fuel top-line growth, the Biopharma industry has to strike the delicate balance of buy vs. build.
Global Head of Business Development & Licensing, Executive Committee Member
Bayer Pharmaceuticals
Founder and Senior Advisor
Aisling Capital
Professor of Economics
SRH University Heidelberg
Vice President of Worldwide Business Development
Pfizer Inc.