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

1:45 PM - 2:45 PM, Wednesday, June 10, 2020 ・ Room 6D
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.
Vice President, Head of Alliance Management
Merck Healthcare KGaA
Professor of Economics
Heidelberg University
Vice President of Business Development, Pharmaceuticals Commercial Portfolio at GSK