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Biotech FDA Approvals Peak

Last September, I discussed how increased biotech funding is having a material effect on overall pharmaceutical research and development spend. The output of my analysis showed that total R&D spend was approaching 40% from companies outside the top 30 pharmaceutical firms. I've re-posted my chart below for reference.

Pharma R&D Spend Trend

Biotech Funding Remains Strong

While Q4 2018 funding was down from previous years, Evaluate Pharma reported November 16, 2018 YTD venture investments of approximately $15.1 billion – which is a new record.

Nov 2018 YTD Biotech VC Investments

The biotech spend ramp has been good for the CRO industry. The mid-size CRO sector has seen a great deal of success and growth. The primary reason I joined Clinipace was that I enjoyed working with small and midsize companies during my career. I wanted to build a CRO with a consultative mindset that could be a valuable long-term partner to small and midsize biotech/pharma companies. Mega/Large CROs have taken notice of the recent biotech gold rush and have established biotech business units within their sizable infrastructures. Outsourcing-Pharma recently reported that IQVIA renamed its Novella Clinical subsidiary IQVIA Biotech and Parexel unveiled Parexel Biotech this past January. CRO consolidation slowed in 2018 at all levels – perhaps due to the growth provided by the biotech sector.

Early Results?

Raising and spending capital is great, but I wondered if investors and patients were actually seeing a return on these investments. I decided to breakdown FDA approvals from 2014 - 2018 between companies in the Scripps Top 100 and all other companies (primarily small pharma/biotech).

I found the output of my analysis pretty interesting. 2018 looks to be the first year where the majority of new novel drug approvals came from companies outside the Scripps Top 100. A quick analysis of FDA data shows that in 2017 approvals were split 50/50 from Scripps Top 100 and non Scripps 100 pharma/biotech companies. Also important to note that 2018 was a record year for drug approvals and represented a 28% increase over 2017 (59 vs 46). The growth from companies outside the Scripps 100 was even more substantial 48% (23 to 34).

2014-2018 FDA Drug Approvals

A few other observations:

  • "All Other" companies had almost as many approvals in 2018 (34) as 2014-2016 combined (37).

  • "All Other" companies had more approvals in 2018 (34) than all companies companies combined in 2016 (22)

I think its reasonable to expect approvals outside the Scripps Top 100 accelerate. We know that drug development is a long process and the recent money raised should help develop therapeutic solutions that are several years away from FDA submission approval.

Will the Good Times Continue?

The government shutdown has slowed new IPOs in early 2019 and Q4 biotech funding was beginning to slow. David Windley (also reported by Outsourcing Pharma) stated that biotech funding would be likely flat to lower in 2019. I would characterize any funding amount close to 2018 a win. That would not only increase the amount of drug development funding but also likely the number of companies with active compounds. Time will tell how long biotech investments remain in favor - one would assume if FDA approvals continue to increase, strong investment levels will continue.

A New Paradigm

The increase in biotech funding, consistent investment from large pharmaceutical companies, rapid scientific advances and FDA Commissioner Scott Gottlieb’s progressive approach to drug development is not only a boon to CROs and investors, but also patients. We have entered a stage where more life changing therapeutics have a chance to be approved and made available. A truly remarkable time for healthcare. I am both excited and in awe of being able to participate in all of this at Clinipace.

Jason Monteleone is CEO of Clinipace & President at Pivotal Financial Consulting, LLC. Clinipace is a global mid-size CRO with operations in the Americas, Europe and Asia-Pac serving small and mid-size pharma and biotech sponsors. Pivotal provides Divestiture Assistance, Acquisition Advisory Services and Strategic Planning to the Pharmaceutical Outsourcing Industry. Jason can be reached at, Follow me on Twitter @JMPivotal. Sign up for Jason's latest blogs and updates at my

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