According to various industry and market publications, pharmaceutical companies spend, on average, 17% of revenues on R&D, making it one of the biggest spenders in this area. Outside of the semiconductor industry, no other industry spends more on R&D. A quick survey of other industries by Investopedia, clearly shows how much most of them are outspent in R&D by pharmaceutical companies. The overall average spending on R&D by industries engaged in developing new products is a mere 1.3% of sales revenues. The chemicals sector, one of the larger R&D sectors, spends an average of 2 to 3%. Aerospace and defense firms, although they do a great deal of research and development work, only dedicate about 4 to 5% of revenues to R&D spending. Investopedia says that, in fact, the pharmaceutical industry’s lifeblood is R&D. The success of major drug companies is almost wholly dependent upon the discovery and development of new medicines, and their allocation of capital expenditures reflects that fact. “Although the average spending is 17% of revenues, some companies spend substantially more.” The report continued: “As of 2019, many of the largest pharmaceutical firms spend nearly 20% on R&D. Of the 20 largest R&D spending industries in the world, the pharmaceutical industry makes up nearly half the list… Many smaller pharma companies have lower revenue totals; so, they often spend significantly higher percentages of their budget on R&D – up to 50% for some firms. Active biotech and pharma companies in the markets this week include CNS Pharmaceuticals, Inc. (NASDAQ: CNSP), Agios Pharmaceuticals, Inc. (NASDAQ: AGIO), Proteostasis Therapeutics, Inc. (NASDAQ: PTI), Eli Lilly and Company (NYSE: LLY), Sangamo Therapeutics, Inc. (NASDAQ: SGMO).
Another report says that: “The pharmaceutical industry’s activities have significant socio-economic impacts on society in the form of investments in R&D and manufacturing. Of note, R&D is the “backbone” for success in any drug discovery program. Thus, the extent of pharma R&D spending serves as an important metric to show a company’s commitment to finding new drugs. At present, the global pharmaceutical industry has the second highest R&D intensity (expenditure as a share of sales) measures of any sector…” The report also indicates that overall R&D spending is expected to grow by 3% each year, reaching roughly $203.9 USD billion by 2024.
CNS Pharmaceuticals, Inc. (NASDAQ: CNSP) BREAKING NEWS: CNS’ Berubicin Awarded $5.8 Million Non-Dilutive Grant from EU/Polish National Center Through its Development Partner – CNS Pharmaceuticals, a biotechnology company specializing in the development of novel treatments for brain tumors, announced that its partner, WPD Pharmaceuticals (“WPD”), a Polish corporation founded by Dr. Waldemar Priebe, the founder of the Company, was awarded a $5,798,875 grant from the EU/Polish National Center for Research and Development under the Smart Growth Operational Program 2014-2020 (the “EU Grant”).
The Company previously entered into a sublicense agreement with WPD, in which WPD committed to a $2.0 million minimum expenditure on the development, testing, regulatory approval, and commercialization of Berubicin over a three –year period. WPD’s subsequent development project, “New approach to glioblastoma treatment addressing the critical unmet medical need” (the “WPD Project”), received the grant co-financed by the European Union under the Smart Growth Operational Program 2014-2020, Priority I: Support for Research and Development work by Enterprises, Measure 1.2: Sectorial Research and Development Programs, Sectorial Program InnoNeuroPharm. The main goal of the WPD Project is to implement the world’s first multicenter pediatric Phase I clinical trial to determine maximum tolerated dose (MTD) and Phase IB and II clinical trials in adults, to assess the efficacy of Berubicin. Proceeds from the grant will be used independently by WPD Pharmaceuticals in order to fulfill its commitment arising from its sublicense agreement with the Company.
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“The EU Grant represents an important milestone for the advancement of our novel anthracycline, Berubicin, especially in pediatric settings,” commented CEO of CNS, John M. Climaco. “We believe this grant will allow our partner, WPD Pharmaceuticals, to fulfill its commitment arising from its sublicense agreement with us in a manner that is capital-efficient and non-dilutive to the CNS. Additionally, this EU Grant and our partnership with WPD presents an opportunity to potentially accelerate our efforts to bring Berubicin to patients around the world.”
Source: BioSpace
