While the pharmaceutical industry is less susceptible to market dynamics during a downturn as compared to other industries, this unpredictable environment amid the COVID-19 pandemic has pharma rethinking their portfolios and pipeline assets, supply chains, API sourcing, and manufacturing.
Arda Ural, Ph.D., a Principal and the Americas Industry Markets Leader, Health Sciences and Wellness at Ernst & Young LLP, provides insights on market dynamics, enduring therapeutic areas, near term M&A for pharma/biopharma, and how industry can use this time for transformation in commercial, supply chain and product development. –KB
Contract Pharma: How are pharma/biopharma companies adjusting their portfolios as a result of the pandemic?
Arda Ural: COVID-19 has meant biopharma companies’ must reconsider their portfolios, prioritizing how to secure the performance of in-market products and re-thinking assets currently in the development pipeline.
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As it relates to in-market products, companies have been exploring supply chain initiatives to pre-empt any disruption by securing their APIs and excipients. They are also forecasting demand for specific products based on the elasticity for each therapeutic area. We recommend a dynamic and scenario-driven forecasting methodology and increasing the number of sales and operational planning sync-ups between manufacturing and commercial functions to adjust to this highly unpredictable environment. Of note, commercial teams are pivoting to digital channels, given sales’ inability to meet in-person with target providers.
Companies are also closely assessing their pipeline. COVID-19 has already impacted the pace of patient enrollment in clinical trials. As a result, the net present value of these pipeline assets may have changed, leading to a reshuffling of portfolio priorities. We are aware of several companies who are re-optimizing their pipeline as a result of COVID-19. Our recommendation to clients is to analyze the full portfolio immediately in a scenario-based approach and keep refreshing it on a monthly and quarterly basis.
Finally, companies with a viable candidate for a diagnostic tool, treatment or vaccine for COVID-19 have prioritized all their developmental activities to bring it to the market. While it’s a pressing imperative for the public good, this also asserts the company as a leader in fighting COVID-19.
CP: How are sponsors responding to new challenges conducting research and clinical trials?
AU: The COVID-19 outbreak has made it difficult for pharmaceutical companies to recruit patients for new trials and to keep already-enrolled patients compliant with protocols to avoid invalidation of the study outcomes.
Studies suggest that approximately 56% of U.S. clinical research study sites and 81% of European sites are less likely to continue current enrolled clinical trials and comply with study protocols and schedules.1 At this point, more than 30 pharma/biopharma companies have reported a clinical trial disruption due to COVID-19. Some companies have paused clinical trial enrollment, uncertain about the ability to access testing sites. In parallel, trials for therapeutics and vaccines for COVID-19 have been expedited. A silver lining of this pandemic may be the much-needed acceleration of the digitalization and simplification of clinical trials. Addressing these cumbersome processes is long-overdue.
Biopharma companies spend approximately 17% of its revenue on R&D activities. This number has been consistently increasing over the last decade and is mostly driven by large and expensive later-stage clinical trials.
Source: Contract Pharma