Pipeline advancements and asset acquisitions fuelled mid-cap biotech R&D spend in 2014

Combined R&D spend of 35 mid-cap biotech companies increased by nearly US$2bn to reach a total of $9.7bn in 2014

The combined spend on research and development (R&D) for the peer group of 35 mid-cap biotech companies increased by nearly US$2bn to reach a total of $9.7bn in 2014, primarily thanks to top spenders Regeneron and Vertex, says research and consulting firm GlobalData.

The company’s report states that Regeneron led the way with R&D expenses of $860m in 2013, with further analysis showing that Regeneron’s R&D expenses grew by 47.9% year-to-year to $1.3bn in 2014.

According to Adam Dion, GlobalData’s Senior Industry Analyst, this expenditure was boosted by an increase in clinical trial expenses, owing to additional costs for studies of dupilumab, and REGN-1033, the company’s antibody to myostatin (GDF8), which is in Phase II trials for undisclosed musculoskeletal disorders.

Dion comments: ‘Regeneron’s R&D expenses also grew as a result of fees for the regulatory submissions and marketing approvals for Eylea, which GlobalData forecasts to be the top-selling eye drug by 2016.’

‘However,’ he added, ‘Regeneron’s overall R&D cost burden was partly offset by the conclusion of the Phase III trials of Eylea in wet age-related macular degeneration and macular oedema following central retinal vein occlusion.’

The analyst adds that Vertex had the second largest R&D outlay among the peer group, spending $855.5m in 2014, representing a 3% decrease from 2013. This resulted from the company completing the TRAFFIC and TRANSPORT clinical trials evaluating VX-809, a combination product of lumacaftor and ivacaftor for treating cystic fibrosis.

Despite this, unexpectedly sharp rises in spending from Jazz and Alnylam helped to drive R&D in 2014. Dion continues: ‘Jazz’s 518% spike in R&D spend was the result of a $197m surge of in-process R&D (IPR&D) expenses, derived from the asset purchases of Aerial BioPharma and Sigma-Tau Pharmaceuticals. These purchases gave Jazz the rights to two promising drugs, namely JZP-110 to treat aspects of narcolepsy and sleep apnoea, and defibrotide, to prevent severe hepatic veno-occlusive disease in bone marrow transplant patients.

‘Meanwhile, Alnylam’s R&D expenses soared by 266% to $411m in 2014, up from $112.3m during 2013. This increase in R&D spend resulted primarily from a $221m IPR&D charge in connection with Alnylam’s acquisition of Sirna Therapeutics’ RNAi assets from Merck,’ the analyst concludes.

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