Pharma faces a colossal conundrum of how to score more approvals without breaking the bank. The quants have exposed massive inefficiencies in the R&D groups of Big Pharma, but some companies have fared better than others. And a recent analysis ranks R&D chiefs based on the performance of their companies.
Bristol-Myers Squibb's ($BMY) Elliot Sigal topped his counterparts at other large pharma companies--which included Novartis ($NVS), GlaxoSmithKline ($GSK), Amgen ($AMGN), and Merck ($MRK), respectively--in an analysis of R&D productivity from 2004 to 2011, The Wall Street Journal reports, citing the numbers from Informa-Scrip Group. During the period analyzed, Bristol spent $28.41 billion on R&D and racked up 7 FDA approvals of new drugs or biologics, costing the company $4.06 billion per approval.
Just over $4 billion might seem like too much money for an approval, yet consider that Sigal's counterpart at Merck, Peter Kim, presided over an R&D organization that spent $12.72 billion for each new FDA approval of a new drug or biologic (or $7.27 billion per approval if you count approvals of Merck's vaccines). Bristol-Myers, despite struggling to recover from a patent cliff, shows how more can be done with less relative to its industry peers. And in Informa-Scrip Group's Christopher Bowe's view, Sigal deserves lots of credit.
"Individuals matter," Bowe noted, as quoted by the WSJ. "One person can make a difference in a huge company, in a big world, within the infinite realm of science. There are better R&D chiefs than others; it's a fact. We must set up new ways to develop these unusual individual talents, so that companies don't settle and find them."
It's also a fact that Bristol has benefitted from savvy dealmaking and extramural activities with partners. Bristol gained rights to at least a couple of drugs that were approved by the FDA during the analysis period--the skin cancer immunotherapy Yervoy via Medarex and the antitumor antibody Erbitux from ImClone Systems--through partnerships or acquisitions.
In fact, pharma chiefs have copied Bristol's "String of Pearls" strategy that emphasized bolt-on acquisitions rather than megadeals. Teva Pharmaceutical ($TEVA) this year poached Jeremy Levin, Bristol's former strategy chief, to steer the growth of that company as CEO. Does Levin deserve some credit for Sigal's success?
- check out the WSJ's post (sub. req.)
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