When the FDA announced that it had OK'd 35 new drugs in fiscal 2011, the agency boasted of a spike in approvals that rivaled a peak for the past decade. Since then, agency officials have continued to assert that the jump in approvals signaled a significant sea change for the industry, which could expect a wave of next-gen drugs to get a green light from regulators.
But the trend may not make it past the end of last year. Fitch Ratings did the math on new drug approvals for the first half of calendar 2012 and came up with 14 new molecular entities--compared to 18 for the same period last year. A weak second quarter snapped a strong streak of approvals in the first three months of 2012. And Fitch doesn't believe that the industry's late-stage pipeline can make up the gap in the second half of the year.
The downturn in approvals comes at a painful time for the industry.
"These trends come as the global pharmaceutical industry faces several risks over the course of 2012, including a historic zenith in the dollar amount of drug patent expirations," Fitch notes in a release. "Four of the industry's once top-10 best-selling medications will have lost market exclusivity by the end of 3Q'12. Fitch anticipates little relief from the patent cliff this year, as key drug patents continue to lapse and the industry contends with 2011 losses."
A downturn in new drug approvals this year would only raise fresh questions about the productivity rate for the biopharma industry. CEOs like Sanofi's ($SNY) Chris Viehbacher have offered scathing reviews of the industry's poor returns on its multibillion-dollar gamble on new drug research. For OKs to dip now, at a time patent expirations are eliminating a string of blockbusters at major companies, would likely add fresh pressure on the agency to speed new approvals. And it could also shorten the tenure of more top execs, like David Brennan, who fail to deliver badly needed new products.
- here's the press release
Special Report: FDA approvals of 2011
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