Chasing a big payday, new drugmakers slightly favor solo launches: report

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A new report from QuintilesIMS presents several factors—including product differentiation and unmet need—that can help an emerging biopharma company decide whether to partner or go it alone.

To partner or not to partner on a new drug launch? Of all the decisions emerging biopharma companies have to make, that's among the most important. After crunching 10 years' worth of data, analysts at QuintilesIMS now have info that could help execs make that choice.

The top-line stats offer a first set of clues: Average first-year sales for a partnered launch topped $17 million, compared with $13.1 million for drugs launched solo. For partnered meds, the average number of initial sales calls was way higher at about 65,000, compared with about 10,000 for solo launches.

Those figures may be stark, but they aren’t the only considerations when deciding whether to hunt for a partner. Going solo may be a high-risk option, but it offers bigger rewards. Even with lower average sales, the solo route produced enough growth to power more companies to “medium-sized”—with first-year sales between $101 million and $500 million—than partnering did, according to the report.

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One of those risks lies with payers. Even as they're able to set their own launch terms, companies that go solo have had a harder time dealing with reimbursement gatekeepers, according to the report. Their products were rejected for coverage half the time, compared with 32% for those that launched with a partner. QuintilesIMS figures that pharma partners have more experience with—and leverage in—payer negotiations.

What it finally comes down to is a classic cost-benefit analysis, and here the analysts can help. In making a partnering decision, companies should consider under which “archetype” their launches fit, according to the report. Weighing product differentiation and unmet need, the analysts came up with four launch types, each with different demands and opportunities.

About 60% of companies elected to go it alone with their first launches between 2006 and 2015, the analysis found. They either developed their own product, in-licensed a med or acquired a company to sell a drug, according to the group. The other 40% of companies partnered up through a variety of deal types.

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Over the period, Vertex's hep C med Incivek, marketed solo, turned in the highest first-year sales at $1.4 billion, according to the report. That was a case of a brand-new drug class in a disease with millions of patients.

Meanwhile, Imbruvica, a cancer med from Pharmacyclics and Johnson & Johnson, generated the second-highest launch-year sales at more than $350 million—and J&J obviously contributed a lot of marketing experience to that rollout. AbbVie picked up Pharmacyclics for $21 billion back in 2015.

Choosing to go it alone can have broader consequences, of course. Consider the next-gen obesity drug, Qsymia, which hit the market in 2012. Vivus elected to take on that launch without a commercial partner, and caught a lot of investor flak for that decision—including a proxy fight.

Because so many companies are opting to go it alone, large pharma companies are having to compete more and more for deals to fill their pipelines, according to the report. That trend can be seen in Pfizer's $14 billion purchase of Medivation, struck after the New York drugmaker elbowed out a host of Big Pharma and Big Biotech rivals to seal the deal.

The analysis didn’t look at potential long-term benefits from a partnership, such as lasting sales support and follow-up launches.