Drug research and development is always challenging, and many companies ultimately wind up failing. However, sometimes it is a self-inflicted wound. It’s not only the challenge of developing a new drug but also the way that you’re going about it.
In this guide, we look at some of the reasons why your drug R&D efforts are falling flat. We look at the common causes of development failures and why some companies don’t get to final clinical trials and FDA approval.
Lack of clinical efficiency and monitoring
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The most common reason for drug R&D failures is a lack of clinical efficiency in humans. Many companies test their products in animals and cell models and believe that they have a good chance of working in people. However, when it comes to final testing in Phase III trials, results don’t deliver. What worked very well in mice doesn’t often translate into human beings who are much more complex. We’ve already seen this countless times in diseases like cancer, Alzheimer’s, and diabetes.
These are notoriously challenging to treat and often require a multi-chemical approach to address. While simple mouse models might show improvements that are clinically significant, these don’t always translate into wild-living human beings. Poor target translation means that taking results out of the lab and then assuming that they work for people as well is premature.
It’s very difficult to think of a solution to this problem. The best way to deal with it is to get drugs into people as soon as possible. If there are case reports suggesting that a particular molecule or natural analog works, then this is often a good sign that it’s a path worth pursuing.
Toxicity and safety issues
On a related point, many companies often face toxicity and safety-related issues. While drugs appear safe in fruit flies, worms, and rodents, the same may not translate to human beings, who tend to have a vastly different biology from most of the rest of the natural world.
Unfortunately, about 30% of drugs fail because of toxicity and safety issues. They create real harm in the body because they are targeting a single receptor or blocking a particular process from occurring. Unfortunately, many of these toxic side effects only come out in late-stage trials after many weeks of testing. This means that the costs can be even greater, and healthcare start-ups can go out of business very quickly.
One way to reduce this risk is to do in-silico testing. The idea here is to simulate the impact of specific molecules on cells and body systems by simulating reactions in a supercomputer. These can sometimes determine whether population-level risks are likely to emerge in real-world testing.
Rising costs and diminishing returns
Rising costs and diminishing returns in R&D effort is also a problem that hampers many companies in the industry. The number of new drugs that are developed per billion dollars of R&D spent tends to halve roughly every nine years. This means that developing new drugs is vastly more costly than it was historically. Drugs now cost between $2B-$3B per approval and require more complex and longer-lasting trials. In terms of inflation adjustment, return on investment often sits at around 5%, which is significantly lower than many brands want. While there are blockbuster drugs that succeed, such as Ozempic recently, that is not the case for the majority of compounds.
To reduce the risk of overspending, look for affordable lab supplies. Also check the minimal viable trial options. Authorities will tell you whether your plans are acceptable or not.
Increasing trial complexity and attrition
Another problem when healthcare businesses get to Phase II trials is their complexity and attrition rates. Modern experiments are bigger and more global than their historical counterparts and often require coordination across multiple countries. Because of this, success rates have dropped to below 30% in most industries and niches within the healthcare sector, while at the same time, pipeline attrition is rising.
The biggest challenges are in areas like oncology where there are dozens of drugs in trial at any given time. More candidates in a particular space means that regulators are less likely to approve specific drugs for any given disease or treatment.
So, what can you do about this? The best way to get around this problem is to look for ways to support attrition where it is high. This could mean offering incentives or working with regulators to find the best path forward.
Misaligned incentives
Misaligned incentives can also be a significant problem in a lot of drug R&D companies. Many businesses lack the type of planning that’s going to lead to properly aligned long-term outcomes. For example, there might be shifting markets or a lack of commercial need for a particular drug. This is where proper market research comes into the frame. A lot of drug and healthcare startups have a push it forward culture, which means that they want to progress at all costs. However, simply spending venture capital money on medications that aren’t going to offer a return is a losing business strategy.
The best way forward is to be ruthless about the drug candidates that actually have market potential. If medications don’t offer patients real value and there aren’t clinical trials supporting their use, then they should be abandoned immediately.
Lab inefficiencies
Finally, some drug companies can become unstuck in the R&D process because of lab inefficiencies. Things like manual workflow and siloed data create bottlenecks that are difficult for companies to overcome without organizational change. Another issue is outdated equipment. Old technology tends to be significantly less productive and fruitful than newer versions, especially in a lab setting. This can lead to productivity gaps that force companies in this position to fall behind their competitors.
AI is actually a strong tool for kitting out laboratories properly and ensuring that they work efficiently. Artificial intelligence can identify problems in your existing business model and suggest ways to correct them quickly.
Top Photo by Jaron Nix on Unsplash
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