A new report from Deloitte and Thomson Reuters -‘Measuring the return from pharmaceutical innovation 2012 predicts the rate is showing signs of stabilising.
The R&D internal rate of return (IRR) of leading pharmaceutical companies has fallen for a second successive year to 7.2% in 2012 from 7.7% in 2011. The observations are based on the findings of the latest review of pharmaceutical R&D returns performance by Deloitte, the business advisory firm, and Thomson Reuters. However, indications are the decline is beginning to stabilise as these companies have improved the upstream movement of compounds into the late stage pipeline.
Measuring the return from pharmaceutical innovation 2012,the annual study of the top 12 research-based pharmaceutical companies globally, reveals the number of product approvals increased by a third between 2010-11 and 2011-12. Conversely, the 32 approvals in 2010-11 accounted for forecast revenues of $309bn, the 41 in 2011-12 just $211bn.
Of the 12 companies considered, 10 have improved the replenishment of their late stage pipelines. The number of new compounds entering the late stage pipeline has more than doubled from 35 in 2010-11, to 78 in 2011-12. The forecast value of these assets has also doubled, from $193bn in 2010-11 to $378bn in 2011-12.
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