North America leads in number of strategic pharma partnerships between 2014 and H1 2019

From 2014 to the first half (H1) of 2019, there were more than 1,300 separate strategic partnerships and 1,000 licensing agreements made in the global pharmaceutical industry that involved gene therapy, immuno-oncology, microbiome and orphan drug therapeutics, according to GlobalData, a leading data and analytics company.

The company’s latest report, ‘Deal-Making Trends in Pharma – Thematic Research’, reveals that North America had two times more strategic partnerships in these areas than Europe and five times as many as the Asia-Pacific (APAC) region. Since 2018, the number of licensees in the APAC region has begun to overtake those in Europe, indicating that APAC will continue to become an emerging player in the pharmaceutical deal landscape driven by the strength of the Chinese stock market.

Driven by US market prices, North America not only leads in the total number of strategic partnerships, but also across each therapeutic theme. Among gene therapy, immuno-oncology, microbiome and orphan drug therapeutics, strategic partnerships revolving around immuno-oncology assets were the most prominent across North America, Europe and APAC, while microbiome remains low across the board (mostly stemming from that fact that the microbiome market is still in its early stages and most compounds derived from microbiome research are still in discovery or preclinical stages).

Jesus Cuaron, PhD, PPM, Associate Director of Cardiovascular and Metabolic Disease (CVMD), as well as Gender Health Pharma at GlobalData, explains: “There is a high volume of established partnerships, especially between early-stage companies and established players. With this approach of undertaking multiple partnerships, established players can hedge their bets as they wait for more clinical data to become available.”

As for licensing agreements, this type of deal is an attractive strategy for both the licensor and licensee. In the pharmaceutical space, it is advantageous for the licensor (usually biotech firms and start-ups) to grant a license to a larger company with the financial resources needed for clinical trial completion and commercialization. The licensee (usually big pharma) benefits through adding promising drugs to its pipeline and having access to platform technologies. Overall, licensing expedites development while mitigating risk.

Cuaron concludes: “From a commercial perspective, companies, especially those that are developing gene therapies, depend upon having reliable strategies or platforms. For developing next-generation cell-based therapeutics, required platforms would include technologies such as zinc finger nuclease and CRIPSR. It is important for companies to be aware of the challenges associated with licensing agreements. For example, smaller biotech companies in particular will face challenges in the form of pressure to meet major clinical milestones.”

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