Small-Molecule Muscle: What Does the Market Show?

In the battle of small molecules versus biologics, how have new small molecules fared? DCAT Value Chain Insights examines recent approvals of new molecular entities to see which modality is winning.

Small molecules still prevail in the global pharmaceutical market, but the share of biologics is increasing as they occupy a larger number of the top-selling drugs. So what do the numbers show?

Small molecules in the global pharmaceutical market
To consider the role of small molecules in the global pharmaceutical industry market going forward, it is important to consider overall market projections.Total spending on medicines is forecast to reach $1.5 trillion by 2021, up 33% from 2016 levels, but down from recent high growth rates in 2014 and 2015, according to a recent analysis by QuintilesIMS, Outlook for Global Medicines Through 2021: Balancing Cost and Value. Medicine spending will grow at a 4% to 7% compound annual growth rate (CAGR) during the next five years, down from the nearly 9% growth level seen in 2014 and 2015, according to the report. The short-term rise in growth in 2014 and 2015 was driven by new medicines in hepatitis and cancer that contributed strongly to growth but will have a reduced impact through 2021. The total global spend for pharmaceuticals through 2021 will increase by $367 billion on a constant-dollar basis, according to QuintilesIMS. Spending is measured at the ex-manufacturer level before adjusting for rebates, discounts, taxes and other adjustments that affect net sales received by manufacturers. The impact of these factors is estimated to reduce growth by $127 billion, or approximately 35% of the growth forecast through 2021. Specialty medicines, for which more than 50% are small molecules, are projected to increase their share in globally, particularly in developed markets. QuintilesIMS defines “specialty products” as medicines that treat specific, complex chronic diseases with four or more of the following attributes: (1) initiated only by a specialist; (2) requires special handling and administration; (3) unique distribution; (4) high cost; (5) warrants intensive patient care; and (6) might require reimbursement assistance. Specialty medicines’ share of global spending has risen to less than 20% 10 years ago to 30% in 2016 and to 35% by 2021, approaching half of total spending in US and European markets, according to the QuintilesIMS study.

Biologics for leading therapeutic areas
Most global spending growth, particularly in developed markets, will be fueled by innovations in oncology. autoimmune, and diabetes treatments, with particular important opportunities for biologics in the oncology and autoimmune sectors. By 2021, the oncology sector is projected to reach sales of $120 billion to 135 billion, according to the QuintilesIMS study with growth of 9–12%.

Oncology research and development activity remains concentrated on targeted therapies, which make up approximately 87% of the late-phase oncology pipeline, according to a 2016 QuintilesIMS study, the Global Oncology Trend Report: A Review of 2015 and Outlook to 2020. Targeted therapies include small-molecule protein kinase inhibitors, biologic monoclonal antibodies, and a range of new mechanism that can identify or block the cell processes that cause cancer cells to multiply, according to the report. The late-phase oncology pipeline includes 270 biologic therapies, including 16 gene therapies, 86 new monoclonal antibodies and 15 biosimilars of existing monoclonal antibodies. The late-phase pipeline also includes 74 potential vaccines for various tumor types. Immunotherapies are a fast-growing area and are projected to make up a larger portion of the pipeline in 2020, according to the report.

Biologic treatments for autoimmune diseases, including treatments for rheumatoid arthritis, psoriasis, ulcerative colitis, Crohn’s disease and a range of related disorders continue to see increasing usage across geographies and will reach $75 billion to 90 billion in spending by 2021, up 11–14%, according to the QuintilesIMS study. In addition, biosimilar products—those approved as similar to an originator reference biologic product—will be available for several of the leading autoimmune products by 2021, potentially allowing wider use of these medicines with the same or lower overall spending.

The top-selling small molecules and biologics
In looking at the 20 top-selling products, small molecules accounted for 11 products and biologics nine, according to IMS Health (now QuintilesIMS) MIDAS as of December 2015 (based on manufacturers’ prices and sales covering direct and indirect pharmaceutical channel wholesalers and manufacturers; for purposes of this article numbers are rounded). The number one ranked drug was a small molecule, Gilead Sciences’ Harvoni (ledipasvir and sofosbuvir), a combination treatment for hepatitis C with sales of $18.14 billion. Gilead also had the eighth ranked drug with its small-molecule hepatitis C treatment, Sovaldi (sofosbuvir) with sales of $6.58 billion. The other small molecules in the industry’s 10 top-selling drugs were AstraZeneca’s Crestor (rosuvastatin), an anti-cholesterol drug, ranked fifth (sales of $8.61 billion) and GlaxoSmithKline’s Seretide (fluticasone and salmeterol), a respiratory drug, ranked seventh with sales of ($8.00 billion).

Rounding out the 20 top-selling drugs that were small molecules were: Pfizer’s Lyrica (pregabalin), a drug to treat seizures and nerve and muscle pain, ranked eleventh (sales of $6.04 billion); Bristol-Myers Squibb’s Abilify (aripiprazole), an antipsychotic, ranked twelfth (sales of $5.80 billion); Merck & Co’s Januvia (sitagliptin), a diabetes drug, ranked fifteenth (sales of $5.44 billion); Boehringer Ingelheim’s Spiriva (tiotropium), a respiratory drug, ranked sixteenth (sales of $5.36 billion); Johnson & Johnson’s Xarelto (rivaroxaban), an anticoagulant, ranked seventeenth (sales of $5.14 billion; AstraZeneca’s Nexium (esomeprazole), a drug for treating gastroesophageal reflux disease, ranked eighteenth (sales of $5.07 billion); and Teva Pharmaceutical Industries’ Copaxone (glatiramer acetate injection), a multiple sclerosis drug, ranked nineteenth (sales of 5.05 billion), based on the IMS data.

Oncology and autoimmune indications dominate the therapeutic areas for the top-selling biologics. Nine of the 20 top-selling drugs in 2015 were biologics, according to data from IMS Health (now QuintilesIMS) MIDAS as of December 2015. Among the biologics in the top-10 were: Abbvie Humira’s (adalimumab) for treating multiple chronic inflammatory diseases, including rheumatoid arthritis, inflammatory bowel disease, and psoriasis, ranked number two (sales of $14.95 billion); Sanofi’s Lantus (insulin glargine) for treating diabetes, ranked number three (sales of $11.48 billion); Pfizer’s and Amgen’s Enbrel (etanercept), an anti-inflammatory agent for treating rheumatoid arthritis, plaque psoriasis, psoriatic psoriasis, ankylosing spondylitis, and polyarticular juvenile idiopathic arthritis, ranked fourth (sales of $9.47 billion); Johnson & Johnson’s Remicade (infliximab) for treating rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn’s disease, plaque psoriasis, and ulcerative colitis. ranked sixth (sales of $8.19 billion); Mabthera/Rituxan (rituximab) for treating several autoimmune diseaases, ranked ninth (sales of $6.30 billion); and Roche’s Avastin (bevacizumab), an anticancer drug, ranked tenth (sales of $6.18 billion). Rounding out the top-selling drugs in 2015 that were biologics were: NovoNordisk’s NovoRapid (insulin aspart) for treating diabetes, ranked thirteenth (sales of $5.61 billion); Roche’s Herceptin (trastuzumab), an anticancer drug, ranked fourteenth (sales of $5.60 billion); and Amgen’s Neulasta (pegfilgrastim) to treat neutropenia after cancer treatments, ranked twentieth (sales of $4.74 billion).

Small molecules versus biologics as new drug approvals
In the battle of new drug approvals, small molecules still hold more than a majority share, but the share of biologics is increasing. In 2016, the US Food and Drug Administration’s (FDA) Center for Drug Evaluation and Research (CDER) approved 22 new molecular entities (NMEs). On a molecule basis, the 22 NME approvals in 2016 consisted of 13 small-molecule drugs, seven biologics, and two radioactive diagnostic imaging agents (see Tables I [at end of article] and II). The percentage of biologic-based drugs approved relative to all NME approvals reached a recent high in 2016, accounting for 32% of all NMEs approved, compared to the prior two years in which biologics accounted for 27% of total NME approvals in 2014 and 2015. (see Table I). With the approval of the seven biologics and two radioactive diagnostic imaging agents in 2016, the percentage of small-molecule drug NME approvals hit a recent low in 2016, accounting for 59% of total NME approvals. The recent high was in 2013 when 81% of NME approvals were small molecules. (see Table I). 

Table I: Small Molecule and Biologics New Molecular Entities Approved by the US Food and Drug Administration’s Center for Drug Evaluation and Research, 2010 to 2016.
Year Number of New Molecular Entities (NMEs) Approved Percentage relative to total NME approvals and number of small molecules and biologics approved as NMEs
2010 21 NMEs approved 71% small molecules (15 NMEs)
29% biologics (6 NMEs)
2011 30 NMEs approved

77% small molecules (23 NMEs) 
20% biologics (6 NMEs)
Plus 1 NME radioactive diagnostic imaging agent)*

2012 39 NMEs approved

79% small molecules (31 NMEs)
15% biologics (6 NMEs)
Plus 2 NME radioactive diagnostic imaging agents)**

2013 27 NMEs approved

81% small molecules (22 NMEs) 
11% biologics (3 NMEs)
Plus 2 NME radioactive imaging agents)***

2014 41 NMEs approved

71% small molecules (29 NMEs)
27% biologics (11 NMEs)
Plus 1 NME radioactive diagnostic imaging agent)****

2015     45 NMEs approved* 71% small molecules (32 NMEs) and 1 insulin analog NME approved as a new drug application)*****
27% biologics (12 NMEs)
2016 22 NMEs approved**

59% small molecules (13 NMEs)
32% biologics (7 NMEs)
Plus 2 NME radioactive diagnostic imaging agents)******

*In 2011, 23 small-molecule drugs and 1 radioactive diagnostic imaging were approved as new drug applications (NDAs)
**In 2012, 31 small-molecule drugs and 2 radioactive diagnostic imaging agents were approved as NDAs
***In 2013, 22 small-molecule drugs and 2 radioactive diagnostic imaging agents were approved as NDAs
****In 2014, 29 small-molecule drugs and 1 radioactive diagnostic imaging agent were approved as NDAs
*****In 2015, 32 small-molecule drugs were approved as NDAs and one insulin analog, Novo Nordisk’s Tresiba (insulin degludec injection), a long-acting basal human insulin analog produced by a process that includes expression of recombinant DNA in Saccharomyces cerevisiae followed by chemical modification was approved as a NDA, not as a biologics license application.
******In 2016, 13 small-molecule drugs and 2 diagnostic imaging agents were approved as NDAs.

Source: US Food and Drug Administration’s Center for Drug Evaluation and Research and company information.

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