By Richard Staines, account director, Optimum Strategic Communications
Few would deny that the decade has had a turbulent start, but after the tragedies of the COVID-19 pandemic and the Ukraine war, there’s hope that 2023 will see a new wave of clinical research.
Exciting new technologies such as gene editing, gene therapy and a next generation of cell therapies are heading into the clinic.
But investors warn that in 2023 any pent-up demand for clinical trials is likely to be countered by the ongoing impact of geopolitical issues on the financial market.
Tom Burt, partner for crossover strategy at Sofinnova Partners, said that 2023 will likely see a downturn in clinical activity as pharma and biotech weed out any projects with limited potential.
Burt said: “With public market valuations remaining depressed, cost-of-equity at present is very expensive. Consequently, biotechs either cannot raise finance due to lack of demand or are reluctant to at these prices or dilution levels. Such financing constraints will necessitate cash conservation, with a strict focus on only those programs that offer the best return on investment, which will lead to pipeline prioritization and program termination.”
Reducing the level of clinical research in 2023
Klaas Zuideveld, CEO of Versameb, agreed: “A reduction in levels of investment has caused many companies to delay or cancel activities and programs, which together with delays in regulatory assessments both in the U.S. as well as EU, will reduce the level of clinical research in 2023 and beyond.”
Therese Liechtenstein, investment director at M Ventures’ technology team, suggested that the Inflation Reduction Act, which provides that U.S. drug pricing can be set by the Centers for Medicare & Medicaid Services (CMS) after nine years, could produce a shift away from small molecule research.
She cited Eli Lilly’s decision to scrap a phase I BCL2 inhibitor, which the company decided was an unattractive investment in light of the act.
“While it is too early to really predict how the act will be put into practice, an additional effect, at least in the short- to mid-term, we expect to see will be a shift of investment, M&A, and development in biologics versus small molecules, by big pharma, biotech, and VCs,” Liechtenstein said.
China: a destination for clinical research in 2023
In 2023, the geographical spread of trials is also likely to continue to change, with China emerging as an important player in the market for drugs and as a destination for trials.
While the U.S. is still the largest market for drugs, figures from Globaldata showed China accounted for a 26% share of global clinical trials activity in 2021 and the consensus is that this shift will continue.
There has been an increased focus on immune-oncology in line with the latest trends in cancer treatment, according to Ian Wilson, CEO of radiopharmaceuticals firm ImaginAb.
He said: “The volume of immune-oncology trials in China has increased rapidly in recent years. China also has the highest incidence of cancer in the world, accounting for 24% of newly diagnosed cases and 30% of cancer-related deaths worldwide in 2020, making cancer treatment a major unmet need.”
But Catherine Pickering, CEO of oncology biotech iOnctura, noted that it’s likely that trials will continue to start in other territories because of the demands of major regulators.
She said: “It’s worth noting that the FDA is unlikely to accept data only gathered in China and will ask for multiregional trials, driving demand in other countries.”
Ukraine war
The invasion of Ukraine has been a humanitarian tragedy, but it has also had an impact on clinical research, with companies deciding against starting new studies in the affected areas.
With a well-established, centralized healthcare system, Ukraine was emerging as an attractive destination for studies over the past few years.
There were more than a thousand trials ongoing in Russia and Ukraine at the time of Vladimir Putin’s invasion in February 2022. Since then the war has severely damaged Ukraine’s healthcare infrastructure, with a UN report published in September estimating there had been more than 500 attacks on healthcare facilities, personnel and transports, killing more than 200 people since the invasion started. The fighting has disrupted supplies to Russia, where pharma companies are maintaining clinical supplies but halting or scaling back other activities.
Ukraine’s healthcare system has been resilient despite the attacks and some trials have managed to keep running through use of remote technology and other strategies, but the war is nevertheless going to mean fewer trials starting in Eastern Europe and Russia in 2023.
Pickering said: “Big companies like Pfizer have also said they won’t start new trials in Russia because of the conflict, so it’s likely that manufacturers will look to other geographies for their research.”
New approaches to cancer
According to Burt, pharma’s strategic priority will be to cover imminent patent expiries for blockbuster medicines set to occur over the next three to five years.
In response, investor focus could be expected to shift towards later-stage pipeline companies over earlier-stage platform-led companies. Despite this later-focus, exciting developments in fields such as gene editing, protein degradation, neuroinflammation, and synthetic lethality will likely continue to attract finance.
Peter van Rijn, bioinformatics specialist at immunotherapy specialist ISA Pharmaceuticals, said: “For cancer, the focus on neo antigen therapies will keep growing, either personalized or shared. “
He added that cell therapies must soon start to show long term effect in solid cancers.
“They will eventually be phased out if they don’t, considering treatment cost and scalability issues.”
Wilson noted that targeting RNA that make disease-associated proteins could also begin to bear fruit, citing the example of Arrakis Therapeutics, which is using the approach to block the formation of a previously undruggable cancer protein called Myc.
The recent clinical trial success from Biogen’s Alzheimer’s drug lecanemab could lead to further activity in Alzheimer’s and neurology, according to Burt.
He added: “We may see a similar interest in infectious diseases – a field so long deprioritised, but where the health and economic impact of communicable diseases has never been clearer.”
New approaches developed in the pandemic, such as mRNA technology and diagnostics, could be used to further research in the area, according to Burt.
Other areas to watch include tissue specific oligonucleotide, gene therapies and gene editing technologies being used outside of the liver, Liechtenstein said.
She said: “This will likely not hit the clinic in 2023, but there are companies attempting to tackle this in the discovery or pre-clinical stages.”
Antibody-drug conjugates and other targeted drugs such as radiomolecular therapeutics will also attract VC and pharma interest, according to Liechtenstein.
Artificial Intelligence
According to a recent report by Morgan Stanley, dozens of new medicines created using artificial intelligence (AI) technology could create a $50 billion opportunity over the next decade.
AI has a range of uses in drug research from predicting which drugs are likely to succeed at discovery stage, to helping identify eligible trial candidates from electronic records.
Looking back at 2022, Sanofi demonstrated pharma’s appetite for AI technology, with a potential $1.2 billion deal with Hong Kong’s Insilico in November. This built on a similar deal with Atomwise of San Francisco in August, an expanded collaboration with the U.K.’s Exscientia in January 2022, and an equity investment in French-American AI firm in November 2021.
Van Rijn noted that there are already AI models used throughout drug research, from helping clinicians select clinically relevant mutations in genome diagnostics, writing programming code and creating photorealistic images.
There is also the second iteration of AlphaFold, an AI system developed by Alphabet subsidiary DeepMind, which is able to predict a protein’s 3D structure from its amino acid sequence.
In July 2022, AlphaFold released protein structure predictions for nearly all cataloged proteins known to science, and this “protein almanac” could be used to further accelerate clinical research.
“You cannot predict what will come next, but you can prepare for the assimilation,” said Van Rijn.
Data in the real world
With healthcare systems under pressure to reduce costs, they may want to see evidence that expensive new drugs can be justified because of wider benefits to budgets.
In the past, so-called “real world evidence” has been used to show how respiratory drugs could reduce costs associated with exacerbations of chronic obstructive pulmonary disease (COPD), for example.
This new non-clinical data gathered alongside conventional trial information will become increasingly important in 2023 and beyond, according to Pickering.
“Use of this data will continue to grow, with registries and electronic health records helping to support product development. These data can also feed into pricing negotiations after a product has been approved by regulators,” she concluded.
It’s not looking like a vintage year for clinical research in 2023 – but as ever with the new year comes new hope.
From the pharma industry comes the possibility of therapies for untreatable diseases and powerful new options for conditions where drugs are already approved.