A majority of life sciences companies are planning on acquisitions and are targeting companies with a personalized medicine focus.
Personalized medicine is having a growing role in the strategies of life sciences companies, according to a new study from law firm Reed Smith in partnership with Mergermarket. More than two-thirds (70%) of respondents in a global study of 100 senior executives at life sciences companies said they are looking to acquire businesses that focus on personalized medicine.
The study, “Life Lines: Life Sciences M&A and the Rise of Personalized Medicine,” explores how life sciences companies are getting more strategic about where they want to focus and how they are looking for ways to add value. The respondents were evenly split across the US, Europe, and Asia.
Personalized medicine was the second most popular area for targeted acquisitions in the survey, a strong indication that it has a significant part to play in life sciences companies’ future strategies. Companies recognize that personalized medicine offers the promise of higher returns even though the patient population is much smaller.
“The future of medicine is to have the right medicine for the right patient and the right dose at the right time,” Carol Loepere, Reed Smith partner and Chair of Reed Smith’s Life Sciences Health Industry Group, said in a statement.
Many companies are beginning to reassess their strategies, with many looking beyond broad-indication drugs and seeing personalized medicine as the future, according to the study results. Targeted therapies enable companies to differentiate their products with payers, and they’re likely to get better coverage, as a result. Targeted therapies also improve patient compliance, one of the biggest therapeutic challenges, because with these treatments patients are more likely to see a benefit and to comply, explained Diane Frenier of Reed Smith.
The survey found that the vast majority of pharmaceutical companies believe that technological advances will drive the move towards personalized medicine. More sophisticated data tools allow more advanced analysis of patient information and new delivery systems facilitate a personalized approach to treatment. Advances being made in studies of genetic differences that cause patients to respond differently to the same drug are also contributing to the interest in personalized medicine.
The promise of personalized medicine is “a happy combination of improved outcomes for many patients and an enhanced commercial performance,” the report notes. More than one-fourth of life sciences companies see an opportunity to charge more for more targeted drugs and a nearly equal percent point to the higher efficacy rate per patient for these treatments.
It is relatively early in the field of personalized medicine, but advances are being made quickly, the report notes. Of the therapies on the market today, 19% are targeted in some way, which is up from 6% in 2010. Some of the challenges are around reimbursement and payment because if a drug and an accompanying lab test are needed to see if a patient would benefit there is regulatory uncertainty about whether the patient’s insurance company will pay for both the product and the test. Life sciences companies are beginning to work to help the regulatory authorities move more quickly.
“Companies understand that they have to find new ways to present data showing the efficacy of therapies,” notes Diane Frenier. “They will have to make this even more of a priority.”