So if you’re thinking about interesting market dynamics, I think if we look back over the last couple of years, I think there’s been really interesting stories of clinical trial successes. I think these are going to have long lasting repercussions. Of course, we’ve had success with new vaccine technology, but in particular what’s been grabbing the headlines has been trial results in obesity also Alzheimer’s disease. These are some areas that you might think traditionally the larger pharmaceutical companies have neglected or deprioritized over recent years. So based on some of these successes, I think we might see some research priorities shifting. Not just obesity and Alzheimer’s disease, also some important advances in related areas that are heart disease, liver disease, kidney disease, even in psychiatry too. So pharma companies are constantly looking for ways to rejig their pipelines to kind of renew themselves. They need to be launching new products to compensate for their older products that are facing competition and losing pathologic expiry.
So as we see these new clinical advances, perhaps in areas where these companies aren’t currently have a strong market position, I think we’re going to see a lot of interesting dynamics as these companies all try and move with the science. Some of these diseases as well should be mentioned that they affect large numbers of patients.
The onus is very much on the pharma companies to change how they communicate the value of these medicines because they might have quite large budgetary impacts. And then also for governments and payers to find access to these new medicines for their patients as well. So without data and insights and if you’re trying to make decisions, you’re essentially flying blind. It’s a well-known fact that fewer than 10% of drugs that enter clinical trials actually reach the market and get approval. And then even of this subset that we’re able to successfully navigate through clinical trials, some of these will also miss their forecasts and not achieve commercial success. But if you consider the whole universe of drug development, there’s so many lessons that can be learned from the successes, but also from the failures. I’d say the only real failure isn’t a drug that doesn’t work in a clinical trial.
The failure is in not taking those lessons and embedding them into some of the decisions that you make in the future. So here at Evaluate and also within the sister companies at Norstella, we’re sitting on a wealth of information about clinical trial programs, successes, failures, and we’re ideally placed to actually critique what’s gone before in the past, use this to help predict what’s going to work in the future and then work with our clients to embed these lessons into their strategies to enable them to bring new medicines to patients.
So what should investors be looking at if they’re looking at companies today? I’d really be looking at what companies are trying to stand out. One of the prevailing trends over the last, I don’t know, decade or two decades that I’ve been doing my role, a lot of companies, particularly in the large pharma cohorts are becoming increasingly similar. They’re kind of starting to look alike. They’re all focusing on the same diseases. They’ve all been divesting certain parts of the business that are perhaps non-core. And what we’ve left with is a crop of companies that are very focused on areas such as oncology, immunology, rare diseases. They’re all focused on trying to find the next first in class or best in class assets. So it’s increasingly difficult for these companies to actually make an investment proposition that actually stands out from their peers. So I’d be looking at, well, which companies are perhaps trying to buck the trend.
There are certain large pharma companies that have broken the mold in recent years and have performed incredibly well. Perhaps investors may have missed the boat if they’re trying to buy into these companies now, but really if I was investing today, what I’d be looking for is what are the next big picture themes? So if we think about some of the technological capabilities, I think we’re a long way still to go with some of these new modalities such as cell, gene and RNA medicines. There’s also a huge area of research that’s opening up into the underlying cellular processes that drive aging. This can really change how we define diseases, how we define treating, perhaps focusing not so much on lifespan, but more health span and longevity research. I think if you’re a healthcare investor, you’re really in it for the long term. And so I think these kind of bets that will play out over not just a few years, but potentially a few decades or the places to play.
