Research is booming: 1,425 therapies are being studied, 50% over 10 years ago Mackay (Pfizer): "The golden age of experimentation" But Wall Street remains sceptical: costs are high and successes are few Meanwhile in 2011 patents worth 150 billion dollars will expire
MICHELLE CORTEZ
Pfizer, GlaxoSmithKline and Sanofi-Aventis are testing a record number of new drugs, but the market still remains indifferent. According to Cowen & Co., there are 1,425 potential therapies under study, more than 50% than a decade ago. Treatments, mainly for diabetes, cancer and mental disorders, could help offset the industry's expected decline in revenues in 2011, as generics flood the market. "We are living in the golden age of pharmaceutical experimentation", comments Martin Mackay, president of research at Pfizer: "We have the science, the technology, the skills: our challenge is to affirm the new discoveries". Still, Wall Street is reacting hesitantly to these dynamics, with the index of the sector which, in 2007, increased by only 1.7 percent. An approach also justified by the number of drugs that received the go-ahead from the authorities last year: never so low since 1983. "With so many failures in trials, market confidence is low," explains John Fisher of the Fifth Third Am. However, 2008 opened with a modest rise (S&P Pharma has already gained 4.7%), also because pharmaceutical stocks are less sensitive to the trend of the economic cycle and are attracting investors. «We have been asking our customers to observe pharmaceuticals for six months – comments Quincy Crosby, manager of Hartford. They are groups that have a lot of liquidity. We expect these to be put to good use, in order to see the drugs of the future leave the experimental phase". In 2007, the performance of industry leaders was mixed. Pfizer lost 14%, Sanofi-Aventis lost 10%, while Merck gained 14%, thanks to the six new drugs it gained approval for in the past two years. "It won't be easy to replicate Merck's success," comments Kenneth Kaitin, director of the Tufts Center in Boston, a center for analysis of scientific research developments: "While on the one hand there are no doubts about the increase in drugs found in the early stages of experimentation, on the other hand, the probability that these experiments will be successful has not increased". For Merck, the results obtained are nothing if not the result of "our scientific expertise", as emphasized by the company's research chief, Peter Kim. The rock on which the ambitions of many experiments are shattered remains the US Food and Drug Administration. In 2007, it approved the marketing of 19 new drugs, 3 less than in 2006, also because it has been subjected to strong pressure from both the legislator and consumers and doctors to apply the quality standards more rigorously. Meanwhile, it has given the green light to market 400 rival generics. However, the industry remains buoyant. John Lechleiter, CEO of Eli Lilly & Co, recently said that the number of new treatments under study is "exciting". "However, we must not be satisfied," replied David Brennan, CEO of Astrazeneca, a company that has been able to double the number of drugs in the last stages of experimentation in five years. "I don't know if I'll ever be satisfied,
