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Home » Report: Pipeline advancements, asset acquisitions fueled biotech R&D spend in 2014

Report: Pipeline advancements, asset acquisitions fueled biotech R&D spend in 2014

April 29, 2015
CenterWatch Staff

The combined spend on R&D for the peer group of 35 mid-cap biotech companies increased by nearly $2 billion to reach a total of $9.7 billion in 2014, primarily thanks to top spenders Regeneron and Vertex, according to research and consulting firm GlobalData.

The company's report, Mid-Cap Biotechnology Benchmark Report—Sales Forecasts and Product Valuations of Innovative Biotechs, found Regeneron led the way with R&D expenses of $860 million in 2013, with further analysis showing Regeneron's R&D expenses grew by 47.9% year-to-year to $1.3 billion in 2014.

According to Adam Dion, GlobalData's senior industry analyst, this expenditure was boosted by an increase in clinical trial expenses, due to additional costs for studies of dupilumab and REGN-1033, the company's antibody to myostatin (GDF8), which is in phase II trials for undisclosed musculoskeletal disorders.

Dion said Vertex had the second largest R&D outlay among the peer group, spending $855.5 million in 2014, representing a 3% decrease from 2013. This resulted from the company completing the TRAFFIC and TRANSPORT clinical trials evaluating VX-809, a combination product of lumacaftor and ivacaftor for treating cystic fibrosis.

Despite this, unexpectedly sharp rises in spending from Jazz and Alnylam helped to drive R&D in 2014.

Dion said, "Jazz's 518% spike in R&D spend was the result of a $197 million surge of in-process R&D (IPR&D) expenses, due to the asset purchases of Aerial BioPharma and Sigma-Tau Pharmaceuticals. These purchases gave Jazz the rights to two drugs, JZP-110 for potentially treating aspects of narcolepsy and sleep apnea, and defibrotide to prevent severe hepatic veno-occlusive disease in bone marrow transplant patients.”

He added that meanwhile, Alnylam's R&D expenses soared 266% to $411 million in 2014, up from $112.3 million in 2013, resulting primarily from a $221 million IPR&D charge in connection with Alnylam's acquisition of Sirna Therapeutics' RNAi assets from Merck.

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