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For organizations across the life sciences industry, the last few years have been notably full of rapid change and uncertainty. With continued advancements in AI, medical breakthroughs, new regulatory hurdles, and more, 2024 will be no different.
ONTOFORCE has been supporting life sciences organizations for more than a decade and is vested in the growth and evolution of the industry and its players. Over the years, we’ve seen first-hand how some trends come and go, and how others stick around, greatly impacting how the life sciences landscape further develops. Below are five trends touching the industry that we’ll be tracking as 2024 progresses:
Generative AI of course topped the trends list for many last year. Thanks to the speed at which this technology’s capabilities proliferate, evolving and enhancing many tasks and processes for the industry, it is unsurprising to see it topping many lists again this year. While adopting large language models (LLMs) and other forms of GenAI into existing organizational practices can cause massive changes and disruptions to workflow, many pharma and biotech companies are still taking the leap to further invest in these types of technology despite the possible risks.
Hear more about the risks associated with GenAI from experts across the pharma landscape, including Merck, Novo Nordisk, Roche, and Novartis in this panel discussion on data-centric approaches in the life sciences industry >>>
It’s not a stretch to suggest that generative AI has begun to touch every phase of drug development, driving efficiencies across a multitude of processes both big and small. Within R&D, LLMs will especially continue to grow our knowledge and understanding of biology, improving the quality of preclinical pipelines. Moreover, we are already witnessing how GenAI can be used to identify targets and develop molecule structures: last year, a handful of biotechs announced the development of AI-designed drugs in their pipelines with some now in the clinical phase.
What will also be interesting to watch is how GenAI continues to be adopted in relation to existing technology. There is undoubtedly a lot of value in leveraging established tools that are already driving optimization and efficiency across organizations. Knowledge graphs are a prime example. As Gartner puts it in their Emerging Tech Impact Radar Generative AI report for 2024, “Knowledge graphs...are expected to play an important role in the Generative AI domain, because they can be used to improve the performance of GenAI-enabled applications." This year we are bound to see major strides made in relation to how the two technologies can further drive data and knowledge capabilities across the drug development timeline.
Throughout last year, mergers and acquisitions (M&A) saw an uptick and industry watchers are predicting the trend to continue in 2024. PwC reports that there was a steady increase in deal value over 2023 when compared with past few years in the United States. This year, the firm expects activity to continue, with deal values reaching $225 billion to $275 billion across all sub-sectors of the life sciences industry.
There are perhaps many factors driving the uptick in M&A, such as patent expirations on the horizon, greater interest in filling strategic gaps, sustaining long-term growth, and more available resources. Concerning the latter, EY estimates $1.37 trillion in available capital for M&A endeavors, even despite the recent (large) deal-making activity.
Entangled within this trend is the current state of many biotech companies. EY’s 2023 Beyond Borders report suggests that more than half of emerging European and US biotechs don’t possess the cash necessary for sustaining the next two years. While this might indicate a buyers’ market, biotechs can still maintain certain positions of power thanks to the impressive innovation contributions they bring to the pharmaceutical industry. In these instances, a biotech can expect to leverage its seller’s power when it comes to late-stage assets that attract the interest of various companies across the landscape.
Over the past few years, oncology has remained the top therapeutic area for the industry, driving major revenue for many pharma companies. In the first half of last year alone, Merck & Co’s Keytruda brought in sales totaling over $12 billion. AstraZeneca reports $8.8 billion in total revenue for oncology during H1 driven by sales from Tagrisso, Imfinzi, and Lynparza, among others.
However, some players in the industry are now seeing historic profits thanks to a different therapeutic area: metabolic disease. In 2023, social media helped to usher in metabolic drugs to the zeitgeist. Semaglutide, namely Novo Nordisk’s Ozempic, saw a major boom in name recognition and consumer demand throughout 2023 despite being around since 2017. In September, Novo Nordisk even briefly surpassed LMVH as the most valuable listed company in Europe. Many are crediting “off-label” use for weight management for the boost in popularity and usage. Towards the end of 2023, reports of shortages for Ozempic came online, with some doctors suggesting that those using Ozempic off-label for weight loss may be exacerbating the shortage creating access challenges for diabetes patients who rely on the drug for lowering blood sugar levels and regulating insulin.
With consumer interest in weight loss drugs peaking, along with the rates of metabolic syndrome and obesity growing across the globe, it’s understandable that the demand for these types of drugs continues to rise as well. While Novo Nordisk’s Wegovy is currently the only approved semaglutide medication for weight management on the market, five other weight loss drugs are already approved by the FDA for long-term use.
There are also several new developments in the space that might promise improved solutions for weight loss, such as Novo Nordisk’s CagriSema, which began a new Phase III trial towards the end of 2023. In addition to this, pharma companies have been making big moves to acquire promising molecules: in November, AstraZeneca paid Eccogene $185 million for a small molecule that was brought into a Phase I trial late in 2022; in December, Roche offered up $2.7 billion for a takeover of Carmot Therapeutics, a biotech firm with three promising candidates.
While the massive growth and development of metabolic drugs over the past few years suggests a shift in the market, it does not imply that innovation and growth for oncology will slow down. Rather, it seems that certain oncology developments are speeding up. Antibody drug conjugates (ADCs) being a notable area of growth. Johnson & Johnson kicked off the year announcing their $2 billion acquisition of ADC-developer, Ambrx. Last year was also marked by impressive deal-making in this arena: AbbVie’s $10 billion acquisition of ADC-developer ImmunoGen and Pfizer’s $43 billion acquisition of world-leader in ADCs, Seagen.
In its Firepower report, EY predicts the global biopharma market to grow by around $419 billion by 2028, with 34% of this growth ($142 billion) coming from oncology alone. In this same vein of growth, the report predicts a combined $78 billion in growth for endocrine and metabolic therapeutic areas, thanks to the market disruption caused by GLP-1 receptor agonists like semaglutide. While this growth is a little more than half than that predicted for oncology, consumer demands and the unmet needs for endocrine and metabolic disease in the coming years could warrant pharma to direct more resources to the space.
Over recent years, patient recruitment for clinical trials has become increasingly challenging for the industry. With a crowded clinical trial landscape, many companies are in competition with each other to recruit patients. On top of this, it’s come to light that diversity and inclusivity desperately need to be addressed within the clinical landscape. According to a multi-year FDA study, almost 80% of patients participating in clinical trials in the US are white. Further, less than 20% of approved drugs have available data on the evaluation of side effects or treatment benefits on Black patients. Hopefully, these percentages will see some change in light of legislation passed that requires diversity strategies for clinical trials evaluated by the FDA. It’s predicted that similar legislature might follow from other regulatory bodies in 2024.
To overcome recruitment challenges, including roadblocks to recruiting diverse patient populations, trials need to become more accessible and efficient. Decentralized clinical trials (DCTs) have become prominent throughout the industry since the pandemic greatly accelerated their adoption. In a decentralized trial, many or all of a trial’s activities don’t occur at a traditional trial site but rather in alternate locations like a patient’s home or a local healthcare facility or laboratory, lowering barriers to entry and enhancing patient convenience.
In a recent Deloitte survey, 52% of participants noted that they would be “extremely willing” or “very willing” to participate in a clinical trial offered from home (compared to at a research center). The survey also revealed that retail clinics, which are clinics conveniently located across pharmacies, grocery stores, and larger retail stores within the US, are also highly attractive to potential participants. Deloitte reports that Asian, Black, and Hispanic consumers would be more willing to participate in a clinical trial if it were to take place at alternative locations like a retail clinical rather than a traditional research center.
With more opportunities for alternate trial locations, along with the proliferation of wearable technologies like smart watches and other types of connected devices that provide data collection, the opportunity for DCTs continues to grow. In fact, a PPD - Thermo Fisher Scientific survey of 150 biotech and biopharma leaders reports that almost half of these leaders predict that 90% of their companies’ trials will involve decentralized elements by 2025. We can thus expect clinical trial designs throughout the year to find a balance between tradition and decentralized methods to hopefully better meet the needs of patients and drive more inclusion in the clinical space. This evolution will necessitate organizations to pay special attention to their clinical trial design processes, enabling efficiencies and optimization when possible, so as to not lose time when managing this new layer of complexity.
There’s a lot on the horizon for the industry in the upcoming year with many opportunities for acceleration, growth, and success. As the year unfolds, it will be essential to stay abreast of these trends, especially regarding how they impact industry players and their operations.
