Thursday, May 03, 2018

Cancer Cures - Where's the profit

 The promise of modern cancer drugs is an increasingly crowded pharmaceuticals field from which investors must try to select future winners.

With over 2,000 drugs in the cancer immunotherapy space, the competitive landscape has never been more crowded as each firm seeks its own proprietary version of often similar drugs. Overall, researchers are working on more than 5,200 cancer drugs, up 7.6 percent from a year ago, according to the Pharmaprojects database. The sheer number is stretching the ability of scientists to find enough patients to test them on.

Cancer now makes up 34.1 percent of the total drug industry pipeline, up from 26.8 percent in 2010, as companies divert resources into a promising sector where new treatments can often fetch more than $100,000 a year. Pharmaceutical executiveseach hopes to find a winning formula in immunotherapy - the fastest-growing part of the $100 billion-a-year cancer drug market, with sales expected to top $25 billion by 2021, according to analyst forecasts

However, the wholesale rush by pharmaceutical and biotech companies into the cancer area poses a dilemma for investors. A flood of similar products makes it hard for investors to pick those companies that will achieve commercial success.

“More competition means you should be more circumspect,” said Nooman Haque, head of life sciences at Silicon Valley Bank in London, which provides financing for start-ups and venture capitalists. “The traditional investment thesis in biotech is to have a differentiated medicine with not many competitors, which helps drive value. Here the problem is that even if there is a big patient benefit, there are questions as to how long your advantage lasts and what your commercial edge will be.”

“You’re either first or you’re best or you’re nowhere because it has become such a race,” said Paul Major, an investment manager at BB Healthcare Trust, who is cautious about investing in cancer immunotherapy.

Lydia Haueter at Pictet Asset Management is also wary, pointing out there are already five PD-1/L1, drugs targeting molecular pathways, on the market - from Merck , Bristol-Myers Squibb , Roche, AstraZeneca and Pfizer - and more are coming. “It seems everybody has a PD-1, so we especially don’t go for those kind of cancer companies,” she said.

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