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First-cycle approval for NME produces $640 million in incremental revenue on average.
Boston, MA, October 16, 2008-Gaining a first-cycle approval for a new molecular entity (NME) is worth an estimated $640 million in incremental revenue on average, according to a new analysis from PAREXEL Consulting, a business unit of PAREXEL International (NASDAQ: PRXL) and leading global life sciences consultancy serving the biopharmaceutical and medical device industries. According to the PAREXEL Consulting analysis, 60 percent of sales for newly-approved drugs and biologics each year are derived from the top five-selling products. Therefore, first-cycle approval can potentially produce up to approximately $2 billion in additional revenue for each of these top-selling products.
The estimate, which appears in a new PAREXEL Consulting white paper entitled Getting to Approval: Emerging FDA Review Outcome Trends for New Drugs, is based on the NMEs approved in 2007 and during the first half of 2008. The analysis tracks the differences in review times between the new drugs that obtained first-cycle approval and those that did not. PAREXEL Consulting has analyzed the average review time gap between approved NMEs that the U.S. Food and Drug Administration (FDA) cleared in the first review cycle and those that took multiple review cycles to gain approval. The dollar value of the approval time gap is based on using five-year post-launch sales projections for recently approved NMEs from EvaluatePharma, which tracks and forecasts the performance of biopharmaceutical companies and their products, from early-stage R&D through post-marketing.
"Obtaining new product approvals is an important measure of the industry's performance, and this first-cycle approval metric helps companies calculate appropriate investments in initial new drug application submissions,” said Gadi Saarony, Corporate Vice President and Worldwide Head, PAREXEL Consulting. "More than ever, biopharmaceutical companies should focus on reaping the greatest return on their R&D investments, maximizing product value at every stage of the lifecycle, and gaining the most efficiency from the development process. Crucial decisions must be made early in development planning, including which regulatory approaches to apply to achieve first-cycle approval.”
"With continuing focus on first-cycle approvals for new drugs, especially under FDA Good Review Management Practices, our goal was to provide biopharmaceutical companies with a real-world metric on the value of first-cycle approvals,” said Mark Mathieu, Director of Strategic Research at
PAREXEL Consulting. "Our data show that priority designations are now closely linked to first-cycle approvals for both NMEs and NDAs. As a result, this metric can help biopharmaceutical companies assess the value of the new priority review vouchers available under the FDA Amendments Act.”
The Getting to Approval white paper is part of PAREXEL Consulting's Intelligent Development Series, which provides data and insights in support of successful biopharmaceutical and medical device product development. The white paper is available at www.PAREXELConsulting.com /firstcycleapproval.