Playing to win in oncology: Key capabilities for success

McKinsey 26 Mar 2020 12:00

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The landscape

Today, oncology is one of the world’s fastest-moving therapeutic areas (TAs); as the largest single TA, it is expected to represent 26 percent of pharmaceutical sales by 2022, 1 1. EvaluatePharma, June 1, 2018. with 107 new drug approvals in 2018 alone. 2 2. Includes all cancer indication approvals (that is, including new indications for drugs previously approved); for more, see EvaluatePharma, September 17, 2019. The space is also highly competitive: 35 percent of the industry preclinical pipeline is now in oncology (Exhibit 1), and all top ten players have a commercial presence. Such interest and investment is partly aided by rapid development cycles.

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High growth and unmet need have also attracted several new players to oncology—while making others double down. In 2000, 23 percent of all compounds in the visible preclinical pipeline were in oncology, increasing to 38 percent in 2019. This increases competition in terms of clinical-trial recruitment—for example, the number of breast-cancer patients required for active clinical trials exceeds the annual number of diagnoses twofold. In the commercial space, competition is intense, with multiple marketed and pipeline assets in key classes, such as CDK4, CDK6, or PD1.

Increasingly, the most innovative science sits outside of Big Pharma—the number of clinical trials initiated by non-top-ten players has increased from 4,500 in 2007 (72 percent in total) to 5,900 in 2018 (65 percent in total). 3 3. Biocentury, BCIQ, August 2019. The level of venture-capital (VC) investment has also continued to increase, with oncology experiencing 197 rounds of VC investment involving a corporate investor between 2009 and 2018 compared with an average of 24 rounds in other TAs. 4 4. Average includes central nervous system, gastrointestinal, cardiovascular, musculoskeletal, respiratory, endocrine, genito-urinary and dermatology; for more, see Philip Chong Edwin Elmhirst, and Jonathan Gardner, “Like the rest of biopharma investors, corporate VCs love oncology,” Vantage, February 21, 2019. Therefore, to drive the next generation of growth, pharmaceutical companies are increasingly exploring collaborative and externally facing innovation models. The growth of combination therapies in oncology emphasizes such an approach, with 81 percent of immuno-oncology (IO) trials conducted as combination trials with two or more agents. 5 5. Limited to registration potential and proof-of-concept trials. Data for 2019 is as of October 2019; for more, see McKinsey MIOSS.

Increased focus on value

In this context, development plans (for instance, combination partners, indication sequencing, and approval strategy) must be strategically developed making complex trade-offs that include the ability to recruit for clinical trials, cost of comparator drugs for studies, time to market, and breadth of label. Such an approach requires deep competitive intelligence and war-gaming type approach. Here, biopharmaceutical companies increasingly leverage adaptive trials and may increasingly explore the use of real-world evidence (RWE) to create synthetic control arms to reduce the overall size (and cost) of trials and ensure that as many patients as possible can receive the most-effective therapies in development.

Stakeholder engagement amidst intense competition

A focus on capabilities

Finally, having in place systems that consistently track talent, capabilities, and resource allocation are critical for planning and enable faster decision making, both at the region level and globally. Strategic workforce planning (hiring, partnerships, consortia, and acquisitions) should also be embedded into business-planning cycles. Companies that build these measures into their best practices will be successful in having the right capabilities in place and staying ahead in the fast-moving and competitive oncology arena.

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