Drug Delivery Report

Philip Brown,  Commercial Analyst
Vectura Group plc, 1 Prospect  West,  Chippenham, Wiltshire SN14 6FH, UK

Introduction

In the previous edition of the DDR (Drug Delivery Report Autumn/Winter 2005), an article was published that analysed the trends within drug delivery deals. This article highlighted  a number  of significant trends within these deals. The key trends related to the following:
•  The number  of licensing deals within the drug delivery sector is increasing year on year.
•  The number  of drug delivery deals involving collaborative research and development is increasing but the number  of co-development deals is decreasing.  This trend indicates that  drug delivery technologies are being considered  earlier in development.
•  Prior to 2000,  the number  of drug delivery deals involving joint ventures was increasing each year. However, after 2000,  the trend reversed and a considerable  decrease  was recorded.  This is mirrored in the total pharmaceutical deals recorded.  The likely reason for this reverse is due to the changing  financial environment seen during 2000 where funding became more difficult.
•  Drug delivery deals that  involve mergers  or acquisitions have been increasing. The rate of this increase has been faster than  the increase seen for the industry as a whole.
The aim of this article is to take this analysis further, assessing the deals within each therapy area that  include a drug delivery focus.

Trends within the Drug Delivery  sector

Considering the total drug delivery deals that  have been announced over the past nine years, there has been a continual  increase in the absolute  numbers  (Figure 1a). However, as a percentage of the total deals reported by PharmaVentures' PharmaDeals Agreements database, there has been a slight decrease,  although some of this decrease  was reversed in 2005.

Therapy Focus

Taking the analysis to a more detailed level, it is possible to assess the therapy focus of the set of drug delivery deals. This will enable the visualisation of any trends within each therapy area. The therapy areas that  are to be reviewed include cancer, cardiovascular, hormones, anti-infective, dermatology, immunology,  neurology,  sensory, respiratory and genitourinary.
There is clearly a general increase in the number  of drug delivery deals for cancer based products,  increasing from 12 to 48 over a 9-year period. Also, within this series, the year 2000 is an outlier, where the recorded  deals are higher than  the years 1999 or 2001 (see below).
Similar trends are seen when looking at the next series of cardiovascular, dermatology and hormonal  therapy areas. Although the trends for these  three areas are similar to cancer, the absolute  number  of deals is lower (26, 18 and 11 respectively). With all of these  areas, including cancer, there appears  to have been a rise
in the rate of increase in deal numbers  over the last two to three years. Furthermore,  as is seen with cancer-based therapies, the hormone series shows a similar peak around
the year 2000.  However, this peak is not evident for cardiovascular or dermatology.
The results for anti-infective, immunology,  neurology and sensory therapies  show a marked increase in deal activity during 2005. This is similar to that  observed during analysis for cardiovascular and dermatology. However, there is a slight difference in the trends of the two groups; anti-infective, immunology, neurology and sensory therapies  only show this increase in deal activity during 2005,  perhaps  indicating a delay in the incorporation of improved drug delivery technologies in these  areas.
Once again, as with cancer and hormone series, anti-infectious  and sensory areas show a peak during 2000/2001. However, this peak is absent  in the areas of immunology and neurology.
Also, an interesting  trend that  emerges  during analysis of the therapy focus is that  respiratory and genitourinary do not follow the same pattern as the other therapy
focuses. With these  two therapy areas, there is no observable increase and the overall trend is stable. There may be many reasons for this observation. The main reason,  however,  is likely to be due to the need for a particular route  of administration; for example, respiratory products  traditionally have been delivered to the lungs and this route  of administration  is unlikely to change.
The cancer, hormones, anti-infective and sensory datasets reveals an increase in the deal numbers  around the time period 2000/2001. This is also evident from other deal analysis undertaken using PharmaDeals Agreements. The likely explanation  for this trend was the financial strength of the pharmaceutical industry around  this time
period. Interestingly, this trend is not seen when analysing the drug delivery deals that  focus on cardiovascular, dermatology, immunology,  neurology,  respiratory, genitourinary  or neurology.
Assuming the peaks seen in 2000/2001 are related to funding,  this analysis allows the identification  of the areas that  received significant funding.  However, it appears  that this selectivity is now not present  within the industry as the increases seen in 2005 are across virtually all therapy areas.

Generics

Another area of consideration is the influence that generics are  having on drug delivery deals. Without conducting the analysis, the assumption would be that the number of signed generic drug delivery deals would be increasing, as generics become a more important area of the prescription drug market. There has been a move within Europe over  the last several years  to promote the use of generics and, therefore, it might be considered that the development of generic products that include a drug delivery system would be increasing. At an absolute level of drug delivery deals this is generally true. This trend is mirrored if you compare the drug delivery deals relating these deals to the absolute number of drug delivery deals. However, when these deals are  normalised as a percentage of the absolute number of deals recorded in PharmaDeals Agreements, the general increase in deals is not seen (Figure 6c). Therefore, even though there is an observed increase in generic drug delivery deals, this is not reflected in the total number of deals recorded - the total number of deals is increasing at the same rate as generic drug delivery deals.

Technology Access

As one would expect from drug delivery deals, the number of deals concerned with technology access has increased considerably over  the last three years. The business models of a lot of drug delivery companies is to allow other companies access to their technologies and this is reflected in the deal activity.

Conclusion

A final observation  is that,  in 2005,  the deal activity of 2000 was exceeded  for the first time. The market conditions in 2000 and 2005 were very different; the financial environment in 2000 was much easier but proved to be unstable.  The fact that  the current deal activity
has increased to the level of 2000,  but in a much more cautious funding environment, should be expected  to lead to a stable deal environment.