The value of the late-stage pipeline of a cohort of 12 major research-based life science companies has risen for the first time since 2010, growing 5.5% to $966 billion in 2014, versus 5.1% in 2013. Although the number of assets has fallen year over year from 194 to 181, the sales potential of the assets has increased, with the lifetime projected sales-per-asset rising 9.1% to $2.4 billion. However, the number of failed assets rose from 22 to 44, and the cost of bringing a product to market grew 3.9% to $1,401 million. The 2012–14 rolling average return for the cohort’s late-stage portfolio grew 6.3%, compared with 6.9% for 2011–13. According to an analysis of these results, smaller companies show greater cost effectiveness in developing assets and have better returns. At 58% in 2014, externally sourced assets accounted for the majority of the forecast value of the cohort’s late-stage pipeline revenue. In addition, therapy-area focus is correlated with higher late-stage pipeline returns.

Source: Deloitte