Biopharma R&D Funding Has Rebounded But Clinical Trial Starts Slowed Down in 2023, Says IQVIA Institute

Research and development (R&D) funding — which include initial public offerings (IPOs) in IQVIA’s reckoning — by biopharma companies grew to $72 billion in 2023, an 18% increase from $61 billion in 2022, although $62 billion less than $134 billion in 2020, according to the IQVIA Institute for Human Data Science “Global Trends in R&D 2024” report.

The chart-packed, 81-page report is based on data from IQVIA databases on drugs in development, new products, pharmaceutical industry deals and patents. Other report’s authors also used information from Citeline’s Trialtrove database and Bioworld’s news services.

The report notes that the 2023 funding level exceeds the $58 billion level in 2019, before the surge of activity and investment in the sector that was fueled by the response to the COVID-19 pandemic. But the mix of funding types has shifted, the report notes, with IPO activity of just $4 billion in 2023 compared with $9 billion in 2019. Follow-on funding at 38% ($27 billion of the $72 billion total) accounted for the largest share of the 2023 funding. IQVIA reports that 91% of that follow-on funding went to companies headquartered in the U.S.

The report says that merger and acquisition deals totaled $140 billion in 2023, led by Pfizer’s acquisition of Seagen for $43 billion and AbbVie’s $10.1 billion acquisition of Immunogen. Both Seagen and Immunogen have antibody drug conjugate products that many believe could lead to more effective treatment of certain cancers.

The 15 largest pharmaceutical companies collectively spent $161 billion on R&D in 2023, an increase of 17% from the $138 billion spent in 2022, according to IQVIA. The R&D spending was 23.4% of the sales for those companies, an upswing from 18.8% in 2022, The report says the proportion increased partly because of lower sales figures by these companies as sales of COVID-19 vaccines and therapeutics fell off from the previous years.

IQVIA’s tally shows more than $12 billion in deals involving companies with artificial intelligence, machine learning or advanced analytics product. The largest deal was between Exscientia, an AI drug discovery company in Oxford, England, and Sanofi.

A total of 69 novel active substances were launched in 2023 globally in 2023 compared with 63 in 2022, the report says. A total of 362 novel active substances have been launched globally in the past give five years. The total for the past 20 years is 942.

The reports says that number of clinical trial starts at all phases slid by 15% in 2023 compared with 2022 (4,873 vs. 5,754) and were down 22% from 2021 (6,250). Approximately 20% of the trial starts in 2023 were phase 3 trials (1,001 of 4,873). Therapies in oncology, immunology, metabolic diseases/endocrinology and neurology accounted for 79% of the trial starts. Not surprisingly given the lofty sales expectations for the GLP-1 drugs for weight loss — Wegovy (semaglutide) and Zepbound (tirzepatide), trials for therapies for obesity were up 68% in 2023 from the prior year and doubled from five years ago. The report says there are 124 obesity drugs in active development, almost half (46%) of which are, like tirzepatide, GIP/GLP receptor agonists.

Note: This story was updated at 1:24 p.m.