Creative solutions needed as pharmaceutical in-licensing competition heats-up

Continued demand for innovative and potentially first-in-class medicines is driving up the cost and driving down the potential return on investment for late stage in-licensing deals, pushing the pharmaceutical industry to be more creative as it tries to lessen the impact of patent expiries, finds independent market analyst Datamonitor.

The number of health care-focused licensing deals entered into by the top 10 pharmaceutical companies in 2009 rose by 12% over the previous year. With the drug industry seeking to reshape its development pipeline amid widespread cost-cutting and restructuring of internal R&D activities, deal numbers are expected to continue growing.

Martin Adams, senior health care analyst at Datamonitor, comments: 'The annual increase in in-licensing deal activity confirms that Big Pharma is actively seeking acquisitions and licensing agreements as a more cost-effective means of gaining access to novel products than carrying out extensive in-house R&D.'