In-house vs. In-license

Big pharma have had the capability to do it all in-house.  Attractive biological targets or clinical candidates may be in-licensed at any stage, Figure 1.  In-licensing costs will vary and are likely to be higher in later stages.

Figure 1, In-licensing can Occur at Any Stage.

Deloitte and Thomson Reuters recently published a study of the internal rate of return for the top twelve bio/pharmaceutical companies. 1 Within their data set was a chart showing the origin of late stage projects. The percentage of “self-originated” (not acquired) projects in the late stage pipelines of these companies ranged from zero to 30% – with an average of only 12%.

Dimasi et al. found that acquired assets have higher success rates in Phase 1 and 2 than self-originated assets. 2 Thus, when determining corporate performance, it may be better to separate projects that originated via in-licensing from those that began in Target Discovery.

  1. Deloitte and Thomson Reuters, “R&D Value Measurement, Is R&D Earning its Investment?”, 2010. www.deloitte.com/assets/Dcom-UnitedKingdom/…/UK_LS_RD_ROI.pdf
  2. See Fig. 3, p. 276, J.A. DiMasi, L. Feldman, A. Seckler and A. Wilson, Trends in Risks Associated With New Drug Development: Success Rates for Investigational Drugs” Clin. Pharm. & Ther. 2010, 87, 272-277

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