Following a steady recovery from the Covid-19 pandemic and amid recent global geopolitical tensions, the pharmaceutical industry is facing a completely new landscape in which new players and new challenges have risen in prominence.

A landslide shift has seen the sector industry facing continued financial challenges and brand-new legislative considerations.

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The recently concluded BIO-Europe 2023 conference highlighted booming areas in the pharmaceutical industry, dedicating specific panels to oncology, cell and gene therapies and obesity therapeutics. At the conference, Susan Schaffert, the board director at Novo Holding, said there is “a tsunami of innovation coming in the space”. However, many experts highlighted hurdles that may block biotechs from advancing new drugs in these areas.

Held from 7 to 9 November in Munich, key opinion leaders gathered at the conference to debate key challenges in the industry while highlighting areas that require further improvement.

Overcoming financial hurdles

Despite 2023 predictions forecasting a better year for investments, many experts lamented a “risk-averse” venture capital climate. Jean-Paul Kress, CEO of cancer biotech MorphoSys, said: “If you don’t have value creation opportunities in your pipeline it has become almost impossible to get funding.” He described how his company had turned to alternative financing methods such as the sale of royalties to push its later-stage clinical trials.

Ingrid Kelly Spillman, a partner at Xista Science Ventures, commented: “There are not many investors across Europe that are willing to take risks.” At a panel on early financing, i&i Biotech Fund I CEO Jaromir Zahrádka explained that his company chooses to “de-risk” its early-stage biotechs by using its expertise and contacts to iron out issues as they come.

Lutz Bonacker, CSL Behring’s general manager of commercial operations in Europe, said that “Europe needs to recognise the value pharma is bringing”, calling for governmental changes that would attract pharmaceutical investment in the area. However, he and others expressed concerns about how upcoming regulatory change could affect the landscape.

Questions remain about EU regulatory changes

The European Commission (EC) has two pieces of legislation lined up for the upcoming years that will directly affect the pharmaceutical industry; a plan to harmonise EU health technology assessments (HTA) and the European pharmaceutical legislation, both of which were key topics at the BIO-Europe conference.

The 2022 EC proposal for regulation on HTAs (HTAR) described a new system in which all EU member states would have a combined regulatory process to conduct HTAs. This is aimed to expedite the regulatory process and improve access to medicines in all EU countries, starting from 2025 for advanced therapeutic medicinal products and oncology therapies. However, Kevin Rieger, the director of corporate affairs at Beigene, discussed possible issues with the new movement.

In a panel, he said that it would be nearly impossible for companies to prepare submissions for all 27 EU countries at once.

“We’ve tried to be as fast as possible…we have been trying to get through as many pricing and reimbursement processes as fast as possible…[but]in two years, we have managed to do it in 14 countries not 27,” said Rieger, describing an undisclosed recent drug launch. He highlighted how this task would be even more difficult for smaller biotechs with fewer resources.

Whilst this was discussed, others brought up concerns about the new EU pharmaceutical legislation. Released in April 2023, the legislation proposes reduced market exclusivity for new therapies unless companies can take certain measures such as allowing an initial launch in all member states, using comparative clinical trials, or developing products for medical unmet needs.

In another panel session, Daniel Steiners, senior vice president of Bayer Pharmaceuticals in Germany, expressed potential issues with this new outlook. He said the current definition of unmet needs was too narrow, only including life-threatening or severely debilitating diseases. This may deprioritise non-fatal diseases that require new medical interventions, he added. Europa Bio’s general director Claire Skentelbery added that the unified launch across all member states may be too difficult for smaller biotechs who would not have the funds for consultation on each country’s regulatory system. She said that the legislation will “come into shape” in the next one to two years.

On the EC’s proposed changes, Miguel Forte, CEO of French biotech Kiji Therapeutics, said: “The EC’s intention is right, but the execution is flawed.”