The United States is home to more than 2,300 life sciences companies – including more than 85 percent of the world’s small, early-stage biopharmaceutical companies – each competing to bring new treatments and cures to patients. Within this dynamic and competitive ecosystem, these small, research-intensive companies play a critical role in the initial discovery and development of many new medicines.
- 70 percent of the medicines currently in development were first discovered by early-stage companies.
- 2 in 3 medicines approved by the FDA originate from small, early-stage companies.
- Small, pre-profit biopharmaceutical firms invest more than $712,000 into research and development (R&D) for each person they employ. This investment is critical to maintaining the United States’ leadership in biopharmaceutical innovation.
These small, pre-profit companies can channel the vast majority of their resources to R&D. However, in many cases, the considerable scientific, regulatory and financial headwinds present in the life sciences mean that these early-stage companies are unable to bring new treatments and cures to market alone. As a result, these companies often look to mergers and acquisitions (M&A) and other collaborations with larger, more established companies to be able secure the additional resources, expertise and investment needed to advance their new discoveries to patients.
- Nearly half of life sciences companies employ fewer than 10 people, and 79 percent have fewer than 100 employees.
- As many as 80 percent of life sciences companies operate without a profit as they work to bring new treatments and cures to market.
- It can cost more than $2.6 billion and take more than 10-15 years to bring a new treatment or cure to market.
- Promising new therapies are most likely to stall during early-stage trials.
- Just 29 percent of therapies that enter phase II trials – often the first time a new medicine’s proof-of-concept is tested – will successfully advance.
- Less than 10 percent of new medicines that enter clinical trials will eventually make their way to patients.
As policymakers at the Federal Trade Commission and Department of Justice continue to weigh a significant shift in their approach to life sciences M&A, it is vital that they keep these unique market dynamics in mind and avoid placing an excessive burden on early-stage companies that count on M&A to bring innovative new medicines to patients.