Every day, life sciences innovators discover promising new therapies with the potential to transform our approach to treating life-altering or life-threatening diseases. But what lies between these initial discoveries and an FDA-approved treatment reaching patients is the so-called “valley of death” – the considerable scientific, regulatory and financial hurdles that life sciences companies must overcome to bring their biopharmaceutical breakthroughs to market. Not every company or promising therapeutic advances – in fact, the overwhelming majority (nearly 90 percent) fail to advance beyond the lab.
Mergers and acquisitions (M&A) allow life sciences companies of all sizes to navigate the “valley of death” with the necessary resources, expertise and infrastructure required to bring a new therapy to patients. In a recent interview with STAT, Athena Countouriotis – whose company Turning Point Therapeutics was acquired in 2022 – discussed being motivated to sell in order to overcome the myriad challenges faced by smaller biotech companies in commercializing new medicines and helping them reach patients. “What I actually take the most pride in is that the transaction will now mean that the sixth drug that my team would have brought to market is now going to be used in children and adults with cancer,” Countouriotis said.
Daphne Zohar, founder and CEO of biotech company PureTech, spoke to these challenges faced by life sciences innovators around scaling and securing the necessary resources to advance a new treatment on the latest episode of the I AM BIO podcast: “In order to get through, you need to be able to do many things with limited resources…including raising enough funding to conduct key experiments and activities that reduce the risk and clarify the value [of innovations]…”
However, as resources are increasingly stretched thin across the life sciences ecosystem, companies are forced to make difficult financial and operational choices. Consider that it takes 10-15 years, and costs more than $2.6 billion, on average to shepherd a new medicine from discovery to delivery to patients, including the process of conducting numerous and costly clinical trials (ranging from $200,000 per participant) in addition to navigating the robust regulatory approval process along the way.
Pro-innovation M&A is critical to attracting outside investment to support an increasingly uncertain research and development process while ensuring a broad and efficient allocation of resources across the life sciences ecosystem. Within complex economic and regulatory environments, this means that early-stage life sciences innovators are more able to access the tools they need to develop and deliver new treatments and cures to patients.
For decades, balanced and bipartisan competition policies – like Hatch-Waxman and the Orphan Drug Act – have provided powerful incentives and thoughtfully balanced innovation, competition and patient access across the U.S. life sciences ecosystem. Amid the backdrop of these longstanding market principles, pro-innovation M&A is essential for helping life sciences leaders advance new innovations. As a result, the U.S. life sciences ecosystem has emerged as the most competitive and innovative in the world.
For life sciences leaders like Zohar, Countouriotis and many others, preserving a balanced approach to M&A is critical for survival. In Zohar’s words, taking into consideration the unique needs of life sciences companies “ensure[s] that we don’t kill the innovative ecosystem that creates new medicines.”
Pro-innovation M&A policy helps life sciences innovators cross the “valley of death” to bring life-changing therapies to patients in need. As thousands of patients already cannot afford to wait for a treatment or cure, policymakers must preserve our existing, prudent approach to life sciences competition policy.