The pricing and reimbursement environment in the pharmaceutical industry makes it difficult for a new drug to be profitable. For every big success that brings in billions in profits, there are dozens of failures that cost manufacturers billions in losses. It has been some time since the last major success. Where will we see the next billion dollar pharmaceutical franchise? These key areas have the most potential.

1. More effective cancer treatments: The pharmaceutical industry has started to see some success in cancer treatments with targeted drugs that boost the immune system for cell elimination. Continuing down this road, it is feasible to think cancer vaccines can be developed which will help the body prevent disease development. We already have this with the HPV vaccine, but expansion into non-viral causes could be a billion dollar franchise.

The immunotherapy market is making progress with a new generation of drugs that could help make a difference in the current pipeline of blockbuster drugs, which is starting to thin out. Immunotherapy drugs use the immune system to attack the cancer cells. It is expected to be worth approximately $40 billion a year in sales.

Since the start of 2014, there has been an estimated 44 corporate deals within the immuno-oncology market. One of the biggest ones was Pfizer’s $4.4 billion deal with the French biotech company Cellectis to develop immunotherapy treatments for 15 cancer targets. The American pharmaceutical company Merck got approval for an immunotherapy treatment against skin cancer. Other big companies such as Roche, Pfizer and a number of  biotech firms are also in the process of developing immunotherapy drugs for various cancer targets

2. New antibiotics: With drug resistance on the rise for many bacterial diseases, the quest for a new antibiotic has been on for some time. A public health crisis will likely develop if there isn’t success in this area. Depending on how teixobactin develops through additional research and development, it could be the next billion-dollar franchise for the pharmaceutical industry.

In 2013, the Innovative Medicines Initiative (IMI) created the New drugs for Bad Bugs (ND4BB) program in which a number of companies including Sanofi, GlaxoSmithKline, AstraZeneca and Janssen to collaborate together in researching new antibiotics. Data from 2011 reveals that infections caused by resistant bacteria are responsible for an estimated of 25,000 deaths in EU every year . In 2014, the World Health Organisation (WHO) reported that new drugs to treat antibiotic resistance are needed now as common bacterial infections are representing a major risk to the healthcare systems across the world.  New bacterial resistance mechanisms are spreading rapidly across the world and standard procedures are becoming less effective .

3. Alzheimer’s disease treatments: There are 93 different medicines that are either in the clinical trial stage right now or awaiting FDA approval in the United States. With up to 13.5 million people expected to have this disease by the year 2050 , having pharmaceuticals that can help to conquer this devastating disease could easily spark a brand new franchise within the industry. By 2015 the total costs incurred in taking care of individuals that suffer from Alzheimer’s and related dementia will reach approximately $226 billion in the United States .

The main challenges for the development of new drugs against Alzheimer are recruiting enough trial patients, gaining appropriate consent from them and obtaining funding for clinical trials. The current medicines in the pipeline include gene therapy, which involves the creation of nerve growth factor in the brain and medicines that targets beta-amyloid peptide production in the human body .

Recently, Biogen Idec has been making progress with an Alzheimer treatment, which seems to slow patient’s unstoppable cognitive decline. The data and scores report show that the drug could be effective later on and can significantly improve quality of life in Alzheimer’s patients . The drug is called Aducanumab, an antibody that attacks Amyloid plaques, which are believed to be the main cause for Alzheimer’s.

The pharmaceutical industry has seen several small successes over the years, but there hasn’t really been a billion dollar franchise for some time. These three key areas represent significant commercial opportunity for pharmaceutical companies to build a successful business case.

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