According to an analysis conducted by BioWorld of the fourth-quarter and year-end 2019 financial reports filed by the top 100 public biopharmaceutical companies ranked by market cap, and excluding big pharma companies, the amount that was invested in research and development (R&D) during the year increased 35% compared to the same period in 2018. The elevated spending reflects the continuing supportive financial environment and the relatively easy access to cash to support product development. In 2019 biopharma companies had no difficulty in raising funds, with $30 billion generated from public offerings. The 100 biopharmaceutical companies invested a total of $42 billion on R&D in 2019 compared to $31 billion that was invested during 2018.

Doubling R&D investments

Not unexpectedly, blue chip companies led the charge in terms of R&D investments. The top 20 companies, in fact, incurred 73% of the group’s total R&D expenses at $30.9 billion. (See Top 20 biopharmaceutical companies by R&D spending in 2019, below.)

Among the group, two companies reported triple-digit surges in their R&D spending. United Therapeutics Corp., of Silver Spring, Md., reported a 230% increase in R&D expenses reflecting product pipeline development during 2019, which includes products in multiple phase III trials in cardiopulmonary diseases and oncology as well as programs in regenerative medicine and organ manufacturing.

During the period, the company recorded an $800 million up-front payment to San Diego-based Arena Pharmaceuticals Inc. for a global license agreement covering its phase III investigational drug candidate, ralinepag, a next-generation, oral, selective prostacyclin receptor agonist in development for the treatment of pulmonary arterial hypertension. In return, the company gained exclusive, worldwide rights to develop, manufacture and commercialize ralinepag.

Carlsbad, Calif.-based Ionis Pharmaceuticals, Inc. reported it spent $771 million on R&D last year, a 123% increase. The company noted it was "an exceptional year financially, with growth in both commercial revenues and R&D revenues.” Elizabeth L. Hougen, chief financial officer added, “We achieved our third consecutive year of net income while investing substantially in our pipeline and technology."

Leading spenders

In 2019, Foster City-based Gilead Sciences Inc., recorded R&D expenses increased by $4.1 billion to $9.1 billion, an increase of 81%, primarily due to $3.92 billion being paid up front to Galapagos NV in July.

The 10-year research and development alliance also included a $1.1 billion equity payment. In return, Gilead secures an option to ex-European rights on everything resulting from the Belgium firm's clinical and preclinical pipeline, including six clinical-stage programs, another 20 in preclinical research and the fruits of future Galapagos research.

At the same time, the two companies said they revised the terms of the existing alliance on their partnered filgotinib, the drug candidate being advanced for rheumatoid arthritis and other inflammatory diseases, to provide a broader commercialization role for Galapagos in Europe.

In addition to the Galapagos deal, Gilead reported increased investment in its oncology programs that were partially offset by the purchase of an FDA priority review voucher that the company acquired from Duchenne muscular dystrophy specialist Sarepta Therapeutics Inc. for $125 million.

Biogen Inc. spent $2.2 billion on R&D, which was a 12% drop from a year earlier, primarily due to a $482.6 million net charge the company said it recognized in 2018 when it closed an expanded strategic collaboration with Ionis Pharmaceutics, The 10-year agreement covers the development of novel antisense drug candidates for a broad range of neurological diseases. Biogen paid Ionis $1 billion in cash, which included $625 million to purchase 11.5 million shares of Ionis and a $375 million up-front payment.

In December 2019, Biogen entered a global license and collaboration agreement with Catalyst Biosciences Inc. for the development and commercialization of pegylated CB-2782, a preclinical anti-C3 protease, for the potential treatment of geographic atrophy associated dry age-related macular degeneration and paid Catalyst Biosciences an up-front payment of $15 million.

Precision genetic medicine developer Sarepta Therapeutics Inc. increased its R&D spending by 40% to $561 million for the 12 months ended Dec. 31, 2019, compared to $401.8 million for the same period of 2018. The increase included a $111.1 million increase in clinical and manufacturing expenses primarily due to a ramp-up of manufacturing activities for gene therapy programs and increased patient enrollment in the Essence trial, Sarepta’s placebo-controlled, postmarketing confirmatory trial to support Vyondys 53’s accelerated FDA approval for the treatment of Duchenne muscular dystrophy in patients amenable to skipping Exon 53. 

Top 20 biopharmaceutical companies by R&D spending in 2019

Company Ticker R&D expenses 2019 ($M) R&D expenses 2018 ($M) % YoY change

Gilead Sciences

GILD

9106

5018

81.5

Amgen

AMGN

4116

3737

10.1

Regeneron Pharmaceuticals

REGN

3037

2186

38.9

Biogen

BIIB

2280

2597

-12.2

Vertex Pharmaceuticals

VRTX

1754

1416

23.9

United Therapeutics

UTHR

1183

358

230.4

Incyte

INCY

1154

1198

-3.7

Beigene

BGNE

927

679

36.5

Alexion Pharmaceuticals

ALXN

886

730

21.4

Ionis Pharmaceuticals

IONS

771

345

123.5

Seattle Genetics

SGEN

719

565

27.3

BioMarin Pharmaceutical

BMRN

715

696

2.7

Alnylam Pharmaceuticals

ALNY

655

505

29.7

Bluebird Bio

BLUE

582

449

29.6

Sarepta Therapeutics

SRPT

561

402

39.6

Moderna

MRNA

496

454

9.3

Zealand Pharma

ZEAL

438

525

-16.6

Nektar Therapeutics

NKTR

435

400

8.8

Agios Pharmaceuticals

AGIO

411

341

20.5

Sage Therapeutics

SAGE

369

282

30.9

Source: SEC 10-Q filings, company press releases

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