GLP-1 drugs boost biopharma R&D returns significantly

A new report from Deloitte highlights how GLP-1 drugs are boosting returns on investment in the biopharma industry. These popular drugs, used for diabetes and weight loss, are increasing the financial value of research and development (R&D) efforts. In 2024, R&D returns are expected to rise to 5.9%, up from 4.1% in 2023. Deloitte notes that without GLP-1s, the returns would have fallen to just 3.8%. The value comes from promising drug candidates that are nearing the end of their development stages. According to Kevin Dondarski from Deloitte, about 20% of the late-stage drug candidates that use new technologies contribute to 40% of the overall R&D value. However, creating innovative treatments for diseases can be challenging. Dondarski emphasizes the importance of exploring new opportunities in the pharmaceutical market. The report suggests that pharmaceutical companies should seek out areas where medical needs are unmet. Investing in new technologies could lead to high returns, similar to those of GLP-1s, even if the market size is not as large. Deloitte also reports that peak sales projections for drugs are rising. Average expected sales per drug have increased to $510 million, while without GLP-1s, that figure would drop to $370 million. The growth of GLP-1s, especially in obesity treatments, shows their significant potential for addressing health needs and generating revenue. Overall, the success of GLP-1 drugs reflects the industry's ability to create valuable new therapies for important health challenges.