Behind the successive waves of R&D enthusiasm for innovative drugs, the debate over “who is the true driving force behind innovation” has never ceased.
Biotech companies have grown at an astonishing pace, continually redefining “first-in-class” (FIC) drug development through breakthrough targets and mechanistic innovations. However, large pharmaceutical companies, which control the vast majority of clinical resources and commercialization channels, although often labeled as “relying on acquisitions to sustain innovation,” have consistently been the key force in bringing new drugs to global markets.
“Small companies provide innovation, large companies are responsible for realizing value”—behind this seemingly simple industrial division lies a complex interplay of value transfer and capability alignment. A study published in Drug Discovery Today uses detailed data analysis to systematically reveal the real contributions of various players in the innovative drug industry chain.
The study traces all 50 FIC oncology drugs approved by the US FDA between 2010 and 2020, deeply analyzing—from “who discovered more new drugs” to “who ultimately drove drug approvals” to “whose developed drugs are more likely to become blockbusters”—the intertwined collaborations and competitions among Biotech firms, small companies, big pharma, and academic institutions.
These data and insights also provide key inspiration for China’s rapidly developing innovative drug industry—how to create blockbuster drugs? How should the future division of labor in the innovative drug industry be designed to maximize both innovative potential and commercial value?
The first data finding of the study confirms the industry’s perception that “Biotech represents innovation”: indeed, Biotech has been the primary early discoverer of FIC drugs over the past decade. Among these 50 FIC oncology drugs, 46% were independently discovered by small Biotech firms, while 14% originated from large pharmaceutical companies—on par with academic institutions. When collaborative projects are included, Biotech’s participation rate rises to 62%, far exceeding the 26% for big pharma.
Among the innovative products contributed by Biotech are star molecules. For example, the BTK inhibitor ibrutinib was initially developed by Celera and later pushed to market by Pharmacyclics and Johnson & Johnson; the PARP inhibitor olaparib originated from the UK’s KuDOS but was ultimately led to development by AstraZeneca; the anti-CD38 monoclonal antibody daratumumab was developed by Denmark’s Genmab and later licensed for commercialization to Johnson & Johnson. These have all become blockbusters with annual sales in the billions of dollars.
However, the situation reverses significantly at the commercialization stage. The study points out that by the time products reach the market, 76% of FIC drugs are held or co-held by large pharmaceutical companies. In other words, even though Biotech is active in the discovery phase, it is still the big pharma firms that ultimately carry these drugs into Phase III clinical trials, complete the regulatory pathways, and drive global launches.
This division of labor reflects differences in resources and capabilities. Biotech companies are agile, specialized, and willing to take early-stage risks, but they lack the funding and organizational capabilities to support long-term development, regulatory communications, and commercial promotion. FIC drugs often involve novel targets and complex mechanisms, requiring both early scientific daring and later industrial steadiness. The study found that only 17% of Biotech firms can independently complete the entire process from discovery to market, with most opting for acquisition or licensing in the mid-to-late stages.
Large pharmaceutical companies dominate the “development” stage of drug development. The study notes that although only 14% of FIC drugs originate from big pharma labs, by the time of market launch, 76% of products are held or co-held by large pharmaceutical companies. Many Biotech firms, upon completing early R&D, either get acquired or license their global rights, while only a very small number possess the capacity to independently carry out late-stage development and commercialization.
The development of FIC products carries extremely high risks and uncertain pathways, requiring massive funding and an international clinical trial network. At the same time, trial design, regulatory communications, market pathway optimization, and reimbursement negotiations are system-level undertakings that demand high organizational maturity and accumulated experience. Small companies excel at innovation but struggle to build a complete chain from Phase III trials to pricing and reimbursement negotiations. In contrast, it is big pharma’s command of market pathways, patient education, and physician training that truly turns a candidate molecule into a medicine.
However, does higher output increase the likelihood of producing a blockbuster?
In order to more concretely measure how much value FIC drug discoveries by different companies ultimately generate in the market, the study introduces sales figures as the metric, producing some interesting comparisons.
Although Biotech discovered the most FIC drugs, in terms of sales—a metric reflecting clinical impact—large pharmaceutical companies hold a slight edge: FIC drugs discovered under their leadership account for 44% of total peak sales, compared to 40% for Biotech.
On average, FIC drugs discovered by large pharmaceutical companies generate roughly 3.6 times the annual sales of those discovered by Biotech, and are more likely to become blockbusters.
Moreover, this sales gap is not driven by just one or two drugs. The study further notes that even after excluding the highest-grossing drug Keytruda (estimated sales of $19.5 billion in 2022), the other FIC drugs discovered by big pharma still outperform Biotech overall, in both mean and median. The top four include Pfizer’s Ibrance as well as Biotech-contributed Imbruvica and Darzalex from Celera and Genmab—but these Biotech drugs were also ultimately brought to market by large pharmaceutical companies.
This illustrates a “value transfer” in the innovation pathway: the former ignites the spark, the latter lights the lamp.
The reality that large pharmaceutical companies “produce less but have greater impact” is not accidental. The gap is the result of a comprehensive set of structural capabilities:
Large pharmaceutical companies possess stronger “value selection and realization capabilities,” while shouldering most of the financial costs and risks of clinical programs. In today’s era, where drug development has shifted from a scientific problem to a systems engineering challenge, these qualities matter more than pure scientific breakthroughs in determining a drug’s ultimate fate.
In academic discourse, innovation is often equated with “being the first to do something,” but in the industrial context, the key lies in “who first makes it a reality.”
This study, through a systematic review of 50 FIC oncology drugs, provides us with a new evaluation framework: what ultimately determines the fate of an FIC drug is whether, before it hits the ground, it is backed by a mature ecosystem—one that can tolerate risk, integrate resources, weather cycles, and ultimately deliver the drug to patients.
It is also noteworthy that when discussing the division of roles in the innovative drug industry, academia plays a more significant role in drug discovery than commonly assumed. Through collaboration with industry, academia has made major contributions to the discovery of innovative drugs.
Among the 50 FIC oncology drugs selected in the study, the number of molecules originating from academia is equal to that of big pharma, each accounting for 14%. Furthermore, of all the FIC collaborative projects (11 cases), 64% involved academic institutions. More importantly, 60% of the Biotech companies in the sample had at least one (co-)founder who previously held a tenured position at a university. Many of these companies were founded on the basis of academic research. These scientists didn’t just provide ideas—they brought prototype molecules from the lab into the drug development pipeline.
Ibrance was initially discovered by Pfizer, but its relaunch benefited from crucial clinical data generated by a UCLA team. After Imbruvica was developed at Celera, Stanford researchers helped shape its clinical strategy. Keytruda was originally initiated by Organon, but after several rounds of acquisition and competition, it was Merck that ultimately emerged ahead of BMS in the PD-1 race.
These success stories show that innovative drug development is not a rivalry between Biotech and Pharma, but rather a relay race that requires joint collaboration among universities, Biotech firms, and large pharmaceutical companies.
For China’s innovative drug industry, which is in a phase of rapid development, these research findings are particularly thought-provoking.
In the early stages, the focus was largely on “who discovered something first” or “who bet on the right target.” Today, in areas like bispecific antibodies and ADCs, China has already become a key force in global front-line innovation. But in the next decade, how can China’s innovative drug industry transition from being a “discoverer” to becoming a “drug maker”?
Biotech companies need to strengthen their ability to collaborate with both academia and industry. They must leverage academic strengths upfront, and on the backend, build a more complete capability system in commercialization, global registration, clinical strategy, and reimbursement negotiations.
Large pharmaceutical companies, on the other hand, should not merely act as late-stage acquirers. Instead, they should embed themselves earlier in the pipeline, actively participating in early R&D. By building deeper collaborative pathways with academia and Biotech firms, and by creating more efficient translation mechanisms and open partnership frameworks, they can push more FIC drugs to market.
After all, truly bringing a drug to market has never been the job of one person or one company—it is a complex, coordinated, systemic endeavor. And that is precisely the value of the pharmaceutical industry’s existence.
