Print Page   |   Contact Us   |   Sign In   |   Join
Bonus Focus - Life Sciences Ups Its Innovation Game

 

 

By Bob Stembridge


Life sciences companies do not do research & development like everyone else. With longer innovation cycles, several well-defined layers of regulatory approval and various global hurdles to overcome, patent volumes in the pharmaceutical industry are often dwarfed by those of fast-moving industries like semiconductors and consumer electronics, which tend to steal the spotlight when it comes to showcasing innovation.
Does that make pharma companies any less innovative? No. In fact, despite the obvious headwinds facing the industry, a growing number of leading pharmaceutical companies have been showing up on the Thomson Reuters annual Top 100 Global Innovators list (top100innovators.com).
This is no small achievement for any organization, let alone a group of companies that are operating by a unique set of rules that stack the odds against them.

Measuring Innovation
First, some background: Each year for the past four years, the Intellectual Property and Science business of Thomson Reuters has conducted a quantitative analysis to identify the Top 100 Global Innovators, based on a series of patent-related metrics.
While there are several ways to measure evaluation – and no shortage of opinions on which is the best way to do it – our peer-reviewed methodology is unique in its unbiased approach, using concrete data to measure both the breadth and influence of corporation innovation. We do this by measuring four principle criteria: patent approval success rate, global reach of patent portfolio, influence as measured by patent citations and overall patent volume. By analyzing corporate patent portfolios in this manner, we are able to identify that sweet spot of innovation where pure R&D meets corporate strategy for protecting intellectual property.
The end result is an annual compendium of companies and research organizations that are setting the high water mark for commercial innovation. In addition, by conducting the analysis each year, we are able to track trends in innovation among different industries, different regions of the world and within specific companies. For example, in digging into the details of our 2014 list, which was published this past November, we found that this year’s crop of Top 100 Global Innovators nearly doubled the annual revenue growth rate of the S&P 500 while increasing their R&D spend by 17 percent year-over year. We also saw – for the first time – that Asia produced more top innovators than any other part of the world.

Pharma Expands Its Innovation Footprint
While all of these insights are intriguing, one of the most interesting trends we’ve noted over the last four years conducting this analysis is the growing presence of the pharmaceutical industry. As noted above, the Top 100 methodology, by virtue of its criteria, favors fast-moving, hyper-competitive industries such as semiconductors/electronic components and computer hardware, computer software, where product lifecycles are short and advancements in technology are user driven. This has historically impacted the inclusion of pharmaceutical firms, which tend to have longer R&D cycles.
Despite this, for the second year in a row, a growing number of pharmaceutical companies, including Abbott Laboratories, Johnson & Johnson, Novartis and Roche, have cemented their presence on the Top 100 list by virtue of their strong global patent portfolios.
This is up from three pharma firms – Abbott, Johnson & Johnson and Roche – on the 2013 list and just one (Roche) in 2012.

What’s Driving the Trend?
As we dig deeper into the patent filings of each company represented on the list, we start to see a few common trends emerge. For one, the pharma industry has continued its evolution away from blockbuster drugs and toward the development of more targeted therapies, personalized medicine and drug repurposing for orphan and other diseases. This focus on developing a wider overall footprint is clearly reflected in pharmaceutical representation on the Top 100 Innovators list.
R&D teams are rapidly compressing their R&D cycles, another trend that is playing out in pharmaceutical companies around the globe. As we noted in the Thomson Reuters 2014 Pharmaceutical R&D Factbook, the global pharmaceutical industry has dramatically overhauled its R&D process over the last few years by focusing on “failing fast and cheaply.” In essence, total pipeline volumes and success rates in early clinical development phases have declined as approval rates in the latter stages have improved. By leveraging more robust research capabilities and coordinating efforts globally, pharma companies have developed a laser focus on efficiency to determine which projects get the most funding and, ultimately, which become commercialized.
We are also seeing a nascent trend toward pharmaceutical companies filing patents for non-drug-related technologies. For example, in a Thomson Reuters analysis conducted for one of the world’s leading pharmaceutical companies earlier this year, we found that among the 245 patents filed over the course of the year, just 98 were drug-related. The rest were devices or methods of development and other related technologies that are helping the company innovate in ways that transcend individual drug development.

What’s Next?
Innovation means many different things to many different people, but in the context of business growth, it refers specifically to the conversion of good ideas into tangible assets. Innovators create jobs and wealth from creative thinking. And, in the case of the global pharmaceutical industry, these innovations bring the added benefit of curing disease, improving and saving lives.
Are there other ways to measure pharmaceutical industry innovation beyond the patent-related metrics developed in the Thomson Reuters Top 100 Global Innovators study? Yes. But by continuing to evaluate companies’ ability to transform abstract thought into practical products that can be commercialized and leveraged around the world, we have created a benchmark for monitoring the continued evolution of the industry.
While the competitive benchmarks will be in constant flux, one thing is certain for the future of pharmaceutical industry innovation: converting breakthrough thinking into commercially viable products will be the key to surviving and thriving no matter what new challenges come down the pike.
The companies featured on this year’s Thomson Reuters Top 100 Global Innovators list have shown that a significant investment of time and resources in innovation are reaping rewards with shareholder value, growing revenue and increased market share. Equally important, the regions in which they operate are playing a critical role – through various governmental policies, incentive programs and safety standards – in helping to cultivate innovation to lift the tide of their global economies.

Bob Stembridge is a customer relations manager of the IP Solutions business of Thomson Reuters. Email Bob at bob.stembridge@thomsonreuters.com.

We provide life sciences training and education professionals with the Clarity, Community and Career resources they need to excel in leadership and learning.

Membership Software Powered by YourMembership  ::  Legal