If you pay attention to observation, many of the world's top pharmaceutical companies are "century-old stores." The sensitivity to innovation has enabled top pharmaceutical companies to focus on their core businesses, and to deploy new businesses through internal incubation, investment, cooperation, and acquisitions, and to achieve continuous growth. Among them, investment is the most tested insight and ability to judge trends, especially venture capital for start-ups.

The arterial network combs the investment situation of venture capital established by the global TOP20 pharmaceutical companies, and plans to analyze the investment trends of the head enterprises.

What are the top pharmaceutical companies in the world?

From the perspective of pharmaceutical business revenue, Pfizer topped the global pharmaceutical companies. In 2017, the prescription drug business revenue was 45.345 billion US dollars. Novartis and Roche followed closely, and the pharmaceutical business income was relatively close, respectively, at US$41.875 billion. US$41.732 billion; followed by Merck, Johnson & Johnson and Sanofi, with revenues from the pharmaceutical business reaching $30 billion.

Global TOP20 pharmaceutical companies have their own "blockbusters", such as Pfizer of Pfizer, Gilenya of Novartis, Rituxan of Roche. Of course, the most eye-catching item is Aberdeen’s Humira, which earned $18.427 billion in 2017, helping Abbott enter the pharmaceutical business’s income rankings. ten.

Novartis is the most active, followed by Merck, Pfizer and Anjin.

Most of the TOP20 pharmaceutical companies have set up special venture capital funds to invest in start-ups. Such as Pfizer Venture Investments of Pfizer, Novartis Venture Fund of Novartis, Roche Venture Fund of Roche.

Other companies that do not have a dedicated venture capital fund will also have an investment department inside to invest in innovative projects. It is also worth noting that TOP20 pharmaceutical companies will also participate in the investment and establishment of industrial funds, including the subscription of industrial funds, and the establishment of venture funds in cooperation with other companies. This is also confirmed in China, that is, the establishment and cooperation of pharmaceutical companies every year. More than hundreds of industrial funds.

TOP20 pharmaceutical company's venture capital fund

Source: crunchbase, arterial network

Through the tracking of TOP20 pharmaceutical companies and their venture capital funds, we have obtained the following table, which shows the participation of pharmaceutical companies in startup investment.

Source: crunchbase, arterial network

Judging from the number of investment events and the number of participating companies, Novartis has achieved 172 investment events and 44 participating companies; Pfizer, Roche, Merck & Co, Amgen, etc. The number of events is around 70, and more than 10 companies are participating in the event.

In terms of the fields involved, there is a considerable proportion of innovative therapies and drug developments that are highly relevant to the pharmaceutical industry's main business. The digital tools and platforms that provide complementary services for the pharmaceutical business are also favored by pharmaceutical companies, such as AI+ new drug tools, big data collection and Application tools, etc. With the market development of drugs as the core, innovative projects in the fields of online marketing, patient education, and doctor-patient communication have also been favored by pharmaceutical companies.

Data source: crunchbase, the division of the arterial network has certain subjectivity, only for reference

Although biopharmaceuticals are still the most concerned area for venture capital ventures, under the concept of “digitalization”, pharmaceutical companies have also carried out many layouts, including digital medicine, digital marketing, and data services. Given the high relevance of the pharmaceutical business to medical services, medical payments and patient preferences, pharmaceutical companies are also actively entering these areas to fully understand the market.

"Technology" is the most valued point for pharmaceutical companies to invest.

On the whole, “technology” is still the core competitiveness of pharmaceutical companies, especially innovative pharmaceutical companies. While investing in high R&D, it will also acquire new technologies and commercialize through investment, cooperation and acquisition. Of course, the technology here refers not only to the technology of drug development, but to the entire process from drug development to drug marketing to patient use.

A typical commercial process for drug technology, and the key links that may be involved.

Around every link in the commercialization of pharmaceutical technology, or every link that can influence the market direction of pharmaceutical companies, pharmaceutical companies will invest heavily in the layout.

Market challenges are also a problem that pharmaceutical companies have to face. First, the cost of R&D investment is getting higher and higher, and output is getting lower and lower. Secondly, the behavior of doctors and patients is being affected by more and more factors, and their The choice will directly affect the income of pharmaceutical companies.

The first point is called the "anti-molar law" of the pharmaceutical industry. This word from the IT industry originally said that the integration of integrated circuits doubled every 18-24 months. Accordingly, the product is iteratively fast. The price of a product after 18 months is only half of that when it was first launched. . And if a company continues to sell the same product, then he must sell twice the product today to get the equivalent income before 18 months.

The “anti-molar law” of the pharmaceutical industry means that the cost of medical research and development is getting higher and higher, while the output rate of research and development continues to decline. In fact, this is supported by data. Derek Lowe's report pointed out that in the 1950s, US pharmaceutical companies could get dozens of new drugs for every $1 billion spent, and this number has fallen below 1 after the new millennium.

Even taking into account factors such as economic growth, inflation, and rising labor costs, the changes in the cost of research and development of new drugs are still surprising. It shows that the development of new drugs is already an ultra-high threshold, which undoubtedly blocks many ambitious new entrants.

If we consider the success rate of new drug research and development, the results will be even more frustrating. Generally speaking, in the various stages of new drug research and development, the clinical trial phase has the highest elimination rate, and the phase I clinical success rate is about 65%. Phase II clinical success rate About 35%, the clinical success rate of phase III is about 20%, and the success rate in the clinical trial phase is less than 10%. In specific areas such as cancer, the success rate of new drug development is lower. This shows that the development of new drugs is already a "gamble" of betting more than one billion US dollars.

Anti-molar law of the pharmaceutical industry

Under this trend, the pharmaceutical industry is more concerned with “technology,” including technologies that improve the efficiency of drug discovery, or the ability to accelerate market access to recover costs after productization. In other words, the commercial nature of a pharmaceutical company requires him to focus on the input-output ratio more than ever before, and it is extremely urgent to improve operational efficiency.

"Digitalization" that pharmaceutical companies are most concerned about

“Digitalization” tools or technologies undoubtedly have the most urgent need of the pharmaceutical industry. It refers to the use of the Internet and information technology to apply at all stages of the pharmaceutical business, changing the original business processes and models, with the main purpose of saving costs. Improve efficiency or both.

Correspondingly, innovative companies that emerged at these different stages have also been favored by pharmaceutical companies. For example, the application of AI tools in early development, the application of big data tools in the clinical research phase, the attempt of digital marketing in doctor tools/platforms, and the penetration of patient management tools.

From the timeline, since 2016, the cooperation between pharmaceutical companies and technology companies has become closer:

In October 2016, ObbVie used Aicure's technology for medically compliant facial recognition in clinical research;

In December 2016, Pfizer used IBM Watson to conduct a hypothesis test for cancer drug discovery;

In February 2017, Bayer used AI to develop combination therapies for different patient groups;

In May 2017, Sanofi reached a partnership with AI drug discovery company Exscientia in diabetes and related conditions;

In November 2017, BMS used PathAI's platform to analyze pathological samples and understand how patients respond to drugs.

According to a survey by the Pistoia Alliance, 44% of people in the life sciences industry are using artificial intelligence tools, and 94% want to increase the use of machine learning within two years. In clinical development, the use of artificial intelligence is being combined with sensor and mobile device data to improve insight into patient behavior and create more digital products and services.

Digital tools in the pharmaceutical industry

We can see that many of these “digital” star projects have investment and participation from pharmaceutical companies. For example, there is Lilly Ventures behind Numerate, and Monsanto Growth Ventures is behind Atomwise. Bayer has acquired Monsanto, behind the Flatiron is Roche, and the Patientslikeme has in-depth cooperation with pharmaceutical companies such as AstraZeneca, Takeda Pharmaceuticals and M2GEN. The above case illustrates the pharmaceutical companies' embrace of digital technology.

Some investors have commented on Roche’s acquisition of Flatiron – “ferry” and “bridge building”. The traditional pharmaceutical business is like a ferry. It can only show limited results at a time, and after the “bridge” is built, there will be unlimited on the other side. may. Specifically, AI tools can improve the efficiency of compound research and preclinical research, combined with precision medicine can improve the success rate of clinical research, big data analysis, electronic data acquisition systems, online marketing tools can also bring the same effect.

The development of the Internet and mobile Internet after 2000 has made the pharmaceutical industry's application of digital tools into the 1.0 era. The tools of the Internet of Things, sensors, big data, artificial intelligence, and blockchain after 2010 have brought the digitalization of the pharmaceutical industry into the 2.0 era.

Just as the development of biotechnology has brought the target of precision treatment to the pharmaceutical industry, this round of digitalization with AI, big data, wearable devices and flexible sensor technology will change the driving factors and trends of the pharmaceutical industry. In the future, only companies that can correctly grasp the digital trend can gain a place in technological change. The TOP20 pharmaceutical companies that took the lead in investing in digital medical companies are undoubtedly ahead.

The five startups that deserve the most attention

Founded in June 2012, Atomwise is a company that uses computers for drug discovery and development. The project aims to simulate pharmaceutical processes using supercomputers, AI and sophisticated algorithms to predict the effectiveness of new drugs while reducing R&D costs. The company is headquartered in San Francisco, USA.

Atomwise's core product is the AtomNet system, which uses statistical methods to extract data from millions of experimental affinity measurements and thousands of protein structures to predict the binding of small molecules to proteins. Often, in the early stages of drug discovery, researchers need to select effective and safe drug candidates from millions of compounds and find the combination of potential drugs and proteins.

This complex multitasking optimization is good at computers. Atomwise's AI technology predicts new active molecules through a combination of convolutional neural networks, making research and development no longer limited by the number of compounds available in the library and the time to screen these compounds. Let the discovery and optimization process, which traditionally takes years, can be compressed to weeks.

Atomwise completed a $45 million Series A round of financing in March 2018. Investors include Monsanto Growth Ventures, Tencent, Baidu, etc., which have raised more than $50 million in financing. Atomwise's business partners include Merck, Aberdeen, Monsanto, and Duke University.

Founded in April 2012 and headquartered in New York, USA, Click Therapeutics is committed to providing digital prescription treatment solutions to patients through the development and commercialization of software.

Through cognitive and neurobehavioral mechanisms, Click's Digital Therapeutics® can intervene internally to individual behavior and can be designed to be used alone or in combination with other biological therapies. The company's Clickometrics® adaptive data science platform is able to personalize the user experience to optimize patient engagement and treatment outcomes.

The company's current commercial product is Clickotine, an app designed to help people quit smoking, deploying smoking cessation strategies digitally, such as teaching breathing exercises, enabling users to record their smoking logs and feelings; Information and more. After a groundbreaking clinical trial, the Clickotine program has been launched nationwide to serve people.

In July 2018, Click Therapeutics announced the completion of a $17 million financing, led by Sanofi Ventures, and in the seed round financing, Click received Flatiron Health's investment. Currently, Click’s total financing exceeds $25 million.

Numerate was founded in May 2007 and is headquartered in San Bruno, California. It combines the advances in computer science and statistics with the chemistry of traditional medicines to provide a drug design platform for companies developing small molecule therapies. The platform develops a range of drug programs for cardiovascular, metabolic, neurasthenic, Alzheimer's and Huntington's chorea.

The 11-year-old company has deep technical know-how, modeling based on 3D ligands, allowing them to use machine learning to solve phenotypically driven drug development challenges without requiring structural information on compounds. This kind of research and development is often a low-throughput, high-concept biological problem.

In April 2018, Numerate joined ATOM (Accelerating Therapeutics for Opportunities in Medicine), a founding member of the organization including GSK, two US National Laboratories and several well-known universities.

Founded in January 2016, Digital Therapeutics was created by a team of clinicians who believe that behavioral interventions can have a profound impact on health, but for most people, behavioral changes are difficult to sustain and difficult to obtain. High quality and evidence-based behavioral therapy.

The first product of Digital Therapeutics is Quit Genius, a smoking cessation therapy that took two years to prepare before going live, including scientists, behavioralists, doctors and smokers. The therapy includes a range of cognitive behavioral interventions such as audio and video, animation, and interactive links. According to data released on its official website, the product has a success rate of 36%, and the number of smoking has decreased by 60, saving employers more than 155 million US dollars.

In fact, the pharmaceutical industry has been paying attention to digital prescription therapy for a long time. This concept was driven by Omada Health CEO Sean Duffy, and now there are more than a dozen companies developing digital therapy. This list includes Welldoc, Virta Health, Propeller Health, Big Health, and more.

Founded in 2000, GNS Healthcare created a series of ideas from founder Colin Hill: Can genetic and genomic data be transformed into computer models of disease progression and drug response? Can these models reveal new drug targets and new drugs as well as coping markers for personalized care? Can breakthroughs in machine learning, modeling, and simulation be combined with ever-increasing supercomputing power? And turn this dream into reality, change the treatment of cancer, diabetes, Alzheimer's disease, heart disease, multiple sclerosis and other diseases?

These problems led Colin Hill and Dr. Iya Khalil to start GNS Healthcare at Cornell University in 2000. The technology is based on Dr. Stuart Kauffman (5 winners of the MacArthur Genius Award), Dr. Judea Pearl (the winner of the Turing Award), and systems biology, chaos theory, statistical physics, and artificial intelligence.

The core product of GNS Healthcare is the REFS platform (Reverse Engineering & Forward Simulation, reverse engineering and forward simulation). Its working method is as its name suggests. First, REFS obtains a large number of data on pathogenic mechanisms and combines the same parts of the pathogenic mechanism to derive the cause of the disease (the data is derived from the health records of a large number of patients); , REFS simulates the course of treatment to determine which treatments and drugs produce the best results. By identifying causal relationships between variables, REFS can quickly identify the factors that apply to a particular individual, enabling precise personalized care.

REFS serves commercial health plans, healthcare systems, pharmaceutical industries and research institutions. Partners include Novartis, BMS, Celgene, Horizonblue and more. GNS Healthcare is currently raising more than $50 million.

At this year's ASCO Annual Meeting, GNS and ACTO (Alliance for Clinical Trials in Oncology) published a study that can effectively help identify metastatic colorectal cancer (mCRC) in Phase III trials. The patient's response to different medications or combinations of medications helps to stratify the patient. The study was reached in 2015 and the first phase of the study was published at the 2017 ASCO Annual Meeting.

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