Research and development (R&D) stages

Artgen’s biotech ecosystem increases the probability of success and the speed of implementation of developments, while being an independent source of capital growth.

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Development stages of first-in-class drugs

A biotech company’s research and development activities are divided into steps: R&D stages

R&D stages are a sequence of steps in the activities of biotech companies aimed at the creation, production, research, and implementation of developments in medical practice.

Generally, the total duration of all R&D stages for first-in-class drugs, from the scientific idea to its implementation in medical practice, is from 10 to 15 years. However, the scientific idea itself associated with the creation of a drug may exist long before the start of active development.


Этапы разработки «первых в классе» препаратов
Этапы разработки «первых в классе» препаратов
Этапы разработки «первых в классе» препаратов
Этапы разработки «первых в классе» препаратов
Этапы разработки «первых в классе» препаратов

Cost and time of R&D stages

Biotech startups often lack some necessary competencies and resources to go through the complex, lengthy, and expensive R&D stages, so they often engage consultants and contractors. To develop a biotech startup and bring its development to the market, an ecosystem with the necessary competencies in all biotech areas is required.

Scientific Idea
Prototype, Molecule
Proof of concept
Patent
CMO
PCT
CT
MA
Market access
Start of sales

Where does it all begin?

~16 million ₽
Stage cost
1-3 yrs.
Duration
? %
Probability of success

An idea is selected on the basis of which a drug can be created.

Generally, this is the analytical stage, where developer scientists consider all the possible pros and cons of a particular scientific idea for treating a disease.

It is important to analyze competing treatment options for a specific disease that are also under development.

This stage includes a preliminary step of assessing the cost efficiency, process and production capabilities, multiple clinical aspects, epidemiology of the disease, etc.

Many ideas and concepts often lie on the surface.

For example, the idea of viral delivery system-based vaccines has existed for a long time, but companies creating specific drugs appeared only years later. Another situation: technology startups appear immediately after a scientific discovery is made, new data become available, or a license is obtained.

What happens at this stage?

  • Economic appraisal.
  • Medical assessment.
  • Determining in vitro (test tube) and in vivo (animal) models for this technology.
  • Assessment of the potential bioavailability of the drug.
  • Assessment of the “patent landscape”

What questions does it answer?

  • What specific diseases is the development intended for?
  • What competitive technologies exist and are being developed for these conditions?
  • Is the development economically and medically justified?
  • Will patent rights of other developers interfere with the development? — Freedom to operate (FTO) analysis.

Where does it all begin?

15-100 million ₽
Stage cost
1-3 yrs.
Duration
10 %
Probability of success
  • Several different drug prototypes are created to compare and evaluate their properties. The number of prototypes depends on the drug type: from 1 or 2 to hundreds or thousands.
  • The physical and chemical properties of the drugs and their in vitro (test tube) activity are assessed.
  • Developers must determine whether other companies’ patents may interfere with their development.

How does the stage end?

  • Creation of several candidate drug for proof of concept by in vitro (test tube) and in vivo (animal) experiments.
  • Models must be selected to evaluate the drugs in vitro (test tube) and in vivo (animal).
  • Some data about the drug properties become available.

Main risks and challenges.

  • A patent has been registered for the development.
  • There are no relevant in vitro (test tube) and in vivo (animal) models.
  • Intellectual property (IP) rights may be lost (stolen, etc.).

What happens at this stage?

15-100 million ₽
Stage cost
1-3 yrs.
Duration
10 %
Probability of success
  • The goal of the stage is to show how the main selected prototypes function in in vitro (test tube) and in vivo (animal) models. It must be demonstrated that they function, and their effectiveness must be compared.
  • Ultimately, the stage should provide an answer to the question: “Does the concept work?”

How does the stage end?

  • An evaluation of the study results and the principle of operation of the drug in vitro and in vivo is available.
  • If the developer’s experiments confirm the principle of operation of the drug, this is at this stage that company can be valuated for the first time. However, as a rule, this is only possible if the research results are patentable.

Main risks and challenges.

  • Animal and cellular models are not always relevant to humans, sometimes they do not exist at all. As a result, the principle of action of the drug may not be reproduced. Developers have to compromise, often receiving an insufficiently reliable answer about the prospects for using the drug.
  • The research results may not be patentable.

What happens at this stage?

1-5 million ₽
Stage cost
0,5-1 yrs.
Duration
80 %
Probability of success
  • Patent development must begin from the first stage of a biotech company’s operation. At the initial stages, the possibility of free use of all elements of the development itself, as well as its production process, delivery, treatment, etc., is evaluated.
  • Usually, developers must plan their research so that the results would let them confirm the patentability of their development.
  • Patent development relates to both the drugs and methods for their creation, including expression systems.

How does the stage end?

A patent claim is drawn up and a registration application is submitted to the patent office. A further patent development plan is prepared (for the preclinical, clinical trials and production stages): for what other elements of the drug under development can developers register viable intellectual property?

Main risks and challenges.

  • Underestimating the rights of other patent holders that interfere with the use of the development.
  • Rejection of a patent.
  • Obtaining a patent which de facto does not protect the development.

What happens at this stage?

10-100 million ₽
Stage cost
1-2 yrs.
Duration
100 %
Probability of success
  • The company must work out laboratory and industrial production regulations and produce the first batches of the drug for preclinical and clinical trials. Only small batches of the drug are produced for PCTs and CTs, but the same requirements as for mass production apply, which entails significant costs.
  • Small biotech companies generally do not create their own production facilities, but use contract manufacturing organizations (CMOs) which must be licensed. At this stage, the drug for PCTs and CTs must be produced in full compliance with the GMP.

How does the stage end?

  • A drug batch is produced for preclinical and clinical trials.
  • A drug stability report is published.
  • Production regulations and other documents are prepared as necessary for submitting a dossier for a PCT and CT permit. The same documentation will be required later on to obtain a marketing authorization (MA).

Main risks and challenges.

  • Obtaining a license is a complex and lengthy process that is not always successful.
  • The contract manufacturer may lose interest or steal the design.

What happens at this stage?

25-100 million ₽
Stage cost
1-3 yrs.
Duration
65 %
Probability of success
  • During preclinical trials, contract research organizations generally obtain data on the safety and effectiveness of the drug.
  • A range of safety-related PCT tests are carried out. The drug’s acute and chronic toxicity, immunogenicity and allergenicity, reproductive toxicity, etc. are evaluated.
  • The scope of PCTs to be conducted depends on the drug type, route of administration, disease, and patient population.

How does the stage end?

A PCT report is drawn up to be included in the dossier for a clinical trial permit containing all the necessary data. Based on the report, regulators must decide whether the data are sufficient and the drug is safe enough to begin a CT.

Main risks and challenges.

  • The PCT stage may show that the drug is unsafe or ineffective.

What happens at this stage?

50-100 million ₽
Stage cost
3-7 yrs.
Duration
10 %
Probability of success
  • Clinical trials (CTs) are conducted by developers, pharmaceutical and biotech companies in order to evaluate the safety and effectiveness of the drug, to determine the therapeutic dose and obtain data on side effects and contraindications.
  • A clinical trial authorization is issued by the state regulator (Ministry of Health, FDA, etc.) based on an examination of the dossier containing preclinical trial (PCT) data, the clinical protocol, and drug production data. Before issuing a CT authorization, accredited professional panels conduct an examination, including an ethical review, a review of documents, research data, and the CT protocol.
  • A CT consists of several stages during which the safety, dose, performance, side effects, and adverse events are assessed. Trials can be combined and typically consist of 3 phases: 1 - safety, 2 - dose finding, 3 - performance.
  • CTs are conducted by independent contract research organizations (CROs) which monitor compliance with the GCP (correct work of the investigators, data integrity, randomization of patients, monitoring of the trial, etc.) among the developers, clinical sites, and investigators.
  • For drugs urgently needed by the medical community or those for the treatment of rare diseases, accelerated registration (fast track, orphan drug status) may be available. For example, for drugs to treat COVID-19.

How does the stage end?

  • Each CT phase ends with a report to be submitted to the regulator for examination. Based on the examination, a permit to proceed with the next CT phase may be issued.
  • After the 3rd CT phase, if the drug is effective, the developer may be issued a marketing authorization (MA) for practical use of the drug in medical care.

Main risks and challenges.

  • Patient enrollment may take years.
  • Indications may be chosen incorrectly, as a result of which the drug will not show its effectiveness.
  • The developer may not have enough funds to conduct all CT phases and obtain an MA.
  • The drug may be unsafe and/or ineffective.

What happens at this stage?

? million ₽
The cost of a step depends
on the type of drug
1-2 yrs.
Duration
95 %
Probability of success
  • Based on the CTs conducted and the report submitted, the regulator decides whether to issue a marketing authorization (MA) for the drug.
  • Once an MA is issued, the developer can begin to produce, certify, and sell the drug.
  • To produce a drug, a license is needed for the production of a specific drug or a drug of a specific group.

How does the stage end?

Having received an MA and organized the production of the first industrial batches, the company can start selling the drug.

Main risks and challenges.

  • The production cost of the drug and, accordingly, its price, may not correspond to its effectiveness and medical value.
  • By the time the MA for the drug is issued, more effective competitor therapies may emerge.

What happens at this stage?

0-30 million ₽
Stage cost
1-5 yrs.
Duration
? %
Probability of success
  • Market access means the release of a first-in-class drug to the market. For such drugs, more than 90% of funding comes from the state, insurance companies, and compulsory health insurance (CHI) funds. The use of the drug and its place are usually first determined by the medical community, and then by the regulator and the CHI system.
  • As part of market access, the drug is included in national guidelines created by professional medical communities.
  • The drug is included in various vital and essential drug lists (EDLs), diagnosis-related groups, global value dossier (GVDs), and other regulatory instruments of the CHI system, and sometimes in treatment standards at the level of Russia’s constituent entities.

How does the stage end?

  • Once the drug is included in the required lists, physicians and medical facilities (MFs) can start prescribing the drug to treat the disease.

Main risks and challenges.

  • For economic reasons, the regulator and the opinion leaders of the medical community may place the drug not as the developer intended.
  • For reasons of cost efficiency or effectiveness of treatment using the drug, market access may take years.
  • National guidelines may not be updated for 1, 2, or more years.
  • Many medical communities can be quite closed to communication.

What happens at this stage?

  • Sales can be started even before the completion of market access, provided that a marketing authorization (MA) has been issued.
  • Typically, companies make a presentation of the drug and conduct a series of medical marketing events to familiarize the medical community with their new development. These events include: participation in medical conferences, workshops, cooperation with schools of continuing medical education (CME), post-market clinical trials (CTs), publications on the practice of using the drug in medical journals. Such events can take place from time to time or last for years.
  • Generally, biotech companies (developers) mostly enter into a licensing agreement and transfer the rights to produce, sell, and distribute their drug to larger pharmaceutical companies that have their own distribution and sales systems.
  • The company begins to generate profit.

How does the stage end?

  • The drug or treatment option is implemented in medical practice.
  • The market launch can take quite a long time. Ultimately, the development is translated into the medical community.
  • A large number of medical facilities are using the drug.

Main risks and challenges.

  • A biotech company may fail to find a partner for implementation, while its own competencies may not be enough.