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Using Clinicaltrials.gov As A Metric: Analyzing Therapeutic Industry Growth

 

The current metrics that we use to track the digital health, diagnostic, medical device and therapeutic industries are limited. The most impactful metrics on an industry-wide scale that we currently use are financial metrics, the number of new approvals and products and the success rate of bringing new products to market. I propose that we add a rarely used metric to this list: the number of interventional clinical trials initiated every year. With this metric, we gain additional insights into the industry that would otherwise be challenging to uncover.

The number of clinical trials conducted, especially industry-sponsored clinical trials, allows us to understand the pipeline of therapeutics and medical devices in development on an industry-wide scale. Although this metric is currently best served for medical devices and therapeutics, it holds value for digital health, wearables and sensors. In fact, it’s one of the analysis tools that I used for my wearables article. The number of clinical trials initiated each year has business applications enabling us to make future projections and adjust strategies accordingly.

In this article, we harness clinicaltrial.gov data to understand the therapeutics industry and uncover an unexpected trend that has driven the growth in the number of therapeutic clinical trials over the last decade. Understanding these trends is important for medtech and digital health companies that interact with the therapeutics industry.

Therapeutics in 2018 and First Half of 2019

Last year was a fantastic year for the U.S. therapeutic industry, with record-setting figures of overall funding and biopharma exits. It even far surpassed the previous high-water mark set in 2015. Although 2019 is not expected to reach the financial peak set in 2018, in its H1 2019 report, Silicon Valley Bank provides an optimistic outlook for the future. Bay Bridge Bio’s report is less optimistic, projecting a 25% decrease from the 2018 figures. Does clinical trial data give us any insights into what might occur for the remainder of 2019 and into 2020?

Therapeutics Overview

Before diving into the trial data for 2018 and 2019, let’s step back and consider the 2008 financial crisis. It is widely held that 2008 had a significant impact on the therapeutic industry, but the number of therapeutic clinical trials initiated in 2012, which was the year with the lowest number of clinical trials during the aftermath of the 2008 financial crisis, was only down 5.5% from the high-water mark number of therapeutic clinical trials set in 2008.

Examining only industry-sponsored therapeutic clinical trials, there was a 14.5% reduction from 2008 to 2012. This industry-sponsored reduction is nearly three-times greater than the overall decline. More interesting, therapeutic clinical trials experienced a 1.4% annual growth rate from 2008 to 2018, increasing by a total of 531 additional new clinical trials initiated each year. Over this same period, industry-sponsored therapeutic clinical trials experienced a -0.1% annual growth rate. What does this say about the industry’s investment in new therapeutics, and where is this therapeutic clinical trial growth coming from if industry is not the driving factor?

Therapeutic Clinical Trials

 

Two things leap out from the data: First, the number of industry-sponsored clinical trials is flat, with little overall change from 2008 to 2018. Second, non-industry sponsored clinical trials are driving the increase in clinical trials and, as a result, have a more significant impact on the future of healthcare than they did a decade ago.

The Driving Factor Behind the Increase in the Number of Therapeutic Clinical Trials

On clinicaltrials.gov, there are four categories of sponsors for clinical trials: industry, the National Institutes of Health, other U.S. federal agencies and other funding sources. The other category includes universities, hospitals, individuals and organizations. Looking at a small sampling of the other category, the majority of sponsors are universities and hospitals, with individuals and organizations sponsoring trials much less frequently.

SponsorAnnual growth rate (2008 to 2018)Change in the number of trials
Industry-0.11%-27
Government-0.23%-18
Other5.67%+604

 

The other category has been the sole driver of growth in the number of new therapeutic clinical trials over the last decade. This does not mean that universities and hospitals are developing significantly more new therapeutics than they were a decade ago. Instead, it likely means that they are conducting trials on existing therapeutics or on products that are not financially viable for the therapeutics industry to bring to market. Promising therapeutics that are not patentable and existing low-cost generics for new purposes fall into this category. The growth of the other category has been impressive over the last decade, with positive growth in eight out of the 10 years and two years surpassing 15% growth.

Evaluating the Near-Term Future for Therapeutic Clinical Trials

The overall number of therapeutic clinical trials initiated in 2018 grew by 0.7%. This is less than half of the average annual therapeutic clinical trial growth rate from 2008 to 2018, and only one-fourth of the growth rate from 2012 to 2018. However, 2018 was a highly positive year for industry-sponsored clinical trials, with 3.6% growth. In fact, 2018 posted the second-highest growth rate for industry-sponsored clinical trials over the last decade.

According to data collected in late August 2019, there was a 0.5% increase in the total number of therapeutic clinical trials in the first half of 2019 compared with the first half of 2018.In a reversal of the figures from 2018, industry-sponsored clinical trials decreased by 4.3%. The other sponsored clinical trials category has increased by 6.4% compared with the first half of 2018. Although the initial 2019 industry figures are enough to cause some concern, the first half figures from 2017 and 2018 were a poor predictor of the final 2018 results. The final results from 2018 significantly underperformed the first half results for 2018 for all categories except other sponsored clinical trials.

It is too early to draw conclusions about the near-term future of the therapeutics industry from this data, but the second half results from 2019 have the potential to be quite impactful, more than unraveling the significant gains experienced in 2018. If this short-term trend continues, there is some reason for concern in the therapeutic industry.

Understanding the Shift to Startups Away from In-House Development at Large Therapeutic Companies

In the next article, we continue to harness clinicaltrials.gov data to understand the shift in the therapeutic industry towards startups. We delve into how much large therapeutic companies have reduced their pipelines, which stages of therapeutics have experienced the greatest reductions, and how this impacts medtech and digital health companies.

Specifics of the Indicator

The number of clinical trials initiated was collected from clinicaltrials.gov. Under FDAAA 801, all clinical trials initiated in the U.S. since Sept. 27th, 2007, must be submitted to clinicaltrials.gov. Despite FDAAA 801, the list of clinical trials on clinicaltrials.gov is not a complete list but should function as a highly representative sample of the whole. Data collection was focused on interventional trials conducted in the U.S., which used the keyword “drug.” Drug is a term used on clinicaltrials.gov under the intervention category to label therapeutics. “Biological” is also a label but is used much less frequently and is often used alongside drug when it is used. All analyses used 2008 as the starting year because it was the first complete year where FDAAA 801 was in effect.

David Saxner

David Saxner

    David Saxner is a consultant at Longfellow Associates where he focuses on earlier stage medical device, diagnostic, and digital health companies.

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