The decision (to invest in a novel drug indication) ends up requiring a careful balancing of risk and reward, informed by a deep understanding of the scientific, clinical, regulatory, and commercial factors at play.

It also requires organizational alignment and buy-in, as well as a willingness to adapt and pivot as new data emerges and assumptions are pressure-tested.The feasibility of the clinical development path can be another critical factor, particularly in novel indications where regulatory precedents may be limited.

Beyond the scientific merits and like any industry, pharma will also weigh the commercial attractiveness of the opportunity.

This would include an assessment of the potential market size, competitive landscape, and pricing and reimbursement dynamics.

In areas with limited precedent, there can more creative forecasting and scenario planning to model different adoption curves and revenue trajectories.

“[Every company is] pushing boundaries of science and take bold bets on novel targets, modalities vs. financially sustainability and returns for shareholders over the long-term.”

“This balance is never a steady state (like any industry) requires a thoughtful and disciplined approach to portfolio management and risk mitigation. At the heart of this is the need to maintain a diverse and balanced pipeline that includes a mix of both high-risk, high-reward programs and more conservative, validated bets.”

Strategies seen in the market:

A common strategy is to allocate a portion of the R&D budget towards novel, exploratory projects that have the potential to be game-changing if successful.

1. These could include new targets with limited prior validation, cutting-edge modalities.

2. Or, innovative platform technologies that could have broad applicability across multiple disease areas.

While the failure rate for these types of programs is typically high, the potential upside – in terms of scientific breakthroughs, first-in-class products, and new revenue streams – can be significant.

At the same time, we will see companies investing in a portfolio of more traditional, lower-risk assets that leverage proven targets, mechanisms, and development pathways.

Examples like:

- New indications for existing drugs

- Improvements on established modalities like small molecules and antibodies

- Product lifecycle management initiatives aimed at extending the commercial potential of marketed brands.

Collaboration and partnerships have become increasingly central to the pharmaceutical R&D model for :

1. Seeking to access external innovation.

2. Leveraging specialized expertise.

3. Sharing risks and costs of drug development.

For Pharma, developing these types of platform technologies often requires significant upfront investments and a wide range of specialized skills and capabilities.

By partnering with academic labs, technology startups, or other pharmaceutical companies, companies can tap into existing expertise and infrastructure, rather than trying to build everything from scratch in-house.

For established therapeutic areas:

1.     A deep analysis of the current treatment paradigms,

2.    SWOT review strengths and limitations of existing therapies

3.    Review of the size and segmentation of the patient population,

4.    Key drivers of physician and patient decision-making.

In emerging therapeutic areas:

This can be a more challenging assessment as there might be limited precedent or historical data to draw upon.

1.     Often primary market research, including in-depth interviews with key opinion leaders, surveys of physician and patient attitudes and behaviors are under taken

2.    Analyses of Real-World Databases (RWD) to assess existing usages and comparative trends.

3.    Regulatory and reimbursement landscape are often assessed in emerging areas where the pathways to approval and market access may not be well-defined.

4.    Pharma also conduct competitive dynamics assessments