Pediatric oncology therapeutics can be a particularly risky venture. Historically, pharmaceutical companies have been dissuaded from pursuing pediatric oncology therapeutics due to low incidences, high costs of conducting pediatric trials, and an overall lack of funding for early stage research. Thus, cures and treatments for many pediatric cancers remain unpursued or minimally researched.

A team of medical doctors and financial specialists reviewed possible strategies to reduce risk and maximize returns for pediatric oncology therapeutics in a report published in JAMA Oncology. The authors reviewed a number of studies about pediatric oncology, the cost of drug development, as well as pediatric oncology clinical trials on ClinicalTrials.gov. They identified a total of 77 potential drug development projects for hypothetical portfolios, which were then assessed for financial returns and risks under simulated business strategies including combining projects at different clinical phases of development, obtaining partial funding from philanthropic grants, and obtaining government guarantees to reduce risk. 

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A portfolio funded solely by a private-sector saw returns of only 10.2% to 24.2%, supporting the idea that financial disincentives for pharmaceutical companies impeded the pursuit of pediatric oncology therapeutics. “[It also] implies that financial support from the public and philanthropic sectors is essential,” noted the authors. However, standard philanthropic grants had only marginal expected returns; and government guarantees had a greater association by reducing downside exposure. 

Phase diversification increased the likelihood of drug development success and bore higher expected returns. The authors conclude, that a combination of financial and business strategies might be able to eliminate some the risk and maximize expected returns to as high as 50.1%.

Reference

Das S, Rousseau R, Adamson PC, Lo AW. New Business Models to Accelerate Innovation in Pediatric Oncology TherapeuticsJAMA Oncology. 4:9. 1274-1280. 2018 Sept. DOI:10.1001/jamaoncol.2018.1739