* R&D returns at top 12 drug firms continue to slide
* Average return 4.8 pct in 2013 vs 10.5 pct in 2010
* Average new drug cost $1.3 bln - Deloitte, Thomson Reuters
By Ben Hirschler
LONDON, Dec 3 (Reuters) - The number of new drugs approvedfor sale by regulators may be rising but manufacturers are stillstruggling to get a decent bang for their research buck,according to a report on Tuesday.
The global pharmaceuticals industry is trying to replenishits medicine chest after a wave of patent expiries that peakedin 2012. Optimism has been growing that the industry might havebeen getting the formula right as more products, especially forcancer and rare diseases, win approval.
The latest annual productivity study by Deloitte and ThomsonReuters, however, reveals a continuing decline in projectedreturns on investment in late-stage drug research anddevelopment (R&D).
For 2013, the average internal rate of return (IRR) from R&Dwas estimated at just 4.8 percent, down from 7.2 percent lastyear and 10.5 percent in 2010. Over the same four-year period,the average cost of developing new medicines has risen by 18percent to $1.3 billion, the study added.
Significantly, the average forecast peak sales of each newdrug has dropped by 43 percent to $466 million in 2013 from $816million in 2010, reflecting the impact of austerity measures onhealth spending, plus a shift to more niche drugs.
Although the figures paint a picture of overall decline, theaverage does hide a big divide in performance between leadersand laggards, with five of the 12 companies having a projectedR&D return of more than 7 percent this year.
The difference in R&D success rates is evident in the widevariation in the cost of developing a new drug for differentcompanies. Since the figure includes money spent on drugs thatultimately fail, the most successful firms have lower costs.
For the best performing company in the group, the averagecost of developing a drug in 2013 was just $393 million, whileat the other extreme one firm spent $3.08 billion.
The companies analysed in the study were Pfizer,Roche, Novartis, Sanofi,GlaxoSmithKline, Johnson & Johnson, AstraZeneca, Merck & Co, Eli Lilly, Bristol-MyersSquibb, Takeda and Amgen.
The study calculated IRRs for these companies by estimatingthe future value of sales from products in final-stage Phase IIIclinical trials, or those submitted for regulatory approval,using standard industry benchmarks for success rates.
Results for individual companies were not disclosed.