GUEST COMMENTARY—During a recent venture capital class, I was asked: what percentage of a biotech startup’s equity should a university retain when it is the company’s founders who conceive the key ideas?
It is impossible to quantify the impact of the “butterfly effect” in biotech: How can we assess the cumulative ripple effects of multiple conversations, lectures, or pieces of advice that helped inspire and lead to a major breakthrough?
Following the recent U.S. Presidential election, there is intense scrutiny on the value of federally funded research and the work of government agencies including the National Institutes of Health (NIH) and the National Science Foundation (NSF). Thesudden resignation of Francis Collins, MD, PhD, from the NIH is but one example of a new climate of uncertainty and shifting research priorities across the U.S. government. As a new director prepares to be sworn in, it is a good time to ask: What is the contribution of governmental grants to modern medicine as we know it today?
Because of the difficulty in quantifying these factors, they remain subjects of fierce debate, shaped by personal biases and perceptions. In an effort to better understand and communicate the impact of basic research, I have attempted to quantify it by determining what proportion of the top earning drugs of 2024 were developed by pharma companies internally versus those that originated through academic licensing deals or biotech acquisitions?
Table 1 presents a chart mapping the blockbuster drugs of 2024, their origin,revenue, and patent expiration dates. While the numbers are approximations drawn from multiple sources, the trend is clear: The vast majority of top-selling drugs were not discovered in-house by pharma companies. Even drugs that are set to lose exclusivity soon (meaning they were developed about 20 years ago when pharma’s internal R&D spending was at its peak) mostly stemmed from academicresearch or biotech M&A.
Table 1: Analysis of the Highest Revenue-Generating Blockbuster Drugs in 2024
Table 1: Analysis of the Highest Revenue-Generating Blockbuster Drugs in 2024. This Table presents the top-selling pharmaceutical products of 2024, detailing their origin (e.g., in-house development, biotech acquisition, or academic licensing), annual revenue, and patent expiration dates. Selection criteria were based on total revenue, irrespective of therapeutic modality.
The layperson typically associates drug development with big pharma companies. In fact, the primary role of global pharmaceutical companies today lies not in drug discovery but rather in clinical development and commercialization. Only 28% of new drugs are currently developed internally within large pharma companies. Instead, the majority of biologics (63%) and more than half of small molecules (54%) originate from biotech companies.1
If blockbusters still largely arise from in-sourcing, even during high pharma R&D spending eras, then what happens next as internal R&D budgets shrink and academic funding faces uncertainty? It is important to remember that basic science paved the way for the research and discovery of those drugs. Drug commercialization cannot exist unless basic research takes place.
Academic roots
Most financially and clinically successful drugs were not discovered with a specific application in mind but emerged from fundamental scientific inquiry. For example, the role of GLP-1 as an incretin
hormone2was uncovered in academia. University researchers studying venom peptides in the Gila monster found
exendin-4,3which led to the development of Byetta, the first long-acting GLP-1 agonist. Novo Nordisk, leveraging its expertise ininsulin analogs, then optimized it into Ozempic (semaglutide), now a blockbuster in diabetes andobesity.
Keytruda, today’s #1 blockbuster, was an “accident.” Biotech scientists were trying to stimulate, not block, PD1 in patients with autoimmune diseases. Even after itscancer potential was realized, the program nearly died during two company mergers before ending up atMerck.
Trikafta is a notable exception. The internal drug’s discovery and optimization were driven by Vertex’s longstanding research in CFTR modulators, resulting in a highly effective triple combination therapy. Of note, the critical high-throughput screening platform that enabled its discovery came through the acquisition of Aurora Biosciences, co-founded by Nobel laureate Roger Tsien.
Time and time again, we see how the line between academic, biotech start-ups, and pharmaceutical contributions is blurred, highlighting that today’s successful drugs would not exist without the foundational basic research that preceded them.
Although genetic medicines have yet to make the top ten list (Table 1)—still facing challenges in market adoption and manufacturing that limit their full financial potential— they have already proven to be lifesaving for patients with no alternative treatment options. While Novartis spearheaded the commercialization of the first CAR T-cell therapy, Kymriah, after recognizing clinical data reminiscent of Gleevec’s transformative potential, the foundational science behind it was originally developed by scientists at the University of Pennsylvania under the leadership of Carl June, MD.
Or take Casgevy, the first CRISPR-approved medicine developed by Vertex and CRISPR Therapeutics and approved in December 2023. Critical to the development of the fetal hemoglobin switching approach were genome-wide association studies performed 15 years earlier by Stuart Orkin, MD, and colleagues that identified BCL11A as a key genetic switch.4
And of course, the development of CRISPR tools by Nobel laureates Jennifer Doudna, PhD, andEmmanuelle Charpentier, PhD, alongsideother academic labs around the world, could not have happened without support from various governmental and philanthropic funding bodies. The NIH funded genome engineering research long before therapeutic applications arrived in the clinic.
Euro skeptic
As a European molecular biologist drawn to the vitality and success of the American biomedical ecosystem, I’ve often reflected on what makes the United States the global leader in life sciences. To me, the answer is clear: a relentless investment in innovation, a high-risk appetite, and a funding structure that supports novel and ambitious ideas from the outset. The NIH, in particular, plays a crucial role, functioning almost like a pre-pre-seed VC. Funding in foundational research fuels the entire ecosystem that exists in an academic discovery-biotech start-up–VC–pharma equilibrium. One cannot exist without each other.
That’s why it is difficult to understand the rationale behind the Trump administration’s proposed NIH funding cuts, including suspension of grant-review
meetings,5,6large-scalelayoffs at the NIH and FDA, and acap on indirect cost reimbursements at 15% for new federal grants. These cuts not only threaten individual research programs but also risk destabilizing the aforementioned academic discovery–biotech–VC–pharma equilibrium. A reduction in academic funding, coupled with an ongoing exodus of researchers from academia to industry in search of financial and professional stability, is creating a vacuum in early-stage drug discovery, one that pharma, already shifting away from internal R&D, is unlikely to fill. Moreover, these financial uncertainties have led several universities toreduce or halt PhD admissions, threatening the training pipeline for the next generation of researchers and potentially hindering scientific progress in the long term.
In response, small biotech companies and venture creation funds are stepping up to bridge the gap. Notably, the CEO of Recursion recently launched a pre-seed fund to support early-stage life science startups affected by these funding cuts. Similarly, we are likely to see philanthropic foundations and patient advocacy groups playing a greater role in sustaining early research. While these efforts are very much needed, one fundamental truth remains: transformational drugs rarely emerge from a targeted, application-driven approach. Rather, they arise from deep scientific inquiry over many years, an approach that only robust, early-stage funding can support.
Because without fundamental science, how will the next generation of novel therapies emerge?
Eirini Vamva, PhD, is a business development and corporate strategy associate at a stealth-mode NewCo focused on advancing nonviral genetic medicines. She completed her postdoctoral training in the lab of professor Mark Kay, MD, at Stanford University . Eirini earned her PhD from the University of Cambridge . Contact: irevamva [at] gmail.com.
* The views expressed here are my own and do not represent those of my current or past employers.
References
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Eng J, Kleinman WA, Singh L, et al. Isolation and characterization of exendin-4, an exendin-3 analogue, from Heloderma suspectum venom. Further evidence for an exendin receptor on dispersed acini from guinea pig pancreas. J Biol Chem. 1992 Apr 15;267(11):7402-5. PMID: 1313797.
Sankaran VG, Menne TF, Xu J, et al. Human fetal hemoglobin expression is regulated by the developmental stage-specific repressor BCL11A. Science. 2008 Dec 19;322(5909):1839-42. doi: 10.1126/science.1165409. Epub 2008 Dec 4. PMID: 19056937.
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