Schulich logo The word Schulich Schulich Wordmark The word Schulich with the words Leading Change Schulich Logo The Schulich logo Schulich 50th Logo The number 50 Search An icon depicting a magnifying glass Envelope An icon depicting an envelope Phone An icon depicting a phone Fax An icon depicting a fax machine Map Pin An icon depicting a map pin People An icon depicting two people Graduation Cap An icon depicting a graduation cap Menu An icon depicting three lines Close An icon depicting an X Arrow Up An icon depicting an upward facing arrow Arrow Right An icon depicting a right facing arrow Arrow Down An icon depicting a downward facing arrow Arrow Left An icon depicting a left facing arrow Plus An icon depicting a plus sign Minus An icon depicting a minus sign Chart An icon depicting a chart Book An icon depicting a book Envelope An icon depicting a stamped envelope Dollar Sign An icon depicting a dollar sign Briefcase An icon depicting a briefcase Page An icon depicting a single page Share An icon depicting three connected dots Alert An icon depicting a triangle with an exclamation point Calendar An icon depicting a blank calendar Event An icon depicting a blank calendar Add Event An icon depicting a calendar with a plus sign on it Event Details An icon depicting a calendar with a question mark on it Print An icon depicting a printer Comment An icon depicting a speech bubble Feed The RSS icon Details An icon depicting a page with three lines of text Facebook An icon depicting the Facebook logo Twitter An icon depicting the Twitter logo YouTube An icon depicting the YouTube logo LinkedIn An icon depicting the LinkedIn logo Instagram An icon depicting the Instagram logo Long Arrow Left An icon depicting an arrow pointing left Long Arrow Down An icon depicting an arrow pointing down Flexible Study Options An icon depicting a branching line Awards An icon depicting a ribbon Advisory Board An icon depicting a round table Graduate Diploma An icon depicting a graduation cap Professional Designations An icon depicting a certificate Academics An icon depicting an academic building Schulich Logo The Schulich logo Academics An icon depicting an academic building Globe An icon depicting the globe with an arrow circling it Globe An icon depicting the globe with an arrow circling it Award Ribbon An icon depicting a ribbon Teacher An icon depicting a teacher pointing at a blackboard Double Location An icon depicting two location pins Wireframe Globe An icon depicting a wireframe globe Airplane An icon depicting an airplane Play Icon in the shape of a play button as found on videos Full-time Icon representing a full-time program Part-time Icon representing a part-time program Full-time Accelerated Icon representing a full-time accelerated program Part-time Accelerated Icon representing a part-time accelerated program Program Details Icon representing program details Program Tuition Icon representing tuition and fees Career Opportunities Icon representing program details Accreditations Icon representing program accreditations Program Options Icon representing program options Requirements Icon representing program requirements Courses and Electives Icon representing program courses Faculty Icon representing program faculty Clubs Icon representing program clubs Courthouse Icon representing a courthouse Oil Icon representing an oil droplet Retail Icon representing a shopping bag Food Icon representing a fork and knife Construction Icon representing a hammer and wrench Person A silhouette of a person Person An outline of a person Folder An outline of a folder Pie chart An outline of a pie chart Graph An outline of a bar graph Save An arrow pointing into a box Play An outline of a play arrow Key An outline of a key Ticket An outline of a ticket Books Two books Computer A laptop computer Globe An outline of a globe Plane An outline of a plane Accelerated Program An outline of a fast-forward button Part-time Program An arrow arcing around a clock Viewbook An outline of an open book Medal A medal with a star Professor A lecturing professor Suit A person wearing a suit Laptop Laptop computer (by FlatIcon) Locked Closed Access Unlocked Open Access Google Scholar Google Scholar icon Calendar An icon depicting a blank calendar India An icon depicting a Indian landmark Report An icon depicting a briefcase Skip to content

Drug development firms spending too much time on R&D projects that have little likelihood of commercial success

  • Future Students
  • Current Students
    Undergraduate Students ›Graduate Students ›PhD Students ›
     › › › ›
  • Alumni
    • Mentorship & Volunteering ›

      Alumni Benefits ›

      Success Stories ›

      Common Questions ›

      Contact Alumni Relations ›

    • Alumni Events ›

      Global Alumni Chapters ›

      Alumni Services for Students ›

      Alumni Recognition Awards ›

    Overview ›Alumni Career Portal ›Online Community ›
     › › › ›
  • Donors
    • Ways to Support ›

      The Impact of Giving ›

      Sponsorship Opportunities ›

      Leaving a Legacy to Schulich ›

      Contact Development Office ›

    • Schulich Priorities ›

      The Schulich Annual Fund ›

      The Dean’s Society ›

      Tribute Giving ›

    Overview ›Donate Now ›
     › › › ›
  • Recruiters
  • Media
MySchulich
Schulich School of Business
  • Future Students
  • Current Students
    Undergraduate Students ›Graduate Students ›PhD Students ›
     › › › ›
  • Alumni
    • Mentorship & Volunteering ›

      Alumni Benefits ›

      Success Stories ›

      Common Questions ›

      Contact Alumni Relations ›

    • Alumni Events ›

      Global Alumni Chapters ›

      Alumni Services for Students ›

      Alumni Recognition Awards ›

    Overview ›Alumni Career Portal ›Online Community ›
     › › › ›
  • Donors
    • Ways to Support ›

      The Impact of Giving ›

      Sponsorship Opportunities ›

      Leaving a Legacy to Schulich ›

      Contact Development Office ›

    • Schulich Priorities ›

      The Schulich Annual Fund ›

      The Dean’s Society ›

      Tribute Giving ›

    Overview ›Donate Now ›
     › › › ›
  • Recruiters
  • Media
  • Programs
    & Courses
    • Undergraduate

      BBA ›

      Master of Business Administration

      MBA ›
      MBA / Juris Doctor ›
      MBA / MFA / MA ›
      Kellogg-Schulich Executive MBA ›
      Tech MBA ›

    • Specialized Masters Programs

      Accounting ›
      Artificial Intelligence ›
      Business Analytics ›
      Finance ›
      Health Industry Administration ›
      Management ›
      Marketing ›
      Real Estate & Infrastructure ›
      Supply Chain Management ›

    • Exchange

      Incoming Exchange and Programs ›

      Graduate Diplomas

      Post-MBA Diploma in Advanced Management ›
      Accounting Analytics ›

      Doctor of Philosophy

      PhD in Administration ›

     › › › ›
  • Admissions
    • Undergraduate

      Apply Now ›
      Admissions FAQs ›
      Connect With Us ›
      Admission Events ›
      Meet the Team ›

    • Graduate

      Apply Now ›

      Tuition Fees & Costs ›

      Application Tips ›

      Connect with Us ›

      Admission Events ›

      Meet the Team ›

    Admissions Requirements ›
     › › › ›
  • Faculty
    & Research
  • Student Life
    & Services
    • Case Competition Program ›
      Centre for Career Design ›
      Event Calendar ›
      Financial Aid ›

    • International Relations ›
      Libraries ›
      Services for Students ›
      Student Life at Schulich ›

     › › › ›
  • About
    • Our Dean ›

      Rankings ›

      Equity, Diversity, and Inclusion ›

      Case Competition Program ›

      Schulich Startups ›

      Impact Report ›

      News & Events ›

      Contact Directory ›

    • Our Heritage ›

      Recruit at Schulich ›

      Work at Schulich ›

      Hospitality & Hotel Services ›

    Learn more about Schulich ›
     › › › ›
  • Executive
    MBA
    • Program Information

      Overview ›

      Program Details ›

      Schedule & Courses ›

    • Admission Requirements ›

      Tuition Fees ›

      Follow us on LinkedIn ›

    Are you EMBA ready? ›Request a pre-assessment ›

     

    Contact us at 416-736-5486 or emba@schulich.yorku.ca​

     › › › ›
  • Executive
    Education
  • MySchulich

About

About › News & Events

  • ‹ News Feed
  • January 11, 2021

    Drug development firms spending too much time on R&D projects that have little likelihood of commercial success

    TORONTO – Monday, January 11, 2021 – A new study shows that biopharma companies might be ‘pulling the plug’ too late on R&D projects that show few signs of succeeding.

    The study, available online for an early view and to appear in the journal Production and Operations Management, investigates whether scientific teams in biopharma firms allocate too much time to early-stage drug discovery projects that are doomed to fail.

    Spending on research and development (R&D) by firms such as J&J, Merck, Novartis, Pfizer, Roche, and Sanofi amounts to billions of dollars and is rising. However, the increase in R&D spending has not been accompanied by increases in the returns on investment (ROI), which has become a growing concern in the biopharma industry. According to the findings of the new study, a primary cause for this decline in productivity is the failure to discontinue less-promising, early-stage drug discovery projects fast enough.

    Authors Moren Levesque, Professor of Operations Management and Information Systems and CPA Ontario Chair in International Entrepreneurship at York University’s Schulich School of Business, together with Annapoornima Subramanian, an Associate Professor of Industrial Systems Engineering and Management at the National University of Singapore, and Vareska van de Vrande, a Professor of Collaborative Innovation and Business Venturing at Erasmus University, uncovered that if a biopharma firm possesses a large portfolio of late-stage drug development projects and a large scientific team involved in early-stage drug discovery, then the firm can achieve maximum gain by shifting more resources toward the late-stage projects than the early-stage ones.

    “A central feature of drug discovery projects is whether the drug is more of a follower- type or first of its kind,” says Lévesque, Co-Director of Entrepreneurial Studies at Schulich. “Pfizer’s LIPITOR was a follower drug developed to lower bad cholesterol since it had four predecessors prior to its launch in 1997. But the NERLYNX launch by Puma Biotechnology in 2017 and the FEDOSINE launch by BioCryst Pharmaceuticals the same year were both first-in-class drugs.” By nature, first-in-class drugs face significantly more risk during their development since they have no predecessors to learn from. “We found that highly risk-averse firms extended the time to discontinue these projects. By being highly risk-averse, risk becomes more of a concern than return, with the result that some biopharmas are not pulling the plug fast enough!” 

    Lévesque says these findings, which are based on rich data related to approximately 1,300 early-stage drug discovery projects in biopharma firms worldwide, also reflect a tradeoff faced by decision-makers: first-in-class drugs promise high returns but face high risk of coming to fruition, while follower drugs face lower returns and lower risk. “Whether a drug is a follower or first-in-class is not a binary measure but more like a continuum because it is captured by the number of competitors that engage in the discovery of similar drugs,” remarks Lévesque. “To balance risk and return, biopharmas should favour delaying pulling the plug on those projects in the middle of this continuum.” But there is a caveat to this recommendation, she adds: “Highly-risky, first-in-class drug projects targeted at rare diseases—aka orphan drugs—might never see the light of day if we follow this recommendation, so third-party intervention is required.”

    “Governments worldwide must find ways to encourage biopharmas to continue developing drug projects targeted at rare diseases, like the 2010 National Institutes of Health (NIH) program to accelerate the discovery of such drugs.” To afford biopharma firms a longer time to pull the plug on these drugs, Lévesque contends that “policymakers can also play a crucial role to encourage biopharma firms to openly share selected drug discovery data with other firms wanting to work on these needed drugs.”

    Lévesque says that recent drug discovery during the COVID-19 pandemic has opened the door to promising new models of future drug development. “AstraZeneca, Eli Lilly, and Pfizer were part of a program from the NIH where scientific teams at the biopharmas received the help of university researchers to develop new drugs,” notes Lévesque. “Today, Oxford University and AstraZeneca are working together on the ‘Oxford Vaccine’ for COVID-19 or, more scientifically, ChAdOx1 nCoV-19. Such programs that combine expertise and efforts will undoubtedly remain needed in the new normal ahead of us.”

  • Related Posts

    Research ›
  • Schulich - York University
    • Directions
    • Location Inquiries
    • Contact Directory
    • Event Calendar
    • MySchulich
  • Information for:

    • Future Students
    • Current Students Undergraduate
    • Current Students Graduate
    • Current PHD Students
    • Alumni
    • Donors
    • Recruiters
    • Faculty & Staff
    • Media
  • Go to:

    • About
    • Admissions
    • Faculty Listing
    • Student Life at Schulich
    • Services for Students
    • Wellness Suite
    • Privacy
    • Site Map
  • Facebook
  • Twitter
  • YouTube
  • LinkedIn
  • Instagram

© Copyright 2025 The Schulich School of Business, York University.