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Matt Sagan: Big Pharma’s Reliance on External Drug Innovation

Matt Sagan/X

May 25, 2025, 16:13

Matt Sagan: Big Pharma’s Reliance on External Drug Innovation

Matt Sagan, Founder, Managing Partner and CEO of MoD Partners and Executive Director of BioForum Accelerator, shared a post on X:

“This is one of the most interesting pieces of data I’ve seen in a while. Truth be told – I was not much surprised. I was talking about this for a long time and was hearing that as well from top senior executives os Big Pharma over the last few years

Between 2015 – 2021, only 28% of new drugs approved by top pharma companies were invented in-house. Companies like AstraZeneca, AbbVie and Roche sourced over 80% of their approvals externally! 80%! Johnson and Johnson and Sanofi had ZERO internally invented drugs during this period…

What’s happening?

Declining ROI on internal R&D in big pharma

Risk-shifting to venture-backed biotech

Science is evolving faster outside the big pharma walls

Patent cliffs are forcing urgency

New modalities demand fresh expertise

Big Pharma is leaning into what they do best. Late-stage trials, regulatory execution, and global sales. This is exactly why the whole sector of early-stage biotech companies is very much needed! Early-stage preclinical biotech startups are fast, flexible and have great science (not all, but many).

It’s great to be now in the biotech sector at any side: startups will generate the future blockbuster drugs and BigPharma will lead them through late-stage clinical trials and to the market. Source: Mark Ross of Hunter Healthcare.”

Matt Sagan reflected on recent data revealing that the majority of drug approvals by major pharmaceutical companies from 2015 to 2021 were sourced externally, not invented in-house. He emphasized the strategic shift toward leveraging biotech innovation for early-stage development, while Big Pharma focuses on late-stage trials and commercialization.

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Matt Sagan: Big Pharma’s Reliance on External Drug Innovation

“This is one of the most interesting pieces of data I’ve seen in a while. Truth be told – I was not much surprised. I was talking about this for a long time and was hearing that as well from top senior executives os Big Pharma over the last few years

Between 2015 – 2021, only 28% of new drugs approved by top pharma companies were invented in-house. Companies like AstraZeneca, AbbVie and Roche sourced over 80% of their approvals externally! 80%! Johnson and Johnson and Sanofi had ZERO internally invented drugs during this period…

What’s happening?

Declining ROI on internal R&D in big pharma

Risk-shifting to venture-backed biotech

Science is evolving faster outside the big pharma walls

Patent cliffs are forcing urgency

New modalities demand fresh expertise

Big Pharma is leaning into what they do best. Late-stage trials, regulatory execution, and global sales. This is exactly why the whole sector of early-stage biotech companies is very much needed! Early-stage preclinical biotech startups are fast, flexible and have great science (not all, but many).

It’s great to be now in the biotech sector at any side: startups will generate the future blockbuster drugs and BigPharma will lead them through late-stage clinical trials and to the market. Source: Mark Ross of Hunter Healthcare.”