5 things to know in life sciences: Week of Sept. 19
REAL ECONOMY BLOG | September 22, 2022
Authored by RSM US LLP
This week, we look at another drug breaking the record for most expensive in the world, a complicated labor market with layoffs at many large pharmaceutical companies and expansions at others, and plans to build a quantum computer for life sciences research. We also look at GSK requiring various environmental, social and governance commitments across its supply chain.
Each week we highlight five things affecting the life sciences industry. Here’s the latest.
Last month, bluebird bio received Food and Drug Administration approval for the blood disorder gene therapy treatment, Zynteglo, with an estimated price of $2.8 million per dose. At the time this was the highest-priced drug in the world. This week, bluebird received approval of yet another breakthrough gene therapy, Skysona, which treats the rare neurological disorder cerebral adrenoleukodystrophy. Skysona will debut at a $3 million price tag. Both drugs are designed as single dose therapies which would replace a lifetime of traditional treatments. The cumulative cost savings and the impact on patient outcomes are major factors into the high price tags.
AbbVie and Bristol Myers Squibb announced combined layoffs of 360 employees in California. They join other large pharmaceutical companies such as Biogen, Teva and Novartis which have also announced layoffs. Overall labor demand in the life sciences industry has continued to grow this year, and layoffs at these companies, as well as across the tech space, could provide opportunities for other firms within the life sciences space that have been struggling for STEM talent in a tight labor market.
While many of the giants of the industry have had layoffs recently, Johnson & Johnson announced plans to open a new research and development facility in the San Francisco Bay Area. The new plant is expected to have capacity for up to 400 employees and will nearly double the company’s presence in the region. The company hopes that the expansion in the Bay Area will provide greater access to academic institutions and startup companies operating there.
The Novo Nordisk Foundation announced that it is committing $200 million to build a quantum computer it hopes will be capable of addressing various challenges in drug production. The project will be led by researchers at the University of Copenhagen, with involvement from scientists throughout the United States. A recent McKinsey study indicated that quantum computing is likely to play a major role in identification of new disease targets.
Many companies have continued to embrace ESG practices, as part of their long-term strategy for environmental, operational and market-facing sustainability. While this effort is currently voluntary in the U.S., investors and customers have increased expectations for companies, and some foreign countries have mandated ESG reporting by large enterprises. GSK (headquartered in the U.K.) is taking its environmental efforts one step further and will be requiring suppliers to make commitments and monitor improvements in its sustainability footprint. GSK has taken these efforts in part because 40% of its carbon footprint is a direct result of its suppliers. In October GSK will be meeting with 160 of its suppliers to discuss the new measures, which will also provide ample opportunities for markets to gauge interest and acceptance of these measures, and if they will be more broadly adopted by the life sciences industry.
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This article was written by Justin Culbertson, Steve Kemler, David Stuart, Brian Winne and originally appeared on 2022-09-22.
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