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Drug launch curves in the modern era

Nature Reviews Drug Discovery volume 16, pages 13–14 (2017)Cite this article

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How quickly will a drug in development reach peak revenues after launch? Anyone who builds financial models in the pharmaceutical industry has wrestled with this question — which is to say, every investor, analyst, banker, dealmaker, commercial team, franchise head and senior executive in the sector, not to mention scores of consultants and journalists focused on drug development and commercialization.

The shape of the launch curve can dramatically affect financial models of pre-commercial drugs. Because revenues are discounted to account for the 'time value of money', a fast ramp has an outsized effect on the projected net present value (NPV). Shortening the projected time to peak sales by even 20% — say, from 5 years to 4 — can radically change the apparent attractiveness of an asset to both financial and strategic investors.

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Figure 1: Distribution of times to peak sales for drugs launched in the United States, 2000–2002.
Figure 2: Shape of a median launch curve for drugs launched in the United States, 2000–2002.

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  1. Pharmagellan LLC, 499 Adams Street, Box 94, Milton, 02186, Massachusetts, USA

    Seth Robey & Frank S. David

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  1. Seth Robey
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  2. Frank S. David
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Correspondence to Frank S. David.

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Competing interests

The authors work for Pharmagellan, an advisory firm that provides paid consulting services to pharmaceutical and biotechnology companies in areas related to the topics covered in this article.

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Robey, S., David, F. Drug launch curves in the modern era. Nat Rev Drug Discov 16, 13–14 (2017). https://doi.org/10.1038/nrd.2016.236

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