Three Key Impacts in 2025: Fundraising, ICH E6(R3), and Policy

A  Q&A featuring Tania Zieja, President of Halloran Consulting Group.

As we approach the end of the year, I sat down with Tania Zieja, President of Halloran Consulting Group, to reflect on 2024’s key impacts on clinical development, get an understanding of the industry’s progress, and what’s on the horizon for 2025. 

We focused on three key areas – fundraising, a revised industry guideline, and policy – that will continue to have downstream ripple effects as we approach the new year.  

Fundraising remains a challenge for many small and mid-sized biotech and pharma companies, resulting in challenging strategic decisions, and a landscape of haves and have-nots. The anticipated finalization of ICH E6(R3), the global standard for clinical trial conduct, has many clinical trial sponsors reeling, preparing for changes to their procedures and programs. Lastly, the Inflation Reduction Act (IRA) and the potential for the BIOSECURE Act to be signed into law continue to impact clinical development strategy. 

In this Q&A, learn how leaders at small and mid-sized biotech and pharma companies can prepare for a new year with sustained roadblocks, new challenges, but also renewed opportunities. While we certainly cannot predict the future, we can identify risks and prepare in advance to partner with you to propel development forward. 

Q: Let’s talk fundraising. 2024 was still a challenging year for many companies, particularly start-ups. Is there hope for a turnaround? If so, how can leaders position their companies for success? 

2024 has been a year of haves and have nots. We’ve certainly seen this play out in the years following the record-breaking pandemic peaks. The haves: companies with – and investors in – clinical-stage assets on big pharma’s radar. Then, there’s the have nots: earlier, pre-clinical stage companies for whom development have stopped before reaching proof of concept. 

While some companies have not been impacted by the current environment, for many, funding has been hard to come by in 2024 due to interest rates remaining high until only recently when the Federal Reserve System substantially cut the Interbank Offered Rate. This cut should spur investment by decreasing the cost of funding, however, leaders may want to remain cost conscious by outsourcing what they can in order to keep fixed costs down.   

2024 has also presented itself with unique challenges – political uncertainty in an election year, significant decrease in spending on average across biotech and pharma companies, and minimal IPO activity. 

But there is dark before dawn. Melanie Senior’s article, “Biotech financing: darkest before the dawn,” published in Nature Biotechnology, writes, “It was the best of times, it was the worst of times, wrote Charles Dickens in A Tale of Two Cities. The same might be said for biotech financing today. There certainly is positive momentum heading in 2025, but most biotechs are stuck in a long-lasting downcycle.”¹  

Leaders at biotech and pharma companies will need to consider a revised fundraising approach in 2025, seeking to curate a broader investment (or buyout) base than perhaps envisioned. For example, aligning with big pharma needs may place early companies at an advantage, considering the uphill battle for pre-clinical biotechs to secure funding amid a tight public market. There are certainly other strategies, as well, and this is not a one-size-fits-all approach.  

While some in our industry will say that things feel better now than this time last year, I’d say it truly depends on your vantage point. Many still face difficult times, and will continue a challenging journey through 2025, and as we march into an upcoming election with geopolitical uncertainties, this can often test investor confidence. Yet, we are still confident the upswing will happen, but it will likely be in the latter half of 2025 before we feel any sense of real recovery.  

Q: The ICH GCP E6(R3) draft guideline is set to be finalized in late 2024. Why is it important to think about this revision now? What are the changes, and how can clinical trial sponsors prepare? 

For those that have been in the industry over the last 10 years, you too have seen a significant shift toward integration of technology and digital tools and innovation in clinical trial design. As a result, the U.S. Food and Drug Administration (FDA) has taken significant strides towards modernizing clinical trials by releasing a draft guidance offering recommendations for Good Clinical Practice (GCP) aligning with the ICH GCP E6(R3) update. 

When we look at the side-by-side comparison of R3 and the previous revision (R2), you will notice that R3 has a different framework. R3 is reorganized by principles, and Annex 1 includes four key sections. Additionally, there is a glossary, followed by three appendices that are now in a more user-friendly layout, as well as Annex 2.  

To put it simply, the R3 guidance is intended to provide flexible, modern, and clear Good Clinical Practices for conducting clinical trials. 

Whether you are a clinical trial sponsor, provider, or clinical trial site organization, the impact of R3 will reach across the lifecycle of clinical trials and adoption will support a more agile, efficient path forward for clinical trials. 

The overall message of R3 – as we see it – is for us to challenge ourselves to envision the bigger picture and think (and act) differently. For example, consider the following: 

• Regulatory: How can we develop a flexible study design that meets regulatory requirements? 

• Risk quality management: Contemplate proportionate risk-based decisions 

• Critical to quality factors: Progress thinking from trial inception and be more proactive to avoid and lessen issues 

• Efficiency: Assess your approach and consider how to propel efficiency in clinical trials  

• Data governance: Consider the fit-for-purpose approach to computerized systems and data handling at all stages 

Regulators will be looking for evidence (i.e., through data collection, audit trails, etc.) and we, as an industry, need to be able to demonstrate the data integrity controls of such electronic systems across the entire development lifecycle.  

Q: It’s been two years since the Inflation Reduction Act was signed into law. What’s your take on the impact so far? What about 2025 – are you anticipating experiencing more of the same and is there new policy to be mindful of? 

The growing number of discontinued product development programs due to the implementation of the IRA will continue to have a long-term impact on health economics and progress toward addressing unmet medical needs. The Life Sciences Investment Tracker notes that 36 research programs and 21 drugs have been discontinued since the passage of the IRA. 

Additionally, the announcement of maximum fair prices for the first 10 medicines targeted under the IRA has propelled concerns about the law’s impact on biopharma product development and innovation. As negotiators work out prices for certain top-selling Medicare Part D drugs, the maximum fair price could be far below the actual value the drug offers to patients. And we haven’t even factored in the cost it takes, on average, to execute clinical development. 

Ken Getz, Executive Director and Professor of the Tufts Center for the Study of Drug Development, notes that when we look at price controls and the average cost per day to run a clinical trial, which is $40,000 in direct daily clinical trial costs, there is and will continue to be an unsustainable economic relationship between risk and reward in product development. As drug and biologic success rates – from Investigational New Drug application filing to FDA approval – have been declining during the past several decades (the risk), so too have the total sales and the average daily sales generated per drug or biologic that enters the market (the return).² 

How the IRA will influence future research and development (R&D) spending is largely based on two broad factors – how much revenue will be lost and how connected are expected revenue and company R&D spending.³

Revenue Loss: 

• Considering the government has claimed it will save billions due to price controls, most likely from manufacturing costs, the IRA will reduce the amount of capital that companies can obtain. 

Connection Between Revenue and R&D Spending: 

• When funding is more fluid, so is R&D spending. When funding is challenging to acquire, then R&D funding tightens.  

Government price controls will significantly impact the industry's ability to continue uncovering future breakthroughs. The extent of the damage in the years to come is unclear, but it’s something we will be following. 

Another policy that we are watching is the BIOSECURE Act, which was passed by the House of Representatives on September 9 of this year and now awaits a vote from the Senate.  

If passed by the Senate and signed into law, this legislation will prohibit federal agencies from procuring, purchasing, or obtaining biotech equipment or services from a biotech company that is controlled or operated on behalf of a foreign adversary, most notably, China.  

If the House and the Senate agree on a version of this Act, agencies will begin enforcing the new rules upon the president’s signature. We are watching this update closely. 

Maximizing Clinical Development Opportunities in 2025 

As 2024 comes to a close, it’s certainly not the turnaround we hoped for. As challenges and uncertainties arise, so do opportunities to reimagine new approaches and processes to move clinical development forward in 2025. 

As you assess your goals for next year (and beyond), consider asking for the help you need. Perhaps you’re called upon to continue to do more with less, a trend we’ve seen play out over the years, but don’t know where to prioritize your time and limited resources. It begins with a conversation. When you’re ready, contact us. 

References 

1. Senior, M. Biotech financing: darkest before the dawn. Nat Biotechnol 42, 1331–1338 (2024). https://doi.org/10.1038/s41587-024-02357-2 

2. Applied Clinical Trials. How much does a day of delay in a clinical trial really cost? June 6, 2024. https://www.appliedclinicaltrialsonline.com/view/how-much-does-a-day-of-delay-in-a-clinical-trial-really-cost-

3. Bio News. The economics of the Inflation Reduction Act’s impact on innovation. August 29, 2024. https://bio.news/bios-view/the-economics-of-the-inflation-reduction-acts-impact-on-innovation/