What is life science?

Life science is a broad concept that, among other, includes products and methods aimed at maintaining good health or treating diseases. Karolinska Development’s investments are focused on potentially ground-breaking pharmaceutical treatments or medtech products. The process of gaining approval for a new pharmaceutical product, and the frameworks for market launches of a medtech product, are described below.

The various stages of pharmaceutical development

Developing a new pharmaceutical product takes a long time and demands substantial investments.1 It takes an average of 12 years to translate a new scientific theory into a registered pharmaceutical. The risk of an individual project failing to make it to market is high – only around 10% of the projects that start phase I trials make it to market.2 Commercialising the project can also prove difficult, whether the intention is to achieve this via out-licensing during development or through an in-house launch. The enormous potential for growth in value in those companies that achieve success is, of course, the reason why there is, nonetheless, considerable interest in investing in smaller life science companies. A number of licensing agreements with contract values of billions SEK have been signed in recent years for projects that are comparable with those being conducted by Karolinska Development’s portfolio companies.3

  • 1. Preclinical research 

    • Research and development activities carried out in a laboratory setting. Potential target structures for new pharmaceuticals are identified. Chemical or biological compounds with the ability to influence these target structures are characterised, produced on a small scale, and tested in a range of experimental models. The objective is to designate one or more candidate drugs with the desired properties for further development.  
  • 2. Preclinical development 

    • Officially regulated preclinical trials to ensure that a candidate drug has the properties required for it to be suitable for progression to clinical trials on humans. Ensuring that the compound has a good safety profile is an important component of this process.  
  • 3. Phase 1 studies 

    • Conducted on healthy test subjects to determine whether the candidate drug behaves in the same way in the body as that indicated in preclinical trials. Documentation of the safety profile of the compound is, once again, the focus of this phase. 
  • 4. Phase 2 studies 

    • Conducted on a limited number of patients with the disease that the candidate drug is intended to alleviate or cure. The focus is on studying efficacy and safety, and on establishing data for determining the doses to be used in the phase III studies.  
  • 5. Phase 3 studies 

    • Studies involving a substantially larger number of patients, sometimes numbering in the thousands. The results of the phase III studies form an important element of the source data required to obtain market approval from the pharmaceutical regulatory authorities.  
  • 6. Registration process 

    • An application, which can comprise 100,000s of pages of documentation, is submitted to one or more pharmaceutical regulatory authorities. Processing an application normally takes around one year.  
  • 7. Market launch 

    • If the pharmaceutical regulatory authority has approved the application, the product launch can begin. Price negotiations with the organisations that will pay for the drug must, however, be conducted first in the majority of countries.  

Market introduction of medtech products  

Medtech products comprise everything from sticking plasters to radiotherapy equipment, and the commercialisation processes naturally differ in line with the type of product. One of the key differences between the development of medtech and pharmaceutical products is that medtech products do not usually undergo the formal clinical development phases (phase I−III studies) described in the section above. Another difference lies in the fact that the development risk is generally lower while the commercialisation risk is higher. Fewer projects fall by the wayside, but the market launch process is often more drawn out than for pharmaceuticals.  

The official approval requirements for medtech products depend on the control level required to determine the product’s safety and efficacy, or its similarity to previously approved products. 

Approval process in the USA

In the USA, the products are divided into three categories. Class I products require no formal approval, class II products are only required to show that they are equivalent to a previously approved product, while class III products must obtain Pre-Market Approval (PMA) before launch. In the latter case, clinical studies supervised by the US regulatory authority, the FDA, are required.

Approval process in the EU

In the EU, the majority of products must be CE-labelled before sales may commence. The CE-labelling (Conformité Européenne) system requires the manufacturer to confirm that the product meets regulatory requirements. A product that achieves CE-labelling in one country has access to the entire EEA market. In many cases, the manufacturer can carry out all of the tests and investigations required to demonstrate the product’s regulatory compliance. If the products are associated with specific risks, the manufacturer is required to engage an independent certification organisation, known as a “notified body”.

Subsidies

Once it has been approved, the product can be marketed and used, but a strong sales performance will usually require the health care provider to receive subsidies from government bodies or private insurance companies. The process of obtaining the go-ahead from the payers can be both complicated and drawn out.

Health economic evaluations have become an increasingly important factor in obtaining payment for medtech products.

In the USA, the products are divided into three categories. Class I products require no formal approval, class II products are only required to show that they are equivalent to a previously approved product, while class III products must obtain Pre-Market Approval (PMA) before launch. In the latter case, clinical studies supervised by the US regulatory authority, the FDA, are required.

In the EU, the majority of products must be CE-labelled before sales may commence. The CE-labelling (Conformité Européenne) system requires the manufacturer to confirm that the product meets regulatory requirements. A product that achieves CE-labelling in one country has access to the entire EEA market. In many cases, the manufacturer can carry out all of the tests and investigations required to demonstrate the product’s regulatory compliance. If the products are associated with specific risks, the manufacturer is required to engage an independent certification organisation, known as a “notified body”.

Once it has been approved, the product can be marketed and used, but a strong sales performance will usually require the health care provider to receive subsidies from government bodies or private insurance companies. The process of obtaining the go-ahead from the payers can be both complicated and drawn out.

Health economic evaluations have become an increasingly important factor in obtaining payment for medtech products.