The Value of Backup Compounds to Drug Development Programs

Drug discovery operations in pharmaceutical companies are often required to decide if it is better to commit resources to the development of novel, first-in-class compounds (“prototypes”) or to use the same resources to develop “backups” that can be brought forward to replace a prototype that fails during development. By examining the probabilistic dependency between the failure of a prototype and its backups, we find that adding backup compounds to a development program enhances the chances that a program will result in the development of one or more marketable products. The benefit of developing backup compounds is subject to the law of diminishing returns. Thus, the most cost-effective strategies will involve creating a limited number of backups for each prototype. Despite the existence of inherent similarities between a prototype and its backups, continuing to pursue backups after the prototype has failed can still be an attractive development opportunity.