Weight-Loss Drugs' Gains Lift Pharma R&D Returns, but 'Bubble' Risk Grows
Deloitte UK and Deloitte US analysis finds projected R&D returns rose for the third straight year — driven largely by GLP‑1 assets, as obesity overtakes oncology as the largest contributor to late-stage pipeline value for the first time in 16 years.
NEW YORK, May 4, 2026 /PRNewswire/ -- The sixteenth annual "Measuring the Return from Pharmaceutical Innovation" report shows projected internal rate of return (IRR) for late-stage biopharma pipelines rose to 7% in 2025, up from 5.9% in 2024, marking the third consecutive year of improvement. The increase is disproportionately driven by a small cohort of mega-value assets — primarily GLP/GLIP1s, and the underlying pressure on broader R&D organizations to drive cost-effective innovation remains high.
That concentration is being fueled by rising expectations for commercial value: average forecast peak sales per asset increased to $598 million in 2025, up from $510 million in 2024, with the uplift overwhelmingly attributable to a handful of high-forecast GLP‑1 assets. GLP‑1 assets, primarily in obesity and diabetes, but also spanning indications such as chronic heart failure, osteoarthritis and liver fibrosis, now account for an estimated 38% of projected commercial inflows from the 2025 late-stage pipeline.
Key takeaways
- Returns improved again: Projected IRR increased to 7% in 2025 from 5.9% in 2024.
- GLP‑1s drive the rebound: GLP‑1 assets represent ~38% of projected commercial inflows; excluding the GLP‑1 class, projected IRR falls to 2.9%.
- Obesity leads pipeline value: Obesity assets now account for ~25% of total forecast late-stage pipeline sales/value, displacing oncology (~20% in 2025, down from 26% in 2024).
- Value is increasingly concentrated: 54 blockbuster assets (about 9% of the late-stage cohort) are projected to generate ~70% of total risk-adjusted peak sales.
- Costs keep rising: Average cost to develop a drug from discovery to launch increased to $2,671 million in 2025 from $2,229 million in 2024, raising the bar for commercial success.
Why this matters
With obesity assets, driven almost exclusively by GLP‑1s, now the dominant value driver, portfolios (particularly among the highest-performing companies) are becoming more sensitive to therapeutic-area-specific shocks. This analysis points to risks including tightening pricing and market access, rising competitive intensity, unexpected safety signals, and manufacturing supply constraints within the GLP‑1 space.
Key quotes
"The increase in the top-line IRR could be seen as an encouraging sign for the industry and is reflective of the positive impact pipelines are having on patient health. As competitive dynamics are likely to continue to intensify and costs continue to escalate, it's important that companies employ a capital allocation strategy that preserves sufficient investment for long-term innovation."
"To help them make today's gains durable beyond the GLP‑1 wave, leaders should consider connecting strategy to dynamic capital allocation, embed competitive reality into progression and deal decisions, and evolve AI investments from isolated projects to an end-to-end operational vision focused on measurable outcomes and workflow transformation."
Additional findings
This analysis shows the late-stage pipeline continuing to shift toward large-molecule modalities such as monoclonal antibodies and protein therapeutics. In 2025, large molecules account for 55% of late-stage assets (up from 51% in 2024) and are projected by the respondents to generate 64% of total value (up from 45% in 2024), largely at the expense of traditional small molecules, which represent 38% of assets and 29% of projected value (down from 41% of assets and 46% of value in 2024).
The report also finds the value share of assets with a "novel" mechanism of action rose sharply to 53% in 2025 from 35% in 2024, with value highly concentrated: the top 10 novel MoAs, primarily GLP‑1 combinations, capture approximately 60% of the value in the "novel" tier.
Innovation sourcing remains a meaningful contributor. In 2025, externally sourced assets make up 61% of the pipeline by volume and contribute 43% of total projected value (down slightly from 44% of value in 2024).
Finally, rare/orphan disease programs remain a steady strategic focus: rare disease assets account for 36% of late-stage pipeline volume in 2025 and are projected to contribute 18% of total late-stage pipeline value (from 37% of volume and 20% of value in 2024).
Methodology
The "Measuring the Return from Pharmaceutical Innovation" series, which is a collaboration between Deloitte US and Deloitte UK, has tracked biopharma R&D productivity since 2010 and evaluates projected IRR using an objective methodology focused on each company's late-stage pipeline, drawing on multiple inputs (including forecast revenue estimates, risk adjustments, and cycle times) to calculate IRR as its measure of R&D productivity. The current cohort tracks the top 20 companies by 2020 R&D spend.
Find the full report here.
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SOURCE Deloitte
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