A case study assessing the impact of M&A and licensing on FDA drug approvals of leading pharmaceutical companies

• We analyzed the impact of various strategy elements on big pharma's R&D output. • We could show that higher R&D expenditures of the leading companies were related to higher R&D output. • Investing US$1B in internal R&D was positively correlated with 0.12 new drugs approved by the FDA. • R&D intensity was not associated with new drug launches. • One M&A deal correlated positively with 0.53 new drugs. • In-licensing was not correlated with a higher R&D output. Despite a recent increase in FDA new drug approvals, leading pharmaceutical companies continue to face R&D productivity challenges. This highlights the need to better understand the context of their R&D concepts and related R&D outputs. Consequently, we conducted a systematic assessment of the impact of R&D expenditures, R&D intensities, mergers & acquisitions (M&A) deals and licensing agreements on new drug approvals of leading pharmaceutical companies between 2012 and 2021. Our analysis provides key insights into differentiating R&D factors: whereas R&D expenditures and the number of M&A deals correlate with the number of new drug approvals, our analysis shows no correlation with R&D intensity or the number of licensing agreements.