U.S. regulators approved 39 new drugs in 2012, the most in 16 years, suggesting that pharmaceutical makers are poised for growth after losing billions of dollars in recent years to generic drug makers because of patent expirations.
There were eight approvals in December alone, including a new treatment from Johnson & Johnson called Sirturo for drug-resistant tuberculosis — the first new TB drug in decades.
The pharmaceutical sector badly needs a pick-up in productivity as companies try to refill their medicine chests after heavy losses to generic manufacturers, which have benefited from a string of patent expirations that peaked in 2012. When generics go on the market at a lower cost, sales of name brand drugs plummet.
The tally of 39 new drugs and biological products approved by the Food and Drug Administration compares with 30 in 2011 and just 21 in 2010. At least 10 of the drugs had fast track status in 2012, which enabled them to be reviewed more quickly.
It is the highest number since 1996, when 53 so-called new molecular entities won a green light.
The FDA has met and exceeded its drug review goals under the Prescription Drug User Fee Act, in which drug companies help fund the drug approval process in return for an agreement by the Food and Drug Administration to meet regulatory deadlines, FDA spokeswoman Sandy Walsh said in an e-mailed statement.
She said the "pipeline of new drugs under development remains strong and is growing."
Major U.S. drug companies have lost about $21 billion in revenue this year from lucrative medicines coming off patent, while the hit for European businesses is about $10 billion, according to ratings agency Standard & Poor's.
This year's expirations have included Plavix, a heart drug made by Sanofi and Bristol-Myers Squibb, and Seroquel, an antipsychotic made by AstraZeneca.
Winning approval from regulators, however, is only part of the battle for drugmakers.
Investors will also be watching closely to see how the new drugs perform commercially once they reach the market, since securing payment for innovative medicines is an increasingly tough fight.
"The patent exposure will be less going forward, but where there is still a little bit of uncertainty is how much better the pipelines have become and how strong the recently approved products are," said Damien Conover, the director of pharmaceutical research at research firm Morningstar Inc.
The 2012 approvals included some medicines that are forecast by analysts to become multibillion-dollar sellers, such as Eliquis for reducing stroke risk in patients with irregular heartbeats from Bristol Myers-Squibb and Pfizer Inc.
But many others are for rare diseases, underscoring the drug industry's increased focus on specialized, niche products.
They include treatments such as a Kalydeco from Vertex Pharmaceuticals Inc. for a rare form of the lung disorder cystic fibrosis and Signifor from Novartis AG for Cushing's disease, caused by over-production of the hormone cortisol.
The last drug approval of the year on Monday afternoon was for a drug to relieve symptoms of diarrhea in patients with HIV and AIDS made by Salix Pharmaceuticals Ltd.
There are also encouraging signs that the pick-up in new drug approvals could continue in 2013. The European Medicines Agency said on December 18 that it expected 54 new drug applications in 2013, up from 52 in 2012, 48 in 2011 and 34 in 2010.