Pharma's future flows through the drug pipeline. And nothing speaks to changes in the industry like a new mix of drugs in development. Despite the thousands of compounds moving through clinical trials, many experts we interviewed called the industry's "lifeblood," as the pipeline truism goes, downright anemic. But even naysayers see signs of hope, pointing to promising compounds in early stages and even preclinical development.

"The industry's pipeline in general is pretty disappointing and not very significant," says Barbara Ryan, a pharmaceutical analyst and managing director at Deutsche Bank. "The pipeline looks to be fairly small relative to the size of these companies. But at the early stages of the pipeline, things are improving in sheer numbers. Companies have more products going into early stages of development than they've had in their histories."

In this year's annual report, we profile 40 drugs. Not necessarily the "Top 40," but 40 that our pharma watchers on Wall Street, at medical schools, and at the nation's top hospitals brought up again and again. A few drugs could be blockbusters: new molecules like Acomplia and Lucentis, new formulations like Exubera, even new ingredients like Traceptera, which may extend Lipitor's patent life. But we heard most about new niche drugs, especially in oncology, and new molecules for infectious-disease targets like AIDS, cervical cancer, hepatitis C, tuberculosis, and malaria. It is some of these new approaches that hold out hope for refilling the pipeline.

TARGET INDICATION
Obesity
DEVELOPMENT
Phase III
LAUNCH DATE
2006
PEAK ANNUAL SALES
$2 billion

David Molowa, managing director, UBS

The cannabinoid type-1 receptor (CB1) antagonist, which is sometimes called an "anti-munchie drug" because it blocks receptors thought to trigger hunger impulses in marijuana smokers, will hit the market as the United States struggles with an unprecedented wave of obesity. But it launches in the wake of the infamous Fen-Phen (fenfluramine/phentermine) debacle, a "revolutionary" diet pill that crashed and burned. The company might also study Vioxx (rofecoxib), which floundered, in part, on Merck's decision to target too many pain indications too soon.

"Everyone wants to lose weight and the American way is to take a pill rather than exercise or diet," says Barbara Ryan of Deutsche Bank. "The efficacy of the drug looks pretty good. The question is going to be safety, and the cost in terms of safety. The mechanism of the drug would signal that there may be a problem with depression. It has the opposite effect of marijuana: As one of my colleagues says, 'Instead of getting high you get low.'"

The drug's broad range of additional indications, including smoking, perhaps alcoholism, and a host of heart-disease and insulin-related disorders often lumped together as the "metabolic syndrome," have some analysts predicting a multi-billion-dollar blockbuster. However, the drug's apparent versatility and broad marketability may harbor the seeds of its downfall, especially if unforeseen side effects surface in the early going.

"This will be a bellwether of how companies in a post-Vioxx environment are going to be more cautious in the way they promote their broad-indication products," says Murray Aitkin, senior vice president for corporate strategy at IMS Health. "I think it will also be interesting to see the DTC campaign. While there is obviously a whole program around physicians, the way this is promoted to patients will be carefully watched in the context of a post-Vioxx environment, and with an expectation that Sanofi would not begin promoting it directly to patients until six months after its launch, consistent with the PhRMA guidelines."