Ipsen's billion-dollar drug Somatoline is maintaining strong sales despite facing generic competition since 2021. The drug is extremely difficult to manufacture, which has prevented generic players from ramping up production. This "manufacturing moat" serves as a powerful, often overlooked, defense against revenue erosion after a patent cliff.

Large pharmaceutical companies face losing up to 50% of their revenues by 2030 due to the largest patent expiration wave in history. To survive, they will be forced to acquire innovation from the biotechnology sector, fueling a sustained M&A cycle for years to come.

Adderall's success proves a core chemical patent isn't essential for market dominance. A strong brand that becomes synonymous with a condition, combined with secondary patents on novel delivery mechanisms (like Adderall XR's capsule), can create a durable, highly profitable business moat.

By reformulating existing oncology drugs, Nenology uses the streamlined 505(b)(2) regulatory pathway, de-risking and accelerating development. Simultaneously, their composition-of-matter patents provide strong intellectual property protection typically associated with entirely new chemical entities, creating a unique strategic advantage.

While patents are important, a pharmaceutical giant's most durable competitive advantage is its ability to navigate complex global regulatory systems. This 'regulatory know-how' is a massive barrier to entry that startups cannot easily replicate, forcing them into acquisition by incumbents.

A key trend in 2025's drug approvals is that "best-in-class" therapies are distinguished not just by efficacy, but by innovations in formulation and delivery that improve the patient experience. Examples include subcutaneous versions of IV drugs and new delivery methods that expand patient access.

To commercialize a simple mixture, the company built an IP portfolio around the timing, delivery, and indications for GIK. Crucially, they secured a 'trifecta' of FDA support: Special Protocol Assessment, Breakthrough Designation, and a Biologic License Application, which grants 12 years of market exclusivity, creating a strong competitive barrier without a traditional drug patent.

For old molecules lacking composition-of-matter patents, a robust IP moat can be built by combining new use patents, patents on novel administration forms, and securing market exclusivity through Orphan Drug Designation for rare diseases.

With patent cliffs looming and mature assets acquired, large pharmaceutical companies are increasingly paying billion-dollar prices for early-stage and even preclinical companies. This marks a significant strategic shift in M&A towards accepting higher risk for earlier innovation.