Building on the promise of biotech

Mar 01, 2009

Faiz Kermani
In recent years, the pharmaceutical industry has struggled to maintain a high level of productivity. In the late 1990s, it was suggested that for the industry to maintain even a modest growth rate, companies would need to triple the number of new molecular entities (NMEs) launched annually.1,2 Judging by media releases from top 10 companies around this time period, such targets appeared eminently achievable.3,4 However, these public statements were primarily designed to impress the financial sector and meet shareholder expectations.

In the current economic climate, many companies are being forced to be more realistic and admit that their original targets were not achievable. Financial analyses show that the global pharmaceutical industry is now investing twice as much in R&D as it was 10 years ago to generate two-fifths of the medicines it previously produced.2 Furthermore, in 2007, FDA approvals were at their lowest level for 5 years, with only 17 NMEs gaining approval in the US.5 In addition, FDA approved 65 original new drug applications (NDAs) in 2007, the fewest since 1999.5

Declining new drug output has led to criticism of some of the major pharmaceutical companies for lacking new ideas and methodologies. Critics assert that the larger companies are producing too many 'metoo' drugs that are similar to each other and offer little clinical advantage compared with those already available on the global market. Major companies highlight their commitment to innovation by citing their heavy investment in R&D, but this has often not centred on inhouse efforts.

In fact, licensing has become a key growth strategy for the top 20 global pharmaceutical companies, with a number of them openly stating it as a core strategy.6 However, a heavy reliance on licensingin while reducing investment in internal R&D may cause problems for companies. In one industry survey, respondents suggested that licensingin to fill a productivity gap was risky unless a company had sufficient inhouse R&D expertise to assess the compound's potential. In addition, licensing is a hugely competitive field and companies that have built up the widest network will have access to the most promising, laterstage compounds. In contrast, those companies with fewer partnering opportunities may be forced to opt for riskier earlystage compounds.

Exploiting biotech

With traditional R&D approaches failing to live up to expectations in terms of producing new drugs, many have looked to biotechnology to reinvigorate drug development and provide recognizable medical advances. The number of biotech compounds has been increasing steadily during the last 20 years, and most of these focus on difficult disease targets for underserved medical conditions.

The author says...
Since its emergence in the 1970s, recombinant DNA technology has been used to develop a number of therapeutic proteins, including antibodies, cytokines, hormones and vaccines for tackling and diagnosing a range of disorders. In 2008, the Pharmaceutical Research and Manufacturers of America (PhRMA) reported that there were more than 630 biotech drug products and vaccines in clinical trials targeting more than 200 diseases, including various cancers, Alzheimer's disease, cardiovascular disease, diabetes, multiple sclerosis (MS), AIDS and arthritis. The clinical impact that the current generation of biotech products have had in areas such as cancer and MS illustrates the potential biotechnology has to tackle diseases. In addition, biotechnology is at the heart of many medical diagnostic tests that provide the results needed to optimize drug treatment.

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