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The worldwide market for biopharmaceuticals was estimated to be $50 billion in 2005. North America accounts for 60% in terms of revenue and R&D. Europe accounts for 20% and Japan 10%. It is also estimated that 400–500 biotech drugs are under clinical development for various disease conditions. Biopharmaceuticals are being developed to fight cancer, viral infections, diabetes, hepatitis and multiple sclerosis. The distinct families of biopharmaceuticals include
The worldwide market for biopharmaceuticals was estimated to be $50 billion in 2005. North America accounts for 60% in terms of revenue and R&D. Europe accounts for 20% and Japan 10%. It is also estimated that 400–500 biotech drugs are under clinical development for various disease conditions. Biopharmaceuticals are being developed to fight cancer, viral infections, diabetes, hepatitis and multiple sclerosis. The distinct families of biopharmaceuticals include:
There are a variety of issues affecting size and growth in the market including the capacity gap — the difference between the supply and demand of manufacturing capacities — which presents a challenge to the industry because a capacity deficit is likely to significantly affect progression. In terms of key strategies, there must be an understanding of the existing gap compared with demand balance, and the company must evaluate its financial and cash flow situations.
Depending on the demand–supply situation, talking to contract manufacturing organizations (CMOs) for long-term manufacturing contracts or investing in manufacturing plants is important. The long-term cost-benefit should be assessed. Another key issue is the absence of internationally accredited intellectual property laws or patent models, causing companies to hesitate over innovation and limits application to particular countries.
Patents required for a particular licence need to be clarified, and a close relationship with academics and their technology transfer offices is required to clarify patent and licensing deals. Additionally, the high cost of biopharmaceuticals and low reimbursement from insurance companies and governments present a major challenge. Cost-reduction technologies must be developed to help bring the cost of manufacture down; it becomes more viable to manufacture biopharmaceuticals with large market size and high market growth.
Information technology (IT) needs are likely to increase exponentially for the biopharmaceutical industry. There must be an investment in IT infrastructure and companies need to know what up-to-date IT resources are available to increase efficiency and accuracy. The lack of investment and closing of "initial public offering (IPO) windows", could also pose a challenge to the industry in the immediate future.
Key market drivers include the completion of the human genome project (HGP) and developments in the field of proteomics and genomics. Technological advances are also an important driver affecting the growth rate of the biopharmaceutical manufacturing market. This includes stem cell technology, which involves the use of stem cells to treat diseases by supplementing the injured tissue or organs with multipotent stem cells.
There are many benefits of transgenic technology, a form of genetic engineering that involves the artificial insertion or transfer of a particular gene of interest into the genetic structure of either a plant or animal, which then expresses the protein. The main benefits of the technology include lower cost of biopharmaceutical production, increased production capacity, reduced risk of contamination of human viruses and other pathogens, especially in the case of plant transgenics and easy production of complex biopharmaceuticals. Other technology trends include development of efficient mammalian expression systems and cloning technology, though there is still some way to go before cloning becomes part of normal treatment procedure.
Some major factors restraining growth of the world biopharmaceutical manufacturing market for the period 2005–2011 include lack of adequate funding for biopharmaceutical drug development and high entry barriers, such as R&D and manufacturing facility setup (Table 1).
Table 1 Drivers and restraints of the world biopharmaceutical market (2005â2011).
It is expected that there will be 81 biopharmaceutical approvals within 4 years covering 136 indications. A wide range of diseases and physician specialities will be covered, including infusions, injections and chronic therapy. In particular, the future of the biopharmaceutical industry will increasingly focus on the diverse potential of monoclonal antibody products. New technologies will continue to emerge, but the spectrum of supportive technologies currently available is already permitting a growing pipeline of novel therapeutics. Approvals over the last 5 years have begun to transform oncology and inflammatory disease treatments with the prospect of more advances in these and other areas of medical practice (Table 2).
Table 2 Product pipeline as of March 2004 (late-stage US development).
The biopharmaceutical market is a strategic and highly competitive one. There is untapped potential for companies that are properly positioned as it is a market where high growth and rapid rise in profit is expected. Biogenerics, genomics and proteomics expansion are likely to impact market growth. Transgenic, stem cell and cloning technologies are a becoming a reality and will affect the biopharmaceutical manufacturing market. The future holds many expectations for further development and implementation of transgenic technologies, although there will doubtless be more debate on the ethical issues.
Advances in bioinformatics will have a direct impact on drug discovery and target validation. Another important aspect for the future is alternative formulation technologies, which improve patient convenience and ease of administration. Improvements in scale and yield of protein and antibody production are also next. This will increase availability of these and future important biopharmaceuticals.
Companies will look to differentiate and consolidate, with a move from the small molecule blockbuster model to the biopharmaceutical model. Also, biopharmaceutical companies will be looking to take advantage of a one-stop-shop to promote a complete portfolio of their products under one brand, with more and more companies moving into niche areas of the biopharmaceutical market. Additionally, greater public awareness and acceptance of biopharmaceuticals will be evident.
Paljit Mudhar is an industry analyst, pharmaceuticals and biotechnology, healthcare (EMEA) at Frost & Sullivan (India).