IDBS Blog | 31st May 2019
Biotechnology: Is it worth the hype?
When one thinks of the pharma and biopharma markets, one thing stands out – growth.
In recent years, driven by necessity, advances in technology and ultimately funding, there has been a focused effort to transform our approach to medicine and treating patients.
There is a particularly strong demand for novel therapeutics that address unmet needs.
Explosive growth of the biologics market creates an overlapping Venn diagram of rare diseases, biotechnology and a more personalized approach to treatment. Biotechnology companies such as Biogen and Gilead Sciences are looking to bridge the gap between small molecule, untargeted pharmaceutical products and larger molecule, more targeted biopharma products and their generic versions, biosimilars.
Without a doubt, large pharma companies such as Pfizer, Bayer and AstraZeneca continue to expand by attracting investments and churning out quality medicines, but the biopharmaceutical market is keeping up – developing big moneymakers including Merck’s immunotherapy cancer drug Keytruda.
Biotech going strong – the evidence
Just how successful are bioengineered medicines? Let’s talk numbers. Drug development is generally considered to be a rather risky venture given the lengthy development cycle and possible complications regarding drug safety and efficacy. In fact, in 2018, MIT measured the failure rate in drug development to be more than 85%.
And yet, biotech capital has increased dramatically in the last few years. This could be, in part, due to a healthy return on investment, attracting new investors in swarms. According to data put together by Silicon Valley Bank, companies with a focus on oncology and immuno-oncology are the most lucrative, with the worldwide market estimated at $133 billion and $14 billion respectively.
Will these therapeutic areas remain profitable? Nothing is certain; high returns in the past does not guarantee continued success. But it is safe to say that for the moment, they are fruitful.
The moneymakers – which therapies are making the most noise?
If you think pharma products are expensive, they’re nothing to the cost of biologics. The latter are generally more expensive because they require more extensive testing as part of the development process. But these therapies are more targeted and therefore, extremely high in demand. Among them are:
- Keytruda – Estimates by GlobalData show the immunotherapy cancer treatment market which includes Keytruda from Merck, is estimated to have a global worth of $125 billion in 2024. The pipeline includes more than 300 molecules with 60 different mechanisms considered for Phase I and II clinical trials, targeting 34 different tumor types.
- Luxturna – According to Allied Market Research, the gene therapy market, which includes Spark Therapeutics’ Luxturna, is worth about $584 million globally and is expected to reach $4.4 billion in 2023.
- Kymriah – Research by the IQVIA Institute for Human Data Science valued the market for CAR-T cancer drugs (such as Novartis’ Kymriah) at $131 billion globally and projected to be worth $200 billion by 2022. It’s probable that 9 of the top 20 products will be cancer treatments in 2024.
Partnerships help biotech thrive
The emergence of CROs in recent years has helped biotech organizations to grow consistently. Biotechs are turning more and more to CROs for their expertise in niche therapy areas, process execution and expert advice. Together, these companies have expanded their reach and propelled their research efforts, creating novel medications to introduce to the market.
However, this landscape shift is not without its challenges to overcome. The primary one is speed. To stay competitive, biotechs need to develop safe and novel, high-quality drugs and push them to market quickly. Operating in a fast-paced environment is essential, but this is not the norm for CROs, which tend to operate at a slower pace due to a more corporate structure.
Since ‘the customer is king’, CROs must adapt to the expectations of their biotech clients and cater to their specific requirements – an urgency to improve productivity and bring novel medications to patients sooner. This demand has pushed CROs to adjust their methods and processes – from strong quality processes, scale and scope that were required by large pharma organizations to flexible tailored solutions for biotechs.
As biotechs continue to secure their position in the drug development landscape and its future, they can expect more services out of their outsourcing partners on the journey to meet their goals.
Regulatory approvals increase
The regulatory landscape shapes research and drug development. And one of the biggest challenges for biologics, which pursue more niche markets, is the small batches of drugs developed. If the medication is only for a few hundred people, as in the case of rare diseases of which achondroplasia is just one, there is always the chance that the company will not recover the development costs without charging extortionate prices. For neglected diseases, the right incentives, including reduced regulatory fees, can encourage companies to take on drug production.
Partnerships help innovations as well. For example, pharma giant Pfizer bought the rare drug biotech Therachon for $810 million. Together, they’ll be making milestones in the development and commercialization of TA-46, a possible treatment for achondroplasia.
Despite strict regulatory guidance, more new drugs are being approved than ever before. Last year alone, the FDA approved around 59 new drug applications – a record high – of which 64% were from emerging biopharma companies. Also, the total drugs in development increased by 46% between 2012 and 2018.
What’s next for biotech?
While it’s still in its embryonic stage, biotechnology has already had a significant positive impact on R&D and has proven to be vital to the market, the economy and patient health.
When it comes to the future of biotech and their quest to create new and exciting treatments for patients, we’re optimistic.
To discover more about the biotechnology industry and how software can help increase productivity in the lab, click here or get in touch with our experts.