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Can Biotech Deliver?

Future trends in Biotech R&D Posted on: 16 Jul 02


The biopharmaceutical industry faces several challenges to grow, but opportunities abound for companies with the right strategies.
Introduction Since 1990, the rate of increase in biotech R&D has been considerably higher than that for pharmaceutical R&D. Between 1990 and 2000, biotech R&D expenditure increased by 262% whereas that for pharmaceuticals rose by 121% over the corresponding period 1. This led to predictions that biotechnology would be making a significant contribution to new drug output by 2000. R&D problems Current information suggests that only 15% of new drugs entering development subsequently reach the market 2. This places a substantial burden on companies trying to get a return on their R&D investment. The chances of a new drug in development reaching the market increases with each stage of the R&D process, but the route is far from straightforward. Even at the latter stages of development the failure rate is considered by many to be too high. Success rates from Phase III to market can range between 50% and 70% 2. For companies involved in biotech research there are suggestions that it is not all bad news when it comes to R&D. In a recent survey, development data were examined for 43 biotech products and 256 other new chemical entities belonging to the cardiovascular, immune system, endocrinological and anticancer/metabolic therapeutic classes 1. For all 43 biotech products for which development data were available, mean development times were between 8.3 years and 9.6 years. This compared with a range of 11.3 years to 12.9 years for other new chemical entities 1. It has been suggested that the shorter development times for many of the biotech products is due to these products being recombinant versions of well-characterised molecules 3. However, as biotech products become more innovative and focus on more difficult biological targets a longer period of R&D will be needed for them to be launched onto the market. Is biotech beginning to deliver? An interesting observation from 2001 is the substantial contribution of biotech to new drug launches from the biopharmaceutical industry. In 2001, around 35% of new drug launches were biotech products, whereas in 2000 the number had been less than 15%. This was surprising, given that the contribution of biotech to new drug launches had been declining for the previous two years 4. Also in 2001, a number of smaller companies were able to get their products to market without partnering with a major company. In general, as R&D costs are so high, without financial backing from major players, few small companies are able to operate successfully. Once products reach the clinical stage, the most expensive part of R&D, smaller companies have had to look for partners as a matter of course. If these smaller companies gain sufficient revenue from marketing their own products it should strengthen their financial position and allow them to operate on their own terms rather than subject to deals made with other companies. It may also help their position with the investment community. One means of retaining control over their products has been through the use of outsourcing. It is predicted that the increasing portion of pharmaceutical R&D being outsourced together with a high demand for biotech will drive growth of the CRO sector by 10-12% 5. CROs can be used to increase a company’s skill base and to control R&D costs 1. Outlook The biopharmaceutical industry faces several challenges to grow, but opportunities abound for companies with the right strategies. Pharmaceutical and biotech companies in the USA are estimated to have 369 medicines in development that meet the definition of biotech products and these are targeted at more than 200 diseases 6. This is a considerable increase from the 1993 figure of 143 biotech drugs in development and indicates a commitment by industry to the development of more biotech products 1,6. About Chiltern Chiltern can provide an extensive range of services for both the international and national management of your clinical studies. For more information, please visit our new website at or contact the author. References 1. Kermani F and Findlay G (2000). The Pharmaceutical R&D Compendium. 2. Ashton G and Kermani F (2002). Getting to grips with attrition rates. CMR News Vol 20 (1): 8-9. 3. Hulme J. Biotech R&D Finally Starts Delivering the Goods. Scrip Magazine May 1999; p26-28 4. Kermani F & Van den Haak M (2002). Drug development 2001. 5. M. Mathieu. Parexel’s Pharmaceutical R&D Statistical Sourcebook 2002. 6. Anon. PhRMA Survey Finds 369 Biotechnology Medicines in Testing for More than 200 Diseases, 27 March 2000.

Dr Faiz Kermani

Last updated on: 27/08/2010 11:40:18

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