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Biotechnology and the Revitalisation of Drug Devel

By Pietro Bonacossa and Dr Faiz Kermani Posted on: 02 May 03


The development of novel medicines is critical if diseases and disorders are to be effectively treated. As a result, many have looked to biotechnology to provide continuing innovation in the field of
The development of novel medicines is critical if diseases and disorders are to be effectively treated. Despite the considerable medical advances that have occurred over the last few decades, there still remain major areas of unmet need. As a result, many have looked to biotechnology to provide continuing innovation in the field of new drug development. A key contributor to healthcare There are more than 350 biotech drug products and vaccines currently in clinical trials which are targeting more than 200 diseases, including various cancers, Alzheimer's disease, cardiovascular disease, diabetes, multiple sclerosis (MS), AIDS and arthritis (1). The clinical impact that the current generation of biotech products for MS have made illustrates the exciting potential that biotechnology has to tackle disease. It should also be remembered that biotechnology is responsible for hundreds of medical diagnostic tests that detect medical conditions early enough to be successfully treated. A growing industry Worldwide there are more than 4,000 biotech companies (2). The most well known companies are located in the US and Europe, but there are significant companies emerging in Canada, Australia, New Zealand and throughout Asia. Most of these companies are small in size and limited when it comes to finances. For many of these smaller companies, if they cannot get a drug to market on their own, there is the possibility of forging an alliance with a bigger pharmaceutical company. This will give the smaller company the finance to carry on with their R&D and for the bigger company it will have the result of supplementing their new drug pipeline. This approach has proved very successful and some of the major pharmaceutical companies have well-established programmes for establishing collaborations with biotech companies. For example, the recent announcement, that Roche established with Antisoma to exclusively buy worldwide rights to the company’s portfolio of oncology drugs revitalised the biotech company’s fortunes (3). For Roche, the deal allows them to supplement their already impressive oncology portfolio, which already includes lymphoma treatment MabThera, breast cancer treatment Herceptin, and breast and colorectal cancer treatment Xeloda, with innovative products to tackle other types of cancer (3). Biotechnology in the US It is well recognised that the US has the most established biotech industry in the world. Despite the difficulties in attracting funding, the number of biotech companies in the US has steadily been growing. In 1992, there were 1231 companies with 79,000 employees, but by 2001 this had risen to 1457 companies with 191,000 employees (2). The US biotech industry spent US$15.6 billion on research and development in 2001, which greatly exceeds the amount spent by foreign biotech industries. In general terms of productivity and in terms of attracting finance, US companies are well ahead of their nearest rivals in European. Around 72% of the global biotech revenues are from US companies (2). Biotechnology in Europe There are 1,879 biotech companies in Europe, with most of these being located in Germany, the UK, France and Sweden. At present, Europe accounts for 22% of global biotech revenues (2). One of the problems that these companies face in terms of attracting new funding is to convince investors that they have the ability to get their products to market. Despite some successes, at the moment, they are somewhat behind their American counterparts in this respect. However, there is still considerable enthusiasm for the future of the European biotech industry. According to Ernst & Young, Europe’s biotech sector attracted US$1.4 billion in private equity in 2001, compared with US$1.2 billion in 2000 (2). This is a positive sign for the industry, given that overall investing by European venture capitalists has dropped following the failure of others in the technology sector such as the companies. A Bright Outlook Although the medium to long-term potential for biotechnology is promising, companies are currently experiencing difficulties in operating. The current state of the economy has hit the industry hard. Investors have become more selective in who they fund, as they become more aware of the high risks involved in getting biotech drugs successfully to market. Only a small fraction of potential drugs make it through the hazardous process of clinical trials and regulatory approval. Yet, along with the high risks, biotech companies can achieve high rewards. For those drugs that do make it through the final clinical trials and regulatory approval, the demand is almost a certainty. After all, medical need does not depend on the state of the economy. Furthermore, this is not the first time that the biotechnology has suffered a slump. The rise in the number of approved biotech products demonstrate that some companies have found the right balance between scientific flair and financial strategy. References 1. Biotechnology Industry Statistics. Biotechnology Industry Organization (BIO). 2. Beyond Borders. The Global Biotechnology Report 2002. Ernst & Young. 3. Antisoma hails ‘ground-breaking’ Roche cancer deal. PharmaFocus November 18, 2002.

Pietro Bonacossa and Dr Faiz Kermani

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

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