A new review by my client, Scientia Advisors, finds that, with the market for biologic drugs growing much faster than that of drugs based on chemical compounds, many biopharma companies are repositioning and forming new alliances in order to succeed in a rapidly changing pharmaceutical landscape.
In the review, released today, Scientia reports that revenue growth for the small molecule (chemically-based) drug segment has slowed and will begin to decline within three years as numerous blockbuster drugs go off patent and are replaced by less expensive generic substitutes.
In contrast, the market for biologics (based on living matter) which comprises approximately one-third of the overall pharmaceutical market, increased at a 21% compound annual growth rate (CAGR) between 2003 and 2008, to $110B.
While the CAGR for biologics has since slowed to 8%, Scientia projects 2013 revenues of $165B, due largely to rapid growth in monoclonal antibodies. Scientia also projects growth opportunities in the vaccine and cell therapy segments.
Many biologics command relatively high prices and require complex and expensive manufacturing processes. To keep costs down, biopharmaceutical companies are increasingly seeking to outsource their manufacturing to contract manufacturing organizations (CMOs).
In addition, “numerous biologic therapies with total revenues of $37B will have lost patent protection by 2017, promising considerable opportunity in biosimilars (government-approved new versions of branded biopharmaceutical products following patent expiration),” Glorikian said. “As a result, pharmaceutical, generic drug, and contract manufacturing companies are joining forces to enter the biosimilars space. To be successful, they must take into account the considerable technical, competitive, and regulatory hurdles that will be involved.”
Scientia Advisors’ review, entitled “Assessing the Biopharmaceutical Market: Promises and Challenges,” is available for download at no charge from www.scientiaadv.com.
–Anita M. Harris
HarriscomBlog is a publication of the Harris Communications Group–a public relations, content and thought leadership firm in Cambridge, MA. We also publish New Cambridge Observer.
HarrisCom Blog 