OVERALL BIO/PHARMACEUTICAL TRENDS
These trends are, in large part, resulting from global shifts that continue to drive the bio/pharmaceutical industry. Below
are broad industry trends we project in 2012.
Biopharmaceutical markets. The worldwide market for biopharmaceuticals continues to expand and at a more rapid rate than for pharmaceuticals in general.
The world market for biopharmaceuticals is approximately $140 billion, with approximately $100 billion involving recombinant
proteins and antibodies (2). The market includes over 430 biopharmaceuticals, including over 300 recombinant proteins and
antibodies that are approved in the US and/or Europe. The biopharmaceutical market has been and is expected to continue to
grow about 15–18% annually, well above overall economic growth rates. This steady overall growth rate is driving much current
investment in biopharmaceutical R&D.
Biopharmaceutical approvals. Despite increasing biopharmaceutical sales, the number and rate of biopharmaceutical approvals in the US has been relatively
poor in the past few years (12 biopharmaceuticals entered the US market in 2011). The 2011 approvals were even fewer in number
than the relatively poor results in 2010 and 2009 (4). This weak showing for biopharmaceuticals is in contrast with FDA reporting
in November 2011 near record overall pharmaceutical approvals. The 2011 FDA biopharmaceutical approvals are listed in Table
Table I: FDA full biopharmaceutical approvals in 2011.**
Approval-related innovation and progress. The good news, particularly for patients and the healthcare system, is that 2011 FDA biopharmaceutical approvals involved
genuine innovation and advances, with nearly all products being approved w either new indications for which no treatments
were previously available or for indications for which the last product approval was granted well over a decade ago. A record
number (i.e., eight) products were approved with orphan designation. Recombinant antibodies are a leading area for biopharmaceutical
development. The large number of recombinant monoclonal antibody and recombinat monoclonal antibody-like products that many
companies are relying on for future products may finally be starting to enter the market.
Approval-related problems. Largely due to the limited markets for these orphan and other approved products, 2011 US approvals will not have as much
industry economic impact as is likely needed in the long-term. Only two of the twelve approvals are expected to eventually
reach blockbuster sales levels of $1 billion or more per year.
Company and country approval trends: Illustrating the trend towards internationalization of manufacturing, a record number of four, or 33%, of newly-approved
US biopharmaceuticals are manufactured outside the US—in the United Kingdom. Germany, Mexico, and Italy. These products include
the first product manufactured in Latin America that received FDA approval—a scorpion venom antitoxin (equine immunoglobulin
F(ab) fragments), Anascorp, manufactured by a Mexican company.
Biosimilars (biobetters / biogenerics). With patents expiring for most established, successful, biopharmaceutical products, development of biosimilars is accelerating
worldwide and will change the industry landscape. This emergence of biosimilars will likely involve the entrance of many new
manufacturers. Most of this activity is targeted to introducing these products in the US and European markets, but many products
are being developed by foreign companies, if only initially, for marketing in lesser-regulated domestic and international
markets. There will likely be multiple biosimilars (as well as biobetters and biogenerics) for each currently successful biopharmaceutical.
As a result, the number of biopharmaceuticals in the market and the number of biopharmaceutical manufacturing facilities will
rapidly increase, perhaps doubling in the next five years.
Many biosimilar/biobetter/biogeneric developers are adopting state-of-the-art expression systems and other manufacturing platforms.
Biosimilars are competing with products being manufactured using 20-year-old technology. Although biosimilar manufacturers
will have technical advantages with newer technology, drug innovators of the the now biosimilars will have long off paid off
manufacturing facilities. As a result, biosimilar/biobetter/biogeneric developers will have to compete on the basis of price
and adopt aggressive cost-cutting technologies to effectively compete with the original biologic and other biosimilar manufacturers.
Although over a dozen biosimilars have received European Union (EU) approval, no biologics have yet been approved as biosimilars
by FDA. BioPlan analysis shows that biosimilar/biobetter companies are present in virtually every biotechnology-capable region,
including Latin America, Korea, and other areas that have yet to be significantly involved in major Western biopharmaceutical
markets (2). For example, of the nearly 400 organizations involved in biosimilars/biobetters development, more than 30 companies
are based in India and 14 in China.
The economy. The worldwide economic downturn in recent years continues to affect the biopharmaceutical industry. Yet, with continuing
growth in its underlying sales revenue, the industry has managed to remain largely insulated from severe economic problems.
Financial issues continue to affect most companies, including the major international (i.e., Big Pharma) companies that are
the source for most biopharmaceutical R&D, with many having to deal with their most profitable products coming off patent.
Spurred, however, by their interest in new, profitable products, biopharmaceutical R&D continues to increase. R&D invesment
includes a record amount of more than $70 billion being invested by the pharmaceutical industry in R&D, about 90% sponsored
by the largest international companies, with an increasing number and percentage of pharmaceuticals in the development pipeline
being biopharmaceuticals versus chemically manufactured drugs). Biopharmaceuticals provide more exclusivity, market monopolization,
and are increasingly attractive to the Big Pharma-type companies.
One important trend, however, is the internationalization of R&D. Large international (i.e., Big Pharma) companies continue
their expansion and/or off-shoring of R&D. Several companies have announced major, multimillion, investments in new R&D centers
in China, such as Merck Serono's $225 million, four-year commitment in Beijing.
Mergers and acquisitions. The trend for industry mergers, acquisitions, and other corporate consolidation at all scales continued in 2011. This is
particularly evident among large international companies that continue merging and purging (i.e., acquiring or merging companies
and then downsizing the merged company). Some companies, such as Merck & Co., are moving from mergers/acquisitions in favor
of more in-house and company-sponsored R&D. The continuing trend of pharmaceutical mergers, combined with off-shoring of certain
jobs and facilities, has resulted in relatively high bio/pharmaceutical industry unemployment rates in the US.
Patent litigation. Patent-infringement suits can be expected to increase, particularly as a large number of biosimilars (and biobetters and
biogenerics) approach filing in the US and other major markets. Major test cases, such as Classen Immunotherapies versus Biogen Idec, involve whether business methods patents include coverage of methods for determining the optimal dose of a therapeutic.
Biopharmaceutical companies may soon need to consider yet another type of patent, in addition to those for composition-of-matter
(e.g., sequences), formulations, uses, bioprocessing, and reference standards.