MARKET TRENDS

Reviewing the past 25 years, it is clear that the biopharmaceutical industry has more than survived the recent economic downturn, and 2012 is looking to be a good year again. This year, BioPlan's annual survey results show that both biopharma companies and their vendors are spending and investing more in improving R&D and bioprocessing productivity, staff, and other infrastructure. A summary of recent trends includes the following:

• Industry status is improving: The world market for biopharmaceuticals is now about $145 billion, growing at 15–18% annually. Much of this growth is due to an increasing number and sales of recombinant monoclonal antibodies, now a $45 billion market. New products and new markets, particularly internationally, continue to support market growth, driving more investment in the industry.
• Industry spending and investment are up: Survey results indicate that companies are investing more in biopharmaceutical R&D, including hiring staff and expanding manufacturing capacity. Increased spending is occurring in new technology, capital equipment, process development, and personnel training and development. Vendors are also investing more in product development and new and better technology.
• Outsourcing trends remain but are slowing: Outsourcing, including contract manufacturing, continues as a major trend, with our data showing 70% of biopharmaceutical companies outsourcing at least some activity. Survey results also indicate the rate of outsourcing is slowing, probably as outsourcing approaches its inherent limits. Companies are taking a much more rational and sophisticated approach to outsourcing, looking at options from a longer-term perspective.
• Mergers, acquisitions and partnering are becoming more strategic: Corporate mergers and acquisitions are being directed to improving R&D pipelines. Many large companies are now focusing more on acquiring smaller companies and licensing-in candidate products.
• New and small company financing is tight: Financing available for new startup and smaller non-public companies continues to be tight, despite an improving environment. Much smaller company financing and expansion is being accomplished through partnerships and collaborations with larger biopharmaceutical companies.
• China, India, and the rest of the world as biopharmaceutical manufacturers: Biopharmaceutical companies in many developing countries serving their domestic, regional, or lesser-regulated international markets are experiencing rapid growth, but have yet to pose a threat to US and European dominance of the innovative biopharmaceutical industry, particularly related to product development and manufacturing.
• Pipeline shrinkage? The biopharmaceutical pipeline of products in development appears to no longer be significantly expanding, perhaps due to streamlined or leaner staff and delayed investments in recent years.
• Single-use equipment: The trend towards adoption of single-use equipment continues, with rapid growth in this market projected. As confirmed by survey data, single-use equipment, particularly for upstream manufacture (e.g., bioreactors), now thoroughly dominates precommercial, although fixed stainless-steel equipment still dominates commercial-scale manufacturing.
• Bioprocessing continues to improve: The gradual increase in expression yields continues, with incremental improvements in host cell lines, cell line engineering, expression systems, vectors, promoters, etc. But other improvements are also nearing industry adoption, including large-scale single-use systems and new downstream technologies such as highly-flexible simulated moving bed purification systems. More and better sensors and control equipment are also becoming available, but improvements are needed.
• Biopharmaceutical R&D outpacing small molecule R&D: Biopharmaceutical R&D investment is growing, at the expense of small molecule R&D. It is widely accepted that 40% or more of pharmaceutical industry R&D funding is now going for biopharmaceutical versus small molecule development, and this could grow to 50% or more within a matter of years.
• Downstream is becoming less of a problem: Survey results indicate that problems are lessening and the industry is finding ways to increase downstream productivity. Downstream processing today remains more of a challenge than upstream.
• Mammalian-cell manufacturing is crowding out other platforms: More companies, particularly larger ones, are now standardizing their in-house bioprocessing to be solely mammalian-cell based, as higher cell-culture yields and improved technology have made mammalian manufacture more cost-effective and easier than microbial manufacture.
• Modular bioprocessing facilities are coming: Multiple bioprocessing equipment and technology developers and vendors are developing modular approaches to bioprocessing. Companies will be able to assemble bioprocessing systems using off-the-shelf or customized modules ready for plug-and-play with other modules (from the same company).
• Biosimilars are finally coming to the US: Well over 400 biosimilars and over 350 biobetters are in development targeted for the US, EU and other major markets. With private sector insurers expected to rapidly require use of biosimilars wherever possible, the market for biosimilars will likely grow rapidly over the next five years.
• FDA and industry are getting ready for biosimilars: In later 2011 FDA finally issued its first installment of biosimilars filings guidance documents, which contained few surprises are unlikely to disrupt ongoing development activities. In many respects, developing a biosimilar is harder than developing an innovative product involving full approval, since it will likely be harder to closely match many aspects of analytical,clinical, and safety data.
• Cost-containment and controls: Since most biopharmaceuticals are used for indications for which there are few alternatives, the overall market is rather protected from widespread cost-containment and controls. But in other countries, cost containment and government-directed cost controls continue to adversely affect biopharmaceuticals.
• Internationalization of biopharmaceuticals: Perhaps indicative of a trend, FDA granted the first approval in 2011 for a biologic manufactured in Latin America. With the US by far the largest and most receptive market for biopharmaceuticals, we can expect other companies in developing countries to launch products in the US, EU, and other major markets.
• Manufacturing in developing countries is increasing: Biopharmaceutical manufacturing outside of the major market countries is increasing, as indicated by BioPlan's Top 1000 (2).
• Worldwide standardization of manufacturing: As more biopharmaceutical manufacturing is performed worldwide, companies, particularly large ones, are working to standardize products and manufacturing processes on a worldwide basis. For many, this includes having second or even third source facilities actively manufacturing or serving as backups, having received approvals for manufacture for the US and other major markets.

The past 25 years have seen a maturation of the biopharma industry, and it has transformed from a technology-focused industry, to a process-based, outcomes- and patient-focused segment. Industry participants envision the next 25 years as the time when strategic manufacturing becomes closely aligned with global patient care.

ERIC S. LANGER is president and managing partner at BioPlan Associates, and a member of BioPharm International's Editorial Advisory Board, langer@bioplanassociates.com
, http://www.bioplanassociates.com/.

REFERENCES

1. 9th Annual Report and Survey of Biopharmaceutical Manufacturing, BioPlan Associates, Inc, April 2012, http://www.bioplanassociates.com/.

2. Top 1000 Global Biopharmaceutical Facilities Index, BioPlan Associates, http://www.top1000bio.com/.