What Are
the Needs and Interests of Biopharmaceutical Companies in XXI Century?
Madhu Arora
CRA program student
KRC,
gonubala@yahoo.com
Summary
The discovery of recombinant DNA and monoclonal antibody technologies in the 1970s marked the birth of the biopharmaceutical industry. Biopharmaceuticals are complex macromolecules derived from recombinant DNA technology, cell fusion, or processes involving genetic manipulation. They include recombinant proteins, genetically engineered vaccines; therapeutic monoclonal antibodies; and nucleic acid based therapeutics (i.e. DNA based drugs), including gene therapy vectors. Unlike orally delivered small molecule drugs that underpin the traditional pharmaceutical industry, biopharmaceuticals are usually administered by subcutaneous, intravenous, or intramuscular injection.
Modern drug discovery is built on four core technologies:
genomics (source of novel targets), combinatorial chemistry (source of
molecules that interact against those targets), high-throughput screening
(testing one against the other); and bioinformatics which is crucial to the
analysis of the vast amounts of data generated. Advances
in biotechnology have brought a sea of change to the entire global
pharmaceutical industry, and have moved far ahead from the realm of standard
immuno products to custom-specific glycosylated glycotherapeutics. The reason
for this is that biopharmaceuticals can be tailored for a specific problem in a
given individual. Any drug can be genetically modified using DNA recombinant
technology or cell fusion technology so as to increase its specificity for a
particular disease.
During the last 30 years, the biopharmaceutical industry has successfully launched nearly 1,400 new chemical entities as human therapeutics, and has achieved strong sales as a result. As a result of these successes, many companies have shown double-digit growth year on year. However, the industry like any other industry faces enormous challenges in today’s global business environment. It is also one of the most regulated industries in the world especially in approval and marketing of products. According to analysts suggestion the companies will have to substantially increase the annual launch of new chemical entities to remain competitive and innovative, such high growth rates for the biopharmaceutical industry can no longer be taken for granted. In addition, smaller companies continue to face financial problems for their survival despite the innovative nature of their research.
In the
future, the biopharmaceutical industry is likely to increasingly focus on
products and, more particularly, on the diverse potential of monoclonal
antibody products," says the analyst of this research service.
"Although new technologies are expected to continue to emerge, the
spectrum of supportive technologies currently available is now permitting a
growing pipeline of novel therapeutics". Biopharmaceutical drugs have
already gained approval for use in oncology and inflammatory diseases and are
gradually expected to permeate other areas of medical practice.
Biopharmaceuticals’
greatest potential lies in gene therapy and genetic engineering, which have
been revolutionizing medicine with their ability to mass produce safe and more
effective versions of proteins and enzymes created naturally by the human body.
Introduction
The biopharmaceutical industry cannot be identified using the
Standard Industrial Classification which distinguishes firms on the basis of
their output rather than their technology or production process, and
international data are difficult to compare. Many biotechnology firms, for
example, are identified as biopharmaceutical companies to differentiate them
from the mainstream pharmaceutical industry, but their prime focus are small
molecule drugs targeted against proteins thought to be important in the disease
pathway (proteins can be used both as drugs i.e. biopharmaceuticals or drug
targets). Biologics, an area that consists of blood derived polyclonal
antibodies and clotting factors, antibiotics, and classical vaccines based on
live or killed viruses, are frequently classified as biopharmaceuticals, but
these long predate the emergence of recombinant DNA and monoclonal antibodies.
Insulin, for example, was originally obtained from porcine or bovine pancreas
while human growth hormone was extracted from the pituitary glands of cadavers.
The biopharmaceutical category also often includes drugs derived from plants,
fungi or marine organisms, but these are more in the realm of traditional
medicinal chemistry research based on the random screening of natural
compounds.
The basic science underlining all biopharmaceutical drugs is that every living cell in the human body contains DNA (deoxyribonucleic acid) and contained within them are genes. Cells are able to perform their functions because of the instructions encoded within the genes. The cell activates only those genes required to produce specific proteins, even though the cell contains the entire string of DNA for that organism. The interactions between the proteins control all the processes within an organism. It is now possible to identify the exact genetic sequences that control the production of these proteins and pinpoint the exact functions of specific genes. These genes are then isolated and duplicated on a large scale to produce the desired protein, which is then extracted, purified and used for the production of the biopharmaceutical or biotech drugs, as they have come to be known.
Currently biopharmaceuticals are being developed to fight against cancer, viral
infections, diabetes, hepatitis, multiple sclerosis and several other
conditions and diseases. Distinct advantages include fewer side effects and
stronger, effective and potent action on the target cells.
Current Market
Scenario
The success achieved by companies with a few revolutionary new drugs has
captured media attention in recent years. As a result, the industry has grown
significantly over the past decade, and gained much attention both in the
medical field and the equity stock markets all over the world.
Despite the slow growth of the overall pharmaceutical industry, the biotech
sector has shown an impressive compound annual growth rate of more than 20
percent during the past five years. Factors that have spurred this high growth
rate include the ability of biopharmaceuticals to target diseases such as
cancer and HIV, a high rate of biopharmaceutical approval as compared to that
for small molecules, and limited development of a generic version in this
sector. Out of all categories, erythropoietins seem to be the largest group
followed by insulins and monoclonal antibodies.
The global market for biopharmaceuticals is estimated to be about $50 billion
in 2005 out of which North America (NA) alone accounts for more than 60 percent
in terms of global revenues and R&D expenditures. NA is followed by Europe
and
Industry Structure
The top
five companies in the market alone account for close to 30 percent of the
revenue earned by the industry globally. However, a majority of these companies
have had success based on a small basket of products in the market and
therefore are actively looking to supplement this for continued growth. The
growth potential harbored by these companies is based on their financial
resources and technological expertise.
With
the exception of Serono in Europe, industry leaders such as Amgen, Genentech
and Biogen are all based in the
The
small or medium firms are typically private, start-up companies initiated with
venture capital funding. They also comprise of university spin-offs, with
initial support from the educational institution but often have to depend on
venture financing. Historically, Europe has held the advantage over the
CMOs (contract manufacturing organizations) have achieved first mover advantage
and etched their place in the industry by building large facilities, which cost
between $300 to $500 million. Additionally, their early entry has assisted them
in gaining high technological experience in the difficult manufacturing process
and hence a sustainable competitive advantage. It is estimated that there are a
few hundred CMOs in the world, comprised of large and medium size enterprises
with their facilities located in either the
Production Process – Can Supply Match the Demand?
The
biopharmaceuticals industry is expected to grow rapidly after 2008, owing to
increased product launches from newer technologies that will mature at that time.
Manufacturing capacity is likely to become one of the critical challenges,
especially for monoclonal antibodies as demand is likely to exceed supply in a
few years. It is predicted that with the increasing number of protein-based
drugs hitting the market, production capacity as high as four times the
existing capacity would be required by 2007. To counter this problem, the
industry is evaluating alternate forms of manufacturing such as plant-based
pharmaceutical production or transgenic animals, besides the mammalian and
microbial cell culture systems.
Microbial
expression systems, such as mammalian and fungal cell lines are currently the
most widely used technologies in this sector. These systems allow greater
control over the process and it works out positively on the scale of economics.
The disadvantage however, is the limited production capabilities vis-à-vis
demand for biodrugs. Though mass production is the main advantage of
transgenics (animal and plants) it takes a long time for product realization.
Typically, it could take anywhere between 12 months and 18 months for product
standardization, which is the limiting factor for its wide usage.
Most of the recently approved biopharmaceuticals were protein-based drugs and
the primary method of producing these biopharmaceuticals is mammalian cell
culture. With these approvals, the demand for manufacturing capacities has
grown rapidly during the past decade. The demand curve is expected to rise
steeply in the near future with numerous biotech drugs under the pipeline for
life threatening diseases such as cancer and AIDs. In addition, the aging
population and high incidence rate of diseases further contribute to the
increase in demand.
Regulatory Environment
The
therapeutic biopharmaceutical environment is relatively new compared to
traditional drugs. However, the evolution seen in biologics has been of great
help in understanding where the field is moving to. Experience and familiarity
with the intricacies of biologic behaviour and the ability to define a
regulatory path in conjunction with the regulatory agencies is the key to
success in this area. The regulatory world of fine-chemical/small-molecule
drugs is abundant with clearly delineated guidelines and precedents that can be
used to reliably advance a development program. In biologics, there have been
constantly evolving new territories based on past relevant experiences. This is
a constant challenge
as the knowledge about
biopharmaceuticals increases.
In the
Industry
expects
The
biopharmaceutical industry's expectations for increasing revenue rely to a
large extent on ensuring that their R&D investment translates into new
products. In 2000, the global biopharmaceutical industry was projected to have
invested US$58 billion in R&D.
However,
whilst most companies have increased their R&D expenditure considerably
over the last few years, this has not resulted in a notable increase in output
of new chemical entities for the industry as a whole. In fact, the rise in
R&D expenditure has been accompanied by a steady decline in new drugs
reaching the market. In 2001, the output of the global biopharmaceutical
industry in terms of new drugs was the lowest in ten years. Only 31 new drugs
were recorded as having been launched by the industry as a whole during 2001.
It has
been estimated that for the top 20 companies to continue growing at their
current rate they will need to generate, on average, an extra US$28.9 billion
in sales from new products between now and 2005. This suggests that they must
each launch at least 2 to 3 new products earning between US$1 billion and
US$1.45 billion apiece during the next few years. Many companies have publicly
stated their intention to improve productivity, but will need to improve their
R&D processes if they are to meet their self-imposed targets.
In a
recent survey of the productivity of the global pharmaceutical industry, major
companies were predicted to launch 1.2 new chemical entities over the next six
years, with smaller companies predicted to launch up to 0.8 new chemical
entities over the same period. This is noticeably lower than the published
targets of up to 3 new chemical entities per year.
Using
the outsourcing option
Many
companies are increasingly turning towards outsourcing as a means to improving
their performance in drug development and get their drugs to market. Outsourced
projects now cover all areas of R&D, from discovery to post-marketing
studies, and CROs are used not only to cover gaps in capacity, but also to
increase a company's skill base and to help control costs.
A
recent study suggested that project sponsors are now using CROs on more than
60% of their clinical projects and that annual industry spend on contract
clinical services rose by 17% over that of 2001. This is a significant move by
the biopharmaceutical industry as the clinical function can represent around
40% of overall R&D spend for major companies.
Interestingly,
the development of formalised plans to use contractors for particular areas of
work are increasingly becoming part of a company's overall R&D strategy. It
is predicted that the increasing portion of pharmaceutical R&D being
outsourced will drive growth of the CRO sector by 10-12% over the next few
years.
Room
for optimism?
Although
when looked at as a whole, the biopharmaceutical industry has work to do in the
area of productivity, it is certainly not all bad news for companies. For a
start, the global pharmaceutical market continues to show strong growth. The
world pharmaceutical market grew by around 12% in 2001, indicating
opportunities for companies with the right strategies. In
Many
companies in the biopharmaceutical industry are beginning to focus on
previously unidentified disease targets and on marketing innovative medicines
designed to treat conditions for which there is no existing treatment, or where
treatment is inadequate. However, development of these types of drugs is not
only going to involve entirely new R&D processes but also more complex and
longer clinical development than was necessary in the past.
Therefore
increased productivity may take more time and a new ways of thinking to
actually materialise in terms of new generation drugs. It may be companies that
plan for the long-term who reap the greatest benefits from new approaches to
R&D rather than those under heavy pressure to deliver in the immediate
future.
Need of the Hour
Most of the biotech companies, which are into the
biopharmaceuticals sector are research-based start-up organizations. These
companies do not have the wherewithal to set up a large marketing and sales
organizations to market drugs once approval is obtained. The ideal strategy
that can be adopted is to form profitable partnerships with large biotech or
pharmaceutical companies to handle the product commercialization. For instance,
collaboration between Tanox Biosystems and Genentech is meant to leverage
the expertise
of both companies.
Alternative
formulation technologies that will improve patient convenience and ease of
administration have to be considered. Meaningful improvements in scale and
yield of protein/antibody production will expand the availability of future
important biopharmaceuticals. Efforts should be made to overcome barriers that
include cost and risk of failure of clinical trials through phase III and
beyond, financial road blocks, difficulties inherent in moving beyond basic
research to large-scale and frequently changing regulatory requirements by
federal oversight committees.
Future Developments
In
recent years, significant innovations have occurred in the biopharmaceutical
area. A robust pipeline of new biotherapeutics point towards strong growth of
the biopharmaceutical market in the near-to-medium term. Innovation in
biotechnologies and sustained performance of the monoclonal antibody segment
has brought in new classes of biopharmaceuticals addressing new markets as well
as targeting new diseases.
The future of the biopharmaceutical industry will increasingly focus on
products and, more particularly, on the diverse potential of monoclonal
antibody products. Although new technologies will continue to emerge, the
spectrum of supportive technologies currently available are now permitting a
growing pipeline of novel therapeutics. Approvals during the past five years
have already begun transforming oncology and inflammatory diseases with the
prospect of more advances in these and other areas of
medical practice.
New
developments in the fields of genomics, proteomics and stem cell research seem
attractive. However, these new developments, especially those of stem cell
research, are extremely controversial and hence their speed of development
remains questionable. Two other crucial issues that will affect the future
progression of this industry are biogenerics and the regulatory structure.
Biogenerics are essentially generic versions of the same biopharmaceutical drug
that have come off patent protection and can be manufactured and sold by any
company. Today there are at least 8-10 drugs that have either gone off-patent
or would lose patent protection within the next three years—having global sales
in excess of $5.5 billion. However, once the regulatory requirements are
defined, it would affect brand product sales and capacity demand. The policies
and attitude adopted by the U.S. FDA in the future would have a direct
relationship with the future growth of this industry, thus impacting technology
requirement or research focus currently established.
Another important area is gene therapy, which involves the insertion of genetic
material into cells, encompasses repairing or replacing defective genes in
order to make the target cells more susceptible to treatment. A great potential
of pharmaceutical biotechnology lies in gene therapy and genetic engineering.
Genetic engineering has been revolutionizing medicine by enabling mass
production of safe, pure and more effective versions of proteins and enzymes
that the human body produces naturally.
Trends and Forces
Likely to Affect Bio-Pharma Companies in future
a.
The need to reduce the
cost of drug products (hence, trying to reduce the cost of quality, which is
estimated to be more than 20% of the total cost of manufacturing)
b.
Regulatory agency
acceptance (both FDA and EMEA) of Process Analytical Technology (PAT) as a
means of bringing more science into our manufacturing processes (and hopefully
reducing the amount of end product testing).
c.
The need to prevent
drug counterfeiting (e.g., when radio-frequency identification tags are placed
into labels, QA will need to verify that the information is correct and the
tags are working correctly)
But biopharmaceutical QA/QC will
also be shaped by regulatory forces unique to the biopharmaceutical industry.
For example, should a rapid reliable assay for Prions be developed, the
regulatory agencies would most likely insist on validation of prion removal
from a manufacturing process and/or lot release testing. We probably have not
seen the full ripple effect of regulatory agency reaction from such recent
incidents as the unpredicted pure red cell aplasia (PRCA) from administration
of recombinant erythropoietin (Eprex) that had interacted with increased
leachates from the container closure system after a formulation change, and the
significant GMP deficiencies that led to the 2004 flu vaccine shortage. The
political reaction (or overreaction) should a transgenic recombinant drug
product accidentally enter into the food system is beyond comprehension.
Change, rather than stability, will continue to engulf biopharmaceutical QA/QC
groups. It will be up to QA/QC management and staff to adapt to these future
changes and maximize the benefit for the patients they serve.
Conclusion
The biopharmaceutical industry has demonstrated the ability to deliver the blockbusters. The drugs manufactured in the future will be more chemically diverse, placing even greater pressure on process development teams. While certain processing technologies have evolved into industry standards, the innovations keep coming. Process development teams must be able to rapidly identify the tools that can help companies realize new product objectives. Bioengineers now have more options and must choose carefully as each host cell line has its advantages and disadvantages. Looking forward, bioengineers will have more options for host production systems as key post-translational genes can be successfully cloned into many of the established manufacturing cell lines. The industry will likely witness the first licensed biopharmaceuticals derived from enhanced baculovirus and yeast systems. The multitude of collaborations with contract research organizations (CROs) underscore the priority that drug companies have on getting to the next best therapy. Any platform capable of simultaneously enhancing performance and improving yield will receive a warm welcome from pharmaceutical companies. Technologies simply offering a reduction in Cost of Goods (COGs) will have a difficult time winning the attention of drug manufacturers and making an impact on the industry overall. In the next five years expect a steady stream of licensed PEGylated drugs as the label is capable of masking many shortcomings found in the first generation biopharmaceuticals. For many years the device and formulation areas were viewed as window dressing. However, with the industry experiencing its first wave of generics, biopharmaceutical companies are wrestling with how best to differentiate their products and hold on to the advantage. The new routes and delivery devices present an opportunity for biopharmaceutical companies to improve therapy and extend patent protection around flagship drugs. A side benefit can be a substantial reduction in the amount of drug required to achieve a particular therapy (dose sparing), providing much needed relief in upstream processing.
Overall,
the field of biopharmaceuticals has a bright future—one with definite
challenges. But the scientific, technological and clinical motivations that
have driven this industry continue to grow and will drive future successes in
the translation of science and technology into meaningful human therapies.
Alternative formulation technologies, which will improve patient convenience
and ease of administration, are now increasingly being considered. In addition,
meaningful improvements in scale and yield of protein/antibody production are on
the horizon—which will expand the availability of these and future important
biopharmaceuticals.
References