Why would a Big Pharma company want to remake itself as a biotech? In a recent Xconomy piece, I discussed the changes in Roche’s corporate culture brought on by their recent acquisition of Genentech, along with recommendations for creating an innovative biotech research culture. What I didn’t have the space to dive into was a discussion of why Roche is attempting to transform itself from Big Pharma to biotech (OK, Big Biotech). The answer can be summed up in one word. Biologics. Here’s how I see it all coming together:
Biologics are Hot, Hot, Hot
Plant-based drugs have been used by cultures around the world for thousands of years. Drugs based on chemical synthesis have been with us since the latter half of the 1800s. Now, the era of biologics—genetically engineered protein drugs made in living cells—is upon us. Biologics now account for 20 percent of the global drug market, according to market research firm IMS Health. In 2000, only one biologic made the top ten list of worldwide drug sales (Amgen’s recombinant erythropoietin in 4th place). By 2008, five of the top 10 drugs in sales were biologics, and by 2014 biologics are expected to occupy six of the top ten positions, according to EP Vantage.
The trend is clear: worldwide sales of biologics are on track to hit the $100 billion level by 2011. As recently as 35 years ago there were no recombinant protein drugs in the marketplace. Today the marketplace contains many types of recombinant proteins, including growth factors, monoclonal antibodies, soluble receptors, clotting factors, replacement enzymes, vaccine components, and immune system stimulators. Biologics comprise about 25 percent of new drugs, according to the Washington Post, and accounted for about 16 percent of total prescription drug spending in 2008, according to IMS Health.
Small molecules, however are not likely to go away anytime soon, because they retain … Next Page »
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