Biopharma turns to outsourcing in fast-changing drug business

Biopharmaceutical companies are increasingly looking to outsource their manufacturing to contractors, according to a new report out this week.

In the report, Assessing the Biopharmaceutical Market: Promises and Challenges, consulting firm Scientia Advisors said that while biologics - drugs based on material from living organisms, rather than on chemical compounds - command relatively high prices, they also require complex and expensive manufacturing processes. It said that developers would therefore aim to cut costs by outsourcing their manufacture to contract manufacturing organisations (CMOs).

Harry Glorikian, managing partner of Scientia Advisors, said that biologics now comprise around a third of the overall pharmaceutical market, and that share is growing.

He added that revenue growth in the chemical drug segment has slowed and and will begin to decline within three years, as numerous blockbuster drugs go off-patent and are replaced by less expensive generic substitutes.

Among the success stories which could see the biologic segment reach $165bn by 2013, he highlighted monoclonal antibodies and the vaccine and cell therapy segments.

“With the market for biologic drugs growing much faster than that of drugs based on chemical compounds, pharmaceutical, biotechnology, generic drug and contract manufacturing companies are repositioning and forming new alliances in order to succeed in a rapidly changing landscape,” he said.

Glorikian warned though that just like their chemical cousins, biologic drugs will start to go off-patent over the next few years.

“Numerous biologic therapies with total revenues of $37B will have lost patent protection by 2017, promising considerable opportunity in biosimilars,” or government-approved generic versions of branded products, he 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.”

Further information:
www.scientiaadv.com

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