Biotech in Big Pharma Clinical Pipelines Growing Dramatically, Biosimilars Join the March

By Steven E. Kuehn, Editor in Chief

Nov 20, 2013

Big Pharma has dramatically shifted its R&D focus away from its historical pursuit of small molecule drugs to include a rapidly increasing number of biotechnology products, according to a new study from the Tufts Center for the Study of Drug Development CSDD).

Biotech products, according to the study, accounted for just 7% of revenue generated by the 10 top-selling pharmaceutical-biotech products worldwide in 2001, in 2012, they accounted for 71% of the 10 top selling products in 2012.

The study, which examined R&D, pipeline, and sales data for three specific time points—2002, 2007, and 2012— was conducted by Ronald Evens, adjunct faculty and biotechnology consultant with Tufts CSDD. “The focus of Pharma companies in biotechnology certainly has accelerated and is substantial, broad, and consistent across all applicable parameters,” says Evans. “That encompasses the many biotech products in clinical research, the size and scope of Pharma pipelines in biotech, the extensive research dollars in biotech, the number and value of research alliances between Pharma and biotech, all the Pharma companies now engaged, the number of biotech products on the market, dramatic and novel impact of biotech products on patient care and disease amelioration, sales extent and growth, and acquisition of biotech companies."

The transformation of Big Pharma has been driven as much by new technologies that have enabled development of new products that improve disease outcomes and command high prices, as by the expiring patents on many top-selling small molecule drugs, according to Tufts CSDD director Kenneth I. Kaitin.

Speaking of expiring patents, elsewhere in the biotech universe MarketsandMarkets just announced the availability of its new study on the market for biosimilars noting that it will be worth nearly $2 billion by 2018. According to MarketsandMarkets study, recombinant glycosylated proteins make up the largest segment and that it accounts for a 40% share of the global biosimilars market in 2013, at an estimated $314.2 million and is expected to grow at a CAGR of 17.5% from 2013 to 2018. The biggest factor behind the growth of this segment is the increasing demand for second-wave biosimilar products, such as insulin and interferon, for the treatment of diabetes and infectious disorders. Of all segments under the product category, the monoclonal antibodies segment is the fastest-growing segment at an estimated CAGR of more than 40% from 2013 to 2018.

Helping to drive that evolution, says Tufts, has been the development of novel technology platforms over the last three decades, which has spurred an extensive pipeline of products across a wide range of therapeutic areas. In 1989, for example, only 13 biotechnology products were commercially available. By 2012, that number had grown to 210. “The notion that large pharmaceutical companies primarily develop small molecule drugs no longer holds,” Kaitin said.

The analysis, reported in the November/December Tufts CSDD Impact Report also found that:
• The number of biotech products in clinical trials grew 155% in 11 years, from 355 in 2001 to 907 in 2012, with Big Pharma in 2012 engaged in about 40% of all biotech products in clinical development.

• Financing of biotech research increased nearly 10-fold in a decade, from $10.5 billion in 2001 to $103 billion in 2012.

• Worldwide growth in biotechnology product sales grew 353% between 2001 and 2012, from $36 billion to $163 billion.

Biosimilar Markets Not So Similar

By application, says MarketsandMarkets, oncology is the largest and fastest-growing segment and accounts for a share of 25%of the global biosimilars market. This is attributed to the increasing prevalence of oncology along with the rise in aging population and the changing lifestyle. Europe dominates the global biosimilars market with around 40% share in 2013. Factors driving the European market, notes the study, is Europe’s well-defined regulatory guidelines; presence of various biosimilar drugs such as omnitrope, tevagrastim, and binocrits; numerous pipeline products; and more than 15 biologics going off-patent in the coming years.

MarketsandMarkets finds that penetration of biosimilars varies by country, and depends on various factors, including local pricing and reimbursement policies, stakeholder influence, and attitudes towards the adoption and use of biosimilars. Currently, Germany commands the highest share in the European market due to the presence of a reference pricing system.

On the other hand, the U.S. has a very restricted biosimilars market due to North America’s more stringent regulatory environment. The Asia-Pacific market is estimated to be the fastest-growing market. Asia-Pacific accounts for an overall share of 29% of the global biosimilars market. According to MarketsandMarkets, this large share of the market is mainly due to the semi-regulatory environment of the region that easily approves similar biologics in the market. In addition, low manufacturing costs and the presence of highly skilled expertise at low costs are also factors that make Asia-Pacific a lucrative destination for the biosimilars market.
Among the factors restricting market growth in North America and Europe are its higher manufacturing complexities and costs, stringent regulatory environment and the innovative strategies used by biologic drug manufacturers to protect their intellectual property, costly purification processes, arrival of biobetters, and the presence of low-priced biogenerics that compete with biosimilars in the market.