For Pharmaceuticals:

Pundits Forecast Pharma's Future
By Robyn Barnes

End of first-quarter economic reports are pouring in and the economic pundits are pondering the industry's performance in 2007 and forecasting the future of pharma in the remainder of 2008.

Most reports cite forecasts of increasingly cost-conscious times. Fewer drugs are receiving FDA approval because of safety issues, not surprising in the wake of recent drug withdrawals and the heparin situation. Expiring patents, the rise in popularity of generic drugs and low reimbursement rates are all negatively impacting the pharmaceutical industry.

IMS Health recently released its annual U.S. Pharmaceutical Market Performance ReviewTM, reporting that overall sales growth in the U.S. prescription market moderated to 3.8 percent in 2007, compared with growth of more than 8 percent in 2006. Total U.S. prescription sales reached $286.5 billion, with slower sales growth resulting from loss of exclusivity of branded medicines, fewer new product approvals, the leveling of year-over-year growth from the Medicare Part D program, and the impact of safety issues.

"Once there was a need for drugs to treat illnesses that affected a large number of people; blockbuster drugs were developed that filled these requirements. Today...niche markets rather than blockbuster drugs are the wave of the future."

IMS states that in 2008, the expected introduction of new, novel biologics and vaccines, as well as the launch of five to eight new products with potential global blockbuster status, will help offset the impact of lower generics pricing. An additional $13 billion in branded products are likely to be exposed to generics this year.

In the U.S., IMS forecasts compound annual pharmaceutical sales growth through 2012 of 3 to 6 percent. Dynamics that will shape the market during the next five years include the continued loss of exclusivity in major therapy areas, new specialist-driven products, greater levels of therapeutic substitution, along with greater awareness and focus on safety issues.

Research and Markets' "United States Pharmaceuticals and Healthcare Report Q2 2008" report states that "Despite concerns over the economy, the US drug market should continue its solid growth in the coming years with BMI expecting a compound annual growth rate (CAGR) of 3.99% for 2007-2012. By the end of the forecast period total drug expenditure should reach $364.7 billion dollars."

Monocolonal Antibodies
The real growth market for pharmaceuticals in 2008 may be in monoclonal antibodies (mAbs). Simply stated, monoclonal antibodies are proteins that all have an affinity for the same antigen. They are produced by one type of immune cell that are copies of the same parent cell.

Datamonitor's report "Monoclonal Antibodies Report Part II: Companies - Holding mAbs in Portfolio Promises Protection Against the Looming 2011-12 Patent Cliff" says that during 2006-2012, mAbs are forecast as the key growth segment of the prescription pharmaceutical market. mAb revenues are anticipated to grow at a compound annual growth rate of 14.2% over the period 2006-12, versus 2.2% for the overall market.

The report's abstract states, "Four players currently hold a dominant position in the global mAb market: Genentech, Roche, Johnson & Johnson and Abbott, accounting for a combined 74.8% share of mAb market revenues.

However, Datamonitor forecasts that by 2012 a number of additional players will have significantly enhanced their presence in the mAb segment, with four companies---Biogen IDEC, Amgen, Novartis and UCB Pharmatech---forecast to generate mAb sales growth in excess of $1 billion."

The Tufts Report
According to a report by the Tufts Center for the Study of Drug Development, the number of monoclonal antibody products entering clinical study nearly tripled in the last decade and now require 7.6 years on average to complete the clinical development process and receive marketing approval

Total development and approval times for mAbs, one of today's premier biotech tools, compare favorably with small molecule drugs, which require an average of 7.5 years to follow the same path, and with all biotech products, which require an average of 8 years.

"Historically the province of biotechnology companies, mAbs are now just as likely to be developed and marketed by major pharmaceutical firms as they are by biotechs," said Janice M. Reichert, senior research fellow at Tufts CSDD and author of the study.

She noted that mAbs have also become big business. In 2006, the global market for these products exceeded $17 billion, with sales forecasted to grow an average of 14% per year through 2012.

Currently, 21 such products have been approved for sale in the United States and abroad, and more than 200 are in clinical study.

Tremendous Opportunities on the Horizon
Lulu Pickering, program manager of the Spectrum Pharmaceutical Industry Dynamics Reports, gathers and reports on data for studies about the future of the industry. "There are some tremendous opportunities in the marketplace," she says. "In order to take advantage of these opportunities, though, things have to change."

Pickering sees opportunities in terms of biotech genomics, new technical platforms, emerging markets and outsourcing, especially in the pharmaceutical industry. "The question companies have to ask themselves is what can they realistically do, what can they do well and what can they do now?" she says. "Usually the answers to these questions are different."

"Pharmas have become conglomerates and this is not the wave of the future," she says. "Big Pharma's business models need to change."

Pickering says these conglomerates are not going to be able to develop the drugs of the future by themselves. Once there was a need for drugs to treat illnesses that affected a large number of people; blockbuster drugs were developed that filled these requirements. Today, she says, niche markets rather than blockbuster drugs are the wave of the future.

"They've developed drugs to treat the major illnesses," she says. "Now they should look to the specialty markets to treat a portion of the patients instead of large groups. If you look at targeted treatments for a particular illness, that's a specialized market."

"The concept that one drug can treat everything is becoming a dinosaur," she continues. "With biomarkers and genetics you need drugs tailored for an individual's disease. Businesses that can understand this fundamental change, that this is the future of pharmaceuticals, are the ones that will thrive in the future."

Biotechnology has been around for more than 25 years, Pickering says. "Initially, there was a real bias against 'those poor biotech companies,'" she muses. "That attitude is changing. Now the new therapies are coming out of the biotechs and pharmas are in-licensing products from them. Pharmas are asking themselves if they have to do all the research and development themselves or if they should license it to a biotech. That's much different than it was 15 or 20 years ago."

Pickering thinks the next big thing will be mAbs. "Pharmaceutical companies who want to get into mAbs will have to decide if they want to function as small companies starting from square one or buy into a company that already has a mAb product."

"There's a feeding frenzy in the monoclonal antibody market," she says. "Some licenses are being sold for $500 million or more. There are huge deals being made right now. That shows the value that pharma companies are placing on biologics and monoclonals in particular. Pharma companies are desperate to get this technology."

Robyn Barnes is a marketing communication specialist at MasterControl Inc., a global provider of GxP process and document management software solutions for life science companies (www.mastercontrol.com).

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FDA Link:
Points to Consider in the Manufacture and Testing of Monoclonal Antibody Products for Human Use
http://www.fda.gov/cber/gdlns/ptc_mab.pdf

Additional Article:
Number of Monoclonal Antibodies On Market Nearly Doubles by 2008
www.biotechnologyhealthcare.com/journal/journaldisplay.cfm?aid=2/3/BH0203064.pdf

Quick Way to Make Human Monoclonal Antibodies Against Flu Discovered
http://www.sciencedaily.com/releases/2008/04/080430134319.htm