Enthusiasm Abounds In The Biopharma Industry
The world market for biopharmaceuticals is now about $140 billion1, growing at 15-to-18 percent annually. In fact, the biopharmaceutical market itself is the biggest positive long-term trend in the industry, says Eric S. Langer, managing partner, BioPlan Associates Inc., which conducts market analysis for life science and biopharmaceutical companies.
BioPlan Associates has recently released the results of its “9th Annual Report and Survey of Biomanufacturing,” where the company surveys biomanufacturers around the world. Biomanufacturing includes the production of commercial drug products using biotechnology processes such as mammalian cell culture, microbial fermentation, etc.
Another positive in the biopharmaceutical industry focuses on approval-related innovation and progress. In 2011, the FDA’s biopharmaceutical approvals involved genuine innovation and advances, with nearly all products being approved for new indications or for which the last product approval was granted well over a decade ago.
However, despite increasing sales, the rate of biopharmaceutical approvals in the United States is flat, with 12 biopharmaceuticals in 2011. (See www.bioplanassociates.com/biopharma).
Langer says another positive trend in the industry is its continued internationalization, in both R&D and manufacturing. A record number four (33 percent), of newly-approved U.S. biopharmaceuticals are manufactured outside the United States in the UK, Germany, Mexico and Italy. What’s more, capacity is being added to existing facilities.
Langer says this is significant, especially as biosimilars (biogenerics) move forward as patents expire. Expect the entrance of new manufacturers, and multiple biosimilars for each currently successful biopharmaceutical. “Our global facilities analysis, www.top1000bio.com 2, indicates that biosimilar/biobetter companies are present in virtually every biotechnology-capable region,” Langer says. “This is also seen in the internationalization of R&D — large international companies continuing their expansion and offshoring of R&D.”
The internationalization of R&D is driven by the demand for local production of biologics. The local manufacture of vaccines, for example, contributes to developing countries’ scientific/technical infrastructure and provides continued availability and price stability. New technologies, such as single-use device manufacturing, will enable products to be developed, standardized and the same manufacturing systems shipped and installed at multiple facilities, benefitting emerging markets.
Another trend unfolding centers on single-use/disposable bioprocessing systems, which has increased its dominance in the manufacture of biopharmaceuticals for pre-clinical R&D and clinical testing. It is expected that in 10 years about half of new commercial biopharmaceutical manufacturing systems will be single-use based.
In regard to microbial manufacturing, a confluence of trends is contributing to increased use of microbial (bacteria, yeasts, other fungi, etc.) host cells for recombinant proteins manufacture. Most of the attention in recent years has concentrated on mammalian cell culture-produced recombinant proteins.
With so many trends at play, we asked Langer to detail what’s on the horizon for the biomanufacturing sector.
Global Corporate Xpansion: Eric, why is the global biopharma industry so optimistic about doing business in 2012?
Eric Langer: Budgets are, in my mind, most telling about where trends are going. It is one thing to have meetings and technical discussions about new technologies; it is entirely another to determine that biomanufacturers are increasing budgets in specific areas, and for specific technologies. Outsourcing budgets, for example, are down this year, while budgets for improving productivity are up. Hiring budgets in operations areas are also up. This tells a fairly clear story, when included in other aspects of the research [the ninth annual survey]. We cover 12 different areas, including 67 sub-areas, and more than 200 graphs and data tables. These data, when evaluated together, can present a quantitative picture of the industry, and the emerging trends more clearly than qualitative analysis or expert opinion.
In regard to spending, it is occurring in:
*Process development and optimization
*Personnel training and development
GCX: What challenges does the biomanufacturing industry face down the road, such as financing issues, government spending, government approvals, talent shortages and so forth?
Langer: Certainly financing will remain tight in the short term, but good technology, and good medicine, will find investors. What may happen is a delay in the development of companies with ‘good’ technologies, as the short-term investment money goes toward those with ‘excellent’ potential.
Regarding talent shortages — hiring continues to be generally up in this industry. And finding and retaining good workers not just in scientific and technical areas but in production areas as well is something of a challenge for biomanufacturers. The widely publicized layoffs are affecting large organizations, and those that are rightsizing may be doing so to adjust for strategy changes that were made during the recent past.
Overall, the industry is maturing and appears to be doing the right things as it goes forward. Urgent problems like capacity crunches that affected the industry seven or eight years ago are over partly because production planning has been done much more effectively.
GCX: Based on the results of your survey, what countries are showing strong growth? Why are they doing so well in an otherwise challenging global marketplace?
Langer: China and India continue to grow their industries, and the United States and other Western companies are increasingly looking at these regions for outsourcing of R&D, certainly for clinical trials, and even for some biologics production. However, quality issues remain to be resolved. This is occurring at a steady pace.
GCX: What’s next for the industry?
Langer: The industry is surprisingly solid, and has remained insulated with its underlying sales revenue. Financial issues affect most companies; however, demand for new and profitable products, ensures R&D will continue. More than $70 billion is being invested by the pharmaceutical industry in R&D.
What’s more, the trend for industry mergers and acquisitions will continue. However, some companies are recognizing that gutting their core competencies such as R&D and manufacturing is counterproductive.
There will always be the need for new drugs, and the supply side of this industry continues to show that it remains relatively insulated from the recession.
To learn more about BioPlan Associates, visit www.bioplanassociates.com. Contact Langer by calling 301-921-5979 or emailing firstname.lastname@example.org.
1.Rader, R.A., Biopharmaceutical Products in the U.S. and European Markets (database), BioPlan Associates, www.bioplanassociates.com/publications/pub_bpuseu.htm
2.See BioPlan Associate’s Top 1000 Global Biopharmaceutical Facilities Index, www.top1000bio.com/index.asp Accessed June 20, 2011
About The Survey
For the “9th Annual Report and Survey of Biomanufacturing,” BioPlan Associates reached out to 270 members of its Biotechnology Industry Council; and between 350 and 450 directors, vice presidents and managers; as well as 150-to-200 vendors to evaluate trends from the suppliers’ perspective as well. The survey reviews trends, upstream production capacity constraints, downstream problems and challenges, budget trends and issues and quality management. It also looks at the use of novel technologies such as disposable and modular biomanufacturing technologies, training, hiring and other issues.