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With the drug industry pressed to find new paths to innovation, the tension between large- and small-molecule therapeutics takes center stage The pharmaceutical industry is poised for a transformation. The impetus for change can be seen on its business side, where an era of surging profits fueled by blockbuster drugs grinds to a halt. Research pipelines at big pharmaceutical companies, directed at overserved therapeutic categories, are running dry, and the sector may be hitting the limit on growth through consolidation.
The catalyst for change, on the other hand, is science--specifically the reorientation of chemistry and biology to address underserved therapeutic categories such as cancer and central nervous system disorders. The decoding of the human genome and the mounting banks of targets for new drugs have created an enormous new opportunity for growth. The expanding role of biology has, however, introduced uncertainty as to which sector of the industry--major pharmaceutical or biopharmaceutical--will benefit most. Indeed, there is a growing tension between the development of small-molecule and large-molecule therapies--between the pharmaceutical industry's traditional synthetic organic chemicals and the complex proteins and antibodies that are emerging from biotechnology. Many new drug targets key on protein-protein interactions, posing seemingly daunting barriers to traditional small-molecule approaches. Industry sources estimate that about 30% of the drugs in the development pipeline are biopharmaceuticals--the majority at preclinical stages. The question is how many of these candidates will make it to commercial launch. The 40% failure rate for small-molecule drug candidates in late-stage clinical trials will probably translate into a similarly bleak prospect for success in biotech drugs, according to industry watchers.
There are, however, several practical barriers to developing large-molecule therapies. The mainstream pharmaceutical industry is still geared to the production of small-molecule drugs and lacks the infrastructure to produce major biopharmaceutical products. Small-molecule drugs can be administered in oral dosage form, whereas large-molecule drugs are administered via injection--a less popular option with patients. And the cost of producing biotech drugs is much higher than that of manufacturing small-molecule drugs. Major pharmaceutical companies, nonetheless, are working on making biotech part of their future. Similarly, biotech companies have small-molecule development programs--albeit programs based on biology in early-stage development. In fact, several biotech drug development companies focus entirely on small-molecule approaches. The largest suppliers of fine chemicals to the pharmaceutical sector are also positioning themselves to provide biologics on a contract manufacturing basis. Lonza, DSM, Avecia, Dow Chemical, Akzo Nobel, and other top companies have made major investments in biologics production and announced more to come. As fine chemicals suppliers adapt to changes in the pharmaceutical market, a distinct class of combined fine chemicals/biotechnology companies--often referred to as "biofine" suppliers--is emerging, composed of the large, comprehensive fine chemicals companies that have led the sector through the 1990s. "There is no question that biologics will play a greater role in the grand scheme of all human therapeutics," says Jeffrey D. Hsi, an intellectual property and patent law attorney with Fish & Richardson, Boston. "Amgen and Biogen and other biopharmaceutical companies have really established their effectiveness and have what are deemed blockbuster biologic drugs. However, the state of the industry is such that large pharmaceutical companies are driving what is going on, and they are skewed toward small molecules." Hsi says, however, that genomics has provided a more accurate understanding of the specific role proteins play in various diseases. "Some extrapolate to the point where there will be individualized medicines based on patients' genetic makeup," he says. Genentech's Herceptin, a breast cancer drug known to be effective for about 25% of all patients, is a kind of prototype of such drugs. Patients are screened for receptivity before Herceptin is prescribed. The advent of individualized biopharmaceutical medicines, Hsi says, would be a fundamental break from the blockbuster approach of targeting the widest possible population. Individualized medicines are a long way off, though, and Hsi says biotech's primary role will be in drug discovery and development. This will often lead to a small-molecule approach where development is done by or for a traditional drug company. "Certainly, the larger pharmaceutical company will be interested in pursuing the small molecule, because it is less costly to develop than a biologic," he says. "Because of the nuances of proteins, there are so many things that can vary in production of a biologic. The cost of production and quality control is much greater than with small molecules. The hurdle is much higher." Still, large pharmaceutical companies claim they are keeping their options open. "I don't believe any pharmaceutical company is all small molecule anymore," says Raghavan V. Venkat, senior technology manager with GlaxoSmithKline. "All have significant resources dedicated to large- molecule manufacturing." He says biotechnology is of interest mainly in the area of target validation. "Most pharma companies are collaborating with genomics partners," he says. GSK has many of the necessary tools in-house, however. "We have access to one of the largest libraries of genomics databases," Venkat says. "We also have discovery and research alliances. Reagents are made internally. We've been heavily involved for six years." GSK has had no success so far in coming up with a commercial biopharmaceutical product, but at least 5% of its drugs in clinical development are proteins, and the company has a plant with commercial-scale protein manufacturing capacity, Venkat says. Over the past six years, several GSK biopharmaceutical molecules have gone to Phase II trials. One, Bexxar, a cancer drug codeveloped with Corixa, has been filed with the Food & Drug Administration. Partnership is an important route for drug firms that lack a biopharmaceutical infrastructure. AstraZeneca, for example, recently announced a deal with Dyax, in which Dyax will supply a monoclonal antibody with a high affinity for an Alzheimer's disease drug target. In other cases, big drug companies are acquiring the rights to a biopharmaceutical company's pipeline. Recent deals include Roche's acquisition of worldwide rights to Antisoma's oncology pipeline, including Pemtumomab, a product in Phase II trials for ovarian cancer, and GSK's acquisition earlier this month of the rights to Theravance's experimental respiratory drugs. Both deals are worth about $500 million.
"TURNING a blind eye to biotech is not reasonable," says Jitendra Patel, director of discovery alliances at AstraZeneca. "Genomics has opened up a large area of opportunity where biotechnology is the immediate route to benefit. You need to recognize when the time is right to go beyond small molecules, where restricting yourself to small molecules will also restrict your breadth of opportunity." AstraZeneca is trying to identify all areas where biotechnology leads to the development of a superior drug--large molecule or small, Patel says. "There will always be new technologies for developing small molecules thought to be too daunting to take on," he says. "There are a variety of biotech techniques to engineer compounds that disrupt protein-protein interactions. These technologies will allow us to better understand the nature of protein-protein interactions and can show us small-molecule options." This will limit the area now perceived as only approachable through large-molecule therapeutics, Patel says. "If technology allows us, realistically, to do so, the bias will always be to develop small-molecule drugs," Patel says. "It is possible that the scope of biotech will decrease because of this, but that scope is so large that there will be ample opportunity to build value through biotechnology." Biopharmaceutical companies are similarly positioned to pursue chemical as well as biotech options in drug development. Biology is the front line in both cases, however, and research managers say this leads to the kinds of efficiencies in the lab needed to compete with large pharmaceutical companies. "WHAT DISTINGUISHES biotech companies from big drug companies is that we are biology driven. Our competency is experimental biology," says Michael Gilman, senior vice president for research at Biogen. "By contrast, the big drug companies are primarily chemistry driven. They have big corporate libraries, and their main focus is on trying to find homes for as many of those compounds as possible." Biotech firms such as Biogen, he says, begin drug discovery by identifying relevant "pieces of biology," that through biological experimentation, can be developed into molecules that work. "Once we find these molecules, we are actually sort of agnostic as to what the therapeutic modality is, whether it is a protein, a small-molecule, or even a gene-therapy approach," Gilman says. "We are prepared to go in any of those directions." However, according to Gilman, the biology underpinning most new therapies in areas such as immunology and neurobiology is extracellular in nature, pushing researchers toward work with cell-surface receptors, secretive proteins, antibodies, and other biopharmaceutical approaches. "People think companies like Biogen are into biologicals because that is where our manufacturing capabilities are," he says. "But the fact is that protein drugs remain the best way to get at some of these extracellular targets." In small molecules, the name of the game for biopharmaceutical companies is efficiency. With Biogen's small medicinal chemistry group of about 30 chemists, Gilman says, risk must be handled differently than it is at large drug firms. "Big companies reduce risk in their small-molecule program basically through diversification," he says. "They run 100 projects, knowing that 5% of them will succeed. We can only run three projects at a time. We don't start a small-molecule program until we are sure we know what the target does." Gilman says Biogen shut down its high-throughput screening facility three years ago. "We don't play the numbers game," he says. "We don't want to develop big libraries." Another strategy, he says, is to focus on projects that are difficult to pursue for large research organizations. "We focus on projects that make use of structure-based drug design and virtual screening. Being small, we find it easy to assemble the necessary multidisciplinary teams. At large pharmaceutical companies, it is a challenge getting chemists and biologists to live together." Molecular biologists play a key role, especially in producing proteins in bulk from X-ray crystal structures. "In one of our projects now, we are turning around X-ray cocrystals faster than we are getting assays on the material," Gilman says. "This is becoming a primary asset for us, and it is something that requires a multidisciplinary group that really works together well." Working from a biotech-validated target can result in a small-molecule therapy, Gilman says. Biogen is currently working with Icos to develop a small-molecule psoriasis drug that will compete with Raptiva from Genentech and Xoma. "We are codeveloping Icos' inhibitor, and our medicinal chemists are working on their second-generation molecule," Gilman says. "The biology is worked out, we have all the assays, and we know exactly what to do with the molecule when we get it." The ideal development path at Biogen, he says, is to lead with the development of an antibody, introduce a biotech drug, and follow immediately with small-molecule work. "Hopefully, five to seven years later you get the patients onto a pill," Gilman says. Amgen, the largest biopharmaceutical company, may be more geared toward a numbers game than Biogen. Its archives of structural databases on proteins that are critical to developing small molecules are envied by large pharmaceutical companies, says Paul J. Reider, Amgen's vice president of chemical research. So is the entrepreneurial spirit of the biotech sector. "This spirit is something that existed in pharma in the 1980s, in the heyday," Reider says.
IT'S HARD to find now, he says, because companies have become so big and risk-averse. "The biotech culture is to take prudent risks, remembering that the focus must remain on developing great new therapies," Reider says. "At Pfizer and Merck, if a drug doesn't look like it will be a billion-dollar drug, they don't want to start any work on it." This, he contends, is a primary example of where drug companies limit their opportunities--many of the multi-billion-dollar drugs of the 1990s, such as Merck's Zocor, were not perceived as potential blockbusters when they were first being developed in the 1980s, he says. Amgen's development model is similar to Biogen's. "You lead with injectable proteins," Reider explains. "You go in and prove the concept and rapidly follow up with small-molecule development." But not always. Cross-functional development teams keep options open as to whether to pursue protein, antibody, peptide, or small-molecule therapies, he says. "My clinical colleagues don't care what the therapeutic option is," he says. In fact, the advantage of oral over injectable delivery does not automatically push development toward small molecules, he says. Some protein-based drugs involve infrequent injections or one-time vaccinations that are easier for physicians to monitor than oral dosage therapies. The limiting factor in discovery and development is target validation, Reider says. "The strategy is to know as quickly as possible that you are looking for the right molecule with the right therapeutic outcomes." The big money in drug development is in clinical trials, he says, so Amgen looks to make a quick "go/no go" decision using biotech as a front line in target validation. Reider maintains that the odds for success are far greater than those for the large pharmaceutical companies' approach of throwing chemicals at targets without full understanding of the targets. David Brown, director of strategic consulting for the biotech clinical services firm Covance, says biopharmaceutical companies are finding new strength through partnerships with big drug companies. "Biotech is feeling very bullish now," Brown says. "Last year was its toughest, but the sector was still able to raise $10 billion in financing. Companies feel they don't have to knuckle under when they get offered a deal by big pharma. They can really negotiate the terms." By 2010, the two groups will be launching the same number of products each year, he says. "The products won't be the same value, but given its size, biotech doesn't need them to be." Covance offers project management services to smaller biotech companies that are stepping up to the big league. In the area of large-molecule therapies, the company offers services such as cell banking, protein characterization, and clinical trial management. Covance also works in medicinal chemistry. Brown, however, questions the notion that work in areas like antibodies inevitably gravitates toward developing a small-molecule mimic a few years down the road. "That is a very simplistic approach," he says. "The other way of looking at this is to look at the delivery system [for large-molecule therapeutics]. You can actually try to achieve something like an inhalation formulation. There are technical ways to get around injectable drugs."
"It isn't true that by escaping the issues of large molecules you get out into a nice green open field." BROWN ADDS that many of the new small-molecule therapies introduce technical difficulties in the lab. "The history of pharmaceutical chemistry tells us all the easy ones have been done," he says. "So now we are looking at combinatorial chemistry, high-throughput screening, and targeted design." These methodologies introduce considerable difficulties in assaying cost, manufacturing, and handling. "We have had some very significant problems formulating some of these new molecules," Brown says. "It isn't true that by escaping the issues of large molecules you get out into a nice green open field. Some of these new small molecules are tough to deal with." For some biotech-based drug development companies, the agnosticism that Gilman describes applies more to the means than the end, which is small-molecule therapies. Vertex, for example, focuses on difficult-to-develop small-molecule drugs. According to President Vicki L. Sato, Vertex channels this effort into medicinal chemistry. "Orally administered drugs, especially for the treatment of chronic diseases, offer a significant advantage over biopharmaceuticals," Sato says. "So the opportunities for orally bioavailable drugs are greater and more dynamic. The counterargument is insulin--people inject themselves with insulin several times a day and have been for decades. But it's also true that if we were successful coming up with an oral mimic, we'd probably switch clinical treatment." Vertex has applied small-molecule technologies to enzymes and is moving into work on integral membrane protein targets, Sato says. "They are tough targets, and we employ a number of technologies to design the right molecule with the right potency and the right safety features." Sato describes the company's technology as a suite of proprietary and nonproprietary approaches including X-ray crystallography, high-throughput screening, and computational methodologies. Vertex uses the atomic definition of protein structures to map the development of small-molecule drugs. Vertex currently has two anti-inflammatory agents in clinical trials that lower TNF and IL-1, highly inflammatory cytokines associated with rheumatoid arthritis and osteoarthritis. The drugs would compete against Enbrel and Kineret, both from Amgen. The big boost for the drugs would be the replacement of injections by oral administration. Although the therapeutic mechanism would differ, the end result would be similar, she says. Vertex is partnering with Aventis on one of the products, an IL-1 inhibitor, and hopes to develop the other on its own. At Sunesis, the goal is to develop small-molecule therapies that major pharmaceutical firms write off as too hard to pursue. The company is driven by the industry's bias for oral dosage pharmaceuticals. "If you look at the pharmacopeia, 80% of the drugs are orally active," says Daniel N. Swisher Jr., chief business officer. "The only reason to go to biologics is that somebody hasn't been able to develop a small molecule." Sunesis uses a proprietary drug development method called tethering that starts with finding isolated entry points on drug targets screened against its library of protein fragments. "We discover drugs in pieces or fragments that can bring forth new chemotypes," says James A. Wells, president and chief science officer. "We can also scan diversity space very efficiently, accessing targets that have been difficult to find hits to with most small-molecule approaches." According to Wells, drug companies generally assign chemists to only 30 to 50% of the targets that go through high-throughput screening. "There is a large proportion of targets that don't have the high-throughput screening hit criteria that are just left on the shelf," he says. "There is a lot of target validation to say these targets are important, but there is little chemical opportunity to advance them." Those that do come out as hits generally fall within 20% of the human genome that has already been decoded--usually the G-protein-coupled receptors, Swisher says. The tougher targets associated with some major diseases have not been amenable to high-throughput screening or other traditional small-molecule discovery approaches, he says. By screening fragments of protein molecules as opposed to intact molecules, Sunesis' tethering approach allows it to screen thousands or tens of thousands as opposed to hundreds of millions of compounds to cover the same diversity space, Wells claims. Sunesis is pursuing partnerships where pharmaceutical and biopharmaceutical companies provide targets for which Sunesis looks for hits using the tethering approach. The partnership then advances those hits toward clinical candidacy. The company currently has collaborations with Johnson & Johnson and Italy's Chiesi Farmaceutici. Both are based on protein-protein targets in inflammation treatments. Last month, the company announced a deal with Biogen to discover oral therapeutics against as many as six targets in inflammatory and autoimmune diseases. Cytokinetics is another biology-based drug development firm exclusively focused on small-molecule therapies. The company concentrates on target cells' cytoskeletons--intercellular proteins involved in performing mechanical functions including cell division and movement. This directs Cytokinetics' efforts to cell-penetrable small-molecule therapies. "We exploit the biology through small-molecule reagents that ultimately become drug candidates," says Robert I. Blum, senior vice president for corporate development. "We use cell biology to inform chemists where to expend their energy," Blum says. "Traditionally, biotech companies graft chemistry onto their biology focus several years down the road, doing so in a modest way. Because we are a cell-biology company, we have an opportunity to use technology as an attrition management tool to eliminate compounds that have incorrect cell biologies. So we can put larger teams of chemists onto fewer optimization programs."
Biotechnology poses a major question for companies that supply intermediates and advanced pharmaceutical ingredients (APIs) to the drug industry. The majority of fine chemicals companies, most of which are significantly smaller than those that can claim biofine status, say they are secure in the traditional fine chemicals market. Few could afford the investment in new biologics agents, and many operate in small-molecule drug niches with plenty of room for growth. For example, Helsinn, a family-owned business with annual sales of about $100 million, specializes in in-licensing pharmaceutical technology and developing APIs. The company's new angle is high-potency actives--a capability it added in a recent $23.5 million project at its plant in Biasca, Switzerland, where it is headquartered. Roger LaForce, senior manager for marketing and sales, says there is little fear that large-molecule therapeutics will encroach on Helsinn's market anytime soon, and he believes there is not much sense in going into biologics. In fact, the efforts of biotech drug development firms may result in new opportunities to license small-molecule drugs for protein targets, LaForce says. The large, comprehensive fine chemicals suppliers agree they need to push into biologics, and many have done so, despite the new element of risk and uncertainty that comes with the territory. According to Nick Hyde, director of Dow's pharmaceutical services business, small-molecule custom manufacturing is an $8 billion market growing at 6 to 8% annually. Microbial and mammalian cell biologics, in contrast, is a $1.5 billion market growing at 15 to 20%. "Simple economics shows that the small-molecule piece will be the largest segment for the foreseeable future--even 10 years out," he says. IT IS, HOWEVER, impossible to accurately predict the balance going forward, Hyde says, and biofine producers must remain flexible. "You can't wed yourself to a particular plan," he says. "Assume that whatever your plan is, it is going to be wrong and you're going to have to change it. The question is, How responsive can you be as things change? You need to have as many of the capabilities in your portfolio as needed to manage all possible future scenarios. Companies that are not biofine are going to find it tough to handle. This will accelerate consolidation in the fine chemicals business." Dow has initiated a major push in pharmaceuticals since 1999, amassing microbial fermentation, chiral technology, oligonucleotides, and other capabilities through the acquisition of Ascot, Collaborative BioAlliance, and Angus Chemical. Hyde does not see a black-and-white split between pharmaceutical and biopharmaceutical companies on issues of chemistry and biology. He does, however, recognize innovative drug development technologies emerging from biotech. "Big pharma has always tried to understand the biology, cell biology, and microbiology--the mechanisms behind the drugs," he says. "But it now costs pharmaceutical companies as much as $800 million to launch a new drug. If you look at the balance sheets of biotechnology companies that have successful drugs on the market, they aren't spending anything like that. So they must be doing something different than the big pharmaceutical companies. Will they be any more successful than big pharma companies? That's hard to say. But big companies know they have to improve the performance of their R&D organizations." The bottom line for biofine companies is an increase in outsourced manufacturing of biologics at a time when traditional fine chemicals outsourcing remains in a holding pattern, he says. Cambrex also entered the biofine category through acquisition--in 2001, the firm acquired Bio Science Contract Production, Baltimore, and Marathon Biopharmaceutical, Hopkinton, Mass. Last year, the company launched a cell-therapy contract manufacturing business. It recently signed a contract with BioHeart, a Fort Lauderdale, Fla.-based cell-therapy firm. Like Dow, Cambrex is looking to cover all the bases and remain flexible as to which technologies to apply. "The genomics and proteomics revolution has changed the nature of how we discover and design pharmaceuticals," says Dan Marshak, Cambrex' vice president and chief technology officer for biotechnology. "We focus now on target identification and target validation. Once you validate a target as a site for pharmaceutical intervention, you can design a small-molecule inhibitor, an antibody, or another type of therapy such as cell-based gene delivery." He says a client may want to approach a target using several approaches simultaneously. Ron Carroll, vice president and chief technology officer for pharmaceutical technologies, says some of Cambrex' big- pharma clients are starting to lower the sales goal for a new drug in their development efforts. "They want to go back and think about designing drugs with estimated values under half a billion dollars that are more specifically targeted." The blockbuster era has peaked, he says, and many see the industry moving toward custom therapy and drugs designed to address specific patients' genetic profiles. Avecia is also striving for a balance of large- and small-molecule offerings. "This is not the dawn of a new era of large molecules," says David Killworth, senior vice president for fine chemicals at Avecia. "The mix is not likely to change drastically. So it is in our interest to produce both large and small molecules." He says, however, that the biologics part of Avecia's business is growing much faster than small-molecule fine chemicals and that the two businesses will be roughly the same size by next year. The company's involvement in biologics dates back to work on proteins and fermentation that began in the late 1970s in Billingham, England. The company also launched work in oligonucleotides in Grangemouth, Scotland, in the early 1990s. Last year, it announced a $100 million expansion at its Advanced Biologics Center in Billingham as well as a first foray into mammalian cell biologics. Killworth says, "We are in a fortunate position in that we have already experienced a decade of growth" in large-molecule therapeutics. According to Iain Crowder, biotechnology strategy manager for Avecia, the biofine field is filling up. Fine chemicals companies face prohibitive know-how and investment barriers, and there are few good candidates for acquisition. Crowder says a major concern for developers of large-molecule therapeutics is the need to create drugs for lower cost, broad markets for chronic diseases. "The pressure is on to produce large molecules more cost-effectively--to bring the cost of goods down so you can compete with small-molecule therapies on a like-to-like basis." Markus Gemuend, Lonza's CEO and head of the firm's biologics business, agrees that serving the pharmaceutical sector will require fine chemicals companies to offer small-molecule and both microbial and mammalian cell biologics. Lonza manufactures mammalian cell biologics in Portsmouth, N.H., and in the U.K., and is currently investing $87 million in microbial fermentation capability in Visp, Switzerland. There are some concerns, however--primarily that the lack of manufacturing capacity for biopharmaceuticals will hold the sector back. Another worry is the unanticipated failure rate of biotech drugs. "We've seen some setbacks in biopharmaceuticals in 2002," Gemuend says. "Somehow the industry didn't anticipate the failure rate for biotechnology, but clearly we will see more and more of this negativity as more drugs come forward."
According to Gerben Algra, president and CEO of DSM Biologics, the interest in biopharmaceuticals stems from the specificity of activity of biotech drugs and the general trend toward attacking the root cause of disease though biology. "Decoding of the human genome will definitely accelerate product development," he says, "but in all fairness, there is still a lot to be learned about the working mechanisms of biotech products and about how the body reacts to those products." DSM entered biologics with the acquisition of Gist-brocades in 1999, and currently manufactures mammalian cell and microbial biologics in Montreal and the Netherlands. Degussa may be the last biologics holdout of the major fine chemicals companies. That may soon change. "We believe that to be a comprehensive manufacturer, Degussa Fine Chemicals may need to have access to this technology--especially mammalian cell culture," says Peter Nagler, president of the business. The firm is pursuing a partnership with--or acquisition of--a small player in biologics, he says. Talks with at least two firms fell through last year, Nagler says, and Degussa hopes to find a partner in 2003. On another front, Degussa last year consolidated the therapeutic oligonucleotides from its Proligo unit into its fine chemicals division, moving production to its Raylo division in Edmonton, Alberta. "In oligonucleotides, we are in earlier than most others and well situated," Nagler says. "A lot of these drugs come from small, biotech-oriented pharmaceutical companies, and Raylo has a lot of contacts with these companies." Nagler says the decision to pursue mammalian cell culture biologics is based partly on the greater opportunity for growth compared with small-molecule fine chemicals. "The question is whether this is a technology we will need to offer customers so that they will come to us for any kind of project," he says. "Essentially, we see it as another kind of manufacturing technology. Not a very easy one, but it is manufacturing technology, and that is where we want to be a leader. So we have to think about this portfolio enhancement." Nagler says the pharmaceutical industry is going through a period of adjusting its expectations, noting that far fewer drugs have emerged than were expected over the past three years, despite the promise that genomics, proteomics, high-throughput screening, and combinatorial chemistry would accelerate breakthroughs in drug research. Nagler thinks many in the industry are still overenthusiastic about the number of biotech drugs in the pipeline and in clinical trials. Biopharmaceuticals, he says, likely will not rise above 15% of the overall drug market any time soon. Instead, biotech research advances will direct both small- and large-drug development toward more targeted therapies and may reduce the failure rate. However, he cautions that the risks in getting involved in biologics manufacture cannot be underestimated, and that there won't be a capacity shortfall fueling growth forever. "Some biologics are being replaced with small molecules, and the manufacturing process technology for biologics is improving," he says. "In three years, yields may be much better. If all the announced investment projects in biologics come through, it will more than double the capacity we have today. There is a certain risk for overcapacity, and then the cycle begins again. But maybe that is just the normal business cycle." With the major pharmaceutical companies still at the center of the action, big changes are unlikely to happen overnight. Most industry watchers see a subtle shift toward an increased reliance on biotechnology in product development in an overall atmosphere of status quo. Some say, however, that an important milestone was reached in 2002 with the high proportion of biopharmaceutical new drug approvals. Others see the way forward as fundamentally changed. "I'm biased," Biogen's Gilman says, "but I think that going forward, biology will be the driver. My chemist friends will kill me for saying it, but biology will get you to great drugs. Not chemistry."
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