The Winner’s Curse
Most of us mix up the meaning of Biotech and Pharma since both do pretty much the same thing, invent new drugs. We tend to use Pharma to describe the FIDDCO, i.e. a fully integrated Drug Discovery and Development Company, whereas Biotech companies are more likely to be emergent and on some pathway towards full integration, driven by their own research. But as I remember it, Biotech was originally used to describe the new “big molecule” companies inspired by the early success of Amgen and Genentech from inventing protein drugs. However, when this early success was hard to reproduce, most biotechs stuck to the small classical organic molecules which still dominate clinical practice. This is now changing, as the majors move to acquire or develop a protein drug component for their pipelines. Some argue that we are likely to see protein drugs as 50% of Pharma pipelines, indeed with the acquisitions of CAT and Medimmune, AstraZeneca now has 27% of its current pipeline as proteins and that’s a big change for a company that grew out of manufacturing paints and dyestuffs.
Why is this happening now? No doubt the science has improved and people have gained much more experience in the technologies required to develop and manufacture proteins to the demanding standards required of a new drug, but there are also significant commercial drivers, proteins are expensive and the technology barrier to cloning by generics is higher.
If this continues there will be big changes coming …
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