Biotech: Form alliances to survive
03/01/2001
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by Hank Rahe
Biotechnology seems to be the pathway to deliver many of the cures for diseases that have plagued mankind. The technology has made significant contributions to healthcare by providing protein-based products from other than natural sources.
The industry profile seems to reveal two tiers of companies. The first tier includes a large number of companies with relatively few employees that tend to be the innovators or discovery force behind new products. The second tier has been able to bring products to market and is made up of large pharmaceutical companies and a few biotechnology companies that were able to work their way through the regulatory maze and launch a product.
The innovator companies are constrained by both capital and regulatory expertise to take the products through the extensive and costly gauntlet leading to approval by the Food and Drug Administration (FDA). Industry data indicates that it will take well over $500 million and eight to nine years to successfully bring a product to market. As an alternate route, smaller companies seek a partner that has the resources to continue the journey to approval once a promising compound has been identified and synthesized.
This model for bringing biotechnology products to market can be viewed as good news / bad news. The good news is that important potentially profitable products have a better chance of getting to the consumer more quickly. The bad news is that products may be discarded from consideration more quickly, leaving the chance that an important compound may be overlooked in the race for market approval. The disconcerting thing about this scenario is a number of compounds targeted for a particular medical use have been proven to be very valuable in treating another medical condition, and this secondary use will in all likelihood be missed. The biotechnology segment, because of the two-tiered structure, seems to be at highest risk for this lost potential.
Requiring companies to rigorously test compounds for safety and efficacy before approval has established the U.S. FDA as the gold standard throughout the world. Without compromising this standard and given the cost of screening and testing, is there a way to take a second look at the discarded compounds in the hope of identifying a different targeted use?
A possible solution is to align the current resources such as life-science based universities, foundations focused on improving the health of mankind and the healthcare industry into an alliance, which, if properly focused, could bring a powerful force to bear on developing new products from discarded compounds. Each of the partners has essential resources to accomplish the objective.
The life-science based universities have the resources of research-based facilities supported by a student population interested in gaining experience and, in some cases, facilities. The foundations have funding focused toward improving the health and safety of mankind. The healthcare industry has created the front-end work on the compounds and has developed limited knowledge, which will jump-start the screening.
This type of alliance would create a win- win situation for all parties. The universities would gain financially by grants from the foundations, the sale of the compound and enhanced reputations as important academic institutions. An arrangement could be made to give companies that contribute the compounds first rights to buy them back. The foundations would gain by improved return on their goals, and healthcare companies would gain from additional research resources and ultimately bring more products to market.
Hank Rahe is director of technology at Contain-Tech in Indianapolis. He has over 30 years' experience in the healthcare industry, as well as four years in academia. He is an expert in the areas of conventional and advanced aseptic processing. He is the past chairman of the board of the International Society of Pharmaceutical Engineers, and is a member of the CleanRooms Editorial Advisory Board.