Evolving World of Pharma: Demand for biologics is predicted to grow at 10% per year over the next 4-5 years

As biopharmaceuticals continue to grow at a rapid pace, a number of trends are impacting industry. Also known as biologic(al) medical products, or ‘large molecules’, the biopharma sector encompasses drug products that are manufactured in, extracted from, or semi-synthesized from biological sources. Demand for biologics is predicted to grow at 10% per year over the next four to five years, as more pharma and biopharma companies see these products as an increasingly important part of their portfolios. According to this year’s CPhI Annual Report, some of the hottest topics in 2019 have included cell and gene therapy, biosimilars, intensified bioprocessing and contract biomanufacturing.

At the moment, the majority of biomanufacturing capacity is innovator-based, rather than CMO-based. However, as more small biotech companies enter the sector, without the resources needed to build the necessary facilities, there will be a reliance on CMOs who have mature supply chains and the capacity for production of these therapeutics. According to the CPhI Annual Report, North America currently has the greatest percentage of installed capacity, but Asia and Europe have seen a surge in installations. Europe has been predicted to surpass the USA in biomanufacturing capacity by 2023, and growth in China’s capacity has been particularly impressive in the past decade. In fact, China’s biopharma service sector has been growing at a compound annual growth rate (CAGR) of 30% and is poised to surge to $1.4 billion by 2021. Biomanufacturers in China are orienting themselves to be major players in the game.

This was reflected in recent news (November 2019) that GE Healthcare Life Sciences and Akeso Pharmaceuticals, a Chinese biotech company specializing in the development and commercialization of novel biologics, plan to speed up biomanufacturing with a new facility in Guangzhou, China. It is designed for the efficient and cost-effective manufacture of recombinant biologics. The facility, which is expected to be operational by the end of 2020, will be configured with four 2000L bioreactors to support the production of therapeutic antibodies, and will support the company’s aim to expand its operations to large-scale biomanufacturing.

While flow chemistry is intensifying the processing of small molecules, within the biopharma space ‘intensified processing’ refers to any steps that accelerate a biomanufacturing process. The production of biologics typically follows a two-step process: first, the microorganisms produce the molecules of interest, then those molecules are purified from the growth medium, cells, viruses and other impurities. This can be hastened with the use of specialized bioreactors that permit continuous harvesting, for example, or with innovative chromatographic separations that enable faster purification. Several technologies are in development – the challenge often lies in scaling the technology for manufacturing volumes. As biomanufacturing becomes more efficient, the overall cost of production should potentially begin to fall.

Economic pressure from biosimilars will also push biomanufacturers towards lower costs. Often compared with generics in the small molecule sector, these products are less expensive than their original counterparts and are claimed to offer greater patient access to innovative healthcare. The regulatory and economic climates in Europe, in particular, are driving an uptake of biosimilars in many countries. The UK’s National Health Service (NHS) has calculated a saving of $45 per day for the use of biosimilars (compared with a saving of $2 per day for the use of generic pharmaceuticals), demonstrating the significant savings that can be made with the use of these products.

This opens considerable market opportunities for companies developing and producing biosimilars. More than 30 biologics lost patent protection in 2015 and are open for biosimilar development. As manufacturing and regulatory challenges with biosimilars have been overcome in recent years, the main hurdles to wider access are now patent walls and litigation.

While therapies such as recombinant proteins led the charge in biopharma, cell and gene therapy has been described as the “hottest ticket in biopharma town” (Michiel E. Ultee, Ulteemit BioConsulting; CPhI Annual Report). Following recent approvals for cancer and rare-disease therapies, R&D in this area has peaked and manufacturing facilities are in great demand. However, a lack of cell and gene expertise is causing potential issues in the progress of many novel therapies. CDMOs and small biotechs with expertise in this field are therefore in great demand, meaning they can charge premium rates for these services right now.

In conclusion, the development and manufacturing of biologics has shown rapid advancement in recent years – both in technological innovations and volume capacities. New therapies such as cell and gene therapies are like to dominate R&D efforts in the near future, while obstacles to biosimilars are quickly diminishing, with likely consequences on costs for the entire sector.

Author biography

Sarah Harding, PhD

Sarah Harding worked as a medical writer and consultant in the pharmaceutical industry for 15 years, for the last 10 years of which she owned and ran her own medical communications agency that provided a range of services to blue-chip Pharma companies. In 2016, she began a new career in publishing as Editor of Speciality Chemicals Magazine, and has more recently taken up the role of Editorial Director at Chemicals Knowledge. She continues to also provide independent writing and consultancy services to the pharmaceutical and speciality chemicals industry.

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