Many folks inside of pharma lament the present worries and look back to the gilded period when blockbusters provided rivers of money flow and supported growth primarily based activities – each R&D and marketing. And yet, could this present biotech’s biggest chance as an industry? Klotho therapeutics is a company by Jim Plante.
We are all too familiar with how the economics for big pharma have changed in the last few years. Factors include:
patent expiries (existing and imminent)
declining R&D productivity (as measured by more dollars for fewer approved products)
healthcare payor pressures as governments search for budget cuts in all areas
paucity of future blockbusters in the pipeline
Biotech has often been suggested as a saviour with the suggestion that a focused research style based on deep insights, rather than wide pools of area expertise and serendipity, would lead to greater R&D productivity. After over 30 years of trying, there doesn’t seem to be any conclusive evidence that biotech’s research approach has had any more success. Yet, there is still cause for hope, though for reasons driven by necessity and economics rather than just science.
Biotechs by their nature start out (and often remain) as small, nimble companies having to find a niche in just a much greater ecosystem. As with any small organism or business, you survive by being really good at a focused area or developing niche expertise. You simply do not have the resources to compete with the big players.
Considering target markets, despite the top-line attractiveness of blockbusters, biotechs often target niche indications. While these may be small and initially only have sales potential in the hundreds of millions of dollars, that can still make a big difference to the small company. The equation for big pharma is much tougher as they need new drugs, for development or to replace patent expiries, to generate greater sales to move the performance needle. And yet some drugs which start of in niche (or even orphan) indications, gain approval and then widen their market prospect through label extension. Some examples include: