Emerging Business Models in the Pharmaceutical Industries ...

Long Term Strategies - Biotech and Genomics
Key Developments in Biotech
Only 26 new molecular entities were launched on the world
market in 2003, and this was preceded by equally
disappointing results in 2002 and 2001. Allergan has applied
FDA approval for the treatment of neuropathic pain,
triggering a milestone payment to Acadia. Currently, the
leading treatment for neuropathic pain is Neurontin, which
had worldwide sales of approximately $3 billion in 2003.
Iconix Pharmaceuticals, a Silicon Valley company, is helping
Bristol-Myers Squibb, Abbott Laboratories, and Eli Lilly to
develop drugs. It has signed a $24 million contract with
Bristol-Myers, a company that spends about $2 billion a year
on research and development. Development costs for a new
drug range between $800 million and $1 billion including all
failed attempts. Nine out of 10 new drugs fail in human
clinical trials and Iconix helps drug companies better predict
the fate of drugs being developed.
Amgen, one of the world's largest biotechnology companies,
recently announced the formation of Amgen Ventures, a
corporate venture capital fund designed to provide emerging
biotechnology companies with resources to develop
pioneering discoveries focussed on human therapeutics.
Biogen Idec and Elan Corporation have announced that the
U.S. Food and Drug Administration (FDA) has approved
TYSABRI ® (natalizumab), previously called ANTEGREN ® ,
as a treatment to reduce the frequency of clinical relapses
of multiple sclerosis (MS). Other important biotech
companies are Genzyme, Gilead Sciences, Celgene,
Sepracor and Cephalon.
R&D Expenses of Biotech Companies
The small biotech companies account for 2/3 of the total
industry’s clinical pipeline. The percentage of R&D
expense to revenues in case of biotech companies is three
times higher than the percentage expense in the pharma
industry.
Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 25