And this article lends support to GZTC (as well as BGEN with its surplus capacity and excellent manufacturing track record). So maybe I was wrong in not getting back into GZTC during its weakness...
Thursday June 7, 9:28 am Eastern Time
Press Release
Shortfall in Therapeutic Protein Manufacturing Capacity Could Threaten Biotech Development, Experts at Arthur D. Little Warn
Shortage could severely impact pharmaceutical industry's ability to produce drugs
CAMBRIDGE, Mass.--(BUSINESS WIRE)--June 7, 2001-- Biopharmaceutical companies may fall victim to their own success and face critical shortages in protein manufacturing capacity, according to experts from Arthur D. Little's Health Industries Practice. This shortfall comes at a time when industry players are looking to capitalize on a very robust late-stage biopharmaceutical pipeline.
``The growth of the biopharmaceutical market is going to create critical shortages in some areas of protein manufacturing capacity, with severe consequences for pharmaceutical companies' ability to deliver products and meet rising market expectations,'' said Roland Andersson, head of Arthur D. Little's North America Health Industries Practice.
As a result, pharmaceutical companies may have to become more actively involved in the production and manufacture of vital proteins, Arthur D. Little experts said. Arthur D. Little estimates that meeting industry cell-culture production requirements will demand more than $5 billion in capital.
``The manufacturing decision is crucial to a stake in the large-molecule game and it's simply no longer possible to ignore large molecules,'' said Andersson. ``Given the need to maximize access to the available clinical candidates, drug companies could well find protein manufacturing a requirement not simply for success, but for mere independence.''
According to Richard Mynahan, a manager in Arthur D. Little's Health Industries Practice, ``growing pressure for protein production capacity will strengthen the bargaining position of contract manufacturing organizations and make alternative production platforms such as transgenic protein production more attractive.''
These projections by Andersson and Mynahan were published in an article titled ``The Protein Production Challenge,'' in the just-released May 2001 issue of ``IN VIVO: The Business & Medicine Report,'' a Windhover Information publication. Arthur D. Little estimates that while the pharmaceutical industry will grow 7 to 8 percent annually over the next five years, the therapeutic protein segment will reach up to 15 percent growth annually over the same period of time due to a strong pipeline of protein-based drugs. Because Big Pharma did not fully anticipate this shift, many of these protein products in areas such as oncology, immunology, and cardiovascular and infectious diseases are being discovered and developed primarily by biotech companies.
``Big Pharma and investors were caught unawares because the success of protein drugs has been relatively sudden, at least in pharmaceutical terms,'' said Mynahan. ``Five years ago, when much of the current later-stage pipeline was being established, few of the products now reaping such huge rewards were predicted to be worth anything like what they've become.''
At the root of the production gap is monoclonal antibodies (MAbs), a class of therapeutic proteins that have been proven particularly effective in recent years. MAbs are used primarily for chronic diseases, often in high doses. Recent market success of MAbs--such as Remicade by Johnson & Johnson's Centocor Inc., directed at rheumatoid arthritis and Chron's disease--have stretched production resources. Today's capacity limitations, however, are mild compared to the projected need based on the industry's existing pipeline. According to Arthur D. Little, there are approximately 270 MAb products in the pipeline. Using standard clinical success rates, this pipeline could yield 50 to 60 product approvals in the next 6 to 7 years.
``The industry will need a six-fold increase in cell culture capacity as pipeline products reach commercialization,'' said Andersson.
Arthur D. Little (www.adl.com) is one of the world's premier management and technology consulting firms, with offices and laboratories in more than 30 countries around the world. Drawing on its unique blend of knowledge and hands-on experience across industries, the firm collaborates with its clients to develop significant breakthroughs in practices, products, and processes that lead to dramatic growth, innovation, and the creation of new value. In the health industries arena, ADL works with leading global pharmaceutical, biotechnology, and medical technology companies to achieve breakthrough results.
``IN VIVO: The Business & Medicine Report'' is published by Windhover Information (www.windhover.com), which is dedicated to providing superior analysis and commentary on health care market trends, company strategy, emerging technologies, dealmaking, and key industry events. Reaching senior executives and top industry observers around the world, Windhover's products and services include trade journals, annual reference guides, web & desktop databases, and a full range of industry conferences. Windhover's expertise spans the pharmaceutical, biotech, medical device and equipment, hospital supply, and in vitro diagnostics industries.
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Contact:
The Rasky/Baerlein Group
Amy Seigenthaler, 202-530-7704
aseigenthaler@rasky.com |
