The State of the Biotechnology Industry Today
Biotechnology can be defined as the use of living organisms (such as bacteria), biological processes or biological systems in order to create a desired end result or end product for human benefit. Primary markets for biotechnology include: 1) Agriculture, where genetically-modified seeds are now in wide use in many nations. These seeds deliver plants that have much higher crop yields per acre, and often have qualities such as disease-resistance and drought-resistance. 2) The manufacture of enzymes, including enzymes used in food processing and in converting organic matter into ethanol for fuel. 3) Pharmaceuticals, where biotechnology creates antibodies, interleukins and vaccines based on living organisms (as opposed to the chemical compounds that make up traditional drugs) that are able to target specific cell types, often with dramatic results and fewer side effects.
Biotechnology is a modern word that describes a very old science. For example, bio-enzymes have always been essential in the production of cheese. The modern difference is that much of the world’s cheese production today utilizes a bio-engineered version of an enzyme called microbial chymosin. This chymosin is made by cloning natural genes into useful bacteria. Another example: For thousands of years, mankind has used naturally-occurring microbes to convert fruit juices into wine.
Analysts at global accounting firm Ernst & Young estimate global biotech industry revenues for publicly-held companies at $98.8 billion for 2013, including U.S.-based companies at $71.9 billion for the year. Genetically-engineered drugs, or “biotech” drugs, represent an estimated 10% of the total global prescription drugs market. The U.S. Centers for Medicare & Medicaid Services (CMS) forecast called for prescription drug purchases in the U.S. to total about $275.9 billion during 2014, representing about $900 per capita. That projected total is up from only $200 billion in 2005 and a mere $40 billion in 1990.
Estimates of the size of the drugs market vary by source, but it is generally accepted that the global prescription drugs market was more than $1 trillion in 2014. By 2022, American drug purchases may top $450 billion, according to the CMS, thanks to a rapidly aging U.S. population, increased access to insurance and the continued introduction of expensive new drugs.
Advanced generations of drugs developed through biotechnology continue to enter the marketplace. The results may be very promising for patients, as a technology-driven tipping point of medical care is approaching, where drugs that target specific genes and proteins may eventually become widespread. However, it continues to be difficult and expensive to introduce a new drug in the U.S. According to FDA figures, 39 new molecular entities (NMEs) and new biotech drugs (BLAs) were approved in the U.S. during calendar 2012, but that number plummeted to only 27 during 2013.
A total of 41 NMEs and BLAs were approved during 2014 by the FDA.
These NMEs are novel, new active substances that are categorized differently from “NDAs” or New Drug Applications. NDAs may seek approval for drugs based on combinations of substances that have been approved in the past. Also, a large number of generic drug applications are being approved each year. That is, an application to manufacture a drug that was created as a brand name at another firm, and has now lost its patent so that competing firms may seek FDA approval to manufacture it.
New Drug Application Categories
Applications for drug approval by the FDA fall under the following categories:
BLA (Biologics License Application): An application for approval of a drug synthesized from living organisms. That is, they are drugs created using biotechnology. Such drugs are sometimes referred to as biopharmaceuticals.
NME (New Molecular Entity): A new chemical compound that has never before been approved for marketing in any form in the U.S.
NDA (New Drug Application): An application requesting FDA approval, after completion of the all-important Phase III Clinical Trials, to market a new drug for human use in the U.S. The drug may contain active ingredients that were previously approved by the FDA.
Biosimilars (generic biotech drugs): A term used to describe generic versions of drugs that have been created using biotechnology. Because biotech drugs (“biologics”) are made from living cells, a generic version of a drug may not be biochemically identical to the original branded version of the drug. Consequently, they are described as “biosimilars” or “follow-on biologics” to set them apart.
In Europe, their manufacture and sale has been allowed for some time under special guidelines. In February 2012, the FDA created guidelines for biosimilars in the U.S. Manufacturers will now be able to rely to a large extent on the clinical trials research previously conducted by the maker of the original version of the drug. In early 2015, a Sandoz International biosimilar (a generic version of Amgen’s popular Neupogen) received approval from a vital FDA committee and was on track to become the first biosimilar to hit the U.S. market.
Priority Reviews: The FDA places some drug applications that appear to promise “significant improvements” over existing drugs for priority approval, with a goal of returning approval within six months.
Accelerated Approval: A process at the FDA for reducing the clinical trial length for drugs designed for certain serious or life-threatening diseases.
Fast Track Development: An enhanced process for rapid approval of drugs that treat certain life-threatening or extremely serious conditions. Fast Track is independent of Priority Review and Accelerated Approval.
Video Introduction to Biotechnology, Drugs & Genetics Industry