Biotech Set to Dominate Drug Industry Growth

Despite some recent setbacks for Avastin’s (RHHBY.PK) life cycle management, the cancer antibody is still set to be the industry’s biggest-selling drug in 2014 with revenues of $9.23bn, according to latest consensus forecasts from EvaluatePharma.

The fact that a biotech product will assume Lipitor’s (PFE) crown in 2012, after the cholesterol-lowering drug phenomenon goes off patent, is indicative of the increasing dominance of biotech products, and specifically cancer antibodies; seven of the top 10 drugs in 2014 are forecast to be biotech in origin, compared to five in 2008 and just one in 2000 (see tables below).

In addition, recent analysis by EvaluatePharma (World Preview 2014) reveals that biotech drugs will account for 50% of the top 100 drugs in 2014, compared to just 28% last year and 11% in 2000. Although the patent life for the majority of these blockbuster biotech products extends well beyond the current patent cliff for conventional drugs, these facts illustrate the huge significance of the ongoing debate over a regulatory pathway for bio-similars in the US.

Increasing dominance of antibodies

Not only will there be a dominance of biotech products in 2014, the fact that all of the top six best-selling drugs will be biotech illustrates the importance of these products as growth drivers for the industry as it faces its biggest challenge to date, given the scale of the small molecule patent cliff (Vantage Point - boom time for generics as patent cliff looms large, May 18, 2009).

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Just behind Avastin, and rapidly closing the gap, is Abbott’s (ABT) anti-rheumatic antibody, Humira, with forecast sales of $9.13bn in 2014. With analysts yet to fully assess the full impact of Avastin’s setback for adjuvant use in colon cancer, Humira could yet steal the number one spot.

Five of the top ten drugs in 2014 will be antibodies, three of which are specifically anti-cancer agents, illustrating the importance of this technology to the industry, which is only now bearing the fruits of decades of hard work which for the most part generated limited success.

Anti-cancer antibodies appear set to easily become the most valuable therapeutic class of drug, justifying a large proportion of Roche’s recent move to acquire Genentech outright.

In contrast, last year four of the top five spots were held by small molecule drugs, dominated by Lipitor with sales of $13.5bn. Avastin only just made it into the league table in tenth place.

To complete the picture and emphasise the dramatic switch in value from small molecule to biotech drug, in 2000 Amgen’s (AMGN) erythropoietin agent, Epogen, was the only biotech product to make it into the top ten. The table in 2000 also reflects the dominance of cholesterol-lowering agents at the time, occupying three of the top six places.

The following table summarises some of the data in EvaluatePharma’s World Preview 2014 report, illustrating how biotech products are rapidly closing the gap on small molecule drugs.

Although the higher value products are seeing a dramatic shift towards biotech, the data also illustrates that in overall value terms, small molecule drugs will still represent the bulk of the pharmaceutical market, generating revenues of $406bn in 2014, compared to $169bn for biotech products.

Nevertheless, the weight of evidence for a shift to biotech products as the industry’s growth driver is overwhelming, making the recent moves by big pharma to access biotech platforms, not only for generating innovative medicines but also to launch bio-similar products, all the more compelling.

Disclosure: no position