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Biotech Bucks the Market Trend

Innovation in Pharmacology in the form of Unbelievably Expensive Biopharmaceuticals

Beginning in the late 1970s, biopharmaceuticals were being researched for conceptual production in those places once called academic institutions, and conducted basic research to identify new product candidates and applied a great amount of research. The same protocol is applied with biopharmaceutical companies today as it was then.
The first biopharmaceutical ever was synthetic insulin called Humulin made by Genetech in 1982, that utilizing what is called rDNA technology, which also is used to produce human growth hormones. Later the rights were sold to Eli Lilly for this insulin.
Biopharmaceuticals are distant and covert relatives of big pharmaceuticals, whose products are typically small molecule and carbon based in their design. Due to the lack of innovation and creation of truly unique products, large pharmaceutical corporations in particular have become intimate with the innovative biopharmaceutical companies more often now than ever. In fact, large pharmaceutical companies often acquire biopharmaceutical companies. These large pharmaceuticals do this because of the unlikely possibility that biopharmaceuticals will have generic products with therapeutic equivalents for some time. In addition, biopharmaceutical companies have historically been and experienced accelerated growth that has proven to be quite lucrative for them.
How do these drugs differ from typical drugs that have been made before this advent of biopharmaceuticals? Unlike the small molecule, synthetic, carbon based pharmaceuticals of yesterday, biopharmaceuticals, classified under what is called Red biotechnology due to this being a medical process in the biotechnology world, essentially are larger and very complex modified proteins derived from living biological materials that vary depending on what medication will be manufactured and for what disease state. In fact, it is difficult to identify the clinically active component of a biopharmaceutical drug, which is why there is no pathway for generic copies of such drugs, as it would require expensive and meticulous clinical trial processes. Yet recently, a company called Insmed demonstrated bioequivalence to Amgen’s Nupogen that increases white blood cells. While there still is no defined pathway for follow-on biologics, this study demonstrated that another biologic drug can show that it is therapeutically equivalent. Insmed’s drug in this study will not be available for marketing until next year or later, though. Amgen recently had to pay a settlement to JNJ, who makes an identical drug called Procrit, for rebates and incentives Amgen was giving Oncologists for using Nupogen, and this will be addressed later.
Also, a transformed host cell is developed to synthesize this protein that is altered and then inserted into a selected cell line. The master cell banks, like fingerprints, are each unique and cannot be accurately duplicated, which is why there are no generic biopharmaceuticals as of yet, as there is no known process to create them. So the altered molecules are then cultured to produce the desired protein for the eventual biopharmaceutical product. These proteins are very complex and are manufactured from living organisms and material chosen for whatever biopharmaceutical that may be desired to be created. It is difficult to identify the clinically active component of biopharmaceutical drugs. So manufacturing biopharmaceuticals clearly is a different and innovative process, and a small manufacturing change could and has raised safety issues of a particular biopharmaceutical in the developing process. Also, it takes about 5 years to manufacture a biopharmaceutical. And each class has a different method of production and alteration of life forms to create what the company intends to develop. Yet overall, their development methods are rather effective.
Over 20 biopharmaceutical drugs were approved in 2005, I believe, and their growth tripled of what large pharmaceuticals experienced then. Also, just last year, biopharmaceutical companies made close to 80 billion in sales as well. Presently, over 20 biopharmaceutical products are blockbusters by definition. They are overall very effective treatments for what are viewed as very difficult diseases to manage. This is due to the fact that some pharmaceutical products target specific etiologies of these diseases, while limiting side effects because of the specific way in which such products work.
Unlike traditional medications that have been created in the same way for decades, biopharmaceutical companies seek through their research specific disease targets by genetic analysis and then search for a way to manipulate this target in a very specific way to provide superior treatment for such patients. Furthermore, these products are biologically synthesized and manipulated to maximize their efficacy while not crossing into a patient’s bloodstream.
There are about a dozen f different classes or mechanisms of action of biopharmaceuticals that have about a half of dozen different types of uses today. Often, Label alterations for additional disease states occurs often as well due to the progressive and novel effectiveness of biopharmaceuticals. Some of these drugs are catalysts for apoptosis of tumor cells. Others may cause angiogenesis to occur to block blood supply to the tumors of cancer patients. Then some biopharmaceuticals have multiple modes of action that benefit certain patient types and their diseases greatly, as with most biopharmaceutical products, the safety and efficacy is evident and reinforced with clinical data and eventual experience with the biopharmaceutical that is chosen to be utilized. And this clinical data is of a different method as well in comparison with what are traditional medications. For example, patients in the clinical trial involving a pharmaceutical are profiled, which allows better interpretation of this clinical data on their products.
Some biopharmaceuticals appear to be more noteworthy than others, such as Enbrel, which was originally created for the many forms of RA, which is a devastating form of arthritis that is caused by the patient’s own immune system attacking them to manifest this disease.
At one point, demand exceeded supply for Embrel, as the efficacy and safety was evident and unexpected by its manufacture. As a result of both doctors and affected patients seeking this drug, there were anticipated to be over 1000 patients on a waiting list for Enbrel for several weeks.
Enbrel was approved in 1998 and was developed from what are called monoclonal antibiodies, which is one of several ways in which biopharmaceuticals are produced. In fact, some call the 1990s overall the biopharmaceutical decade.
Partnering of biopharmaceutical companies and larger pharmaceutical companies began during this time as well, if not being acquired by large pharmaceutical companies. Needless to say, large corporate pharmaceutical companies have a very high affinity for potential blockbusters.
The country of Belgium provides the most biotech products to the biopharmaceutical companies in the United States, and the U.S. leads the world in regards to biopharmaceutical product creation- with more than 70 percent of both revenues and research and development expenditures in this country. Canada is ranked number two in this area, others have said.
Some biopharmaceutical drugs are more profitable than others as well. Biopharmaceuticals compose around 10 percent of the pharmaceutical market presently, I understand. And with the government health care programs who are the largest U.S. payers for pharmaceuticals, Medicare pays 80 percent of the cost of biopharmaceuticals, as many are administered in the doctor’s office.
One other controversial, yet profitable biopharmaceutical class is known as EPOs. The two that are available are actually identical, yet have different names of Procrit and Epogen. Both are indicated for anemia that is experienced in patients on dialysis or who have cancer in particular. Doctors are monetarily incentivized to exceed dosing requirements of these agents for their anemic patients. When this happens, it potentially causes premature deaths as well as accelerating the progression of cancer patients placed on one of these meds. Once this tactic was exposed, there are now limitations regarding the amounts authorized to be given to particular patients placed on these EPOs. They are in the class of hormone biopharmaceutical drugs, which is another type of several classes of biopharmaceuticals, and they reduce the need for blood transfusions as they increase RBC proliferation safely and effectively if dosed properly.
Another controversy involving biopharmaceuticals is that, while they overall are very efficacious and safe, the typical cost of biopharmaceuticals is rather unbelievable, as the cost approaches 10 thousand dollars a year for many of them. F urthermore, with cancer drugs, they are used together with chemotherapy for their treatment regimens, so others have argued the limite improvement in the quality of life of some patients on biopharmaceuticals, considering the devastating side effects of chemo treatment. Another criticism of biopharmaceuticals is that, with cancer patients in particular, they normally provide an extension of their life of only a few months.
Several years ago, I saw Roy Vagelos, former CEO of Merck Pharmaceuticals, and heard him speak to others at Washington University in St. Louis about his views on medicines. And during his presentation, he stated something similar regarding the cost of biopharmaceuticals and asked as well about whether or not the value related to the cost of biopharmaceuticals is truly clinically beneficial for such a brief life extension of cancer patients in particular, for the most part.
An issue or issues are always associated with new paradigms and innovations. Yet there are only a few biopharmaceuticals out of many available with debatable benefits with the high price tag. It ends up being what the market will bear for what their makers charge others. Yet the real question is the clinical evidence behind biopharmaceuticals: If a biopharmaceutical stops tumor progression without harming such patients is clearly both safe and effective.
Another difference with biopharmaceuticals is that they are also regulated by what is called The Public Service Act, and are involved in authorizing the marketing of biopharmaceuticals.
Safety protocols regarding biopharmaceuticals are a mystery to me as well. What is known is that biopharmaceuticals have the potential to discover therapies to treat the cause of a particular disease state instead of treating such a disease only symptomatically. They set out to solve unmet clinical needs by science that has yet to be proven. Biopharmaceuticals save, enhance, and extend the quality of life of patients with terrible diseases, and over 250 million people have benefited from their products.
Yet presently, few biopharmaceutical companies are actually profitable. Also, with biopharmaceuticals, some years are better than others from a revenue and market share growth point of view. Yet like any business, some years are better than others, and biopharmaceuticals are anticipated to offer quite a bit to public health in the future, with a focus on cancer patients in particular.
The cost of developing a biopharmaceutical exceeds a billion dollars, with about a third actually making it to market. The market size of biopharmaceuticals is rapidly approaching 100 billion dollars a year, with average annual growth between 10 and 20 percent.
With cancer biopharmaceuticals, between70and 80 percent of them are believed to be prescribed off-label, so it will be interesting on how these drugs will be used in such disease states now and in the future.
So the future looks good for this industry, as biologics have tremendous marketing power along with superior therapeutic value.
Regardless of the challenges and flaws that exist with biopharmaceuticals and their makers, I’m pleased to see the results and realization of true innovation in pharmacology by taking a different path of drug development. Furthermore, I believe others should behave in a similar manner and be inspired by the biopharmaceutical companies and what they have done and continue to do for the benefit of patients regarding the issue of innovation.
“The progressive development of man is vitally dependent on invention.” --- N. Tesla
Dan Abshear (what has been written is based upon information and belief)

Celgene Corp. Q1 2008 Earnings Call Transcript

Some statements follow from a layperson from both a clinical and financial paradigm, who has a fascination with biopharmaceuticals, so what is said is only what I believe or understand:

Celgene may be one of the top ten biopharmaceutical companies in existence out of 200 companies or so, and one of the few that are actually profitable.

Thalmide is the comeback drug of all drugs considering its history, yet proved itself to be an asset in the onconology. More importantly, Revlimid was approved a couple of years ago and is a cleaner drug than thalmide. Revlimid is a immunomodulating drug that has many mechanisms of action that delay the progression of multiple myeloma and in some cases, remission occurs when patients take this medication. A deadly hematological cancer, about one third of all cases can advance to leukemia from multiple myeloma. Revliid stops the spread of myeloma for several months, and is highly active against the many etiologies and aspects of this disease state, along with being highly efficacious and safe for use, and this has been proven often. Revlinid increases the survival and response rates to ensure durable disease control for appropriate patients. Doctors adapted and contine to adopt to Revlinid rather quickly because of the clinical data behind the drug that has continuously proven it to be very safe and efficacious compared with previous treatment options available. For anemia, most patients on Revlimid achieve independence from transfusions during treatment with this medication. Not bad or being an analogue of Thalmide.

Pts. on Revlimid has improved complete response rates due to the drug being a powerful angiogenesis inhibitor and catalyst of apoptosis in regards to tumor destruction. More incredibly compelling traits of this drug is that it inhibits TNF and continued cancer cell growth, while simulating the production of T-cells, interleukin, and interferon, as well as being an excellent cytogenic remitting agent as well, all of which benefit a patient who has a cancer of this nature.

Revlimid is approaching 2 billion annual sales due to the preferred agent for the diseases for which it treats, with Velcade being the only competitor, and not much of one at that. Celgene's pipeline is interesting as well.

Celgene is one of the most richly valued biopharmaceutical companies relative to it's earnings. The company remains independent, and finally, Celgene puts 2 to 3 times as much revenue in thie research and development than other drug makers, which is 30 to 40 percent of thier annual revenue. Thier innovation is obvious, and acquisitions appropriate. I'm sure haematolgists would concur with much of what has been written. Pt's actually get thier money's worth with this agent.