Biologics set to dominate – but will Canada participate?

---

By Brad Thompson

According to some expert forecasters, in five years, six of the top ten drugs will be biologics. The top seller is predicted to be Roche’s cancer antibody Avastin, which is expected to bring in USD $9.2 billion in annual sales. Close behind will be Abbott and Eisai’s Humira, a rheumatoid arthritis medicine, with estimated sales at $9.1 billion.
The report, by EvaluatePharma, underlines how critical it is for Big Pharma to invest in biotechnology now, and particularly in biologics. Setting aside for a moment the all-important quality of life and extension of life to patients, the economic impact of the successful commercialization of new drugs is staggering. One blockbuster drug provides thousands of high quality jobs in manufacturing, packaging, shipping, sales and providing the drug to the end user – the patient. The revenue from blockbuster drugs also provides the bulk of the research and development dollars required to explore additional drug candidates that may further improve the lives of patients.
But for emerging companies, whose funding has traditionally been provided by the capital markets, the outlook is grim. The recession is taking a heavy toll on those companies seeking capital to commercialize promising scientific discoveries. In an updated survey of Canada’s emerging biotechnology companies, BIOTECanada estimated that 70 per cent of companies will be out of cash and unable to continue their current research programs within one year. These companies are preserving their cash by reducing highly skilled staff and ending promising programs.
More than 2,500 researchers and scientists have already been laid off, and that number is expected to grow to 7,000 permanent cuts by the end of 2009, if short term financing cannot be obtained to bridge companies until the investment market returns to more normal levels. These are layoffs of highly educated scientists, researchers and entrepreneurs in the fields of agriculture, medical innovation, renewable energy production and industry research. If Canada loses its international foothold in this sector, it may be unable to retain or rebuilt this talent over the long-term. The impact of these losses to Canada’s long-term economic health cannot be understated.
The international Organisation for Economic Co-operation and Development (OECD) forecasts that biotech will be the main source of new medical treatments within the next 10 years, providing one new drug or treatment per year, and will be an increasingly important source for chemical, plastics and energy production. But will Canada play a role in this critical sector?
By 2014, it is expected that not only will biotech dominate the top ten drugs in terms of revenue, but half of the top 100 drugs as well.
Other developed nations, keenly aware of the contribution biotechnology companies can make to the economy, have demonstrated deep commitment to their industries through a variety of assistance programs. In the U.S., the U.K., Israel, Australia, and Norway, governments have announced immediate, multi-billion dollar loan and assistance programs to protect and further develop their biotechnology industries.
While Canada argues over the relative merits of tax credits and other mechanisms poorly suited to supporting the biotechnology industry, our best minds are receiving opportunities to practice their professions in other countries. Peter Brenders, the president and CEO of BIOTECanada, says Canada is effectively giving away its research to other countries, countries which will gladly capitalize on the potential of our research.
The capital markets will eventually recover, but I’m not certain the same can be said for our biotechnology industry. The key to ensuring the survival of the biotechnology sector lies in developing short and long term economic recovery strategies that make sense for our unique industry.