Survey: Companies Look To Novel Therapeutic Modalities For Growth
This article was originally published in The Pink Sheet Daily
Executive Summary
A broad cross section of the biopharmaceutical industry is concerned about managing the regulatory process in the geographies where they already conduct business, followed by political issues and reimbursement issues.
Nearly half of the respondents in a 254-company survey of the biopharmaceutical industry – spanning the range of company sizes and geographic locations – say they are looking to new therapeutic modalities, such as gene or stem cell therapies, as a key driver for growth.
"The Changing Biopharma Risk Equation" study
– sponsored by Merck KGaA and conducted by the Economist Intelligence Unit – found that 40% of companies in the sample consider "expansion into new products" the most important driver for growth over the next five years.
Regarding risks faced by current business, 20% cited the local regulatory environment as their primary concern, followed closely by "political/governance issues" and "ability/willingness of local payers" to buy their products.
EIU sought out a balanced sample for the survey – 31% of the participating companies were based in Europe, 30% in North America, 29% in Asia and 10% in the rest of the world. The sample was split virtually evenly between companies that earn $500m a year or less and companies with larger earnings.
The study found that many companies are looking to cutting-edge modalities, including gene and cell therapies, for expansion. Forty-eight percent said their firms either already work in these novel therapeutic areas or plan to in the near-term future.
"Therapies in this category are still largely in experimental phases and not readily available to the market," the document notes. "However, expectations of widespread adoption are at the core of many visions of personalized medicine."
New modalities was the most common growth strategy, followed by expansion into new therapeutic categories and expansion into new geographies.
Near-Term Growth Strategies
Source: Economist Intelligence Unit
While 48% of the sample already is working in new modalities or plans to, 15% say they aren't looking into cutting-edge technologies at all. Antibodies, vaccines and plasma-derived products are other modalities respondents said they were considering.
Adding Therapeutic Modalities
Source: Economist Intelligence Unit
Companies seem to be most concerned about having to address competition from gene therapies and/or stem cell products.
Disruptive technology concerns
Source: Economist Intelligence Unit
Meanwhile, regulatory hurdles, governance issues and reimbursement processes are the most common areas of concern for companies in the businesses and geographies in which they already participate.
Business Risk Concerns
Source: Economist Intelligence Unit