This is a post from Seeking Alpha's Jason Chew that makes the observation that the line between Big Pharma and Big Biotech is increasingly non-existent. I think it is basically self-evident that most Big Pharma companies have recognized that the much of the immediate future growth will come with the biological drugs rather than through small molecules. As such, there has been tremendous acquisition activity in the industry whereby Big Pharma has been swallowing up its biotech bretheren. This has been accelerated not only by the realization that biologics have a better immediate growth future but by the fact that many traditional small molecules have reached the end of their patent life and face generic competition globally.
Similarly, the Big Biotech's, like Amgen and Genetech, are seeing their initial blockbuster drugs coming to the end of their patent lives over the next few years. These drugs will increasingly face biosimilar competition globally and most of the early patent expirations already have competitive drugs waiting in the wings in clinical development.
My expectation is that a "Big Pharma" player and a "Big Biotech" won't look that different in the near term future - say next 5 years - and you likely can throw in some of the larger generic or biosimilar players like Teva as well. I think these companies will have portfolios of innovative products both large and small molecules, as well as generics and biosimilars. I think the majority of the industry will have that type of product portfolio breadth. You can probably sprinkle in some diagnostics and vaccine components as well. And, there will be a move toward personalized medicine.
An exception might be a company, like Roche to its credit, that appears to be willing to go after only innovative small and large molecules -- and in many cases still goes after blockbuster indications. But, that will be the exception and not the rule. Also, there may be more niche-type players like a Genzyme that focus their attention toward innovative products for orphan applications that may keep them out of the generics and biosimilar battles -- but of course these companies will be targetted for acquisition by Big Pharma players, like Sanofi, that will be out to build the more complete portfolio described in the paragraph above.
By and large, the industry will be made up of surviving Big Players who originated from the pharma, biotech and generics side of the fence to evolve to companies that blended products from all three models.
Posted by Bruce Lehr Jan 21st 2011.
Comments