In my 15-year industry tenure, I have seen rapid market shifts within the Pharma and Biotech segment, sometimes stemming from even a trigger point event. What motivates me to write this blog, however, is more than my industry experience. As a professional who is passionate about drug development, a woman, and a mother of two, I want to impact the world by helping to save more lives, and to make more treatment options available to the patients. I strongly believe in the potential of emerging biopharma companies to get us there.
No company should be left behind. Yet, this has been the norm for small innovative companies impacted by the changing market landscape. Emerging biopharma companies continue to deliver innovations driving positive shifts in the market, operating with a visionary mindset and determined to make an impact on patients. While these companies are the ‘engines’ behind discoveries, they constantly battle barriers to keep the innovation running.
Even when things were going great…
From the first mRNA vaccine to the first allogeneic cell therapy (1,2) to new 3D tools or to study the genome, small companies have driven material changes within the biotech industry ultimately improving patient lives. These crucial contributors should be celebrated for delivering disruptive technologies but also for surviving within a landscape that doesn’t offer adequate support to progress their innovation to impactful outcomes.
Health is better than wealth. Or is it? From 2019 to 2021, over 3,200 mergers and acquisitions have occurred fueling growth within the therapeutic development, most notably lifting small companies (3). While this may sound as a positive driver on a surface level, it illustrates an undesirable competitive dynamic that ties the promise of the cure almost singularly to its financial health. Let’s imagine a scenario if these deals hadn’t happened? Would these promising cures still make it or will they phase into the noise despite their life-changing potential? How many potential cures were withdrawn due to lack of funding versus therapeutic ineffectiveness? The market prioritization matrix rebalances the focus on funding rather than the cure, a trend that underserves to expand promising clinical options for patients.
It takes a village to raise a child. A clinical asset in its infancy needs the right infrastructure, i.e. the village, behind it for it to successfully reach clinical maturity. While financial resources are rate limiting for small companies, availability of the necessary infrastructure becomes equally challenging. The CDMO market reports supply-demand capacity imbalance, even more prevalently for biologics with an unprecedented growth (4). This has resulted in limited capacity availability amongst many growing contenders. Coupled to these constraints is specialized manufacturing needs and expertise for some advanced therapeutic modalities. The financial incentive typically drives the capacity and expertise sourcing towards commercial-scale programs. This dynamic leaves the small company’s early-stage assets behind where expert support is much needed to move these cures to a commercially-viable option. Investors prefer to see a strong manufacturing plan before funding innovative technologies. Without the reliable capacity and delivery plan, companies incur extensive timeline delays and lack access to best-in-class manufacturing expertise that further propels the vicious cycle of financial losses and funding constraints.
There is something to be said about learning from prior experience. However, what if you never had this experience? Small companies possess the skills to discover promising cures but need additional experience to turn these discoveries into reproducible and manufacturable treatments. This requires an engineering or scale up mindset, regulatory acumen, and forward-looking commercial processes from the beginning. CDMOs and regulatory authorities can step in and fill this need. CDMOs, however, may prioritize financially viable programs and regulatory bodies are proportionately under-resourced to satisfy the ever-growing market demand (6). With everything on the line, small companies are expected to ‘get it right’ the first time around often without the diverse and expert support needed to turn their asset into a promising cure.
Now things are not as rosy…
Headwinds often have a higher impact on small companies and this is true in current economic conditions. The competition for funding has increased within shrinking M&A deals and tighter markets for IPOs and VC investments. While the demand for cures and patient population is increasing, the eradication of funds from the market is chipping away from the potential treatment options. The funding constraints have led to a cascade of ill-fated events in recent year for small companies from pipeline consolidation to extensive layoffs. In 2022, over 120 companies have reported layoffs many of which are small innovators with early phase candidates (5).
With the emergence of new promising modalities like mRNA, ADCs, and bi-specifics, the capacity imbalance is further exacerbated with more contenders entering the pipeline needing manufacturing support. The inflationary costs have further reduced the manufacturing options for small companies. The fate of these cures is, consequently, stuck in a vicious cycle where stable manufacturing plans drive prioritization of limited funding but manufacturing itself has become difficult to attain with available funding.
The growth of the clinical pipeline has also led to bottlenecks on the regulatory front, a factor that could have given a lifeline into an asset plagued by a financial downturn. In 2022, the FDA reported they are “grossly understaffed” to meet the incoming demand of new medicines (6). There have been recent reports of the fate of the companies resting upon the FDA approval while the clock is ticking on their financial health. The industry overall has witnessed a meaningful reduction in FDA approvals in 2022 (7). While there may be promising assets in the workflow, they may not progress to clinic or cure if the clock runs out on funding before the regulatory bodies are able to evaluate it.
But there is hope…
Some CDMOs give me hope that emerging innovators won’t be left behind and there is promise to expand more treatment options for patients. What drove me to the companies I have worked for is their unwavering commitment to small companies, who face challenges on all fronts. Biomanufacturing companies cannot solve all these challenges but can offer the right partnership to alleviate some of the burden.
Consultative services to new entrants in the drug development spectrum from GMP/GLP advice to co-positioning assets to funding partners
Some prioritize the needs and capacity for early phase assets as a crucial component to their business strategy
Continuously develop innovative platforms to streamline and expedite discovery to commercial workflow
Offer regulatory support customized to your project complexity
Strategize holistically to implement the right solutions to scale your molecule through clinic
Small companies are the engines behind next-generation cures and tools. Picking the right outsourcing partners will make the difference. We all depend on these innovations and companies to drive economic growth and new healthcare solutions. Without prioritizing support to small companies, we run the risk of constraining the innovation pipeline and underserving ourselves in the long run.
About the Author:
Lubna Hussain has over 15 years of experience in Pharma and Biotech industry. She has held Product Management and Marketing roles covering the full product life cycle and has held responsibility in strategy planning, new product development, M&A commercial due diligence, marketing execution, and product line P&L management. Lubna has a portfolio of organizations she has worked for ranging from small to large companies, national to global markets, product and service businesses. Outside of her professional career, Lubna spends time with her family and likes to travel and experience diverse cultures.
References
First Allogeneic Cell Therapy Product Launched in Japan by Mesoblast Licensee www.globenewswire.com/news-release/2016/02/24/813541/0/en/First-Allogeneic-Cell-Therapy-Product-Launched-in-Japan-by-Mesoblast-Licensee.html
The story of mRNA: How a once-dismissed idea became a leading technology in the Covid vaccine race www.statnews.com/2020/11/10/the-story-of-mrna-how-a-once-dismissed-idea-became-a-leading-technology-in-the-covid-vaccine-race/
GlobalData Dec 14, 2022 pharma4.globaldata.com/Deals/Dashboards?islhnav=1&dealtype=37021&dealyear=2022,2021,2020,2019&yeartext=2022;2021;2020;2019&SaveId=945752
Biologics CDMO market is expanding rapidly but is challenged by capacity constraints www.biopharma-reporter.com/Article/2022/02/15/Biologics-CDMO-market-is-expanding-rapidly-but-is-challenged-by-capacity-constraints
Fierce Biotech Layoff Tracker: November layoff wave pulls in 23 biotechs amid pipeline pivots. 12 December 2022 www.fiercebiotech.com/biotech/fierce-biotech-layoff-tracker-2022
Why Is Biopharma Paying 75% Of The FDA’s Drug Division Budget? www.forbes.com/sites/johnlamattina/2022/09/22/why-is-biopharma-paying-75-of-the-fdas-drug-division-budget/?sh=40061ca07480
FDA anticipates fewer novel medical device approvals in 2022 https://www.fiercebiotech.com/medtech/fda-anticipates-fewer-novel-medical-device-approvals-2022
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