The biotech industry is perceived as the “little guy” in the overall scheme of delivering new
medicines. Biotech companies are small and lack resources but are portrayed as quick and agile.
They are thought of as decisive, not bureaucratic; scientifically smart, not stuck-in–the–mud. Big
Pharma are contrasted as slow Goliaths. It is common to read a commentary on R&D in which Big
Pharma is urged to focus on the manufacture and marketing of new medicines and let biotech do
innovative research. In fact, many drugs to treat AIDS, cancer, infectious diseases, heart disease
etc. have been discovered by Big Pharma.
However, biotech firms do play an important role in the search for new medicines. Start-up
companies provide a venue for the exploration of more speculative ideas. The first biotech
companies had their roots in bioengineering techniques designed to discover protein therapeutics –
work that was outside the scope of Big Pharma. Biotech then moved into other forms of proteinbased
therapies such as antibodies. Now small biotech companies can be founded on a whole
gamut of new ideas from the exploration of new technology platforms to the search of a small
molecule inhibitor of a newly discovered target hypothesized to play a role in the evolution of a
specific disease like diabetes.
A mutual dependency has grown between biotech and Big Pharma. This is no surprise. Big Pharma
has historically generated about one-third of its revenues from products licensed from other
inventors. No matter how much money a company invests in R&D, this is just a small percentage of
the funds invested in R&D globally. It is arrogant to believe that any one company has a monopoly
on the best ideas. Thus, Big Pharma will often look to biotech companies to help fill its pipeline. But
small biotech companies have their own needs. The development of major new medicines is a timeconsuming,
expensive and risky endeavor. Most biotech companies do not have the wherewithal to
advance a compound beyond the early clinical stages. Thus, they will seek to partner potential new
drugs with Big Pharma in order to realize the full potential of these compounds by taking advantage
of Big Pharma’s resources, expertise and experience.
In reality, the imaginary line between biotech and Big Pharma is blurring. Big Pharma is now
devoting a lot of resources to discover and develop protein therapeutics – a domain that had been
exclusive to biotech. Likewise biotech companies are building their capabilities in small molecule
drugs. The rationale for this is quite simple. All of these companies are trying to bring new
treatments to patients. To treat diseases like Alzheimer’s, cancer or diabetes, a patient may require
a biologic, a pill, or maybe both. These companies are in search of medical breakthroughs
regardless of how they are packaged. One should expect, therefore, that the bond between Big
Pharma and biotech will continue to strengthen in the coming years.
About the Author
Dr. John LaMattina
Dr. John LaMattina is the Chairman of the Corporate Advisory Board at Bilcare Global
Clinical Supplies (GCS).
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