Posted by: Audrey Erbes | February 14, 2011

Challenge of Overcoming Big Pharma Revenue Losses

We all are reading about layoffs at Big Pharma companies and wondering when the sector will stabilize. I’ll consider one path companies took to overcome the revenue gap they faced in the past couple of years and through 2012 big time. The increasing sales for oncology treatments, especially, from targeted therapies like Avastin at tens of thousands of dollars per year created a race to the development of large molecules with their high prices by Big Pharma companies as they watched their blockbuster drugs go off patent. Despite the limited indications for the extremely ill without other available effective therapies, the high prices for these new molecule entities offset the low population size using them.


Prior to the recent rush to branded generics in BRIC countries by Big Pharma, we heard the majors looking to increase large molecules to 30% of their pipeline. Two years ago I reported from JP Morgan that CEOs were competing for which company had the largest percentage share of biologics under development and in the market. In that year a large share of future large molecule business was viewed as the “rescue” from the impending “patent cliff.”


We know that Big Pharma has been burned by the blockbuster business model that focused on selling chronic care drugs to the masses in high volume via primary care physicians–all these high revenue drugs are great until their patent expires—an ending which is inevitable. But even the biologics will eventually face this same patent cliff dilemma. With the coming of the biosimilar pathway in the U.S., these currently protected drugs will face a rapid falloff of sales when biosimilars are approved. The addition of high priced biologics to a company’s product line is only a partial answer to replacing the billion dollar blockbuster gap.


Meanwhile, here is list of upcoming Bay Area events to “keep you informed” and provide opportunity to expand your network.

  • BioCentury This Week” TV—See Sunday, Feb. 13th Broadcast Online; Topic: “Lost in Translation: Slicing Up $31 Billion at NIH;” Howard Garrison. PhD, Deputy Executive Director for Policy, Federation of American Societies for Experimental Biology; Kelly Slone, Director of Federal Life Science Policy, National Venture Capital Association;Amy Comstock Rick, CEO, Parkinson’s Action Network
  • Bio2Device Group, Tuesday Morning, Feb. 15, 2011; Topic: “Analyzing Opportunities & Challenges presented by Emerging Markets; Speaker: Ravi Kiron, Adjuvant
  • San Jose BioCenter, Wednesday Midday, Feb. 16, 2011; Topic: “Life Science Industry & Social Networking”
  • BioScience Forum, Wednesday Evening, Feb. 16, 2011; Topic: “Innovate Your Life Sciences Business Model Through Ecosystem Mapping;” Speaker: Ed Yu, Director, PRTM
  • Palo Alto AWIS, Wednesday Evening, Feb. 16, 2011; Topic: “Embracing Your Inner Critic;” Speaker: Pat Duran, Business Consultant and Coach
  • Engineering in Medicine and Biology Society (EMBS), Wednesday Evening, Feb. 16, 2011; Title: “The Basics of Intellectual Property;” Speaker: James Fox, PhD, Patent Attorney, Arnold & Porter LLP
  • BayBio Therapeutic Focus, Thursday Afternoon, Feb. 17, 2011; Topic: “Therapeutic Focus: A Mouse Trap Without the Mouse: The New Frontiers in Bio-Safety Models;” Moderator: John R. Manthei, Partner, Latham & Watkins; Panelists: Ananth Kadambi, Vice President of R&D, Entelos, Inc.; David A. Lustig, Ph.D., VP, Business Development, Optivia Biotechnology Inc.; Moo Yeal Lee, Lead/Senior Scientist, Solidus Biosciences, Inc.
  • Annual HR Life Sciences Forum Sponsored by BOLD, Thursday Evening, Feb. 17, 2011; Topic: “The State of the Life Science Industry:  Trends, Issues and Possibilities for the Future;” Guest Speaker:  James Sabry, VP of Genentech Partnering and former CEO of Cytokinetics  speaking on topic of “Partnering and Trends in Drug Discovery”
  • Product Realization Group (PRG), Thursday MidDay, Feb. 17, 2011; Topic: “How to Fix the Gaps in Your Medical Device Development;” Speakers: Mark Brinkerhoff, President, FusionDesign; Walt Maclay, President, Voler Systems; Rajan Patel, Medical Device Entreprenuer
  • Bay Area Clinical/Regulatory Roundtable (BACRR), Thursday Afternoon, Feb. 17, 2011; Topic: “FDA Final Rule on IND Safety Reporting;” Speaker: Sally Van Doren, PharmD, President and CEO, BioSoteria, Inc.

I’ve linked the list of Audrey’s Picks through end of March which also includes details about this coming week’s meetings in the highlighted title. You right click on the title and open the list in a new window.

Happy Valentine’s Day!



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