Economics

Bioreactor Design for Adherent Cell Culture: The Bolt-On Bioreactor Project, Part 4 — Process Economics

The Bolt-on Bioreactor (BoB) project is an independent initiative developing and commercializing a bioreactor for efficient, automated culture of adherent cells for biopharmaceutical applications (1). After conducting thorough research on available culture systems for adherent cells, the BoB team believes that a successful alternative to existing devices must solve four major challenges: volumetric productivity (2), process automation (3), containment and sterility (4), and process economics. This month concludes a four-part series addressing each of those challenges while describing design features…

Special Report: A World of Difference — Biosimilars and Biobetters Offer Unique Benefits — and Risks

by John Otrompke, with Cheryl Scott and S. Anne Montgomery When the United States Food and Drug Administration (FDA) approved the country’s first ever biosimilar on 6 March 2015, it had been a long time coming. After all, the European Union had approved the first biosimilar in 2006, and a number of others have followed in Europe since then. Still, the approval of biosimilar filgrastim, a recombinant colony-stimulating factor used to offset the complications of chemotherapy, was a welcome step…

Paying for Pricey Medications: Debt Financing Options Could Provide a Solution

In an era of US$1,000/dose medications, a new approach may be needed to finance an emerging breed of expensive but highly effective pharmaceuticals and vaccines, according to a new Rand Corporation analysis. In other industries, it is common for suppliers to encourage customer investment — particularly for costly capital purchases such as new automobiles and machinery — through approaches such as equipment leases or supplier-financed credit. The healthcare industry could learn from such approaches. For example, instead of paying up…

To Serve and Promote: A Conversation with BIO’s President and CEO

BIO is the world’s largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial, and environmental biotechnology products. BIO plays a leading role in shaping public policy related to the biotechnology industry — at the state, national, and international levels. Jim Greenwood has been BIO’s president and CEO for 10 years,…

Planning for Commercial Scale of Cell Therapy and Regenerative Medicine Products, Part 1: Achieving Manufacturability and Managing Cost of Goods

Much mystique and mystery surround the emerging industries of cell therapy and regenerative medicine. As companies progress toward commercial manufacture with potential game changers (e.g., cures for cancer and diabetes) the industry could be on the verge of significant breakthroughs. However, with no real successes to date, the question is raised: What core attributes are required to achieve commercial success? The tale of Dendreon’s struggles highlights how difficult it can be to commercialize even an approved cell therapy product. Since…

When Is a Virtual Business Model Suitable for Biopharmaceutical Companies?

Virtual companies are based on the model that all activities are outsourced. Such companies have no (or few) employees, occupy no laboratory space, and use contract service organizations for all activities. Over the past decade, several virtual biopharmaceutical companies have formed (1–4). They are primarily start-up ventures that use contract research organizations (CROs) for R&D and contract manufacturing organizations (CMOs) for product manufacturing. By contrast, a fully integrated biopharmaceutical company is based on the model that all activities are internal to…

A Quick Guide for Sourcing Biopharmaceutical Raw Materials

Before the ratification of regulatory guidelines from The International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) Q8–Q11 (1–4) — whose scope includes raw materials for biopharmaceutical production — many drug manufacturers chose the most cost-effective and readily available raw materials sourcing options without specifically considering the provenance of those materials. Depending on the chosen supply chain, such materials could be of widely varying quality and not necessarily suitable for a destined application. Raw-material…

A Case for Biopharmaceutical Operations in Low-Cost Countries to Maximize Return on Investment

A company’s success is associated with its growth. An expanding company hires more employees (full-time equivalents, FTEs) to support its commercial products, to develop new products, and to provide administrative services. As it grows, an organization can become more complex and its operations less efficient. Analysis of 2013 financial data showed that revenue of US biopharmaceutical companies increases with a growing number of FTEs at a slower rate than does cost (1). That study assumed that all US biopharmaceutical companies…

Special Report: The Path to Vaccine Profitability

Managing vaccine supply chain improvements involves a complex interaction of laboratories, other facilities, CMOs, and suppliers. Since the business of making vaccines became a commercial proposition, profitability has often been elusive. The economics are difficult: Costs of development and production, already high, are rising. Profit margins historically have been lower than those of other pharmaceutical products, in part because of the complexities of manufacturing and distributing vaccines as well as their stringent safety, testing, and quality requirements.

Revenue per FTE and Cost per FTE: Metrics of Operational Efficiency and Performance

www.graphicstock.com Revenue from operations (herein referred to as revenue) and operating cost (herein referred to as cost) are two independent sentinels of a corporation’s performance and return on investment (ROI), which is defined as the ratio of revenue to cost (revenue/cost). Although a company can actively manage cost by controlling its number of full-time employees (FTEs) and the number or type of activities, it cannot directly manage revenue. Revenue is entirely driven by market forces. So if a company experiences…