The pipeline of biopharmaceuticals remains strong, and the market for biologics could exceed US$450 billion by 2025. Analysts predict that sales within segments such as regenerative medicine and antibody–drug conjugates (ADCs) will grow faster than 20% each year. Yet considerable challenges remain for biopharmaceutical companies to overcome if they wish to be successful. First, they must reach the market quickly. Analysis by the Boston Consulting Group shows that the proportion of available value that a newly launched product can capture is a function of both the therapeutic advantage that it provides and its position in the launch of competing products. Being first to market is critical for commercial success of a new biologic.
Commercial risks inherent in developing new biological products have not gone away. Only a small proportion of such products that enter clinical assessment will make it through to a commercial launch. Although speed to market is important, companies must be careful to balance that need for speed against the risk that investments in process development activities will yield no return. It is a difficult balancing act. Cutting corners on development activities may allow companies to reach clinical phases quickly but also could result in them launching with poorly optimized production processes. Optimizing those processes after commercial launch is a very costly exercise because of regulatory obstacles that firms must overcome in making postapproval changes to manufacturing operations. When product sponsors enter the market with high operating costs, their profitability is reduced, making product sales vulnerable to attack from low-cost biosimilars. That is no longer a hypothetical situation: Regulators have been approving such products since 2013.