The protein therapeutics industry got its start in early 1980s with the launch of recombinant insulin. Since then, the sector has undergone a rapid metamorphosis with the introduction of innovative new therapies like interferons and interleukins in the 1990s and monoclonal antibodies in the 2000s. Indeed, the market for therapeutic proteins is arguably the most exciting sector in the pharmaceutical industry .
The success of the sector is truly a triumph of good science. These treatments have revolutionized the treatment paradigms in areas of high unmet need. Driven by strong innovation, the market has experienced handsome double-digit growth since the early 2000s and should continue to see strong growth for the foreseeable future.
According to Kalorama Information’s(www.kaloramainformation.com) research, the protein therapeutics market totaled $51 billion in 2005 and is expected to reach more than $87 billion by 2010. Though the protein therapeutics market is substantially smaller than the pharmaceutical market—about $660 billion in 2005—the relative growth of protein therapeutics market at 19% is substantially higher than overall pharmaceutical market growth, which was closer to 7% in 2005. The genesis of this market explosion can be traced back to the last 20 years of building a knowledgebase and research base in proteomics and genomics and a broader understanding of the molecular basis of disease.
In addition to the strength of the science, there are several other reasons the protein therapeutics sector is outpacing traditional pharma. The biopharmaceutical sector has fared much better than the pharma industry as a whole in terms of receiving regulatory approvals for its products. The biotech sector gained about 40 new chemical entity (NCE) approvals in 2005 as compared with the pharma sector that gained a meager 11 NCE approvals in 2005.
The sector also enjoys a much lower threat from generic erosion. Despite the fears of an onslaught of biosimilars, or biogenerics, the protein therapeutics market remains relatively immune to a threat from generic products. The primary reason is that protein products require specialized manufacturing cell lines and strong process controls. So, generic products may not be able to offer similar or equivalent efficacy and safety at their lower prices.
The biotech industry has been the fortunate beneficiary of capital investment in recent years. The success of recent company launches in the protein therapeutics market area has led to a significantly upbeat investor mood. Overall, the protein therapeutics sector raised nearly $35 billion through both public and private sources in 2005, which is up from $18 billion in 2002.
The pricing environment has also been favorable for protein therapeutic products, which generally target diseases with high unmet needs and potentially life-threatening consequences. In such situations, the bargaining power of HMOs, private and public payors, and patients is limited. Several products have targeted such niche markets and have such strong IP behind them, such that they are virtual monopolies.
There are challenges ahead for the sector. Manufacturing these products is difficult and expensive, and despite new potential approaches, such as transgenics, alternatives to cell culture processes are not around the corner. Manufacturing capacity and supply chain issues will continue to be challenges for the biopharma sector. Pricing issues, too, while currently a net plus for the sector, may in the future become onerous.
These challenges aside, the protein therapeutics industry is currently in the growth phase of its life cycle. Considering its robust biotech pipeline, the growing acceptance of protein therapeutics in the market, and the expected emergence of strong enabling technologies in drug delivery and pharmacogenomics, the industry is expected to continue in a growth phase for a protracted period of time. By our assessment, the protein therapeutics market has an immensely attractive future.