Written by: Shannon Harty-Speers,
Senior Commercial Manager – North American Lead
In our last installment, we spoke about the market downturn and some of the ways biotech companies, small-to-large, are trying to survive and thrive in this new environment.
New collaborations with government, patients, payers, and other stakeholders brought forward lifesaving Covid-19 vaccines and treatments. The world has seen how pairing technology from one company with innovation from another can get treatments to people much faster than was ever imagined. There is perhaps a no better illustration of this than the more than 4 billion people worldwide who received a Covid vaccine.
Collaboration’s increasing role
As more major pharma companies focus on innovative products, they’re shifting to outsourcing the manufacturing of mature drugs and new drugs going to market, minimizing the need to heavily invest in their own manufacturing. This trend has contributed to significant growth within the contract research and manufacturing sectors. The wave of momentum began due to the pandemic and the need for manufacturing capacity to produce new vaccines took priority.
In research and development, the collaborative approach allows pairing the core value proposition – the pharmaceutical drug – with technological solutions in terms of prevention, diagnostic solutions, and treatment. Collaborating with biotechnology, medical technology, and healthcare providers serves as a value-creation network, which focuses on patient needs.
At each phase of drug development, there are opportunities for collaboration. From discovery through to filing for approval, each step has the potential to be optimized by working together.
The increasing outsourcing trend in the pharmaceutical industry demonstrates the success of this business model, as CDMOs are increasingly becoming integral parts of pharmaceutical companies’ value chains.
Outsourcing with a biologics CDMO allows pharmaceutical companies access to the equipment and facilities they need, without requiring the capital investment to purchase or build them. This also provides the companies with increased flexibility should future needs change.
CDMO partnerships increase capabilities, flexibility, etc.
Much of the innovation in biopharma pipelines is being driven by smaller biotechs, (companies with revenues of less than $250 million), or listed companies with a market cap lower than $2.5 billion. There are about 5,500 of these companies, and it’s estimated that by 2026 they will contribute more than 60% of biopharma growth while having little or no scale-up capabilities in-house*.
These companies are looking to partner with CDMOs, through a “virtual pharmaceutical” business model that gives access to flexible capabilities, and allows them to both simplify and accelerate development, hit milestones, and retain ownership without having to invest significant capital into infrastructure. And CDMOs are, of course, seeking mutually beneficial partnerships.
Complexities of collaboration
With more complex therapies and product areas coming to market including biosimilars, cell and gene therapies, vaccines, hybrid medical devices, and more, collaboration and licensing agreements are becoming more complex.
Considerations for licensing and collaboration structures extend beyond the development of the therapeutic product, to cost-sharing and profit split structures, which require creative approaches to governance, decision-making, and intellectual property ownership.
Collaboration will remain vital
While collaboration is unlikely a cure-all in a sector facing an array of complex and ever-evolving challenges, it is a strategy that is likely to maintain its momentum. The pandemic illuminated the power of meaningful collaborations and how they propel outcomes for public health — from research and development to commercialization and distribution. New collaborations with government, patients, payers, and other stakeholders brought forward lifesaving Covid-19 vaccines and treatments. The world has seen how pairing technology from one company with treatments from another can get successful innovation to people much faster than was ever imagined.
In our next installment, we’ll discuss the growing life sciences innovation gap and the looming patent cliff >>>
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