Drug Development and Biotechnology

Manthan D Janodia, D.Sreedhar, Virendra S. Ligade and N.Udupa

Abstract: Drug discovery and development in recent years is posing a great challenge to pharmaceutical companies. With escalating costs of drug discovery and diminishing product pipelines, pharmaceutical companies are always looking for newer avenues to fill the drying pipeline. Various strategies are adopted by companies ranging from mergers and acquisitions to licensing deals with small research based organizations. Pharmaceutical companies have realized that traditional model of drug discovery and development is risky and uncertain. In order to reduce the risk and uncertainty pharmaceutical companies are looking towards biotechnology, which seems a promising proposition to these companies. In the western world many big pharmaceutical companies have tied up with small biotech companies and various institutes for research related to drug discovery that is based on the concept of biotechnology. So, pharmaceutical biotechnology is one area where the companies have seen a ray of hope in terms of successful drug discovery. Some companies have even launched products that are purely an outcome of biotechnology based research.

Biotechnology has been frequently referred as the technology of 21st century along with Information Technology. Modern Biotechnology has already made significant contribution to the health and agriculture sector. During the first half of the twentieth century, bench chemistry was the sole method of creating new drugs. Discovery and preclinical development was conducted with biology providing animal models for pharmacological and toxicological evaluation, while chemistry produced and modified small sets of compounds to improve symptoms in the animal models of disease. Recent advancements in the once seemingly unrelated fields of molecular biology, chemistry, and computer science, are changing the way we look for new drug compounds. The core of identifying potential new drugs, however, remains the same, following two phases. Phase one, or discovery, focuses on identifying disease targets and developing chemical compounds that produce a desired biological effect on a specific target. Development of several drugs, various pharmaceuticals, vaccines using recombinant DNA technology has given rise to multi billion dollar industry. So far the drug development revolved around new chemical entities and a serious consideration was not given to biotechnology sector until 1980. This implies that the biotechnology industry is relatively young. New biologic entities were first introduced in the 1980s. By 1994, only 29 new biologic entities had been introduced into the U.S. market, but this number has increased dramatically since then. In this regard, 41 new biological introductions occurred between 1995 and 2001. Further, DiMasi et al has identified that the clinical phase development for biotech and pharmaceutical products were similar.

Drug Development
R&D accounted for 15.6% of global sales in 2000 for the US research-based pharmaceutical industry, compared to 10.5% for computer software, 8.4% for electrical and electronics firms and 3.9% for U.S. companies overall, excluding drugs and medicines. The average R&D cost per new chemical entity (NCE) brought to the market is estimated at US$ 802 million (DiMasi et al., 2003). Danzon states that the cost per NCE is high for three reasons: high input costs for both drug discovery and drug development, including human clinical trials that are required by the Food and Drug Administration (FDA) to establish proof of safety and efficacy; the time value of money considering that it takes 12–15 years to advance a drug from discovery through regulatory approval (see figure1); and high failure rates. Despite faltering investor confidence, development of biotechnology products has surged to the point where one quarter of all drug development is now biotech-based. Whereas a few years ago biotech accounted for just 15% of drugs in R&D, this has risen steadily to the 2002 figure of 25%.


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