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Remember the DRAM (Dynamic Random Access Memory chip) industry in the 1980s & 1990s? -- a supposedly "lucrative" business that, like biosimilars today -- became a race to the bottom of profit Hell for 80++ % of companies
Likewise biosimilars will become a race to the bottom for the following reasons:
(1) Almost no barriers to entry. There will be 100s of entrants, like the auto industry in the U.S. in the 1930s and 1950s. 80++ % who went out of business.
(2) Many Asian and some Middle Eastern countries are establishing biosimilar "Berlin Airlift" programs to quickly become self-sufficient in biosimilars and thus will set up trade barriers to imports. You got a better biosimilar ? -- who cares ? -- it's illegal here. National autarky (self-sufficiency) in biosimilars will kill your biosimilar exports. National job creation and minimization of trade deficits are more important than your biosimilars business plan. Tsk, tsk.
(3) For those old enough to remember, about 10 - 12 years ago Xoma and Genentech had trouble transferring an Rx Ab manufacturing process between the two companies only 30 miles apart from each other. Why ? -- incompatibility of manufacturing processes. They quickly recovered from the problem in only 7 - 9 months and received FDA approval for the transferred process. But if 2 of the most experienced biopharma companies in the world have trouble transferring an Rx Ab bio-manufacturing process, imagine new entrants to the field with no access to proprietary CMC / process / manufacturing files. So 90 + % of them will be dead in the water due to producing non-equivalent product -- and having to repeat extensive clinical trials to receive any approvals.
(4) -->> Add your own rational death wishes here for the 100s of poorly funded and poorly staffed biosimilar entrants worldwide who think biosimilars is a "lucrative" business.
Dumb and dumber.
Finally, the article below from FierceBiotech will partially reify (make concrete) the points above.
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"Multinationals eager to jump into the multibillion-dollar biosimilar business"
"Dealtalk: Race to copy biotech drugs creates odd bedfellows"
By John Carroll of FierceBiotech -- 22 June 2011
"There's a new breed of corporate player jumping into the biotech business.
Reuters takes a close look at an unlikely lineup of multinational companies like Samsung, Hanwha Chemical and Fujifilm which are weighing in with new pacts on biosimilars to compete against dozens of biologics that will lose patent protection in the decade to come.
While tech manufacturers and camera companies aren't known for their expertise in drug development, they make excellent deep-pocket partners for Merck and others who are beavering away at the biosimilar game."
...
http://www.fiercebiotech.com/story/multinationals-eager-jump-multibillion-dollar-biosimilar-business/2011-06-22?utm_medium=nl&utm_source=internal
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http://www.reuters.com/article/2011/06/22/us-pharmaceuticals-biotech-idUSTRE75L2M020110622
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Dateline -- San Diego, Calif.: 27 June 2011 -- 2:30 AM
Posted by:
David A. Palella
BIOSCIENCE VENTURES Inc.
San Diego, California
cell: 619-787-5767
email: dpalella@gmail.com
http://www.linkedin.com/in/davidpalella
web site: http://www.BSVpartners.com
blog: http://biobizdev.blogspot.com
& Group Founder:
Infectious Disease R&D and Business Network
http://www.linkedin.com/e/-ubgx8c-godydbie-43/vgh/3937807/
Japan Biotech / Biopharma Partnering Forum
http://www.linkedin.com/e/vgh/2857975/
Biotech / Pharma Business Development, Licensing & Dealmaking
http://www.linkedin.com/e/-ubgx8c-gp40f4dt-22/vgh/3964633/
Asia Business & Finance Roundup
http://www.linkedin.com/e/vgh/3132759/
Biofuels & Sustainable Chemicals Networking Group
http://www.linkedin.com/e/vgh/3891375/
X-tech Roundup(SM) - San Diego
http://www.linkedin.com/e/vgh/2836926
& Co-founder:
Stem Cells & Regenerative Medicine
http://www.linkedin.com/e/vgh/3921448
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