Chapter 3. Biotechnology Industry Perspective on Drug Development

Summary

The decision to select and develop a new drug candidate is complex. It is dictated by the interplay between the potential markets and the scientific advances being made in basic, translational, and applied research. The drug development process, from the inception of a therapeutic strategy to the approval and introduction of the therapeutic compound for human use, involves investments, sharing of knowledge, and collaboration among government agencies, pharmaceutical companies, universities, and other research organizations. Ever since the existence of enabling technologies to produce pharmaceutically acceptable proteins and peptides, biotechnology companies—new start-up or existing ones—have been examining, refining, and developing these technologies for commercialization. Today, funding for a start-up biotechnology is provided by a combination of federal grants, private parties and by venture capital. Frequently, biotechnology firms raise cash through stock offerings and licensing key first-generation products and vital market segments to established drug companies in exchange for financial stability. Additional financial strategies include developing drugs that qualify under rare diseases regulated by the Orphan Drug Act for market exclusivity of drug candidates, and testing of a drug candidate tested in early clinical trials for multiple indications (generally known as clinical leverage strategy) to reap maximum financial return on the investments. This chapter highlights current biotechnology industry perspectives on developing business strategies and in establishing key alliances with established drug companies to improve their financial positions. When successful, these interactions lead to the development of drugs that provide a cure, treatment, or prevention of disease.