1. Rodney J. Y. Ho Ph.D., FAAAS, FAAPS Fellow of American Association for the Advancement of Science Fellow of American Association of Pharmaceutical Scientists Professor of Pharmaceutics Director of DNA Sequence and Gene Analysis Center Affiliate Faculty of Center for AIDS and STD Research Affiliate Member of Washington Primate Research Center Affiliate Investigator of Center on Human Development and Disability and
  2. Milo Gibaldi Ph.D.* Endowed Professor of Pharmaceutics Dean Emeritus of School of Pharmacy University of Washington Member of the Institute of Medicine, National Academy of Sciences

Published Online: 25 OCT 2013

DOI: 10.1002/9781118660485.ch3

Biotechnology and Biopharmaceuticals: Transforming Proteins and Genes into Drugs

Biotechnology and Biopharmaceuticals: Transforming Proteins and Genes into Drugs

How to Cite

Ho, R. J. Y. and Gibaldi, M. (2013) FINANCING BIOLOGIC DRUG DEVELOPMENT, in Biotechnology and Biopharmaceuticals: Transforming Proteins and Genes into Drugs, John Wiley & Sons, Inc, Hoboken, NJ. doi: 10.1002/9781118660485.ch3

Author Information

  1. Deceased

Publication History

  1. Published Online: 25 OCT 2013
  2. Published Print: 8 NOV 2013

ISBN Information

Print ISBN: 9781118179796

Online ISBN: 9781118660485



  • biologic drug development;
  • biopharmaceutical industries;
  • clinical leverage strategy;
  • orphan drug act


The common objective of start-up or established biopharmaceutical companies is to make health and commercial impacts with the most promising products that leverage all available resources. There is government grant support available for some aspects of commercial development, but the majority of governmental funds are invested in basic discovery and validation of cellular and molecular mechanisms of disease. The results of government funding provide a basis for developing and testing potential treatment modalities. The process of translating basic discoveries and technical innovations into therapeutic products takes many years and millions of investment dollars. In 1983, the U.S. government implemented the Orphan Drug Act, which provided a development grant and 7 years of market exclusivity to encourage development of therapeutics with treatment indications that benefit fewer than 200,000 patients. Leveraging the market exclusivity, many biological molecules are developed as orphan drugs to gain market approval and then enjoy market exclusivity. Once approved, these biopharmaceuticals receive added treatment indications. Expansion of treatment indications provides biopharmaceutical sales to a wider patient pool that captures much higher financial returns. Building on the understanding of the success rate in clinical development, a biological molecule potentially effective for multiple disease conditions is tested for each condition in parallel, instead of in sequence, to reduce the clinical development time and increase the odds of success. This plan, referred to as clinical leverage strategy, is a widely accepted practice across the pharmaceutical and biopharmaceutical industries. Both the Orphan Drug Act and clinical leverage strategy have contributed to the speed and number of biological molecules available for treating a wide range of diseases. The choice of what molecule to develop is complex. Regardless of whether the therapeutic candidates considered by a company are a molecular conversion from tissue extracts to recombinant form or new and novel biomolecules, each company makes its choice based on a number of factors, including intellectual position, commercial interests, available resources, and the potential for success and health impact.