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Quantitative Analysis of Global Biopharmaceutical Manufacturing
Frost & Sullivan, Oct 2004
Extensive Benefits of Biopharmaceuticals Promote Increased Manufacturing
Biopharmaceuticals offer numerous advantages that are driving enhanced production on a worldwide basis. For instance, they have a stronger focus on target diseases and provide more effective and potent action. They also entail fewer side effects and have great potential to actually cure diseases rather than merely treat the symptoms. Moreover, biopharmaceuticals - which are generally injected directly into the blood stream and are very fragile molecules - degenerate very easily in the human digestive system. With the growing number of new diseases that can be treated with biopharmaceuticals, the demand for these drugs is on the increase, leading to increased manufacturing.
This strategic analysis provides global coverage of the manufacturing capabilities of biopharmaceuticals. It provides detailed quantification of the supply and demand for production capacities. It also examines the demand-supply balance and offers strategic recommendations to address the challenges arising from the inequalities in this balance.
Understanding the Demand-Supply Balance of Manufacturing Capacities Vital for Biopharmaceuticals Industry Progression
The capacity gap - which is the difference between the supply and demand of manufacturing capacities - presents a fundamental challenge to the industry, observes the analyst of this research service. Deficit of capacity is likely to significantly affect industry progression. Biopharmaceuticals developers need to understand the existing capacity gap in the market as well as evaluate their own financial positions. Based on this demand-supply situation, they can enter into long-term contracts with contract manufacturing organisations (CMOs) or invest in building manufacturing plants.
Frost & Sullivan estimates that the global manufacturing capacity - including that held by captive use and contract manufacturers - will grow from 2.27 million litres in 2004 to 3.69 million litres in 2011 at a compound annual growth rate (CAGR) of 7.2 per cent. The global demand for manufacturing capacity, on the other hand, stands at 1.37 million litres in 2004 and is likely to increase to 3.13 million litres in 2011. Currently, there is overcapacity in the industry with capacity utilisation pegged at around 60 per cent. This is likely to increase to 70 per cent by the end of 2006 and 80 per cent in 2008, after which demand will continue to rise due to key drug approvals.
Drying Product Pipeline and Absence of Intellectual Property Laws are Causes for Concern
Resource and product portfolio management is proving to be a key challenge to the biopharmaceuticals industry, says the analyst. There are growing concerns about the drug pipeline drying up in the pharmaceuticals industry and this extends to biopharmaceuticals as well. Additionally, the lack of internationally accredited intellectual property laws or patent models prevents companies from innovating and causes them to limit application to certain countries only.
Companies will have to collaborate with academics to clarify the patents required for a particular licence. Subsequently, keeping a track of developments in the areas where they have filed for patents is essential. Only then will companies be able to realise the full potential of this industry.
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