The past year has been a turning point for the biotechnology industry

Fashion for proven
Galina Papernaya, "Time of News"The modern pharmaceutical industry is impossible without biotechnologies.

For this advanced segment of the global pharmaceutical industry, both from the point of view of the importance of developments and from the point of view of investment attractiveness, 2009 was a turning point. Biotech, like other sectors of the economy, did not escape the impact of the crisis: out of 1.5 thousand companies of this profile, many closed, and some began to deal with related problems, for example, developments in the field of alternative fuels and new packaging materials. "Biotech companies concentrated in Southern California burst like soap bubbles in the first half of the year," Yan Lavrovsky, CEO of Avineuro, which successfully survived this difficult period, tells Time News. According to him, the immediate cause of the ruin was the outflow of venture capital in the first months of the year. US President Barack Obama, who started healthcare reform at the same time, also added nervousness to investors. The reform implies, on the one hand, an increase in public procurement of biotechnological drugs, but on the other – an increase in the price pressure of the authorities on the market. In order for wealthy American companies to become more accommodating in price, US insurance companies will probably be allowed to resort to re-exporting a number of expensive original drugs from Canada and Mexico, where the price for them is several times lower thanks to government subsidies.

The difficulties of the American biotech industry are reflected in the global industry as a whole. After all, according to various estimates, from 60 to 70% of all enterprises in this profile are concentrated in the USA (Japan is in second place – 15%). Unlike the situation five years ago, now, when talking about the biotechnology industry as such, no one means only numerous small companies (located mainly in the USA). The balance of power has changed in just a few years, during which time almost all the leaders of the traditional pharmaceutical market have acquired biotech companies (many of which by that time were already comparable in their turnover to medium-sized companies of "big pharma"). We can note such deals made this year: Pfizer acquired Wyeth for $ 68 billion, Roche – Genentech for $ 47 billion, Merck – Schering-Plough for $41 billion, Eli Lilly – ImClone Systems for $6.5 billion. Now the entire global biotech community is discussing what Novartis has found for itself in this regard. Thus, it turned out that having a division dealing with protein compounds in its composition is much more profitable than buying molecules ready for clinical trials on the side for a lot of money (this practice has been considered common since the 90s). The biotech companies themselves have also changed, which, as already mentioned, have long gone beyond small forms in the sense of finance. They began to actively develop traditional chemical directions.

"But 2012 should have an even stronger impact on the state of affairs in the global biotechnology industry and has already begun to have an impact," says Yan Lavrovsky. – Coincidentally, it is this year that the patent protection of hundreds of expensive original drugs is completed. This means that their generics will appear, which, as already calculated, will lead to financial losses of large pharmaceutical companies for a total of $ 100 billion." This fact is considered by the participants of the biotechnology market as deeply positive, even in many ways salutary – able to reverse the negative trend of the beginning of this year, when tens of thousands of biotechnologists were left on the street. After all, the leaders of the drug market will really need new effective molecules that can provide them with patents for many years. "Now venture capitalists are running after us again and offering money, and given that the number of companies has significantly decreased since the beginning of the year, they do not have such a big choice," the head of Avineuro notes.

If we talk about the most fashionable topics of biotechnology-2009, then these are molecules for the development of drugs for the treatment of diseases of the central nervous system – Alzheimer's disease, Parkinsonism and schizophrenia. The latter direction is becoming more and more in demand among investors, as the progressive aging of the population of developed countries makes these diseases more and more widespread.

But the most popular are the development of molecules to combat malignant neoplasms (this is traditionally the largest area – work is being done with hundreds of substances), although the influx of money on this topic has noticeably decreased over the past year. Analysts are sure that the disappointment of investors played a role by the very method of work of scientists, who first choose a target (a certain pathogenic factor), and then thousands of actually blindly sort through molecules, trying to find the key to them. Moreover, without any guarantee that this process will not last for years and will generally end in success. "This year, everyone – both investors and scientists – have become more pragmatic,– notes Yan Lavrovsky. – In most cases, they try to build on already known drugs, increasing their effectiveness. With this approach, there is much more chance of success in clinical trials – the most expensive part of the development of new drugs."

Russia does not have its own bioindustry yet, although several small biotechs already exist. Due to the crisis, many Russian scientists who previously worked in American companies returned to Russia. If we talk about the costs of the state for the purchase of expensive drugs abroad and the need to optimize these costs in the future, then we definitely cannot do without our own biotechnology industry. In addition, this is a good way not only to save money, but also to earn. Thus, the annual turnover of European biotechnology is over 1.73 billion euros, while more than 22 million people are employed in the industry. "The bioindustry is a lucky ticket for Russia," said Raif Vasilov, President of the Society of Biotechnologists of Russia. – This is the basis for converting the geopolitical advantages of our country into the economic development of the state. It is the bioindustry that is able to solve the key issues that the country is facing today in terms of depopulation and degradation of socio-economic aspects of life."

Portal "Eternal youth" http://vechnayamolodost.ru23.12.2009