Tuesday, February 9, 2010

Biosimilars - Part IV - Key Success Factors

This is the last installment of the Biosimilar series.  In Part I, I covered aspects of healthcare reform legislation geared to define and streamline the FDA regulatory approval pathway of Biosimilars.  In Part II, I reviewed the presence of high entry barriers to the emerging Biosimilar market, and in Part III, I discussed the potential size and dynamics of the developing Biosimilar Markets.  Here, in Part IV, I'll list five key success factors for participant success in the emerging marketplace.  So here's my list...
  1. Strong Marketing Acumen - Picking the right product opportunities to pursue is critical.  Some Biosimilars will have an easier time receiving regulatory approval and market acceptance than others.  Some Biosimilar opportunities will require less of an investment in marketing and sales than others as they will target very focused markets preserving capital and increasing ROI.  A smart, informed, target choice will lower the risk of failure and heighten potential market penetration at lower costs.  Almost all, except for what will likely be a few Biosimilars deemed interchangeable by regulatory authorities, will require competent marketing and sales execution. 
  2. Manufacturing Know How - Biotech products are harder to manufacture than small molecules.  Having access to cell lines and the ability to consistently produce a quality product at a reasonable price will be important.  The last thing any Biosimilar manufacturer can afford to do is to "Toyota" their end product as customer confidence will be very hard, if not impossible, to gain back.
  3. Strong Product Development and Regulatory Skill - a need to conduct the right clinical trials with the best end points (from both a regulatory and marketing standpoint) and navigate uncertain regulatory pathways dictate competent clinical development and regulatory skill.  Time to market will be key as the first product approved will enjoy higher pricing and profits until other follow on products reach the market.  I would also include in this success factor the need for proprietary drug delivery technology which can confer clinical benefit and provide a marketing differentiation platform over the originator and other follow on competitors.
  4. Adequate Capitalization - the investment funds to bring not just one product to market but several to develop on ongoing business will be substantial... $100s of millions.  With ample risk of failure or regulatory delays, access to sufficient and substantial capital, either from the public market directly or from a well capitalized parent (e.g. Big Pharma Co) will be necessary to emerge as an ongoing competitor in the business.
  5. Partnering Skills- While some companies  have all the factors for success, many miss critical pieces.  The ability to craft win-win, profitable partnerships will be necessary to successfully play in the emerging Biosimilar marketplace.  A great example is the Teva/Lonza partnership were Teva brings the regulatory/marketing/development piece and Lonza brings the expertise in biotechnology manufacturing. 

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