Blog & Resources Camargo Blog January 11th, 2010

PhRMA Adds New Bio Companies

The trend in Big Pharma continues to shift from small molecules to biologics. PhRMA announced that it added seven (7) new members to its roster at the end of the year. The new PhRMA members are Cubist Pharmaceuticals, Inc., Lexington, MA; OSI Pharmaceuticals, Inc., Melville, NY; Alexion Pharmaceuticals, Inc., Cheshire, CT; Ferring Pharmaceuticals, Inc., Parsippany, NJ; Talecris Biotherapeutics, Inc., Raleigh, NC; Vifor Pharma, Basking Ridge, NJ; and Xoma Ltd, Berkeley, CA. Most of these companies specialize in drugs from biological processes, not small molecules.

This shift away from small molecules will have a profound consequence for generic companies in the not too distant future. It has been shown that by 2017 (known as the ‘generic cliff’) there will be very few opportunities for generic companies as we know them now. The opportunity will be in generic biologicals, but 505j, the ANDA submission pathway, will not be the answer. Congress is still debating the biosimilar pathway, but 505(b)(2) isn’t the likely answer either. The reason we see consolidation in the generic industry is to build up the resources to make biosimilars. While today a 505j can cost a mere few hundred thousand, the development of biosimilars will cost 10’s of millions. For many generic companies, their response to the generic cliff will be 505(b)(2). The development cost is higher than ANDA’s and the product will need to be promoted, but this transformation is less painful than the costs of biosimilars.

Categories: 505(b)(2) Development

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