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along with the ever-increasing size of the major players in pharmaceutical development. In fact, it is not just how small these companies are that is surprising, it is that they only encompass one aspect of the drug discovery and development process. Some companies are focusing on discovery, others specialize in clinical development. Some companies plan that once the NDA is granted, the company will license the product to a larger firm for marketing. Then there are other companies that neither discover or develop drugs but place their energies in the marketing of developed pharmaceuticals. One may argue that the niche enterprises are doomed to failure. But a number of factors combine to make this approach viable. The total overhead of the very large companies limits development to compounds expected to have sales of at least $100 million. At times a drug may have a smaller market and a large company will develop the product for public relations, to bolster sales of existing products in their product line, or out of sheer miscalculation of market potential. However, the small companies look to a potential market of $5 to $50 million a year as a bonanza. Their costs are far lower permitting adequate profit margins after development, marketing, discovery costs, and expenses for sales. Small companies cannot carry out clinical trials at the same level expected of a Pfizer or a Merck. Thus, the studies are fewer, smaller, and aimed at proving the efficacy and safety as directly as possible. Clearly, though, the niche company will play a major role in drug development. They will service areas not considered appropriate in terms of market size by the larger companies. They will represent the dynamic growth of academic entrepreneurs who look to the commercialization of their ideas especially in biotechnology and gene manipulation. |
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VIII. Academicians and Entrepreneurs |
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Many of these companies are investor driven and thus have intense dedication to development and success. But can a company with one or two products compete? It appears it can. There are a number of such examples. For instance, Medco Research developed a rather novel therapy for SVT, adenosine, and has become quite successful for a very small pharmaceutical company. While Medco is involved in the traditional pharmaceutical development approach of synthetic chemistry, they in fact developed an existing product not unique to the Medco research. However, most small companies are in the biotechnology field. The biotechnology industry seems most appropriate for the small-company approach. If the companies besides Genentech and Amgen can climb out of the start-up phase remains to be seen. Centicor, Genzyme, and US Bioscience have all made attempts, some more successful than others, but it is difficult to develop a viable product and then to sustain the research and development necessary for continued growth. But the trend is clearly established. Academicians with a novel idea no longer publish their results and go onto the next |
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