Lacuna HC Observer #50: Emerging Biopharma Companies

·????????Emerging Biopharma companies (EBP) –

The term “biopharmaceuticals” was coined in the 1980s and refers to pharmaceuticals produced in biotechnological processes using molecular biology methods?(Rader, 2008).

In simple terms, biopharmaceuticals are manufactured in living organisms or are built on compounds in the body.

In an article published by IQVIA, emerging biopharmaceutical companies were defined as those companies which has annual sales of less than $ 500mn. and the R&D spend is less than $ 200mn. annually

·????????Emerging biopharma companies’ market –

o??As we can see from the chart below, EBP companies are developing nearly 4,000 drugs which represents 65% of the total drug development pipeline with an additional 7% being developed by EBPs in partnership with larger firms.

o??According to IQVIA, the relative contribution of EBPs to the total pipeline by country or region reflects differing characteristics and maturity of biomedical innovation ecosystems around the world.?

As we can see from the chart above, c.a. 90% of emerging biopharma R&D activity concentrated in five major geographies.

China based EBP companies have seen tremendous growth of c.a. 456% in the pipeline since 2016.

o??Oncology represents 39% of the EBP pipeline and currently has more than 1500 oncology products in development.

As we can see from the chart above, the other leading therapies in the clinical pipeline other than oncology are neurology, infectious disease, GI products, and vaccines.

·????????Strategic Transactions

Over the last 2 years, we have seen an increase in the deals between EBPs and larger companies. Key acquisitions of EBPs in 2021 included larger companies acquiring compounds after launch, along with pipeline products.?

As we can see from the chart above, the number of deals among companies has been rising over the last five years with emerging biopharma companies becoming more involved. In 2021, 90% of all deal activity involved an EBP which included deal activity with the large/mid companies.?

Conclusion

Through our investment experience in EBPs, we have noticed that the launch success of any drug is influenced by their clinical benefits which further demonstrated that opportunities are still open for small companies. These small companies experience a huge growth in their revenues due to the patent exclusivity and vast market opportunities