More and more, biotechnology is fundamentally changing the way drug discovery and development are conducted. By mid 1999, about 75 therapeutic biotechnology products, among them eight monoclonal antibodies, had been licensed in the United States and/or major European markets, most recently trastuzumab (Genentech's Herceptin) for breast and other cancers, rituximab (IDEC's Rituxan) for non-Hodgkin's B-cell lymphoma, and infliximab (Centocor's Remicade) for Crohn's Disease. In addition, a substantial number of promising products have reached or completed Phase III clinical trials (Coulter's Bexxar for relapse-remitting low grade Non-Hodgkin's lymphoma).

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"Biotherapeutics are poised for a major new phase of growth that will be fueled by the stream of receptor-based targets, particularly for proteins and peptides, emerging from the discipline of genomics," explains Michael Goodman, Director of R&D at Decision Resources, Inc., a Waltham, Massachusetts-based pharmaceutical research and consulting company. Decision Resources is the publisher of The Global Biotechnology Industry to 2010, a new report written by Dr. Hermann A.M. Mucke. According to this report, biotechnology products are transforming the practice of medicine. As the pharmaceutical industry interprets the results of the Human Genome Project, pharmaceutical development will not be able to progress without what we today conceive as biotechnology. By 2010, most industry scientists will find it perfectly natural to use genomic, proteomic, and chemical data in an integrated fashion to develop new drugs and to optimize the use of existing ones for any given individual.

As the technology that defines the sector becomes less experimental, its valuation should become more rational and consistent than it has been so far, offering better opportunities for long-term investments. These investments, in turn, will allow the industry to discover and develop novel drugs in a more predictable financial environment. Companies such as Genentech and Amgen have become profitable, well-capitalized, vertically integrated ventures, thus the perception that biotechnology companies are difficult to value and always seem to be a long way from earning profits is slowly beginning to fade. Nevertheless, even the largest and most established biotech stocks are more volatile than their counterparts in other high-tech industry segments. "The March 2000 stock market correction, as it affected biotech companies, signaled that we are embarking on a period of more rational valuations of the biotech sector, which in turn will lead to more long term investment in biotech," states Goodman. "This trend toward stable valuation will be reinforced by further proof-of-concept launches such as Herceptin and Enbrel that vindicate a novel therapeutic approach."

However, as Goodman also points out, "Intellectual property issues with regard to genomic information will have to be resolved before there is true stability in the industry." For many start-up biotechnology companies, their proprietary platform technologies are their primary business asset; therefore, securing and defending intellectual property rights is a high priority. Without the ability to convince potential investors that it can conduct business in a secure legal framework, a company will have difficulty raising significant capital. However, the patenting of genes, cells, and transgenic organisms constitutes a special and most difficult facet of biotech intellectual property. The biotechnology industry has experienced frequent reversals of practice by patent offices and even governments in this matter, and biotech patenting is probably less reliable than elsewhere in the pharmaceutical industry. As an illustration of how controversial this subject has become, U.S. legal professionals have recently alleged the need for "reach-through" licenses for genomic inventions. The concept is that inasmuch as these inventions enable subsequent discoveries, the original discoverer should receive a share of the profit that may later arise from compounds discovered with the aid of the original genomic invention. Such a regulation would set the most undesirable precedent.

The Global Biotechnology Industry to 2010 is available for $7500.00. Contact: Cindy Ohlman, 781.487.3721 (telephone), 781.487.3735 (fax), or (e-mail). In Europe, contact Francoise Bidart, +32.2.351.4082 (telephone), +32.2.351.2347 (fax), or (e-mail). In Japan, contact Makiko Yoshimoto, +81.3.5401.2615 (telephone), +81.3.5401.2617 (fax), or (e-mail).

Decision Resources, Inc., is a world leader in research publications, advisory services, and consulting designed to help clients shape strategy, allocate resources, and master their chosen markets. Founded as a subsidiary of Arthur D. Little, Inc., the company has provided strategic information services for 30 years, assessing international pharmaceutical and health care industry trends.


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SOURCE: Decision Resources, Inc.

Contact: Cindy Ohlman of Decision Resources, Inc., 781-487-3721,

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