Expansion is imperative

Biopharmaceuticals have long since become firmly established on markets worldwide and in 2002 generated sales of over $ 41 billion, according to a recent survey by Frost & Sullivan. Furthermore, the list of biopharmaceuticals currently in clinical trials is getting longer all the time. Before long, one in five active substances could well be a product of genetic engineering. Market researchers believe that current trials of pioneering new drugs for cancer, AIDS, diabetes and cardiovascular disease will help stimulate the demand still further, especially in view of the ageing of the population and ever greater incidence of these diseases.

Yet there is now a risk that the shortage of capacity already looming on the horizon could well slow down the biotech up swing. It is important to distinguish between the short-term and long-term effects of this. While in the short term, the shortage of capacity could drive prices up, the more producers move into this field and the more capacity there is, the more difficult it will become for biopharmaceutical producers in the long term, or so the market researchers predict. No matter how one looks at it, the fact is that sooner or later producers will have no choice but to increase their biotech production capacity. An expansion from the current level of two million liters to over three million liters by the year 2006 is now expected. Here are two topical examples: At its plant in Penzberg, Germany, Roche is investing e 45 million in an enlargement of its production plant for the genetically engineered hormone, Epo.

Sandoz, meanwhile, recently commissioned two new production plants for biopharmaceuticals at its plant in Schaftenau, Austria (where it invested e 50 million) and at its Slovenian subsidiary Lek, in Menges near Lubljana (e 18 million). Even if experts believe that chemical synthesis will remain the most important method of pharmaceutical production for many years to come, an increase in process yields and new expression systems for the large-scale production of active substances could well bring about a dramatic change in the available capacity, or so the Frost & Sullivan analysts predict. Transgenic technology, for example, has the potential to create huge production capacity at very low costs, which would in turn have a negative impact on contract manufacturers’ profit margins. Here, too, as is so often the case, one person’s pain is another’s gain.

- Gerd Kielburger -