Isolation and complete synthesis of bacterial genome in the year 1971 opened new doors for traditional pharmaceutical practices worldwide, which practiced traditionally small molecules. Biopharmaceutical is a new concept in medicine or medical treatment to cure some previously incurable diseases like Type I or insulin-dependent diabetes, non-hodgkin’s lymphoma, cancers, Corhn’s disease, blood diseases and viral diseases.

Biopharmaceutical practice is an art of recombinant DNA technology (genetic engineering) to create biologically active molecules such as therapeutic proteins, antibodies, mammalian cells activated with live or attenuated virus that target a mechanism of disease inside the patient’s body. Biopharma technology has successfully created products like Insulin, therapeutic vaccines, monoclonal antibodies (MAbs), activated enzymes, therapeutic proteins, growth hormones, blood stimulating factors and cell/tissue stimulating techniques that has opened new ventures for the pharmaceutical industry in modern era. A list of biopharmaceutical categories and compounds can be seen in Figure 1.

A brief chronological history of biopharmaceuticals indicates that isolation of bacterial genome made possible to introduce human gene in bacteria to specifically target certain enzymes. Study on insulin dependent diabetes and enzymes that coded insulin production in human pancreas made possible to artificially produce insulin using pancreatic cells and a genetic code carrier. Therefore, insulin was the first US-FDA approved biopharmaceutical product in the year 1982. In 1986, Hepatitis B vaccine (HBV vaccine) was first of its kind that utilized recombinant DNA technology using live or attenuated viruses. Genetic engineering techniques made possible to extract antibody proteins that became useful in treatment of acute kidney and liver transplant cases in USA.

The US government launched “The Human Genome Project” in the year 1984 after the worldwide success of insulin and HBV vaccine trials, which was successfully completed in the year 2005. Many growth stimulating factors, enzymes and monoclonal antibodies have been produced using biological cell lines since this major achievement. USA is the major consumer of biopharmaceutical products in the world followed by Europe, though these biologically active compounds are still subjected to regulatory approvals in other major countries of the world. 119 such products are currently under clinical trials and as many as six blockbuster drugs have replaced traditional pharmacy in treatment of blood diseases and rheumatoid arthritis.

Biopharmaceuticals are therapeutic or preventative medicines derived from substances naturally present in living organisms, using recombinant DNA technology. These are natural proteins, peptides, nucleic acids or inactivated virus/bacteria synthesized using plant, microbial or mammalian cell lines. Unlike traditional pharmacy, biopharmaceuticals has limited exposure to generic competition because they have very sophisticated and expensive manufacturing process. This advantage poses threat to generic pharmacy companies that do not have manufacturing competency or relevant technology to produce a biopharmaceutical product. In addition, biopharmaceuticals are subject to strict regulatory approvals and ethical constraints for using a mammalian or plant cell line. Unlike traditional pharmacy, contract manufacturing organizations (CROs) in USA and Europe are moving into a totally new dimension to follow these strict protocols for handling number of biopharmaceutical products in veterinary and human use. Some other products such as human growth hormone (hGH) and human insulin are already open to generic competition. Other generic companies are developing biogenerics for select biopharma products such as Epogen, Procrit, Neupogen and Intron – A to treat certain cancers.

Critical path analysis for novel discovery – the value chain
Medical research translation is a major milestone in discovery of biopharmaceutical products. Medical and clinical research forms the basis of bio-analytics, diagnostics and treatment procedure that should associate a particular type of cancer or immunologic disease (For Example, CroFAB – an antivenom product used for treatment from bite of rattlesnakes in North America). There is no standard time-frame for research (phase – I), which totally depends upon intellectual ability of an individual researcher, company, institution or university. A novel idea for biopharmaceutical product or technology is the beginning of value-chain to assess critical attributes associated with the technology (Figure 2).

 Many novel ideas remain at the backdrop of preclinical data and number of bio-processing challenges that arise in production of a therapeutic compound. However, there are advantages associated with therapeutic proteins or gene therapy that use non-viral recombinant plasmid DNA in yeast or bacterial cells or virus transfected via mammalian route. Advantages are weighed in terms of delivery method (injection or oral) to alter cells of patients ex vivo or in vivo. This encapsulated cell therapy utilizes genetically altered cells of any origin through implantation. Later stages of development have concerns over safety, quality, medical utility, and market acceptance of the product, which must be cost effective over generic counterparts. There is a lot of regulatory pressure in approval of a new technology or product due to intellectual property assessment (IPR), industrialization, clinical trials and mass acceptance of the product for intended application. Lack of due diligence to any of these requirements can lead to business failure in any phase of the value chain line, making it a risky venture for business investors.

Some key considerations to assess the credibility of biopharmaceutical technology:

• Preclinical: Molecular characterization (E.g. drug structure and activity relationships), qualitative and quantitative characterization, limit of detection (E.g. MAb diagnostics), technical evidence.
• Clinical safety: Therapeutic efficacy for in vitro animal testing, (E.g. Animal trials), safety and quality protocols from clinical studies (E.g. Acceptable dosage form and regime).
• Medical utility: Clinical Trial approvals (E.g. in vitro computer model evaluation), Clinical acceptance (E.g. evaluating in vivo animal and human efficacy), clinical diagnostics
• Process development: Laboratory data (E.g. Isolation and purification of compound), pilot scale study (E.g. Mass production technique using cell culture), engineering studies (E.g. Process design)
• Industrialization: Manufacturing scale (E.g. Production amount and GMP), storage and handling of bioactive compounds (E.g. refrigerators), technical specifications (E.g. batch records)
• Quality: Manufacturing process and product must be consistent, reliable, easy to use and promise results in diagnosis of disease or therapeutic delivery to alleviate symptoms of disease. Product should have established identity and required potency for compound. It must be cost- effective.

Resource management – planning and evaluating start-up operations
Biopharma is fast turning out to be investment driven business due to some of the promising results delivered in identifying new clinical markers, histochemical techniques, rapid diagnostic kits, gene sequencing methods, therapeutic proteins and bioinformatics growth worldwide. This sector is heavily regulated and has products characterized by lengthy, costly and risky development cycles, which is a major drawback influencing the way development projects are financed.

Venture funds in life sciences are less flexible for small investments in the initial phases and attract larger capital in later stages of development, particularly post regulatory approval. According to London Financial times, October 2006, there were 78 small stage deals and 192 late stage deals in 2005 in Europe as compared to 222 early stage deals and 114 late stage deals in the year 2000 in Europe. These figures demonstrate the investment trend for life science sector that is unique in diversity of its customer and product bases. Low cost – high volume products (e.g. glucose testing machine) is favored over to low volume – high cost product (e.g. MRI scanner technology). People, products and services are three main pillars of technology that must be effectively managed for evaluating the overall value of a project. Resource management (time, people, money, infrastructure, machinery or knowledge resource) for a commercial venture requires effective business strategy.

Figure 3 outlines a simplified overall strategy for managing a business venture in life sciences. Turning a good idea into business plan; and planning and evaluating start-up operations for a technology driven commercial venture requires in-depth analysis of an ideal approach at each step. One must perform a rapid analysis to determine available resources in terms of technical skills, infrastructure, intellectual property, support from market, investors and technology back-up to execute an idea. Venture capitalists (VCs) fund less than one per cent of new business proposals for rapid assessment because unfortunately an idea does not always work for variety of technical and nontechnical reasons. Detailed assessment involves determining scientific feasibility, commercial feasibility, resource management, clinical trial management, industrial impact and wealth utilization to bring a profitable venture. Some other factors to consider are: increased awareness, social consequences, health of society, microbial handling, hazardous wastes, toxins, and pollution emission that would impact the environment. Scientific development is time consuming and costly throughout the life cycle of development.

There is a significant risk of failure associated with development of clinical technology due to potential changes occurring within biomolecules. Detailed assessment of a business strategy is important because there is a usual tendency to overestimate one’s own skills, abilities, talent, utility, attractiveness of idea, desire of potential customers and ease of generating funds. There is also a usual tendency to underestimate technical feasibility, clinical risk, ease of operation, complexity of marketing, selling and distribution, resources (time, money, people), regulatory issues and product development cycle.  

It is important to consider competition from commercial point of view to validate quantification of market size and scope of product while integrating a business plan.

The supply chain management
Supply chain aims to fulfill the gap-deficit between customers and suppliers by balancing demand-creation system (potential market) to demand-fulfillment system (production and supply).  Supply chain manages information and materials to maintain continuity of supply of cost-effective product to meet the customer requirements whilst minimizing the resources consumed.

Information is collected from customers based on their need, location and market dynamics to provide materials accordingly.

Some key performer indicators for the job is attainment of service level, cost optimization and settlement of cash tied inventory. For Example, Typical steps involved supply of tablets are (A) Material flow management for API, (B) Bulk tablets production and packaging, (C) Custom clearance and secondary packaging, (D) Warehousing and distribution, (E) Logistics, (F) Wholesalers and retailers.

The general theory of supply chain theory says that “life gets more complex the closer you are to the customer” therefore, there is a natural point to hold stock in all supply chains that balances manufacturing risk to demand risk. A decoupling point is identified between material supply, packaging and supply to meet demands of the market in different locations.

Decoupling point determines the pricing according to industry standards, packaging, additional handling or usage. Post decoupling point is associated with high volume operation and low cost equipment that requires operational skills, responsiveness, flexibility to generate lead times and physical material handling. For example, packaging tablets of different strengths with different containers, sizes for different companies. Inventory management is another key area that should be included in the design to maintain cyclic flow of stock, safety and strategic management.

Risk management is also an essential component of supply chain to manage operational risk associated with business to meet stakeholder’s expectations – customers, regulators, shareholders and employees. It involves identification of errors and modes of failures. Usually services collapse when combination of events occurs. For Example, High level failure modes with API supply is identification of process controllers and unpredicted demand. API supply failures have most active ingredients in the living world subject to high levels of uncertainty. One must walk the supply chain back to source to determine in each step the failure modes, probability of success and ways to alleviate diagnosis. One must identity alternative sources as secondary supply chain or switch to lower risk alternative.