Published: Jan, 2017
The global biologics market displays highly competitive characteristics with a significant presence of some of the world’s top pharmaceutical companies and several domestic companies, which are contending for gains in the highly profitable market, says Transparency Market Research (TMR) in a new report.
A TMR analyst says, “Mergers and acquisitions is a popular trend in the market, with top companies focused on expanding their manufacturing facilities and services globally and augmenting their product portfolio by means of co-development alliances and licensing agreements.”
Pharmaceutical majors such as Pfizer Inc., Novartis AG, and GlaxoSmithKline Plc. have invested heavily in the field of biologics, which has led to focused research and development and capacity expansion. With the objective to leverage the vast growth opportunities, leading players are collaborating with local manufacturers in developing economies for product development and outsourcing manufacturing activities.
An excellent example is Pfizer Inc. The company has collaborated with Heptares Therapeutics, a global biopharmaceutical company of Japan for development of biologic medicine for multiple therapeutic areas.
Oncology to Emerge as Leading Application Segment
Transparency Market Research finds that the global biologics market will display a healthy 10.9% CAGR between 2016 and 2024 for the market to increase from US$209,779 mn in 2016 to US$479,752 mn by 2024. In terms of product, monoclonal bodies is anticipated to dominate the market displaying a CAGR of 11.9% between 2016 and 2024 to reach a valuation of US$221,858 mn by 2024; the product segment held a dominant share of 43% in the global market in 2016. On the basis of application, oncology is the fastest growing segment, which is expected to expand at a CAGR of 11.2% between 2016 and 2024; the application segment is expected to account for the dominant share of 45.70% in the global biologics market during the forecast period. Geography-wise, North America is the leading regional segment with a dominant share of 44.89% in the global market in 2016; the region is expected to expand at a CAGR of 9.6% between 2016 and 2024.
Treatment Efficacy Overrides High Price Point of Biologic Drugs
The increasing investments from large pharmaceutical giants for research and development of biologic drugs, expansion of manufacturing capabilities translates into substantial growth for the company upon product approvals. Drug companies charge premiums for innovative biologic drugs with profit margins in the range 20-40%. Biologic drugs have been observed to provide effective treatment for many complex diseases, most of which have lacked effective treatment so far. As such, demand for biologics usually displays an upward trend despite their high prices.
As per data from Express Scripts, which is a pharmacy management service provider, approximately only 2% population in the U.S. used biologic drugs. However, biologic drugs account for 40% of prescription drug spending in the U.S., irrespective of 22 times higher treatment cost of biologics in comparison to small molecule drugs. The high profitable returns have attracted investments from pharmaceutical giants over the past few years. The trend is anticipated to continue in the next few years, attracting investments from notable pharmaceutical companies for highly profitable returns and driving the global biologics market to new heights.
Despite the high efficacy of biologic drugs as compared to traditional drugs, biologics have long clinical and approval time due to stringent manufacturing processes, regulatory pathways, and several other product parameters. This results in significant increase in the capital cost for R&D and marketing of biologics in comparison to traditional drugs. This has prevented small vendors to venture into the global biologics market and is posing as a restraint to the market’s overall development.
The review is based on the findings of a Transparency Market Research, report, titled “Biologics Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 - 2024.”
The global biologics market is segmented as follows:
Global Biologics Market – By Product
- Monoclonal Antibodies
- Recombinant Hormones/Proteins
- Cell Therapy
- Gene Therapy
Global Biologics Market – By Application
- Infectious Diseases
- Autoimmune Diseases
Global Biologics Market – By Region
- North America
- Latin America
- Rest of Latin America
- Rest of Europe
- Asia Pacific (APAC)
- New Zealand
- Rest of Asia Pacific
- Middle East and Africa (MEA)
- Saudi Arabia
- Rest of MEA
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