Biologics Market: Highly Profitable Returns through Premium Prices to Drive Increased Investments

The global market for biologics features a fragmented competitive landscape with stakeholders being some of the world’s most influential pharmaceutical companies and several domestic companies, which are vying for a share in the highly profitable market, observes Transparency Market Research (TMR) in a recent report. “A popular trend in the market is strategic mergers and acquisitions, with big companies wanting to expand their services and manufacturing units globally and enhancing product portfolios by co-development activities and licensing deals,” states a TMR analyst.

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Pharmaceutical giants such as Eli Lilly and Co., Bristol-Myers Squibb, Novartis, AstraZenca, and GlaxoSmithKline Plc. have invested billions of dollars in the field of biologics, which have translated into capacity expansion and focused research and development. With an aim of gaining a quick hold on the vast growth opportunities, established players are entering into strategic collaborations and investing in local manufacturers in emerging economies for product developments and manufacturing activities.

Point in case is the investment of US$500 mn by Novartis for building cell-culture based manufacturing facility in Asia in collaboration with its Asia Pacific HQ in Singapore. In the near future, the global market for biologics is expected to witness considerable traction and tread along a healthy growth path.

Monoclonal Antibodies to Emerge as Leading Product Segment

Transparency Market Research states that the global biologics market will expand at a healthy 10.9% CAGR from 2016 to 2024. If the number holds true, the market, which is expected to value at US$209, 779 mn in 2016, is expected to rise to US$479, 752 mn by 2024. In terms of product variety, the segment of monoclonal antibodies is expected to dominate the market, with an annual share of 43% in 2016 and a CAGR of 11.9% from 2016 through 2024. Geographically, the global biologics market will be led by North America, which is expected to account for a 44.89% share in the global market in 2016 and expand at a 9.6% CAGR from 2016 through 2024.

Promise of Profitable Returns to Drive More Investments in Market

The vast funds directed by pharmaceutical companies towards research and development activities, manufacturing, and the process of trial and approval of new product varieties often reflect on the high costs of products upon approval. It has been observed that drug companies charge premium prices for innovative biologics, with profit margins as high as 20-40%. Biologics have been noted to provide effective treatment for many complex diseases, which have mostly lacked notable treatment options so far. As a result, despite the high prices, demand for biologics usually witnesses an upward trend.

According to a pharmacy management service provider Express Scripts, only about 2% of people in the U.S. used biologic drugs. Regardless of this, biologics account for as much as 40% of prescription drug spending in the country. In general, biologics treatment costs about 22 times more in comparison to small molecule drugs. Owing to such profitable returns, the market has witnessed a vast influx of investment from notable pharmaceutical companies in the past few years. The trend is expected to remain strong in the next few years as well, making highly profitable returns one of the key factors bringing in more investments and driving the overall development of the market.

Read the Current Market Analysis of Biologics at: http://www.transparencymarketresearch.com/global-biologics-market.html

High Initial Capital Requirement and Complex Regulatory Approval Process to Hinder Market Growth

Biologics have demonstrated a relatively higher success rate of approval compared to traditional drugs. However, the total time required for clinical trials and approvals is much longer owing to stringent manufacturing processes, regulatory pathways, and a variety of product parameters. This leads to a significant increase in the cost of capital required for R&D and marketing of biologics as compared to traditional drugs. The scenario has deterred many small vendors from venturing into the global biologics market and is considered a key restraint for the market’s overall development.

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This release was published on openPR.