To bio or not to bio......

.....That was the question everyone was asking themselves and each other at Informex in New Orleans recently. The answer, however, varied widely according to whom you asked. Figures bandied about during the week projected the market share for biopharmaceuticals at anything from a conservative 15% to a somewhat optimistic 50%.

In these times of political and economic uncertainty, companies are bound to be drawn to a rapidly expanding market with huge growth potential and the promise of untold riches. And with the traditional small molecule side of the industry reaching maturity it is no wonder that the exponential growth rates of biopharmaceuticals are attracting the attention of many of the bigger players.

As Dow's Andrew Liveris pointed out in his keynote speech at Informex, the compound annual growth rate for biopharma is some 20%, compared with just 8% for traditional APIs. And unlike the small molecule side, which has become crowded and competitive, there are few players in biopharma manufacturing as yet because of the high cost of entry into the market. The rewards for those who have taken the plunge and committed themselves to this path are potentially huge – margins, at least for now, will be determined by added value rather than by the supply/demand balance, and there is little risk of customers suddenly switching to another, cheaper supplier.

And good luck to them – those who dare probably deserve to win. For those who have not yet drawn up concrete plans to get into this sector, or who do not have the resources to fund such a massive investment, it may already be too late to get on board.

But just as the small molecule sector will not return to the high growth and high margins of several years ago, nor will the exponential growth of biotech continue indefinitely. 'Any new market that meets with success and growth will eventually reach a point where that level of rapid growth moderates to normal growth and eventually slow growth or even decline,' Liveris warned.

In the meantime, the outlook for small molecules remains healthy. More than one exhibitor at Informex suggested that what is possible today and tomorrow only with large molecules will be achievable using small molecules the day after tomorrow. In the meantime, there are plenty of new and evolving technologies out there that are well within the reach of smaller players, such as the Delvivo implant system, topical treatments for erectile dysfunction and heterogeneous asymmetric catalysis, that can bring much needed innovation to the market.