Navigation For Mobile

Niche Growth & Growing Niches: A Market Report on APIs and Eroom’s Law

A recent market report on APIs by Future Market Insights (FMI) paints a generally rosy economic picture of the industry over the next decade, but in this case the report’s details matter.

The 2017 market report on APIs – “Specialty Active Pharmaceutical Ingredient (API) Market: Global Industry Analysis and Opportunity Assessment 2016 – 2024” – projects a CAGR of 8.8% over the next 8 years, with about two-thirds of the $120 billion market attributed to small molecule APIs.

A big piece of the growth trend, however, will be driven by high-potency APIs (a “staggering increase,” as the report puts it) and their increasing role in cancer therapeutics. The rise of peptide drugs also drew a mention, but came with some manufacturing and regulatory caveats:

“Popularity of peptide-based drugs and the patent expiry of blockbuster branded drugs in the near future is also expected to boost the growth of the market. Complex manufacturing guidelines and stringent regulatory processes will continue to pose challenges to widespread adoption of peptide-based drugs.”

It reminded me of this chart from an article at sciencebasedmedicine.com, which sums up the long-term pharma productivity trend. (Spoiler alert: the trend hasn’t looked good.)

This is Eroom’s law in practice. (Eroom’s law – Moore’s law spelled backwards – posits that pharmaceutical R&D costs go up while drug approvals fall.)

This is also something that has been mentioned elsewhere. In a January piece at PharmTech, the editors referenced the growing imbalance between investment in – and sales of – a new drug:

“Since 2015, the report states, the costs of launching a new drug have remained near where they were during the heyday of the blockbuster, at $1.539 billion, 30% above where they were six years ago. A three-fold improvement in productivity would be needed to restore balance the imbalance between investments and sales.”

Specialty APIs Driving Growth

Back to the API report: it rightfully, in my opinion, points out the nuance in the sector’s projected growth. Bottom line: As pressure mounts to streamline & increase the efficiency of traditional API production, especially in the generic space, newly-emerging compounds (e.g., peptides, HPAPIs) are beginning to shift the balance in the wider market – hence the still-quite-respectable projected growth rates.

Specialty API projects tend to be more complex, requiring extensive process discovery and development across multiple scales. With high-potency APIs, additional containment and infrastructure adds to the challenge, while peptides have their own complexities.

In response to the increasingly specialization-driven nature of the pharma manufacturing space, most manufacturers have evolved their own respective knowledge sets and expertise. In the case of Neuland, we bring mastery of complex chemistry to bear on small molecule drug manufacturing challenges, with an emphasis on regulatory excellence.

API Geographical Market Segmentation
In terms of the API Market report’s segmentation into North America, Europe and Rest of World (ROW), the breakdown seems broadly (and very generally) accurate. [Of course, we do take issue with ROW CMOs reportedly focusing on bulk manufacturing versus quality…the implication being that ‘bulk’ and ‘quality’ are somehow mutually exclusive. Neuland has been a bulk ROW manufacturer focused almost exclusively on the U.S., E.U. and Japanese markets for over 30 years with a spotless regulatory record. Our focus is on quality, high-purity and, yes, also bulk APIs that meet the most stringent global regulatory standards. It is just a long-time point of pride for us!]

Here’s the link to the press release about FMI’s report: http://www.digitaljournal.com/pr/3189658

 

Leave a Reply

Your email address will not be published. Required fields are marked *