FIT Biotech’s market outlook
The pharmaceutical industry typically invests up to 2,6 billion euros to develop one new drug to the market. Pharmaceutical companies continuously scout for promising drug candidates that smaller companies develop and test in preclinical and early clinical studies. Development companies have ongoing contacts and negotiations with big pharmaceutical companies to execute long term collaboration and licensing agreements with optimal partners.
Increased use of drugs is positively impacted by growth and ageing of population, launch of new drugs and therapies on developed markets and improved access of drugs and therapies on developing markets.
The pharma market has recently evidenced a multitude of licensing agreements at early development stage between biotech companies developing gene based therapies and the so called “large pharma”. A high demand on a rapidly growing market has resulted in rapidly escalating values of the total licensing agreements. Advance payments can total hundreds of millions of dollars with running royalties exceeding ten percent of net sales. This licensing market is targeted by us.
Drugs can be divided into biological and chemical drugs. Chemical drugs most often have small molecules and they are manufactured using chemical reactions. Examples include painkillers and drugs for cardiovascular diseases. Biological drugs, on the other hand, contain mainly large molecules and they are manufactured by biotechnological methods. Examples include various antidotes and vaccines. The majority of new drugs and drugs under development are biological. Biological drugs are generally expected to provide better targeted, more efficient and safer treatments than chemical drugs.
Biologic drugs, i.e. drugs that are made by living cells, will bring in the bulk of the profit to biopharma companies in the coming years, particularly via antibodies that are developed to treat various forms of cancer (source: Evaluate Pharma World Preview 2017).
FIT Biotech has positioned itself well with the market. The Company’s strategy is to develop therapies based on producing biologics via gene therapy, which means transferring production of the therapies into the cells of the patient. Gene therapy is becoming increasingly recognized, which is also reflected by fact that some of the largest biopharma deals in the past years have been executed in this area (source: Ernst & Young, Beyond Borders 2016).