The Booming Business
of Biotechnology
Barbara Lano Rummel
Lindquist & Vennum PLLP
©2006 Lindquist & Vennum
Biotechnology
“Biotechnology could have more
impact on the world economy than
information technology.”
“Biosciences are going to change our
lives in the next 20 years the same
way computer sciences changed our
lives in the past 20 years.”
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Our Program
• Barbara Rummel
What Is Biotechnology and Why Is It so
Important?
• Simon Smith
An Overview of Biotechnology in Europe
and Elsewhere
• Kevin Cunningham
Biologics in the Pharmaceutical Industry
and Legal Work for Biologics
• TAGLaw Life Sciences Specialty Group
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Biotechnology
• The science of developing
and manufacturing new
products by manipulating
living organisms or parts of
living organisms (e.g., cells,
genes or proteins) for the
purpose of modifying human
health, food supplies or the
environment
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Biotechnology—History
• Bacteria long used to process cheese
and beer
• 1940s—penicillin made from living
organisms
• Dramatic increase in past 10 to 20
years
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Types of Biotechnology
• Agri-biotech seeks to develop crops
that are resistant to insects and
drought, have extended shelf lives and
offer increased nutritional value
• Industrial/environmental biotech
includes bioremediation (cleanup of
hazardous waste) and energy
production (biofuels)
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Types of Biotechnology
• We will focus on pharmaceutical
applications
– Industry looking to biologics
for predictable and
preventative treatments at
lower cost and to counter
threat of bioterrorism and
pandemics
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The Booming Part
• Industry, academia and government
are all chasing the action
• Industry players
– Companies range from small startups to
multibillion-dollar firms
– Over 5,000 companies globally
– S&P reports 350 biotech companies
listed on major U.S. stock exchanges
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Industry, Academia and
Government
• Universities
– Seeking revolutionary
advances
– Abundant NIH funding
for sponsored research
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Industry, Academia and
Government
• State, local governments hope to
create high-paying jobs, promote
economic development
– In 2005, 41 states reported biotech as
target industry
– Widespread state funding to develop
bioscience development zones
– Need venture capital support
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Industry, Academia and
Government
• Industry
– R&D spending in biotech is among
highest of U.S. industry groups (Amgen–
$2.2 billion in 2005)
– Global revenues/spending estimated at:
• $80 billion in revenues in 2005
• $160 billion invested between 2000 and 2005
• $34 billion in U.S. financing/partnering
among firms in 2005
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Trends Fueling the Boom
• Demographics and disease trends
– Longer life spans
– Higher percent of elderly
– Growing populations in developing nations
• Top four causes of death are diseaserelated
• Large pharmaceutical companies
looking for biologics to replace blockbuster drugs with expiring patents
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Trends Fueling the Boom
• In 2004, PhRMA reported 800
experimental meds in R&D for
application in elderly
• U.S. awarded $1 billion in flu-vaccine
contracts to five companies to
develop cell-based vaccine
technologies for seasonal and
pandemic influenza viruses
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Pharmaceutical Biotech
A brief introduction to biologics
• Traditional “drugs” are typically small
molecules developed in a chemical process
• Biologics are large molecules developed
from manipulating a natural source such
as a cell, protein or gene
– E.g., therapeutic proteins, monoclonal antibodies
– Far less predictable than chemical means
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Legal Services
• Development, manufacture, sale of
biologics involves myriad legal
services
– IP and patents just the beginning
– Longer, less productive R&D requires
more funding; extensive licensing,
partnerships and M&A between small
biotech companies and large pharma
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Legal Services (cont.)
– Global industry heavily regulated by FDA
and foreign authorities; complex
reimbursement issues
– High failure rates: disputes, workouts
and bankruptcies
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Life Sciences Specialty Group
www.taglaw.com
Life Sciences Specialty Group
• Member list
• Firm experience
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