Pros and Cons of Five Biotech Businesses - Research Paper Example

 Table of Contents 1.Introduction 4 2.Discussion 5 2.1.Vertically Integrated Biotech Company 5 2.1.1.The Company: ECI Biotech, Inc. 5 2.1.2.Technology Perspective 6 2.1.2.1.ExpressDetect® 6 2.1.2.2.ExpressProtect™ 7 2.1.3.Business Perspective 7 2.2.Contract Research Organization (CRO) 7 2.2.1.The Company: Pharmaceutical Product Development, Inc. 7 2.2.2.Technology Perspective 8 2.2.3.Business Perspective 9 2.3.Bio-Remediation Company 11 2.3.1.The Company: Catalina BioSolutions 11 2.3.2.Technology Perspective 11 2.3.3.Business Perspective 11 2.4.Startup Biotech Company 12 2.4.1.The Company: Beeologics, LLC 12 2.4.2.Technology Perspective 12 2.4.3.Business Perspective 13 2.5.Foreign Biotech Company 13 2.5.1.The Company: Artes Biotechnology GmbH 13 2.5.2.Technology Perspective 14 2.5.3.Business Perspective 14 3.Conclusion 14 References 16 1. Introduction Christopher Plein has opined that “biotechnology refers to the use of recombinant DNA techniques, cell fusion, and bioprocessing techniques to modify life forms for various research and commercial uses” (Plein, 1991, pp.474). Ernst & Young (EY), “a global leader in assurance, tax, transaction, advisory services and strategic growth markets” (Ernst & Young, n.d.), had undertaken a comprehensive study of this lucrative sector in May, 2000, on the basis of which it had opined that “the biotechnology industry has grown rapidly in recent years, doubling in size between 1993 and 1999”; while pointing at the future prospects of this economic sector by mentioning that “much attention is given to the potential of the biotechnology industry, from drugs, agricultural and environmental products currently in the pipeline”, EY laid emphasis on the fact that “these products have the potential to generate tremendous opportunities for society, by improving the quality of health care, increasing agricultural production and producing a cleaner environment” (Biotechnology Industry Organization, 2000, pp.1). Furthermore, the London (U.K.) based professional services giant has also categorically mentioned that “no less significant, however, is the fact that the industry clearly makes substantial current economic and fiscal contributions to the U.S. economy” (Biotechnology Industry Organization, 2000, pp.1), thereby highlighting the immense importance of the biotechnology sector as an indispensable ingredient in the national economy. It has been reported that “recognizing the importance of this industry and its geographic concentration, states and regions are developing initiatives designed to foster an environment in which biotechnology companies can succeed and grow” (US-Israel Science & Technology Foundation, 2001, pp.1). In the light of the fact that state governments have been exhibiting enhanced levels of activities as well as involvement in recognizing the opportunities that are offered by the potentially strong bioscience industry, the current research will aim at evaluating the various pros and cons of five different types of biotech businesses, both from the business as well as technology perspectives. The five categories of biotech companies that will be analyzed during the course of this research will include (1) a vertically integrated biotech company, (2) a contract research/manufacturing organization, (3) an agro-biotech/bio-fuel/bio-remediation company, (4) a startup biotech company, and (5) a foreign biotech company. Once these organizations are analyzed at length, the concluding remarks will be written to put emphasis on the significance of the research findings. 2. Discussion 2.1. Vertically Integrated Biotech Company 2.1.1. The Company: ECI Biotech, Inc. ECI Biotech, Inc. (ECI), located in Worcester, Massachusetts, is “a vertically integrated diagnostic sensor company” that is having plans of launching “its first ExpressDetect® technologies in 2010” (ECI Biotech Inc.-a, n.d.), The company carries out all its research activities, product development as well as light manufacturing within a BL2 laboratory that sprawls over an area of 11700 sq. ft. While claiming that it’s “staff is able to engineer, express, purify, and assay proteins on location in our state of the art facility”, it has also revealed that “plans are currently underway to add a production facility to the company's capability” (ECI Biotech Inc.-b, n.d.). 2.1.2. Technology Perspective ECI shows commendable strength in terms of Intellectual Property (IP), and its assortment of patents “can be separated into 17 patent families in five product areas: diagnostics for Wound Care, Women’s Health, and Oral Care; Therapeutics; and Advanced Molecular Technologies”; furthermore, as has been revealed by the company’s website, “ECI’s proprietary diagnostic technologies incorporate both specific and broad-spectrum targets for detection of microbial pathogens that are derived from genomic studies and high throughput library screening” (ECI Biotech Inc.-c, n.d.). The variety of detection platforms that are addressed through this IP “include simple food grade sensors for bacterial monitoring, rapid enzyme-linked (zymogen) sensors for point-of-care use, and electromagnetic biosensors for ultra-sensitive detection” (ECI Biotech Inc.-c, n.d.), and ECI accomplishes its core activities by using a pair of complementary technologies, viz. ExpressDetect® and ExpressProtect™. 2.1.2.1. ExpressDetect® This is a proprietary technology through which ECI develops sensors that “detect specific enzymes associated with bacterial infections”; moreover, this technology “enables rapid, easy detection of femto (10-15) gram quantities of specific enzymes produced by microorganisms” (ECI Biotech Inc.-c, n.d.). Being economical, fast, secure and simple, these sensors can be incorporated easily into a wide range of products that are associated with consumer as well as professional care. 2.1.2.2. ExpressProtect™ ExpressProtect™ proteins, as said by the website of ECI, “are small molecular chaperone (alpha-crystallin) proteins that protect against cell death (apoptosis) under various physical and chemical traumas (e.g. infections, burns, chemo therapy)”; furthermore, these engineered bio-molecules have been reported to “inactivate bacterial toxins, reduce matrix metalloproteases (MMPs) to basal levels, and block the upstream mechanisms in programmed cell death” (ECI Biotech Inc.-c, n.d.). 2.1.3. Business Perspective The Board of Directors (BoD) at ECI is a seven member team consisting of competent leaders from different walks of biotechnology, such as protein engineering, drug development, etc. Notable companies that provide equity financing to ECI include “Collaborative Seed and Growth Partners, LLC”, “Thomas Crown Investments, LLC”, and “The GS Fuller Foundation” (ECI Biotech Inc.-d, n.d.). The technological expertise of ECI provides ample room for collaboration opportunities, and the products developed by the company may add considerable value to medical devices used in catheters, drains, nosocomial infection control, sutures, wound dressings, etc.; and consumer products such as bandages, dental floss, diapers, feminine napkins food safety, and home hygiene (ECI Biotech Inc.-e, n.d.). 2.2. Contract Research Organization (CRO) 2.2.1. The Company: Pharmaceutical Product Development, Inc. Pharmaceutical Product Development, Inc. (PPD), incorporated in the state of North Carolina “is a leading global contract research organization (CRO), celebrating 25 years of providing drug discovery, development and lifecycle management services” (Pharmaceutical Product Development, Inc.-a, 2010). The company works in close association with various organizations that belong to the academic, biotechnology, government, medical instrumentation, and pharmaceutical sectors; in addition, “with offices in 41 countries and more than 10,500 professionals worldwide, PPD applies innovative technologies, therapeutic expertise and a commitment to quality to help clients and partners accelerate the delivery of safe and effective therapeutics and maximize the returns on their R&D investments” (Pharmaceutical Product Development, Inc.-a, 2010). 2.2.2. Technology Perspective Having said that “for drug developers, finding the right patients, investigators and outsourcing partners is essential”, INC Research has laid emphasis on the fact that “with shareholders demanding improved efficiencies, the resources, reach and expertise of a contract research organization (CRO) can expedite the research and development process” (INC Research, 2009, pp.2), thereby highlighting the linkage between the technology perspective and the business objectives of a CRO. PPD has two distinct services that carry out discovery and development respectively. BioDuro, one of its subsidiaries, specializes in drug discovery and is “focused on integrated drug discovery programs” (Pharmaceutical Product Development, Inc.-a, 2010); in addition, PPD also takes part in nonclinical development and preclinical services, and its development services are associated with academia, biotech, government, medical devices, and pharmaceuticals. 2.2.3. Business Perspective Figure 1: Performance Measurement Archetypes (R&D) (Source: Chiesa & Frattini, 2009, pp.36) The figure appended above illustrates three archetypes (soft, hard, and motivational) for the performance evaluation in terms of research and development (R&D). As has already been mentioned in the previous section, technology and business objectives go hand in hand, as far as technology-intensive organizations are concerned. However, there are numerous issues that determine the extent which the CROs may succeed in achieving their goals, and outsourcing plays an important role in this regard. Talking about pharmaceutical companies “who have a new compound to test”, Adriana Petryna has come up with an assumption “that they wanted to outsource the development of that entity”, and has opined that these companies would rather “turn to a CRO, which could handle subject recruitment, clinical testing, data management, and drug approval” (Petryna, 2009, pp.73). She has also taken into account the possibility that “the CROs might have direct links with investigator sites, or it might act through yet another party, the site management organization (SMO)” (Petryna, 2009, pp.73), thereby highlighting the pivotal role that the CROs play in the process of drug development. Figure 2: Stages in Process-Driven Clinical Research (Source: INC Research, 2009, pp.6) Owing to the criticality of a clinical research process, CROs should have clear business perspectives and they should also take into consideration the amounts of competition that prevail in this lucrative sector. The vision of PPD “is to be the global leader in our industry based on consistent quality and execution, exceptional customer-aligned service and constant innovation” (Pharmaceutical Product Development, Inc.-b, 2009), and it provides a comprehensive idea about the viewpoint of a competent CRO. 2.3. Bio-Remediation Company 2.3.1. The Company: Catalina BioSolutions Catalina BioSolutions (Catalina), based in Tucson, Arizona claims that it has been successful in maintaining its rate of customer satisfaction at hundred per cent, even “after 15 years in the bioremediation business” (Catalina BioSolutions-a, 2007). The company employs microorganisms that are non-pathogenic as well as non-opportunistic, and terms them as “BioCritters”; even though it has been reported that “most sites treated with BioCritters reach full closure on the first attempt”, Catalina provides unmatched services in the form of unconstrained technological support “throughout the project to ensure complete site closure” (Catalina BioSolutions-a, 2007). 2.3.2. Technology Perspective Environmental Biotechnology, according to Koenigsberg et al. (2005) “involves a continuum of subjects, from the traditional domains of sewage, wastewater, and drinking water treatment through to the more recently established bioremediation sciences” (Koenigsberg, Hazen & Peacock, 2005, pp.6). The “BioTreatment System” of Catalina includes two components, viz. (1) “BioCritters”, and (2) “BioBooster” (Catalina BioSolutions-b, 2007). 2.3.3. Business Perspective As far as the business perspectives of bioremediation companies are concerned, they have to work in accordance with environmental standards and towards the betterment of environmental quality; in this context, it may be mentioned that “Catalina BioSolutions provides Full Service Bioremediation (in situ or ex situ) including: initial lab analyses; plate counts and lab tests throughout the project; inoculations and site work until the site reaches the required action levels; and the final lab analyses” (Catalina BioSolutions-c, 2007). 2.4. Startup Biotech Company 2.4.1. The Company: Beeologics, LLC The main feature that makes the Florida based Beeologics, LLC (Beeologics) an interesting company lies in the fact that it “is an international firm dedicated to restoring bee health and protecting the future of insect pollination” (Beeologics-a, n.d.). Although the primary goal of the company “is to control the Colony Collapse Disorder (CCD) and Israeli Acute Paralysis Virus (IAPV) infection crises”, its corporate mission “is to become the guardian of bee health worldwide”; the company aims at achieving these objectives “through continuous research, scientific innovation, and a focus on applicable solutions, Beeologics is developing a line of RNAi-based products to specifically address the long-term well being of the bees” (Beeologics-a, n.d.). 2.4.2. Technology Perspective “Incorporated in 2007, Beeologics was founded upon many years of research conducted by some of the world's leading scientists”, and it is quite comprehensible that “this unique integration of diversified talent and progress toward achieving its mission has enabled Beeologics to quickly command worldwide attention”; furthermore, it has been observed that “the company is recognized by the United States Department of Agriculture (USDA), the USDA-ARS, the media, beekeepers and leading entomologists worldwide” (Beeologics-a, n.d.). As is the case with any other startup venture, even biotech startups generally come with an extensive knowledge about technological advancements, albeit, it may often so happen that they may run low on financial resources. However, Michal Lev-Ram has reported that Beeologics “aims to create vaccines for all viruses that could lead to CCD”, and has also opined that “it's an unlikely collaboration between Eyal Ben-Chanoch, 49, a tech entrepreneur who helped design the first Intel (INTC, Fortune 500) Pentium chip, and Ilan Sela, 71, an Israeli expert on sequencing the genomes of bee viruses” (Lev-Ram, 2009). 2.4.3. Business Perspective Although the company seems to have a unique business perspective, it is understandable that they have healthy prospects. Beekeeping serves as a potential economic activity and hence, Beeologics can actually provide a strong impetus to this sector. The fact that “to date, Beeologics is the only company to make a scientific breakthrough on the road to protecting bees from viruses” (Beeologics-a, n.d.) speaks volumes about the promising future that the company may achieve in the near future. Although “FDA approval is still pending”, it had been reported in 2009 that “the company is confident it will be able to commercialize the vaccine this summer, at around $2 per dose” (Lev-Ram, 2009). While observing that “a hive will need one dose per month”, Michal Lev-Ram has asserted that “Beeologics could soon be buzzing with revenues” (Lev-Ram, 2009). 2.5. Foreign Biotech Company 2.5.1. The Company: Artes Biotechnology GmbH Artes Biotechnology GmbH, a Langenfeld, Germany based biotech company offers contract research and development services for “recombinant strain development in microbial expression systems” (Artes, 2004). It has more than 15 years of experience on the related domain and holds worldwide licensing rights for the technology that it has developed in house. 2.5.2. Technology Perspective Artes Biotechnology operates in a niche biotechnology domain - recombinant strain development in microbial expression systems. With more than one and a half decade of experience, an extensive network of technology and research partners, and a small but strong pool of in house researchers, Artes Biotechnology has superior technological capabilities in its own domain, which is aptly represented by over 11 patents Artes Biotechnology holds. 2.5.3. Business Perspective With the cost of development of a new drug shooting up, pharmaceutical companies increasingly turning towards contract research and development to reduce cost and development time, and access specialized expertise on a project to project basis. 3. Conclusion It has been observed during the course of this research that biotech companies may be classified under different categories, each having their own sets of technology as well as business perspectives. This is largely due to the fact that each category has its distinct activities that may be completely different from those of the others. It has been observed that vertically integrated biotech companies enjoy a more streamlined production facility and have a wide range of clientele and business associations. CROs on the other hand require a better alignment of processes because most often they are given the responsibility of managing the entire process of drug development starting from the scratch. Furthermore, they have enhanced levels of accountability. Bio-Remediation companies work on the principles of environmental biotechnology and play a vital role in the betterment of environmental resources. Coming to the startups, it may be said that these exhibit wonderful examples of novel as well as innovative ideas. Moreover, they are technology intensive ventures and hence they have the inherent capacity to withstand competition, provided, they have sufficient funds to support their initiatives. References 1. Artes. (2004). ARTES – THE FINE ART OF BIOTECHNOLOGY. [Online]. 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Available at: http://www.usistf.org/download/documents/Reports-ScienceTechnolgy/State-Government.pdf [Accessed on Aug 4, 2010]. Read More