Even though genotyping will segment the market for new drugs into narrowing, predictable sub-populations of responders and non-responders, capital investment in drug discovery and development is still based on the assumption that the occasional multi-billion dollar blockbuster drug will return, in multiples, the capital risked on an entire drug portfolio.
In the Q&A session following his presentation to BioScience Forum last night, Genentech’s chief medical officer, Hal Barron, MD, explained that the expectation of blockbuster returns from smaller markets is not the paradox that it seems. Dr. Barron pointed out that although Herceptin (Trastuzumab) is known to work on only 25% of patients with metastatic breast cancer (those whose tumors overexpress the HER2 protein), the drug offers a very prominent treatment effect for that segment. Therefore, the market penetration within that segment is very high.
Drugs that only "sort of" work have weak penetration. But doctors will prescribe enthusiastically when the intended effect is much more certain. Dr. Barron predicts that in the future, drugs won’t be viable unless they offer robust treatment effects.
According to Genentech’s 2004 10-K, net sales of Herceptin were $483 million last year, rising 14% from 2003.
Comments on this entry are closed.