What’s on the Horizon in Health Care?
Wednesday, July 05, 2023
Health care is an ever-evolving industry. Consider the momentous changes witnessed over the ages and the progress achieved through research and development. Whether it be in pharmaceuticals, techniques and procedures, new tools and equipment; the history of medicine is rife with spectacular discoveries. So, what’s next?
Biologics and Bioprocessing
Cell-based pharmaceuticals, including certain flu vaccines, have been around for a long time. More recently, a new class of drugs has emerged – biologic therapeutics. Biologics are genetically engineered living cells used to produce helpful enzymes, organic acids, antibiotics, vaccines and proteins. The most notable biologics are monoclonal antibody therapies, or MABs, which have progressed meaningfully since they were developed in the mid-1980s. Other examples include cell and gene therapies that target disorders and infections like rheumatoid arthritis, chronic migraines and anemia.
Bioprocessing is the procedure through which living cells become biologics. It includes the research, development and manufacturing of biologic treatments. Manufacturing begins with a cell culture (i.e., growing cells in a lab.) The cells are cultivated, refined, harvested and densified for large-scale production. Bioprocessing also involves various stages of filtering and clarification.
Similar to oil and gas, bioprocessing is divided into two manufacturing categories: (1) “upstreaming,” when cells are grown to achieve a targeted solution; and (2) “downstreaming,” when the desired biological product is completed through a series of steps, including separation, purification and product packaging. Bioprocessing requires equipment, like bioreactors and mixers, and consumables, such as chromatography resins and filters, which make up the majority of industry sales.
For more information on bioprocessing visit ScienceDirect.com.
What Makes Bioprocessing an Attractive Investment?
Producing biologics is a heavily regulated process. As part of the approval process, biologic manufacturers must disclose broad-based descriptions of the product, including the production process, testing and controls. In other words, it’s not just the products that receive approval but also the manufacturing process used to develop the therapies. Once a biologic is approved, manufacturers typically avoid making changes, as doing so would require new approval and certification. From our perspective, that makes bioprocessing equipment and consumables consistent and reliable investments.
According to Precedence Research, the global biologics market is expected grow roughly 8% from 2022 to 2030 to $720 billion. The success of biologics, and MABs in particular, is driving demand for bioprocessing equipment and consumables, which is also forecasted to achieve above-average growth of around 8-9% per year.
Today, 60% of all drugs in development are in biologics compared to roughly 20% just 20 years ago. The research and development pipeline for biologics is strong – there are more than 20,000 biologics in development, while cell and gene therapy developments are 10X higher since 2015.
We gravitate toward high-quality companies with dominant market share in relatively concentrated industries. To learn more about our specific recommendations in this space, speak to your Odlum Brown Advisor or Portfolio Manager.
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