Frost & Sullivan: Orphan Drugs to Create Paradigm Shift in the Pharmaceutical Industry!

LONDON, April 6, 2010 - The economic recovery process has proved difficult for the pharmaceutical
industry. Factors like patent expiry, dry pipeline, and strict approval
guidelines have slowed down the attractive drug discovery and industry
growth. Coupled with an investment risk in new therapy or molecules, this
creates a challenge for the industry to overcome. However, in the midst of
the current status, there seems to be a bend in the road - marked by the
evolution of a paradigm shift in the industry: Orphan drugs.

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"While the pharmaceutical industries have been focusing on 'blockbuster'
small molecules (chemical drugs) for high revenue generation in the past, it
is expected that in 5 years, around US$90.0 billion worth of branded drugs
will lose their exclusivity," finds Frost & Sullivan Healthcare consultant
Shabeer Hussain. "The current economic situation plus the huge generic
competition shifted the focus of pharmaceutical companies and they are moving
to a new business model - 'Niche busters,' also called Orphan drugs."

This new business model will provide an approach to an integrated
healthcare solution, thereby enabling pharmaceutical companies to develop
newer areas of therapeutics, diagnosis, treatment, monitoring and patient
support. Orphan drugs provide attractive opportunities to reduce the impact
of revenue loss due to the patent expiry for blockbuster drugs. Clinical
trials for orphan drugs are run efficiently with smaller patient groups,
thereby reducing costs significantly. Incentives for drug development
provided by governments, the FDA and the EU commission support in special
protocols are a further boost for companies developing orphan drugs.

Pharmaceutical and biopharmaceutical companies are also joining in
partnerships by licensing products to maintain revenue. Such collaborations
reduce the cost of developing and marketing orphan drugs. In numerous ways, a
balanced, strong alliance will achieve mutual benefit to both pharma and
biotech companies.

While the focus on "niche busters" grows, the safety regulations and
approval processes will become stricter, putting larger companies in a better
position to cope with the increasing demands. However, though smaller
pharma-biotech companies will struggle to compete with the more powerful
competitors in the industry, Hussain believes there will still be assurance
for niche players with specialist therapies, technologies, unique
capabilities and expertise. Acquisitions at a global level, aimed at specific
niche capabilities with technologies, are likely to be the most effective way
of achieving a better partnership and collaboration, as well as a more
diverse client space. This will add the necessary stability smaller
collaborations need to survive and thrive.

Though there may still be challenges ahead for the pharmaceutical
industry, orphan drugs seem to offer the key to recovery and stability within
the market. The crucial focus is maintaining unique desirability within
smaller collaborations, while emphasizing competitive strategy and vigor.
Hussain believes orphan drugs to be highly competitive market drivers: "The
global pharmaceutical industry is beginning to grow and expand, but part of
the reason is because this year has been the year of biopharmaceuticals.
Biopharmaceuticals are likely to continue to take the major share of the
pharmaceutical industry and be in direct competition to the small molecule
drugs. These effects will create new consolidated companies, and this
evolution will change the landscape of the pharmaceutical industry," he
concludes.

If you are interested in more information on Frost & Sullivan's research
on Orphan Drugs, please send an e-mail to Katja Feick, Corporate
Communications, at katja.feick@frost.com, with your full name, company name,
title, telephone number, company e-mail address, company website, city, state
and country.

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    Contact:
    Katja Feick
    Corporate Communications - Europe
    P: +49-(0)-69-7703343
    E: katja.feick@frost.com
    www.frost.com
    Twitter: twitter.com/frost_sullivan

Katja Feick, Corporate Communications - Europe of Frost & Sullivan, +49-(0)-69-7703343, katja.feick at frost.com