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CASE STUDY 10.1

BIOTECH – THE DEVELOPMENT

OF A RADICAL NEW

THERAPEUTIC FOR AN ACUTE

INFLAMMATORY DISEASE

>> BACKGROUND
BIOTECH is a biopharmaceutical company which mainly develops human monoclonal
antibody therapeutics. BIOTECH seeks to develop products both independently and in
collaboration with partners, using its capabilities and technologies in the discovery and
development of medicines in selected therapeutic areas. BIOTECH also seeks to license
its technologies to enable others to develop new medicines. BIOTECH is a publicly listed
company, with 600 employees based on the west coast of the United States. It has net
cash and liquid resources in excess of $500 million. BIOTECH’s most significant (and
growing revenue) is from the royalties it receives from a drug it developed and subse-
quently licensed to a large pharmaceutical firm who took it on during later stage Phase
II trials and though to commercialization (see Figure 10.3 for a description of the entire
drug development process). BIOTECH has ten further licensed product candidates in
clinical development, funded by BIOTECH’s licensees. BIOTECH also has two proprietary
product candidates which it is currently developing. BIOTECH’s expertise predominantly
lies in early stage/preclinical development. Its financial strategy is that all its R&D activi-
ties, excluding later stage product development, are to be funded from revenues. This is
to ensure that the business itself is effectively self-financing up until the demonstration of
efficacy (see ‘Glossary of terms’) in clinical trials. The strategy is aimed at enabling BIO-
TECH to continue to pursue its own, carefully targeted, proprietary discovery programmes
in-house. Decisions regarding the funding of any later stage clinical development activity
are taken on a case-by-case basis. To date BIOTECH has taken only four development
programmes into clinical trials itself from a total of 11 in trials development.

>> THE FOCAL INNOVATION PROJECT – BIOTECH-123
BIOTECH-123 is a therapeutic aimed at tackling an acute respiratory disease
which affects significant proportions of Western populations and which continues
to increase in prevalence. As such then the drug has the potential to become a

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