Lux Research report finds that pharmaceutical giants invest less money and people in nanotech than
other industries - despite pressure to replace fading blockbuster drugs
NEW YORK, Feb. 15 /PRNewswire/ -- The U.S. National Institutes of Health counts nanomedicine as
one of its top five priorities, the National Cancer Institute committed $144 million to nanotechnology
research in October 2004, and 40% of nanotech venture capital since 1998 has gone to life sciences
start-ups. Yet despite nanotechnology's promise in improving how drugs are developed and delivered,
major pharmaceutical companies are committing almost no money or people to nanotechnology
research -- exposing them to strategic risks, according to a new report from Lux Research entitled
"Why Big Pharma Is Missing the Nanotech Opportunity."
"Nanotech presents many opportunities to pharmaceutical giants, ranging from better delivery of
existing drugs to entirely new therapies based on nanomaterials," said Lux Research Vice President of
Research Matthew M. Nordan. "But big pharma is not investing in nanotech today. If this trend
continues, nanotech will play out in pharmaceuticals just as biotechnology did, with major
pharmaceutical companies leaving money on the table and allowing new competitors to take root."
Lux Research bases its conclusions on in-depth interviews conducted with individuals accountable for
nanotechnology at 33 global corporations with annual revenues exceeding $5 billion. The interview data
reveals that:
- No life sciences interviewee rates nanotech as a high corporate priority, as opposed to 78% of
interviewees in electronics and materials. - Only one out of six life sciences respondents claims to have an explicit strategy for
nanotechnology, compared with two-thirds of those in other electronics and materials. - Big pharma companies on average commit 16 people and less than half of one percent of R&D
spending to nanotechnology research, whereas like-sized electronics and materials firms commit
more than 100 people and more than 8% of R&D.
Lux Research's analysis finds that large drug manufacturers pay little attention to nanotechnology for
three reasons: Organization, history, and hubris. First, big pharma companies typically entrust
accountability for nanotechnology to an executive responsible for drug discovery, pharma's biggest cost
driver -- but nanotech's big near-term impact is in drug delivery. Second, big pharma companies learned
during the biotech revolution that they could avoid their own investment and instead in-license drugs
from start-ups at a late stage -- but greater pressure on big pharma's drug pipelines today gives
nanotech start-ups a negotiating advantage. Finally, many big pharma executives claim they've been
"doing nanotech" for years by developing small-molecule drugs or engineering proteins -- however, few
can claim the materials science expertise that truly novel nanotech innovations depend on.
Pharmaceutical companies' laissez-faire attitude towards nanotech will have consequences. "Big pharma
will have to contend with a new wave of superbranded generics that will erode market share. This trend
began with the approval of American Pharmaceutical Partners' nano-enabled Abraxane cancer therapy
this January," said Nordan. "On the other hand, opportunity exists for a forward-thinking drug
manufacturer to go on the offensive and acquire competitive capabilities by picking up a nanoscale
reformulation specialist, as mid-cap pharma manufacturer Elan and medical devices leader Baxter
already have. We think Kereos in the U.S., Nanocarrier in Japan, and Solubest in Israel look like prime
targets."
The report provides interview data comparing the nanotech strategy, staffing, and R&D spending of
global life sciences companies versus like-sized competitors in the electronics and IT sectors, and also
profiles 14 start-up and mid-cap companies developing nanoscale drug delivery technologies. It is
available immediately to clients of Lux Research's Nanotechnology Strategies advisory service. For
information on how to become a client, contact Rob Burns, Vice President of Sales, at (646) 723-0708.
About Lux Research:
Lux Research is the world's premier research and advisory firm focusing on the business and economic
impact of nanotechnology and related emerging technologies. Lux Research provides continuous
advisory services, customized consulting, and reference studies to corporations, start-ups, financial
institutions, and public sector organizations. Our founders and our research staff are the most widely
recognized nanotechnology visionaries throughout the world. Visit http://www.luxresearchinc.com/ for
more information.
Website: http://www.luxresearchinc.com/
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