Unlocking the Molecular Diagnostic Interpretation Bottleneck

Posted on 08 Nov 2012 by Bioentrepreneur

As noted in the news feature Direct-to-consumer genomics reinvents itself, 23andMe has filed to secure 510(k) clearance for some of its genetic tests, which poses the question of whether a foot in the door at the FDA will increase demand and re-energize the direct to consumer (DTC) genomics market?

FDA approval is undoubtedly an important step, but it will not address the most fundamental bottleneck to growth of the DTC market. The far more fundamental problem to the evolution, growth and value of genomic testing, whether DTC or through a physician-driven model, is the inability to scale the interpretation of these tests and the need to improve, by several orders of magnitude, the speed and quality of interpretation and variant classification.

For decades, clinicians have been running tests of a single gene or a small panel of genes for tightly defined phenotypes. These tests have emphasized clinical validation or confirmation of a clinical hypothesis, and the tests have generally been limited to genetic variation associated with broadly accepted clinical guidelines and benefits. Even so, a small- to medium-sized lab employs five to 10 medical geneticists and pathologists to interpret, score and report on these tests.

As the industry moves to testing with larger gene panels, exomes and whole genomes, and as we target these tests to more complex and multiple phenotypes, the time and complexity of interpreting these tests will grow exponentially. Add to this the desire to run millions of tests per year, and the interpretation becomes intractable with current solutions. No clinical geneticist can handle the enormous complexity, and no testing lab can hire enough medical geneticists to scale and address the need with currently available solutions.

The bottom line is that for the DTC and molecular diagnostic market to grow much beyond its current state and realize its full potential, the industry needs to develop fundamentally new content and software solutions that deliver many orders of magnitude improvements in the time, quality and cost to interpret and classify genetic variation.

At Ingenuity, we think in terms of comprehensive curation of all known human phenotype variations from peer-reviewed literature and computationally tractable models of biology that allow us to more fully understand the impact of genetic variation on the biological system.

Easy-to-use software that enables clinical geneticists or pathologists to quickly and with high confidence produce test reports with clinical relevance and impact is the solution. Until innovative companies and the scientific community solve this problem, no amount of FDA clarification, sequencing technology improvement or reduction in the cost per test will materially alter the market dynamics. By every estimate this is a daunting task, but science had the ingenuity to drop the price of sequencing faster than Moore’s law over the past 10 years, and now together we need to focus our attention on unlocking the full market and clinical potential by addressing the interpretation bottleneck before it becomes a showstopper.

Jake Leschly, CEO, Ingenuity Systems

To be (briefly) on the front lines

Posted on 22 Oct 2012 by Julia Fan Li

For many of us working in the life sciences and passionate about the biotechnology sector, our motivation often stems from the power of medicine to help people. Somewhere on the career path, one may have thought about the doctor route. For me personally, the potential there ended in high-school with an aversion to blood and sensitivity to bearing bad news to patients.

However, during the final year of my PhD this year on financing global health, I had the opportunity to attend Oncology Summer School at the University Medical Centre at the University of Gronigen, in the Netherlands. The course brought together 36 medical students from six continents to attend a course on clinical and experimental oncology. I was the only student without prior clinical training, but I had experience in drug development and financing. I was very excited about this opportunity – and the course did not disappoint.

Continue reading →

Agbio in Africa: a train that is finally rolling

Posted on 29 Aug 2012 by Ed Rybicki

It took an interesting temporal juxtaposition of articles in two very different media – the Cape Times newspaper business section, and an editorial in New Scientist – to set me off, but once I’d started, there was no stopping.

The theme? The uptake of advanced biotechnology in Africa, and in particular, of genetically modified (GM) crops.

I have been interested in this field ever since I became practically involved back in 1990, with the birth of our fledgling GM crop programme at the University of Cape Town. It has been with some degree of enlightened self-interest, therefore, that I have followed the application of GM technology in Africa and abroad – and one of my sources has in recent years been the excellent and regular reports on the global status of commercialized biotechnology and GM crops by The International Service for the Acquisition of Agri-biotech Applications (ISAAA), such as the latest one available here. It has been very interesting to watch the steep rise in cultivated area under GM crops over the years, in countries like Argentina, South Africa and now Brazil: in fact, there was an almost 100-fold increase in area from 1996 to 2011, from 1.7 million to 160 million hectares. As the brief reports, this makes

“…biotech crops the fastest adopted crop technology in the history of modern agriculture.”

The interesting thing is that of the top ten growers of GM crops, no fewer than seven – excluding China– are developing nations. While the USA leads the pack, the next three slots are filled by Brazil, Argentina and India. Paraguay, Pakistan, South Africa and Uruguay bring up the rear, with another eight developing countries in the next ten. Thus, it is not the First World that is growing the most; it is the countries with the populations that are: the brief makes the point that more than half the world’s population live in the 29 countries growing GM.

However, while Latin American countries are very well represented among the leaders – 9 of the top 20 producers are in South or Central America – Africa has just two: South Africa, at 9, and the surprise entry Burkina Faso, at 15. Egypt pegs in at 24th with less than 50,000 ha of crops, which is less than a sixth of Burkina Faso’s total.

The world’s top GM crops are maize, cotton and soybeans, and Africa grows a considerable amount of the natural versions of all of these: according to the FAO information site, South Africa is 8th in maize production, with Nigeria at 10th, followed by Tanzania, Ethiopia, Kenya and Malawi in the top 20; Burkina Faso and Nigeria are bracketed at 13 and 14th for cotton with Egypt 16th; South Africa is 12th and Nigeria 15th for soybean production.

However, again South and Central America do better: Argentina is 10th for cotton production; Brazil, Argentina and Mexico occupy positions 3-5 for maize production; Brazil and Argentina are 2nd and 3rd with Paraguay 6th and Bolivia 9th for soybean production.

There is far more arable land in Africa than in South America – total land areas of 30 million and 18 million km2 respectively, with 1.946 million vs. 1.046 million km2 cultivated – and populations per km2 are not much different at a low 34 and 22 respectively, so why is productivity so much lower? Why, then, is uptake of GM also so slow in the continent that could probably benefit the most?

The answer to the first question is mired in a toxic mix of chronic under-development as a result of colonial pasts, past and present politics, and grinding poverty, and is not mine to give.

The answer to the second, however, is more simple: it is mainly due to a mix of political and economic and regulatory inertia, and innate cautiousness about solutions that people are being fostered on them from outside – and in particular, from countries that are not seen to be applying them at home. A knock-on from the last is that anti-GM activists from especially European countries have exported their campaigns, lock stock and barrel, into the developing world – where politicians have taken notice, and have become even more cautious as a result. Thus it is, that while the major proportion of both maize and cotton grown in South Africa is GM, and this share is increasing, other southern and central African countries like Zambia have even been reluctant to accept milled GM maize as food aid, let alone to plant it.

Mrs. Pauline Ruiru, on her farm near Githungiri, central Kenya, standing behind an MSV-infected plant.{credit}Ed Rybicki{/credit}

Kenya has bucked this trend, however: in 2011 they became Africa’s 4th member of the GM crop club, with publication of regulations governing the cultivation of GM crops in open fields for research and commercial purposes by the National Biosafety Authority. ISAAA has long had offices in Kenya; there is also a home-grown NGO in the shape of Africa Harvest, which has been very active in advocacy for GM plantings since 2002: their mission is

“…to promote the use of advanced science and technology products to improve agricultural productivity among Africa’s farmers, and free Africans from poverty, hunger and malnutrition.”

Neighbouring Ugandahas also been contemplating legislation that will regulate – and allow – GM plantings. Crops under consideration are bananas, maize, cotton and cassava: in particular, Uganda is interested in cassava engineered to be resistant to cassava brown streak virus, which is a serious and emerging problem in the country, for which no natural resistance genes are known. There was also recently news about a successful Bill & Melinda Gates Foundation-funded GM banana nutritional enhancement programme. This was an Australian-led initiative that heavily involved local researchers, and has led to the “golden banana,” or banana which is highly enriched in vitamin A and iron, and will hopefully also be engineered to be nematode-resistant.

There is a common thread running through all but possibly one of Africa’s GM adopters – and that is that local scientists have been involved in developing products everywhere except maybe Burkina Faso, and that the countries involved have put legislation and regulations in place to deal sensibly with GM issues. This is very similar to the case of Brazil, which was aired in this forum in March a year ago, in a blog titled “Brazil Feeds The World.” Luiz Antonio Barreto de Castro wrote then that:

“…why did it take so long to see biotech crops released inBrazil? We had a biosafety law in operation since 1995, but literally lost 10 years disputing the judiciary in Brazil, which took sides and made political decisions against science and scientists.

After 2005 everything changed. A new biosafety law stimulated the combination of tropical genetics and biotech so much that Brazil is second only to the US in biotech crop production. We have few plants entirely engineered in Brazil, but Brazilian corporations take advantage of our breeders’ expertise and release the best crops for all Brazilian biomes.”

He finishes with:

“There is work to do, but Brazil can make the gene revolution work in the same direction as the green revolution did decades ago, by the hands of Norman Borlaug with more powerful science tools available.”

This is an excellent sentiment, and one that surely applies for other developing nations, too. There are important lessons for Africa here: first, once the legislation is in place, and regulations enforced, it is possible to apply imported GM technology under your own conditions and under your control. Second, development of your own biotechnology research community can result in products specific for your country, which owe nothing except in original concepts to the outside world. An important object example here is the engineering via specific siRNA expression of GM green beans resistant to the Bean golden mosaic geminivirus that was discovered in, and is endemic in, Brazil.

Indeed, my group has similarly attempted to produce a home-grown solution to Africa’s worst viral disease affecting its premier food crop: for some 22 years now, and with only local money, we have been working towards engineering resistance to Maize streak virus, with lab-scale success coming in 2007. This work may yet fail at the field-trial hurdle; however, what we have done is to lay a foundation of routine maize transformation and regeneration for us and others to make other products – such as plants resistant to fungi, bacteria, and drought, as also mentioned by Luis in his blog.

There has been an increasing tide of positive media commentary recently on the potential of GM crops to improve living standards and help in poverty alleviation in Africa– and good example was this article on the Voice of America web site. While it is a long and well-reasoned article, one comment from ISAAA Kenya’s Director, Margaret Karembu, struck me forcefully as epitomising the problem:

“Everybody else wants to make decisions for Africa without letting Africans make decisions.”

Which is why Africans don’t want to adopt the technology.

And what were the two articles I’d read that sparked writing this blog? The first – which was rescued from having been used to clean windows after I frantically phoned home, having forgotten to put it in my work bag – was “Agricultural Technology Grows Food for Africa”, by Ayanda Mdluli in the AgriScope column of our local Cape Times. While Ayanda is, I think, unnecessarily gloomy about the potential of GM seed growing to negatively impact small farmers, he also has this to say:

“The aim of various ongoing projects in Africa by biotechnologists is to curb vitamin deficiencies and address the gruelling challenge of food security, which will take some time to correct due to infrastructure impediments and policy issues.

Whether we like it or not, the use of biotechnology in agriculture is here to stay, the question is how it will be used by its advocates in their crusade towards creating a productive agricultural industry in Africa that could rival the likes of Brazil and even the US.

Sub-Saharan Africa is destined to be one of the key areas of food production, and with more technological advancements at the centre of the food security agenda, biotechnology may serve as the tool that eradicates the poverty datum line for Africans.”

I could not agree more – which is why I was enthused to write this piece. And as I was about to start, I saw the second of my inspirations in the shape of this editorial in New Scientist on Golden Rice. The editors make the point that the opposition to the Golden Rice project – which has no links to Big Agriculture, and has at its heart the prevention of vitamin-deficiency-caused blindness – is essentially dogmatic, and wrong. Moreover, in the light of evidence that eating just 100 – 150 gm of the rice can provide 60% of the recommended daily intake of vitamin A, the opposition may just be in danger of getting run over in a rush to adopt it.

Which is entirely as it should be, and would be an excellent vindication of an excellent and humanitarian project, long past due time. And while we’re about it, let’s grow it in Africa!

Ed Rybicki

On the Sidelines

Posted on 06 Jul 2012 by Rick Jones

When I recently stepped down as CEO of a small biotech, it was the first time since kindergarten, about fifty years ago, when I was not on a schedule of some kind. Although I keep up with trends through the usual channels of conferences, newsletters and conversations, my new perspective starting from scratch in search of my next opportunity has led me to ponder topics that are only now important to me. These include the role of luck in achieving successful outcomes, the changing business of university tech transfer offices, and the forces impacting the pool of experienced entrepreneurs in biotech. But today I want to concentrate on an issue raised by the unstoppable rush to embrace the virtual model in biotech—the role of generalist managers versus discipline specialists.

In its purest form the virtual biotech adheres to a “just enough, done expertly, just in time” business plan. In theory, only disciplinary experts need apply for what is typically a single asset company. For a small molecule development candidate this may mean an expert in preclinical development, another for CMC and a third for clinical and regulatory affairs. The CEO will be one of these specialists, or one of the investors may assign a partner to the role. There may be an opening for a project manager or clinical coordinator. Everything else is farmed out to CROs, CMOs, consultants and service providers, each again an expert in their respective disciplines.

On the surface this seems a logical response to the costly, unproductive research enterprises that characterize big pharma and many biotechs, especially as availability of capital falls. There are some potential issues, however, that might be summed up by the saying, “If you have a hammer, everything looks like a nail.”

A limited number of disciplinary experts leads to limited knowledge sets available to address the inevitable problems that arise in drug development. I’ve known examples of chemists who believe that the biggest hurdle in a project is chemistry, biologists who feel the same about their biologic assays, and even regulatory affairs experts who feel they have the ultimate burden. Of course it’s a combination of all of these disciplines and many more that must come together for a successful project. An expert with a deep focus on a particular field may be invaluable for the insights they provide in that critical area of a project, but may not even recognize what they don’t know about the wider issues if they have never been responsible for the larger picture.

This problem becomes even more acute when the subject extends to business development, board relationships and investor outreach. It would be unusual for a pure disciplinary expert to be adept at handling these areas, which unfortunately won’t be reduced to scientific principles. Achieving scientific excellence (using your hammer) in a way that does not translate into value creation won’t get you far — in other words, that was not a nail, it might be a screw (pun intentional).

I’ve heard several stories of senior managers who had moved beyond their discipline into cross-functional leadership positions but who are considered to be too “senior” or not specialized enough for startup leadership positions. Recently I discussed a CEO role in a company working in a therapeutic area familiar to me that had fundraising issues complicated by a potentially awkward strategic relationship, founders issues, competitive issues and needed to be led through a management shakeup. I was not a viable candidate because I was not a world expert in the scientific field being pursued by the company, even though one could argue this was the least of their many concerns.

The virtual model will be with us for some time as we work through this current business cycle and its accompanying theories. For these tiny organizations attempting to cover something as broad as drug development with extremely limited resources, we still have to figure out what is the right balance of deep and narrow versus limited but broad expertise.

Rick Jones

BIO 2012: Development cost comparison, China vs. US

Posted on 02 Jul 2012 by Chloe Liu

I attended BIO this year, and while there I felt responsible for China as a Trade Secrets contributor, so I settled in at “The China Day” – a day-long program organized around China, and was happy to take down some interesting numbers from the morning session.

Two domestic Chinese biotech companies shared their development stories. Beijing Continent Pharmaceuticals and Beta pharmaceuticals have a lot in common – both started 10 years ago from discovery research, both developed pipeline in specific therapeutic areas, and both got their first innovative drug approved by Chinese SFDA last year. There are not many Chinese biotech companies who had gone through the drug development and approval process, so their perspective offered some valuable insights.

According to Ying Luo, chairman of Beijing Continent pharmaceuticals, his company’s development experience was that China costs about 1/3 to 1/2 less than the US at the discovery stage, with the pre-IND cost in China being between US$600,000 to US$1 million.

The cost of clinical trials between US and China were estimated as following:

	China (million, USD)	U.S. (million, USD)
Phase I	0.3 – 0.8	3-5
Phase II	2-3	20-50
Phase III	3-7	60-300

Mr. Luo pointed out that the cost saving in China seemed not significant at the early stage but obvious at the clinical trial stage. This seems especially true at phase III, where the cost could be 10- to 20-fold less than that is in the United States. (Continent pharmaceuticals has its own in-house clinical development team.)

Beta pharmaceuticals started 10 years ago by screening for EGFR- Tyrosine kinase inhibitors based on Gefitinib (Iressa) and Tarceva’s molecular structure. In early 2000, Beta discovered Icotinib. Mr. Xinxiang Wang, CEO of Beta pharma, said that they were able to develop Icotinib with a relatively small team, by efficiently using contract research organizations. The trial was double-blinded and multicenter, comparing Icotinib and Gefitinib in advanced non-small cell lung cancer. It involved 500+ patients, and, thanks to the large number of hospitals involved, the total recruitment time was only 11 months. He said that they spent about 60 million RMB (US$7+ million) in Icotinib’s phase III trial.

This number is low – their full China clinical development program could be less than $11 million. Globally, 10 years and $1 billion has been the price tag of a new molecular entity, though people say it is getting longer and more expensive.

I caught up to Mr. Luo in the hall way and asked about this large difference in cost.

Luo was friendly and stressed that trials are different by drug, size, protocol and patient number, so one cannot generalize the cost. In addition, his numbers are not from a comprehensive poll, but individual experiences of his company and his peers. “But innovative biotech companies are rare in China, maybe not more than a dozen,” he said.

Global pharmas in China usually use global CROs, and the statistics I quoted before may come mostly from global multicenter trials. In which case, part of the cost reduction by Chinese companies might come because “global CROs are a lot more expensive than local CROs… global multicenter trials are a lot more expensive than local trials… “ Luo said.

Another contributing factor to the cost difference in the clinical trial may pertain to the number of patients tested, Luo pointed out. Global pharmas usually conduct several phase III trials globally on one drug candidate, each ranging from a few hundred to a couple thousand patients. In China, there is a requirement on the patient number for phase III trials, which is to have statistical significance and with minimum 300 patients on the test arm.

Beta pharma’s 10 years development seems to have created a blockbuster in China. The product was launched in August 2011. Sales reached RMB 100 million in February 2012, and is projected to reach one billion RMB by 2016. Mr. Wang said Beta is preparing to file FDA approval in the United States.

Chloe Liu

Carving a Niche

Posted on 27 Jun 2012 by Bernard Dichek

The success story of Yosef Behrend suggests an unconventional, though seemingly straightforward way to create a biotechnology business.

In order to set up new companies, biotech entrepreneurs often look for groundbreaking technologies and unmet medical needs but Yosef Behrend has carved out a thriving niche business in what is probably the oldest branch of biotechnology – fermentation.

Behrend decided to set up his own company, Fermentek, after studying and teaching industrial microbiology at the Hebrew University and working in R&D for the Sigma-Aldrich Corporation in Israel and the U.S. He observed that the commercial application of fermentation products created by microorganisms was an underexploited field

Today Jerusalem-based Fermentek markets more than a hundred products – all based on biochemicals that Behrend and his staff have isolated and identified as having commercial applications.

Setting up the company was not expensive, Behrend explains, because he initiated his operations through conducting literature searches based on his expert knowledge of the microorganism field. He also saved on marketing expenses by establishing international distribution deals with leading companies like EMD Biosciences, Apollo Scientific, Enzo Lfie Sciences as well as Sigma-Aldrich.

By pinpointing products not listed in the catalogues of the global biochemical providers, and by enabling the large companies to market his products under their name, Behrend worked out a win-win proposition for both sides. He has been able to leverage the extensive sales forces of the international players, while maintaining his own independence and grow his business as he sees fit.

Currently Fermentek has 12 employees and more than $2.5 million in annual sales. The company is moving into new fields as it unveils a number of biochemicals with active pharmaceutical ingredients (APIs) that originate from microbial fermentation. Products being developed in collaboration with drug companies target oncological and dermatological indications for drug development.

Still, the main users of the antibiotics, enzyme inhibitors, ionophores, signal transduction agents, mycotoxins and other biochemicals developed by Fermentek are researchers at life science companies, universities and government institutions.

Bernard Dichek

Begin With the End in Mind

Posted on 18 May 2012 by Janette Dixon

Last year I was asked to make a presentation on how I would approach strategy in my next start up. I’ve founded several life science start-ups in various countries over the years, and I also consult to companies needing assistance with their business development and strategic partnering, but the request gave me pause because there would be many in the room with a lot more experience (and grey hair) than me. I felt surely everything I have to say is common sense. But the conference organizer reassured me and we both agreed that strategy is often handled badly in start-ups, proving that there is room for more common sense.

I’d recently completed ten years of research on corporate strategy, mainly in biotech start-ups, and knew that many companies don’t realise their early decisions shape the options that they have for plugging into the value chain further down the track. In earlier posts I’ve talked about the typical value chain for drug development and the typical business models companies adopt. Corporate strategy is about how we interact with this value chain – ‘what’, ‘where’, ‘how’ we plug in to get a return for our shareholders.

So, if I was starting afresh, how would I approach strategy in my new start-up? I’d begin with the end in mind.

Consider all options upfront

What, when and how are we going to plug into the value chain? I’d consider all the options, implications and trade-offs upfront. The decisions made about ‘what’ our end product will look like has far-reaching implications for when and how we can plug into the value chain. The decisions we make about ‘when’ we want to take money off the table have implications for ‘how’ we can do it. (You can read more here and here.)

Continue reading →

New Bioentrepreneur article

Posted on 03 Apr 2012 by Bioentrepreneur

On the Bioentrepreneur site you’ll find a new Building a Business article (read it here). The piece stemmed from a discussion at JP Morgan in 2011, when the author Bill Polvino detailed his background and hiring at Veloxis Pharmaceuticals. Bill put together an outline, and after we’d hammered out a few drafts and got it through production, the final product emerged: A Work in Progress. The article gives advice on how to recognize the need for change in your biotech company, and how to implement it.

Enjoy.

International Business Development in Africa

Posted on 29 Mar 2012 by Blessed Okole

Africa is the world’s second largest and second most populous continent, comprising more than 54 countries. With a population of over 1 billion, it is attractive for any investor. Being successful in these markets requires insight into the languages, cultures, government bureaucracy, regulations, type of innovative technologies and workforce of each country. Every one is different, and this makes it very difficult to use the same recipe for any two countries. There may be similarities in the regions but inside information is still required.

As a result of colonialism, many African countries inherited European languages. In addition to these languages, there are many national languages that are spoken. For example, French is the dominant language in Central Africa, while English is dominant in Western, Eastern and Southern African countries. North of Africa, in addition to English you can survive if your Arabic is good. There is also Portuguese spoken in Angola, Mozambique and Equatorial Guinea. This makes it a rainbow continent. The language barrier can be seen clearly in the type of investments made in these countries, French pharmaceutical companies feel more comfortable establishing themselves in French-speaking countries. This paradigm is gradually changing as people begin to understand the culture and language of these countries. South Africa is learning fast in this area and taking the lead in penetrating the African market. This is done by hiring locals who can speak the language to be part of the development or management team.

If you consider culture to be an integrated pattern of human knowledge and beliefs, as well as a set of shared attitudes, values, goals, and practices that characterize a group of people, then Africa is a continent with diverse culture. This should be seen as an opportunity for any investor. Certain countries in Africa are very particular about the clothes that they wear. The religion practiced by the people in the country allows the women to dress in certain attire, and cotton is the most preferred and affordable clothing material. Thus, the introduction of genetically modified cotton in South Africa and Burkina Faso will not only increase the cotton production but will also revive these industries that are competing with cheap imported materials. Another interesting development in the agriculture sector is the emergence of different types of farmers. The younger farming generation would prefer early maturing, high-yielding food crops that are resistant to environmental and biological stress factors. This is simply because they want to make money fast, therefore, seed companies should be aware of this new trend. In general, only companies that know what their customers want will grow and expand fast in Africa.

Government bureaucracy and regulations: This is an area in Africa where every country has its own governance model. This normally confuses investors and is one of the biggest hurdles to jump, though some African countries are putting systems in place to make it easy for an investor. It is now clear that for unemployment to be lowered in African countries, Small Medium and Micro Enterprises (SMMEs) have to be encouraged and fully supported by governments. In the ’80s and early ’90s, the government in many African countries was the major employer. African countries have realized that there is a limit to the number of jobs that could be given by the government and are now encouraging SMMEs. This is good for economic growth; however, they have not learnt how to remove the hurdles for investors.

Investors prefer a soft landing or reward (tax holidays, tax loss, tax incentives for the initial period especially for SMMEs, favourable exchange laws) to make the country attractive to invest. Regulations are good but the bar on meeting these regulations do not have to be cumbersome. This at times is a bottleneck in selecting a country for investment. In the biotech sector, countries like Kenya, South Africa and Egypt will benefit in the agriculture and pharmaceutical industries, because they have started putting in place policies that are attractive to investors.

Another positive is that Africa embraces technology without fear. The cell phone has revolutionized the African market. Novel biotechnology food products are widely accepted. South Africa is one of the most technological-advanced countries in Africa and it is successful in selling its products to Africa because they can produce and sell at affordable prices and the quality is high. Africans do not compromise on quality, contrary to what some investors think. The salary range in Africa is normally divided into three categories: high, middle and low income class. In many African countries, the buying population normally falls within the middle income class, and this is usually the young generation who normally desires innovative technologies. As an investor, you must know and understand the target group that you will like to sell your products.

Blessed Okole

BoPping and MoPping

Posted on 13 Mar 2012 by Chris Dippel

I recently read a report on how private sector companies and grant-supported organizations have addressed and can address the need for medicines in bottom and middle-of-the-pyramid (BoP/MoP) markets. While aimed at the major international pharma companies, I thought it also had useful guidance and resources for bioentrepreneurs. The report, “Bringing Medicines to Low Income Markets,” was sponsored by the German Federal Ministry of Economic Cooperation and Development (BMZ) and Sanofi, and written by Endeva, a consulting firm offering “enterprise solutions for development.” The report starts with a helpful and succinct description of the BoP/MoP healthcare market’s opportunities and challenges. Here’s my summary of the salient points made:

the demand (need) is large with 1.7 billion people lacking access to the basic, essential medicines and another 2.3 billion with limited access;
while the annual household income of these 4 billion is under $3,000, they spend about $160 billion on healthcare, about one-third of which is on pharmaceuticals;
drugs are 2-6 times more expensive in the under-served markets than in developed markets due to taxes/tariffs, middleman mark ups, and supply (inventory) problems;
in lower-income countries communicable (infectious) and non-communicable diseases (NCDs, such as diabetes, heart disease, cancer) contribute equally to a country’s mortality rate, while in middle-income countries the NCDs contribute more than twice as much as the communicable diseases; and
companies seeking to enter the low-income markets are challenged by missing “enablers” such as the lack of doctors and other trained health practitioners, regulations (in many countries 20-30% of the drugs sold are counterfeit), infrastructure for delivery and stocking of products, financing for businesses providing health care, and insurance plans (70% of low-income patient drug purchasing is out-of-pocket).