A hi-tech boom helps the medicine go down

Injections without needles, pills with microchips - drug delivery systems are a rapidly growing secto

Faced with the prospect of having a needle jabbed into their private parts, most men would politely decline, but until recently such an injection has been the most effective way to cure male impotence.

Then Vivus, a US drug delivery company, found an alternative - packaging the same drug into pellets to be delicately inserted into the urethra - and took half the $60m world market in four months.

The next improvement could come from PowderJect, which will float on the London stock market this month and has a pain-free, needle-less injection. "If all men suffering from impotence had treatment, this would be a $500m market," says Paul Drayson, PowderJect's chairman.

As this example shows starkly, the way a drug is given can matter at least as much as what it does. This is the premise behind the drug delivery industry. The sector has come from nowhere 10 years ago, to capture a $12bn slice of the $150bn world-wide pharmaceutical market. Moreover drug delivery is growing fast - at 15-20 per cent a year, twice as fast as the wider drugs market.

The product that put drug delivery on the map was a heart pill called Procardia XL. The first version of Procardia, sold by Pfizer, had to be swallowed three times a day, restricting sales to $400m a year, and in 1989 was about to lose its patent.

In a well-timed move, Pfizer linked up with Alza - a then tiny drug delivery company - which came up with a once-a-day version, reviving Procardia's patent and tripling sales to $1.2bn. Felix Theeuwes, Alza's president of research and development, remembers the excitement: "We enormously expanded the market for angina drugs. Our technology gave Pfizer its first billion-dollar drug."

The range of delivery technologies today is vast and ingenious. It includes everything from simple skin patches, inhalers, gels and nasal sprays to implants, pills with microchips and contact lenses that release drugs into the eye.

SkyePharma's Geomatrix technology, for example, can release a drug in tablet form immediately, slowly over days or in prescribed bursts so that, say, someone at risk of heart attack could take a pill before bed and get regular doses throughout the night. Elan is developing a smart pill embedded with a microchip and Alza has a titanium implant, no bigger than a matchstick, that leaks out a cancer drug over a year.

The most exciting area in delivery, though, is driven by the biotechnology industry, which is developing protein and peptide-based compounds like insulin. These large and complex molecules have to be given by injection because they are digested if swallowed and are too big to pass normally through the skin.

Among the many companies working in this area, Cortecs is developing insulin and brittle bone pills, Inhale has an insulin dry powder inhaler and PowderJect a helium pump which can drive molecules through the skin at three times the speed of sound.

For both patients and healthcare payers, there are huge benefits in all this - the easier a drug is to take, the more compliant a patient will be. Alex Zisson of US broker Hambrecht & Quist says the cost benefits of improving compliance are central to the delivery sector: "In the US, 28 per cent of hospital admissions can be traced to people not taking their drugs properly."

Glen Travers, chairman of Cortecs, says that less than a third of women prescribed hormone patches for brittle bones stay on the treatment after two years: "The cost to the US government in hospital fees to treat broken bones is $10bn a year and growing."

For the big pharmaceutical companies, meanwhile, a clever delivery system can extend the patent life of their drugs, generating substantial extra revenues. The number of alliances with specialist delivery companies is growing.

Alza's Mr Theeuwes says: "It is financially unrewarding for pharma groups to spend millions on their own technologies to improve just one drug." Donal Geaney, president of Elan, says: "Many medicines stay on the shelf because they cannot be delivered properly and this is costly."

Rolf Stahel, chief executive of Shire, sees another reason for alliances: "Research directors in big pharma groups are not enthusiastic about delivery. It does not lead to Nobel prizewinners."

Investors, though, should be more excited. While the small numbers of UK delivery companies are normally lumped in with their biotechnology cousins, as Jo Walton of broker Lehman Brothers points out, their risk profiles are substantially different.

"Delivery companies work on existing chemicals, where all the data - animal tests, safety, which patients to target, which clinical trials to use - are already known. Times to market are shorter and the chances of success are higher." Mr Zisson agrees: "It takes a delivery company about three to four years to get a drug to market, compared to six years for a normal drug."

Financial risks are also lower. Robert Chess, chief executive of Inhale, estimates his research costs are a tenth those of an average biotech company and with three times as many products, risks are spread.

And as Richard Stewart, SkyePharma's finance director, points out, the development costs of reformulating an old drug are borne by clients, while established sales and marketing teams can push the new version at minimal cost: "All this means more in royalties," he says.

Though royalties can limit upside, companies working in protein delivery or on big drugs stand to gain substantial returns and make profits sooner than most biotechs. So far, their potential is more apparent in the US. According to Ms Walton: "Investors are more cynical in the UK, where hopefuls like Cortecs have not yet made it. In the US there are some huge and profitable companies." UK delivery companies may not be far behind.

Drug delivery contenders

Company Market value

Alza Corp (US) $2.5bn

Cortecs (UK) pounds 277m

Cygnus $292m

Dura Pharmacls (US) $1.7bn

Elan Corp (Irish/US) pounds 2.5bn

Ethical Holdings (US/UK) $78m

Guilford Pharmacls $501m

Inhale (US) $307m

Liposome Company (US) $993m

PowderJect (UK) pounds 109m

RP Scherer $1.3bn

Shire Pharmacls (UK) pounds 198m

SkyePharma (UK) pounds 307m

TheraTech (US) $237m

Vivus (US) $13m

News
newsGlobal index has ranked the quality of life for OAPs - but the UK didn't even make it into the top 10
News
people
News
people
News
peopleStella McCartney apologises over controversial Instagram picture
PROMOTED VIDEO
Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
News
i100
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
News
people
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsA Welsh town has changed its name - and a prize if you can notice how
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Kristen Scott Thomas in Electra at the Old Vic
theatreReview: Kristin Scott Thomas is magnificent in a five-star performance of ‘Electra’
News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
peopleAt the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?