Despite nanotechnology's potential in improving the way drugs are being developed and delivered, pharmaceutical companies are committing almost no money or people to nanotechnology research. The fear is this will eventually expose them to strategic risks as other sectors invest in this technology.
The US National Institutes of Health counts nanomedicine as one of its top five priorities, the National Cancer Institute committed $144 million (€111 million) to nanotechnology research in October 2004, and 40 per cent of nanotech venture capital since 1998 has gone to life sciences start-ups.
The US National Nanotechnology Initiative had a 2001 budget of less than $450 million. By 2005 this figure is set to reach approximately $1 billion. It is a similar story for the National Cancer Institute, which had a budget of $144 million this year.
The new report from Lux Research entitled: "Why Big Pharma Is Missing the Nanotech Opportunity," bases its conclusions on interviews conducted with individuals accountable for nanotechnology at 33 global corporations with annual revenues exceeding $5 billion.
The interview data reveals that big pharma companies on average commit 16 people and less than half of one per cent of R&D spending to nanotechnology research, whereas like-sized electronics and materials firms commit more than 100 people and more than 8 per cent of its R&D budget.
The report also noted that only one out of six life sciences respondents claimed to have an explicit strategy for nanotechnology, compared with two-thirds of those in other electronics and materials.
"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 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's analysis found that pharmaceutical 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.
The report warns that pharmaceutical companies' casual 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 US, Nanocarrier in Japan, and Solubest in Israel look like prime targets."
The signs are that the pharmaceutical industry is gradually warming to nanotechnology. Companies such as Caliper Technologies are now looking at life science applications of nanotechnology with greater interest. The company have an extensive range of micron-scale microfluidics technologies in drug discovery applications and are researching the use of even smaller systems for their lab-on-a-chip portfolios.
Swiss-based microfluidics technology company SpinX Technologies are currently working on programmable microfluidics, which enables sub-microlitre reactions where in the fluidic components, paths, sequence and doses can be chosen in real-time.
The sheer scale of funds invested into nanotechnology by some countries illustrates just how seriously they are taking the potential of this technology. For 2003, the US spent $860 million (€663 million) compared to $650 million for Europe. Countries such as Japan were also there on the list with a budget of $800 million.
Current nanotech product sales have been estimated to be between $20-$50 billion with a figure set to top $2 trillion by the year 2015.