Biotechnology (or biotech) has impacted almost every aspect of human life. It has reorganized industries, drastically changed healthcare, helped to improve the environment, and led to important changes in laws and ethical norms.

Among the various biotech fields, medical biotech has been by far the most influential, beneficial, and controversial. It has generated not only superlative discoveries to improve the lifespan and quality of human life, but also the greatest amount of wealth for all the players involved, and the greatest volume of public debate.

Several important trends are shaping the future of the pharmaceutical (or pharma) and biotech industries. The biotech industry is characterized by the presence of strong clusters in all countries. The pharma and biotech industries are experiencing an outsourcing phenomenon, mainly due to a lack of in-house expertise and efficiencies. Diagnostics and therapeutics are increasingly converging, a trend that will lead to predictive and precise diagnostics and personalized and preventive medicine. The first few years of the twenty-first century have witnessed significant changes in the pharma/biotech alliance landscape. Today we are seeing the “omic”-ization of the biotech industry: most of the emerging technologies are genomics, proteomics, cellomics, and pharmacogenomics. In addition, the biotech industry faces uphill ethical issues, including excessive marketing, third-world drug availability, genetic engineering, stem cells, and cloning.

The medical biotech industry faces several challenges. First, science, the human body, and disease are, essentially, complex. Second, unlike other high-technology industries, the biotech product development cycle is very long, even after proof of concept. Biotech projects take between ten and twenty years to become successful and cost over $200–300 million before a product reaches the market. Third, delivery of most biotech products and therapies is complex and can be painful, often involving intravenous delivery. Fourth, the preceding three factors pose significant challenges for research and development (R&D) financing. In addition, there are certain outside determinants that influence the biotech industry, including regulation, demography, reimbursement climate, and big pharma companies.

Stem cell research is one of the most fascinating areas of biology, but it raises questions as rapidly as it generates new discoveries. The greatest potential application of this research is the generation of cells and tissues that can be used for cell-based therapies. A stem cell is a special kind of cell that has a unique capacity to renew itself and to give rise to specialized cell types. Through the process of differentiation, stem cells form various tissues and organs, and the combination of these differentiated materials develops into the whole human body. This class of human stem cell holds the promise of being able to repair or replace cells or tissues that are damaged or destroyed by many of our most devastating diseases.

Diabetes mellitus is a group of diseases characterized by high levels of blood glucose resulting from defects in insulin production, insulin action, or both. Diabetes mellitus is a type I diabetes—also called juvenile-onset diabetes or insulin-dependent diabetes—and develops when the body’s immune system destroys pancreatic beta cells, the only cells in the body that make the insulin that regulates blood glucose. Type II diabetes, also called adult-onset diabetes or noninsulin-dependent diabetes, may account for 90–95 percent of all diagnosed cases of diabetes. There are more than 194 million diabetics worldwide, with this number expected to exceed 333 million by 2025.

Insulin is currently the most effective drug for controlling hyperglycemia and is widely accepted as the gold standard for treating type I diabetes and even late-stage type II diabetes. However, physicians and patients are reluctant to use insulin until other less effective drugs have been attempted. This is mainly because insulin therapy is invasive and painful: patients must take insulin intravenously.

One of the most promising ways to cure diabetes is to restore the function of islet cells biologically, either through islet cell transplantation or by engineering cells to restore the insulin secreting function. Islet transplantation, a procedure that can restore insulin production in patients, is a highly promising area of research.

Based on analysis of stem cell research, diabetes market opportunities, and the development of stem cell therapies, it is possible to place a value on a company in the early (preclinical) development stage of a stem cell therapy for diabetes. Such an exercise involves valuing a company based on three different approaches—(1) the discounted cashflow model, (2) the royalty or licensing model, and (3) the comparables valuation model. Sensitivity analysis based on market, pricing, costing, R&D, and development stage can further lead to precise valuation range for a given company.

For biotechnology companies, various drivers play a critical role in company valuation, including people (management team), alliances and partnerships, intellectual property rights, R&D and technology, funding and financing, market opportunity, and therapeutic area.

BACKGROUND: Recent work has shown that rates of severe disability, measured by the inability to perform basic activities of daily living, have been rising in working age populations. At the same time, the prevalence of important chronic diseases has been rising, while others falling, among working age populations. Chronically ill individuals are more likely than others to have activity of daily living limitations.

OBJECTIVE: We examine the extent to which chronic disease trends can explain these disability trends. DATA: We use nationally representative survey data from the 1984-1996 National Interview Survey, which posed a consistent set of questions regarding limitations in activities of daily living over that period.

METHODS: We decompose trends in disability into 2 parts-1 part due to trends in the prevalence of chronic disease and the other due to trends in disability prevalence among those with chronic disease.

RESULTS:: Our primary findings are that for working age populations between 1984 and 1996: (1) disability prevalence fell dramatically among the nonchronically ill; (2) rising obesity prevalence explains about 40% of the rise in disability attributable to trends chronic illness; and (3) rising disability prevalence among the chronically ill explains about 60% of the rise in disability attributable to trends in chronic illness.

CONCLUSIONS: Disability prevention efforts in working age populations should focus on reductions in obesity prevalence and limiting disability among chronically ill populations. Given the rise in disability among these population subgroups, it is unclear whether further substantial declines in elderly disability can be expected.

BACKGROUND: The elderly constitute the fastest-growing segment of the end-stage renal disease (ESRD) population, but the epidemiology and outcomes of dialysis among the very elderly, that is, those 80 years of age and older, have not been previously examined at a national level. OBJECTIVE: To describe recent trends in the incidence and outcomes of octogenarians and nonagenarians starting dialysis. DESIGN: Observational study. SETTING: U.S. Renal Data System, a comprehensive, national registry of patients with ESRD. PARTICIPANTS: Octogenarians and nonagenarians initiating dialysis between 1996 and 2003. MEASUREMENTS: Rates of dialysis initiation and survival. RESULTS: The number of octogenarians and nonagenarians starting dialysis increased from 7054 persons in 1996 to 13,577 persons in 2003, corresponding to an average annual increase in dialysis initiation of 9.8%. After we accounted for population growth, the rate of dialysis initiation increased by 57% (rate ratio, 1.57 [95% CI, 1.53 to 1.62]) between 1996 and 2003. One-year mortality for octogenarians and nonagenarians after dialysis initiation was 46%. Compared with octogenarians and nonagenarians initiating dialysis in 1996, those starting dialysis in 2003 had a higher glomerular filtration rate and less morbidity related to chronic kidney disease but no difference in 1-year survival. Clinical characteristics strongly associated with death were older age, nonambulatory status, and more comorbid conditions. LIMITATIONS: Survival of patients with incident ESRD who did not begin dialysis could not be assessed. CONCLUSIONS: The number of octogenarians and nonagenarians initiating dialysis has increased considerably over the past decade, while overall survival for patients on dialysis remains modest. Estimates of prognosis based on patient characteristics, when considered in conjunction with individual values and preferences, may aid in dialysis decision making for the very elderly.

OBJECTIVES: To determine whether gaps exist in published cost-utility analyses as measured by their coverage of topics addressed in current HIV guidelines from the Department of Health and Human Services (DHHS).

DESIGN: A systematic review of US-based cost-effectiveness analyses of HIV/AIDS prevention and management strategies, based on original, published research.

METHODS: Predefined criteria were used to identify all analyses pertaining to prevention and management of HIV/AIDS; information was collected on type of strategy, patient demographics, study perspective, quality of the study, effectiveness measures, costs, and cost-effectiveness ratios.

RESULTS: One hundred and six studies were identified; 62 described strategies for averting new HIV infections, and 44 dealt with managing persons who are HIV positive. The quality of studies was generally high, but gaps were found in all studies. Especially common were omissions in reporting data abstraction methodology and discussions of direction and magnitude of potential biases. Among the 22 most highly rated papers (score of 90 or higher), only 1 was cited in the guidelines, and 3 papers reported on interventions that were superseded by newer approaches. Using a USD 100,000 threshold, the guidelines usually endorsed interventions found to be cost-effective. Exceptions included recommending postexposure prophylaxis (PEP) for populations in which PEP is unlikely to be cost-effective and not recommending primary resistance testing in treatment-naive persons, although the intervention was reported to have a cost-effectiveness ratio of less than USD 50,000.

CONCLUSIONS: Despite an abundant literature on the cost-utility of HIV/AIDS-targeted strategies, guidelines cite relatively few of these papers, and gaps exist regarding assessments of some strategies and special populations.