Pipelines in Biotech Companies

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The word pipeline in biotech companies generally refers to the stages of clinical trials. In the pharmaceutical industry, pipelines are frequently used when describing and evaluating a biotechnology company's activities, research and development progress, and overall potential for success and growth.

The status of a drug in the pipeline refers to the stages of clinical trials that it is at (or must pass through) before being approved for sale and/or public use. The pipeline overall is the group of unique products or processes reported or in development by a company.

Drugs in the Pipeline

Drugs that have entered into clinical trials and are pending approval by the U.S. Food and Drug Administration (FDA) are said to be "in the pipeline." A company that has several drugs in various stages of development has multiple products in the pipeline. Likewise, a product in the pipeline is one that we can anticipate hearing more about and possibly using in the future.

Clinical Trials

A clinical study involves research using human volunteers (also called participants), which is intended to add to medical knowledge. There are two main types of clinical studies: clinical trials (also called interventional studies) and observational studies. Clinical studies can take place in many locations, including hospitals, universities, doctors' offices, and community clinics. The location depends on who is conducting the study.

Clinical trials are conducted in a series of steps, called phases, and each phase is designed to answer a separate research question. You can search clinical trials on the government site ClinicalTrials.gov, which lists many studies with locations in all 50 States and in 193 countries.

  • Phase I: Researchers test a new drug or treatment in a small group of people for the first time to evaluate its safety, determine a safe dosage range, and identify side effects.
  • Phase II: The drug or treatment is given to a larger group of people to see if it is effective and to further evaluate its safety.
  • Phase III: The drug or treatment is given to large groups of people to confirm its effectiveness, monitor side effects, compare it to commonly used treatments, and collect information that will allow the drug or treatment to be used safely.
  • Phase IV: Studies are done after the drug or treatment has been marketed to gather information on the drug's effect in various populations and any side effects associated with long-term use.

Pipeline Goals

Goals such as building the pipeline, or reaching different stages of clinical trial, are among the milestones set by pharmaceutical companies and venture capitalists. Genentech, for example, lists numerous drugs in its pipeline from various areas of medicine—oncology to immunology.

A biotech company's pipeline of up-and-coming products is a critical factor in evaluating its investment potential. Therefore, market analyst's reports on company pipelines are an important investment tool. However, the value of each individual pipeline drug depends upon its progress through clinical trials and, ultimately, approval. When evaluating a company pipeline, each drug is assigned a weighted value which increases as it progresses through these trials.