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GTC Biotherapeutics (GTC) business strategy is to form business relationships that provide unique benefits to our partners through the economic enablement created by the production of recombinant proteins in the milk of transgenic animals. Transgenic production provides several advantages compared to mammalian cell culture and other more traditional methods of pharmaceutical protein production. These include: competitive cost of goods with respect to price per gram of material, favorable capital expense structure with respect to both the absolute amount of investment required and flexibility of timing of investment and the ability to produce biotherapeutics which cannot be made in a commercially feasible manner in any other system.
GTC is currently involved in various types of collaborations with several companies for the development of biopharmaceuticals using this enabling technology. These products encompass a broad range of indications and are currently in various stages of development. Many of the companies we are partnering with are now evaluating the efficacy of potential new drugs in clinical trials with product sourced by alternative methods and their strategy is to transition from their current production method to transgenically derived product in order to meet market demand.
In addition, GTC has formed multiple strategic alliances with technology based companies for the purpose of increasing technical efficiency and future capabilities.
Economics of Transgenic Production
Transgenic production offers potentially critical advantages in the production of recombinant proteins:
Flexibility of capital
Creating a herd and providing appropriate dairy facilities operated within Good Agricultural Practices can be accomplished with substantially less cost than building a cell culture bioreactor facility. In addition, expanding to meet future needs can be accomplished with a higher degree of flexibility in the timing of the deployment of capital. Our partners are therefore able to make informed judgments about needs and constraints as scale-up and market launch occur and we can supply additional capacity more quickly as market growth develops.
Profitability at both high and low volumes
The fit between transgenic production and high-volume proteins requiring more than 100 kilograms per year is widely acknowledged. Less immediately apparent is the suitability of this method for making low-volume products. GTC has achieved the same consistent expression rates with unique molecules, as we have with other recombinant proteins. This accomplishment, in conjunction with the economics of herd development, means that for some products with low-volume demand, transgenics may be as viable as those that require 1000 kilograms or more.
Overall lower cost of goods
These economic factors all converge to lower the ultimate cost of goods. High protein expression levels in transgenic animals, concentrated raw material, and efficiency in purification contribute to a highly cost-effective transgenic equation. As a result, the cost of a transgenically derived product is, in most cases, substantially lower than that of a cell culture product. As further improvements are made on the downstream purification side, we anticipate that the cost of the transgenic sourced product will decline even further.
Benefits of Partnering with GTC Biotherapeutics
GTC Biotherapeutics believes that our expertise makes us the strongest partner for companies seeking to develop the commercial potential of therapeutic recombinant proteins. Our partnerships are enabling because we are willing to form alliances customized to the needs of each partner. We offer flexibility in structuring our alliances.
In some cases, potential partners have developed recombinant proteins that they want to produce with cost-effective transgenic technology, and we are able to meet their production needs by supplying this service. GTC engages in a broad spectrum of these types of alliances. At one end of the spectrum, we may produce finished bulk drug. At the other, we may provide partially purified, clarified intermediate so that our partner can control the final production and release of the product utilizing its internal expertise and resources.
Other potential partners may be at earlier stages of development, and they may therefore look to GTC to supply some of the development resources and share opportunity costs. In alliances of this type, we take a long-term approach to profit and craft individualized agreements that typically include some compensation in the form of additional royalties.
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