The pharmaceutical industry has historically been driven by molecules obtained through chemical synthesis (so-called “small molecules”).
From the 1990s onward, a new therapeutic era emerged with the advent of biological medicines (“biologics”), which are produced within living systems through biotechnological processes. The development of biologics gathered paces in the 2000s and 2010s, with the launch of several blockbuster drugs offering new therapeutic options for patients, especially in oncology.
This new generation of medicines—including, in particular, recombinant proteins, hormones, and monoclonal antibodies—constitutes a paradigm shift, not only from an industrial, clinical, and commercial standpoint, but also interms of protection strategies through intellectual property assets.
In 2024, the global market for antibody-based biologics was valued at approximately USD 328 million, with some projections forecasting growth to as much as USD 2 trillion by 2040[1]. However, it is widely expected that this market will undergo significant structural transformation in the years ahead. The upcoming expiry of intellectual property rights protecting some leading biologic blockbusters will open the door to biosimilar competition. Biosimilars play a role in the biologics space comparable to that of generics for small-molecule drugs. As such, they pose a clear threat in terms of market share erosion and downward pricing pressure for companies commercializing innovative biologics.
Against this backdrop, innovator companies face the strategic challenge of softening the impact of the “patent cliff” — in other words, turning the cliff into a slope. Meanwhile, biosimilar developers seek to secure their market access and mitigate the associated risk, while navigating in a considerably more complex landscape than that encountered in the traditional generics sector.
A Fundamentally Different Class of Products
Biologics represent a game changer, as they differ fundamentally from small molecules. While the last — produced through chemical synthesis — are low molecular weight entities that are well characterized, reproducible, and manufactured as homogeneous batches of identical molecules, biologics are macromolecules defined by complex three-dimensional structures, which drive their stability and pharmacological activity. Moreover, they often consist of assemblies of multiple protein subunits, as is the case for antibodies, which are composed of several chains.
Biologics also exhibit immunogenic potential, meaning they can trigger an immune response in humans. Such immunogenicity may affect both their efficacy and clinical tolerability, thereby requiring the implementation of specific mitigation strategies—such as antibody humanization—which further adds to the complexity of their design.
Beyond their intrinsic nature, the complexity of biologics extends across their entire development lifecycle. Their development does not rely solely on defining a three-dimensional structure, but also requires mastering biological production system, including host cells, culture conditions, and downstream purification processes. Because biologics are produced by living cells, microheterogeneity between each macromolecule exists even within a single batch. Moreover, variations in process parameters — such as temperature or oxygenation — can have a significant impact on the properties of the final product.
In this context, manufacturing activities — referred to in the pharmaceutical industry as “Chemistry, Manufacturing and Controls” (CMC) — are pivotal to the development of biologics and demand substantial efforts, both in terms of analytical characterization of drug batches and in ensuring process consistency and reproducibility.
From a regulatory standpoint, this complexity complicates compliance with regulatory requirements, particularly with respect to comparability, stability, and impurity control.
Thus, although biologics exhibit—on average—a higher clinical success rate than small-molecule drugs[2], their development is longer and more costly, due to the extent of studies required to meet regulatory expectations and the constraints associated with bioproduction[3].
These factors largely account for the substantial investments required for the development of biologics, their high pricing, and their frequent positioning in high-value therapeutic areas — such as oncology, autoimmune diseases, and rare diseases — where they address significant unmet medical needs. That said, biologics are increasingly expanding into much broader markets, including the treatment of diabetes and obesity[4].
Strategic approaches to IP protection
Reflecting this scientific and industrial paradigm shift, intellectual property strategies differ significantly between small-molecules and biologics.
With regards to small-molecules, IP protection typically relies on a “product patent” covering the active ingredient through its precisely defined chemical structure. In Europe, this product patent generally serves as the basis for a supplementary protection certificate (SPC), which is an intellectual property right that extends the protection conferred by a patent for a medicinal product in order to compensate for the effective loss of commercial exclusivity resulting from the time required to obtain marketing authorization.
This product patent, together with the SPC, often forms the cornerstone of protection, which may be supplemented by secondary patents (covering therapeutic indications, dosage forms, salts or polymorphs, or synthesis processes). The scope of these rights is — in practice — relatively clear, and the overall strategy is typically structured around a well-defined core asset.
By contrast, biologics give rise to more fragmented and evolving protection strategies, reflecting both the complexity of the products and that of their development.
Protection may thus be sought, cumulatively, for:
- the macromolecule as a whole, for example an antibody defined by native or humanized amino acid sequences of its chains;
- functional fragments of the macromolecule which confer its therapeutic activity, such as the variable regions of an antibody (VH/VL chains, single-chain variable fragments (scFv), or complementarity-determining regions (CDRs) involved in target binding);
- functional variants of the macromolecule;
- derived formats (such as multispecific constructs or formats wherein the biologic molecule is conjugated with a chemical payload);
- aspects of the manufacturing process, including the use of specific cell lines, culture conditions, and purification parameters;
- specific therapeutic indications or patient subpopulations likely to benefit from the treatment*;
- particular treatment regimens, such as combinations with other therapies, dosing schedules, or lines of treatment (e.g., first-line treatment or use following failure of a prior therapy)*;
- as well as route of administration or associated delivery devices*.
* These three latter aspects may also be protected for small-molecules, although they tend to play a more prominent role in protection strategies for biologics.
This results in the gradual development of genuine “patent thickets,” providing biologics with protection over a longer effective period compared to small-molecules. Such patent portfolios are designed to maximize product value throughout their lifecycle and to delay, as far as possible, the entry of biosimilars onto the market.
The complexity of this landscape, which lacks a single overarching compound patent, makes it more challenging to devise a strategy for obtaining a supplementary protection certificate (SPC) for biologic product. Indeed, such an SPC must be based on a basic patent in which the product is necessarily and specifically identifiable[5].
Regulatory frameworks alongside IP rights
In parallel with — and independently from— intellectual property rights, pharmaceutical products benefit from a regulatory protection framework according to which regulatory authorities granting marketing authorizations ensure, for a defined period, that innovator companies are afforded:
- Data exclusivity for the data package submitted to obtain the Market Authorization (MA) for an innovative chemical or biologic product; and
- Market protection for that innovative product.
The first mechanism prevents generic or biosimilar manufacturers from relying on the data generated by the innovator company to obtain marketing authorization — which is the common practice that allows them to avoid conducting full preclinical and clinical studies — while the second mechanism ensures that a generic or biosimilar product cannot be placed on the market for a certain period, even if it has received regulatory approval.
It follows that the scope and duration of these regulatory protection mechanisms vary across jurisdictions.
In the United States, the regulatory protection framework differs between small-molecules and biologics.
While the Hatch–Waxman Act grants a 5 years protection to new chemical entities (NCEs), the Biologics Price Competition and Innovation Act (BPCIA) provides biologics with 12 years of market exclusivity, including four years of data exclusivity. Such differential treatment is intended to reward the greater time and investment required for the development of biologic products.
In Europe, the regulatory protection framework — currently subject to revision under the pharmaceutical package regulation[6]— provides for 8 years of data exclusivity, followed by one year of market protection, which may be extended under certain conditions, up to a maximum total duration of 11 years.
Accordingly, no differentiated regime exists in Europe between small-molecules and biologics from a regulatory protection standpoint. Only products meeting specific criteria — such as addressing unmet medical needs — may benefit from extended periods of market exclusivity, irrespective of whether they are of chemical or biological nature.
It is worth noting that a differentiated IP rights regime in favor of biologics could emerge if the proposed European Biotech Act were adopted as currently proposed. It provides with a one year extension of the duration of supplementary protection certificates (SPCs) protecting such biologic products under certain conditions[7].
Thus, the disparity in complexity between small molecules and biologics has a direct impact on the protection strategies implemented by innovator companies. These differences extend beyond innovator strategies and are equally reflected in the approaches adopted by generic and biosimilar manufacturers, a topic that will be explored in a forthcoming article.
[1] The biologics manufacturing rivalries – Episode I: a new geopolitical order – the rise of the biomanufacturing empire, July 2025, KPMG public.
[2] Beall et al. Pre-market development times for biologic versus small-molecule drugs. Nat Biotechnol. 2019 Jul;37(7):708-711.
[3] Beall et al. Pre-market development times for biologic versus small-molecule drugs. Nat Biotechnol. 2019 Jul;37(7):708-711. et Favour Danladi Makurvet, Biologics vs. small molecules: Drug costs and patient access, Medicine in Drug Discovery, 2021, Vol 9,100075,
[4] Favour Danladi Makurvet, Biologics vs. small molecules: Drug costs and patient access, Medicine in Drug Discovery, 2021, Vol 9,100075,
[5] Article 3a) du règlement 469/2009/CE et arrêt CJUE C-493/12 Eli Lilly and company Ltd c/ Human Genome Sciences Inc.
[6] Press release of the European Parliament on the agreement on the deal on comprehensive reform of EU pharmaceutical legislation
https://www.europarl.europa.eu/news/en/press-room/20251209IPR32110/deal-on-comprehensive-reform-of-eu-pharmaceutical-legislation
[7] https://www.santarelli.com/en/european-biotech-act-medicaments-biologiques-europe/
April 2026
Contributing author
