Can "backyard biotechs" beat Big Pharma at the development game?

Over the last few years, the virtual biotech model has become one of the hottest topics on the industry's bustling circuit of partnering and association gatherings. Every drug developer is being challenged to learn from its lean-and-mean work ethic; the antithesis of all the bloated and unproductive workings of Big Pharma. Now The Atlantic has picked tiny FerroKin to illustrate just how versatile "backyard biotech" can be.

With just seven employees working out of their own homes, FerroKin has raised $27 million to fund development of a new treatment for congenital anemias like sickle-cell anemia and thalassemia. The biotech believes it has an effective new approach to flushing the high levels of iron patients are left with after they get the blood transfusions they need to stay alive. Much of the biotech's money has been paid out to its network of 60 vendors and contractors who do a considerable amount of the actual lifting and carrying involved in drug research. And by sticking to its virtual guns FerroKin, like other "backyard biotechs," has been able to advance a drug for a niche market.

The piece in The Atlantic makes the point that Big Pharma companies aren't really suited to the development of new treatments for rare conditions, something that a number of the biggest leviathans in the drug industry are devoting considerable resources to disprove right now. Rare diseases are hot, as Sanofi, GlaxoSmithKline, Novartis and others are eager to demonstrate. In coming years we'll be able to see if the tiny FerroKins of the biotech world--which rely on a complex network of scientists and suppliers held together by the Internet--can do things cheaper, faster and better than the giants now coming into the field.

- here's the story from The Atlantic