Space is rapidly evolving from a theatre of exploration into a platform for high‑value industries, such as pharmaceuticals. As in‑orbit manufacturing becomes more technically and commercially viable, it is opening new frontiers in drug development and raising important questions around intellectual property, value creation and competitive advantage, writes Paul Bettridge, IP partner at European intellectual property firm Carpmaels & Ransford.
History was made this month when humans travelled further from Earth than ever before aboard Orion Integrity on the Artemis II mission. The flight captured headlines and imaginations, but the programme’s future phases – long‑duration space infrastructure and a sustained human presence on the moon – may prove more even more significant.
Artemis II launched less than a month after the UK announced a coordinated package of measures designed to support the development of technologies focused on manufacturing in orbit, particularly for drug development. The initiatives are led by the UK Space Agency, with support from the Medicines and Healthcare products Regulatory Agency (MHRA) and three other government agencies. As Lord David Willetts, chair of the UK Space Agency and Regulatory Innovation Office, noted:
“In-orbit manufacturing of pharmaceuticals represents a significant opportunity for the UK, combining the growth potential of our space sector with the promise of better treatments for patients.”
Why space matters for drug development
Microgravity offers a set of physical conditions that cannot be replicated on Earth. The ultra‑low convection environment alters several factors highly relevant to pharmaceutical manufacturing, including: the behaviour of fluids, promoting diffusion rather than sedimentation; crystal formation, which occurs more slowly and in a more ordered way; cell and protein folding behaviour, and shear stress on living cells; and thermal and mass transport.
These environmental differences may not lead directly to entirely new chemical entities that could not otherwise be synthesised on Earth but they do allow for a wide range of novel formulations that gravity would otherwise prevent. Previously unobtainable crystal structures and biologics can be expected to unlock new products and treatments.
An example of this already in practice is the development of the subcutaneous injectable version of Merck’s Keytruda. Research conducted on the International Space Station into how pembrolizumab crystallises in a low gravity environment led to ground‑based rotational mixing and crystallisation processes that enabled an injectable formulation (deliverable at home in under a minute) to replace an IV suspension requiring a clinical setting.
IP beyond the molecule
Investors in pharmaceutical and biotechnology companies understand the central role of patents in securing value. Products are expensive to develop but relatively cheap to replicate, making robust and defensible IP essential to commercialisation.
In this context, IP protecting novel formulations or treatment pathways can be just as valuable, if not more so, than original new chemical entity (NCE) protection. These are already routinely sought by healthcare companies following well-trodden and predictable patent strategies.
Given that most space-developed drugs will ultimately be delivered to patients on Earth, there is little reason to expect a fundamental shift in IP strategy. The gold standard for pharmaceutical and biotech IP will long remain the original NCE and formulation patents, not least because exclusivity is often determined by supplementary protection certificates (SPCs) that are based on one of these foundational patent rights.
While we may see a boom in formulation patents, potentially in collaboration with a new generation of companies facilitating R&D in orbit, overall patent strategies could remain business as usual.
Do space economics change the IP equation?
The traditional rationale for pharmaceutical patents is based on how the costs for manufacturing an approved drug are dwarfed by the costs for researching, developing it and taking it through clinical trials. Space complicates this imbalance.
If producing a drug requires access to space-based infrastructure in order to produce generic versions of drugs that require a low gravity environment, the barrier to entry for generic competitors could increase significantly. In theory, this could mean that patents will become less mission-critical than they have been.
This outcome appears unlikely. As with Keytruda’s injectable, many drugs researched and developed in space are likely to be manufactured on Earth with processes designed to approximate the desired conditions for manufacture. In these cases, patents will likely play the same role as they do now; protecting not the underlying research but the NCE, formulation, dosage regimes and methods of manufacture.
Specialised drugs that can only be produced in space (with no Earth-bound equivalent) are likely to be rare and extremely high value, not least because of the high cost of manufacture and supply. As production costs increase, so too will a company’s motivation to ensure a high degree of protection against competitors seeking cheaper means of manufacture.
New gatekeepers
A more significant shift may come from the rise of a new category of company: those with the proprietary technology and capabilities enabling research, development and manufacturing in orbit.
Laboratory equipment is already a specialised but competitive market on Earth. In space, the dynamics change. If a company develops a novel lab or reactor essential to the manufacture of a particular blockbuster drug, it effectively becomes a gatekeeper to that market.
This may be the ambition of companies such as BioOrbit (backed by the UK Space Agency), which is seeking patent protection for a “system for crystallizing a substance in a microgravity environment”. Other players include Varda Space Industries, which is seeking to produce more stable crystal forms of HIV-1 medication Ritonavir, and crystal lab developers Redwire Space and Sierra Space.
Quite apart from the engineering challenges of operating in the microgravity environment of low Earth orbit, the conditions of launch and re-entry present additional significant technical hurdles. Companies racing to innovate the next generation of extra-terrestrial laboratories in which tomorrow’s drugs may be made could capture significant value.
IP in space
A further consideration is how existing IP systems apply to space-based investment.
Patents are territorial by nature, grounded in specific jurisdictions on Earth. Although the 1967 Outer Space Treaty 1967 (OST) attempts to establish certain rules around jurisdiction based, for example, on launch site, such rules were not conceived for the purposes of establishing ownership over technologies and products, and in any case may break down when it comes to something manufactured in space.
In many cases, this may be academic if the drug manufactured in space makes its way back to Earth where existing patent protections will still apply.
Challenges, however, arise where patented invention covers a novel manufacturing method that exclusively takes place in space. Existing rules may fall short. This is most likely to affect companies looking to protect the equipment used in space. In such cases, patents protecting the hardware itself might suffice (whilst that hardware is still built on Earth) but new methods that only use that hardware in space might prove unenforceable.
A new frontier for pharmaceutical value
The Artemis programme signals not just a new era of exploration, but a potential inflection point for high-value pharmaceutical innovation.
While space‑enabled drug development is unlikely to displace established IP strategies, it materially expands the opportunity set – particularly through novel formulations, biologics and specialised manufacturing pathways.
For investors, the most compelling upside may lie not only with drug developers, but with the emerging cohort of companies building the enabling infrastructure: in-orbit laboratories, crystallisation systems and manufacturing platforms that could become essential to the production of new blockbuster drugs.
Existing patent frameworks will continue to underpin product exclusivity once drugs return to Earth but successfully navigating questions of enforceability, jurisdiction and access may set apart the leaders and licensors.
As technical, regulatory and capital barriers remain high, those able to secure defensible positions early may command disproportionate long-term value.