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How Originators can Improve Their Understanding of Generic CompetitionTHOMSON REUTERS HEALTHCARE AND SCIENCEAPI INTELLIGENCE
David Harding
CPHI Worldwide12 October 2009
Agenda
• Why API intelligence?
• Trends in the World Generic Market and API Industry
• Generic API development as early warning intelligence
• Examining the generic development process and timing
• The API Intelligence team at Thomson Reuters
• Case studies
Why API Intelligence?
For generic competition, there has to be generic finished product
For generic finished product there has to be generic API
If you want to understand generic competition, you have to
understand generic API manufacturing
Generics: a $100bn+ global market
Total World Pharmaceutical Sales: $600bn
US, Canada: $57bn
Latin America: $19bn
Western Europe
$17bn
Rest of World: $9bn
Eastern Europe & Russia: $5bn
Source: TS Research, IMS Health, VOI PharmaHandbook
Japan: $5bn
China: $3bn
Generics: Growth fastest in BRIC countries
US, Canada2%
Latin America: 15%
Western Europe2%
Rest of World10%
Eastern Europe & Russia12%
Source: VOI PharmaHandbook
Japan2%
China: 15%
Total ANDA Approvals by Indian Generics
0
20
40
60
80
100
120
140
160
180
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
# A
ND
As
0
5
10
15
20
25
30
# H
old
ers Tentative
Final
Holders
Source: Newport Premium™
Top 10 Companies by Number of Final ANDA Approvals: 1999 – 2008
Source: Newport Premium™
Group Country Number
Teva Pharmaceutical Industries Ltd Israel 364
Mylan Laboratories Inc USA 185
Novartis AG Switzerland 166
Apotex Inc Canada 158
Boehringer Ingelheim KG Germany 137
Watson Pharmaceuticals Inc USA 111
Actavis Group Hf Iceland 108
Daiichi Sankyo Co Ltd Japan 90
Fresenius AG Germany 85
Sun Pharmaceutical Industries Ltd India 78
Paragraph IV Patent Challenges – 2008
• 27 unique molecules or molecule combinations saw first
Paragraph IV Patent challenge in 2008
• Some Examples (RLD):
– Cialis
– Avodart
– Copaxone
– Flonase
– Cymbalta
– Sensipar
Source: Newport Premium™
Top 10 Companies by Number of Paragraph IV Patent Challenges
Source: Newport Premium™
Group Country Number
Teva Pharmaceutical Industries Ltd Israel 136
Mylan Laboratories Inc USA 66
Novartis AG Switzerland 63
Apotex Inc Canada 53
Sun Pharmaceutical Industries Ltd India 38
Dr Reddy's Group India 36
Watson Pharmaceuticals Inc USA 32
Daiichi Sankyo Co Ltd Japan 30
Actavis Group Hf Iceland 26
Par Pharmaceutical Companies Inc USA 24
Paragraph IV Patent Challenges – 2009
• There are 17 molecules with New Chemical Entity
exclusivity expiring in 2010, so therefore are exposed to
Paragraph IV Patent Challenge in 2009
• Some products that could have or will likely see a Patent
Challenge include:
– Baraclude
– Byetta
– Revlimid
– Exjade
Source: FDA, Newport Premium™, data as of
9/28/09
Strong forces continue to drive generics
• Near universal encouragement of brand to generic substitution
• Continued price pressures (especially in EU and US)
• Too few products expiring for too many companies
• Emerging possibilities for biogenerics
• Rapid pace of mergers and acquisitions
• Patent challenges key to health of generic pipelines
• Low-cost, high-quality Indian FD production
• Emergent low-cost, high-quality Chinese API production
• Licensing deals now key to sustaining growth
• Early access to viable source of API is still key
World generic API manufacturer landscape
15Source: TS Research
Experience in
supplying regulated
markets
US DMF Filings by Indian, Chinese and Rest of World API Manufacturers: 1998 – 2008
Source: Newport Premium™
Of the ~340 experienced manufacturers…
• Half are vertically integrated into finished dose
• 50 have a presence in the US generic market
• 60% are headquartered in the US, India, China or Italy
18Source: TS Research
Integration into API underpins much M&A activity during the past 5 years
Company Sales
($M)
M&A Spend
2003- ($M)
Backward
Integrated?
Target
Teva 11090 19360 Barr, IVAX, Sicor
Sandoz (Novartis) 7560 8700 Hexal, Eon
Mylan 4670 7460 Merck Generics, Matrix
Hospira 3629 2100 Mayne
Watson 2540 1900 Anrdx
Ratiopharm 2138 ND - -
Perrigo 2050 1060 Agis
Zentiva (Sanofi) 1994 770 Eczacibasi, Sicomed
STADA 1975 1300 - Hemofarm, MAKIZ
Sigma 1900 - Arrow (merged)
Actavis 1700 1724 Amide, Alpharma
Dr Reddy’s 1510 728 Betapharm
19Source: TS Research
The generic development process
Targeting EvaluationDeal
Making
Formulation
Dev’t
Registration
& ReviewLaunch
Find candidate products to develop
Research candidates in detail
Find the right partners
Make it quickly, safely
Get it approved, first time
Get it to the customer
(the very moment exclusivity is lost!)
LOEL – 18 monthsL – 8 years L – 7 years L – 6 years
How Generics view the development lifecycle
Target Product for Development
$ Revenue
Remaining Patent Life (~8 years)
Time
Patent Expiry
Find (Exclusive?) Source of
Active Pharmaceutical Ingredient
Formulation Development
Perform Bio-equivalence Studies
File Dossier and/or
File Patent Challenge
(US Only)Launch Product
Hang in there as long as you can!
From our recent study of commercial managers in innovator companies
• Generics are inevitable, nothing can be done
• Worry about generics ~2 years from patent expiry
• Believe generics are not interested in products selling
less than $200 to $500M
• CI activities (if they are done) focus on traditional
intelligence that comes too late in the process
• Most brand and lifecycle teams know they should be
doing something earlier, but don’t have the time, tools
and/or resources
23
Source: 2008 TS Market Research Study
Innovator’s view of the development lifecycle?
Product promotion
Product Improvement
Phase IV Studies
$ Revenue
Patent Life (20 Years)
Time
Patent Expiry
End of life
Launch
Start worrying
about generics?
Why API Intelligence?
• Generics often start targeting products 8 to 10 years before
patent expiry
– Many start targeting well before commercial launch by
innovators
• API always comes before the finished product (dose form)
– Without API, there can be no generic
– API often precedes dose development by 3+ years
• API has to be available in sufficient quantities and with
sufficient quality for regulated market needs
• The number, capabilities and track record of API
manufacturers is highly indicative of future (FD) competition
• Works for all types of product (traditional or biological)
Weaknesses in traditional generic CI sources
• “Paragraph IV” Patent Challenge
– Not public, need to understand complex litigation
• ANDA/MAA Filings
– Not public (except tentative approvals in the US)
– Closely held by filers
• US Drug Master File (DMF) Filings
– May never appear (can be filed with an ANDA)
• EU Drug Master File (DMF) Filings
– Not public, closely held
26
About Thomson Reuters API Intelligence
• Founded in 1990 as Newport Strategies
• Part of Thomson Reuters Scientific since 2004
• A team of research analysts devoted to collecting, validating,
and analyzing information about API manufacturing
• Unique primary research using an extensive global network of
industry experts
• Team based in Portland, Maine, USA
Our research process
• Many daily conversations with manufacturers, agents,
traders, consultants and experts worldwide to determine
– Which company?
– Is making what active ingredient?
– At which factory?
– What stage of development have they reached?
• Validation requires multiple confirmations (independent of the
original source)
• Historical accuracy and reliability of each source tracked
• Researchers therapeutically aligned
• All work conducted according to a strict confidentiality
protocol
Case #1: ABILIFY (aripiprazole)
31
Hetero finishes
API scale-up
Hetero granted
process patent
Hetero finishes
polymorph
Files NDA Gets US ApprovalInnovator
Generic API
At least 10 other
manufacturers ready
200620052004200320022001
Case #1: ABILIFY (aripiprazole)
32
Hetero finishes
API scale-up
Hetero granted
process patent
Hetero finishes
polymorph
Dr Reddy’s
Files 1st US DMF
Files NDA Gets US ApprovalInnovator
Generic API
US DMF
200620052004200320022001
Case #1: ABILIFY (aripiprazole)
33
Hetero finishes
API scale-up
Hetero granted
process patent
Hetero finishes
polymorph
Dr Reddy’s
Files 1st US DMF
Files NDA Gets US ApprovalInnovator
Generic API
US DMF
200620052004200320022001
Patent Challenge Patent
Challenges
(at least 6)
At least 10 other
manufacturers ready
Case #1: ABILIFY (aripiprazole)
34
Hetero finishes
API scale-up
Hetero granted
process patent
Hetero finishes
polymorph
Dr Reddy’s
Files 1st US DMF
Files NDA Gets US ApprovalInnovator
Generic API
US DMF
200620052004200320022001
Patent Challenge Patent
Challenges
(at least 6)
Begins Litigation
(7 cases)
Some other examples
• LIPITOR® (atorvastatin)
– An ANDA with Paragraph IV was filed by Ranbaxy in December
2002
– Ranbaxy filed US DMF in August 2002
– Newport has been tracking Ranbaxy amorphous form API since
1997
• ZYPREXA® (olanzapine)
– An ANDA with Paragraph IV was filed in 2001
– Dr Reddy’s filed US DMF in February 2001
– Newport has been tracking Dr Reddy’s form I API since 1998
Thank You!
David Harding
Newport Product Specialist
Thomson Reuters Healthcare & Science
+1 207 871 9700 x27
David.harding@thomsonreuters.com
www.thomsonreuters.com/business_units/scientific/pharma/generics
COME VISIT US AT CPHI WORLDWIDE BOOTH 6F38
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