are biosimilars the road to certain success or a high-risk venture?

Are Biosimilars the Road to Certain Success or Are Biosimilars the Road to Certain Success or a High Risk Venture?a High Risk Venture?

Global Trends in an Ambiguous MarketGlobal Trends in an Ambiguous Market

Debbie Toscano, Senior Industry Analyst

Life SciencesLife Sciences

October 17, 2013

© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of

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Today’s Presenter

Debbie Toscano, Senior Industry Analyst

Frost & Sullivan

Follow me on:

@DebToscano

www.linkedin.com/in/dstoscano

2

•Over 20 years of life sciences industry expertise comprising pharmaceutical

R&D and industry research/consulting

•Over 15 years in preclinical research and safety pharmacology at Novartis

•Author or co-author of published peer-reviewed scientific manuscripts and trade

journal articles

www.linkedin.com/in/dstoscano

Focus Points

Today’s agenda:

• Introduction to the biosimilars market

• Global climate of the biosimilars industry

• Key drivers and challenges – the good, the bad, and the

uncertain

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• Competitive landscape and anatomy of a winner

• A look ahead–potential US market scenarios

• Conclusions

Biosimilars–A Hot Topic!

Recent Developments in an Emerging Industry

• Biosimilar penetration of global markets is still awaiting the largest and most lucrative pharma market – the United States

• Much uncertainty surrounds timelines, development costs, end-user acceptance

• European approval of the first monoclonal antibody-based biosimilars –significant milestone for the industry

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• Bottom line: the “biologic safety net” protecting pharma from the patent cliff is becoming less secure

Source: Frost & Sullivan

Trends in the Biosimilars Market –Today and Tomorrow

Current Trends Future Trends

1. Regulatory pathways for approval are gradually being adopted in regions across the globe

1. Technology advancements will allow for improved characterization earlier in development, lowering development cost

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2. Multiple strategic partnerships merging biologics with commercial capabilities

3. Biologics market leaders lobbying for regulations to dissuade biosimilar use

2. Increasing competition anticipated to result in greater discounts of biosimilars

3. Increased market size due to greater access to less costly biologic medications and increased penetration


Some Factors That May Affect a Biosimilar’s Uptake

Price Differential from Originating

Biopharmaceutical

Number of Competitors

Physician/Patient Adoption

The biosimilars market is complex with many factors that may affect market potential.

These include:

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Biosimilar Market Uptake

Sales and Marketing Experience

Reimbursement

Development Costs Mode of Administration

Indication (chronic versus acute)


Poll Question #1

• Which of the following do you think is most important for instilling confidence in a biosimilar product?

a) The reputation of the manufacturer

b) The geographic location of the manufacturer (i.e. developed versus developing region)

c) The quantity and quality of the clinical data

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c) The quantity and quality of the clinical data

d) Length of time on the market

e) Recommendation of the physician

Poll Question #2

• Do you think that substitution of a biosimilar for a biologic should be at the discretion of the prescribing physician, the patient, or the payer?

a) Physician only

b) Payer only

c) Patient only

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c) Patient only

d) All of the above

Global Climate of the Biosimilars Market

50

60

70

80

90

100

$ (

Bil

lio

n)

Total Biosimilars Market: Revenue Breakdown by Region, Global, 2012

U.S.12.3%

Europe44.0%

Japan

Australia1.0%

Brazil6.1%

Mexico3.4%

Argentina2.3%

Global Distribution of Market Share

$94 B

Total Revenue, Biologics Vs. Biosimilars, Global, 2012

11

0

10

20

30

40

Biologics Biosimilars

$ (

Bil

lio

n)

44.0%

India 6.7%

China13.2%

South Korea8.0%

Japan3.0%

$876 M


Biosimilars have penetrated just under 1% of the total biologics market. Biosimilars have penetrated just under 1% of the total biologics market.

Regulatory Guidelines for Key Established and Emerging Global Markets

US: Regulatory guidelines drafted; unclear

Europe: Clearregulatoryguidelines in place

China: Regulatory guidelines in place, but unclear

Japan: Clearregulatoryguidelines in place

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India: No formal guidelines – biosimilar approvals are on a case-by-case basis

S. Korea: Clearregulatoryguidelines in place

Brazil: Clearregulatoryguidelines in place

Mexico: Clearregulatoryguidelines in place

Argentina: Clearregulatoryguidelines in place


Poll Question #3

• Do you think that the biosimilars industry is going to hurt innovation?

a) Yes

b) No

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Key Drivers and Challenges: The Good, the Bad, and the Uncertain

Major Drivers– The Good

• Multi-billion dollar revenues of

successful biologics

• Multiple pending patent expiries

• Abbreviated development and approval

process

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process

• Healthcare expenditure reduction

incentives

• Few competitors


Major Challenges–The Bad

• Greater financial and time investment

compared to conventional generics

• Need for biologics manufacturing

expertise and capabilities

• Inherent risks of biologics

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• Inherent risks of biologics

(immunogenicity)

• Greater risk of non-approval


Major Challenges–The Uncertain

• Unclear regulatory guidelines for approval in many markets, including the US

• Willingness of physicians, payers, and patients to adopt biosimilars

• How much to invest in marketing? No “guarantee” of market share if not

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interchangeable

• Level of investment needed for clinical research – particularly for the US

• Unknown timeline for finalization of regulatory guidance


US Regulatory Activity

March 23, 2010: Patient Protection and

Affordable Care Act signed into law

July 9, 2012: Enactment of the Biosimilars User

Fee Act (BsUFA)

Final guidance and applications anticipated

First biosimilar approvals anticipated

Biosimilars Market: Timeline of Biosimilars Regulatory Activity, US, 2012

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February 2012: FDA issues three draft guidance

documents on biosimilar product development

March 2013: FDA issues fourth guidance document on biosimilar

product development - formal meetings between FDA and

sponsors/applicants

2010 2011 2012 2013 2014 2015


Competitive Landscape and Anatomy of a Winner

Several Blockbuster Monoclonal Antibodies Have Limited Remaining Exclusivity in the US

Rituxan

Lantus

Humira

US Patent Terms for Selected Biologics

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2000 2005 2010 2015 2020 2025 2030

Erbitux

Avastin

Herceptin

Enbrel


…and Competitors are Waiting in the Wings

Rituxan

Lantus

Humira

US Patent Terms for Selected Biologics

Sandoz; Amgen; Biocad; Celltrion;Boehringer Ingelheim; Pfizer

Eli Lilly/Boehringer Ingelheim; Biocon/Mylan

Boehringer Ingelheim; Pfizer

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2000 2005 2010 2015 2020 2025 2030

Erbitux

Avastin

Herceptin

Enbrel


Amgen

Amgen

Pfizer; Biocad; Hospira; Biocon; Amgen/Actavis

Sandoz

Who is Winning the Race?

Sandoz:

•Global market leader

•3 marketed products in 50 countries

•5 candidates in Phase 3

Teva:

•2 marketed products

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Hospira:


•11 candidates in development

•First approved biosimilar mAb


•#2 spot in global market share


Other Noteworthy Up-and-coming Competitors

Celltrion:

•Approved biosimilar mAb

•8 mAb in development

•Multiple partnerships

Amgen:

•Strong biologics,

commercialization capabilities

•Plans for development of 6

Biocad:

•At least 4 molecules in active

development, with 3 in Phase

3

Biocon:

•Partnered with Mylan for

development of 8 molecules

including 3 insulin analogs

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•Plans for development of 6

mAbs in partnership with

Actavis

In addition, multiple big pharmas have molecules in active development or have announced intentions to enter the biosimilars market:•Pfizer

•Sanofi

•Boehringer Ingelheim

•Eli Lilly

•Merck

including 3 insulin analogs

and 4 mAbs


Anatomy of a Winner–Blueprint for Success

Quality and cost efficiency of biologic

manufacturing

capabilities

Advanced analytical characterization

Global market launch

experience

Reputation for producing high quality

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characterization capabilities

Biologics development

and commercialization

experience

producing high quality products

Negotiation skills and experience and

in dealing with

regulatory authorities


A Look Ahead–Potential US Market Scenarios

Poll Question #4

• How much of a price discount do you think it will take to encourage use of biosimilars in the US?

a) 10%

b) 25%

c) 50%

d) More than 50%

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d) More than 50%

Scenario Forecasts–Monoclonal Antibody Segment

20.0

25.0

Re

ve

nu

e (

$ B

illi

on

)

20.0

25.0

20.0

25.0

Optimistic Scenario Realistic Scenario Conservative Scenario

Scenario Forecasts: Percent Market Share

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0.0

5.0

10.0

15.0

2015 2016 2017 2018 2019

Re

ve

nu

e (

$ B

illi

on

)

0.0

5.0

10.0

15.0

2015 2016 2017 2018 2019

0.0

5.0

10.0

15.0

2015 2016 2017 2018 2019

Innovator Biologics

Biosimilars Source: Frost & Sullivan

Conclusions and Recommendations

Conclusions and Recommendations

• The biosimilars market is still in its infancy, especially the US

• Increasing pressure to lower healthcare costs globally is anticipated to drive this market

• As patent protection expires for key biologics in the next few years alongside implementation and refinement of regulatory guidance, a second wave of biosimilars is expected to significantly boost total

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market revenue

• However, there are many significant barriers, and not all players will successfully overcome them

• Comparison to conventional generics market is inappropriate since biosimilars are not identical copies and will not be automatically substituted (in most cases)


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For Additional Information

Jennifer Carson

Corporate Communications

Industry

(210) 247-2450

[email protected]

Debbie Toscano

Senior Industry Analyst

Life Sciences

(212) 402-1818

[email protected]

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Jennifer Lazar Brice

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