biobetters in key markets - ===== sbd information

Biobetters in Key Markets Opportunities for Biotechnology Companies to Sustain Innovation with Low Risk and High Value Offerings

GBI Research Report Guidance

GBIHC228MR / Published JUL 2012

© GBI Research. This is a licensed product and is not to be photocopied

GBI Research Report Guidance

Chapter two provides an introduction to biobetters and the report guidance.

Chapter three gives a market overview, including the impact of biobetter therapies, competition from branded products, promising targets for biobetter therapies and a comparison of biosimilar and biobetter therapies.

Chapter four analyzes the technological landscape of the biobetters therapeutics market.

Chapter five discusses the opportunities and challenges facing the biobetter therapeutics market.

Chapter six outlines the pipeline of the top drug biobetter classes and contains detailed analysis of key pipeline products and the most promising drugs.

Chapters seven to twelve provides detailed analysis of the regulatory policies for biobetters and biosimilar therapies in the US, the EU, Japan, Australia, China and India.

Chapter thirteen provides a detailed analysis of the key companies operating in the biobetter therapeutics market, and includes benchmarking and detailed profiles of the top five companies based on sales value.

Chapter fourteen discusses the strategic consolidations that took place in the market over the historic period.


© GBI Research. This is a licensed product and is not to be photocopied

Executive Summary

Executive Summary

The Launch of Biobetter Therapies has Resulted in Considerable Gains in the Global Market

Biobetter therapies, also known as biosuperiors, are those that have improved qualities over their originators. If they also address an unmet need in the patient population, they are likely to gain a strong foothold in the market. In recent years, biobetter therapies have shown substantial growth in revenues compared to originator therapies. One example is Amgen’s biobetter Neulasta, indicated for neutropenia. It was launched in 2002, 11 years after originator product Neupogen. Neulasta grew at a Compound Annual Growth Rate (CAGR) of XX% between 2002 and 2004, while during the same period Neupogen declined at a negative CAGR of XX%.

Biobetters in Key Markets, Granulocyte-colony Stimulating Factor, Global, Revenue Sales ($m), 2000-2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Rev

enue

($m

)

Originator [Neupogen] Biobetter [Neulasta]

Neupogen CAGR (2002-2004): -XX% Neulasta CAGR (2002-2004): XX%

Neupogen CAGR (2004-2011): XX% Neulasta CAGR (2004-2011): XX%

Source: GBI Research; Amgen annual reports (2000-2011)

Examining the most recent biobetter launches shows that in general, they generate more revenues than their corresponding originator therapies. On the other hand, despite increased sales of Neulasta, Neupogen maintained growth at a CAGR of XX% between 2004 and 2010, showing that growth in Neulasta revenues (at a CAGR of XX%) was mainly driven by the growing incidence of neutropenia and not the substitution of sales. In other cases, the launch of a successful biobetter therapy has resulted in a substitution of sales from an existing originator product or biobetter therapy. This was the case in 2002 when Roche launched Pegasys, a biobetter therapy with an improved dosing regime for hepatitis C, which grew at a CAGR of XX% between 2003 and 2004 and reached $XX billion in 2011. The originator product Intron A declined in sales at a negative CAGR of XX% between 2003 and 2004. Pegintron on the other hand suffered a decline in sales at a negative CAGR of XX% between 2003 and 2004. Biobetter therapies are likely to continue to compete effectively with first-generation therapies as well as preceding biosimilar therapies. Recent launches of biobetter therapies have shown that those that offer improved benefits are likely to gain substantial market share from first-generation biologics, reducing the size of the market available to biosimilar products.

Biobetter therapies show substantial growth in revenues compared to originator therapies.


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Table of Contents

1 Table of Contents

1 Table of Contents................................................................................................................................. 6 1.1 List of Tables............................................................................................................................. 8 1.2 List of Figures............................................................................................................................ 8

2 Introduction......................................................................................................................................... 9 3 Global Market Overview .....................................................................................................................11

3.1 Biobetter Therapies Already on the Market ..............................................................................11 3.1.1 Erythropoietins ................................................................................................................12 3.1.2 Granulocyte-colony Stimulating Factors............................................................................14 3.1.3 Interferon-α, Interferon-β .................................................................................................15 3.1.4 Insulin and Insulin Analogs ...............................................................................................16 3.1.5 Monoclonal Antibodies.....................................................................................................19 3.1.6 TNF-α Inhibitors ...............................................................................................................20

3.2 Promising Drug Classes for Biobetter Therapies ........................................................................21 3.2.1 Human Growth Hormone .................................................................................................21

3.3 Comparison of Biosimilars and Biobetters.................................................................................23 4 Technology Analysis............................................................................................................................26

4.1 Introduction ............................................................................................................................26 4.1.1 Host Cell ..........................................................................................................................26 4.1.2 Glycosylation ...................................................................................................................27 4.1.3 PEGylation .......................................................................................................................28 4.1.4 Polysialylation..................................................................................................................28 4.1.5 Fusion Protein..................................................................................................................28 4.1.6 PASylation .......................................................................................................................28 4.1.7 HESylation .......................................................................................................................29

5 Challenges and Opportunities .............................................................................................................30 5.1 Opportunities ..........................................................................................................................30

5.1.1 Biobetter Therapies Gain Substantial Market Shares upon Launch.....................................30 5.1.2 Higher Success Rates in the Development of Biobetter Therapies.......................................30

5.2 Challenges ...............................................................................................................................30 5.2.1 Uncertainty Surrounding the Implementation of the Affordable Care Act will Limit Patient

Access to Biobetter Drugs.................................................................................................30 5.2.2 Growing Debts and the Slowing of the Economy will Drive Governmental Bodies and

Healthcare Providers to Restrict the Use of Expensive Biobetter Therapies .........................31 5.2.3 Regulatory Policies in Emerging Economies such as China and India do not Provide Enough

Protection for the Development of Biobetter Therapies .....................................................31 6 Pipeline Analysis .................................................................................................................................32

6.1 Introduction ............................................................................................................................32 6.2 Human Growth Hormone.........................................................................................................32 6.3 Erythropoietin .........................................................................................................................34 6.4 Granulocyte-colony Stimulating Factor.....................................................................................35 6.5 Interferon-α and Interferon-β ..................................................................................................36 6.6 Insulin and Insulin Analogs .......................................................................................................38 6.7 Monoclonal Antibodies ............................................................................................................40 6.8 Promising Drugs.......................................................................................................................42

6.8.1 LB03002 - HGH.................................................................................................................42 6.8.2 Degludec - Insulin Analog .................................................................................................42 6.8.3 Theracim - Monoclonal Antibody ......................................................................................43 6.8.4 Pertuzumab - Monoclonal Antibody..................................................................................43 6.8.5 RG7159 - Monoclonal Antibody ........................................................................................44

7 The US Regulatory Environment and Approval Pathways .....................................................................45



Table of Contents

7.1 Introduction ............................................................................................................................45 7.2 Biobetter Therapies .................................................................................................................45 7.3 Biosimilar Therapies.................................................................................................................46

8 The EU Regulatory Environment and Approval Pathways .....................................................................47 8.1 Introduction ............................................................................................................................47 8.2 Biobetter Therapies .................................................................................................................47 8.3 Biosimilar Therapies.................................................................................................................47

9 Japan Regulatory Environment and Approval Pathways .......................................................................49 9.1 Biobetter Therapies .................................................................................................................49 9.2 Biosimilar Therapies.................................................................................................................50

10 Australia Regulatory Environment and Approval Pathways...................................................................51 10.1 Biobetter Therapies .................................................................................................................51 10.2 Biosimilar Therapies.................................................................................................................51

11 China Regulatory Environment and Approval Pathways .......................................................................52 11.1 Biobetter Therapies .................................................................................................................52 11.2 Biosimilar Therapies.................................................................................................................52

12 India Regulatory Environment and Approval Pathways ........................................................................53 12.1 Biobetter Therapies .................................................................................................................53 12.2 Biosimilar Therapies.................................................................................................................53

13 Biobetter Companies ..........................................................................................................................54 13.1 Key Players ..............................................................................................................................54

13.1.1 Amgen.............................................................................................................................54 13.1.2 SWOT Analysis .................................................................................................................55 13.1.3 Merck ..............................................................................................................................56 13.1.4 SWOT Analysis .................................................................................................................56 13.1.5 Roche ..............................................................................................................................57 13.1.6 SWOT Analysis .................................................................................................................58 13.1.7 Novo Nordisk ...................................................................................................................59 13.1.8 SWOT Analysis .................................................................................................................59 13.1.9 Sanofi-Aventis..................................................................................................................60 13.1.10 SWOT Analysis .................................................................................................................61

14 Strategic Consolidations......................................................................................................................62 14.1 Deals Analysis ..........................................................................................................................62

14.1.1 Mergers and Acquisitions .................................................................................................62 14.1.2 Licensing Agreements.......................................................................................................69

15 Biobetters Therapeutics Market to 2018 - Appendix ............................................................................76 15.1 Abbreviations ..........................................................................................................................76 15.2 Sources....................................................................................................................................78 15.3 Research Methodology ............................................................................................................78

15.3.1 Coverage .........................................................................................................................79 15.3.2 Secondary Research .........................................................................................................79 15.3.3 Primary Research .............................................................................................................79 15.3.4 Forecasts .........................................................................................................................80 15.3.5 Expert Panel Validation ....................................................................................................82

15.4 Contact Us...............................................................................................................................82 15.5 Disclaimer................................................................................................................................82



Table of Contents

1.1 List of Tables

Table 1: Biobetters in Key Markets, Human Growth Hormone Therapeutics Pipeline, Development-stage Molecules, 2012......................................................................................................................33

Table 2: Biobetters in Key Markets, Erythropoietin Pipeline, Development-stage Molecules, 2012.........34 Table 3: Biobetters in Key Markets, Granulocyte-colony Stimulating Factor Pipeline, Development-stage

Molecules, 2012......................................................................................................................35 Table 4: Biobetters in Key Markets, Interferon-α and β Pipeline, Development-stage Molecules, 2012 ..37 Table 5: Biobetters in Key Markets, Insulin Pipeline, Development-stage Molecules, 2012.....................39 Table 6: Biobetters in Key Markets, Monoclonal Antibodies Pipeline, Development-stage Molecules,

2012.......................................................................................................................................40 Table 7: Biobetters in Key Markets, Monoclonal Antibodies Pipeline, Development-stage Molecules,

2012.......................................................................................................................................41

1.2 List of Figures

Figure 1: Biobetters in Key Markets, Erythropoietin, Global, Revenue Sales ($m), 2000-2011..................13 Figure 2: Biobetters in Key Markets, Granulocyte-colony Stimulating Factor, Global, Revenue Sales ($m),

2000-2011 ..............................................................................................................................14 Figure 3: Biobetters in Key Markets, Interferon-alpha, Global, Revenue Sales ($m), 2000-2011...............16 Figure 4: Biobetters in Key Markets, Insulin and Insulin Analogs, Global, Revenue Sales ($m), 2000-201118 Figure 5: Biobetters in Key Markets, Monoclonal Antibodies, Global, Revenue Sales ($m), 2004-2011.....19 Figure 6: Biobetters in Key Markets, Monoclonal Antibodies (TNF-α) Global, Revenue Sales ($m), 2000-

2011.......................................................................................................................................20 Figure 7: Biobetters in Key Markets, Human Growth Hormone, Global, Revenue Sales ($m), 2000-2011 .22 Figure 8: Biobetters in Key Markets, Human Growth Hormone Market, EU-5, Annual Cost of Treatment

($), 2011.................................................................................................................................24 Figure 9: Biobetters in Key Markets, Interferon-α Market, US, Annual Cost of Treatment ($), 2011 .........25 Figure 10: Biobetters in Key Markets, Human Growth Hormone Therapeutics, Global R&D Pipeline by

Phase (%), 2011 ......................................................................................................................32 Figure 11: Biobetters in Key Markets, Erythropoietin Therapeutics, Global R&D Pipeline by Phase (%), 2011

...............................................................................................................................................34 Figure 12: Biobetters in Key Markets, Granulocyte-colony Stimulating Factor Therapeutics, Global R&D

Pipeline by Phase (%), 2011.....................................................................................................35 Figure 13: Biobetters in Key Markets, Interferon-α Therapeutics, Global R&D Pipeline by Phase (%), 201136 Figure 14: Biobetters in Key Markets, Insulin and Insulin Analog Therapeutics, Global R&D Pipeline by

Phase (%), 2011 ......................................................................................................................38 Figure 15: Biobetters In Key Markets, Monoclonal Antibodies Therapeutics, Global R&D Pipeline by Phase

(%), 2011 ................................................................................................................................40 Figure 16: Biobetters in Key Markets, SWOT Analysis, Amgen, 2011.........................................................55 Figure 17: Biobetters in Key Markets, SWOT Analysis, Merck, 2011..........................................................56 Figure 18: Biobetters in Key Markets, SWOT Analysis, Roche, 2011 ..........................................................58 Figure 19: Biobetters in Key Markets, SWOT Analysis, Novo Nordisk, 2011 ...............................................59 Figure 20: Biobetters in Key Markets, SWOT Analysis, Sanofi, 2011 ..........................................................61 Figure 21: GBI Research Market Forecasting Model .................................................................................81



Introduction

2 Introduction

Biologic therapies are medicines whose active substance are made up of or derived from living organisms. The market has seen huge growth in recent years. It grew at a Compound Annual Growth Rate (CAGR) of XX% between 2002 and 2010 and is expected to continue to grow at a CAGR of XX% between 2010 and 2017, due to the growing uptake of biologic therapies and the launch of new therapies. Biologics offer patients improved treatment options and better safety profiles than small-molecule drugs. They are also highly specific, with monoclonal Antibodies (mAbs) representing the biggest selling drug class in this area. The increased use of biologics has played a significant role in the growing expenditure associated with healthcare. Biologics cost an average of XX times more than a small-molecule drug (Evans, 2010). This high cost is driving much of the growth, and as a result, many countries have implemented policies and regulations that allow for increased competition through the entry of cheaper, similar biological medicinal products. Regulated markets such as Europe, Australia, Japan and the US have created new laws to govern the authorization of biosimilar therapies through an abbreviated pathway. Europe, Japan and Australia have already implemented these laws and currently have biosimilar therapies on the market. Countries such as India, the Philippines, Vietnam and Canada also have biosimilar products on the market. However, these countries did not create a new abbreviated pathway for biologics but used existing small-molecule generic laws to approve these products. Finally, less regulated markets such as China, Indonesia and Thailand have authorized the entry of biosimilar products under less stringent rules. In the US, despite new healthcare legislature introducing a new abbreviated pathway for biologics, the law has yet to be enacted.

A biosimilar is a drug similar to a biologic therapy which has already received market authorization. The approval of generic small-molecule drugs has been in existence longer than biosimilar pathways. Both the US and EU have laws in place which have allowed the entry of generic drugs into the market since the early 1960s. In the US, the abbreviated pathway for small molecules was introduced in 1984 as the Drug Price Competition and Patent Term Restoration Act. This law has established the current Abbreviated New Drug Application (ANDA) process for generic drugs and allows generic products to enter the market once the originator drug has reached its patent exclusivity period. The introduction of generic drugs into the market leads to competition that may reduce the price of the drug by up to XX%. In Europe, an equivalent system for biologics has existed for around a decade in some countries. The EU was the first country to establish a biosimilar pathway in 2004, implemented under EU law (directive 2001/83/EC), and termed: “similar biological medicinal products”.

The US signed in the legislature for an abbreviated pathway for biologics under the Biologics Price Competition and Innovation (BPCI) Act in the Patient Protection and Affordable Care Act (PPACA) of 2010. In Japan, an abbreviated pathway for biosimilar therapies was implemented in 2009 by the Ministry of Health, Labor and Welfare (MHLW). The first biosimilar therapy was introduced into the Japanese market on June 22, 2009. Unlike other regulated markets the US has not yet legally approved biosimilar therapies. The legislature was only signed into law on March 23, 2010 under the PPACA with the accompanying draft guideline only released by the Food and Drug Administration (FDA) in 2012. In addition to this slow progress, the relatively nascent legislature looks to be under considerable threat from the Supreme Court, which in March 2012 questioned whether the PPACA adheres to the US constitution. The result of this hearing could lead to further delays, which would in turn result in patients not having access to cheaper biosimilar therapies available in other regulated markets such as Canada, Japan and Europe. If the PPACA is not implemented it is likely that the cost of biologic therapies will continue to rise, with no cheaper alternatives. In the US, biosimilar therapies come under the umbrella term of follow-on biologics. An additional segment under this term is biobetter therapies, which do not require new legislation to gain approval.

Biobetters, or biosuperiors, are defined as biologic therapies that have the same targets as the originator therapy but that have been improved, either in the form of safety, efficacy, tolerability or dosing regimen. The specific modifications used to achieve these changes result in new biological therapies. Biobetters belong to the same drug class as the originator product and are approved via a full Biologic License Application (BLA). They essentially allow companies to target a mechanism of action that has been proven to be clinically and commercially successful. Modifications include increasing the drug’s effect on the target, decreasing the dose required for a drug to be effective and reducing the side effects. These enhancements are made possible by progress in technological processes such as glycosylation, chemical modification, protein fusion, altered amino acid sequence, humanization and PEGylation. As biobetters are altered to improve upon the reference products they represent new molecular entities, and changes in the molecular structure can significantly change the mechanism of action.

Biobetters, have the same targets as the originator therapy but they carry improved, qualities over the originators.



Global Market Overview

3.1.5 Monoclonal Antibodies

MAb therapies are genetically engineered Immunoglobulins (IgGs) that have the advantage of being highly specific targeting drugs. They can be chimeric, humanized or fully humanized. Chimeric mAbs comprise antigen-binding parts of the rodent antibody joined to the effector parts of the human antibody. Examples of chimeric mAbs include Remicade (infliximab), Rituxan (rituximab), and ReoPro (abciximab). Humanized mAbs are next-generation therapies in which the rodent section consists only of the amino acid section which makes up the antigen binding site. This section is joined to the human antibody allowing only the rodent section to be the hypervariable region. Humanized mAbs reduce the immunogenicity effect triggered by antibodies. However, with the advent of transgenic rodent technology this immunogenicity is reduced even further with the generation of fully human therapeutic mAbs. An example of a next-generation mAb is the fully humanized Vectibix (panitumumab), for which the mechanism of action is the same as the originator drug Erbitux (cetuximab), in that both target the Epidermal Growth Factor Receptor (EGFR) through blockade and both are indicated for colorectal cancer. Avastin is a humanized inhibitor of Vascular Endothelial Growth Factor A (VEGF-A), also indicated for colorectal cancer.

The following figure shows the revenues of top-selling mAbs for colorectal cancer. This includes the originator product Erbitux and the biobetter products Vectibix and Avastin. Erbitux grew at a CAGR of XX% between 2004 and 2011 but has since dipped slightly, highlighting some patients’ resistance to Erbitux. Vectibix, launched in the US in 2006 and in the EU in 2007, grew at a CAGR of XX% between 2006 and 2011. Global revenues for Avastin showed a growth rate of XX% between 2004 and 2011. Both Erbitux and Avastin showed significantly higher revenues compared to Vectibix because they are prescribed in additional indications. Avastin is indicated in colon cancer, colorectal cancer, glioblastoma multiforme, glioma, metastatic colorectal cancer, metastatic renal cell carcinoma, non-small-cell lung cancer, ovarian cancer and renal cell carcinoma. Erbitux is indicated for colorectal cancer, head and neck cancer, metastatic melanoma, squamous cell carcinoma, whereas Vectibix is only indicated for colorectal cancer and metastatic colorectal cancer, meaning that expansion of its indications will increase its competitive edge.

Figure 5: Biobetters in Key Markets, Monoclonal Antibodies, Global, Revenue Sales ($m), 2004-2011

2004 2005 2006 2007 2008 2009 2010 2011

Rev

enue

($m

)

Originator [Erbitux] Biobetter [Vectibix] Biobetter [Avastin]

Erbitux CAGR (2004-2011): XX% Vectibix CAGR (2006-2011): XX%Avastin CAGR (2004-2011): XX%

Source: GBI Research; company annual reports (2004-2011)



Pipeline Analysis

6.3 Erythropoietin

A total of nine biobetter programs are being carried out in the EPO pipeline. The preclinical development stage accounts for XX%, followed by Phase II with XX%, and Phases I and III with XX% each. Late-stage development consists of one biobetter product, an indication extension. Some of the therapies in the pipeline include Epodure, a Phase II therapy that utilizes a specialized biopump system to produce and deliver EPO over a period of 14 days. Other next-generation EPO drugs include ErepoXen, a polysialylated EPO in Phase II, and HM10760A in Phase I, which uses lapscovery technology to prolong residence time of protein molecules in the bloodstream. BBT-021 is a preclinical drug, developed using ImmunoFusion Protein technology. Early preclinical studies show its half-life is XX times longer than Epogen, and is more potent at stimulating red blood cell formation in animals. EPO receptor agonist is an oral EPO receptor agonist being developed by Ligand Pharmaceuticals it is a more convenient alternative to current Erythropoiesis-stimulating Agents (ESAs). P1116 is another next-generation drug based on PEGylation technology platform. Zosano EPO is based on ZP patch technology which is a transdermal delivery formulation of EPO. There are a total of seven biobetters being developed for anemia or chemotherapy-induced anemia.

Figure 11: Biobetters in Key Markets, Erythropoietin Therapeutics, Global R&D Pipeline by Phase (%), 2011

Phase III

Phase II

Phase I

Preclinical

Discovery

Source: GBI Research

Table 2: Biobetters in Key Markets, Erythropoietin Pipeline, Development-stage Molecules, 2012

Product Name Company Name Phase Mechanism of Action

Aranesp Amgen Inc. Phase III EpoR agonist

ErepoXen Xenetic Biosciences plc Phase II EpoR agonist

Epodure Medgenics Inc. Phase II EpoR agonist

HM10760A Hanmi Holdings Co., Ltd. Phase I EpoR agonist

P1116 PharmaEssentia Corporation Preclinical EpoR agonist

BR 05001 Boryung Pharmaceutical Co., Ltd. Preclinical EpoR agonist

MOD-7023 Prolor Biotech, Inc. Preclinical EpoR agonist

BBT-021 Bolder Biotechnology, Inc. Preclinical EpoR agonist

BBT-009 Bolder Biotechnology, Inc. Preclinical EpoR agonist

Source: GBI Research; ClinicalTrials.gov; company websites Pipeline as of March 2012 EpoR: Erythropoietin Receptor



Biobetters Therapeutics Market to 2018: Appendix

15 Biobetters Therapeutics Market to 2018 - Appendix

15.1 Abbreviations

aBLA: abbreviated Biologic License Application

ACT: Annual Cost of Treatment

ADCC: Antibody-dependent Cellular Cytotoxicity

ADME: Absorption, Distribution, Metabolism, and Excretion

AMD: Age-related Macular Degeneration

ANDA: Abbreviated New Drug Application

ARTG: Australian Register of Therapeutic Goods

BiTE: Bispecific T-cell Engager

BLA: Biologic License Application

BMS: Bristol-Myers Squibb

BNF: British National Formulary

BPCIA: Biologics Price Competition and Innovation Act

CAGR: Compound Annual Growth Rate

CBR: Clinical Benefit Rate

CBER: Center for Biologics Evaluation and Research

CDER: Center for Drug Evaluation and Research

CHMP: Committee for Medicinal Products for Human Use

CHO: Chinese Hamster Ovary

CNS: Central Nervous System

DCA: Drugs and Cosmetics Act

DCGI: Drug Controller General of India

DHFR: Dihydrofolate Reductase

EGFR: Epidermal Growth Factor Receptor

EMA: European Medicines Agency

EPO: Erythropoietin

ESA: Erythropoiesis-stimulating Agent

FDA: US Food and Drug Administration

FFDCA: Federal Food Drug and Cosmetic Act

G-CSF: Granulocyte-colony Stimulating Factor

GCP: Good Clinical Practice

GH: Growth Hormone

GHD: Growth Hormone Deficiency

GLP: Good Laboratory Practice

GMP: Good Manufacturing Practice

GS: Glutamine Synthetase

HES: Hydroxyethyl Starch




HGH: Human Growth Hormone

HPLC: High-pressure Liquid Chromatography

HRF: Hormone-releasing Factor

ICH: International Conference on Harmonisation

Ig: Immunoglobulin

IGF: Insulin-like Growth Factor

IL: Interleukin

INOS: Inhibitors of Nitric Oxide Synthases

INF: Interferon

IV: Intravenous

J&J: Johnson & Johnson

LTB4: Leukotriene B4

mAb: monoclonal Antibody

MEK: Mitogen-activated ERK Kinase

MHC: Major Histocompatibility Complex

MHLW: Ministry of Health, Labor and Welfare

MRI: Magnetic Resonance Imaging

MTX: Methotrexate

NBRA: National Biotechnology Regulatory Authority

NDA: New Drug Application

NK: Natural Killer

NPPA: National Pharmaceutical Pricing Authority

OECD: Organization for Economic Co-operation and Development

OTC: Over the Counter

PAS: Proline, Alanine and Serine

PEG: Polyethylene Glycol

PHS: Public Health Service

PMDA: Pharmaceuticals and Medical Devices Agency

PPACA: Patient Protection and Affordable Care Act

PRCA: Pure Red Cell Aplasia

PSA: Polysialylic Acid

PTM: Post-translational Modification

RON: Recepteur d'Origine Nantais

SDA: State Drug Administration

SFDA: State Food and Drug Administration

SPAC: State Pharmaceutical Administration of China

TGA: Therapeutic Goods Administration

TGF: Transforming Growth Factor




TLR: Toll-like Receptor

TNF: Tumor Necrosis Factor

TNFR: Tumor Necrosis Factor Receptor

TRIPS: Trade-related Aspects of Intellectual Property Rights

VEGF: Vascular Endothelial Growth Factor

15.2 Sources

Baumeister S and Goletz H (2009). Novel Glycosylation Technologies for the Development of Biosimilars and Biobetters. Innovations in Pharmaceutical Technology; 23: 52-58

Bendele A, et al (1998). Short communication: renal tubular vacuolation in animals treated with polyethylene-glycol-conjugated proteins. Toxicological Sciences; 42:152-7.

Dinwoodie N (2011). Biobetters and the Future Biologics market. BioPharm International; 24:31-35.

Ehrenreich H et al (2009). Recombinant human erythropoietin in the treatment of acute ischemic stroke. Stroke; 40:647-56.

Evans I (2010). Follow on Biologics: A new play for big Pharma. Yale Journal of Biology and Medicine; 83: 97-100.

Grabowski H, et al (2009) Data Exclusivity Periods and Next Generation Improvements to Innovator Biologics: Key Issues. Duke University Department of Economics Working Paper; No. 2009-05

Harris JM and Chess RB (2003). Effect of pegylation on pharmaceuticals. Nature Reviews Drug Discovery; 2:214-21.

McHutchison J, et al (2009). Telaprevir with Peginterferon and Ribavirin for Chronic HCV Genotype 1 Infection. New England Journal of Medicine; 360:1827-183.

Molineux G (2004). The design and development of pegfilgrastim (PEG-rmetHuG-CSF, Neulasta). Current Pharmaceutical Design; 11: 1235-1244

Powell J and Gurk-Turner C (2002). Darbepoetin alfa (Aranesp), Proc. Baylor University Medical Center; 15:332-5.

Solomon M, et al (2009). Cost sharing and the initiation of drug therapy for the chronically ill, Archives of Internal Medicine; 169:740-748.

Sroda K, et al (2005). Repeated injections of PEG-PE liposomes generate anti-PEG antibodies. Cellular and Molecular Biology Letters; 10:37-47.

15.3 Research Methodology

GBI Research’s dedicated research and analysis teams consist of experienced professionals with marketing, market research and consulting backgrounds in the medical devices industry as well as advanced statistical expertise.

GBI Research adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and the Strategic and Competitive Intelligence Professionals (www.scip.org).

All GBI Research databases are continuously updated and revised.




15.3.1 Coverage

The objective of updating GBI Research coverage is to ensure that it represents the most up to date vision of the industry possible.

Changes to the industry taxonomy are built on the basis of extensive research of company, association and competitor sources.

Company coverage is based on three key factors: market capitalization, revenue and media attention/innovation/market potential.

An exhaustive search of 56 member exchanges is conducted and companies are prioritized on the basis of their market capitalization;

The estimated revenue of all major companies, including private and governmental, are gathered and used to prioritize coverage; and

Companies which are making the news, or which are of particular interest due to their innovative approach are prioritized.

GBI Research aims to cover all major news events and deals in the medical industry, updated on a daily basis.

The coverage is further streamlined and strengthened with additional inputs from GBI Research’s expert panel (see below).

15.3.2 Secondary Research

The research process begins with exhaustive secondary research on internal and external sources being carried out to source qualitative and quantitative information relating to each market.

The secondary research sources that are typically referred to include, but are not limited to:

Company websites, annual reports, financial reports, broker reports, investor presentations and SEC Filings.

Industry trade journals, scientific journals and other technical literature;

Internal and external proprietary databases;

Relevant patent and regulatory databases;

National government documents, statistical databases and market reports;

Procedure registries; and

News articles, press releases and web-casts specific to the companies operating in the market.

15.3.3 Primary Research

GBI Research conducts hundreds of primary interviews a year with industry participants and commentators in order to validate its data and analysis. A typical research interview fulfills the following functions:

It provides first-hand information on the market size, market trends, growth trends, competitive landscape, and future outlook.

Helps in validating and strengthening the secondary research findings; and

Further develops the Analysis Team’s expertise and market understanding.

Primary research involves e-mail correspondence and telephone interviews as well as face-to-face interviews for each market, category, segment and sub-segment across geographies.

The participants who typically take part in such a process include, but are not limited to:

Industry participants: Chief Executive Officers, Vice Presidents of the companies, marketing/product managers, market intelligence managers and national sales managers.

Hospital stores, laboratories, pharmacies, distributors and paramedics.




Outside experts: investment bankers, valuation experts, research analysts specializing in specific medical equipment markets.

Key Opinion Leaders: Physicians and surgeons specializing in different therapeutic areas corresponding to different kinds of medical equipment.

15.3.4 Forecasts

GBI Research uses the epidemiology-based treatment flow model to forecast market size for therapeutic indications. GBI Research reports cover only seven major geographies namely the US, the UK, Germany, France, Spain, Italy and Japan.

15.3.4.1 Epidemiology-based Forecasting

The forecasting model used at GBI Research makes use of epidemiology data gathered from research publications and primary interviews with physicians to represent the treatment flow patterns for individual diseases and therapies. The market for any disease segment is directly proportional to the volume of units sold and the price per unit.

Sales = Volume of Units sold Price per Unit

The volume of units sold is calculated on the average dosing regimen for that disease, duration of treatment and number of patients who are prescribed drug treatment (prescription population). Prescription population is calculated as the percentage of population diagnosed with a disease (diagnosed population). Diagnosis population is the population diagnosed with a disease expressed as a percentage of population that is treatment seeking treatment (Treatment seeking population). Prevalence of a disease (diseased population) is the percentage of the total population who suffer from a disease/condition.

Data on treatment seeking rate, diagnosis rate and prescription rate, if unavailable from research publications, are gathered from interviews with physicians and are used to estimate the patient volumes for the disease under consideration. Therapy uptake and compliance data are fitted in the forecasting model to account for patient switching and compliance behavior.

To account for differences in patient affordability of drugs across various geographies, macroeconomic data such as inflation and GDP; and healthcare indicators such as healthcare spending, insurance coverage and average income per individual are used.

Annual cost of treatment (ACT) is calculated using product purchase frequency and the average price of the therapy. Product purchase frequency is calculated from the dosage data available for the therapies and drug prices are gathered from public sources.

The epidemiology-based forecasting model uses a bottom-up methodology and it makes use of estimations in the absence of data from research publications. Such estimations may result in a final market value different from the actual value. To correct this ‘gap’ the forecasting model uses ‘triangulation’ with the help of base year sales data (from company annual reports, internal and external databases) and sales estimations.

Analogous forecasting methodology

Analogous forecasting methodology is used to account for introduction of new products, patent expiries of branded products and subsequent introduction of generics. Historic data for new product launches and generics penetration are used to arrive at robust forecasts. Increase or decrease of prevalence rates, treatment seeking rate, diagnosis rate and prescription rate are fitted into the forecasting model to estimate market growth rate.

The proprietary model enables GBI Research to account for the impact of individual drivers and restraints in the growth of the market. The year of impact and the extent of impact are quantified in the forecasting model to provide close-to-accurate data sets.

Diseased Population

The diseased population for any indication is the prevalence. The prevalence rates are usually obtained from various journals, online publications, sources such as WHO or associations and foundation websites for that particular disease.




Treatment Seeking Population

Treatment seeking population is always calculated as a percentage of prevalence. The number denotes the actual number of patients who are going to hospitals to get diagnosis report for any disease. The treatment seeking population is primarily driven by the onset of symptoms, patient awareness and the severity of the disease.

Diagnosis Population

Out of the patients who undergo diagnostic tests to confirm a disease, only a few people get diagnosed with the disease. This number as a percentage of treatment seeking population is the diagnosis rate. The diagnosed population is primarily driven by the sensitivity of the diagnostic tests, state-of-the-art technology, patient access to these diagnostic tests and cost of the diagnostic tests.

Prescription Population

For any disease, multiple treatment options exist. For example, in cancer treatment various treatment options such as surgery, radiation therapy, and drug therapy are available. Prescription population is defined as the number of patients who are prescribed drug therapy. This is calculated as a percentage of diagnosed population. The prescription population is primarily driven by the age at which the disease is diagnosed, the disease stage, patient health and cost of drug treatment.

Forecasting Model for Therapeutic Areas

Figure 21: GBI Research Market Forecasting Model

D is eas e P opu lati onGene r a l Po pu latio n 743 ,535,048

Q ualifying c ondition 1 (Age/S ex/O c c upation e tc )Q ualifying c ondition 2 (Age/S ex/O c c upation e tc )

Preval ence t issu e valve disease 0 .2% 1 ,784,484 Q ualifying c ondition (c om plic at ion, s everity)D IS EA SE D P OPULAT IO N 1 ,784,484

T r eatm en t Flow P attern sT reatm ent S eek i ng R at e (Sy m ptom s/ Dis A wareness) 89% 1 ,588,191 Diagn osis Rat e (C lin ica l and D ia gn ostic Tests ) 75% 1 ,191,143

Prescr iption R ate ( Ph ysic ian P erce p t io n, Tr ea tm ent E ffectiv e n ess)Tis s ue V alve 70% 833,800 O the r T reatm ents for Va lve (Su rg/M ed/N o ne ) -

F ulfi llm en tA vailab ilit y NAW illing ness to U s e (Patient Perc eptions) NAR eady to U se (S urgery e lig ib ility , R eus e e tc ) NA

Affo rd abil it y at Pri ceH E as % of G D P s pendA verage Inc om e (per ind ividua l)P at ient O ut-o f -poc ket Budget (A nnual)

Budget a lloc ation to o ne-t ime s urgeryBudget a lloc ation to o the r h ealth needs

A verage Pay or C overa geP at ient L iab ilityTa rget Pr ic e (@ 20% pat liab)A SP for C os t o f T hera py

T O TA L P AT IEN T V OLUM E SPro du c t P urch a se Fr equ en c y 1

T OT A L U N IT VO LU MES

Pr ic in g per Un it 18,000$ In f lat ionP rice D ec reas e due to c om pet it ion

M a r k et Valu e

G BI R ese ar ch M ar ket Siz in g M o del

Source: GBI Research




The above figure represents a typical forecasting model followed in GBI Research. As discussed previously, the model is built on the treatment flow patterns. The model starts with the general population, then the diseased population as percentage of general population and then follows treatment seeking population as a percentage of diseased population and diagnosed population as a percentage of treatment seeking population. Finally, the total volume of units sold is calculated by multiplying the prescription population by average dosage per year per patient.

15.3.5 Expert Panel Validation

GBI Research uses a panel of experts to cross verify its databases and forecasts.

GBI Research expert panel comprises of marketing managers, product specialists, international sales managers from medical device companies; academics from research universities, KOLs from hospitals, consultants from venture capital funds and distributors/suppliers of medical equipment and supplies etc.

Historic data and forecasts are relayed to GBI Research Expert Panel for feedback and adjusted in accordance with their feedback.

Details of the make up of the expert panel can be viewed through gbiresearch.com, and are available to clients on request.

15.5 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GBI Research.

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