Biomanufacturing in Canada- Opportunity for

Development? Bernard Massie General Manager (acting) Human Health Therapeutics December 7th 2016

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2011 2012 2013 2014 2015 2016

Annu

al S

ales

(CAN

$B)

Biologics market: Double-digit growth! • Canadian biologics market 2015 >$5B growing at 11% 4YR CAGR

• Biologics market share grew from 11% (2008) to 24% (2015)

• WW biologics are 8 of top 10 and 47 of top 100 pharmaceuticals

Source: IMS, PMPRB Annual Report 2014, Biologic Therapeutic Drugs-BCC Research, Outsourcing-DataMonitor2013, EvaluatePharma.

187 biologics

f f

Small molecules vs. Biologics

Small molecules

Production in living organism (cell, bacteria,

yeast, plant, egg)

Aspirin 0.18kDa - 1x

Antibody 150kDa - 850x

Biol

ogic

s

Chemical synthesis

THREE R&D PROGRAMS FOCUSED

ON BIOLOGICS AND VACCINES

CANADIAN BIOMANUFACTURING

INITIATIVE AT NRC

Canadian Biomanufacturing Initiative

Small molecules Biologics

Production complexity

Characterization

Relocating production

Complexity of Biomanufacturing

Small molecules Biologics

Production complexity Low

Characterization

Relocating production

Complexity of Biomanufacturing

Small molecules Biologics

Production complexity Low

Characterization Extensive

Relocating production

Complexity of Biomanufacturing

Small molecules Biologics

Production complexity Low

Characterization Extensive

Relocating production Easy

Complexity of Biomanufacturing

Small molecules Biologics

Production complexity Low High

Characterization Extensive

Relocating production Easy

Complexity of Biomanufacturing

Small molecules Biologics

Production complexity Low High

Characterization Extensive Limited

Relocating production Easy

Complexity of Biomanufacturing

Small molecules Biologics

Production complexity Low High

Characterization Extensive Limited

Relocating production Easy Difficult

Complexity of Biomanufacturing

Small molecules Biologics

Production complexity Low High

Characterization Extensive Limited

Relocating production Easy Difficult

Complexity of Biomanufacturing → Stickiness

Worldwide Investment in Biomanufacturing

$11B Global investment in biomanufacturing facilities

Sept 2016

Oct 2015

Worldwide Investment in Mammalian Cell Biomanufacturing

>90% Investment in facilities with mammalian cell capacity

Sept 2016

Oct 2015

*

*

* * * * *

*

*

*

*

*

* Monoclonal antibody production

Biomanufacturing capacity is controlled by product companies Only 21% of biomanufacturing capacity is accessible for contract

CMOs 21% of capacity 11yr CAGR 15%

Product Companies 79% of capacity 11yr CAGR 17%

Source: BioPlan estimates 2008-2013; Ransohoff, T. Bioprocess Technology Consultants, 2003-2007 data

3 CMOs Control Mammalian Cell Biomanufacturing Offer

33%

27%

16%

24%

Lonza

Boehringer Ingelheim

Celltrion

Others

Eric S. Langer, 2015 12th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, BioPlan Associates, Inc. April 2015 http://www.biopharminternational.com/global-biomanufacturing-outsourcing-market Outsourcing, DataMonitor 2013

Canadian biotechs have limited access to large integrated CMOs.

“Globally, there exists a shortage of [CMOs] to support the development and manufacture of biologic drugs...”

- Branch et al., American Pharmaceutical Review, September 2015

WHY INVEST IN BIOMANUFACTURING?

Retain Pharmaceutical import/export

balance

Nat

iona

l bi

osec

urity

High quality job creation

Strengthen pharmaceutical value-chain

Increase access to therapeutics Reduce cost of therapeutics

economic impact ecosystem

pharma Fill gap in

Support local biotechs

CAN OUR LOCAL PIPELINE SUPPORT LOCAL BIOMANUFACTURING?

Competitive Canadian Biologics Pipeline

institutions developing

Produced in Mammalian Cells

55%

71 a combined pipeline of biologics 196

Discovery + Pre-clinical Stage 72%

Source: MedTrack, company websites, Industry Canada and NRC (and partners)

LOCAL BIOMANUFACTURING?

Gaps in Canadian Biomanufacturing Capabilities?

With 55% of the Canadian pipeline

requiring production in

mammalian cells, is our capacity sufficient?

Company Location / Type Capacity GMP Clinical Commercial

PRO

DUCT

CO

MPA

NIE

S Medicago QC – plant plants PlantForm QC – plant plants Apotex ON – microbial 3X 14kL, 2X 30kL X X Emergent MB – microbial 2kL X Eleven Bio MB – microbial 1.5kL X PnuVax QC – microbial 0.5kL, 2kL X

CMO

s Bio Vectra PEI – microbial 2X 17kL, 15kL X X Biodextris QC – microbial n/a KABS QC – microbial 4kL X Therapure ON – mammalian 0.5kL X

IDLE

PnuVax QC – mammalian 0.5kL, 2kL Ex-Bioniche ON – microbial 5kL

Biomanufacturing facilites in academia, hospitals or research institutions are not included

Canadian investments in the last 2 years

Medicago $245M plant-based production in Quebec with $68M from Qc BioVectra $30M to expand microbial plant Green Cross $315M plasma plant in Montréal with $8M from Qc Therapure $20M contribution from FedDev for expansion of plasma plant Sterinova $20M for fill & finish facility

? ? ? ? ? ? ? ? ?

$0 in mammalian cell facilities

IS BIOMANUFACTURING A CORNERSTONE

OF THE ECOSYSTEM?

CMOs = contract manufacturing organizations Average cost of developing a new drug. Tufts CSDD 2014 Amgen Annual Report 2014, Cost of sales / Net Sales = 23%; Novo Nordisk (2012-2014) = 16% to 17%; W. Nicholson, Boston Law Review 2014 = 14%

Biologics Development Value Chain

Preclinical R&D Clinical Development Approval Commercialization CTA NDS

$1-5M

CMO

$2-13M

CONTRACT SERVICES LICENSE+

$50-350M

CONTRACT SERVICES

$10M

CONTRACT SERVICES

$2M/yr

CONTRACT SERVICES

$5-50M

CMO

Up to $100M/yr

CMO

? ? ?

NOC

Is Biomanufacturing a Cornerstone of the Ecosystem?

14% OF AVG WW SALES $714M/Y

Market Potential for Mammalian Systems in Canada

Preclinical Phase 1

Phase 2

Phase 3

R+M

111 biologics

$1.6B

$600M/Y Annual commercial CMO revenues 6Y+

5Y CMO revenue (cumulative)

In the absence of local CMOs, this market potential will be captured abroad

CMOs – Key to Retaining Value of Biologics

$5B/y Biologics sales in Canada

55% Canadian pipeline in mammalian cells

$1.6B Potential 5Y revenue from Canadian mammalian cell pipeline

$0 Supporting large scale mammalian cell biomanufacturing in Canada

Canadian Biomanufacturing Opportunity

Sustained growth trends of biologics sales

Complexity of biomanufacturing → stickiness factor for local production

Major worldwide investment in mammalian cell biomanufacturing, yet shortage of CMO offer

Gap in mammalian cell biomanufacturing offer in Canada

Is there a case for investing in mammalian cells CMO offer in Canada?

“Every biologic developed in Canada will be manufactured in Canada.”

Acknowledgments - Team work Alex Serrano, Technology Business Analyst Eileen Raymond, Portfolio Business Advisor Frank van Lier, Director R&D - HHT Thomas Loisel, Section Head - HHT Guy Le Houillier, Client Relationship Leader Vivian Woo, Knowledge Management

Consulting: Gérald André, VieTech Terrence Cochrane, BioProcessing Alliance Inc.