Developments, Trends and Strategies

ANDREW BOURGOIN Andrew.Bourgoin@thomsonreuters.com NY Pharma Forum January 31st, 2012

Biologics Market: An Overview

Generics & API Intelligence at Thomson Reuters

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Agenda

Competition in Follow-on Biologic Development

Incentive and Challenges to Compete

Established Companies

Global Development

Strategies, Trends and Forecasts

Gaining a Competitive Advantage through M&A

Takeaways and Questions

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4

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Competitive Landscape

Biologics: a $90bn Global Market

Class #Launched WW Sales

US$

No.

Blockbusters

%Blockbuster

Sales

rhProtein 65 $52bn 13 80%

MAb 26 $42bn 9 90%

Total 91 $94bn 22 85%

5 Source: IMS Health, Newport Premium for Generics, TR Research

Incentive To Compete In The Follow-on Biologic Market

6 Source: IMS Health, Newport Premium for Generics, TR Research

0

1

2

3

4

5

6

7

$B

US

WW

Global MAbs Market

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INN WW Sales

(US$B) Growth

Biosimilar Competition Not Expected Before

USA EU JPN Infliximab 6.3 10% 2010 2014 2012

Adalimumab 6.6 19% 2010 2018 2018 Bevacizumab 5.4 1% 2011 2014 2016

Rituximab 5.3 9% 2016 2013 2016 Trastuzumab 4.4 10% 2008 2014 2014 Ranibizumab 3.4 32% 2017 2014 2019 Cetuximab 1.5 5% 2015 2014 2016

Palivizumab 1.4 10% 2015 2014 2015 Natalizumab 9 16% 2014 2014 Omalizumab 8 16% 2007 2017

Panitumumab 4 81% 2017 2014 2018 Eculizumab 2 26% 2014 2017 2020

Source: IMS Health via Newport Premium for Generics, TR Research

First Wave FOB Launches

Therapy Brand Name Company Markets

Somatropin Omnitrope Sandoz EU, USA,

Canada, Japan

EPO Epokine CJ Corporation South Korea,

Thailand

EPO Binocrit Sandoz EU

EPO Retacrit Hospira EU

EPO Wepox, Epox Wockhardt India

EPO Epiao 3SBio China

EPO Erypo Biocon India

Filgrastim Nivestim Hospira EU, Austrailia

Filgrastim Ratiograstim Ratiopharm EU

INF A 2a Intefen 3SBio China

INF A 2b Realdiron Biotechna Ukraine

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Major Generic Companies Active in FOB Development

Company Proteins Antibodies Vaccines Launches

Teva FP UD FP EPO, GCSF

Sandoz FP UD EPO, HGH

Biocon FP UD FP GCSF

Hospira FP UD EPO, HGH

Zydus FP UD GCSF

STADA FP UD EPO

Actavis FP Via Bioton

Ranbaxy FP UD FP

Dr Reddys FP FP GCSF

Apotex FP UD FP

Cipla UD

9 Source: TR Research

Key: FP = Full Production, UD = Under Development

Big Pharma Committed To Compete

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Company Strategic Positioning (year)

Pfizer Announcement (10), Biocon

Merck Bioventures (09), Parexel, Hanwha (11)

Amgen Watson (11)

Biogen Idec Samsung (11)

Baxter Momenta (11)

Boehringer Ingelheim Announcement (11)

Many of the traditional innovator companies have the most to lose from competition in the follow-on biologics

market. Conversely, companies with established sales

and marketing forces in the US will have a competitive

advantage against competition void of such attributes.

-Thomson Reuters White Paper

Biosimilars and the Patient Protection and Affordable Care Act (H.R. 3590)

Section 351 of the Public Health Service Act (PHSA) amended to include an abbreviated biological license application (aBLA)

for highly similar biological products

Safety and efficacy

Large-scale clinical studies

Same condition(s)s of use, route(s) of administration, dose form, strength and utilizes the same mechanism(s) of action

as reference product

Interchangeability

Must produce the same clinical results as the reference product

Exclusivity

Continuing debate

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Biosimilars and the Patient Protection and Affordable Care Act (H.R. 3590) Continued

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Pre-Market Phase

Initial or annual biosimilar product development fee (BPD)

Reactivation Fee

Marketing Application Fee

Post-Market Phase

Establishment fee

Product Fee

Biosimilar User Fees Congressional Consideration

Many Similarities to the PDUFA Fee structure

Performance Goals

Initial Guidance? Waiting game

NEMJ article

Which Route to take? 351(a) v. 351(k)

Barriers To Entry Will Limit Competition

Biomanufacturing facility, additional capabilities

Significant clinical and non-clinical testing

Substantial, NDA-type dossiers

Post-market safety surveillance

Substantial manufacturing investments

Sales promotion and marketing

Intellectual property considerations

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Recombinant Protein Production: Emerging Markets

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0

2

4

6

8

10

12

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16

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20

India China ROW

Nu

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Under Development

Full Production

MAb Production: Emerging Markets

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0

2

4

6

8

10

12

14

16

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India China ROW

Nu

mb

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Under Development

Full Production

Companies Currently Manufacturing or Developing Active Substances For FOBs

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0

5

10

15

20

25

30

35

China India ROW EU

Inexperienced

Experienced

Biotech Capabilities Among The Top Chinese

Company Proteins Antibodies Vaccines Launches

Anhui Anke FP HGH, IFN

Amoytop FP GCSF, IFN, HGH

Beijing SL FP GCSF

Beijing Tiantan FP Hep B

Citic Pacific FP UD Etanercept

Chanchung Institute FP FP GCSF, IFN

Chengdu Hoist FP Radio MAb

Dalian Hissen FP Hep B, Rabies

National Serum FP Various

Shenzen Kexing FP IFN, HGH

Shenyang Sunshine FP EPO, IFN, IL2

Wuhan Institute FP FP MAb

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Key: FP = Full Production, UD = Under Development

Source: TR Research

Biologic Development in Japan and S Korea

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Company Proteins Antibodies Vaccines Launches

Aska UD

Celltrion FP UD Abatacept

CJ Cheil Jedang FP FP EPO

Dong-A Pharmaceuticals FP EPO, GCSF, INF,

HGH

Fuji UD

Gene Techno Science UD

ISU ABXIS UD FAb

Kissei FP GCSF

LG Life Sciences FP FP EPO

Mochida UD

Nippon Kayaku UD

Samsung UD

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Strategies, Trends and Forecasts

Number of Biologic Product Based Deals 2000-2011

20

0

50

100

150

200

250

First Wave Biosimilar Deals: EPO, G-CSF

Apotex & Cangene (1999), BioGeneriX (1999), Intas (2005)

Ratiopharm via BioGeneriX (2003)

Hospira via STADA (2006)

Barr via Pliva (2005)

Lupin via Bharat (2006)

Mayne via Pliva (2005)

Teva via Savient (1999), Sicor/UAB (1999), IVAX (2004), Tianjin Hualida (2006)

STADA via DSM Biologics (2001), Bioceuticals (2001)

Sandoz in-house

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Source: TR Research

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0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Biologic Manufacturing, Supply & Distribution Deals, 2000-2011

2nd Wave Biosimilar Technology Acquisition

Mylan via Biocon (2009)

Hospira via BresaGen (2006), HGS (2008), Celltrion (2009), Pliva (2009)

Teva via CoGenesys (2008), Lonza (2009)

Pfizer via Biocon (2010)

Strides via Inbiopro (2010)

Kemwell joint venture with Boehringer Ingelheim (2010)

Gedeon Richter via Mochida (2010)

Cipla joint venture with BioMab (2010)

EGIS via Celltrion (2010)

Watson via Itero (2010)

Shenzhen Wanle via Celltrion (2010)

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Source: TR Research

The Trend Continues in 2011

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Merck via Parexel, Hanwha

Viropro via Spectrum

Samsung via Quintiles

Fujifulm via Merck Biomanufacturing Network

Lupin via Nueclone

Compass Biotechnologies via PanGen Biotech

Pharma Praxis and Brazils Ministry of Health

Mochida, Fuji

Natco via Mabxience

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Number of Biologic Product Based Deals 2000-2011

Biologics v Biosimilars

0

50

100

150

200

250

Biologics

Biosimilars

Teva: A Case Study

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Year Deal Activity Impact

2004 Purchased SICOR Biologics Facility

2005 Purchased Tianjin Hualida IFN Producer

2006 Collaboration with Protalix Novel Expression

2008 Purchased CoGenesys Albumin Infusion

2009 Alliance with Lonza Experience

Competitive Advantages Through Strategic Deals

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Current strategies for companies investing in follow-on biologic development focus on novel

technologies and manufacturing experience.

Improved efficacy and safety of products that employ these new technologies and

manufacturing practices will increase incentive for

innovative process development.

Strategic deals will focus on additional solutions that will provide a competitive advantage in the

follow-on biologic market in the U.S. and globally

Conclusions and Considerations

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A new paradigm in pharma competition

Global markets and regulations growing to meet domestic demand and international growth

Uncertainty remains and will effect decision makers but not development and less regulated

market launches

IP considerations and strategies will become defined.

CMR International, a Thomson Reuters business

Further information

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Andrew Fischer Bourgoin

Pharmaceutical Research Analyst

Thomson Reuters Healthcare & Science

Andrew.Bourgoin@thomsonreuters.com

White Paper on US Follow-on Biologic Competition

http://science.thomsonreuters.com/info/newport_whitepapers/

Thank You!