dynamics in the pharma and biotech industry
DESCRIPTION
An analyst briefing delivered by Jennifer Brice, Industry Manager, Pharmaceuticals/Biotechnology.TRANSCRIPT
Dynamics in the Pharma and Biotech Industry
Jennifer Brice, Industry Manager,
Pharmaceuticals/Biotechnology
June 22, 2011June 22, 2011
Today’s Presenter
Jennifer Brice, Industry Manager,
Pharmaceuticals/Biotechnology,
Frost & Sullivan
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Focus Points
• Current Market
– Current state of biopharma
– Global revenues and market shares
– Drug sales by therapeutic categories
• Changing Dynamics
– Major patent expirations
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– Major patent expirations
– Therapy category shift
– Generic companies sales growth
– Biologic patent expiries
– Biosimilars market
– Pharma/biotech consolidation
• Market Opportunities
Current Market
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Current State of BioPharma
• The pharmaceutical and biotechnology industry is in a state of transition.
• Reorganization, M&A, consolidation, and portfolio changes are being evaluated in order to maintain growth centers in the face of a myriad of serious challenges.
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the face of a myriad of serious challenges.
• Overall, companies are looking to align with areas of growth opportunity as well as new business strategy and product development paradigms.
Global Biopharmaceutical Market Share by
Pharmaceutical Companies
Market Share by Pharmaceutical Companies, 2010
Other24.8%
PFE12.3% SNY
GSK6.8%%
AZN6.0%
LLY4.2%
BMY3.5%
JNJ4.1%
ABT3.6%
AMGN2.7%
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• Global Pharma Market (2010) - $550 Billion (4.7% growth)
• In 2010, Pfizer, Merck, Novartis, Roche, Sanofi-Aventis, and GlaxoSmithKline dominated the worldwide market
Source: Cowen & Co 2010, Frost & Sullivan analysis
12.3%
MRK8.4% NVZ
8.8%
RHHBY7.3%
SNY7.5%
Global Biopharmaceutical Market Share by Therapeutic
Categories
Therapeutic Categories: Drug Sales as a Percentage of the Total Market, 2010
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• In 2010, the cardiology therapeutic area (18.3%) produced the most drug sales followed by oncology/hematology (18.0%) and antibiotics/antivirals (14.5%)
Source: Cowen & Co 2010, Frost & Sullivan analysis
Changing Dynamics
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2009 2010 2011 2012
Product Sales ($MM) Product Sales ($MM) Product Sales ($MM) Product Sales ($MM)
Prevacid 3,514 Aricept 1,810 Lipitor 7,493 Singulair 3,327
Topamax 2,302 Cozaar/Hyzaar 1,454 Plavix 4,483 Enbrel 3,274
Lamictal 2,099 Protonix 1,132 Advair 4,321 Diovan 2,848
Valtrex 1,777 Taxotere 1,078 Seroquel 3,772 Lexapro 2,617
Flomax 1,485 Arimidex 729 Actos 2,957 Lovenox 2,539
Small Molecule Pharmaceuticals: Major Patent Expirations (U.S.), 2009-2012
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Imitrex 1,312 Gemzar 722 Zyprexa 2,670 Viagra 1,046
Adderall 1,309 Xalatan 544 Levaquin 1,779 Geodon 989
Keppra 1,247 NovoSeven 497 Avapro 843 Detrol 905
CellCept 968 Combivir 407 Caduet 485 Provigil 867
AmbienCR 899 Mirapex 402 Femara 447 Zometa 796
Suboxone 468 CoregCR 311 Xeloda 420 Avandia 676
All Others 2,335 All Others 3,260 All Others 2,366 All Others 4,584
Totals 19,715 Totals 12,346 Totals 32,036 Totals 24,468
Source: Kenneth Kaitin, Tufts University
Sales of Unbranded Generics by Leading Corporations $MM % Market Share % Growth
Teva 7,925 21.5 12.8
Mylan Labs, Inc. 3,789 10.3 10.3
Sandoz (Novartis) 3,457 9.4 53.0
Watson Pharma 2,125 5.8 7.6
Generic Companies Sales Growth
Sales growth for the top 10 generic companies grow at 21.1%:
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Watson Pharma 2,125 5.8 7.6
Greenstone (Pfizer) 1,470 4.0 -9.5
Par Pharma 1,380 3.7 18.2
Hospira Inc 1,173 3.2 20.5
Actavis US 992 2.7 93.4
Glopal Pharm Corp 980 2.7 255.3
Boehringer Ingelheim 878 2.4 23.7
Top 10 24,169 65.6 21.1
Source: IMS Health, National Sales Perspective, Sept 2010
Cardiology Sales of Key Companies
Company 2010 Cardiology Sales ($MM)
Pfizer 14,957
AstraZeneca 9,334
Sanofi-Aventis 9,194
Novartis 8,764
Bristol-MyersSquibb
8,392
Merck 7,476
Cardiology drug sales as a percentage of the total market expected to decline by 2015 due to patent expiries by top players and increased emphasis on other disease areas:
• Pfizer’s Lipitor (2011)• Pfizer’s Caudet (2011)• Sanofi-Aventis’ Plavix (2011)
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Source: Frost & Sullivan analysis.
Merck 7,476
GlaxoSmithKline 2,789
Abbott 2,664
Roche 497
Forest Labs 429
Eli Lilly 355
Johnson & Johnson
63
Other 10,930
Total 75,843
• Merck’s Cozaar (2010)• Merck/Schering-Plough’s Zetia (2012)• Merck/Schering-Plough’s Integrillin(2015)
• Novartis’ Diovan and Exforge (2012)• Novartis’ Lescol (2012)• AstraZeneca’s Atacand (2012)• Bristol-Myers Squibb’s Avapro (2011)• Abbott’s Advicor (2013)• Abbott’s Tarka (2010)
Central Nervous System Sales of Key Companies
Company
2010 Central Nervous System Sales ($MM)
Eli Lilly 9,268
AstraZeneca 6,099
Pfizer 5,409
Johnson & Johnson
3,995
Bristol-Myers
Central Nervous System drug sales as a percentage of the total market expected to decline by 2015 due to patent expiries by top players and increased emphasis on other disease areas:
• Eli Lilly’s Zyprexa (2011)• Eli Lilly’s Symbyax (2011)• Eli Lilly’s Cymbalta (2013)• Pfizer/Wyeth’s Effexor XR (2010)• Pfizer/Eisai’s Aricept (2010)• Pfizer’s Geodon (2010)
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Source: Frost & Sullivan analysis.
Bristol-MyersSquibb
2,625
Forest Labs 2,409
Novartis 2,077
GlaxoSmithKline 1,997
Merck 1,152
Abbott 658
Other 5,559
Total 41,248
• Pfizer’s Geodon (2010)• AstraZeneca’s Seroquel (2011)• AstraZeneca’s Zomig (2013)• Bristol-Myers Squibb/Otsuka’s Abilify (2015)• Forest Lab’s Lexapro (2012)• Forest Lab’s Namenda (2013)• Novartis’ Exelon (2012)• Novartis’ Comtan (2013)• Merck’s Maxalt (2014)• Boehringer Ingelheim’s Mirapex (2011)• Cephalon’s Provigil (2012)• Novo Nordisk’s Novolog (2014)
Respiratory Sales of Key Companies
Company 2010 Respiratory Sales ($MM)
GlaxoSmithKline 11,575
Merck 7,885
AstraZeneca 4,099
Pfizer 2,007
Respiratory drug sales as a percentage of the total market expected to decline by 2015 due to patent expiries by top players and increased emphasis on other disease areas:
• Merck’s Singulair (2012)• Sepracor’s Xopenex (2012)
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Source: Frost & Sullivan analysis.
Roche 1,246
Sanofi-Aventis 1,077
Novartis 924
Forest Labs 5
Other 595
Total 29,413
• Sepracor’s Xopenex (2012)• Pfizer’s Revatio (2012)• Johnson & Johnson’s Levaquin(2010)
• Sanofi-Aventis’ Allegra and Johnson & Johnson’s Zyrtecgenerics and Merck/Schering-Plough’s OTC Claritin will continue to impede allergy market
Therapy Category Shift (Global), 2010-2015
2010 Revenues
� Cardiology
� Cancer/Oncology/Hematology
� Antibiotics/Antivirals
2015 Revenues
� Cancer/Oncology/Hematology
� Antibiotics/Antivirals
� Cardiology
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� Antibiotics/Antivirals
� Central Nervous System
� Respiratory
Source: Cowen & Co 2010; Frost & Sullivan Analysis
� Cardiology
� Rheumatology
� Diabetes
Biologic Patent Expiries (2004-2020)
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Source: IMS Health, MIDAS, Market Segmentation, June 2010
Key Biologics and U.S. Patent Expiries
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Source: IMS Health, MIDAS,, June 2010
Biosimilars Market
• The biosimilars market is complex with many factors that may affect market potential
– Products with different administration routes may gain favor over less desirable methods
– Biosimilars for chronic diseases may be viewed differently than biosimilars that are used only once
– Doctors may be more willing or less willing to prescribe biosimilars depending upon
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– Doctors may be more willing or less willing to prescribe biosimilars depending upon the indication (cancer vs. immunological disorders)
– Doctors may not be willing to switch patients already using biopharmaceuticals to a biosimilar
– Doctors may only prescribe biosimilars to new patients
– While generic medicines will produce significant cost savings, biosimilars are not expected to save much
• Conservative risk/benefit perspective at the FDA = fewer FDA approvals
• Prolonged FDA regulatory process = exacerbated pipeline gaps
– PDUFA IV requirements for advisory committee reviews
Pharma/Biotech Consolidation Continues
Consolidation
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– Negotiated Risk Evaluation and Mitigation Strategies (REMs) required for most NDA filings
• Tougher patent litigation settlements = loss in key franchise
Consolidation
Source: Frost & Sullivan
Pharmaceutical M&A Activity, 1995-2010
Pharmaceutical M&A Activity, 1995-2010
• In 2010, there have been 986 transactions
• The number of M&A have slightly
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Source: IMAA 2011.
have slightly increased (+3%); this is the fourth consecutively increase since 2006, and a new record in terms of numbers of transaction
Significant Mergers & Acquisitions in 2009
Pfizer - WyethPfizer - Wyeth
Value: $68 billion
Key Reason:
Imminent loss of Pfizer’s revenues due to patent expiration of Lipitor
Value: $68 billion
Key Reason:
Imminent loss of Pfizer’s revenues due to patent expiration of Lipitor
Merck & Co. - Schering Plough
Merck & Co. - Schering Plough
Value: $41 billion
Key Reason:
Schering-Plough pipeline consisting mainly of biologics, with about 18
Value: $41 billion
Key Reason:
Schering-Plough pipeline consisting mainly of biologics, with about 18
Roche -Genentech
Roche -Genentech
Value: $46.8 billion
(44% of remaining shares)
Key Reason:
Roche, through acquiring
Value: $46.8 billion
(44% of remaining shares)
Key Reason:
Roche, through acquiring
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expiration of Lipitor ($13.4bn ) during 2010-2011
Wyeth’s current portfolio of marketed products and strong pipeline of biologics particularly in CNS.
expiration of Lipitor ($13.4bn ) during 2010-2011
Wyeth’s current portfolio of marketed products and strong pipeline of biologics particularly in CNS.
biologics, with about 18 drugs in Phase III.
Schering-Plough offers geographical diversity with 70% of its revenue outside the United States.
biologics, with about 18 drugs in Phase III.
Schering-Plough offers geographical diversity with 70% of its revenue outside the United States.
Roche, through acquiring the remaining 44% of shares gets complete control of Genentech, a leader in biotechnology with blockbusters such as Avastin and Rituxan.
Roche, through acquiring the remaining 44% of shares gets complete control of Genentech, a leader in biotechnology with blockbusters such as Avastin and Rituxan.
Source: Frost & Sullivan
Top Deals in 2010
Target Company Target Country Acquirer Company Acquirer Country
Genzyme U.S. Sanofi-Aventis France
Alcon Switzerland Novartis Switzerland
Millipore Corp U.S. Merck KGaA Germany
Ratiopharm Germany Teva Israel
Valeant Pharm U.S. Biovail Corp Canada
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Valeant Pharm U.S. Biovail Corp Canada
TalecrisBiotherapeutics
U.S. Grifols Spain
OSI Pharmaceuticals U.S. Ruby Acquisition Inc U.S.
Piramal Healthcare Ltd India Abbott Laboratories U.S.
Source: IMAA 2011.
FIPCO (Fully Integrated Pharma Co.)
Manufacturing
Sales &Distribution
CSO
CMO
Partnerships
Clinical
Manufacturing
Sales &Distribution
VIPCO (Virtually Integrated Pharma Co.)
Changing Business Models
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ResearchTechnology
Clinical &Regulatory
CROs
Academia, Scientific, Institutions
R&D
Preclinical Support
ClinicalDevelopment
Preclinical CRO
Source: Burrill & Co.
Market Opportunities
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• Emerging Markets– High unmet needs for treatments
– Potential for growth in contract markets (CROs and CMOs)
• Personalized Medicine– Advances in a number of molecular profiling technologies, including proteomic
profiling, metabolomic analysis, and genetic testing, may allow for a greater degree of personalized medicine than is currently available
• Develop/commercialize biosimilars/generics
Current Pharmaceutical Opportunities
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• Develop/commercialize biosimilars/generics
• Social Media
• M&As
Next Steps
� Request a proposal for or Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. ([email protected]) 1-877-GoFrost (1-877-463-7678)
� Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth (www.gil-global.com)
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� Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities(www.frost.com/news)
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For Additional Information
Jennifer Brice
Industry Manager
Pharmaceuticals & Biotechnology
(650) 475-4560
Britni Myers
Corporate Communications
Healthcare
(210) 477-8481
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Daniel Ruppar
Research Director
Healthcare
(210) 247-2428
Chris Olsen
Director of Business Development
Healthcare
(650) 475-4561