Biosimilars in Europe: The Road Ahead

Biosimilars in Europe: The Road AheadBiosimilars in Europe: The Road Ahead

K. Srinivas Sashidhar, Research Analyst

HealthcareHealthcare

6th March 2012

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Today’s Presenter

Functional Expertise•Experience in Healthcare and Biotechnology domain - R&D

Industry Expertise•Experience in Healthcare industry •Experience in the clinical diagnostics segment

What I bring to the Team•Strong Technical background and expertise•Effective communication and Presentation skills

Career Highlights

2

•Currently working as Research Analyst for Life sciences Division at Frost & Sullivan (Feb 2011 – Present)•Worked as Associate Genetic Research Analyst at Histogenetics India Private Limited (2 Years)

Projects Completed•European Diabetes Therapeutics Market (Published September 2011)•Analysis of European Biosimilars Market (Published December 2011)

Presently Working•Western European In Vitro Diagnostics (IVD) Market•European Diabetes Diagnostics Market

K. Srinivas SashidharResearch AnalystLifesciencesHealthcare Europe

Frost & SullivanChennai

Focus PointsFocus PointsFocus PointsFocus Points

Sneak Peek – Current scenario and how far would it go?

Biosimilars Overview and Key Segments

Key Drivers, Restraints and Challenges

Focus Points

3

Focus PointsFocus PointsFocus PointsFocus Points

Key market participants involved and where do they stand?

Source: Frost & Sullivan analysis.

Regional Focus and factors influencing the biosimilars market

Key Strategies and Conclusions

Market Overview

Biosimilars: Legally approved subsequent versions of innovator biopharmaceutical products following patent and exclusivity expiry.

Huge Opportunities from patent expiries. More than $100 billion worth biologics due to expire in the next decade.

Early stages—very limited experience in the biosimilar market. High initial investment is still a major barrier for new entrants.

4

Existing Biosimilars

Erythropoietin

Human Growth Hormone

Granulocyte Colony Stimulating Factors

Monoclonal Antibodies

Interferons

Insulins

Emerging Biosimilars

Biosimilars Market: Market Segmentation (Europe), 2010


European Biosimilars Market—Comparative Analysis:Generics, Biosimilars and Biologics

Moderate (50−75%)Low (~30%)

BiosimilarsGenerics Biologics

Probability of successProbability of success

TimeTime

CostCost

PricingPricing

Short (3−4 Yrs) Long (8−12)

Low (~$5 million)High

($350−800 million)

Commodity pricing Premium (full pricing)

High (~90%)

Moderate (7−8 Yrs)

$100−200 million

Lower pricing value

Moderate

Pro

du

ct

Dev

elo

pm

en

t

5

Source: Hospira Education Forum and Frost & Sullivan analysis.

Mark

eti

ng

Oth

er

Dyn

am

ics

Marketing investmentMarketing investment

Point of differentiationPoint of differentiation

Barriers to entryBarriers to entry

Product operational profit margins

Product operational profit margins

Decision makersDecision makers

CompetitorsCompetitors

Low High

Group purchasing / Medical professional

OrganisationsPrescribers, patients

High, Less differentiated

Few, well differentiated

Price, breadth of portfolio

Product profile, marketing

Low (Cost efficiency)

High (development process)

Low (~20%) High (~40%)

Payers, prescribers

Moderate

Few, Partially differentiated

Price, Product profile & technology

High (capital and development)

Mixed (25−30%)

Key Industry Challenges

Interchangeability and biosimilar substitution is a contentious issue

Complex manufacturing process is a major challenge for manufacturers

Biosimilars Market: Key Industry Challenges (Europe), 2011−−−−2017

6

Industry Challenges

Industry Challenges

High manufacturing cost poses a major barrier for market entrants

Scaling up of production to meet market demands will be a challenge with increase in demand

Complex regulatory approval process is a challenge for product entry into market

Source: Frost & Sullivan analysis

Key Market Drivers

Emergence of new market participants

in Europe drives market expansion

Reduction in

Biosimilars Market: Key Market Drivers (Europe), 2011−−−−2017

7

Reduction in medical

expenditure drives demand for

biosimilar drugs

More patent expiries lead to increase in market opportunity


Key Market Restraints

Lack of access to process information may effect product

quality

Uncertainty and reluctance of

physicians to adopt biosimilars may have a negative

impact on biosimilar sales

Biosimilars Market: Key Market Restraints (Europe), 2011−−−−2017

8


Time-consuming approval process may lead to slow

market growth

Key Stake Holders

Biosimilar MarketBiosimilar Market

Biosimilars Market: Key Stake Holders (Europe), 2010

9

Hospitals/ PharmacistsHospitals/

PharmacistsPatientsPatients RegulatorsRegulators

Health MinistryHealth Ministry

Pricing Authorities

Pricing Authorities

ProductionCompaniesProductionCompanies

Wholesalers&

Pharmacists

Wholesalers&

Pharmacists

DemandDemandRegulatory

PathwayRegulatory

PathwaySupplySupply

HospitalPharmacies

HospitalPharmacies

DoctorsDoctors


Product Profiling—Biosimilars in Europe

Product Common Name (INN) CompanyReference Product Date of Approval

Omnitrope Somatropin Sandoz Genotropin April 12, 2006

Valtropin Somatropin Biopartners Humatrope April 24, 2006

Binocrit Epoetin Alfa Sandoz Eprex August 28, 2007

Epoetin Alfa Hexal Epoetin Alfa Hexal Eprex August 28, 2007

Abseamed Epoetin Alfa Medice Eprex August 28, 2007

Retacrit Epoetin Zeta Hospira Eprex December 18, 2007

Silapo Epoetin Zeta STADA Eprex December 18, 2007

Biosimilars Market: Approved Biosimilars (Europe), 2011

10

Silapo Epoetin Zeta STADA Eprex December 18, 2007

Biograstim Filgrastim CT Arzneimittel GmbH Neupogen September 15, 2008

Filgrastim Ratiopharm Filgrastim Ratiopharm GmbH Neupogen September 15, 2008

Ratiograstim Filgrastim Ratiopharm GmbH Neupogen September 15, 2008

Tevagrastim Filgrastim Teva Generics GmbH Neupogen September 15, 2008

Zarzio Filgrastim Sandoz Neupogen February 6, 2009

Filgrastim Hexal Filgrastim Hexal Neupogen February 6, 2009

Nivestim Filgrastim Hospira Neupogen June 8, 2010

Source: Frost & Sullivan analysis & EMEA.

Note: According to EMEA’s latest information, Filgrastim Ratiopharm was withdrawn on 20 April 2011. Thismedicinal product is no longer available in Europe.

Market Share Analysis—Segment Breakdown Europe


20%

Biosimilars Market: Market Share percent by segment (Europe), 2010

The European biosimilars market is valued at approximately $172.0 million in 2010. The market is expected toreach approximately $3,987.0 million in 2017, at a CAGR of 56.7 percent from 2010 to 2017. The biosimilarmarket was divided among the following segments as shown below.

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Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis.

Erythropoeitin60%Granulocyte Colony

Stimulating factor20%

Competitive Landscape Analysis (continued)

Market Segment

Erythropoietin

Total Market

1111 2222 3333 4444 5555

Teva Hospira MediceSTADASandoz

Biosimilars Market: Key Market Players - Rank/Market Share (Europe), 2011

6666

CT Arzneimittel

12


Erythropoietin

Granulocyte Colony Stimulating Factor


Hospira MediceSTADASandoz

TevaCT

Arzneimittel

Sandoz

Sandoz

Competitive Landscape Analysis (continued)S

ale

s a

nd

Mark

eti

ng

S

tren

gth

Hig

h Generics and Specialty Pharma

Big Pharma

Sandoz

Teva

HospiraStada

MediceCT

Celltrion

Mylan

Merck

Eli Lilly

Pfizer

Astrazeneca

Key Takeaway: Companies with a strong integration of marketing and R&D is likely to succeed

13


Sale

s a

nd

Mark

eti

ng

S

tren

gth

Lo

w

Low HighProduct Development Strength

Biotech

Potential Entrants

CT Arzneimittel Biopartners

Zydus Cadila

Actavis

Dr. Reddy’s

Ranbaxy

Biocon

Shantha Biotechnics

(Part of Sanofi Group)

Cangene

Crucell

Reliance Life Sciences

Key Revenue Generating Avenues : Replacement Sale in Western Europe andNew Installations in Eastern Europe

Germany – Largest and High potential marketin Europe; Contributed approx. 53% ofEuropean biosimilars market in 2010.

France – Emphasis on cost-containment and

efforts to encourage biosimilar prescription

UK - Strong generic culture and efforts to

reduce healthcare expenditure

Key Takeaway: Germany is expected to be the most attractive market for biosimilars in the long term owing pro-generic policy environment, and emphasis on cost-containment.

Key Takeaway: Germany is expected to be the most attractive market for biosimilars in the long term owing pro-generic policy environment, and emphasis on cost-containment.

Regional Analysis

Scandinavia

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`

`

Benelux - Strong generics culture and

demand for low-cost drugs

Spain - High use of branded biologics; Moreincentives required to encourage biosimilarsubscription

Italy - Branded biologics dominate the market;

Medium growth expected

Scandinavia – Transparent system, rational

use of medicines, and efforts to monitor

prescription ratesSource: Frost & Sullivan analysis.

UK

Benelux

France

Germany

Italy

Spain

European Biosimilars Market—Impact Assessment of Top Trends

High demand of drugs due to low cost

Increase in number of biosimilar approvals

Emergence of new protein class segments leading to market expansion

High Growth Impact

MediumGrowthImpact

ProjectedImpact on the

European

Biosimilars Market: Impact Assessment of Top Trends (Europe), 2010

Huge Opportunity from patent expiries

15

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis.

Low Impact

CertaintyLow High

Penetration of Indian companies in Europe in the future leading to increase in competition

leading to market expansion

LowGrowthImpact

European Biosimilars

Market

Biosimilars Market—Key Success Factors

Vision

&

Strategy

Scale-up

Production

Capabilities

• Clearly defined long-term vision commitment and strategic fit.

• Goals for in-house development marketing, and geographic focus.

• Competitive intelligence on biologics and biosimilars market.

• Competitor pipeline analysis competitor’s R&D investment

• Technical know-how for

clinical development

• Regulatory expertise on

guidelines such as EMEA,

FDA and pharmacovigilance

• Stable multi-step reproducible manufacturing facilities

• Proper supply chain management• Standard testing control facilities

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Competitive

Knowledge

Capital

Investments

Clinical &

Regulatory

Expertise

Marketing

& Sales

Skills

R&D investment strategy.

• Competitive regional benchmarking.

• Effective sales communication to the scientific community

• Effective market activities for commercialization of biosimilars

• Continuous promotional activities and marketing relationship with doctors, pharmacists etc.

pharmacovigilance

Expertise

Success

• Healthy finance infrastructure for high upfront investments

• Ability to cope with high manufacturing, maintenance, and promotional costs

Biosimilars Market—Manufacturing Strategies

Acquisitions CollaborationsScale-up

• Acquisition of biopharmaceutical

companies, having a biosimilar

• Collaboration with companies

with expertise in biosimilar or

• With past experience in

biotechnology, scale-up of the

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companies, having a biosimilar

pipeline, e.g., Teva’s acquisition

of Barr Pharmaceuticals.

• Acquisition of companies with

large-scale production facilities

like CMOs which also have

experience in biopharmaceutical

production scaling up.

with expertise in biosimilar or

biotech companies and access

to production technologies e.g.

Biocon and Pfizer.

• Collaborations with companies

of emerging markets who are

already manufacturing

biosimilars, e.g., Ranbaxy with

Zenotech Laboratories.

biotechnology, scale-up of the

R&D and manufacturing

capabilities to make a logical

extension to the existing

business, e.g., Sandoz

Biosimilars Market—Commercialisation Strategies

RegulatorySales & Marketing

• Access to expertise in

regulatory approval by • Access to sales and marketing

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regulatory approval by

collaborating with contract

research organisations (CROs)

• Companies will have to

educate, train employees about

regulatory processes, and build

these capabilities in house.

capabilities through

collaborations

• Companies need to build these

capabilities in-house as well

Conclusions

Expected Increase in biosimilar approvals

Low costs of drugs leading to higher demand

Conclusions

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Uncertainties and risks for biosimilar manufacturers to continue

New protein class segments to emerge in Europe

Conclusions


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