The Top 10 Pharma Companies in 2017 2013 The Top 10 Pharma Companies in 2017 – leading drivers and resistors to growth A FirstWord OverViews report

March 2013

The Top 10 Pharma Companies in 2017 – leading drivers and resistors to growth

A FirstWord OverViews report

http://www.fwreports.com

The Top 10 Pharma Companies in 2017 – leading drivers and resistors to growth

Published March 2013© Copyright 2013 Doctor’s Guide Publishing Limited

All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping or storage in information retrieval systems without the express permission of the publisher.

This report contains information from numerous sources that Doctor’s Guide Publishing Limited believes to be reliable but for which accuracy cannot be guaranteed. Doctor’s Guide Publishing Limited does not accept responsibility for any loss incurred by any person who acts or who fails to act as a result of information published in this document. Any views and opinions expressed by third parties and reproduced in this document are not necessarily the views and opinions of Doctor’s Guide Publishing Limited. Any views and opinions expressed by individuals and reproduced in this document are not necessarily the views and opinions of their employers.


All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved

March 2013i

The Top 10 Pharma Companies in 2017 –

leading drivers and resistors to growth

www.fwreports.com

ContentsExecutive summary .............................................................................................................................. 1

Introduction ................................................................................................................................................6

Comparative analysis of the top 10 .......................................................................................... 7

Novartis .......................................................................................................................................................10

Drivers .........................................................................................................................................................12

Afinitor ....................................................................................................................................................13

Gilenya ................................................................................................................................................... 17

Tasigna ................................................................................................................................................... 21

Lucentis .................................................................................................................................................25

Galvus ....................................................................................................................................................28

Resistors .................................................................................................................................................... 31

Diovan/Co-Diovan/Diovan HCT ..................................................................................................... 31

Gleevec .................................................................................................................................................33

Zometa ...................................................................................................................................................34

Femara ..................................................................................................................................................35

Tekturna .................................................................................................................................................36

Sanofi ............................................................................................................................................................ 37

Drivers .........................................................................................................................................................38

Lantus ....................................................................................................................................................39

Lantus/lixisenatide combination product ......................................................................................42

Aubagio ..................................................................................................................................................44

Lemtrada ...............................................................................................................................................46

Fluzone/Vaxigrip .................................................................................................................................48



March 2013ii

www.fwreports.com



Resistors ....................................................................................................................................................50

Eloxatin .................................................................................................................................................. 51

Plavix ......................................................................................................................................................52

Aprovel ...................................................................................................................................................53

Taxotere .................................................................................................................................................54

Allegra ....................................................................................................................................................55

Pfizer ..............................................................................................................................................................56

Drivers .........................................................................................................................................................58

Eliquis.....................................................................................................................................................59

Xeljanz ................................................................................................................................................... 61

Prevnar ..................................................................................................................................................65

Xalkori ....................................................................................................................................................68

Inlyta ....................................................................................................................................................... 71

Resistors ....................................................................................................................................................75

Lipitor .....................................................................................................................................................76

Celebrex ................................................................................................................................................ 77

Zyvox ......................................................................................................................................................78

Xalatan ...................................................................................................................................................79

Detrol LA ...............................................................................................................................................80

Geodon .................................................................................................................................................. 81

Roche ............................................................................................................................................................82

Drivers .........................................................................................................................................................83

Perjeta ....................................................................................................................................................84

Avastin ................................................................................................................................................... 87




March 2013iii

www.fwreports.com



Actemra ................................................................................................................................................89

Kadcyla .................................................................................................................................................. 91

Rituxan ...................................................................................................................................................93

Resistors ....................................................................................................................................................96

Herceptin ...............................................................................................................................................96

Xeloda ....................................................................................................................................................98

Pegasys .................................................................................................................................................99

Cellcept ................................................................................................................................................ 101

Boniva ..................................................................................................................................................102

GlaxoSmithKline .................................................................................................................................103

Drivers .......................................................................................................................................................105

Relovair ...............................................................................................................................................105

Anoro ....................................................................................................................................................108

Benlysta ................................................................................................................................................111

Dolutegravir ........................................................................................................................................ 113

Promacta .............................................................................................................................................116

Resistors .................................................................................................................................................. 117

Advair/Seretide .................................................................................................................................. 117

Lovaza .................................................................................................................................................119

Epzicom ............................................................................................................................................... 121

Avodart .................................................................................................................................................122

Flovent .................................................................................................................................................123




March 2013iv

www.fwreports.com



Merck and Co ........................................................................................................................................124

Drivers .......................................................................................................................................................125

Januvia franchise ..............................................................................................................................126

Odanacatib .........................................................................................................................................129

Gardasil ...............................................................................................................................................132

Zostavax ..............................................................................................................................................133

Dulera...................................................................................................................................................134

Resistors ..................................................................................................................................................136

Singulair .............................................................................................................................................. 137

Zetia/Vytorin .......................................................................................................................................138

Temodar ...............................................................................................................................................140

Cozaar/Hyzaar................................................................................................................................... 141

Johnson and Johnson ....................................................................................................................142

Drivers .......................................................................................................................................................143

Stelara ..................................................................................................................................................143

Xarelto .................................................................................................................................................. 147

Zytiga ....................................................................................................................................................149

Simponi ................................................................................................................................................ 151

Invega Sustenna ...............................................................................................................................152

Resistors ..................................................................................................................................................154

Concerta ..............................................................................................................................................155

Aciphex ................................................................................................................................................156

Procrit ................................................................................................................................................... 157

Remicade ............................................................................................................................................158

Risperdal consta ...............................................................................................................................159




March 2013v

www.fwreports.com



AstraZeneca ...........................................................................................................................................160

Drivers .......................................................................................................................................................163

Brilinta ..................................................................................................................................................163

Onglyza ...............................................................................................................................................166

Bydureon .............................................................................................................................................168

Forxiga .................................................................................................................................................170

Fostamatinib.......................................................................................................................................173

Resistors ..................................................................................................................................................175

Crestor .................................................................................................................................................176

Seroquel franchise ........................................................................................................................... 177

Nexium .................................................................................................................................................178

Atacand ................................................................................................................................................179

Arimidex ...............................................................................................................................................180

AbbVie ........................................................................................................................................................ 181

Drivers .......................................................................................................................................................183

Hepatitis C virus franchise .............................................................................................................184

Humira ................................................................................................................................................. 187

Duodopa ..............................................................................................................................................190

Daclizumab .........................................................................................................................................192

Elagolix ................................................................................................................................................194

Resistors .................................................................................................................................................. 197

Niaspan ............................................................................................................................................... 197

Tricor and Trilipix franchise ............................................................................................................199

Kaletra/Norvir .....................................................................................................................................200

Lupron ..................................................................................................................................................202




March 2013vi

www.fwreports.com



Bayer ...........................................................................................................................................................203

Drivers .......................................................................................................................................................204

Xarelto ..................................................................................................................................................205

Eylea ....................................................................................................................................................206

Alpharadin ...........................................................................................................................................210

Riociguat .............................................................................................................................................212

Kogenate .............................................................................................................................................214

Resistors ..................................................................................................................................................216

Yasmin and Yaz ................................................................................................................................. 217

Avalox...................................................................................................................................................219

Mirena ..................................................................................................................................................220

Adalat ................................................................................................................................................... 221

Methodology statement .................................................................................................................222




March 20131

www.fwreports.com



Executive summarynNovartis is forecast to retain its market leading

position in 2017 with sales of US$60.1 billion. Novartis’s sales growth will be largely driven by the sales of five products that have already been approved. These are Afinitor, Gilenya, Tasigna, Lucentis and Galvus. Between them these five products will add US$6 billion to the company’s revenues. Sales growth will be slowed by generic or biosimilar competition to two key products, Diovan and Gleevec.

nSanofi is forecast to move from being the third largest player in the pharmaceutical market in 2012 to the second largest in 2017. Sanofi’s sales growth is forecast to be driven by its diabetes franchise (Lantus and Lyxumia) and its two new treatments for multiple sclerosis (Aubagio and Lemtrada). In common with most of the pharmaceutical industry Sanofi is facing competition from generics, and it is this that is forecast to slow the company’s sales growth. Eloxatin, Plavix, Aprovel, Taxotere, and Allegra all face generic competition, which will lead to these products losing significant sales.

nPfizer until 2011 was the largest pharmaceutical company in the world. However, with the loss of patent protection for Lipitor (the largest pharmaceutical product in terms of revenues of all time) in 2011 its revenues have fallen considerably. Pfizer will continue to be affected by the loss of market exclusivity for Lipitor and other products (Celebrex, Zyvox, Xalatan and Detrol LA)




March 20132

www.fwreports.com



with sales forecast to continue to fall until 2015. From that point on sales are forecast to increase as the impact of new products such as Eliquis and Xeljanz starts to be felt.

nRoche is forecast to have solid sales growth throughout the 2012-2017 period. This sales growth is expected to be driven by the company’s strengths in biotechnology. All five of Roche’s leading growth drivers are antibodies. Perjeta and Kadcyla are expected to allow Roche to strengthen its hold over the HER2-positive breast cancer market whilst Rituxan and Actemra enable the company to grow its market share in the important rheumatoid arthritis market. Roche’s sales growth is forecast to be resisted by generic competition to small molecule drugs and the introduction of biosimilars to Herceptin. Pegasys is forecast to become less important in the treatment of hepatitis C as a result of the launch of new treatments, such as Gilead’s sofosbuvir, and as a result its sales are forecast to fall.

nGlaxoSmithKline is forecast to have continuous sales growth throughout the forecast period. Of the five largest drivers of growth for the company, three are still in the pipeline. These are Relovair, Anoro, and the company’s HIV integrase inhibitor GSK1349572. Relovair and Anoro are both forecast to be blockbuster (>US$1 billion) products in 2017. The largest resistor to the growth of GSK’s sales growth is the loss of patent protection for Advair, with generics expected to be launched in the EU in 2013 and in the US in 2015/2016.




March 20133

www.fwreports.com



nMerck and Co is forecast to have almost flat sales throughout the 2012-2017 forecast period (2012 sales of US$40 billion forecast to decline to US$38.9 billion in 2017). The loss of patent protection for Singulair, which is forecast to see its sales decline – from US$3.8 billion in 2012 to US$597 million in 2017 – is the biggest resistor to Merck and Co’s growth. Zetia and Vytorin are also expected to see their sales fall considerably as a result of the likely poor outcome of the cardiovascular outcomes study IMPROVE-IT. Offsetting the loss of sales from these products is the continued sales growth of the DPP-IV inhibitor Januvia and the launch of the new osteoporosis treatment odanacatib.

nJohnson and Johnson is forecast to have mixed financial fortunes during the 2012-2017 forecast period with sales growth forecast through to 2016 before sales fall back in 2017 to US$27.5 billion. All five of J&J’s largest drivers of sales growth are already approved and on the market. Stelara is indicated for the treatment of rheumatoid arthritis, which is an increasingly competitive space; however, new indications, including Crohn’s disease, are expected to drive additional growth for this product. J&J’s best selling product is Remicade (accounting for 24 percent of 2012 pharmaceutical revenues), and this is forecast to see its sales gradually decline from 2014 onwards as a result of increasing competition in the anti-TNF market place.




March 20134

www.fwreports.com



nAstraZeneca was the seventh largest pharmaceutical company in the world in 2012, though its sales are forecast to decline throughout the forecast period with its growth drivers (Brilinta, Onglyza, Bydureon, Forxiga and fostamatinib) being unable to offset the loss of sales that is forecast to effect several key products. Crestor is forecast to see its sales fall from US$6.3 billion in 2012 to US$3.3 billion in 2017 as a result of competition from cheap generic simvastatin, and the launch of generic rosuvastatin in 2016. Generic competition to Seroquel, Nexium, Atacand, and Arimidex will see sales of these products fall.

nAbbVie was recently created by the separation of Abbott Laboratories into two separate companies. AbbVie is more dependent on one single product than any other company in this report, with 49.5 percent of revenues being derived from the sales of Humira. Despite this dependence on one product, AbbVie’s sales are forecast to continue to rise throughout the forecast period driven by the continued growth of Humira, and the launch of a novel combination treatment for hepatitis C virus.

nBayer is forecast to become the tenth largest company in the pharmaceutical market in 2017 by which time its pharmaceutical revenues will be US$17.3 billion. Bayer will be a new entrant to the top 10 and is




March 20135

www.fwreports.com



forecast to have the strongest growth of all of the companies in the top 10 in 2017 with a CAGR of 4.5 percent over the 2012-2017 period. Bayer’s growth will be driven by the sales of the recently approved and launched Eylea and Xarelto, and the expected approval and launch of two pipeline products: alpharadin and riociguat. This growth will be slowed by the loss of market exclusivity for five key products.

FirstWord Dossier’s research is guided by the needs of its clients. Our aim is to uncover and convey insights and new thinking on issues that are at the top of pharma agendas.

Recent projects have examined KOL relations, market access, pharma and mobile technologies, social media, MSL compliance, payers, sales force innovation, e-detailing, closed-loop marketing, marketing excellence, and others (for a full list, go to www.fwreports.com).

To ensure that future research continues to address subjects that are of most importance to our customers, we would welcome hearing your suggestions for topics that in your view demand FirstWord Dossier’s attention over the coming months.

If your idea is selected as a topic for one of our future reports, we will be pleased to provide you with a complimentary copy of the report on publication.

Please click here to send your ideas to the FirstWord Dossier Research Team. We look forward to hearing from you.

CALL FOR TOPICS




mailto:feedback%40fwreports.com?subject=FirstWord%20Dossier%20Customer%20Topic%20Suggestions%20%28400200156-310%29


March 20136

www.fwreports.com



IntroductionMany of the largest companies in the pharmaceutical industry have recently had to face the loss of market exclusivity for some of their best selling products. The future of the industry is not a uniformly bleak one, however. With seven of the ten companies profiled in this report forecast by analyst consensus to have sales growth through to 2017 there is still much for the industry to be optimistic about.

The year of 2012 saw 39 new drugs gain regulatory approval from the US FDA, the highest number for 16 years1. It is these drugs, and other products approved in the last few years that make up the majority of the identified drivers of growth in this report. With many other promising candidates in development it would appear that the pharmaceutical industry is on the verge of entering a new period of growth having just come out on the other side of the much talked about “patent cliff”.

1 Reuters. FDA new drug approvals hit 16-year high in 2012. December 31, 2012



http://www.reuters.com/article/2012/12/31/us-pharmaceuticals-fda-approvals-idUSBRE8BU0EK20121231


March 20137

www.fwreports.com



Comparative analysis of the top 10As can be seen from the table below Bayer is forecast to have the highest compound annual growth rate (CAGR) over the 2012-2017 period of 4.48 percent, with an additional US$3.4 billion in sales added to the company’s pharmaceutical revenues. The company with the lowest CAGR over the forecast period is AstraZeneca with sales forecast to fall at a CAGR of -2.86%. In absolute terms Sanofi will add the most revenues over the forecast period with an additional US$8.8 billion in 2017 compared to 2012 as a result of the success of products such as Lantus.

Table 1: Sales performance of the top 10 pharmaceutical companies in 2017, 2012-2017 (US$m)

Company 2012 2013e 2014e 2015e 2016e 2017e Absolute Growth CAGR

Novartis 52,938 53,132 55,100 56,989 58,079 60,152 7,214 2.59%

Sanofi 42,132 43,266 45,477 47,186 49,158 50,981 8,849 3.89%

Pfizer 51,214 49,778 49,346 48,318 48,777 48,943 -2,271 -0.90%

Roche 37,593 39,710 41,303 42,782 43,973 45,351 7,759 3.82%

GSK 33,687 34,433 35,536 36,805 38,109 40,122 6,435 3.56%

Merck & Co 40,021 39,457 39,157 39,234 39,750 38,971 -1,050 -0.53%

J&J 25,351 26,669 27,301 28,449 28,912 27,531 2,180 1.66%

AstraZeneca 27,973 27,163 26,698 26,587 25,849 24,196 -3,777 -2.86%

AbbVie 18,716 18,292 18,757 19,397 20,249 20,703 1,987 2.04%

Bayer 13,890 14,247 15,211 15,930 16,491 17,296 3,406 4.48%

Source: FirstWord Dossier




March 20138

www.fwreports.com



The figure below shows the growing importance to the top ten pharmaceuticals companies of their top five growth drivers. It compares the share of revenues from these products in 2012 to the share in 2017. As can be seen both Roche and AbbVie are already highly dependent upon this group of products and this dependence is going to become even more marked. Bayer is another company that stands out with its dependence on its five main drivers growing from 11 percent in 2012 to 33 percent in 2017.

Figure 1: Percentage of total pharmaceutical sales contributed by top five drivers, 2012 and 2017

0%

10%

20%

40%

30%

50%

60%

70%

Novart

isSan

ofiPfiz

er

Roche

GSK

Merck a

nd C

oJ&

J

AstraZ

enica

AbbVie

Bayer


2012

2017




March 20139

www.fwreports.com



The figure below demonstrates the share of total pharmaceutical revenues contributed by the five leading resistors to growth in 2012 and 2017 for the top ten pharmaceutical companies in 2017. Both AstraZeneca and Johnson and Johnson will still derive more than 25 percent of their pharmaceutical revenues from five products that will have seen their revenues decline throughout the forecast period. This would suggest that these products will continue to act as a brake to pharmaceutical revenue growth for these companies beyond 2017.

Figure 2: Percentage of total pharmaceutical sales contributed by top five resistors, 2012 and 2017

0%

10%

20%

40%

2012

2017

30%

50%

60%

Novart

isSan

ofiPfiz

er

Roche

GSK

Merck a

nd C

oJ&

J

AstraZ

enica

AbbVie

Bayer





March 201310

www.fwreports.com



NovartisNovartis was the largest pharmaceutical company in the world in 2012 when ranked by sales, with consolidated revenues from the company’s pharmaceutical divisions (Pharmaceuticals, Vaccines and Diagnostics, Sandoz, and Alcon) reaching US$52.9 billion.

Figure 3: Novartis global revenues 2012-2017

Includes revenues from Pharmaceuticals, Vaccines & Diagnostics, Sandoz and Alcon divisions.

201248,000

50,000

52,000

54,000

56,000

58,000

60,000

62,000

2013e 2014e 2015e 2016e 2017e


Rev

enue

s U

S$ m

Analyst consensus forecasts Novartis revenues to continue to grow strongly through to 2017 when they will be US$60.1 billion

Novartis was formed in 1996 by the merger of Sandoz and Ciba-Geigy. Today the company is a diversified company with a very strong position in generics, through its Sandoz subsidiary, eye care,




March 201311

www.fwreports.com



through its Alcon subsidiary, consumer health, vaccines and diagnostics and, more broadly, in branded pharmaceuticals.

In 2012 Novartis’s pharmaceutical revenues were split as follows:

Figure 4: Novartis pharmaceutical revenues by division 2012-2017

Pharma

32,153

1,858

8,70210,225

0

5,000

10,000

20,000

15,000

25,000

30,000

35,000

Vaccines Sandoz Alcon


Rev

enue

s U

S$ m

As can be seen the core pharmaceuticals business is the most important division the company has despite the company’s efforts to diversify into other areas of healthcare. In April 2011 Novartis and Alcon completed their merger, and this put Novartis in a very strong position in the eye care market with a market share of just under 70 percent. Sandoz is the generics arm of Novartis and is the second largest player in this market behind Teva.




March 201312

www.fwreports.com



As detailed in a recent FirstWord Pharma article2, Novartis has the lowest dependency on a single blockbuster product of all of the leading pharmaceutical companies. In 2012 Diovan accounted for eight percent of Novartis’s consolidated revenues (down from 11 percent in 2011). This protects Novartis from the loss of too great a percentage of its revenues from any one product going generic.

DriversThe following table details the consensus forecasts of the five biggest growth drivers for Novartis from 2012 to 2017.

Table 2: Novartis’s top five drivers of growth, 2012-2017 (US$ m)

Product 2012 2013e 2014e 2015e 2016e 2017e

Afinitor 797 1,130 1,584 1,975 2,219 2,397

Gilenya 1,195 1,333 1,677 1,970 2,196 2,685

Tasigna 998 1,340 1,646 2,083 2,272 2,208

Lucentis 2,398 2,594 2,765 2,875 2,977 3,298

Galvus 910 1,194 1,404 1,568 1,705 1,727


These five key growth drivers are forecast to add US$6 billion to the company’s revenues over the forecast period. Their contribution to Novartis’s pharmaceutical sales will increase from 11.9 percent in 2012 to 20.5 percent in 2017.

2 FirstWord Pharma. FirstWord Lists – Big Pharma’s Blockbuster dependency rates. January 28, 2013.



http://www.firstwordpharma.com/node/1047577?tsid=33



March 201313

www.fwreports.com



AfinitorAfinitor (everolimus) is an mTOR inhibitor that has been developed by Novartis and is approved for five indications (renal cell carcinoma, Primitive neuroectodermal tumours (PNET), renal angiomyolipoma and tuberous sclerosis complex, subependymal giant cell astrocytoma (SEGA), and metastatic breast cancer).

Currently Afinitor is approved for the second-line treatment of HER2-negative breast cancer in postmenopausal women where it is to be used in combination with exemestane. This approval was based on the results of the BOLERO-2 trial that enrolled 724 postmenopausal women with oestrogen receptor positive, HER2-negative, advanced breast cancer with recurrence or progression following treatment with letrozole or anastrozole. Patients were randomized to be treated with either Afinitor plus exemestane, or exemestane plus placebo. Objective response rates were 12.6 percent in patients receiving Afinitor plus exemestane against only 1.7 percent in the placebo arm3.

Novartis hopes to broaden the use of Afinitor in breast cancer further by gaining approval for the drug in first-line HER2-positive patients. To this end Afinitor is being studied in another trial titled BOLERO-1 from which data is expected to be reported in H1 2014. BOLERO-1 is being conducted in 717 people and is a randomized, placebo-controlled study that compares Afinitor in combination with Herceptin and paclitaxel in

3 Baselga J, et al. Everolimus in Postmenopausal Hormone-Receptor–Positive Advanced Breast Cancer. N Engl J Med 2012; 366:520-529. February 9, 2012.




March 201314

www.fwreports.com



patients with HER2-positive locally advanced, or metastatic breast cancer4. If Afinitor can gain approval for the treatment of HER2-positive patients it would make an estimated 100 000 additional patients worldwide eligible for treatment. In addition to BOLERO-1, Afinitor is involved in another ongoing trial (BOLERO-3) in progressed HER2-positive breast cancer.

In terms of total patient numbers breast cancer is the single largest indication that Afinitor can address with 210 000 patients in the US alone in this one indication compared to only 55 000 renal cancer patients. Gaining a broader label in breast cancer should therefore drive sales for the drug over the forecast period. Analysts have, however, pointed out some concerns that arise from the published trial results in breast cancer. During the BOLERO-2 trial, Afinitor plus exemestane was shown to have poor tolerability that resulted in a short median duration of exposure of only 14.6 weeks in the trial. During the trial, 19 percent of patients discontinued therapy due to adverse events compared with only four percent of patients treated with exemestane plus placebo. Five percent of patients withdrew consent compared to two percent on placebo. In addition 11 percent of serious adverse events were attributed to Afinitor compared to only one percent in the exemestane-only group.

4 Hurvitz S. A, et al. BOLERO-1: A randomized, phase III, double-blind, placebo-controlled multicenter trial of everolimus in combination with trastuzumab and paclitaxel as first-line therapy in women with HER2-positive (HER2+), locally advanced or metastatic breast cancer (BC). J Clin Oncol 30, 2012 (suppl; abstr TPS648).




March 201315

www.fwreports.com



These tolerability issues are expected to the drug’s approval.

In addition to the above tolerability issues analysts also point towards changes to the dynamics of the breast cancer market as being factors that will slow the uptake of Afinitor in this key indication. In June 2012 Roche receiving approval for Perjeta (pertuzumab) in combination with Herceptin (Roche’s market leading HER2 targeted therapy). This combination is highly effective and as a result analysts expect this new combination to change the accepted standard of care to one that is significantly more effective. The impact of this on Afinitor is to reduce the number of patients who will be eligible for second-line therapy and thus the number of patients who could be treated with the product will also be lower.

In the second-line setting Afinitor will potentially face stiff competition from Roche’s T-DM1, which is currently in development and was granted priority review status by the FDA in November 2012. T-DM1 is an antibody-drug conjugate made up from the trastuzumab (which is branded as Herceptin when used alone) conjugated to the chemotherapy DM1. In clinical trials T-DM1 has shown to reduce the risk of disease progression by 35 percent and reduced the risk of death by 34 percent against the control group of Xeloda plus lapatinib. Assuming T-DM1 gains approval analysts believe it will present formidable opposition to Afinitor by setting the efficacy




March 201316

www.fwreports.com



bar so high. T-DM1 may also present a further threat to Afinitor with Roche looking to move it into first-line therapy with positive trial results coming out in September 2011. Analysts do not expect T-DM1 to be filed for first-line use until 2014 at the earliest, but it is quite likely that physicians will be using the drug in this setting once it has been approved for second-line use.

Despite the various negative pressures that Afinitor faces in breast cancer analyst consensus still forecasts that it will be Novartis’ largest growth driver over the forecast period adding just under US$1.6 billion in sales to the company’s revenues between 2012 and 2017 to reach sales of US$2.4 billion in 2017.

Figure 5: Afinitor global sales 2012-2017

2012

0

500

1,000

1,500

2,000

2,500

3,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201317

www.fwreports.com



GilenyaGilenya (fingolimid) is a sphingosine-1-phosphate receptor indicated for the treatment of multiple sclerosis (MS). Gilenya was approved by the US FDA in September 2010, the EU’s EMA in January 2011, and by the Japanese MHLW in September 2011.

Gilenya was the first approved orally available disease modifying therapy for MS to be approved in the US and EU, and by January 2012, 30 000 patients had been treated with the drug. Being delivered orally gave Gilenya a distinct advantage on launch compared to all of the injectable therapies that had been approved over the preceding decade.

In addition to the convenience of its route of administration, Gilenya has a novel mechanism of action, and good clinical efficacy. In the Phase III FREEDOMS trial, the 493 treatment naive patients were treated with 0.5mg of Gilenya had a 37 percent reduction in the risk of three-month confirmed disability progression compared to placebo, whilst 350 patients who had been pre-treated with other drugs experienced a 30 percent reduction in this risk. In another Phase III study (TRANSFORMS) Gilenya was compared to Avonex (interferon beta-1a), and was shown to reduce relapses by 52 percent compared to Avonex within one year5.

5 FirstWord Pharma. Novartis’ Gilenya shows “significant early treatment effect” in patients with MS. October 12, 2012.






March 201318

www.fwreports.com



Gilenya’s most common side effects include headaches, influenza, diarrhoea, back pain, liver transaminase elevations and coughing. However, there have been some more serious cardiovascular adverse events associated with the drug’s use that when the drug was initially approved led to all patients who are prescribed the drug being observed for the first six hours following their first dose (24 hours in France) for the signs and symptoms of bradycardia. In November 2011, Novartis announced that one patient had died following initiation of Gilenya treatment, whilst in January 2012 the EMA announced that it was reviewing Gilenya following the deaths of 11 patients and some serious cardiovascular events in patients who had started treatment with the medicine6.

In May 2012, following the re-evaluation of additional data the FDA contraindicated the use of Gilenya in patients with specific pre-existing or recent heart conditions or stroke, or who are taking certain antiarrhythmic medications. Whilst the US label still requires the six-hour monitoring time for signs of bradycardia, higher risk patients should have continuous electrocardiogram (ECG) monitoring including overnight7.

In the EU the EMA follows similar advice with requirements for ECG monitoring before

6 FirstWord Pharma. EMA starts review of Novartis’ Gilenya after reports of adverse cardiovascular effects. January 20, 2012.

7 FirstWord Pharma. FDA revises label, recommendations for use of Novartis’ MS drug Gilenya. May 14, 2012.








March 201319

www.fwreports.com



the first dose is given and for six hours afterwards, and it recommends that Gilenya not be prescribed for patients with a history of cardiac problems, certain conditions affecting blood supply to the brain or those who take medications to reduce their heart rate.

Analysts report that these labelling changes are negatively impacting prescription growth in the US where Medicare and Medicaid often fail to reimburse the costs of monitoring patients. A survey conducted by Bank of America Merrill Lynch with US physicians showed that 28 percent of surveyed physicians would decrease their prescribing of Gilenya as a result of the new labelling requirements. Physicians were roughly evenly split in their reasoning for reducing their prescribing of the drug with just under 50 percent stating the burden of monitoring and just over 40 percent stating increased safety concerns.

Data from IMS Health shows that new weekly Gilenya prescriptions have started to fall in the US, suggesting that sales growth for Gilenya has stalled as a result. When Gilenya was launched it was priced at US$48 000 per patient per year in the US and approximately US$31 000 per year in Germany. This high initial price led to the UK’s National Institute for Health and Clinical Effectiveness (NICE) to recommend against the reimbursement of the drug by the NHS. Novartis agreed a patient access scheme with the NHS that provided Gilenya to the latter at a confidential discounted price, and this allowed NICE to perform a u-turn and recommend the drug’s reimbursement.




March 201320

www.fwreports.com



In the near future Gilenya is expected to face competition from two new oral MS therapies: Biogen Idec’s BG-12 (dimethyl fumarate) and Sanofi’s Aubagio (teriflunomide). BG-12 was accepted for review by the FDA in February 2012 and, following its PDUFA date being pushed back by three months to March 2013, is not expected to launch until Q2 2013. BG-12 has demonstrated similar efficacy to Gilenya but with a better safety profile. In addition Biogen has been reported as stating that it intends to launch BG-12 at a similar price or even discounted to Gilenya’s price.

Sanofi had its NDA accepted by the FDA for Aubagio in October 2011 and was approved in September 2012 for use in patients with relapsing remitting multiple sclerosis. Aubagio is delivered orally and as such was the second oral therapy for MS to be approved after Gilenya. Aubagio is not expected to compete directly with Gilenya, however, as Aubagio is expected to be used as a first-line therapy whereas Gilenya is typically used as a second-line therapy.

When taken together, the launch of Aubagio and the expected launch of BG-12 are expected to further depress Gilenya’s sales growth. Despite the launch of these competitor products and the impact of cardiac adverse events on physician enthusiasm for the drug, analyst consensus is for continued strong sales growth for the drug.




March 201321

www.fwreports.com



In 2012 Gilenya had sales of US$1.2 billion. Analyst consensus forecasts expect Gilenya sales to continue to grow between 2012 and 2017 to reach sales of US$2.7 billion.

Figure 6: Gilenya global sales 2012-2017

2012

0

500

1,000

1,500

2,000

2,500

3,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

TasignaTasigna (nilotinib) is a tyrosine kinase inhibitor (TKI) that has been developed by Novartis for the treatment of chronic Philadelphia chromosome positive myeloid leukaemia (CML). Tasigna received its first approval from the FDA in 2007 when it was approved for the second-line treatment of Philadelphia chromosome positive CML in patients whose disease had progressed following treatment with Novartis’s Gleevec (imatinib). Tasigna was granted a second indication in 2010 which allows the drug to be used as a first-line treatment for Philadelphia chromosome positive CML.




March 201322

www.fwreports.com



Tasigna is a second generation TKI seen by Novartis and many analysts as an improved version of Gleevec to which patients can be switched when Gleevec’s patent expires in July 2015. The strategy that Novartis is pursuing to this end is to conduct clinical trials that will hopefully show that Tasigna can functionally cure CML patients. When patients are treated with Gleevec five to ten percent of patients achieve complete molecular response (CMR) at two to three years of treatment; in trials of Tasigna, approximately 30 percent of patients have achieved CMR in the same time scale. In the Stop Imatinib (STIM) trial conducted in 2010, 40 percent of patients who had achieved CMR at two to three years following Gleevec treatment achieved sustained CMR following the cessation of treatment with the drug. Assuming that this percentage remains at the same level for patients treated with Tasigna approximately 15 percent of Tasigna-treated patients would effectively be cured of their CML8.

Functional cure trials of Tasigna have been initiated by Novartis and analysts expect the first data to be released in late-2014. Should these trials go according to plan the data should give Tasigna an advantage over Gleevec and aid in persuading physicians to switch to the newer drug ahead of generic imatinib reaching the market in 2015.

8 Mahon FX et al. Discontinuation of imatinib in patients with chronic myeloid leukaemia who have maintained complete molecular remission for at least 2 years: the prospective, multicentre Stop Imatinib (STIM) trial. Lancet Oncol. 2010 Nov;11(11):1029-35.




March 201323

www.fwreports.com



Novartis is not the only company that markets TKIs for the treatment of CML. Bristol-Myers Squibb was the first company to receive approval for a second-generation TKI with its product Sprycel (dasatinib) in 2006. Subsequently the US FDA approved another two competitor products at the end of 2012. Pfizer’s Bosulif (bosutinib) was approved in September, followed by Ariad’s Iclusig (ponatinib) in December.

Table 3: Competitive dynamics in CML treatment

Product Company Indications

Bosulif Pfizer Second-line treatment of all phases of CML

Gleevec Novartis First-line treatment of all phases of CML , and Philadelphia chromosome positive CML

Iclusig Ariad Second-line treatment of all phases of CML, and Philadelphia chromosome positive CML

Sprycel Bristol-Myers Squibb

First-line treatment of chronic Philadelphia chromosome posi-tive CML; second-line treatment of acute phase Philadelphia chromosome and all phases of CML

Tasigna Novartis First-line treatment of chronic Philadelphia chromosome posi-tive CML

Source: Prescribing information

Tasigna is also being explored as a possible treatment for a rare form of melanoma. Tasigna inhibits a c-kit mutant that is only found in four percent of melanoma cases, which would equal approximately 2 500 cases annually in the US. Novartis expects approval for Tasigna in this indication in 2014 with ClinicalTrials.gov listing five ongoing trials.




March 201324

www.fwreports.com



The continued success of Tasigna is dependent on the outcome of the trials that hope to show that it can deliver a functional cure and this has lead to some uncertainty with regards to exactly how big a success the product will be, with results not due until 2014 at the earliest. Current analyst consensus forecasts that Tasigna sales will increase from US$1.3 billion in 2012 to US$2.2 billion in 2017 which would add an extra US$1.2 billion in sales onto Novartis’s total revenues.

Figure 7: Tasigna global sales 2012-2017

2012

0

500

1,000

1,500

2,000

2,500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201325

www.fwreports.com



LucentisLucentis (ranibizumab) is indicated for the treatment of wet age related macular degeneration (wet AMD), diabetic macular oedema, and macular oedema caused by occlusion of the veins behind the retina. Lucentis was originally developed by Genentech (now Roche), which retains rights to the US market. Novartis acquired the remaining worldwide rights to Lucentis from Genentech in 2003.

In 2012 Novartis accrued sales of US$2.4 billion from Lucentis, which made the product the company’s third best selling product. Until recently Lucentis benefited from having no competition in its approved indications other than from off-label use of Avastin (bevacizumab). However, Lucentis now faces competition from Bayer’s Eylea (aflibercept), which was approved in the EU in November 2012 for the treatment of wet AMD.

Eylea is certain to negatively impact on Lucentis’s sales growth with experience from the US market demonstrating that Eylea successfully took significant market share away from Lucentis following its launch in August 2011. However, analysts do not necessarily expect the launch of Eylea in the EU to have quite as much impact as it has in the US as a result of differences in the label that Eylea has received in the EU compared to the US.

In the US Eylea’s label gives it a slight advantage over Lucentis – Eylea is to be injected once a month for three months




March 201326

www.fwreports.com



before being injected once every two months, compared to Lucentis, which is injected once a month for four months followed by injections every three months. Although ordinarily fewer injections would be seen as a marginal positive, in the case of wet AMD the less frequent dosing the less efficacious the treatment and this is favourable for Eylea, which is injected more frequently. In the EU Eylea and Lucentis’s labels are more closely aligned with Lucentis being typically injected six to seven times per year and Eylea being injected seven times per year based on the treatment regimen described in their respective labels. Eylea has been launched at a ten percent discount to Lucentis and it remains to be seen how market share is affected.

Currently Eylea is only approved in wet AMD whereas Lucentis is also approved in diabetic macular oedema. Eylea is currently in Phase III trials for this second indication, which accounts for between 15 and 20 percent of Lucentis’s reimbursed market sales. In this indication Lucentis is dosed once monthly and analysts are expecting that in a best case scenario Eylea will have to be dosed twice monthly. This presents an obvious advantage to Lucentis in this particular indication, although they do still expect sales growth for Lucentis to be retarded once Eylea gains this additional indication. Key trial results from the VIVID trial of Eylea in this secondary indication are expected in the third quarter of 2013 and approval would, if all goes well, follow in 2014.




March 201327

www.fwreports.com



The analyst consensus forecast for Lucentis is that in 2017 it will have sales of US$3.3 billion in the markets where Novartis owns the rights to the product.

Figure 8: Lucentis global sales 2012-2017

2012

0

500

1,000

2,000

2,500

1,500

3,000

3,500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

Do you have the authority to speak on pharma sales and marketing, medical affairs, regulatory affairs, market access or generics?

Do you have an opinion on the outlook for e-detailing, KOL relations, patient adherence, key account management, CRM, SFE, digital and mobile marketing, stakeholder engagement, emerging markets, regulation or biosimilars?

If so, we would like to hear from you, and invite you to join FirstWord’s growing community of pharma experts. For further information, please email us at [email protected]

Call for Experts



mailto:expertpanel%40fwreports.com?subject=I%20am%20interested%20in%20joining%20the%20FirstWord%20Expert%20Panel%20%28400200156-310%29


March 201328

www.fwreports.com



GalvusGalvus (vildagliptin) is a DPP-IV inhibitor that is used in the treatment of type II diabetes. In 2012 Galvus had sales of US$910 million for Novartis. The DPP-IVs are the newest class of drugs that have been developed for the treatment of diabetes ,with the first DPP-IV (Merck & Co’s Januvia/sitagliptin) gaining marketing approval in 2006 from the FDA.

Table 4: Approved DPP-IV inhibitors

Brand Manufacturer FDA approval date EMA approval date

Januvia Merck & Co Oct-06 Mar-07

Galvus Novartis N/A Feb-08

Onglyza Bristol-Myers Squibb; AstraZeneca Jul-09 Oct-09

Tradjenta Boehringer Ingelheim; Eli Lilly May-11 Aug-11

Nesina Takeda Jan-13 N/A

Source: FDA, EMA

Novartis has failed to get Galvus approved in the US where the FDA issued an approvable letter in February 2007 requesting additional safety data that skin lesions and kidney impairment observed in some patients in early animal studies were not related to the drug. Novartis has elected not to conduct these studies and as a result the product has not received approval in the US market.

Analysts state that DPP-IV inhibitors are a well accepted part of the diabetes treatment armamentarium. As an orally available class of




March 201329

www.fwreports.com



drugs they are favoured by physicians who want to be able to add an additional drug that can be given as a tablet in addition to other orally available products such as metformin.

As a class the DPP-IVs may benefit from the outcomes of trials designed to demonstrate improved cardiovascular outcomes for patients taking these drugs. Several trials are being conducted on the various approved DPP-IV products in an attempt to demonstrate this benefit with the first expected to report its outcomes in July 2013. Should the SAVOR-TIMI cardiovascular outcomes trial of Onglyza (saxagliptin) report positive outcomes analysts expect it to have a positive impact on the entire class, including Galvus, and potentially lead to DPP-IVs becoming part of the standard of care for type 2 diabetes alongside metformin.9

There is already evidence that supports the hypothesis that the DPP-IVs reduce negative cardiovascular outcomes; for example, meta-analysis of Phase III trials conducted with Tradjenta (linagliptin) demonstrates a reduction in negative cardiovascular outcomes versus a variety of outcomes.10

9 Does Saxagliptin Reduce the Risk of Cardiovascular Events When Used Alone or Added to Other Diabetes Medications (SAVOR-TIMI 53). Clinicaltrials.gov.

10 Johansen et al. Cardiovascular safety with linagliptin in patients with type 2 diabetes mellitus: a pre-specified, prospective, and adjudicated meta-analysis of a phase 3 programme. Cardiovascular Diabetology 2012 11:3.



http://clinicaltrials.gov/ct2/show/NCT01107886?term=Savor+Timi&rank=1http://clinicaltrials.gov/ct2/show/NCT01107886?term=Savor+Timi&rank=1

http://clinicaltrials.gov/ct2/show/NCT01107886?term=Savor+Timi&rank=1http://clinicaltrials.gov/ct2/show/NCT01107886?term=Savor+Timi&rank=1


March 201330

www.fwreports.com



Table 5: Cardiovascular outcomes trials of DPP-IV products

Brand Trial name Patient numbers Expected completion date

Januvia TECOS 14,000 Dec-14

Onglyza SAVOR-TIMI 16,500 Jul-13

Tradjenta CAROLINA 6,000 Sep-18

Nesina EXAMINE 5,400 May-15

Source: Clinicaltrials.gov

Analyst consensus forecasts that Galvus will reach sales of US$1.7 billion in 2017.

Figure 9: Galvus global sales 2012-2017

2012

0

200

400

800

1,200

600

1,600

1,800

1,400

1,000

2,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201331

www.fwreports.com



ResistorsThe table below details the five largest resistors to Novartis’s pharmaceutical sales growth between 2012 and 2017.

Table 6: Novartis’s top five resistors to growth, 2012-2017 (US$ m)

Product 2012 2013e 2014e 2015e 2016e 2017e

Diovan 4,417 2,152 1,849 1,709 1,605 1,475

Gleevec/Glivec 4,675 4,803 4,786 3,951 2,486 1,200

Zometa 1,288 851 629 506 438 328

Femara 438 265 203 164 138 94

Tekturna 383 243 225 200 163 129


In 2012 these five products contributed 21.2 percent of Novartis’s pharmaceutical revenues, this is forecast to decline to 5.4 percent in 2017.

Diovan/Co-Diovan/Diovan HCTDiovan (valsartan) is an angiotensin II receptor antagonist indicated for the treatment of hypertension, heart failure, and myocardial infarction. Diovan HCT/Co-Diovan is a combination of valsartan and hydrochlorothiazide. With sales of US$4.4 billion in 2012 the Diovan franchise was Novartis’s leading product by sales in 2012, accounting for 8.3 percent of the company’s consolidated pharmaceutical revenues. Diovan’s EU patent expired in November 2011, with generics entering EU markets soon afterwards and eroding the product’s sales.




March 201332

www.fwreports.com



Diovan’s US patent expired in September 2012 and although Ranbaxy has had problems getting its generic valsartan approved in the US, Mylan has secured approval for its generic of Diovan HCT. Analysts expect continued rapid generic erosion of Diovan franchise sales as a result of the entry of other generics and the success of the generics already approved in various markets globally. Sales of the Diovan franchise fell 22 percent from US$5.7 billion in 2011 as a result of this generic erosion.

The analyst consensus forecast for the Diovan franchise is for sales to fall to US$1.5 billion in 2017.

Figure 10: Diovan franchise global sales 2012-2017

2012

0

500

1,000

2,000

3,000

1,500

4,000

4,500

3,500

2,500

5,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201333

www.fwreports.com



GleevecGleevec (imatinib) is a first generation TKI that is indicated for several different cancer types including orphan indications. In 2012 Gleevec had sales of US$4.7 billion and was Novartis’s best selling product.

Gleevec is already beginning to face competition from newly launched second generation TKIs including Novartis’s own Tasigna. Analysts expect these new products to slow Gleevec’s sales growth prior to the product losing patent protection in the US in 2015 followed by the EU in 2016. Analysts predict that the loss of patent protection in other smaller markets such as Canada and Brazil will actually occur prior to 2015 and this will expose approximately 25 percent of Gleevec revenues to generic erosion.

Analyst consensus forecasts peak sales for Gleevec in 2014 of US$4.8 billion with sales then beginning a rapid decline through to 2017 when sales will reach US$1.2 billion. As Novartis’s most profitable product analysts expect this to have a large negative impact on the company that will only be partly offset by switching patients to Tasigna.

Figure 11: Gleevec global sales 2012-2017

2012

0

1,000

2,000

3,000

5,000

4,000

6,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201334

www.fwreports.com



ZometaZometa (zoledronic acid) is an injectable bisphosphonate indicated for the treatment of bone complications resulting from cancer. In 2012 Zometa had sales of US$1.3 billion but with its US patent expiring in March 2013 and generics having been approved by the EMA in February 2012 analysts are forecasting a sharp reduction in the product’s sales. Analyst consensus is for sales of US$328 million in 2017.

Figure 12: Zometa global sales 2012-2017

2012

0

200

400

600

800

1,200

1,000

1,400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201335

www.fwreports.com



FemaraFemara (letrozole) is an aromatase inhibitor that is indicated for the treatment of hormone receptor positive breast cancer. In 2012 Femara had sales of US$438 million down from US$911 million in 2011 following the launch of generics in the US and EU in April and July of 2011 respectively which have substantially eroded the sales of the product. This erosion of sales is forecast to continue throughout the forecast period with sales expected to fall to US$94 million in 2017.

Figure 13: Femara global sales 2012-2017

2012

0

150

200

50

100

250

300

350

450

400

500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201336

www.fwreports.com



TekturnaTekturna (aliskiren) is a renin inhibitor that is indicated for the treatment of hypertension which had sales of US$438 million. Tekturna’s sales are forecast to decline precipitously with analyst consensus forecasting total sales of US$129 million in 2017. Unlike the other products listed in this section on Novartis’s resistors this is not a result of generic competition.

In December 2011 Novartis terminated a trial that was investigating Tekturna in high risk diabetic patients with renal impairment due to an increase in cardiovascular and renal events11. As a result of this trial the FDA added warnings to Tekturna’s label recommending that the product not be used in patients with diabetes or mild to moderate renal impairment. In addition to this Novartis has withdrawn a combination product Valturna, which combined aliskiren with valsartan from the US market. The impact of this negative trial data on the drug is expected to see physicians becoming reluctant to use the product and this is reflected in the negative forecast.

11 Novartis. Novartis announces termination of ALTITUDE study with Rasilez/ Tekturna in high-risk patients with diabetes and renal impairment. December 20, 2011.



http://www.novartis.com/newsroom/media-releases/en/2011/1572562.shtml



March 201337

www.fwreports.com



SanofiFrench company Sanofi is currently the third largest pharmaceutical company in the world with consolidated pharmaceutical revenues (incorporating revenues from vaccines) of US$42.1 billion in 2012.

Figure 14: Sanofi pharmaceutical sales 2012-2017

201230,000

35,000

40,000

45,000

50,000

55,000

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

Sanofi has seven different business segments to which it refers as “Growth Platforms”. These are (showing 2012 revenues):

nEmerging markets, US$14.3 billion

nDiabetes solutions, US$7.4 billion

nVaccines, US$5.0 billion

nConsumer healthcare, US$3.8 billion

nAnimal health, US$2.8 billion




March 201338

www.fwreports.com



nNew Genzyme, US$2.3 billion

nOther innovative products, US$786 million

Sanofi has acquired 32 companies since January 2009 to strengthen its position in emerging markets (such as China where it acquired BMP Sunstone in 2010), generics and also within the orphan drugs space. The largest of these acquisitions was that of Genzyme, which was completed in April 2011 at a cost to Sanofi of US$20.1 billion. Analysts commented at the time that this gave Sanofi access to its first true biotech capabilities and Genzyme’s strong R&D track record.

DriversThe table below lists the five biggest drivers of Sanofi’s growth over the 2012-2017 period.

Table 7: Sanofi’s top five drivers of growth, 2012-2017 (US$ m)

Product 2012 2013e 2014e 2015e 2016e 2017e

Lantus 6,377 7,157 7,865 7,988 7,904 7,861

Lantus/Lixisenatide Combination 0 0 56 97 348 661

Aubagio 9 92 225 394 486 551

Lemtrada 0 90 214 347 449 516

Fluzone/Vaxigrip 1,137 1,267 1,363 1,440 1,515 1,593


These products are forecast to see their overall contribution to Sanofi’s pharmaceutical revenues increase from 17.9 percent in 2012 to 21.9 percent in 2017.




March 201339

www.fwreports.com



LantusLantus (insulin glargine) is a long-acting insulin that is indicated for the treatment of adults and children with type 1 diabetes, and adults with uncontrolled type 2 diabetes. Lantus is administered once daily by subcutaneous injection, and is currently available in three forms: 10 ml vials for injection using a traditional syringe, 3 ml cartridges for use with the OptiClik system and the 3 ml SoloStar disposable insulin injector.

Currently Lantus has only one competitor in the long-acting insulin market and that is Novo Nordisk’s Levemir (insulin detemir), which has been available in most markets since 2004.

Lantus will begin to face increasing levels of competition from novel basal insulins including Novo Nordisk’s Tresiba (insulin degludec), which received EU marketing authorisation in January 2013. In the US the FDA unexpectedly issued a complete response letter that demanded additional cardiovascular data for both Tresiba and its combination product Ryzodeg (insulin degludec/insulin aspart). Analysts expect this to delay approval for the product by another two to three years.12 Lilly is also developing a long-acting insulin with the code name LY2605541 that is currently in Phase III trials with results expected in Q3 2013.

12 FirstWord Pharma. FDA issues complete response letter for Novo Nordisk’s Tresiba and Ryzodeg. February 10, 2013.



http://www.firstwordpharma.com/node/1056876?tsid=28&region_id=2

http://www.firstwordpharma.com/node/1056876?tsid=28&region_id=2


March 201340

www.fwreports.com



Table 8: Competitive dynamics of the long-acting insulin market

Product Molecule Phase Company

Lantus insulin glargine Marketed Sanofi

Levemir insulin detemir Marketed Novo Nordisk

Tresiba insulin degludec Marketed EU; Pre-registration Japan and US Novo Nordisk

Ryzodeg insulin degludec/insu-lin aspart

Marketed EU; Pre-registration Japan and US Novo Nordisk

LY2605541 - III Lilly


It has been reported that Novo Nordisk will sell Tresiba at a 60-70 percent price premium over Lantus.13 In the pivotal BEGIN Basal-Bolus Type 2 trial insulin degludec was compared to insulin glargine and found to reduce the incidence of hypoglycaemia by 18 percent whilst being non inferior in terms of lowering blood sugar14. Whether this is enough to persuade physicians to switch their patients to Tresiba remains to be seen, especially with the mooted price difference.

One other potential threat to Lantus sales would be the launch of a biosimilar insulin glargine. The patents that protect the product are expected to expire in 2015 in the major

13 FirstWord Pharma. Novo Nordisk to sell Tresiba in Europe at 60-70 percent premium over Lantus. February 15, 2013.

14 American Health & Drug Benefits. Ultra-Long-Acting Insulin Degludec Noninferior to Insulin Glargine with Less Hypoglycemia in Type 1 and Type 2 Diabetes.





http://www.ahdbonline.com/article/ultra-long-acting-insulin-degludec-noninferior-insulin-glargine-less-hypoglycemia-type-1-and

http://www.ahdbonline.com/article/ultra-long-acting-insulin-degludec-noninferior-insulin-glargine-less-hypoglycemia-type-1-and


March 201341

www.fwreports.com



developed markets. Biocon already markets a biosimilar insulin glargine in India and Eli Lilly (Lilly) has announced that it is also working on an insulin glargine. However, analysts comment that following the termination of Pfizer and Biocon’s collaboration to develop insulins Biocon now lacks the required marketing partner to make an impact in the developed markets. Analysts also point out that with Lilly developing its own long-acting insulin (LY2605541) it is unlikely to want to depress prices for these products by bringing out a biosimilar. Analyst consensus is that biosimilars are only a remote threat to Lantus’s continued success.

Although Lantus will face this additional competition, analysts are confident that the product will continue to experience strong sales growth; it was already Sanofi’s best-selling product in 2012 with sales of US$6.4 billion, with analyst consensus forecasting the product to achieve sales of just over US$7.8 billion in 2017.

Figure 15: Lantus global sales 2012-2017

20125,000

5,500

6,000

6,500

7,500

7,000

8,000

8,500

2013e 2014e 2015e 2016e 2017eSource: FirstWord Dossier

Sale

s U

S$ m




March 201342

www.fwreports.com



Lantus/lixisenatide combination productAs discussed above, Lantus (insulin glargine) is Sanofi’s long-acting insulin product and is the company’s best-selling product. Lixisenatide is a GLP-1 analogue that is being developed by Sanofi as a treatment for type 2 diabetes with a view to getting both a standalone product approved under the brand name Lyxumia, and a combination product that combines it in a single device with Lantus.

The market for GLP-1 analogues already has three incumbent products. The first GLP-1 analogue to gain approval was Amylin and Lilly’s Byetta (exenatide) that was first launched in the US in September 2005. Byetta is dosed twice daily and in clinical trials has demonstrated reduction in HbA1C (%) from 7.9 to 7.2 in the 5 mcg arm and from 7.8 to 6.9 in the 10 mcg arm.

In January 2010 the US FDA approved Novo Nordisk’s Victoza (liraglutide) that is dosed once daily and has been shown to lower HBA1c to a greater extent than Byetta twice daily (-1.12% vs -0.79% respectively).

Amylin subsequently developed Bydureon, which is a long-acting form of exenatide that was approved in the EU in June 2011 and in the US in February 2012. Bydureon is dosed once weekly and in trials has been shown to be more effective at lowering HBA1c than Byetta.




March 201343

www.fwreports.com



Bydureon and Victoza have largely supplanted Byetta and as such any product that hopes to be successful in this class must really demonstrate that it is superior at lowering HBA1c compared to Byetta. In Lyxumia’s pivotal GetGoal-X trial the product only managed to demonstrate non-inferiority to Byetta in terms of HBA1c lowering and Victoza has also demonstrated a greater ability for lowering patient weight15. Analysts believe that these results are not enough to get the product into widespread use.

Lyxumia was approved for use in the EU in February 2013 whilst the FDA is expected to announce NDA filing acceptance in Q1 2013.

In an effort to create something more unique in the diabetes treatment armamentarium Sanofi has elected to pursue the development of a product that combines its long-acting insulin Lantus with Lyxumia in one device (called the Fix-Flex). This device is designed in such a way as to allow variable dosing of Lantus whilst administering a fixed dose of Lyxumia. This product is in Phase II trials currently with analysts expecting Phase III trials to commence in mid-2013.

Analyst consensus forecasts for this product are for 2017 sales of US$661 million with potential launch in 2014.

15 Sanofi. Positive Results for Investigational Compound Lyxumia (Lixisenatide) Presented at American Diabetes Association’s 71st Annual Scientific Sessions. June 24, 2011.




March 201344

www.fwreports.com



Figure 16: Lantus/Lixisenatide global sales 2012-2013

20120

100

200

300

500

400

600

700

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

AubagioAubagio (teriflunomide) is a dihydroorotate dehydrogenase inhibitor that has been developed by Sanofi as an oral treatment for multiple sclerosis. The FDA approved Aubagio in September 2012 for the treatment of relapsing remitting multiple sclerosis with the approval based on the results of two pivotal Phase III trials, TEMSO and TENERE.

The TEMSO trial demonstrated that both doses of Aubagio that were tested in the trial (7mg and 14mg) reduced relapses by 31 percent annually16. In the TENERE trial Aubagio was compared to first-line therapy Rebif (interferon beta-1a) but failed to show superiority in preventing relapses or keeping patients on treatment. In Aubagio’s

16 O’Connor P, et al. Randomized Trial of Oral Teriflunomide for Relapsing Multiple Sclerosis. N Engl J Med 2011; 365:1293-1303.




March 201345

www.fwreports.com



favour is an excellent safety profile with the drug being considered more tolerable than its only oral competitor Gilenia (fingolimid).17

Aubagio was approved as a first-line therapy, which gives it an advantage over the other orally available multiple sclerosis therapy Gilenia, which was only approved as second-line therapy. However, Gilenia has stronger efficacy than Aubagio and also has the advantage of being the first oral therapy to reach the market.

Sanofi filed an MAA with the EMA in February 2012, and analysts anticipate approval and launch of the product in the EU as early as the first quarter of 2013.

Analyst consensus forecast for Aubagio is for the product to reach sales of US$551 million in 2017.

Figure 17: Aubagio global sales 2012-2017

20120

100

200

300

500

400

600

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

17 Genzyme Reports Top-line Results for TENERE Study of Oral Teriflunomide in Relapsing Multiple Sclerosis. December 20, 2011.



http://www.businesswire.com/news/home/20111219006550/en/Genzyme-Reports-Top-line-Results-TENERE-Study-Oral

http://www.businesswire.com/news/home/20111219006550/en/Genzyme-Reports-Top-line-Results-TENERE-Study-Oral


March 201346

www.fwreports.com



LemtradaAlemtuzumab is a monoclonal antibody that was originally developed by Genzyme for the treatment of chronic lymphocytic leukaemia (CLL) and marketed as Campath for this indication in the EU and US markets. Genzyme has subsequently made an effort to develop alemtuzumab (as Lemtrada) for the treatment of multiple sclerosis with Phase II trials in this indication originally completed in 2004

In July 2011 the results of the first Phase III trial of Lemtrada in early, active relapsing remitting multiple sclerosis were released. This trial (CARE-MS I) demonstrated that in patients who had received no prior therapy Lemtrada treatment there was a 55 percent reduction in relapse rate compared with Rebif. In the same trial Lemtrada missed its second primary endpoint of improving time to six month sustained accumulation of disability. After two years of Lemtrada treatment patients had an eight percent increase in their Expanded Disability Status Scale (EDSS) score compared with 11 percent for patients treated with Rebif18. In the CARE II Phase III trial Lemtrada was tested in patients who had relapsed following prior treatment; in this trial Lemtrada reduced relapse rates by 49 percent compared to Rebif after two years of treatment and demonstrated a high level of efficacy at reducing the risk of disability with a 42 percent reduction in EDSS progression19.

18 Sanofi. Sanofi Reports Positive Top-Line Results from First Phase 3 Study of Alemtuzumab (Lemtrada) in Multiple Sclerosis. July 11, 2011.

19 Medscape News. Second Phase 3 Trial Positive With Alemtuzumab in MS. November 14, 2011.



http://en.sanofi.com/Images/28485_20110711_CARE-MSI-RESULTS_en.pdf

http://en.sanofi.com/Images/28485_20110711_CARE-MSI-RESULTS_en.pdf

http://www.medscape.com/viewarticle/753502


March 201347

www.fwreports.com



Despite the product’s excellent efficacy there are serious safety concerns regarding its use. The most serious of these safety issues relates to autoimmune thyroid-related side effects (Graves’ disease), which have affected 16 percent of patients in the Phase III trial programme. Many analysts expect that these safety concerns will lead to Lemtrada being approved with a relatively restrictive label and the drug only being used as a last-line therapy.

In August 2012 Sanofi withdrew Campath from the market in anticipation of the launch of alemtuzumab under its new brand name Lemtrada in an effort to avoid off-label use of the much cheaper Campath product. Analysts are anticipating approval of Lemtrada in multiple sclerosis in Q4 2013 with analyst consensus forecasts of sales of US$516 million in 2017.

Figure 18: Lemtrada global sales 2012-2017

20120

100

200

300

500

400

600

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201348

www.fwreports.com



Fluzone/VaxigripFluzone (Vaxigrip in the EU) is Sanofi’s seasonal influenza vaccine. It is available in several different formulations including prefilled intra-dermal syringes, vials and a novel high-dose vaccine that is specifically formulated for patients over the age of 65. In 2012 Fluzone/Vaxigrip had sales of US$1.1 billion.

The key catalyst for growth outside of the trend is the expected forthcoming approval for a new quadrivalent intramuscular version of the vaccine. This version of the product has been studied in Phase III trials in both the elderly and the paediatric setting. In these trials the quadrivalent vaccine was compared to trivalent intramuscular vaccines and results showed that its immunogenicity profile was comparable to the control vaccines. Sanofi argues that quadrivalent vaccines are now necessary as it has become more difficult to predict which influenza lineage will be dominant in any influenza season.20

The FDA had a supplemental biologics application for quadrivalent Fluzone accepted in October 2012, and the FDA is expected to make a decision in the second quarter of 2013 with the drug expected to then be available for the following influenza season.21 In the EU the quadrivalent version of Vaxigrip

20 Fluzone Quadrivalent Influenza Virus Vaccine in Individuals 6 Months and Older. October 25, 2012.

21 Monthly Prescribing Reference. sBLA Accepted for Fluzone Quadrivalent Influenza Virus Vaccine. October 18, 2012.



http://www.cdc.gov/vaccines/acip/meetings/downloads/slides-oct-2012/08-influenza-greenberg.pdf

http://www.cdc.gov/vaccines/acip/meetings/downloads/slides-oct-2012/08-influenza-greenberg.pdf

http://www.empr.com/sbla-accepted-for-fluzone-quadrivalent-influenza-virus-vaccine/article/264877/

http://www.empr.com/sbla-accepted-for-fluzone-quadrivalent-influenza-virus-vaccine/article/264877/


March 201349

www.fwreports.com



is yet to be filed with the EMA, analysts anticipate submission for EU approval in the first quarter of 2013.

Analyst consensus forecasts for the Fluzone/Vaxigrip franchise is for continued steady growth through to 2017 with sales forecast to reach US$1.6 billion up from sales of US$1.1 billion in 2012.

Figure 19: Fluzone/Vaxigrip franchise global sales 2012-2017

2012500

700

900

1100

1500

1300

1700

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201350

www.fwreports.com



ResistorsThe table below lists the five biggest resistors to Sanofi’s sales growth over the 2012-2017 period.

Table 9: Sanofi’s top five resistors of growth, 2012-2017 (US$ m)

Product 2012 2013e 2014e 2015e 2016e 2017e

Eloxatin 1,229 390 355 336 322 311

Plavix 2,656 2,134 2,203 2,005 1,882 1,759

Aprovel 1,480 1,332 1,145 1,021 940 879

Taxotere 724 543 475 431 398 376

Allegra 711 665 639 621 614 612


These five products are expected to see their contribution to Sanofi’s total pharmaceutical revenues decline from 16.1 percent in 2012 to 7.7 percent in 2017.




March 201351

www.fwreports.com



EloxatinEloxatin (oxaliplatin) is a third generation platinum complex that is used for the treatment of colorectal cancer. Eloxatin lost market exclusivity in the EU in 2009 when generic versions gained approval. The product maintained market exclusivity in the US market for an additional three years until August 2012 when Hospira re-launched a generic version of the product (having previously settled a court case in 2010 that forced it to withdraw its product). The entry of this generic is forecast to rapidly erode Eloxatin’s sales with analyst consensus for sales of US$337 million in 2017.

Figure 20: Eloxatin global sales 2012-2017

20120

200

400

600

800

1200

1000

1400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201352

www.fwreports.com



PlavixPlavix (clopidogrel) is an anti-platelet aggregation drug that is indicated for the treatment of a number of different cardiovascular indications. Originally launch in the EU and US in 1998 Plavix had sales of US$2.6 billion in 2012. The first generic clopidogrel products were approved by the EMA in June 2009 with the FDA following suit in May 2012. This loss of market exclusivity is expected to lead to the erosion of Plavix’s sales in the US and the continued loss of market share in the EU and other markets.

Analyst consensus is for global sales of Plavix to fall to US$1.8 billion in 2017.

Figure 21: Plavix global sales 2012-2017

20120

500

1000

1500

2500

2000

3000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201353

www.fwreports.com



AprovelAprovel (irbesartan) is an angiotensin II receptor antagonist that was developed by Sanofi and Bristol-Myers Squibb for the treatment of hypertension and diabetic nephropathies. Revenues from the sale of Aprovel are split between Sanofi and Bristol-Myers Squibb in all geographies, with the latter having operational leadership in the US market.

Generic versions of the irbesartan were launched in the US (where the product is marketed as Avapro) by Teva in April 2012 and by Watson and Zydus Cadila in October 2012. In the EU generics have been available since August 2012.

Analyst consensus forecasts sales of US$851 million in 2017 down from US$1.2 billion in 2012.

Figure 22: Aprovel global sales 2012-2017

20120

400

600

200

800

1000

1400

1200

1600

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201354

www.fwreports.com



TaxotereTaxotere (docetaxel) is a taxane that was developed by Sanofi for the treatment of breast cancer (and has subsequently had indication expansion to include several other cancers) and is currently available in 86 countries worldwide. Generics have been available in the EU since 2010 with the FDA approving Hospira’s generic in March 2011.

Analysts expect generics to erode the sales of Taxotere in the markets where they are available. The impact of this on sales is clear from the analyst consensus forecast with sales falling from US$724 million billion in 2012 to US$376 million in 2017.

Figure 23: Taxotere global sales 2012-2017

20120

200

300

100

400

500

700

600

800

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201355

www.fwreports.com



AllegraAllegra (fexofenadine) is an H1 receptor antagonist that is approved for the treatment of allergies, including atopic dermatitis, seasonal allergic rhinitis and urticaria. Allegra has been available as an OTC product in the US since January 2011 and is also available as a generic. As patients switch to using cheaper generic versions of fexofenadine sales are slowly being eroded, although the switch to OTC has helped to prop them up more than is usually the case. Analyst consensus forecasts sales of US$612 million in 2017 down from US$711 million in 2012.

Figure 24: Allegra global sales 2012-2017

2012560

600

620

580

640

660

700

680

720

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201356

www.fwreports.com



PfizerWith biopharmaceutical revenues of US$51 billion, Pfizer was the second largest pharmaceutical company in the world in 2012. The figure below details the analyst consensus forecast for Pfizer’s biopharmaceutical revenues between 2012 and 2017. The impact of generic erosion is still expected to be felt by the company through to 2016 at which point the impact of new products and additional indications will allow sales to begin rising again. In 2017 global revenues from biopharmaceuticals are forecast to be US$48.9 billion.

Figure 25: Pfizer global biopharmaceutical sales 2012-2017

201245,000

46,000

47,000

48,000

49,000

51,000

50,000

52,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

Since 2000 Pfizer has been involved in some of the largest acquisitions in the pharmaceutical industry and it is the products acquired through




March 201357

www.fwreports.com



these acquisitions that have been responsible for much of the company’s revenue growth over the last 10 years.

Table 10: Pfizer’s major acquisitions since 2000

Date Acquired company Acquisition price Motivation for acquisition

2000 Warner-Lambert US$90 billion Lipitor (atorvastatin)

2002 Pharmacia US$56 billion Celebrex (celecoxib)

2009 Wyeth US$68 billion Multiple products plus efficiency savings


Pfizer has five operating segments:

1.) Primary Care

2.) Specialty care

3.) Oncology

4.) Established products and emerging markets

5.) Consumer healthcare

Pfizer is looking to cut costs by focusing on its core competency of therapeutics. To this end the company sold its nutrition business to Nestlé in April 2012 for US$11.9 billion and span out its animal health business as a separate entity called Zoetis in February 2013. The end-game for this strategy is to leave the company with two core businesses that will be focused on therapeutics. The first business unit will be driven by innovative, high margin products coming from Pfizer’s R&D division. The second business unit will be focused on




March 201358

www.fwreports.com



maintaining the revenues (and growing them where possible) of the company’s huge array of established products.

Pfizer’s revenues through the first decade of this century were dominated by the sales of Lipitor (atorvastatin), which, at their peak, accounted for 16.9 percent of the company’s revenues. Following the loss of US market exclusivity for this product in November 2011 sales of Lipitor have declined precipitously. In addition to the obvious impact of reduced revenues of Lipitor and other blockbuster products that have lost market exclusivity the launch of several new products in the last few years is expected to broaden Pfizer’s revenue base which will make the company more resistant to future “patent cliffs”.

DriversThe following table details the consensus forecasts of the five biggest growth products for Pfizer from 2012 to 2017.

Table 11: Pfizer’s top five drivers of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Eliquis 0 333 803 1,310 1,840 2,188

Xeljanz 18 252 633 1,051 1,396 1,752

Prevnar 4,117 4,300 4,809 5,166 5,446 5,685

Xalkori 123 318 466 609 731 833

Inlyta 72 215 299 384 419 454





March 201359

www.fwreports.com



These five key growth products are forecast to add an additional US$6.6 billion in revenue in 2017 compared to 2012 and 2017. These additional sales will see their overall contribution to Pfizer’s revenues increase from 8.5 percent in 2012 to 17.8 percent in 2017.

EliquisEliquis (apixaban) is an anticoagulant drug being developed by Pfizer in collaboration with Bristol-Myers Squibb (BMS) for the prevention of strokes and related events in the event of atrial fibrillation (a-fib). It has already received EU approval for the prevention of venous thromboembolic events (VTE) in adults who have had elective hip or knee replacement surgery. This indication is not believed by analysts to be the main market opportunity for Eliquis with the prevention of strokes and related events in a-fib expected to be a much larger market for the drug.

The drug is under review for this second indication in the US. In the US the FDA issued a complete response letter (CRL) requesting additional information on data management and verification from the ARISTOTLE trial in June 2012. BMS and Pfizer resubmitted its application for approval for the drug in September 2012 and the FDA has accepted this as a complete response to its demands in June’s CRL, with the FDA setting a new PDUFA goal date of 17 March 2013. Analyst consensus is that Eliquis will be approved either on that date or at some point before it. In the EU the Committee for Medicinal Products for Human Use (CHMP) of the EMA gave a positive




March 201360

www.fwreports.com



opinion that Eliquis should be granted marketing authorisation, and the European Commission granted approval on the 20 November 2012.

In clinical trials Eliquis was compared to treatment with warfarin, which is currently the standard treatment for a-fib patients. In the pivotal ARISTOTLE trial 18 201 patients were randomised to receive either Eliquis 5mg daily or warfarin (with a target INR range of 2.0-3.0) and the patients were tracked for a median average of 1.8 years. Results from this trial showed that Eliquis consistently reduced the risk of stroke, systemic embolism and also mortality when compared to warfarin.22

The key risk factor with warfarin use is increased bleeding rates including severe bleeding. Compared to warfarin Eliquis significantly reduced the rates of major bleeding and intracranial bleeding, with the greatest reduction in the latter being in patients at the highest risk of bleeding.

The market for anti-coagulants had two other entrants in 2011, with the introduction of Boehringer Ingelheim’s Pradaxa (dabigatran), and Bayer/J&J’s Xarelto (rivaroxaban). Compared to these two products it would appear that Eliquis has the best overall clinical profile according to analyst consensus and it should outperform them in terms of revenues. Warfarin has retained a dominant position (analysts estimate a 60 percent market share) in the market owing to a lack of clear advantages for the two new entrants over the incumbent.

22 ELIQUIS (apixaban) Demonstrates Consistent Reductions in Stroke and Systemic Embolism, Major Bleeding and Mortality Compared to Warfarin in Patients with Nonvalvular Atrial Fibrillation at Varying Risk for Stroke and Bleeding, October 1, 2012.



http://press.pfizer.com/press-release/eliquis-apixaban-demonstrates-consistent-reductions-stroke-and-systemic-embolism-major




March 201361

www.fwreports.com



However, Eliquis’s superior efficacy profile and superior safety compared to warfarin not only gives it an advantage over it but also over Pradaxa and Xarelto. Analyst consensus forecasts sales of just under US$2.2 billion in 2017 following launch in early 2013.

Figure 26: Eliquis global sales 2012-2017

20120

500

1,000

2,000

1,500

2,500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

XeljanzXeljanz (tofacitinib) is an oral pan-Janus kinase (JAK) inhibitor that received FDA approval in November 2012 for the treatment of moderately to severely active rheumatoid arthritis (RA) in patients who have failed to respond to methotrexate. Currently the treatment of these patients is dominated by the anti-TNF biologics, Enbrel (etanercept), Humira (adalimumab) and Remicade (infliximab), which had combined sales of US$25 billion in 2011. It is expected that these will remain the mainstay second-




March 201362

www.fwreports.com



line treatments, with Xeljanz restricted to third-line therapy until physicians are comfortable with the drug.

In two pivotal Phase III studies Xeljanz was shown to be efficacious with acceptable and manageable side effects. The first study (ORAL Standard) was a 12-month study conducted in patients with moderate to severe active RA who had had an inadequate response to methotrexate. These patients were randomised to one of three treatment arms: tofacitinib (5 or 10mg twice daily); adalimumab (40mg subcutaneously every other week); placebo, in combination with methotrexate. In this study tofacitinib was shown to be highly efficacious at both doses. The second study (ORAL Step) also met its primary endpoints with similar levels of efficacy for both the 5 and 10mg doses.23

The FDA chose to approve only the 5mg dose of the drug citing safety concerns over the 10mg dose. The company hopes to be able to persuade the FDA to approve the 10mg dose when it submits further trial data at some point in the future.

Xeljanz does have the status of being the first oral therapy to reach the market and this should offer the product an advantage in the minds of patients who do not necessarily want to have injections. Although oral therapies are favoured by patients, their increased dosing frequency over injectable therapy can have a negative

23 Pfizer Announces Data For Investigational Compound Tofacitinib In Rheumatoid Arthritis To Be Presented At The American College Of Rheumatology 2012 Annual Meeting, September 17, 2013.



http://press.pfizer.com/press-release/pfizer-announces-data-investigational-compound-tofacitinib-rheumatoid-arthritis-be-pre




March 201363

www.fwreports.com



impact on patient compliance due to the need to remember to take the medication.

Xeljanz faces various threats to its success over the coming years, most notably the likely EU introduction of biosimilars of infliximab and rituximab towards the end of 2014. These will be priced at a discount to their branded competitors and will also likely lead to a reduction in the price of all anti-TNF therapies.

In terms of new competitor products that are forecast to reach the market in the next five years analysts have identified two potential threats. The first product that is expected to reach the market is FosD (fostamatinib disodium), which is being developed by AstraZeneca in collaboration with Rigel Pharmaceuticals. FosD targets spleen tyrosine kinase (Syk), which is an enzyme involved in Fc receptor and B-cell receptor signalling in various immune cells. FosD has not had especially good clinical trial results with efficacy being better than placebo in one clinical trial but actually not significantly higher in another. In addition to concerns over efficacy there have also been safety concerns with hypertension and diarrhoea being the main issues. Assuming that FosD can overcome these concerns analysts forecast it to be launched in 2014.

The second new competitor product expected to reach the market during the forecast period is Novartis’s secukinumab. Secukinumab is an inhibitor of IL-17, a pro-inflammatory cytokine which is hypothesised to be involved in joint




March 201364

www.fwreports.com



destruction. Phase II data for secukinumab has been disappointing with it failing to meet its primary efficacy ACR20 endpoint. Secukinumab is thought to be more efficacious in other autoimmune diseases such as psoriasis than in RA. Analysts believe that it is likely to reach the market in 2015 where it will compete against Xeljanz and other products that are already marketed.

Pfizer is pricing Xeljanz at US$2,055 a month in the US, which is approximately a seven percent discount compared to Humira and Enbrel and this should lead to the product being marginally favoured by payers.

Analyst consensus forecasts that in 2017 Xeljanz will have sales of US$1.8 billion with EU and Japanese approval expected in the first half of 2013.

Figure 27: Xeljanz global sales 2012-2017

20120

400

800

1,600

1,200

2,000

200

600

1,400

1,000

1,800

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201365

www.fwreports.com



PrevnarPrevnar is a vaccine designed to prevent infection of infants and young children by the bacteria Streptococcus pneumoniae. The original Prevnar (Prevnar-7) was developed by Wyeth and approved by the FDA in 2000 and by the EMA in 2001 (where it is marketed as Prevenar), this vaccine provided protection against seven serotypes of pneumococcus. In the EU market, the seven valent Prevenar faces competition from GSK’s Synflorix, which offers protection from ten serotypes of pneumococcus – an obvious advantage.

Pfizer has subsequently developed Prevnar-13 that received approval from the FDA in 2010 and from the EMA in 2009. Prevnar-13 offers protection from 13 different serotypes of pneumococcus, and this has helped the franchise to compete strongly against Synflorix in Europe and reinforce its position in the US.

In addition to its approval for the vaccination of children aged between six months and five years Prevnar-13 was also approved for the vaccination of people over the age of 50 to prevent invasive pneumonia and invasive disease caused by Streptococcus pneumoniae. In this market Prevnar-13 has to compete with the well established Pneumovax-23 which first received approval from the FDA in 1983.

For Prevnar-13 to gain widespread use in these patients it must first gain a recommendation from the US Centers for Disease Control and Prevention’s Advisory Committee on Immunization




March 201366

www.fwreports.com



Practices (ACIP). ACIP has said that it will delay its decision until the results of the Community-Acquired Pneumonia Immunization Trial in Adults (CAPiTA) are available.

CAPiTA is being conducted in 85 000 patients aged 65 years or older who have never received Merck & Co’s competing product Pneumovax to evaluate Prevnar-13’s effectiveness at preventing community acquired pneumonia in this cohort.24 Results from this trial are expected in 2013 with the majority of analysts expecting the drug to meet its endpoints in these patients.

One note of caution from some analysts concerning ACIP’s verdict is that an audit is being conducted by national surveillance systems to assess the indirect impact of the paediatric use of Prevnar-13 on reducing the incidence of pneumococcal infection in adult patients. This follows evidence that after the introduction of Prevnar-7 for the vaccination of children there was a substantial decrease in the incidence of pneumococcal infections caused by the seven serotypes against which the vaccine protected in adults. If the analysis by the national surveillance systems shows a similar reduction in the adult incidence of the 13 serotypes against which Prevnar-13 offers protection then the case for recommending the vaccine’s use in the adult population will be significantly weakened.

24 Study Evaluating the Efficacy of a 13-Valent Pneumococcal Conjugate Vaccine (13vPnC) in Adults (CAPITA).




March 201367

www.fwreports.com



Gaining ACIP’s recommendation is the key future catalyst for continued rapid sales growth for the Prevnar franchise, and the majority of analysts believe that the product will gain this recommendation.

In 2012 Prevnar-7 and Prevnar-13 accounted for sales of US$4.1 billion globally, equivalent to approximately six percent of Pfizer’s overall revenues. Analyst consensus forecasts expect Prevnar franchise sales to continue to grow between 2012 and 2017 at a CAGR of 6.7 percent to reach sales of US$5.7 billion.

Figure 28: Prevnar global sales 2012-2017

20123,000

4,000

6,000

3,500

5,000

4,500

5,500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201368

www.fwreports.com



XalkoriXalkori (crizotinib) is being developed by Pfizer for the treatment of anaplastic lymphoma kinase (ALK) positive non-small-cell lung cancer (NSCLC). It is an orally available small molecule that functions as a dual inhibitor of c-Met receptor tyrosine kinase and ALK. Xalkori was approved by the US FDA in August 2011 and received conditional EU approval in October 2012.

The FDA based its approval of the drug on data from two single-arm clinical trials involving 255 patients with locally advanced or metastatic ALK-positive NSCLC patients (as identified using Abbott’s companion diagnostic). In the first trial, the Phase II PROFILE 1005, 136 patients were enrolled and the objective response rate was 50 percent.25 The second trial was a Part 2 expansion of the Phase I Study 1001 that evaluated 119 patients. In this second study the objective response rate was 61 percent with two complete responses and 69 partial responses. Xalkori offers a very large improvement on objective response rate when compared to pre-existing therapies, 61 percent vs ~10% and it is this that prompted the FDA to grant accelerated review to the product.26

25 Crino, L. et al. Initial phase II results with crizotinib in advanced ALK-positive non-small cell lung cancer (NSCLC): PROFILE 1005. J Clin Oncol 29: 2011 (suppl; abstr 7514).

26 Xalkori fact sheet. Pfizer.



https://www.pfizer.com/files/news/esmo/xalkori_fact_sheet.pdf


March 201369

www.fwreports.com



Under the terms of Xalkori’s EU approval Pfizer must submit the results of its PROFILE 1007 study (which was completed in June 2012) to the EMA. The data from this study was presented at the 2012 European Society for Medical Oncology conference and demonstrated that Xalkori extended progression free survival for twice as long as pemetrexed or docetaxel.27

As Xalkori is only effective in patients that have ALK positive NSCLC the product has been approved with a companion diagnostic that has been developed by Abbott Labs to identify these patients. In the US there are thought to be between 5 000-6 000 NSCLC patients annually who are ALK positive and in a study conducted in the EU 6.3 percent of NCSLC cases were ALK positive.

For Xalkori to be successful it is essential that Abbott’s companion diagnostic gain widespread uptake; Pfizer has reported that since launch there has been an increase in ALK testing in the US market from 10 percent of patients to 45 percent of patients being screened nine months later. By June 2012, 1 200 patients had been identified as being ALK-positive and were being treated with Xalkori which Pfizer believes indicates that between 20 and 25 percent of the maximal patient population has currently been identified and is receiving treatment with Xalkori.

27 Phase III trial shows crizotinib superior to single-agent chemotherapy for ALK-positive advanced NSCLC. ESMO. 30 September 2012.



http://www.esmo.org/no_cache/view-news.html?tx_ttnews%5Btt_news%5D=1632&tx_ttnews%5BbackPid%5D=585&cHash=da56fa2b3e

http://www.esmo.org/no_cache/view-news.html?tx_ttnews%5Btt_news%5D=1632&tx_ttnews%5BbackPid%5D=585&cHash=da56fa2b3e


March 201370

www.fwreports.com



Of course Pfizer is making an effort to get ALK testing used more widely and is engaging not only with oncologists but also with pathologists and other healthcare professionals. Analysts are predicting that the screening rate for ALK will increase to approximately 70 percent within the next three years.

Xalkori has demonstrated some efficacy in two other subsets of patients; patients with borderline ALK-positive tumours, and patients with ROS-1 positive tumours and the drug may gain wider use in these smaller patient subgroups.28 Although Pfizer is exploring Xalkori’s use in other ALK-positive cancers it is unlikely that it will be approved for these indications within the forecast period.

In terms of competitors there are several second-generation ALK inhibitors in development with Ariad Pharmaceuticals’ AP26223 being the most advanced with analysts forecasting its market entry in 2014. AP26223 has an advantage over Xalkori in that it is a dual inhibitor of both ALK and epidermal growth factor receptor (EGFR), which is another validated target in NSCLC. In addition AP26223 has demonstrated efficacy against tumours that have mutations that confer resistance to Xalkori. The potential market entry of Ariad’s product in 2015-2016 will almost certainly exert a downward pressure on Xalkori’s sales growth.

28 Tsang-Shaw, A. et al. Clinical activity of crizotinib in advanced non-small cell lung cancer (NSCLC) harboring ROS1 gene rearrangement. J Clin Oncol 30, 2012 (suppl; abstr 7508).




March 201371

www.fwreports.com



Analyst consensus forecasts that Xalkori will have global sales of US$833 million in 2017. Sales growth is expected to be very strong throughout the entire period, only really slowing down in 2016-2017 when the impact of competition from AP26223 is expected to be felt.

Figure 29: Xalkori global sales 2012-2017

20120

200

900

100

500

300

700

800

400

600

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

InlytaInlyta (axitinib) is Pfizer’s next generation tyrosine kinase inhibitor (TKI) that has been developed for the treatment of renal cell carcinoma (RCC). Pfizer was already a leader in the treatment of RCC following the launch of Sutent (sunitinib) in 2006 and the acquisition of Wyeth giving it control of Torisel (temsirolimus). Sutent is Pfizer’s only blockbuster drug in the oncology space with sales of US$1.2 billion in 2011, and with continued strong double digit sales growth.




March 201372

www.fwreports.com



Early stage RCC can be treated with surgery; however if the disease is not picked up early enough and it has moved on to a more advanced phase it is much more difficult to treat and prognosis is not great. The five-year survival rate for advanced RCC patients is around 20 percent. The first treatments for these patients were cytokines such as interferon-α or interleukin-2; these drugs had high toxicity levels and have been replaced by targeted therapies that target key tumour growth and signalling pathways (VEGF and mTOR). The RCC market is already quite crowded with drugs that target these two pathways: there are five drugs targeting VEGF (Sutent/sunitinib, Votrient/pazopanib, Nexavar/sorafenib, Avastin/bevacizumab, and Inlyta/axitinib), and there are two mTOR inhibitors (Torisel and Afinitor/everolimus).

Although Sutent has established itself as the standard of care in advanced RCC it is starting to suffer from competition from GSK’s Votrient (pazopanib), which was launched in the US in 2009 and in the EU in 2010. In the PISCES study (published July 2012), which compared Votrient to Sutent, 70 percent of patients preferred Votrient to Sutent as a first-line treatment for advanced RCC, whilst only 22 percent preferred Sutent, mostly as a result of improved quality of life when taking Votrient29. In the COMPARZ

29 Escudier B, J. et al. Patient preference between pazopanib (Paz) and sunitinib (Sun): Results of a randomized double-blind, placebo-controlled, cross-over study in patients with metastatic renal cell carcinoma (mRCC)—PISCES study, NCT 01064310. J Clin Oncol 30, 2012 (suppl; abstr CRA4502).




March 201373

www.fwreports.com



study, results of which were released in October 2012, Votrient was shown to be non-inferior to Sutent in terms of efficacy and tolerability, although median progression free survival and overall survival were both about a month longer for patients taking Sutent30.

Analysts expect Sutent to lose some market share to Votrient, and on the horizon is competition from Aveo’s tivozanib, which has been filed with the FDA for approval in this indication. The launch of Inlyta in the US market in February 2012 presents Pfizer with the means to shore up its revenues from this valuable market segment.

Inlyta was approved by the FDA as a second-line therapy for the treatment of advanced RCC, and it was approved by the EMA in September 2012 for patients who had failed on treatment with either Sutent or cytokines. There had been hopes that Inlyta would be able to compete strongly against Bayer/Onyx’s Nexavar; however the results of the AGILE 1051 study showed that Inlyta had missed its primary endpoint of significantly improving progression free survival when compared to Nexavar.31

The key future event that will impact on Inlyta’s sales within the forecast period is the launch of tivozanib, which will compete with it in second-line RCC treatment. Tivozanib and Inlyta have

30 New trial results on pazopanib have important implications for patients with advanced renal cell carcinoma. ESMO. October 1 2012.

31 Axitinib Study Does Not Meet Primary Endpoint as Front-Line Therapy for Renal Cell Carcinoma. Ben Leach. Onc Live. October 17 2012.



http://www.esmo.org/no_cache/view-news.html?tx_ttnews%5Btt_news%5D=1678&tx_ttnews%5BbackPid%5D=585

http://www.esmo.org/no_cache/view-news.html?tx_ttnews%5Btt_news%5D=1678&tx_ttnews%5BbackPid%5D=585

http://www.onclive.com/web-exclusives/Axitinib-Study-Does-Not-Meet-Primary-Endpoint-as-Front-Line-Therapy-for-Renal-Cell-Carcinoma

http://www.onclive.com/web-exclusives/Axitinib-Study-Does-Not-Meet-Primary-Endpoint-as-Front-Line-Therapy-for-Renal-Cell-Carcinoma


March 201374

www.fwreports.com



both demonstrated median progression free survival of 12 months in patients who have failed on cytokine treatment. Tivozanib has been shown to be better tolerated than Inlyta in its trials with lower rates of diarrhoea, fatigue and voice impairment.

Following the results of AGILE 1051 analysts do not believe that Inlyta will be able to establish itself as anything other than a second-line therapy and in this particular indication there is a great deal of competition. As a result the analyst consensus is for Inlyta to reach sales of US$454 million in 2017.

Figure 30: Inlyta global sales 2012-2017

20120

100

500

50

300

150

200

400

450

250

350

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201375

www.fwreports.com



ResistorsThe following table details the consensus forecasts of the five biggest resistors to growth for Pfizer from 2012 to 2017.

Table 12: Pfizer’s top five resistors of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Lipitor 3,948 2,161 1,793 1,563 1,376 1,259

Celebrex 2,719 2,691 1,769 914 769 715

Zyvox 1,345 1,351 1,386 1,060 678 615

Xalatan 844 516 379 307 256 219

Detrol LA 761 538 281 203 176 161


Collectively these five products will see sales fall by more than US$6.6 billion by 2017 compared to 2012. Together these five products are expected to see their share of Pfizer’s pharmaceutical sales decline from 11.1 percent in 2012 to 3.5 percent in 2017.




March 201376

www.fwreports.com



LipitorLipitor (atorvastatin) is used for the treatment of high cholesterol and was once the best selling drug in the world. Lipitor lost patent protection in the majority of its major markets in 2011 and as a result its sales have started to decline rapidly and will continue to do so. Analyst consensus forecasts sales of US$1.3 billion in 2017.

Figure 31: Lipitor global sales 2012-2017

20120

1,000

4,500

500

3,000

1,500

2,000

3,500

4,000

2,500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201377

www.fwreports.com



CelebrexCelebrex (celecoxib) is a COX-2 inhibitor indicated for the treatment of the symptoms of osteoarthritis, rheumatoid arthritis and acute pain. In 2011 the US market accounted for 64 percent of Celebrex’s US$2.7 billion sales; however volume has started to decline in the US market as patients move to generic meloxicam and other cheaper alternatives. Celebrex has only had a small amount of success in the EU markets where payers have been reluctant to pay for the drug, and the majority of rest of the world (ROW) sales come from Japan and Canada where the drug has performed well. With patent expiries expected in most major markets in 2014 and the launch of generics expected to follow quickly afterwards, sales are forecast to rapidly decline by analyst consensus. In 2017 sales are forecast to be US$715 million with 93 percent of these sales being made in the ROW rather than the US.

Figure 32: Celebrex global sales 2012-2017

20120

1,000

3,000

500

1,500

2,000

2,500

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m




March 201378

www.fwreports.com



ZyvoxZyvox (linezolid) is an oxazolindinone antibiotic that is used in the treatment of serious infections caused by Gram-positive bacteria that are resistant to other antibiotics. Zyvox is typically used as a second-line therapy to cheaper generics such as IV vancomycin and methicillin and is only used when an infection is found to be resistant to these drugs. Zyvox is available as both an IV and an oral formulation and this gives it an advantage over products such Cubicin (daptomycin) and Teflaro (ceftaroline), which are only formulated for IV administration.

Analyst consensus forecasts continued steady growth for Zyvox through to 2015 when it will lose patent protection in the US, followed by EU patent expiry in 2016. In 2017 sales of Zyvox are forecast to have contracted to US$615 million with these sales largely being derived from markets outside the US including emerging markets.

Figure 33: Zyvox global sales 2012-2017

20120

800

1,600

400

200

600

1,000

1,200

1,400

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m




March 201379

www.fwreports.com



XalatanXalatan (latanoprost) is a prostaglandin F2α analogue that is used in the treatment of glaucoma. Originally launched in the US in 1996, the product lost patent protection in 2011 with Mylan receiving FDA approval to market the first generic version of latanoprost in April 2011. Generic launches have subsequently occurred in several other major markets. The loss of these patents has already seen sales eroded in all markets with 2012 sales falling to US$844 million from US$1.3 billion in 2011. Analyst consensus forecasts 2017 sales of US$219 million.

Figure 34: Xalatan global sales 2012-2017

20120

500

900

300

100

200

400

600

700

800

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201380

www.fwreports.com



Detrol LADetrol LA (tolterodine extended release) is an antimuscarinic drug that is indicated for the treatment of urinary incontinence. Detrol was originally approved in 1998 by the FDA with the once-daily long-acting formulation approved in 2001. Sales in 2011 were US$883 million for Detrol LA and these are expected to fall precipitously as a result of patent expiries and generic entry. Patent expiry is occurred in the EU in September 2012. In the US a deal has been struck between Pfizer and Mylan that is expected by the majority of analysts to delay Detrol LA generic entry until January 2014, whilst in Japan generic entry is expected in April 2014. The impact of this generic competition is expected to reduce sales to US$161 million in 2017.

Figure 35: Detrol LA global sales 2012-2017

20120

500

800

300

100

200

400

600

700

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201381

www.fwreports.com



GeodonGeodon (ziprasidone) is an atypical antipsychotic that was approved by the US FDA in February 2001. In 2012 Geodon had global sales of US$1 billion, and in March 2012 it lost patent protection in the US (where it generates 84 percent of sales) leading to the entry of generic competition. Analyst consensus forecasts sales of only US$86 million in 2017 as a result of this generic competition.

Figure 36: Geodon global sales 2012-2017

20120

250

400

150

50

100

200

300

350

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201382

www.fwreports.com



RocheF. Hoffmann-La Roche (Roche), based in Basel, Switzerland, had total revenues of US$48.5 billion in 2012. These revenues are contributed by the company’s two core operating segments – pharmaceuticals and diagnostics, with the pharmaceutical division being responsible for 77 percent of revenues.

In 2009 Roche completed the acquisition of US biotechnology company Genentech, and this part of Roche has become the main driver of innovation in R&D for the company. This has coincided with Roche announcing the closure of its former US headquarters in Nutley, New Jersey, which analysts have said results from its perceived lack of productivity. With the company increasingly using biomarkers in the development of its products the company believes that it can use innovative clinical trial design to cut development costs by 30 to 50 percent32. Analysts believe that Roche will leave the hepatitis and cardiovascular fields, which would leave the company even more focused on oncology.

Roche is forecast to be the fifth largest pharmaceutical company in 2017 with analyst consensus forecasting sales to reach US$45.4 billion at the end of the forecast period.

32 Spotlight On: FT Pharma conference review – unlocking value in the post-patent cliff world. FirstWord Pharma. December 9, 2012.



http://www.firstwordpharma.com/node/1039389

http://www.firstwordpharma.com/node/1039389


March 201383

www.fwreports.com



Figure 37: Roche global pharmaceutical revenues 2012-2017

201225,000

35,000

50,000

30,000

40,000

45,000

2013e 2014e 2015e 2016e 2017e


Rev

enue

s U

S$ m

DriversThe table below lists the key growth drivers for Roche’s pharmaceutical sales over the 2012-2017 period.

Table 13: Roche’s top five drivers of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Perjeta 60 618 1,033 1,514 2,096 3,327

Avastin 6,150 6,573 6,878 7,162 7,376 7,620

Actemra 898 1,151 1,419 1,661 1,864 2,053

Kadcyla 0 38 167 371 547 704

Rituxan 7,156 7,543 8,032 8,327 7,953 7,515





March 201384

www.fwreports.com



In 2012 these products already accounted for 37.9 percent of Roche’s pharmaceutical revenues, and by 2017 they are forecast to have increased their share of Roche’s pharmaceutical revenues to 46.8 percent.

PerjetaPerjeta (pertuzumab) is a monoclonal antibody that has been developed by Roche for the treatment of HER2-positive cancers. It is the first in a class of HER dimerisation inhibitors and is available with two companion diagnostics that were developed by Dako (a subsidiary of Agilent Technologies) - the Herceptest and FISH pharmDx.

Perjeta received FDA approval for the treatment of late-stage HER2-positive breast cancer in June 2012. This approval was based on the results of a single Phase III trial entitled CLEOPATRA which enrolled 808 patients with HER2-positive metastatic breast cancer. Patients were then randomised to receive one of two different regimens; the first included Perjeta, Herceptin (trastuzumab), and docetaxel, while the second comparator arm contained Herceptin and docetaxel plus placebo. Patients in the arm treated with Perjeta had a median progression free survival (PFS) of 18.5 months, while the placebo arm had a median PFS of 12.4. Complete overall survival data is expected from this study in late-2013 and interim analysis of this data released in 2011 demonstrates a strong trend in favour of the Perjeta treatment arm with 69 patients having died in the Perjeta arm at 19.3 months versus 96 patients in the Herceptin/docetaxel/placebo arm33.

33 Roche. Roche’s Perjeta significantly extends survival in people with HER2-positive metastatic breast cancer. December 8, 2012.



http://www.roche.com/investors/ir_update/inv-update-2012-12-08.htm



March 201385

www.fwreports.com



Perjeta has been launched at a 30 percent premium over Herceptin at US$5,900 a month in the US, and if it is used in combination with Herceptin this would be a very expensive treatment combination34. Roche has mentioned the possibility of introducing a price cap for the Herceptin/Perjeta combination that gives payers a discount for using the combination. The figure below illustrates this concept.

Figure 38: Illustrative pricing for Roche’s metastatic breast cancer portfolio, ex-US

Herceptin IV totaltreatment cost

Perjeta total treatment cost

Cap forcombination

Total cost includingcap on combination

Source: Roche presentation, December 2012

Perjeta has been filed for approval in the EU and in December 2012 the EMA’s Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion that recommends Perjeta be granted marketing authorisation. Payers in the EU are typically averse to reimbursing high cost medications and this may delay its uptake in these markets. Analysts assume that it will be priced at US$4,400

34 FirstWord Pharma. ViewPoints: Roche does it again; Perjeta approval bolsters HER2 franchise. June 12 2012.






March 201386

www.fwreports.com



per month in the average EU market, which would be a 40 percent premium over Herceptin’s EU price.

Perjeta is only one strand of Roche’s strategy to replace Herceptin sales that it expects to lose to biosimilar competition. Kadcyla (trastuzumab emtansine) is another product that the company is developing for HER2-positive breast cancer. The ongoing MARIANNE trial is evaluating a treatment regimen which includes Kadcyla and Perjeta and compares it to Kadcyla alone, and Herceptin plus chemotherapy in the treatment of HER2-positive metastatic breast cancer. The results of this trial are expected in 2013. This presents a further treatment combination that would see Roche cement its position supplying the standard of care for the treatment of HER2-positive breast cancer.

The consensus forecast for Perjeta is for it to reach sales of US$3.3 billion in 2017 having had sales of US$60 million in 2012.

Figure 39: Perjeta global sales 2012-2017

20120

1,000

3,500

500

1,500

2,500

3,000

2,000

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m




March 201387

www.fwreports.com



AvastinAvastin (bevacizumab) is a monoclonal antibody that is indicated for the treatment of breast, colorectal, non-small cell lung, renal, and ovarian cancer in several countries. It is a vascular endothelial growth factor (VEGF) antagonist that partially inhibits VEGF driven angiogenesis. Avastin had sales of US$6.2 billion in 2012.

The key ongoing future events for Avastin include the results of two clinical trials that are evaluating its use as in HER2-negative breast cancer in patients at high risk of relapse. The first of these trials ECOG-5103 is being conducted in 4 950 patients who have been randomised into three treatment arms, two of which are receiving Avastin plus standard chemotherapy, while the other arm receives standard chemotherapy (doxorubicin and cyclophosphamide) alone. The results from this trial are expected in November 2013. The second trial, BEATRICE, is being conducted in 2 530 patients in the same indication as ECOG-5103 and has a similar design but uses anthracycline and taxane as the supporting chemotherapy. The results of these trials are expected by analysts to support the filing for regulatory approval for the treatment of HER2-negative adjuvant breast cancer.

Analysts also expect additional regulatory filings for Avastin in first-line glioblastoma and in adjuvant HER2-positive breast cancer.

The main potential threat to the ongoing sales growth of Avastin is the development of Eli Lilly’s ramucirumab. This is a novel VEGF inhibitor that is in Phase III trials for the treatment of breast,




March 201388

www.fwreports.com



colorectal, gastric, liver, and non small cell lung cancer. Avastin gets approximately 70 percent of its sales from two indications, metastatic colorectal cancer and first-line treatment of non small cell lung cancer – two indications for which ramucirumab is not being tested. However the product is likely to offer some competition in the indications they share, with analysts expecting approval for Lilly’s product at some point in the second half of 2013.

Analyst consensus forecasts are for Avastin to achieve global sales of US$7.6 billion in 2017.

Figure 40: Avastin global sales 2012-2017

20120

4,000

3,000

2,000

1,000

9,000

5,000

7,000

8,000

6,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201389

www.fwreports.com



Actemra Actemra (tocilizumab) is monoclonal antibody that works as an IL-6 inhibitor in the treatment of rheumatoid arthritis. Actemra was originally approved in Japan in April 2008 with subsequent approval in the EU and US for rheumatoid arthritis patients who have failed to respond to previous therapy with either a DMARD or a TNF antagonist. Approval for the product was based on five Phase III trials that involved more than 4 000 patients. These trials showed that Actemra either as a monotherapy or in combination with methotrexate or other DMARDs significantly reduced the signs and symptoms of rheumatoid arthritis compared to DMARDs alone35.

Actemra has faced concerns over its safety with an article in The Asahi Shimbun reporting that of 4 915 people who had been prescribed Actemra between May 2008 and February 2009 there were 221 serious adverse events including 15 deaths in which a causal relationship could not be ruled out. This has led to physicians having more reluctance to prescribe Actemra than other rheumatoid arthritis medications.

One of Actemra’s main competitors is AbbVie’s Humira (adalimumab). In June 2012 results from the Phase IV ADACTA trial that compared Actemra to Humira demonstrated that after 24 weeks of treatment 65 percent of Actemra patients showed a 20 percent improvement

35 Roche. FDA approves ACTEMRA for the treatment of moderately to severely active rheumatoid arthritis. January 11, 2010.



http://www.roche.com/media/media_releases/med-cor-2010-01-11.htm

http://www.roche.com/media/media_releases/med-cor-2010-01-11.htm


March 201390

www.fwreports.com



in their symptoms compared with about 49 percent of Humira patients. Analysts believe that although this may encourage some physicians to use Actemra ahead of Humira it is still likely to be used as a third-line therapy behind methotrexate and the anti-TNF drugs (including Humira).

Analyst consensus forecasts sales of US$2.1 billion in 2017 up from sales of US$898 million in 2012.

Figure 41: Actemra global sales 2012-2017

20120

1,000

2,500

500

1,500

2,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201391

www.fwreports.com



KadcylaKadcyla (ado-trastuzumab emtansine) is an antibody-drug conjugate that combines trastuzumab (the antibody that is branded as Herceptin) with DM1, which has intracellular effects on microtubules. Kadcyla is being evaluated for the treatment of breast cancer in three different clinical trials - EMILIA, MARIANNE and TH3RESA. The EMILIA trial compared trastuzumab-DM1 to capecitabine plus lapatinib in a trial which enrolled 991 patients who had previously been treated with Herceptin and a taxane. The results of this trial were reported at ASCO 2012 and demonstrated that patients treated with Kadcyla had median progression free survival of 9.6 months compared with 6.4 months in the capecitabine/lapatinib arm36. In November 2012 the FDA granted priority review to the product for the treatment of patients with HER2-positive unresectable locally advanced or metastatic breast cancer who have received prior treatment with Herceptin and a taxane. On February 22, 2013 the FDA granted approval to Kadcyla in this indication37. Roche has also stated that the product has been accepted for review by the EMA.38

36 Kimberly L et al. 2012 Primary results from EMILIA, a phase III study of trastuzumab emtansine (T-DM1) versus capecitabine (X) and lapatinib (L) in HER2-positive locally advanced or metastatic breast cancer (MBC) previously treated with trastuzumab (T) and a taxane. J Clin Oncol 30, 2012 (suppl; abstr LBA1).

37 FirstWord Pharma. Roche’s Kadcyla garners FDA approval for metastatic breast cancer. February 22, 2013.

38 FDA grants Roche’s trastuzumab emtansine (T-DM1) Priority Review for HER2-positive metastatic breast cancer. November 7, 2012.








March 201392

www.fwreports.com



The next set of pivotal trial results for Kadcyla is expected in the first half of 2014. These results are from the MARIANNE study39 that is investigating Kadcyla as a first-line therapy in HER2-positive metastatic breast cancer in combination with Perjeta. Analysts believe that positive results from this study will lead to the earlier use of Kadcyla in combination with Perjeta and that this would be a major driver of sales for the product, which, by 2014, should have already been approved in use as a second-line treatment.

Kadcyla is also being investigated for the treatment of HER2-positive gastric cancer and Roche is currently conducting two trials of the product in this indication. The first trial compares Kadcyla to capecitabine in patients with HER2-positive breast or gastric cancer while the second is comparing the product to taxane in patients with HER2-positive advanced gastric cancer.

Having received US approval in February 2013 analysts forecast sales to increase to US$704 million in 2017 as the product gains additional approvals in more indications and other geographies.

39 A Study of Trastuzumab Emtansine (T-DM1) Plus Pertuzumab/Pertuzumab Placebo Versus Trastuzumab [Herceptin] Plus a Taxane in Patients With Metastatic Breast Cancer (MARIANNE).



http://clinicaltrials.gov/show/NCT01120184




March 201393

www.fwreports.com



Figure 42: Kadcyla global sales 2012-2017

20120

500

800

300

400

100

200

600

700

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

RituxanRituxan (rituximab) is a monoclonal antibody that targets the CD20 receptor on B-cells. It has been developed by Roche in collaboration with Biogen Idec and has multiple indications including chronic lymphocytic leukaemia (CLL), follicular lymphoma, B-cell non-Hodgkin’s lymphoma and rheumatoid arthritis, for all of which it has been approved in the US and EU. In the US and Canada it is also approved for the treatment of Wegener’s granulomatosis. A decision by the EMA’s CHMP in this latter indication is expected by analysts in the second quarter of 2013.

In addition to its approved indications Rituxan is in Phase III trials for diffuse large B-cell lymphoma and transplant rejection.

The currently marketed formulation of Rituxan must be dosed by IV infusion, which is takes




March 201394

www.fwreports.com



up to two and a half hours to complete. A new formulation is being developed that can be delivered by subcutaneous injection. This allows for much more rapid administration of the drug (five minutes versus 2.5 hours). The results of the Phase III SABRINA study in follicular lymphoma study were published in December 2012 and demonstrated that the IV and new subcutaneous delivery formulations had similar overall response rates and complete response rates40. Analysts expect this new formulation to receive approval within the EU in the fourth quarter of 2013.

Roche is developing obinutuzumab (known as afutuzumab until 2009) as a successor to Rituxan. It is currently in Phase III trials for B-cell lymphoma, CLL and non-Hodgkin’s lymphoma. In January 2013 headline data from the CLL11 trial in CLL demonstrated that obinutuzumab in combination with chlorambucil significantly improved progression free survival when compared to chlorambucil alone.41 Analysts comment that although this initial analysis does not include any data comparing the effectiveness of obinutuzumab to Rituxan (which is included in the third arm of the trial) it does suggest that the product will be able to gain approval. Analysts are forecasting potential approval in CLL as early as 2014 for obinutuzumab. The impact that obinutuzumab has on Rituxan’s sales will be largely dependent on the results of trials comparing the two products and at this point there is no data available.

40 Roche. Roche reports positive studies of MabThera given by subcutaneous injection. December 8, 2012.

41 Obinutuzumab (GA101) Significantly Improved Progression-Free Survival in People With Chronic Lymphocytic Leukemia (CLL). Genentech. January 30, 2013.



http://www.roche.com/media/media_releases/med-cor-2012-12-08b.htm

http://www.roche.com/media/media_releases/med-cor-2012-12-08b.htm

http://www.gene.com/media/press-releases/14327/2013-01-30/obinutuzumab-ga101-significantly-improve/

http://www.gene.com/media/press-releases/14327/2013-01-30/obinutuzumab-ga101-significantly-improve/


March 201395

www.fwreports.com



Analyst consensus forecast is for the continued sales growth of Rituxan until 2015 when Roche’s share of sales will peak at US$8.3 billion. At this point analysts believe that a biosimilar version of rituximab could enter the EU market. Several companies are working on biosimilars of this product including large multinational biotech companies such Amgen. Gaining approval for biosimilar monoclonal antibodies will prove challenging, and with Samsung recently suspending its multinational trial of its biosimilar rituximab these difficulties are further demonstrated. However, analysts believe that biosimilars will gain EU approval in 2015/2016 and that this will have a negative impact on Rituxan’s sales. In 2017 sales are forecast to have fallen from their 2015 peak to US$7.5 billion.

Figure 43: Rituxan global sales 2012-2017

20126,400

7,400

8,6008,400

8,000

7,600

7,0007,200

6,6006,800

7,800

8,200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201396

www.fwreports.com



ResistorsThe table below details the sales forecasts of the five leading resistors to Roche’s sales growth between 2012 and 2017.

Table 14: Roche’s top five resistors of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Herceptin 6,284 6,422 6,327 5,901 5,373 5,053

Xeloda 1,625 1,592 1,158 963 899 869

Pegasys 1,759 1,847 1,725 1,508 1,285 1,113

Cellcept 970 769 675 612 566 505

Boniva 345 283 223 206 202 187


In 2012 these five products accounted for 29.2 percent of Roche’s pharmaceutical sales. In 2017 their share of Roche’s pharmaceutical sales are forecast to have declined to 17 percent.

HerceptinHerceptin (trastuzumab) is a monoclonal antibody that is indicated for the treatment of HER2-positive breast cancer and HER2-positive gastric cancer. Herceptin is marketed alongside a companion diagnostic called the Herceptest, which was developed by Dako. Analyst consensus is for the continued sales growth of Herceptin through to the end of 2013. In 2014 sales are forecast to begin a slow decline as a result of anticipated biosimilar competition in key markets with South Korean company




March 201397

www.fwreports.com



Celltrion in pole position to be the first company to file for approval in the EU and US for its biosimilar of the product.

As discussed in the drivers section of this report Roche has anticipated the launch of biosimilar Herceptin and has developed two successor products (Perjeta and trastuzumab-DM1) that are designed to cement the company’s position in the HER2-positive breast cancer market and replace any sales lost to biosimilar competition.

Analyst consensus forecasts sales of US$5.1 billion in 2017 down from US$6.3 billion in 2012.

Figure 44: Herceptin global sales 2012-2017

20123,000

7,000

6,500

6,000

5,500

4,500

5,000

3,500

4,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201398

www.fwreports.com



XelodaXeloda (capecitabine) is a fluoropyrimidine carbamate that is an orally active prodrug of doxifluridine. Xeloda is approved to be used in the treatment of breast and colorectal cancer in the EU, the US and Japan. In China Xeloda has the additional indication of gastric cancer for which it has received EMA approval in the EU and is awaiting approval in Japan. The US patent for Xeloda is due to expire in the fourth quarter of 2013 with generics expected to be approved soon afterwards. As a result of generic incursion sales of Xeloda are forecast to decline rapidly throughout the forecast period to US$869 million in 2017.

Figure 45: Xeloda global sales 2012-2017

20120

1,800

1,600

1,400

1,000

1,200

600

800

200

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 201399

www.fwreports.com



PegasysPegasys (pegylated interferon-alpha2a) is indicated for the treatment of hepatitis B and C and in both indications it and Merck and Co’s Pegintron (peginterferon alfa-2b) have become the standard of care in these indications in combination with other drugs including ribavirin in hepatitis C and lamivudine in hepatitis B. The main disadvantage with interferon treatment is its poor tolerability. Patients must inject pegylated interferon once a week and this can lead to injection pain and injection site reactions. In addition the drug itself can have side effects, the most common of which include flu-like symptoms, anaemia, nausea and vomiting, diarrhoea, psychiatric reactions, and gastrointestinal disorders. In one study conducted in 441 hepatitis C patients treated with interferon alpha and ribavirin over one year, 27 percent of patients discontinued therapy due to the adverse effects42.

A new generation of products is in development that is expected to slowly lead to a reduction in the use of the interferons as these new drugs are expected to be both more efficacious, convenient and to have better tolerability. Analysts believe that the most promising pipeline product for the treatment of hepatitis C is Gilead’s sofosbuvir, which is a novel NS5B nucleoside inhibitor and is expected to receive approval in 2014. This and other novel products

42 Gaeta GB, et al. Premature discontinuation of interferon plus ribavirin for adverse effects: a multicentre survey in ‘real world’ patients with chronic hepatitis C, Aliment Pharmacol Ther. 2002 Sep;16(9):1633-9.




March 2013100

www.fwreports.com



that will be launched over the forecast period are expected by analysts to slowly reduce the use of Pegasys during the forecast period starting in 2014. Analyst consensus is for sales to fall to US$1.1 billion in 2017.

Figure 46: Pegasys global sales 2012-2017

20120

2,000

1,800

1,600

1,400

1,000

1,200

600

800

200

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013101

www.fwreports.com



CellceptCellcept (mycophenolate mofetil) is an immunosuppressant that, when it was launched in 1996, was the first new immunosuppressant with a novel mode of action since the launch of Sandimmun in 1978. Cellcept has been approved for use in immune-suppression in heart, liver and renal transplant patients. In 2004 Novartis launched a competitor product called Myfortic (mycophenolate sodium) that is designed to have reduced incidence of gastrointestinal adverse events when compared to Cellcept.

In the face of competition from both Myfortic and generic competitors that became available in 2009, sales of Cellcept have been declining. Analyst consensus is for this decline to continue with sales forecast to decline to US$505 million in 2017.

Figure 47: Cellcept global sales 2012-2017

20120

2,200

1,000

600

800

200

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013102

www.fwreports.com



BonivaBoniva (ibandronic acid) is a bisphosphonate that is available in two formulations, an oral tablet and as an IV infusion. The oral formulation is indicated for the treatment and prevention of postmenopausal osteoporosis and is available in two doses, 150mg tablet taken once monthly or 2.5mg tablet taken twice daily. The IV injection is designed to be given every three months and is also indicated for the treatment of osteoporosis in postmenopausal women.

The patent for Boniva expired in the EU and Europe in 2012, with Watson, Mylan, Orchid and Apotex gaining FDA approval for the first generic versions of ibandronic acid 150mg tablets in March 2012. The impact of the launch of generics is expected to be rapid with sales forecast to fall to US$187 million in 2017.

Figure 48: Boniva global sales 2012-2017

20120

400

350

200

300

250

150

50

100

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013103

www.fwreports.com



GlaxoSmithKlineGlaxoSmithKline (GSK) was the sixth largest pharmaceutical company by revenues in 2012 with pharmaceutical sales of US$33.7 billion. GSK’s pharmaceutical revenues have consistently fallen since 2007; however, the impact of new products has started to be felt in 2012 and sales are forecast to increase throughout the forecast period to reach US$40.1 billion in 2017.

Figure 49: GSK pharmaceutical revenues 2012-2017

201230,000

42,000

40,000

33,000

36,000

32,000

34,000

2013e 2014e 2015e 2016e 2017e

Source: FirstWord DossierIncludes sales from GSK’s pharmaceutical and vaccines business units

Rev

enue

s U

S$ m

GSK’s business is divided into three main segments:

nPharmaceuticals – 68.1 percent of group revenues

nVaccines – 12.6 percent of group revenues

nConsumer healthcare – 19.3 percent of group revenues




March 2013104

www.fwreports.com



Pharmaceuticals also incorporates sales from ViiV Healthcare, a joint venture that GSK set up with Pfizer in November 2009 with both companies transferring their HIV assets into the new company, which is 85 percent owned by GSK and 15 percent owned by Pfizer. Pharmaceuticals also incorporates the sales from GSK’s dermatology subsidiary, Stiefel.

Analysts consider GSK to have emerged onto the other side of the patent cliff and as a result there is a great deal of focus on what the company has in its pipeline rather than those that are going to lose patent protection and face generic competition.

In July 2012 the company completed the acquisition of Human Genome Sciences (HGS) for US$3 billion. This gave the company full control over Benlysta (belimumab), which is indicated for the treatment of systemic lupus erythematosus, and some other co-developed products, such as darapladib, which are considered to be potential blockbusters.




March 2013105

www.fwreports.com



DriversThe following table details the consensus forecasts of the five biggest growth drivers for GSK from 2012 to 2017.

Table 15: GSK’s top five drivers of growth, 2012-2017 (US$ m)

Product 2012 2013e 2014e 2015e 2016e 2017e

Relovair - 74 297 587 928 1,332

Anoro - - 180 369 623 1,093

Benlysta 111 263 436 613 764 808

GSK 1349572 (HIV integrase inhibitor)

- - 148 329 511 698

Promacta 205 278 384 473 524 618


These five products are forecast to increase their contribution to GSK’s overall pharmaceutical sales from 0.9 percent in 2012 to 8 percent in 2017.

RelovairRelovair (vilanterol/fluticasone furoate) is being developed by GSK in collaboration with Theravance for the treatment of asthma and chronic obstructive pulmonary disease (COPD). GSK filed for approval of Relovair at the end of June 2012 for the treatment of COPD in both the US and EU, and has also filed for approval for the treatment of asthma in the EU.




March 2013106

www.fwreports.com



These filings were based on the results of two pivotal Phase III programmes, one in asthma and the other in COPD. The COPD programme consisted of two 12-week trials that evaluated the 24-hour lung function profile of Relovair dosed once daily compared to GSK’s older product Advair (fluticasone propionate/salmeterol). Each of these studies enrolled 500 patients. In the first study Relovair demonstrated statistical superiority over Advair on the primary endpoint of 0-24 hour weighted mean forced expiratory volume (FEV1). In the second trial although Relovair did succeed in demonstrating numerical improvements in FEV1 over 0-24 hours compared to Advair these were not statistically significant43. Analysts believe that clinicians still consider these improvements to be clinically meaningful. Analysts do comment that although this lack of statistical significance will not be enough to prevent the product gaining approval it will probably slow the uptake of the product.

In COPD GSK is conducting a large Phase III mortality study (SUMMIT) that is comparing Relovair to Advair in 16 000 patients. This trial is not expected to report until 2015 at the earliest with analysts suggesting that a positive outcome for Relovair in this trial could lead to a large increase in the rate of switching to Relovair44.

In asthma GSK conducted a trial that compared the steroid found in Relovair (fluticasone furoate)

43 FirstWord Pharma. GlaxoSmithKline reaffirms target for Relovair regulatory filings despite more mixed data. March 23, 2012.

44 Clinicaltrials.gov. Study to Evaluate the Effect of Fluticasone Furoate/Vilanterol on Survival in Subjects With Chronic Obstructive Pulmonary Disease.





http://clinicaltrials.gov/ct2/show/NCT01313676?term=vilanterol+fluticasone+COPD&rank=2

http://clinicaltrials.gov/ct2/show/NCT01313676?term=vilanterol+fluticasone+COPD&rank=2


March 2013107

www.fwreports.com



with fluticasone propionate, which is the steroid found in Advair. In this trial, which was conducted in 330 patients, both fluticasone furoate and fluticasone propionate demonstrated a statistically significant change from baseline in trough evening FEV1 at the end of the 24-week treatment period45. Analysts do not expect the asthma indication to be an important driver of Relovair sales as there would appear to be little reason to switch from Advair, and they comment that approval in this indication in the US is uncertain.

Analysts believe that approval of Relovair is likely and could be granted in mid 2013 for COPD in the US and EU, and for asthma in the EU alone. Sales are forecast to rise rapidly to US$1.3 billion in 2017.

Figure 50: Relovair global sales 2012-2017

20120

1,400

800

1,200

1,000

600

200

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

45 GSK. GSK and Theravance announce completion of the Relovair registrational programme and topline results from Relovair vs. Advair phase III studies in COPD. March 23, 2012.



http://us.gsk.com/html/media-news/pressreleases/2012/2012-pressrelease-997739.htm



March 2013108

www.fwreports.com



AnoroAnoro (vilanterol/umeclidinium bromide) is a fixed dose combination product that combines a long-acting beta2 agonist with a long-acting muscarinic antagonist. It is being developed by GSK in collaboration with Theravance and is a once-daily maintenance therapy for the treatment of COPD that is administered via an inhaler. Anoro has been filed for marketing authorisation with both the EMA (January 2013) and with the US FDA (December 2012).

These filings are based on the results of a Phase III programme that tested the product in 6 000 patients globally. There were seven studies that tested umeclidinium as a monotherapy, and the combination of umeclidinium and vilanterol at two different doses with results reported in July 2012. These results were largely considered to be positive by analysts with the product showing statistically significant improvements in FEV1 lung function when compared to Pfizer/Boehringer Ingelheim’s Spiriva (tiotropium bromide), which is currently the most prescribed long-acting muscarinic antagonist.

In placebo controlled studies Anoro improved trough FEV1 at all doses. There was a 238ml improvement in this measure in the high dose, and in the low dose the difference was 167ml. Phase III data for Advair showed an improvement of trough FEV1 of approximately 160ml, whilst Spiriva demonstrated an improvement of approximately 140ml. In the




March 2013109

www.fwreports.com



first trial where Spiriva was used as an active control Anoro showed a significant 88-90ml improvement in trough FEV1. In the second active control trial the improvements of 60ml and 74ml were not statistically significant. Some analysts believe that this could be a problem for Anoro with regulators in COPD focusing on minimal clinically important difference that is generally defined as an improvement in FEV1 of 120-130ml, something that Anoro has failed to demonstrate46.

Novartis is developing a competitor LAMA/LABA combination product under the code QVA149 (glycopyrrolate/indacaterol). Novartis filed an MAA with the EMA for the approval of this product in October 2012 on the basis of its Phase III trial program IGNITE that consisted of 10 trials in more than 7 000 patients. Results of these trials showed that QVA149 has a similar impact on trough FEV1 to Anoro but has the advantage of reducing COPD exacerbations, something that Anoro has failed to demonstrate in its trials47. Analysts believe that this gives Novartis’s product a significant advantage over Anoro. Novartis has also filed for approval of QVA149 in Japan for the treatment of COPD.

46 GSK. GSK and Theravance announce completion of the Phase III programme for once-daily LAMA/LABA (UMEC/VI) in COPD. August 24, 2012.

47 Novartis. Novartis QVA149 Phase III COPD studies meet primary endpoints. April 2, 2012.







March 2013110

www.fwreports.com



Analysts believe that Anoro may receive approval for COPD in the EU and US in 2014. In the EU it is likely to face almost immediate competition from Novartis’s product. Analyst consensus is for Anoro to reach sales of US$1.1 billion in 2017.

Figure 51: Anoro global sales 2012-2017

20120

1,200

800

1,000

600

200

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013111

www.fwreports.com



BenlystaBenlysta (belimumab) is a monoclonal antibody that was developed by Human Genome Sciences for the treatment of autoimmune disorders. Currently Benlysta is approved for the treatment of systemic lupus erythematosus, an indication for which it was launched in the US in April 2011.

Benlysta is the first new therapy for lupus in over half a century and as such it is theoretically in a strong position. However, the product has failed to win reimbursement approval from payers in key markets including the UK and Germany where NICE, the Scottish Medicines Consortium and IQWiG recommended against its use as they did not believe that the product has any added therapeutic benefit compared to optimised prior standard of care. This has been a setback for the product and has led to the product accruing sales at a disappointing rate.

In addition to the problems caused by lack of reimbursement, competition from Immunomedics/UCB’s epratuzumab is looming on the horizon. Benlysta is dosed once monthly whereas epratuzumab is dosed every one or two weeks, which gives Benlysta an advantage in terms of convenience for both patients and care givers. Analysts have commented that the trials of epratuzumab have been designed in such a way as to make it easier for the product to show a benefit compared to the design used for Benlysta (patients in the control group are not allowed to change their medication in the epratuzumab trial




March 2013112

www.fwreports.com



whereas they were allowed to in the Benlysta trials, and the endpoint is considered less onerous as data has been analyzed after only 12 weeks of treatment).

Two Phase III trials, EMBODY 1 and EMBODY 2, are ongoing in the US and were initiated in December 201048 49. Results are expected to be reported in the first half of 2014 with approval and launch potentially to follow at some point in 2015 and this is likely to slow the growth of Benlysta in the US market.

Analyst consensus forecasts for Benlysta are for sales of US$808 million in 2017.

Figure 52: Benlysta global sales 2012-2017

20120

900

800

700

600

500

300

400

100

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

48 Clinicaltrials.gov. Study of Epratuzumab Versus Placebo in Subjects With Moderate to Severe General Systemic Lupus Erythematosus (EMBODY 1).

49 Clinicaltrials.gov. Study of Epratuzumab Versus Placebo in Subjects With Moderate to Severe General Systemic Lupus Erythematosus (SLE) (EMBODY 2).



http://clinicaltrials.gov/ct2/show/NCT01262365?term=Embody+1&rank=1





March 2013113

www.fwreports.com



DolutegravirDolutegravir is an orally administered HIV integrase inhibitor that is being developed by GSK and Pfizer’s HIV joint venture ViiV Healthcare and Japanese pharmaceutical company Shionogi. Dolutegravir has been filed for approval in the EU, Canada and the US (in December 2012). These filings are supported by data from four key Phase III trials: VIKING-3 and SAILING that were carried out in treatment experienced patients, and SPRING-2 and SINGLE that were conducted in treatment-naive patients.

The data from SPRING-2 demonstrated that dolutegravir was non-inferior to Merck and Co’s Isentress (ratelgravir) with comparable adverse events between the two arms of the study. Isentress is currently the only integrase inhibitor on the market and has sales of around US$2 billion per annum. The VIKING-3 trial was a single arm study that was designed to assess the antiviral activity of a dolutegravir containing regimen in HIV-1 infected patients who have developed resistance to integrase inhibitors. Dolutegravir 50mg was administered twice daily in addition to the current failing regimen. The proportion of patients who were virologically suppressed was 63 percent after 24 weeks of treatment.50

50 ViiV Healthcare. Once-Daily Dolutegravir is Non-Inferior to Twice-Daily Raltegravir in Treatment-Naïve Adults with HIV-1. July 26, 2012.



http://www.viivhealthcare.com/media-room/press-releases/2012-07-26.aspx?sc_lang=en

http://www.viivhealthcare.com/media-room/press-releases/2012-07-26.aspx?sc_lang=en


March 2013114

www.fwreports.com



Some analysts consider the ongoing FLAMINGO trial, which compares dolutegravir plus Epzicom (abacavir/lamivudine) or Viread (tenofovir disoproxil) to the protease inhibitors Prezista (darunavir) and Norvir (ritonavir) in combination with either Epzicom or Viread, to be critical to the product’s success. If this trial demonstrates the superiority of dolutegravir to the protease inhibitors this would allow it to compete with a class of products that have sales of US$6 billion annually.

Dolutegravir is also being developed as part of a fixed-dose combination that combines it with the two components of Epzicom. This product is in Phase III trials that are comparing the product to Gilead/Bristol-Myers Squibb’s Atripla (emtricitabine/tenofovir/efavirenz). Positive data from the SINGLE trial that was reported in 2012 showed that the product is superior to Atripla with a good looking safety profile. Analysts note that this gives the product a distinct advantage over the recently approved Stribild (elvitegravir/cobicistat/emtricitabine/tenofovir) that could only demonstrate non-inferiority to Atripla. Fixed-dose combination products have an advantage in the HIV market where patients cannot be prescribed monotherapy and so can potentially have to deal with high pill counts. Analysts have estimated that 70 to 80 percent of all dolutegravir prescriptions will be of the fixed-dose combination form.




March 2013115

www.fwreports.com



In February 2013 dolutegravir was granted priority review by the US FDA with the FDA having to make a decision by August 17, 2013. Analyst consensus forecasts sales of US$698 million for the product in 2017.

Figure 53: Dolutegravir global sales 2012-2017

20120

800

700

600

500

300

400

100

200

2013e 2014e 2015e 2016e 2017e


Sal

es U

S$

m




March 2013116

www.fwreports.com



PromactaPromacta (eltrombopag) is a non-peptidyl thrombopoietin receptor agonist that has been developed by GSK for the treatment of thrombocytopenia. Promacta was originally approved for the treatment of idiopathic thrombocytopenic purpura in the US in 2008, an indication for which it has received subsequent approvals in both the EU and Japan.

Promacta had its label expanded by the US FDA in November 2012 to include the treatment of thrombocytopenia in patients who have chronic hepatitis C whose condition is so poor that they cannot commence treatment with interferon51.

This additional indication is expected to boost the sales of Promacta considerably with analyst consensus forecasting sales of US$618 million in 2017.

Figure 54: Promacta global sales 2012-2017

20120

700

600

500

300

400

100

200

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

51 FirstWord Pharma. GlaxoSmithKline’s Promacta garners FDA clearance for hepatitis-related thrombocytopaenia. November 19, 2012.






March 2013117

www.fwreports.com



ResistorsThe following table details the consensus forecasts of the five biggest resistors for GSK from 2012 to 2017.

Table 16: GSK’s top five resistors of growth, 2012-2017 (US$ m)

Product 2012 2013e 2014e 2015e 2016e 2017e

Advair/Seretide 7,973 7,913 7,587 7,196 6,408 5,738

Lovaza 959 1,017 1,008 622 476 446

Epzicom 1,051 1,026 1,030 965 789 686

Avodart 1,248 1,383 1,423 1,405 1,121 1,038

Flixotide/Flovent 1,231 1,243 1,242 1,230 1,196 1,177


These five products are forecast to see their share of GSK’s sales decline from 13.3 percent in 2012 to 8.3 percent in 2017.

Advair/SeretideAdvair (fluticasone propionate/salmeterol) is indicated for the treatment of COPD and asthma, and in 2011 had sales of US$8 billion. Analysts expect EU launch of generic Advair in 2013 with Sandoz expected to have the first product to gain approval. Inhalable products are different to orally administered products in that the inhaler will never be identical to that of the originator and as a result these products are not directly substitutable at the pharmacy. Any generic will be launched at a lower price than Advair and so this will lead to some switching of patients.




March 2013118

www.fwreports.com



Analysts do not anticipate the launch of generic competitors to Advair in the US until 2015 or 2016, With Teva targeting that year as the launch date for its branded competitor to the product having stated that under current US guidelines it is actually impossible to demonstrate full bioequivalence. This new branded product will not be substitutable at the pharmacy and in common with the situation in the EU will see Advair’s sales eroded but not at anything like the rate normally associated with generic launch.

The expected approval of Relovair in the US and the EU in mid-2013 will also put downward pressure on the sales of Advair as GSK is likely to begin trying to switch patients onto its new product that is protected by patents. This switching would increase in magnitude should the SUMMIT trial demonstrate the superiority of Relovair over Advair.

The consensus forecast is for Advair to have sales of US$5.7 billion in 2017.

Figure 55: Advair global sales 2012-2017

20120

9,000

7,000

8,000

6,000

5,000

3,000

4,000

1,000

2,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013119

www.fwreports.com



LovazaLovaza (Omega-3 ethylester concentrate), is indicated for the treatment of hypertriglyceridemia and is marketed in 60 countries worldwide including the US, Europe and Japan (where it was approved in January 2013 and is marketed by Takeda). Following a patent dispute that was resolved in May 2012 generics manufacturers Teva and Par Pharmaceuticals will have to wait until 2017 to get their ANDA approved for the launch of a generic version of Lovaza in the US. Analysts also point out that even if at a later date this decision is overturned there are still hurdles to overcome before a generic could be approved in the US, the most difficult of which is proving bioequivalence for a non-standard product.

Analysts believe that the main threat to Lovaza’s continued success is not generic erosion of its sales but the launch of Amarin’s competitor product – Vascepa (ethyl eicosapentaenoic acid). This is being developed for the treatment of severe hypertriglyceridemia, an indication for which it received FDA approval in 2012. Amarin has yet to launch the product and it has not been granted New Chemical Entity status yet (which has an impact on the market exclusivity period for the product). Amarin recently secured US$100 million in additional funding that has allowed it to fund its own sales force with analysts expecting a launch of the product in the first quarter of 2013, although there is still the possibility that the company could be




March 2013120

www.fwreports.com



acquired by a larger pharmaceutical company or form a partnership.

Analyst consensus is for Lovaza sales to continue to grow until 2014 and then decline to reach sales of US$446 million in 2017.

Figure 56: Lovaza global sales 2012-2017

20120

1,200

1,000

800

600

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

Send comments on this research to: [email protected]



mailto:feedback%40fwreports.com?subject=The%20Top%2010%20Pharma%20Companies%20in%202017%20%E2%80%93%20leading%20drivers%20and%20resistors%20to%20growth%20%28400200156-310%29


March 2013121

www.fwreports.com



EpzicomEpzicom (abacavir/lamivudine) is a fixed-dose combination of two nucleoside reverse transcriptase inhibitors that is used for the treatment of HIV infection. The two components were originally launched as single component products in 1995 and 1999 respectively with both components now available as generics. The availability of several products that contain these two compounds plus other active compounds such as zidovudine, which is found in Trizivir, has put downward pressure on Epzicom sales.

Analysts believe that the launch of the new fixed-dose combination of dolutegravir plus the components of Epzicom in 2014/2015 will see this new product supplant Epzicom in the market and erode its sales to a significant degree. Sales of Epzicom are forecast to fall to US$686 million in 2017.

Figure 57: Epzicom global sales 2012-2017

20120

1,200

1,000

800

600

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013122

www.fwreports.com



AvodartAvodart (dutasteride) is a 5α-reductase inhibitor that is indicated for the treatment of benign prostatic hyperplasia. Avodart’s US compound patent is due to expire in November 2015 which will lead to the entry of generic competition and sales erosion of the product. Avodart is patent protected in the EU until 2017 when generics can enter that market too.

Analyst consensus for Avodart is for continued growth 2014 and then sales to decline following the launch of generics in the US market in late 2015. In 2017 sales are forecast to be US$1 billion.

Figure 58: Avodart global sales 2012-2017

20120

1,600

1,400

1,200

1,000

800

600

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013123

www.fwreports.com



FloventFlovent (fluticasone propionate) is a corticosteroid that is indicated for the treatment of asthma, allergic rhinitis and eosinophillic oesophagitis. Generics of this product have been available in most markets and it is the strength of the brand that maintains its market share.

However, analysts are forecasting a steady decline in sales for Flovent as a result of continued generic competition, and the launch of newer products that have demonstrated higher levels of efficacy.

Analyst consensus is for Flovent to have sales of US$1.2 billion in 2017.

Figure 59: Flovent global sales 2012-2017

20121,140

1,260

1,240

1,220

1,200

1,000

1,160

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013124

www.fwreports.com



Merck and CoMerck and Co was the fourth largest pharmaceutical company when ranked by global pharmaceutical revenues with total sales of US$40 billion in 2012, a decline of 1.4 percent on 2011’s pharmaceutical revenues. Analyst consensus forecasts Merck and Co’s pharmaceutical revenues to continue a slow decline for most of the forecast period with a return to slight growth in 2015 and 2016, followed by a further decline in 2017. Pharmaceutical revenues for Merck and Co are forecast to be US$38.9 billion in 2017.

Figure 60: Merck and Co global pharmaceutical revenues 2012-2017

201230,000

42,000

40,000

38,000

36,000

34,000

32,000

2013e 2014e 2015e 2016e 2017e


Rev

enue

s U

S$ m

In 2009 Merck and Co completed its reverse merger with Schering-Plough in a US$41 billion deal. This deal was responsible for a significant uplift in revenues between 2009 and 2010.




March 2013125

www.fwreports.com



Analyst consensus, though, forecasts Merck and Co’s total revenues to decline at a CAGR of -0.5 percent with growth from products such as Januvia (sitagliptin) and Gardasil being offset by the loss of revenues from products such as Singulair (montelukast) and Zetia (ezetimibe) that are expected to face generic competition over the forecast period.

DriversThe following table details the consensus forecasts of the five biggest growth drivers for Merck and Co from 2012 to 2017.

Table 17: Merck and Co’s top five drivers of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Januvia/Janumet/Juvi-sync 5,754 6,787 7,714 8,547 9,133 9,716

Odanacatib 0 0 181 437 760 1,078

Gardasil 1,631 2,033 2,246 2,360 2,447 2,518

Zostavax 649 940 955 1,094 1,159 1,229

Dulera 208 260 328 402 460 516


The five largest drivers of Merck and Co’s sales are forecast to see their share of overall pharmaceutical sales increase from 20.6 percent in 2012 to 38.6 percent in 2017.




March 2013126

www.fwreports.com



Januvia franchiseJanuvia (sitagliptin) is an orally available DPP-IV inhibitor that Merck and Co has developed for the treatment of type II diabetes. Merck and Co has four products within its Januvia franchise:

nJanuvia (sitagliptin) - the original monotherapy of sitagliptin

nJanumet (sitagliptin/metformin) - sitagliptin in a fixed-dose combination with the biguanide metformin

nJanumet XR (sitagliptin/metformin) – sitagliptin plus metformin formulated as an extended release tablet that is dosed once daily

nJuvisync (sitagliptin/simvastatin) - sitagliptin plus the statin simvastatin formulated as a fixed-dose combination tablet.

DPP-IV inhibitors are one of the newest classes of anti-diabetic therapies with Januvia being the first to receive approval in 2006. The table below summarises the approval history for the DPP-IV inhibitors.

Table 18: Approved DPP-IV inhibitors

Brand Manufacturer FDA approval date EMA approval date

Januvia Merck & Co Oct-06 Mar-07

Galvus Novartis N/A Feb-08

Onglyza Bristol-Myers Squibb; AstraZeneca Jul-09 Oct-09

Tradjenta Boehringer Ingelheim; Eli Lilly May-11 Aug-11

Nesina Takeda Jan-13 N/A

Source: FDA, EMA




March 2013127

www.fwreports.com



The key future event that is expected to impact on the sales of products in the Januvia franchise is the outcome of the TECOS cardiovascular outcomes trial that has enrolled 14 000 patients. Should the TECOS trial or the other cardiovascular outcomes trials being conducted on the various DPP-IV inhibitors demonstrate that sitagliptin improves patient outcomes this will be a significant advantage for the product and the other DPP-IV inhibitors. There is already evidence that supports the hypothesis that the DPP-IVs reduce negative CV outcomes; for example meta-analysis of Phase III trials conducted with Tradjenta demonstrates a reduction in negative CV outcomes versus a variety of outcomes.52

See the table below for a list of ongoing cardiovascular outcomes trials.

Table 19: CV outcomes trials of DPP-IV products


Januvia TECOS 14 000 Dec-14

Onglyza SAVOR-TIMI 16 500 Jul-13

Tradjenta CAROLINA 6 000 Sep-18

Nesina EXAMINE 5 400 May-15


52 Johansen et al. Cardiovascular Diabetology 2012 11:3.




March 2013128

www.fwreports.com



Analyst consensus is for continued strong growth of Januvia sales driven by a mixture of favourable demographics (which will increase the number of diabetic patients) and the potential upside from positive results from the above cardiovascular outcomes studies. The Januvia franchise is forecast to have sales of US$9.7 billion in 2017 up from 2012 sales of US$5.7 billion in 2012.

Figure 61: Januvia franchise global sales 2012-2017

20120

12,000

10,000

8,000

6,000

4,000

2,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013129

www.fwreports.com



OdanacatibOdanacatib is an oral, once weekly cathepsin K inhibitor that Merck and Co is developing for the treatment of postmenopausal osteoporosis, and osteoporosis in men. Odanacatib is currently in Phase III trials having reported positive outcomes from its Phase II trial, which was reported at American Society for Matrix Biology 2012. These results demonstrated that odanacatib significantly increased bone mineral density following 24 months of treatment in all bone locations that were tested as part of the trial.53

Further cementing analyst opinion that odanacatib is an effective treatment for osteoporosis was Merck and Co’s decision to close its Phase III trial of the product early due to the favourable benefit-risk profile.

Although the drug has demonstrated high levels of efficacy there are reportedly safety concerns with the drug and this has led to the need for additional Phase III safety data to be available before the company can file for approval. As a result Merck and Co announced in February 2012 that it does not expect to file for approval for odanacatib before 2014.

Odanacatib is not the first cathepsin K inhibitor to have been worked on by the pharmaceutical industry. Novartis was developing balicatib and GlaxoSmithKline was developing relacatib.

53 Odanacatib Increases BMD After Alendronate Treatment. October 19 2012. Medscape Medical News.



http://www.medscape.com/viewarticle/772960


March 2013130

www.fwreports.com



Both of these products had their development terminated as a result of morphea-like skin reactions, and there is concern that odanacatib may have the same problems.54 Of course, until the safety data from the extension study is published it is too early to be sure what the outcome will be.

Assuming that the safety issues are not so great that the product cannot be approved analysts say that the product will still face a challenging market environment. The osteoporosis market is dominated by the bisphosphonates that already significantly reduce the risk of fracture (by approximately 40 percent) and are very cheap given the entry of generics – and, Novartis’s Reclast is expected to lose patent protection in 2013, which will add further cheap competition in this field.

Analysts highlight three areas in which odanacatib can benefit:

nPatients who are intolerant to, or who do not want to initiate treatment with bisphosphonates due to widespread public concerns about the long term safety of this class of drugs.

nPatients who have experienced fractures despite having been treated with bisphosphonates

nPatients who have ceased bisphosphonate therapy due to safety concerns, or intolerance to the drug.

54 Peroni A. et al. Drug-induced morphea: report of a case induced by balicatib and review of the literature. J Am Acad Dermatol. 2008 Jul;59(1):125-9.




March 2013131

www.fwreports.com



The above would suggest that at least initially odanacatib will be restricted to second-line use behind the cheaper generic bisphosphonates. Analysts do however think that there is still the potential for odanacatib to get used as a first-line treatment if the product can be sold on its high levels of efficacy. Merck and Co has been successful in selling Januvia as a first-line product despite its high cost, where it has supplanted cheaper generic sulphonylureas and analysts believe that Merck could apply the same techniques for odanacatib.

With no launch expected before 2014 analyst consensus is for odanacatib to have sales of just over US$1 billion in 2017.

Figure 62: Odanacatib global sales 2012-2017

20120

1,200

1,000

800

600

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013132

www.fwreports.com



GardasilGardasil is a quadrivalent human papillomavirus (HPV) vaccine that has been developed by Merck and Co as a preventative treatment for cervical cancer, anal cancer and genital warts caused by four specific strains (6, 11, 16 and 18) of HPV.

The market for HPV vaccines consists of just two products, Gardasil and GlaxoSmithKline’s Cervarix, which only protects against two serotypes (16 and 18).

Merck and Co has out licensed Gardasil to Sanofi Pasteur MSD in the EU but retains rights to the product in the rest of the world, with its subsidiaries Banyu selling the product in Japan and Merck Frosst selling it in Canada.

Analyst consensus is for Gardasil’s sales to continue to grow through to 2017 driven by continued uptake, and countries following the UK’s lead and switching from Cervarix to Merck and Co’s product. Gardasil is forecast to have sales of US$2.5 billion in 2017.

Figure 63: Gardasil global sales 2012-2017

20120

3,000

2,500

2,000

1,500

1,000

500


Sale

s U

S$ m




March 2013133

www.fwreports.com



ZostavaxZostavax is a vaccine that has been developed by Merck and Co for the prevention of herpes zoster, post-herpetic neuralgia, and the reduction of acute and chronic shingles-associated pain in adults and the elderly. Sanofi Pasteur MSD has in-licensed this product for the EU market. Zostavax is the only licensed vaccine for this specific indication and so has no competition.

Sales of Zostavax were US$648 million in 2012 and analyst consensus forecasts sales of US$1.2 billion in 2017 driven largely by demographics, and sales and marketing efforts.

Figure 64: Zostavax global sales 2012-2017

20120

1,400

1,200

1,000

800

600

200

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013134

www.fwreports.com



DuleraDulera (mometasone furoate/formoterol) is a fixed-dose combination product that has been developed for the treatment of asthma, and was being developed for the treatment of chronic obstructive pulmonary disease (COPD). Mometasone is a steroid whilst formoterol is a beta agonist, and Dulera is the third inhaled steroid/beta agonist to reach the market after GlaxoSmithKline’s Advair (fluticasone/salmeterol) and AstraZeneca’s Symbicort (budesonide/formoterol).

Merck and Co has a strong position in the respiratory market with Singulair, Nasonex (mometasone) and other products contributing US$7.8 billion to the company’s 2011 revenues. However, analysts believe that Dulera is not sufficiently differentiated from the market incumbents and as a result will only ever be seen as a “me-too” product.

Dulera was initially launched in the US for the treatment of asthma in patients aged 12 years and above in the US in October 2010, whilst in the EU development has been stopped for this indication. In February 2012 Merck and Co received a complete response letter from the FDA regarding its application for label expansion for COPD and Clinicaltrials.gov lists no ongoing clinical trials in this indication, which would suggest that Merck and Co has terminated its development in this indication.




March 2013135

www.fwreports.com



Analyst consensus forecasts 2017 sales of US$516 million for Dulera up from 2012 sales of US$208 million.

Figure 65: Dulera global sales 2012-2017

20120

600

500

400

300

100

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

Do you have the authority to speak on pharma sales and marketing, medical affairs, regulatory affairs, market access or generics?

Do you have an opinion on the outlook for e-detailing, KOL relations, patient adherence, key account management, CRM, SFE, digital and mobile marketing, stakeholder engagement, emerging markets, regulation or biosimilars?

If so, we would like to hear from you, and invite you to join FirstWord’s growing community of pharma experts. For further information, please email us at [email protected]

Call for Experts



mailto:expertpanel%40fwreports.com?subject=I%20am%20interested%20in%20joining%20the%20FirstWord%20Expert%20Panel%20%28400200156-310%29


March 2013136

www.fwreports.com



ResistorsThe table below lists the five largest resistors to Merck and Co’s sales growth over the 2011-2017 period. Cumulatively these products are forecast to see their sales fall by US$7 billion.

Table 20: Merck and Co’s top five resistors of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Singulair 3,853 1,484 1,083 923 756 597

Zetia 2,567 2,581 2,255 2,183 2,140 1,002

Vytorin 1,747 1,691 1,456 1,404 1,373 820

Temodar 917 719 420 336 263 211

Cozaar/Hyzaar 1,284 1,153 1,003 887 791 710


As these sales see their sales decline, their share of Merck and Co’s overall pharmaceutical sales will fall from 25.9 percent in 2012 to 8.6 percent in 2017.




March 2013137

www.fwreports.com



SingulairSingulair (montelukast) is an orally available leukotriene D4 antagonist that is indicated for the treatment of asthma, seasonal allergic rhinitis, perennial allergic rhinitis, and exercise induced bronchoconstriction.

In 2012 Singulair had sales of US$3.8 billion. In August 2012 the product lost patent protection in the US with several generics becoming available on 7th of August. With EU patent protection expiring in February 2013, sales of Singulair are forecast to decline rapidly through to 2017. Analyst consensus is for sales to have fallen to US$597 million in 2017.

Figure 66: Singulair global sales 2012-2017

20120

4,500

4,000

3,000

3,500

2,000

2,500

1,500

500

1,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013138

www.fwreports.com



Zetia/VytorinZetia (ezetimibe) is a cholesterol absorption inhibitor that was originally developed by Schering-Plough prior to its acquisition by Merck and Co. Zetia is indicated for hypercholesterolemia and is available in 90 countries globally. Vytorin combines ezetimibe with simvastatin in a fixed-dose combination and the key event that is expected to impact on the future performance of Zetia and Vytorin is the outcome of the cardiovascular outcomes IMPROVE-IT study.

IMPROVE-IT has enrolled 18 000 patients and is comparing Vytorin with simvastatin monotherapy and is expected to have complete trial results in June 2013. Analysts are not particularly hopeful that this trial will demonstrate that ezetimibe plus simvastatin will be any more effective than simvastatin alone. In 2008 data from the ENHANCE study was released and this failed to demonstrate that Zetia could reduce the growth of plaques in the arteries and analysts suggest that the IMPROVE-IT trial could demonstrate poor results again.55

If the IMPROVE-IT trial results are negative then this will lead to a very large reduction in the use of the product from mid-2013 onwards. Many analysts use a risk adjusted forecast model and have assumed somewhere around a 60 percent probability that the trial will generate negative results for the effectiveness of ezetimibe.

55 ENHANCE results yield disappointment for ezetimibe. Heartwire. January 14 2008.



http://www.theheart.org/article/837243.do


March 2013139

www.fwreports.com



Analyst consensus forecast for Zetia is for continued sales growth until the end of 2013, in 2014 sales are forecast to begin their decline and to fall to just over US$1 billion in 2017. Vytorin’s sales have already started to decline with 2012 sales of US$1.7 billion down from US$1.9 billion in 2011. Analyst consensus forecasts sales of $820 million for Vytorin in 2017.

Figure 67: Zetia/Vytorin global sales 2012-2017

20120

3,000

2,000

2,500

1,500

500

1,000

2013e 2014e 2015e 2016e 2017e

ZetiaVytorin


Sale

s U

S$ m




March 2013140

www.fwreports.com



TemodarTemodar (temozolomide) is an oral cytotoxic alkylating drug that is indicated for the treatment of gliomas including anaplastic astrocytomas and glioblastoma multiforme. Originally launched in 1999 Temodar had sales of US$917 million in 2012. Generic versions of temozolomide have been launched in some markets including the UK, and in August 2013 Teva has the right to begin marketing its generic in the US following the decision of the US District Court in January 2010 that the ‘291 patent was unenforceable. The impact of generic erosion is forecast by analyst consensus to see sales fall to US$211 million in 2017.

Figure 68: Temodar global sales 2012-2017

20120

1,000

900

700

500

300

800

600

400

100

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013141

www.fwreports.com



Cozaar/HyzaarCozaar (losartan potassium) is an orally active nonpeptide angiotensin II receptor antagonist that is indicated for the treatment of hypertension either as a monotherapy or in combination with other antihypertensives. Originally launched in 1995, Cozaar lost patent protection in the US and EU markets in 2010 and has subsequently experienced generic erosion.

Hyzaar (losartan potassium/hydrochlorothiazide) is a fixed-dose combination of losartan and the diuretic hydrochlorothiazide that is indicated for hypertension. Generics of Hyzaar were approved by the FDA in 2010 and this has led to generic erosion of the product’s sales.

The analyst consensus forecast is for continued sales declines for this franchise with sales expected to decline to US$710 million in 2017.

Figure 69: Cozaar/Hyzaar global sales 2012-2017

20120

1,400

1,200

800

1,000

600

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013142

www.fwreports.com



Johnson and JohnsonJohnson and Johnson (J&J) is a diversified healthcare company with three separate divisions:

nConsumer

nMedical Devices and Diagnostics

nPharmaceuticals

This report only considers the company’s pharmaceuticals business. In 2012 J&J’s pharmaceuticals products had combined sales of US$25.4 billion up from sales of US$24.4 billion in 2011. Analysts believe that the company will deliver solid sales growth between 2012 and 2016 to reach sales of US$28.9 billion before dropping back to US$27.5 billion in 2017 with the majority of growth being driven by products that have recently been launched.

Figure 70: Johnson and Johnson global pharmaceutical sales 2012-2017

201223,000

30,000

29,000

27,000

28,000

26,000

25,000

24,000

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m




March 2013143

www.fwreports.com



DriversThe table below details the five largest drivers of J&J’s growth through to 2017.

Table 21: J&J’s top five drivers of growth, 2012-2017 (US $ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Stelara 1,025 1,334 1,581 1,762 1,960 1,928

Xarelto 222 408 625 783 935 998

Zytiga 961 1,460 1,732 2,085 1,926 1,689

Simponi 607 677 813 893 1,011 1,199

Invega Sustenna 796 1,068 1,291 1,416 1,539 1,246


Cumulatively these five products will see their share of J&J’s overall pharmaceutical revenues increase from 14.2 percent in 2017 to 25.6 percent in 2017.

StelaraStelara (ustekinumab) is a monoclonal antibody that is indicated for the treatment of plaque psoriasis and is approved in the US, Japan, and the EU. Stelara works as an inhibitor of IL-12 and IL-23 and prevents these cytokines from activating natural killer cells that play a role in plaque psoriasis and other orphan indications.

Stelara received FDA approval for the treatment of plaque psoriasis in September 2009 with its approval being based on the results of two




March 2013144

www.fwreports.com



pivotal Phase III trials. Results from these trials demonstrated that a significantly higher percentage of patients with plaque psoriasis achieved at least a 75 percent reduction in psoriasis as measured by the Psoriasis Area and Severity Index (PASI) after 12 weeks of treatment compared to placebo.

In this market Stelara competes with the TNF-inhibitors, Humira (adalimumab), Remicade (infliximab) and Enbrel (etanercept) and there are several new products in development including Celgene’s apremilast for which positive Phase III results were announced in January 2013. The table below details the late-stage pipeline for psoriasis treatments:

Table 22: The late stage pipeline for psoriasis, 2012

Product Company Phase

AIN457 Novartis III

Brodalumab Amgen/AstraZeneca III

Apremilast Celgene III

Ixekizumab Lilly III

Tofacitinib Pfizer III


Stelara’s continued sales growth is not solely dependent upon its existing indication as it is being investigated in the following new indications:




March 2013145

www.fwreports.com



nRheumatoid arthritis – Phase II

nCrohn’s disease – Phase III

nPrimary biliary cirrhosis – Phase II

nAnkylosing spondylitis – Phase II

nActive sight-threatening uveitis – Phase I/II56

The most advanced of these new indications is Crohn’s disease with Stelara currently in Phase III trials. Phase IIb results in this indication were reported in October 2012. This trial (CERTIFI) evaluated 526 patients who were refractory to anti-TNF therapy who were treated for six weeks at which point their Crohn’s Disease Activity Index score was measured – clinical response was measured as at least a 100 point fall on this scale. Patients were treated with three different doses (1mg/kg, 3mg/kg, and 6mg/kg). In these three arms at six weeks 36.6 percent, 34.1 percent, and 39.7 percent of patients had achieved a clinical response respectively57. Stelara recently entered Phase III trials for this indication, and at this point analysts have not made a prediction/estimate on likely approval dates.

Stelara does face the possibility of increased competition within the psoriasis market where Pfizer’s Xeljanz is currently in Phase III trials. These trials are expected to complete in April 2014 with approval and launch possible in

56 Clincialtrials.gov.

57 Sandborn W.J. et al. Ustekinumab Induction and Maintenance Therapy in Refractory Crohn’s Disease. N Engl J Med 2012; 367:1519-1528.




March 2013146

www.fwreports.com



late 2014 or early 2015. In addition Novartis’s secukinumab is also in Phase III trials for psoriasis which are expected to be completed in May 2015. Analysts expect secukinumab to garner approval in 2016. Xeljanz and secukinumab are expected to offer strong competition to Stelara during the latter part of the forecast period.

Analyst consensus forecasts sales of US$1.9 billion in 2017.

Figure 71: Stelara global sales 20!2-2017

20120

2,500

2,000

1,500

1,000

500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013147

www.fwreports.com



XareltoXarelto (rivaroxaban) is an oral, once-daily anticoagulant that is indicated for the treatment of deep vein thrombosis (DVT) and venous thromboembolism. Xarelto received its first approvals in the EU and Canada in September 2008, and it was subsequently approved in the US in July 2011 for the prophylaxis of DVT that may lead to pulmonary embolism in adults undergoing hip and knee replacement surgery. In November of the same year the drug gained an additional indication approval from the FDA for stroke prophylaxis in patients with non-valvular atrial fibrillation. Finally in November 2012 it received a further indication from the FDA for the long term use of the drug to prevent their reoccurrence58.

J&J shares the commercial rights to Xarelto with Bayer. J&J owns the rights to the US market whilst Bayer retains ownership in all other markets (other than Spain where Bayer has a co promotion agreement with Almirall).

The anticoagulant market is becoming increasingly crowded following the introduction of Pfizer’s Eliquis (apixaban, see Pfizer profile) and Boehringer Ingelheim’s Pradaxa (dabigatran etexilate). Analysts believe that Eliquis has the best clinical profile of the three new anticoagulants and as a result it will be strong competition to Xarelto and will slow sales growth.

58 FDA expands use of Xarelto to treat, reduce recurrence of blood clots. November 2, 2012.



http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm326654.htm


March 2013148

www.fwreports.com



Eliquis is being explored in Xarelto’s most recent indication (VTE treatment/prevention) as is Daiichi Sankyo’s edoxaban, which is currently in Phase III (HOKUSAI) with results expected in 2013. Analysts suggest that these two products could receive approval in this indication as early as 2014 and would pose a competitive threat to the continued sales growth of Xarelto.

Despite this competition the analyst consensus forecast is for Xarelto sales to reach US$998 million in 2017 from sales of US$222 million in 2012.

Figure 72: Xarelto global sales 2012-2017

20120

1,200

800

1,000

600

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013149

www.fwreports.com



ZytigaZytiga (abiraterone acetate) is an orally available hormonal therapy that is being developed for the treatment of advanced prostate and breast cancer. Zytiga received approval from the FDA in April 2011, this approval was based on data from Phase III trials in 1 195 patients with late-stage resistant prostate cancer. These studies compared Zytiga in combination with prednisone to placebo plus prednisone. Patients treated with Zytiga plus prednisone had a median overall survival of 14.8 months compared to 10.9 months in patients treated with placebo plus prednisone59. In the EU Zytiga was approved in September 2011 using the same set of clinical data.

Zytiga does not have the prostate cancer market to itself, however. In September 2012 Medivation’s Xtandi (enzalutamide) was approved by the FDA for the treatment of metastatic castration-resistant prostate cancer. Analysts believe that Xtandi is superior to Zytiga in terms of efficacy and also convenience. In terms of efficacy Xtandi treatment led to an overall survival of 18.4 months compared to 13.6 months for the comparator. In terms of improved convenience, patients taking Zytiga must fast for two hours prior to treatment and one hour after treatment whereas patients taking Xtandi can take the drug with or without food. The one major factor counting against the update of Xtandi is that in trials 0.9 percent of patients taking the drug suffered from seizure (compared to zero percent in the placebo arm)

59 FDA approves Zytiga for late-stage prostate cancer. April 28, 2011.





March 2013150

www.fwreports.com



and the FDA has included a warning about this on Xtandi’s label. Although this is not in a black box analysts believe that it is still likely to make physicians cautious in their use of the product.

The launch of Xtandi in the US and the expected launch of the product in the EU (where an MAA was submitted in 2012) are expected to slow the growth of Zytiga sales. There are also other novel prostate cancer therapies in development, most notably Takeda’s orteronel, which is currently in Phase III and the anticipated launch of this during the forecast period will also slow growth.

The largest event to impact on Zytiga’s sales during the forecast period is the expiry of its patent. This is expected to occur in 2016 and will be swiftly followed by the launch of generics and the erosion of Zytiga’s sales.

The analyst consensus forecasts sales of US$1.7 billion in 2017, down from a peak of US$2.1 billion in 2015.

Figure 73: Zytiga global sales 2012-2017

20120

2,500

2,000

1,500

1,000

500


Sale

s U

S$ m




March 2013151

www.fwreports.com



SimponiSimponi (golimumab) is an anti-TNFα monoclonal antibody that is indicated for the treatment of rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis. The anti-TNFα market is quite crowded with Humira, Enbrel and Remicade all occupying the same space. Simponi’s main differentiating feature is that it is dosed once every four weeks compared to once a week for Enbrel and Humira and every other week for Remicade. This reduced dosing frequency is more convenient, although physicians interviewed in another report for FirstWord say that the drug’s efficacy wears off after three weeks and as a result patients need to reinject at this point60.

An intravenous formulation of Simponi is being developed J&J and its partners, and in September 2012 the company filed a BLA for this formulation.

Analyst consensus is for continued sales growth of Simponi throughout the forecast period, with sales forecast to be US$1.2 billion in 2017.

Figure 74: Simponi global sales 2012-2017

20120

1,400

1,200

1,000

800

400

600

200


Sale

s U

S$ m

60 FirstWord Therapy Trends. KOL Insight: Rheumatoid Arthritis. November 2012.



http://www.firstwordplus.com/therapy_trends_rheumatoid_arthritis_standing_out_in_a_crowded_market.do


March 2013152

www.fwreports.com



Invega SustennaInvega Sustenna (extended release paliperidone) is an antipsychotic that is indicated for the treatment of schizophrenia. It is formulated as a once-monthly controlled-release intramuscular injection. Analysts believe that physicians are increasingly accepting of long-acting injectable antipsychotic therapy as it has reduced relapse rates and improved patient adherence. Patient adherence is a major issue in the schizophrenia patient population so anything that can improve this is considered to be an advantage.

A three-month formulation of Invega Sustenna is being developed by J&J utilising Alkermes’ nanoparticle technology. This product is currently in Phase III trials in 1 800 patients and these trials are expected to complete in November 2014, which analysts believe could allow for a launch at some point in 2015.

Invega Sustenna has several competitors in the market including J&J’s Risperdal Consta (controlled-release risperidone) and Eli Lilly’s Zyprexa Relprevv (olanzapine pamoate). Analysts consider these products to be first generation and to have inferior dosing and side effect profiles and expect them to have their sales eroded by Invega Sustenna and other second generation long-acting injectable antipsychotics. Otsuka and Lundbeck are working on a depot formulation of aripiprazole which will offer further competition to Invega Sustenna.




March 2013153

www.fwreports.com



Analysts believe that Invega Sustenna will continue to see sales growth until 2016 when sales will peak at US$1.5 billion. Sales are forecast to contract in 2017 and fall back to US$1.2 billion following the launch of generics in May of that year.

Figure 75: Invega Sustenna global sales 2012-2017

20120

1,800

1,600

1,200

1,400

1,000

800

400

600

200


Sal

es U

S$

m




March 2013154

www.fwreports.com



ResistorsThe table below details the five greatest resistors to J&J’s sales growth over the 2012 to 2017 period.

Table 23: J&J’s top five resistors of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Concerta 1,073 800 429 331 271 178

Aciphex/Pariet 835 583 348 236 190 107

Procrit/Eprex 1,462 1,265 1,095 965 849 741

Remicade 6,139 6,327 6,140 5,871 5,601 5,420

Risperdal Consta 1,425 1,400 1,347 1,266 1,185 1,113


Cumulatively these five products will see their aggregated sales fall by US$3.4 billion which will see their contribution to J&J’s sales fall from 43.1 percent in 2012 to 27.5 percent in 2017. At this point the revenues from these five resistors will still be bigger than those from J&J’s five biggest drivers of growth.




March 2013155

www.fwreports.com



ConcertaConcerta (extended release medthylphenidate) is a dopamine receptor agonist that is used in the treatment of attention-deficit hyperactivity disorder. In May 2012, Watson Laboratories launched an authorised generic version of the drug in the US, which is marketed in collaboration with J&J subsidiary Ortho-McNeil-Janssen Pharmaceuticals. Mallinkrodt launched the first unauthorised generic version of the product in December 2012.

Generic erosion of sales is forecast to see sales fall to US$178 million in 2017 from sales of US$1.1 billion in 2012.

Figure 76: Concerta global sales 2012-2017

20120

1,200

1,000

800

400

600

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013156

www.fwreports.com



AciphexAciphex (rabeprazole) is a proton pump inhibitor that was developed by Eisai as an antiulcerant. J&J has rights to the product in a number of markets including the US, UK, Germany, China and Korea. Eisai retains exclusive rights in Japan.

Aciphex is expected to lose patent protection in the US in May 2013 with generics expected to be launched at that time and significantly erode sales of the product in this key market. Generic competition is already a factor in several other markets.

Analysts forecast sales of Aciphex to fall to US$107 million in 2017 from US$835 million in 2012.

Figure 77: Aciphex global sales 2012-2017

20120

900

800

700

600

400

200

300

500

100

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013157

www.fwreports.com



ProcritProcrit (epoetin alpha) is a recombinant form of human erythropoietin that J&J markets in all countries with the exception of Japan and China. In the US Amgen markets the product for the treatment of dialysis patients whilst J&J markets it in all other indications.

The availability of biosimilars in Europe has steadily eroded the sales of branded versions of epoetin alpha and analysts expect this to continue throughout the forecast period. The expected launch of biosimilars in the US is expected to replicate this trend.

Analysts forecast sales of US$741 million for Procrit in 2017, down from sales of US$1.5 billion in 2012.

Figure 78: Procrit global sales 2012-2017

20120

1,600

1,400

1,200

1,000

600

200

400

800

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013158

www.fwreports.com



RemicadeRemicade (infliximab) is an anti-TNF monoclonal antibody that is indicated for a number of autoimmune conditions, including rheumatoid arthritis, psoriasis, Crohn’s disease and ankylosing spondylitis.

In 2012 Remicade was J&J’s leading product with sales of US$6.1 billion accounting for approximately 24 percent of the company’s pharmaceutical revenues. Analysts forecast that the sales of Remicade will fall during the forecast period with only one period of growth, in 2013. Analysts put this gradual reduction in sales down to increasing competition in the anti-TNF space from a number of products, including J&J’s Simponi, which offer improved convenience through less frequent dosing.

Analyst consensus forecasts sales of Remicade to fall to US$5.4 billion in 2017. At this point Remicade will still be J&J’s leading pharmaceutical product, and will account for 19.7 percent of the company’s pharmaceutical revenues.

Figure 79: Remicade global sales 2012-2017

20124,800

6,400

5,800

6,200

5,600

6,000

5,400

5,000

5,200

0.0%

30.0%

20.0%

25.0%

15.0%

5.0%

10.0%

2013e 2014e 2015e 2016e 2017e

Remicade SalesPercentage of J&J Pharma sales


Sale

s US

$ m




March 2013159

www.fwreports.com



Risperdal constaRisperdal consta (controlled release risperidone) is a first generation long-acting injectable antipsychotic. Analysts expect the product’s sales to be steadily eroded by the switching of patients to newer longer duration injectable antipsychotics such as J&J’s own Invega Sustenna.

Sales are forecast to decline to US$1.1 billion in 2017 from US$1.4 billion in 2012.

Figure 80: Risperdal consta global sales 2012-2017

20120

1,600

1,400

1,200

1,000

600

200

400

800


Sale

s U

S$ m




March 2013160

www.fwreports.com



AstraZenecaAstraZeneca headquartered in the United Kingdom had pharmaceutical revenues of US$27,973 million in 2012, which was a fall of 16.7 percent compared to the revenues achieved in 2011. Analyst consensus forecasts AstraZeneca’s sales to continue to fall throughout the forecast period, with sales expected to be US$24.2 billion in 2017.

Figure 81: AstraZeneca global pharmaceutical revenues 2012-2017

201222,000

29,000

28,000

27,000

26,000

24,000

23,000

25,000

2013e 2014e 2015e 2016e 2017e


Rev

enue

s U

S$ m

AstraZeneca derived 34 percent of its revenues from its cardiovascular franchise, which consists of products such as Crestor (rosuvastatin) and Atacand (candesartan). The second most important therapeutic franchise for the company is gastrointestinal, which is made up of Nexium (esomeprazole) and Losec (omeprazole).




March 2013161

www.fwreports.com



Figure 82: AstraZeneca therapy area revenues 2012-2017

Source: FirstWord Dossier, Company report

Gastrointestinal

Cardiovascular

Respiratory

Oncology

Neuroscience

Infection & Other

Aptium Oncology

4,852

9,5314,415

3,489

3,923

1,715

48

AstraZeneca appointed Pascal Soriot as CEO in August 2012 following the departure of David Brennan. Analysts note that the new CEO faces several challenges with AstraZeneca facing the loss of patent protection on several products in the next few years and also not having a




March 2013162

www.fwreports.com



particularly well regarded pipeline.61 Analysts believe that AstraZeneca could make a large acquisition at some point in the next couple of years with Shire or Forest Laboratories having been mentioned as possible targets.62 The company completed a smaller acquisition in August 2012 when it completed the purchase of Amylin with its partner Bristol-Myers Squibb. This acquisition was relatively complex with Bristol-Myers Squibb buying Amylin but then receiving US$3.2 billion from AstraZeneca to expand the two companies’ diabetes alliance to include Amylin’s GLP-1 analogue franchise63.

AstraZeneca has identified five growth platforms that it believes will drive its revenues forward these are:

nBrilinta (ticagrelor)

nDiabetes (Bydureon/exenatide, Onglyza/saxagliptin, and Forxiga/dapagliflozin)

nEmerging Markets

nRespiratory

nJapan

This report examines the five leading products that are forecast to drive growth for AstraZeneca through to 2017.

61 FirstWord Pharma. ViewPoints: What awaits the new CEO at AstraZeneca? August 28, 2012.

62 FirstWord Pharma. ViewPoints: Large-scale M&A remains on the menu for AstraZeneca, but will investors swallow dividend cut? February 18, 2013.

63 FirstWord Pharma. AstraZeneca and Bristol-Myers Squibb complete expansion of diabetes alliance through Bristol-Myers Squibb’s acquisition of Amylin Pharmaceuticals. August 9, 2012.










March 2013163

www.fwreports.com



DriversThe table below details the five leading growth drivers for AstraZeneca through to 2017.

Table 24: AstraZeneca’s top five drivers of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Brilinta/ Brilique 89 240 481 675 822 940

Onglyza 323 603 778 898 1,010 976

Bydureon 37 197 333 474 576 574

Forxiga 0 42 93 170 262 349

Fostamatinib 0 0 42 138 262 274


Together these five products are expected to add sales of US$2.7 billion to AstraZeneca’s revenues by 2017. This will see their share of AstraZeneca’s sales increase from 1.6 percent in 2012 to 12.9 percent in 2017.

BrilintaBrilinta (ticagrelor) is an oral platelet inhibitor that has been developed for the treatment of acute coronary syndromes. Brilinta was first launched in the UK in April 2011 and has subsequently been launched in a total of 64 countries including the crucial US market where it was launched in August 2011.

Brilinta was approved on the basis of results from the pivotal PLATO study that compared Brilinta




March 2013164

www.fwreports.com



to Plavix (clopidogrel) in 18 624 patients with acute coronary syndrome. In this study Brilinta demonstrated that it significantly reduced the rate of death from vascular causes, myocardial infarction, or stroke without any increase in the rate of overall major bleeding when compared to Plavix.64

Analysts have commented that the uptake of Brilinta has been disappointing in the US and blame this on the following factors:

nUS data from the PLATO trial demonstrated that Plavix was superior to Brilinta – the opposite of what happened in all other countries.

nCompetition from generic clopidogrel, which is dosed once daily versus twice daily dosing for Brilinta.

nRestricted coverage of Brilinta by both private and public health insurance plans.

nBrilinta is contraindicated with high-dose aspirin, and patients in the US are frequently prescribed high-dose aspirin as part of a dual anti-platelet therapy.65

AstraZeneca has initiated a new trial comparing the drug to Plavix in peripheral arterial disease and which is expected to compete in January 201666. Analysts believe that if this trial goes well it would support increased use of the product. In

64 Wallentin L. et al. Ticagrelor versus clopidogrel in patients with acute coronary syndromes. N Engl J Med. 2009 Sep 10;361(11):1045-57.

65 FirstWord Pharma. ViewPoints: Can AstraZeneca save Brilinta? January 20, 2013.

66 Clinicaltrials.gov. A Study Comparing Cardiovascular Effects of Ticagrelor and Clopidogrel in Patients With Peripheral Artery Disease (EUCLID).




http://clinicaltrials.gov/ct2/show/NCT01732822?term=Brilinta+clopidogrel+peripheral&rank=1

http://clinicaltrials.gov/ct2/show/NCT01732822?term=Brilinta+clopidogrel+peripheral&rank=1


March 2013165

www.fwreports.com



addition AstraZeneca initiated the 21 000 patient PEGASUS TIMI-54 trial in October 2010 that is evaluating the ability of Brilinta plus aspirin to prevent adverse cardiovascular events safely compared to aspirin alone in high risk patients one to three years after heart attack. This trial is expected to complete in February 2014 and this too could support greater use of the product – particularly if it can overcome physician concerns of using the drug in combination with aspirin67.

Analysts believe that although the various pressures above will slow Brilinta’s growth it will still see continuous sales growth during the forecast period. Analyst consensus forecasts continued sales growth for Brilinta through to 2017 by which time sales will have reached US$940 million.

Figure 83: Brilinta global sales 2012-2017

20120

1,000

900

700

500

800

600

400

200

100

300

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

67 Clinicaltrials.gov Prevention of Cardiovascular Events (eg, Death From Heart or Vascular Disease, Heart Attack, or Stroke) in Patients With Prior Heart Attack Using Ticagrelor Compared to Placebo on a Background of Aspirin (PEGASUS).







March 2013166

www.fwreports.com



OnglyzaOnglyza (saxagliptin) is a once-daily oral DPP-IV inhibitor that is indicated for the treatment of type II diabetes. Onglyza was developed by AstraZeneca and Bristol-Myers Squibb as part of their diabetes collaboration. Onglyza was originally launched in the US market in August 2009. The market for DPP-IV inhibitors contains four approved products including Merck and Co’s market leader Januvia (sitagliptin). The table below details the available DPP IV inhibitors.

Table 25: Marketed DPP-IV inhibitors

Brand Manufacturer FDA approval date EMA approval dateJanuvia Merck & Co Oct-06 Mar-07Galvus Novartis N/A Feb-08Onglyza Bristol-Myers Squibb; AstraZeneca Jul-09 Oct-09Tradjenta Boehringer Ingelheim; Eli Lilly May-11 Aug-11Nesina Takeda Jan-13 N/A

Source: FDA, EMA

The key catalyst for growth of Onglyza and the other drugs in this class is the outcome of the cardiovascular outcomes study SAVOR-TIMI 53. This trial has enrolled 16 500 patients and is examining whether adding Onglyza to background antidiabetic treatment (except incretin therapy) for diabetes patients with a history of cardiovascular disease or multiple risk factors have a lower rate of negative cardiovascular outcomes compared to placebo. This study is expected to report in July 2013 and will be the first of four large cardiovascular outcomes studies of DPP-IV inhibitors to report results.




March 2013167

www.fwreports.com



Table 26: Ongoing DPP-IV cardiovascular outcomes studies


Januvia TECOS 14,000 Dec-14

Onglyza SAVOR-TIMI 16,500 Jul-13

Tradjenta CAROLINA 6,000 Sep-18

Nesina EXAMINE 5,400 May-15


A positive result from the SAVOR-TIMI trial is expected to drive sales growth for Onglyza and could offer some differentiation to the other DPP-IVs although most analysts expect this to benefit the class as a whole.

Analyst consensus forecasts sales of US$976 million in 2017 up from US$323 million in 2012.

Figure 84: Onglyza global sales 2012-2017

20120

1,200

1,000

800

600

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m




March 2013168

www.fwreports.com



BydureonBydureon (extended release exenatide) is a once-weekly subcutaneously injected formulation of the GLP-1 analogue exenatide (which is also marketed as a twice-daily injectable form branded as Byetta). Bydureon was approved by the EMA in June 2011 and by the FDA in February 2012 and in 2012 had total sales of US$37 million. The market for GLP-1 analogues is dynamic with four approved products available:

Table 27: Approved GLP-1 analogues

Product Company Dosing

Byetta AstraZeneca/Bristol-Myers Squibb Twice daily

Bydureon AstraZeneca/Bristol-Myers Squibb Once weekly

Victoza Novo Nordisk Once daily

Lyxumia Sanofi Once daily

Source: Prescribing information

Bydureon has a clear advantage in dosing frequency over Byetta, and data from IMS Health reported by Morgan Stanley has demonstrated a clear trend of patients being switched between the two products. However, in clinical trials Victoza (liraglutide) has demonstrated greater efficacy than exenatide at lowering HBA1c (-1.12 percent vs -0.79 percent




March 2013169

www.fwreports.com



respectively).68 In 2012 Victoza had revenues of US$1.6 billion and has quickly established itself as the market leader in the GLP-1 analogue class as a result of its superior efficacy.

Analysts believe that Bydureon’s improved convenience will be enough to persuade some patients to use exenatide-based products and as a result they predict growth throughout the forecast period, to reach sales of $574 million in 2017.

Figure 85: Bydureon global sales 2012-2017

20120

700

600

500

400

300

200

100

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

68 Buse JB et al. Liraglutide once a day versus exenatide twice a day for type 2 diabetes: a 26-week randomised, parallel-group, multinational, open-label trial (LEAD-6). Lancet. 2009 Jul 4;374(9683):39-47.




March 2013170

www.fwreports.com



ForxigaForxiga (dapagliflozin) is an oral, once-daily sodium glucose co-transporter type 2 (SGLT2) inhibitor that is being developed by Bristol-Myers Squibb and AstraZeneca as a treatment for type II diabetes. Forxiga received approval from the EMA in November 2012, making it the first SGLT2 inhibitor to gain approval in any market. This approval was based on the outcome of 11 Phase III trials that between them had enrolled 5 693 patients with results showing that a greater proportion of patients treated with Forxiga achieved the goal of HBA1c below seven percent69. In one study, 420 patients were randomized to three arms:

n5mg of Forxiga plus pioglitazone

n10mg of Forxiga plus pioglitazone

nPlacebo plus pioglitazone

The reduction in HBA1c was 0.82, 0.97, and 0.42 percent respectively in the three arms70.

Although the EMA approved Forxiga it was rejected by the FDA in February 2012, with the agency saying that it wanted additional data to understand the benefit/risk profile of the product. This followed an FDA advisory committee voting against approving the product in July 2011 on the basis of higher rates of breast and bladder cancer in the trial arms treated with the drug. Analysis

69 AstraZeneca. FORXIGA (dapagliflozin) now approved in European Union for treatment of type 2 diabetes. November 14, 2012.

70 Rosenstock J, et al. Effects of Dapagliflozin, an SGLT2 Inhibitor, on HbA1c, Body Weight, and Hypoglycemia Risk in Patients With Type 2 Diabetes Inadequately Controlled on Pioglitazone Monotherapy. Diabetes Care July 2012 vol. 35 no. 7 1473-1478.



http://www.astrazeneca.com/Media/Press-releases/Article/20121114--forxiga-eu-approval-type-2-diabetes

http://www.astrazeneca.com/Media/Press-releases/Article/20121114--forxiga-eu-approval-type-2-diabetes


March 2013171

www.fwreports.com



published in the Lancet suggests that the drug is unlikely to be the cause of the cancer but that because the drug has only demonstrated itself to be as good and not significantly better than other available drugs (such as the GLP-1 analogues) it is not surprising that the FDA wants to wait71.

Forxiga is not the only SGLT2 in development, with J&J working on Invokana (canagliflozin) and Lilly and Boehringer Ingelheim co-developing empagliflozin. In January 2013 Invokana received backing from the same FDA advisory panel that rejected Forxiga, with the FDA expected to make a decision on the drug by March 31, 2013. This recommendation was made despite some concerns over cardiovascular safety, with J&J planning to complete a review of the cardiovascular risks of the medicine in 201572.

The possibility of Invokana gaining approval ahead of Forxiga in the US has the potential to place a downward pressure on Forxiga’s sales. In one Phase III trial of Invokana, which was conducted in 584 patients and compared a 100mg and 300mg dose of the drug to placebo, Invokana reduced HbA1c by -0.77 percent (100mg) and -1.03 percent (300mg)73. This would suggest that the higher dose of Invokana is superior to the higher dose Forxiga and potentially put the drug in a stronger competitive position.

71 Burki TK. FDA rejects novel diabetes drug over safety fears. The Lancet, Volume 379, Issue 9815, Page 507, February 11, 2012.

72 FirstWord Pharma. FDA advisory panel backs approval of Johnson & Johnson’s canagliflozin for diabetes. January 10, 2013.

73 Stenlof K et al. Efficacy and safety of canagliflozin monotherapy in subjects with type 2 diabetes mellitus inadequately controlled with diet and exercise. Diabetes Obes Metab. December 26, 2012.




March 2013172

www.fwreports.com



Analysts expect AstraZeneca and Bristol-Myers Squibb to resubmit an NDA for Forxiga in the US in mid-2013 with further data outlining the risk/benefit profile of the product with approval then expected in 2014.

In the EU where the product has already received approval from the EMA Forxiga is struggling to gain reimbursement in all markets with the UK’s NICE not giving the product its backing in February 201374. This inability to gain reimbursement is expected to significantly hold the product’s sales back.

Analyst consensus forecasts sales of US$349 million in 2017 for Forxiga.

Figure 86: Forxiga global sales 2012-2017

20120

400

350

300

250

200

150

100

50

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

74 Bloomberg. AstraZeneca, Bristol-Myers’s Forxiga Not Backed by NICE. February 1, 2013.



http://www.bloomberg.com/news/2013-02-01/astrazeneca-bristol-myers-s-forxiga-not-backed-by-nice.html


March 2013173

www.fwreports.com



FostamatinibFostamatinib is an orally available Syk kinase inhibitor that is being developed by AstraZeneca for the treatment of rheumatoid arthritis. It is currently in Phase III trials with results from the OSKIRA-4 Phase IIb trial having been published in December 2012. In this trial, although fostamatinib did demonstrate that it was superior to placebo it failed to demonstrate that it was as effective as Humira75. Analysts believe that these results have the potential to make the product uncompetitive in a market with several new products including Pfizer’s Xeljanz (tofacitinib).

The results of pivotal Phase III trials of the drug are expected in 2013 and these will shed more light on the likely approvability of the product. Analysts have concerns that the design of the Phase III clinical trial may not meet the hurdles put in place by new regulatory guidance in the EU, which could potentially delay or even prevent approval.

As a result of these poor clinical trial results and concerns over trial design analyst consensus forecasts for fostamatinib are for sales of US$274 million in 2017.

75 AstraZeneca. AstraZeneca announces top-line results of OSKIRA-4 Phase IIb study of fostamatinib as a monotherapy for rheumatoid arthritis. December 13, 2012.



http://www.astrazeneca.com/Media/Press-releases/Article/20121213-AstraZeneca-announces-results-OSKIRA-4-study-fostamatinib

http://www.astrazeneca.com/Media/Press-releases/Article/20121213-AstraZeneca-announces-results-OSKIRA-4-study-fostamatinib


March 2013174

www.fwreports.com



Figure 87: Fostamatinib global sales 2012-2017

20120

300

250

200

150

100

50

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

FirstWord Dossier’s research is guided by the needs of its clients. Our aim is to uncover and convey insights and new thinking on issues that are at the top of pharma agendas.

Recent projects have examined KOL relations, market access, pharma and mobile technologies, social media, MSL compliance, payers, sales force innovation, e-detailing, closed-loop marketing, marketing excellence, and others (for a full list, go to www.fwreports.com).

To ensure that future research continues to address subjects that are of most importance to our customers, we would welcome hearing your suggestions for topics that in your view demand FirstWord Dossier’s attention over the coming months.

If your idea is selected as a topic for one of our future reports, we will be pleased to provide you with a complimentary copy of the report on publication.

Please click here to send your ideas to the FirstWord Dossier Research Team. We look forward to hearing from you.

CALL FOR TOPICS




mailto:feedback%40fwreports.com?subject=FirstWord%20Dossier%20Customer%20Topic%20Suggestions%20%28400200156-310%29


March 2013175

www.fwreports.com



ResistorsThe following table details the leading five resistors to AstraZeneca’s sales growth over the 2012-2017 period.

Table 28: AstraZeneca’s top five resistors of growth, 2012-2017 (US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Crestor 6,253 5,974 5,957 5,959 4,775 3,253

Seroquel 2,803 1,767 1,678 1,637 1,536 1,207

Nexium 3,944 3,215 2,461 2,470 2,329 2,361

Atacand 1,009 837 755 683 630 556

Arimidex 543 424 371 332 304 246


When combined together these five products are forecast to have their sales fall by US$6.9 billion by 2017. Cumulatively these five resistors to the growth of AstraZeneca will continue to contribute 31.5 percent of pharmaceutical revenues in 2017 and although this is down from 52 percent in 2017 they will still generate significantly more revenue than the five drivers listed in this report.




March 2013176

www.fwreports.com



CrestorCrestor (rosuvastatin) is a statin indicated for the treatment of patients with dyslipidemia. In 2012 it had sales of US$6.3 billion and is forecast to see almost continuous sales declines through to 2017 when the product’s sales will have fallen to US$3.3 billion. Analysts note that with the introduction of generic simvastatin Crestor’s sales are already being eroded even though it is patent protected until 2016. With the loss of patent protection in 2016 generic rosuvastatin will see this erosion accelerate.

Figure 88: Crestor global sales 2012-2017

20120

7,000

5,000

6,000

4,000

3,000

2,100

1,000

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013177

www.fwreports.com



Seroquel franchiseSeroquel (quetiapine) is an antipsychotic indicated for the treatment of bipolar disorder, major depressive disorder, manic episodes and schizophrenia. There are two formulations of Seroquel: Seroquel immediate release and Seroquel XR (extended release). The immediate release formulation lost patent protection in 2012 in the EU, Japan and the US. Seroquel XR’s formulation is protected until 2017.

In 2012 the Seroquel franchise had sales of US$2.8 billion, analyst consensus forecasts sales of this franchise to fall to US$1.2 billion in 2017.

Figure 89: Seroquel franchise global sales 2012-2017

20120

3,000

2,000

2,500

1,500

1,000

500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013178

www.fwreports.com



NexiumNexium (esomeprazole) is a proton pump inhibitor that is marketed for the treatment of gastro-oesophageal reflux disease. Nexium is expected to face generic competition in the EU and US from 2014 onwards, with patent protection in Japan believed to extend to 2020. Generics are already available in some markets including Germany and the UK where generics have been available since 2010 and 2011 respectively. The impact of generic erosion is strong initially between 2012 and 2014, but sales then level out, protected by patient loyalty to a brand they trust.

Figure 90: Nexium global sales 2012-2017

20120

4,500

4,000

3,000

2,000

2,500

3,500

1,500

1,000

500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013179

www.fwreports.com



AtacandAtacand (candesartan cilexetil) is an orally available angiotensin II type 1 antagonist that was originally developed by Takeda. In 2012 Atacand had sales of US$1 billion but it also lost patent protection in the US and Europe with several manufacturers launching generics in those markets.

Analyst consensus forecasts sales of US$556 million in 2017 with sales decreasing throughout the forecast period as a result of generic erosion.

Figure 91: Atacand global sales 2012-2017

20120

1,200

1,000

800

600

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013180

www.fwreports.com



ArimidexArimidex (anastrazole) is an aromatase inhibitor that was developed by AstraZeneca for the treatment of breast cancer and originally launched in 1995. Arimidex lost patent protection in 2010. As a result of generic competition the sales of Arimidex have been falling since 2010 when they were US$1.5 billion. In 2012 sales of Arimidex were US$543 million and analyst consensus forecasts sales of US$246 million in 2017.

Figure 92: Arimidex global sales 2012-2017

20120

600

500

400

300

200

100

2013e 2014e 2015e 2016e 2017e


Sal

es U

S$

m




March 2013181

www.fwreports.com



AbbVieAbbVie was created from the separation of Abbott Laboratories into two separate companies; AbbVie, which took the research-based pharmaceuticals business, and Abbott, which retained the name and took the medical products and diagnostics business.

Abbott announced its plans to separate into two companies in October 2011, in 2011 Abbott’s proprietary pharmaceuticals business which went on to form AbbVie contributed 44 percent of the company’s revenues. The split was reportedly motivated by an understanding within Abbott that as a single entity it was undervalued by investors.76

This separation was effective from January 1, 2013, with AbbVie being listed on the New York Stock Exchange on January 2, 2013.

In 2012 AbbVie’s pharmaceutical products generated revenues of US$18.7 billion, 49.5 percent of which were generated by just one product – Humira (adalimumab). This puts AbbVie in the unenviable position of being the pharma company with the greatest reliance on a single product.77 AbbVie’s next best-selling product is its Tricor/Trilipix (fenofibrate/(choline fenofibrate)) franchise, which had sales of US$1.1 billion in 2012, which represented 5.9 percent of the company’s sales.

76 The Financial Times. Abbott to split into two companies. October 19, 2011.

77 FirstWord Pharma. FirstWord Lists – Big Pharma’s Blockbuster dependency rates. January 28, 2013.



http://www.ft.com/cms/s/0/38450c0e-fa59-11e0-b70d-00144feab49a.html#axzz2LvyBgJSI




March 2013182

www.fwreports.com



The figure below details the analyst consensus sales forecast for AbbVie from 2012 to 2017. Sales are forecast to grow from US$18.7 billion in 2012 to US$20.7 billion in 2017.

Figure 93: AbbVie global pharmaceutical revenues 2012-2017

201217,000

21,000

20,500

19,500

20,000

19,000

18,500

18,000

17,500

2013e 2014e 2015e 2016e 2017e


Rev

enu

es U

S$

m




March 2013183

www.fwreports.com



DriversThe table below details the analyst consensus forecasts for the five largest growth drivers that are expected to impact on the 2012-2017 forecast for AbbVie.

Table 29: AbbVie’s top five drivers of growth, 2012-2017 (US$ m)

Product 2012 2013e 2014e 2015e 2016e 2017e

HCV programme/franchise 0 0 0 358 783 1,563

Humira 9,266 9,981 10,638 10,980 11,219 10,126

Duodopa 0 70 141 219 276 319

Daclizumab + Elotuzumab 0 0 0 32 100 168

Elagolix 0 0 0 0 98 115


In 2012 Humira was responsible for 49.5 percent of AbbVie’s pharmaceutical revenues. The launch of new products and the continued sales growth of Humira throughout the majority of the forecast period will see the share of AbbVie’s sales contributed by the products identified as key drivers increase to 59.4 percent in 2017.




March 2013184

www.fwreports.com



Hepatitis C virus franchiseAbbVie is working on three separate molecules for the treatment of hepatitis C virus infection. These are:

Table 30: AbbVie’s hepatitis C pipeline

Molecule Mechanism Estimated approval date

ABT-333 NS5B non-nucleoside inhibitor 2015

ABT-267 NS5A replication complex inhibitor 2014

ABT-450/r NS3/4A protease inhibitor 2015

Source: KOL Insight: Hepatitis C. The race for the first interferon-free regimen. FirstWord Therapy Trends. February 2013

The current standard of care for hepatitis C virus infection is a combination therapy of pegylated interferon alpha and ribavirin with newer protease inhibitors (such as Merck and Co’s Victrelis) typically only used in patients with the most difficult to treat genotype 1 hepatitis C infections. Treatment with interferons does present some problems:

nInterferons are injectable and patients prefer oral dosing

nInterferons have some common adverse side effects, including flu like symptoms and skin reactions.

Both of these issues can lead to patients discontinuing therapy and this is identified as being one of the major unmet needs within the hepatitis C market by key opinion leaders




March 2013185

www.fwreports.com



interviewed for FirstWord’s Therapy Trends report on the hepatitis C virus market.78

AbbVie is developing an all-oral therapy for hepatitis C virus infection and has conducted clinical trials that combine three of its developmental molecules (ABT-450/r, ABT-267, and ABT-333) together in one pill to be taken in combination with ribavirin. In November 2012 results from the Phase IIb AVIATOR study were published by Abbott. In this trial 12 weeks of treatment with the triple combination plus ribavirin led to sustained viral response (SVR) in 97.5 percent of treatment naive genotype 1 patients and in 93.3 percent of genotype 1 null responders. In genotype 1a patients SVR was achieved in 96 percent of treatment naive patients and 89 percent of null responder patients and in genotype 1b patients SVR was achieved in 100 percent of treatment naive and null responder patients. The study also demonstrated that the drug combination is well tolerated.79

AbbVie is not the only company working on an all oral, interferon-free therapeutic regimen for hepatitis C virus infection. Gilead is working on the NS5B nucleoside sofosbuvir in combination with the NS5A replication complex inhibitor GS-5885. Bristol-Myers Squibb is working on a combination of the NS5A replication complex

78 KOL Insight: Hepatitis C. The race for the first interferon-free regimen. FirstWord Therapy Trends. February 2013.

79 Abbott Presents Promising Phase 2b Interferon-free Hepatitis C Results at 2012 Liver Meeting. November 10, 2012.



http://www.abbott.com/news-media/press-releases/abbott-presents-promising-phase-2b-interferonfree-hepatitis-c-results-at-2012-liver-meeting.htm

http://www.abbott.com/news-media/press-releases/abbott-presents-promising-phase-2b-interferonfree-hepatitis-c-results-at-2012-liver-meeting.htm


March 2013186

www.fwreports.com



inhibitor daclastavir, the NS3/NS4A protease inhibitor asunaprevir and the NS5B polymerase inhibitor BMS-791325. Analysts have commented that all three regimens are highly efficacious with SVRs in excess of 90 percent with good tolerability. Analysts do, however, highlight the likely pill burdens of the three regimens as being a potential differentiator in Gilead’s favour. Gilead’s regimen is expected to consist of one co-formulated pill dosed once daily in combination with ribavirin dosed twice daily. By contrast AbbVie’s combination therapy is expected to require four pills daily plus two ribavirin tablets.

Analyst consensus is for AbbVie’s new, all oral hepatitis C product combination to be approved in 2015 and to quickly accrue sales to reach total sales of US$1.6 billion in 2017.

Figure 94: AbbVie HCV franchise global sales 2012-2017

20120

1,800

1,600

1,200

1,400

1,000

800

600

200

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013187

www.fwreports.com



HumiraHumira (adalimumab) is AbbVie’s dominant product, which in 2012 accounted for 49.5 percent of the company’s revenues with sales of US$9.3 billion. Humira is a monoclonal antibody that acts as a tumour necrosis factor (TNF) alpha inhibitor. It has several approved indications including rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, plaque and Crohn’s disease in several countries including the key markets of the EU, US and Japan (where it is marketed by Eisai which also has rights to the product in South Korea).

Although Humira sales are forecast to continue to grow through to 2016 the product faces increasing competition in key markets from newer products such as Pfizer’s Xeljanz (tofacitinib) and Eli Lilly’s baricitinib. The major advantage presented by Xeljanz is that it is an oral therapy and this will be favoured by patients; however, it does not have as good an efficacy profile as Humira. Analysts believe that these products will only have a relatively small impact over the forecast period, hence the forecast of continued sales growth until 2016.

It is in 2017 that Humira is expected to face its biggest setback. Analysts expect biosimilars of Humira to enter the EU and US markets in 2017-18. These products will be launched at a discount and this should see them erode Humira’s sales. Analysts highlight a number of factors that will impact the degree of erosion that Humira is likely to experience:




March 2013188

www.fwreports.com



nHow well will physicians and patients accept biosimilars?

nHow well will the biosimilars compare in efficacy and safety?

nHow many competitor biosimilars will be launched, and how great will the price discounts be as a result?

nWill biosimilars be considered as interchangeable?

nWill a biosimilar have to be tested in every single indication in which Humira is approved or will data be extrapolated to other indications?

The FDA is still working out exactly what shape its biosimilar pathway will take, although analysts highlight an article in the New England Journal of Medicine from August 4, 2011 as being evidence that the FDA is leading towards granting interchangeability on the basis of in vitro analytical characterisation rather than clinical trials.80 In the EU the EMA is leaving the question of interchangeability for physicians and patients to decide upon. 81

AbbVie has stated that there are at least three companies developing biosimilar versions of adalimumab currently, and analysts believe that the one closest to market is being developed by Boehringer Ingelheim. This product has completed

80 Kozolowski, S. et al. Developing the Nation’s Biosimilars Program. NEJM 365;5, 385-388, 8/4/2011.

81 Questions and answers on biosimilar medicines. September 27, 2012.



http://www.ema.europa.eu/docs/en_GB/document_library/Medicine_QA/2009/12/WC500020062.pdf


March 2013189

www.fwreports.com



Phase I trials in New Zealand in 193 patients.82 Amgen is also believed to be developing a biosimilar adalimumab.83

The impact of biosimilars is uncertain, and analysts suggest that the launch of biosimilar Remicade (infliximab) in the EU will prove to be a useful analogue for the approval of biosimilar Humira.

Sales of Humira are forecast by analyst consensus to continue to grow through to 2016 when they will reach a peak of US$11.2 billion. The first biosimilars are expected to gain FDA approval in 2017 and these will begin to erode the product’s sales. Sales of the product in 2017 are forecast to be US$10.1 billion.

Figure 95: Humira global sales 2012-2017

20128,000

11,500

11,000

10,000

10,500

9,500

9,000

8,500

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

82 Pharmacokinetics and Safety Study of BI 695501 in Healthy Subjects. Clinicaltrials.gov.

83 ViewPoints: Big Pharma’s march on the biosimilars market gathers pace. FirstWord Pharma. February 10, 2013.







March 2013190

www.fwreports.com



DuodopaDuodopa is a levodopa/carbidopa intestinal gel that is marketed in the EU for the treatment of advanced Parkinson’s disease. The gel is infused directly into the small intestine through a surgically implanted tube. The results of a pivotal Phase III trial were announced by Abbott in April 2012. This study assessed the impact of Duodopa on patients’ “off” time – this is defined as the amount of time where the patient is suffering from poor mobility, slowness and stiffness. The drug was compared to levodopa/carbidopa immediate release tablets.

Results from the study showed that patients “off” time at 12 weeks decreased by four hours per day in patients treated with Duodopa, which was 1.91 fewer hours per day of “off” time compared to those treated with levodopa/carbidopa immediate release tablets.

One of the side effects of levodopa treatment is dyskinesia. This trial also assessed the level of dyskinesia experienced by patients treated in both arms. The study refers to “on” time which is periods of good motor symptom control. Patients treated with Duodopa saw their mean “on” time improve by 4.1 hours per day, which was an average of 1.86 more hours of “on” time per day compared to levodopa/carbidopa immediate release tablets.84

84 Abbott’s investigational treatment for advanced Parkinson’s disease demonstrates positive results in Phase 3 clinical trial. April 17, 2012.



http://abbvie.mediaroom.com/2012-4-17-Abbott-s-Investigational-Treatment-for-Advanced-Parkinson-s-Disease-Demonstrates-Positive-Results-in-Phase-3-Clinical-Trial

http://abbvie.mediaroom.com/2012-4-17-Abbott-s-Investigational-Treatment-for-Advanced-Parkinson-s-Disease-Demonstrates-Positive-Results-in-Phase-3-Clinical-Trial


March 2013191

www.fwreports.com



Abbott filed an NDA seeking approval for Duodopa in the US market (which is the only market where AbbVie has commercialisation rights to the product) in 2012, and analysts anticipate approval in the second half of 2013. Although the product does have clear efficacy benefits over levodopa/carbidopa tablets analysts note that its invasive nature will hold back uptake of the product. Analyst consensus is for sales to grow to US$319 million in 2017.

Figure 96: Duodopa global sales 2012-2017

20120

300

250

200

150

100

50

2013e 2014e 2015e 2016e


Sale

s U

S$ m




March 2013192

www.fwreports.com



DaclizumabDaclizumab is a monoclonal antibody that activates CD56 natural killer cells to target over active immune cells that are implicated in the development of multiple sclerosis. AbbVie is developing daclizumab in collaboration with Biogen Idec. Daclizumab is formulated as a subcutaneous injection administered once every four weeks. In the Phase IIb SELECT trial in patients with relapsing remitting multiple sclerosis daclizumab was tested at two separate doses, 150mg and 300mg. In patients treated with the 150mg dose the annualized relapse rate was reduced by 54 percent, while in the 300mg dose arm the relapse rate was reduced by 50 percent.85

Analysts have highlighted some safety concerns that relate to daclizumab with two percent of patients developing serious infections, one percent developing serious cutaneous events and four percent having elevated liver enzymes during the SELECT trial. In the SELECT trial one patient died from autoimmune hepatitis and two other patients developed autoimmune conditions of vital organs.86

AbbVie and Biogen Idec have taken daclizumab forwards into Phase III with the DECIDE trial being pivotal to the product’s approval chances. This trial is comparing daclizumab 150mg to

85 FirstWord Pharma, Biogen Idec and Abbott Present Positive Data for Daclizumab HYP from Select Phase 2b Trial at ECTRIMS/ACTRIMS. October 2011.

86 Giovannoni G, et al. Primary results of the SELECTION trial of daclizumab HYP in relapsing remitting multiple sclerosis.





http://www.slideshare.net/gavingiovannoni/daclizumab-selection-slides-ectrims-2012

http://www.slideshare.net/gavingiovannoni/daclizumab-selection-slides-ectrims-2012


March 2013193

www.fwreports.com



Avonex (interferon beta-1a) in 1 800 patients and is due to complete in March 2014. The two companies are also investigating a prefilled syringe form of daclizumab in the OBSERVE study that is being conducted in 150 patients.

Analysts expect approval to be granted for daclizumab in the third quarter of 2015, with sales forecast to reach US$168 million in 2017.

Figure 97: Daclizumab global sales 2012-2017

20120

180

140

120

160

80

100

60

40

20

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013194

www.fwreports.com



ElagolixElagolix is a gonadotrophin-releasing hormone (GnRH) antagonist that is being developed for the treatment of endometriosis. The initial Phase I and II development of elagolix was conducted by Neurocrine. In the first Phase IIb study (Study 603), 252 patients were enrolled and treated with elagolix over a six-month period with two outcomes measured. The first of these was the impact of elagolix on bone mineral density as a reduction in this is considered to be the most likely negative outcome of gonadotrophin-releasing hormone inhibition. Results from the trial demonstrated that after six and 12 months post treatment there was no significant reduction in bone mineral density as measured by DXA scan. The second outcome that was assessed was symptoms measured using the Composite Pelvic Signs and Symptoms Score (CPSSS) system. Elagolix demonstrated a statistical and clinically meaningful reduction in symptoms as measured by CPSSS with an 86 percent responder rate. 87

At the end of Study 603 the FDA requested additional data from new trials that would assess the endpoints for dysmenorrhoea and non-menstrual pelvic pain on a daily basis rather than on the CPSSS monthly recall scale. Neurocrine subsequently conducted two more Phase IIb trials to evaluate the 150 mg and the 300 mg doses of elagolix. In Lilac PETAL (Study 702), 155 patients were randomised to one of three arms, elagolix 150mg once daily, elagolix 250mg once daily, or placebo. This study demonstrated the drug had

87 Elagolix - Gonadotropin-Releasing Hormone (GnRH) Antagonist. Neurocrine website.



http://www.neurocrine.com/index.cfm?navId=23


March 2013195

www.fwreports.com



only a small impact on bone mineral density, but in efficacy terms analysts believe that the impacts on the FDA proposed non-menstrual pain scale were unimpressive in both trials.

Following these trials Neurocrine had a meeting with the FDA where they discussed the non-menstrual pain scale. Neurocrine subsequently modified the wording of the non-menstrual pain and dysmenorrhoea daily scale and commenced a new trial, the Daisy PETAL Study. This trial enrolled 137 patients into two treatment arms, elagolix 150mg once daily or placebo with results reported in May 2010. The results of this study showed that treatment with elagolix led to a significant reduction in non-menstrual pelvic pain when compared to placebo. There was also a significant reduction in dysmenorrhoea and dyspareunia in patients treated with elagolix compared to placebo. 88

Following these positive results for elagolix, Neurocrine announced a worldwide agreement with Abbott (now AbbVie) to develop and commercialise elagolix and all next generation GnRH antagonists. This deal gave Neurocrine an upfront payment of US$75 million with further milestone payments of up to US$500 million89. A single Phase III trial was initiated in the second quarter of 2012 in 875 patients at approximately 160 sites in the US, Canada and Puerto Rico, and analysts expect an NDA to be filed in 201690.

88 Neurocrine Biosciences Announces Successful Completion of Daisy PETAL Study. November 22, 2010.

89 Fierce Biotech. On a roll, Neurocrine nails $575m licensing deal with Abbott. June 16, 2010.

90 A Clinical Study to Evaluate the Safety and Efficacy of Elagolix in Subjects With Moderate to Severe Endometriosis-Associated Pain. Clinicaltrials.gov.



http://www.prnewswire.com/news-releases/neurocrine-biosciences-announces-successful-completion-of-daisy-petal-study-109862084.html

http://www.prnewswire.com/news-releases/neurocrine-biosciences-announces-successful-completion-of-daisy-petal-study-109862084.html

http://www.fiercebiotech.com/story/roll-neurocrine-nails-575m-licensing-deal-abbott/2010-06-16


March 2013196

www.fwreports.com



AbbVie is not the only company developing novel treatments for endometriosis:

nNovartis is developing BGS-649, which is an aromatase inhibitor currently in Phase II trials.

nRepros Pharmaceuticals is developing Proellex, a progesterone antagonist with a dose-finding study completed in March 201291.

Analysts note that the standard of care for endometriosis patients is combination oral contraceptives. They believe that should elagolix get through Phase III trials successfully it will be used as a second-line treatment for patients who are refractory to oral contraceptives. With analysts anticipating marketing approval and launch in 2016, analyst consensus forecast is for 2017 sales of US$115 million.

Figure 98: Elagolix global sales 2012-2017

20120

140

120

80

100

60

40

20

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

91 Determination of the Lowest, Safe and Effective Dose of the Anti-Progestin, Proellex, in Healthy Women. Clinicaltrials.gov.



http://clinicaltrials.gov/ct2/show/NCT01187043

http://clinicaltrials.gov/ct2/show/NCT01187043


March 2013197

www.fwreports.com



ResistorsThe table below details the five leading resistors to the sales growth of AbbVie over the 2012-2017 period.

Table 31: AbbVie’s top five resistors of growth, 2012-2017 (US$ m)

Product 2012 2013e 2014e 2015e 2016e 2017e

Niaspan 911 480 68 29 22 22

Tricor & Trilipix franchise 1,099 560 371 345 321 308

Kaletra 1,013 942 870 823 700 539

Norvir 402 422 390 149 102 84

Lupron 800 792 790 786 771 717


The aggregate loss of sales from these five products is US$2.6 billion. This will see their share of AbbVie’s sales fall from 22.6 percent in 2012 to 8.1 percent in 2017.

NiaspanNiaspan (extended release niacin) is indicated for the treatment of dyslipidaemia. In the AIM-HIGH trial in 3 414 patients with a history of cardiovascular disease that was conducted by the National Institutes of Health, Niaspan given in combination with statin therapy was shown to offer no additional benefit. In addition to this lack of benefit there was also a small increase in the rates of ischemic stroke in the patients treated with Niacin.92 The

92 The AIM-HIGH investigators. Niacin in patients with low HDL cholesterol levels receiving intensive statin therapy. N Engl J Med 2011.




March 2013198

www.fwreports.com



outcome of Merck and Co’s HPS2-THRIVE study of Tredaptive (controlled release niacin/laropiprant) has also put downward pressure on the sales of niacin-containing products with Tredaptive failing to reach its endpoint and subsequently being removed from sale by Merck and Co.93 Generics of Niaspan will reach the market in September 2013 following AbbVie reaching a settlement with Teva, with generic penetration expected to be rapid. Analyst consensus forecasts sales of US$22 million for Niaspan in 2017.

Figure 99: Niaspan global sales 2012-2017

20120

1,000

900

500

700

800

400

600

300

200

100

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m

93 FirstWord Pharma. Merck & Co. to suspend global sales of Tredaptive. January 11, 2013.





March 2013199

www.fwreports.com



Tricor and Trilipix franchiseTricor (fenofibrate) and Trilipix (choline fenofibrate) are both indicated for the treatment of hyperlipidaemia. Generics of Tricor have been available since 2006 with both Impax and Mylan launching generics of the capsule form of the drug, and Impax, Mylan and Ranbaxy launching generics of the tablet formulation. The first generic of Trilipix is expected to reach the US market in either July 2013 or January 2014 depending on the settlement that AbbVie reaches with Impax, which was first to file in the US market. Analysts expect sales to be rapidly eroded by the launch of Impax’s generic in 2013 or 2014, with sales forecast to decline to US$308 million in 2017.

Figure 100: Tricor/Trilipix franchise global sales 2012-2017

20120

1,200

1,000

800

400

600

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013200

www.fwreports.com



Kaletra/NorvirKaletra (lopinavir/ritonavir) and Norvir (ritonavir) are AbbVie’s two HIV treatments and in 2012 they had combined sales of US$1.4 billion globally. Ritonavir is a protease inhibitor as is lopinavir. Kaletra is not generally considered to be the best protease inhibitor drug, with data from the CASTLE study demonstrating that although it has similar efficacy to Reyataz (atazanavir sulphate) plus Norvir it was less tolerable94. The HIV market is also becoming more competitive with the launch of Gilead’s Stribild (elvitegravir) in September 2012 and GlaxoSmithKline’s dolutegravir potentially entering the market in 2014. Kaletra loses patent protection in 2016 worldwide, with this expiry preceded by Norvir in 2015 in the US and 2014 in other key markets.

As a result of increased competition and the loss of patent protection, analyst consensus is for sales to decline throughout the forecast period for both Norvir and Kaletra. Norvir sales are forecast to be US$84 million in 2017 and Kaletra’s sales are forecast to have declined to US$539 million.

94 CASTLE Study Showed Similar Efficacy Between Once-Daily REYATAZ (atazanavir sulfate)/ritonavir and Twice-Daily lopinavir/ritonavir at 48 Weeks in Previously Untreated HIV-Infected Adult Patients. February 6, 2008.



http://news.bms.com/press-release/financial-news/castle-study-showed-similar-efficacy-between-once-daily-reyataz-atazana




March 2013201

www.fwreports.com



Figure 101: Norvir and Kaletra global sales 2012-2017

20120

1,200

800

1,000

600

200

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m






March 2013202

www.fwreports.com



LupronLupron (leuprolide) is approved for the treatment of endometriosis, precocious puberty, and the preoperative treatment of anaemia caused by uterine fibroids. However, its primary use is in the palliative treatment of advanced prostate cancer. Lupron is available both as an injectable formulation and as a depot. The depot formulation approved in the US in 2011 and has the advantage of being dosed once monthly. Analysts say that although the composition of matter patent for Lupron has already expired AbbVie has been able to maintain its sales by offering physicians support services.

Analysts believe that over the forecast period AbbVie will have to lower the price of its product to effectively compete with generic competition and that this will slowly drive down Lupron’s sales. In 2017 sales are forecast to be US$717 million, down from US$800 million in 2012.

Figure 102: Lupron global sales 2012-2017

2012500

850

800

750

650

700

600

550

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013203

www.fwreports.com



BayerBayer based in Leverkusen, Germany had pharmaceutical sales of $13.9 billion in 2012, and is predicted to see sales growth through to 2017 when analyst consensus forecasts Bayer pharmaceutical revenues will be $17.3 billion.

Figure 103: Bayer pharmaceutical sales 2012-2017

20120

20,000

16,000

12,000

6,000

8,000

18,000

14,000

10,000

4,000

2,000

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

Bayer has three core business units:

n Bayer HealthCare

n Bayer CropScience

n Bayer MaterialScience

Bayer HealthCare is further divided into four operating divisions:

n Animal Health

n Consumer care




March 2013204

www.fwreports.com



n Medical care

n Pharmaceuticals

It is the sales from this final operating division that are considered in this report.

DriversThe following table details the five largest drivers of Bayer’s sales growth over the 2012-2017 period.

Table 32: Bayer’s top five drivers of growth, 2012-2017 (Sales US$ m)

Drug 2012 2013e 2014e 2015e 2016e 2017e

Xarelto 41 606 921 1,150 1,445 1,681

Eylea 18 355 603 840 1,059 1,153

Alpharadin 0 59 170 320 494 610

Riociguat 0 84 181 282 430 617

Kogenate 1,520 1,543 1,573 1,604 1,640 1,672


Cumulatively these products are forecast to add US$4.1 billion to Bayer’s sales over the forecast period. Together these five products will see their share of Bayer’s pharmaceutical sales increase from 11.4 percent in 2012 to 33.1 percent in 2017.




March 2013205

www.fwreports.com



XareltoXarelto (rivaroxaban) is an oral, once-daily anticoagulant that is indicated for the treatment of deep vein thrombosis (DVT) and venous thromboembolism. Xarelto received its first approvals in the EU and Canada in September 2008; it was subsequently approved in the US in July 2011 for the prophylaxis of DVT that may lead to pulmonary embolism in adults undergoing hip and knee replacement surgery. In November of the same year the drug gained an additional indication approval from the FDA for stroke prophylaxis in patients with non-valvular atrial fibrillation. Finally in November 2012 it received a further indication from the FDA for the long-term use of the drug to prevent their reoccurrence95.

The anticoagulant market is becoming increasingly crowded following the introduction of Pfizer’s Eliquis (see Pfizer profile) and Boehringer Ingelheim’s Pradaxa. Analysts believe that Eliquis has the best clinical profile of the three new anticoagulants and as a result it will be strong competition to Xarelto and will slow sales growth.

Eliquis is being explored in Xarelto’s newest indication (VTE treatment/prevention) as is Daiichi Sankyo’s edoxaban, which is currently in Phase III (HOKUSAI) with results expected in 2013. Analysts suggest that these two products could receive approval in this indication as early as 2014 and would pose a competitive threat to the continued sales growth of Xarelto.

95 FDA expands use of Xarelto to treat, reduce recurrence of blood clots, November 2, 2012.






March 2013206

www.fwreports.com



Bayer and J&J share the commercial rights to Xarelto with J&J owning the rights to the US market and Bayer retaining ownership in all other markets (other than Spain where it has a co promotion agreement with Almirall).

In 2012 Bayer derived sales of $41 million from Xarelto. Analyst consensus forecasts sales to increase to $1.7 billion in 2017.

Figure 104: Xarelto global sales 2012-2017

20120

1,800

1,600

1,200

600

800

1,400

1,000

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

EyleaEylea (aflibercept) is a recombinant fusion protein that acts to inhibit angiogenesis. Aflibercept has been developed by Regeneron Pharmaceuticals and Sanofi for the treatment of metastatic colorectal cancer for which it is marketed as Zaltrap. Regeneron and Bayer are developing aflibercept as a treatment for wet age-related macular degeneration (wet-AMD), which is caused by the formation and leakage of additional blood vessels in the eye.




March 2013207

www.fwreports.com



Eylea has already received approval in the US for the treatment of wet-AMD where Regeneron retains 100 percent of the commercial rights to the product. Bayer shares all other commercial rights on a 50:50 basis with Regeneron. Eylea received a recommendation for approval from the EU’s CHMP in November 2012 for the treatment of wet-AMD. The launch of Eylea in markets across the EU and also in Japan is expected to be a key driver of sales growth for Bayer. Eylea made US$848 million for Regeneron in 2012 and this is indicative of the opportunity that the product presents in other markets.

In the US market Eylea has two approved indications:

n Wet-AMD, approved in November 2011

n Macular oedema following central retinal vein occlusion (CRVO), approved September 2012.

Eylea’s approval in wet-AMD was based on the results of two pivotal trials: VIEW 1 and VIEW 2. In these trials patients were randomized to receive either Eylea (2mg every eight weeks) or Lucentis (ranibizumab) (0.5mg every four weeks). Results from the studies showed that both drugs achieved identical results with 94-95 percent of patients in both treatment arms meeting the primary endpoint of maintenance of vision.96

96 Regeneron. Two Year Results of Phase 3 Studies with EYLEA™ (aflibercept) Injection in wet AMD Show Sustained Improvement in Visual Acuity. December 5, 2011.



http://investor.regeneron.com/releasedetail.cfm%3Freleaseid%3D629800



March 2013208

www.fwreports.com



Eylea’s approval for the treatment of CRVO was based on the results of two Phase III trials, COPERNICUS and GALILEO. These studies compared Eylea to placebo with the Eylea group demonstrating superior results. Final results have yet to be announced or evaluated by the FDA.97

Eylea’s main competitor is Lucentis, which - as described above - is only as effective as Eylea whilst having to be dosed twice as frequently. In the US market Eylea was launched at a small price discount of US$1,850 per injection compared to US$1,950 for Lucentis, and when the reduced frequency of injections and other factors are taken into account, Eylea is a much cheaper product and is expected by analysts to take approximately 50 percent of the “premium” wet-AMD market. Off-label use of Avastin (bevacizumab) offers a much cheaper alternative to both Lucentis and Eylea, although in Europe this is only used in approximately 65 percent of patients.98

Eylea is under investigation for the treatment of diabetic macular oedema and is currently in Phase III trials for this indication with results due in November 2014. Further regulatory approvals in the EU, Japan and other markets in CRVO and diabetic macular oedema would give greater impetus to sales growth.

97 Regeneron. Regeneron Announces FDA Approval of EYLEA® (aflibercept) Injection For Macular Edema Following Central Retinal Vein Occlusion. September 21, 2012.

98 FirstWord Pharma. ViewPoints: Can Bayer live up to US-sales benchmark for EU Eylea launch? November 28, 2012.





http://www.firstwordpharma.com/node/1036678%3Ftsid%3D33

http://www.firstwordpharma.com/node/1036678%3Ftsid%3D33


March 2013209

www.fwreports.com



Allergan is working on an anti-VEGF DARPin AGN150998 for the treatment of wet-AMD. This product is being developed to be dosed once every three to four months, which would give it an advantage over both Lucentis and Eylea. AGN150998 is expected to enter Phase III at the end of 2013 and could offer some additional competition to Eylea towards the end of the forecast period.

In 2012 Bayer derived revenues of $18 million from Eylea, analyst consensus forecasts sales of $1.2 billion for the product in 2017.

Figure 105: Eylea global sales 2012-2017

20120

1,400

1,200

600

800

1,000

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013210

www.fwreports.com



AlpharadinAlpharadin (radium-223 chloride) is a radiopharmaceutical that is being developed by Bayer and Algeta. Alpharadin specifically targets bone metastases by mimicking the behaviour of calcium and being taken up by areas of increased bone metabolism. In December 2012 Bayer submitted and NDA to the FDA and an MAA with the EMA for the treatment of castration-resistant prostate cancer (CRPC) patients with bone metastases. The FDA has granted Alpharadin Fast Track designation in this indication.

The key Phase III trial of Alpharadin was ALSYMPCA that compared Alpharadin plus the standard of care to placebo plus the standard of care. The primary endpoint in this study was overall survival with secondary endpoints including time to occurrence of skeletal related events and changes, and time to progression in key bone biomarkers associated with disease status. The trial also evaluated the patients’ quality of life throughout the trial. In this trial, Alpharadin significantly increased overall survival compared to placebo (14 months versus 11.2 months), and significantly delayed time to first skeletal related event (13.5 months versus 8.4 months)99.

Analysts believe that these results should be enough to see Alpharadin gain approval in both the EU and US markets. However with the recent launch of oral treatments including J&J’s Zytiga (abiraterone

99 Vogelzang, N. et al. Updated Analysis of Radium-223 Dichloride impact on Skeletal-Related Events (SRE) in Patients With Castration-Resistant Prostate Cancer (CRPC) and Bone Metastases From the Phase 3 Randomized Trial (ALYSYMPCA). ASCO Abstract #11.



http://kundeweb.aggressive.no/users/algeta2.no/downloads/Vogelzang_ACSO-GU_2013.pdf





March 2013211

www.fwreports.com



acetate) and Astellas/Medivation’s Xtandi (enzalutamide) analysts believe that the product will be restricted to last line use. Analysts estimate that there are approximately 100 000 patients in the EU and US who have CRPC with bone metastases of which approximately 75 percent are chemotherapy failures and this is still a sizable opportunity.

Another opportunity for Alpharadin is in the treatment of bone metastases in patients with endocrine-refractory breast cancer. The product has completed a Phase IIa trial in this indication.100

Analysts anticipate Alpharadin to be launched in the US and EU in the fourth quarter of 2013. Bayer has a profit share with Algeta in the US market and will pay royalties to Algeta in other markets. Analyst consensus is for Bayer’s share of the sales of Algeta to reach US$610 million in 2017.

Figure 106: Alpharadin global sales 2012-2017

20120

700

600

500

300

400

200

100

2013e 2014e 2015e 2016e 2017e


Sale

s US

$ m

100 Clinicaltrials.gov. A Study of Alpharadin in Breast Cancer Patients With Bone Dominant Disease no Longer Considered Suitable for Hormone Therapy.



Fhttp://clinicaltrials.gov/ct2/show/NCT01070485%3Fterm%3Dalpharadin%2Bbreast%2Bcancer%26rank%3D1

Fhttp://clinicaltrials.gov/ct2/show/NCT01070485%3Fterm%3Dalpharadin%2Bbreast%2Bcancer%26rank%3D1


March 2013212

www.fwreports.com



RiociguatRiociguat is an orally-available amino dicarboxylic acid derivative that activates soluble guanylate cyclise which mediates vasodilation. Riociguat is being developed for the treatment of pulmonary hypertension. In February 2013 Bayer filed for approval in both the US and EU for the use of riociguat in the treatment of inoperable chronic thromboembolic pulmonary hypertension (CTPH) and pulmonary arterial hypertension.

These filings were based on the results of two studies, CHEST-1 and PATENT-1. These studies measured improvements in exercise capacity (using the six-minute walking test [6MWT]) and in both studies there was a significant improvement from baseline after six weeks of treatment compared to placebo.

Analysts note that in these two indications the key competitors are phosphodiesterase type 5 inhibitors (PDE5 inhibitors) such as Revatio (sildenafil) and the endothelin receptor antagonists (ERAs) such as Tracleer (bosentan). In pulmonary hypertension analysts believe that riociguat will be positioned as a second-line treatment after the PDE5 inhibitors, potentially in combination with an ERA. In CTPH analysts note that there are currently no products with clinical trial data to back their use, and the PDE5 inhibitors and ERAs are used off-label. This should give riociguat an advantage in this indication, although analysts note that physicians have experience with these drugs and so will have be persuaded to switch to the new drug.




March 2013213

www.fwreports.com



Analysts believe that riociguat will gain EU and FDA approval towards the end of 2013 and analyst consensus forecast is for the product to achieve sales of US$617 million in 2017.

Figure 107: Riociguat global sales 2012-2017

20120

700

600

500

300

400

200

100

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m






March 2013214

www.fwreports.com



KogenateKogenate is a recombinant factor VIII that Bayer has developed for the treatment of haemophilia A. The recombinant Factor VIII market currently contains products from Baxter (Advate), Bayer (Kogenate), CSL (Helixate), and Pfizer (ReFacto). Analysts note that the market for recombinant factor VIII products is on the cusp of becoming more competitive with several new products in development. Companies including Octapharma, Novo Nordisk, and Inspiration Biopharmaceuticals are developing short–acting factor VIII products that offer little in the way of differentiation and so will most likely compete on price.

Analysts believe that the more serious competition will come from long-acting recombinant factor VIII products such as the ones in development with Biogen Idec and Novo Nordisk. These products have improved half lives and as a result injection frequency can be reduced. Biogen Idec is closest to the market with its long-acting recombinant factor VIII and analysts believe that the company will file for approval in the US in the first half of 2013. Analysts note that in the key Phase III trial of Biogen Idec’s product (A-LONG) the median dosing interval was 3.5 percent with only 30 percent of patients reducing their dosing to once every five days. Typical dosing with Advate is once every two to four days and analysts note that this longer acting form does not typically enhance dosing frequency by a large extent and this may remove the main competitive advantage for the product101.

101 Biogen Idec. Biogen Idec and Sobi announce positive top-line results from phase 3 study investigating long-lasting recombinant factor VIII fc fusion protein in hemophilia a.



http://www.biogenidec.com/press_release_details.aspx?ID=5981&ReqId=1752097

http://www.biogenidec.com/press_release_details.aspx?ID=5981&ReqId=1752097


March 2013215

www.fwreports.com



Other companies with long-acting Factor VIII products in development include Novo Nordisk, Baxter, CSL and Bayer itself. Bayer’s long acting product (BAY94-9027) is a pegylated form of Factor VIII and it entered Phase II/III trials in July102.

Kogenate’s sales are forecast to continue to grow throughout the forecast period to reach sales of $1.7 billion, up from sales of $1.5 billion in 2012. Kogenate is expected to lose patent protection in 2017 so this is likely to be a highwater mark for the product.

Figure 108: Kogenate global sales 2012-2017

20121,400

1,700

1,650

1,550

1,600

1,500

1,450

2013e 2014e 2015e 2016e 2017e


Sal

es U

S$

m

102 Bayer Initiates Phase II/III Trial of New Recombinant Factor VIII Compound for Treatment of Hemophilia A. July 8, 2012.



http://www.prnewswire.com/news-releases/bayer-initiates-phase-iiiii-trial-of-new-recombinant-factor-viii-compound-for-treatment-of-hemophilia-a-161702775.html

http://www.prnewswire.com/news-releases/bayer-initiates-phase-iiiii-trial-of-new-recombinant-factor-viii-compound-for-treatment-of-hemophilia-a-161702775.html


March 2013216

www.fwreports.com



ResistorsThe following table details the five largest resistors to Bayer’s pharmaceutical sales growth over the 2012-2017 period.

Table 33: Bayer’s top five resistors of growth, 2012-2017 (Sales US$m)

Drug

Yaz/Yasmin 1,344 985 917 861 790 708

Betaferon/Betaseron 1,563 1,205 1,123 1,026 954 936

Avalox 625 618 454 333 255 198

Mirena 870 913 923 866 649 541

Adalat 861 775 771 760 691 623

FirstWord Dossier

Cumulatively these five products are forecast to see their sales decline by US$2.3 billion over the 2012-2017 period. These products are forecast to see their cumulative share of Bayer’s pharmaceutical sales fall from 37.9 percent in 2012 to 17.4 percent in 2017.




March 2013217

www.fwreports.com



Yasmin and YazYasmin (drospirenone/ethinylestradiol) is a combination oral contraceptive that is available in 75 countries. Watson received approval from the FDA for a generic version of Yasmin in September 2010 and markets the product as Zarah. Generics have been available in the EU since 2011.

Yaz (drospirenone/ethinylestradiol) is a lower dose formulation of Yasmin that was developed for contraception and the treatment of acne. Yaz has a slightly extended active pill intake regimen of 24 days versus 21 days for Yasmin, which is designed to reduce menstrual symptoms. Yaz faces generic competition in many key markets and as a result its sales are forecast to decline throughout the forecast period.

Bayer reports the sales of Yaz and Yasmin together and in 2012 they had combined sales of $1.3 billion. As a result of generic competition to the two products in key markets their combined sales are forecast to decrease to $708 million in 2017.

Figure 109: Yaz and Yasmin global sales 2012-2017

20120

1,600

1,400

1,000

1,200

600

200

800

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013218

www.fwreports.com



Betaseron

Betaseron (interferon beta-1b) is a recombinant, modified interferon-beta. Betaseron is indicated for the treatment of multiple sclerosis and is one of four approved interferon-betas (Avonex, Rebig and Extavia being the other three). Analysts expect the sales of these products to be gradually eroded throughout the forecast period as novel, oral products such as Gilenya and Aubagio reach the market.

Analysts forecast sales to decline from sales of $1.6 billion in 2012 to reach sales of $936 million in 2017.

Figure 110: Betaseron global sales 2012-2017

20120

1,800

1,400

1,600

1,000

1,200

600

200

800

400

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013219

www.fwreports.com



AvaloxAvalox (moxifloxacin) is a broad spectrum quinolone antibiotic that is used as a treatment of various bacterial respiratory and skin infections. Avalox is available in oral and intravenous infusion formulations. Avalox is expected to lose patent protection in 2014 and will then face generic competition that will rapidly erode the product’s sales.

Analyst consensus forecasts the sales of Avalox will decline rapidly from 2014 onwards to reach sales of US$198 million in 2017, down from US$625 million in 2012.

Figure 111: Avalox global sales 2012-2017

20120

700

500

600

300

100

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013220

www.fwreports.com



MirenaMirena (intrauterine device with progesterone) is a hormonal intrauterine device that was developed by Schering Plough (now Bayer) for use as a hormonal contraceptive. Mirena is due to lose patent protection in 2015 which will see the introduction of generic competition. Meanwhile Bayer is also in the process of developing a new lower dose intrauterine device which currently has the code LCS-12 and this product has been registered with the EMA.

As a result of generic competition and expected switching patients to the new lower dose device analyst consensus forecasts sales of Mirena to decline to US$541 million in 2017 from a forecast 2014 peak of US$923 million.

Figure 112: Mirena global sales 2012-2017

20120

1,000

600

800

900

500

700

300

100

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013221

www.fwreports.com



AdalatAdalat (nifedipine) is a calcium channel blocker that is indicated for the treatment of angina and hypertension. Adalat faces generic competition in all major markets and as a result the sales of this product are forecast to decline continuously to reach sales of $623 million in 2017, down from $861 million in 2012.

Figure 113: Adalat global sales 2012-2017

20120

1,000

600

800

900

500

700

300

100

400

200

2013e 2014e 2015e 2016e 2017e


Sale

s U

S$ m




March 2013222

www.fwreports.com



Methodology statementThis report examines the 10 companies that are forecast to lead the global pharmaceutical market in 2017. FirstWord has used analyst consensus forecasts to identify the five key drivers of growth and the five main resistors to growth for each of these companies and analysed what it is that is causing this sales growth or contraction.

Product and company level sales forecasts are consensus projections derived from a comprehensive selection of continually assessed equity research reports.

Leading equity research analysts have an in-depth knowledge of the prescription pharmaceutical markets and the companies they cover. Their highly analytical insight extends to the product franchises (driven by a ‘bottom-up’ forecasting methodology) and the strategic protocols being pursued by pharmaceutical and biotech corporate management. FirstWord’s consensus forecast utilises product level forecasts from equity analysts at the following companies:

nBarclays Capital

nCredit Suisse

nDeutsche Bank

nGoldman & Sachs

nInternational Strategy & Investment

nJefferies




March 2013223

www.fwreports.com



nJP Morgan

nMerrill Lynch

nMorgan & Stanley

nSociété Générale

nStifel Nicolaus

nUBS

nWells Fargo

Consensus forecasts derived from the leading equity research analysts reflect the most up-to-date assessment of the pharmaceutical market, with equity analyst models updated to reflect a broad spectrum of events and catalysts, which range from the publication of quarterly financial results to in-depth discussions with leading key opinion leaders. These consensus forecasts also act as an excellent benchmark against which other projections – produced either internally or by other third parties – can be assessed.

In addition to consensus forecasting, FirstWord Therapy Trend data modules also collate and analyse the key future events that are anticipated to impact product level and shape the broader context of a specific disease area. These allow FirstWord’s consensus reports to produce a ‘consensus calendar’ of events designed to help inform FirstWord clients on how the market will evolve.



Documents

The Top 10 Pharma Companies in 2017 2013 The Top 10 Pharma Companies in 2017 – leading drivers and resistors to growth A FirstWord OverViews report