What underpins the success of Biopharmaceutical CMOs in Europe?
Aiswariya Chidambaram, Research AnalystHealthcare16-09-2011
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Functional Expertise Particular expertise in: - Analyzing regional sales performance, identifying performance gaps and providing relevant solutions to stakeholders for
the growth and development of regional business. - Designing and roll out of appropriate training modules, conducting workshops on selling skills excellence and working on
development of Business executives at professional and personal levels. - Conducting induction training to new recruits and field coaching on marketing projects to ensure smooth implementation. - Recruiting candidates and identifying talents at regional level by appropriate means of performance analysis and
competency mapping. Special projects implementation on a regional scale Industry Expertise• Expertise in diverse therapeutic segments and product portfolios which include - Diabetology – Oral Anti Diabetics - Cardiovascular Diseases – Anti-hypertensives. - General Medicine – Antibiotics, Anti-fungals, and Health supplements. - Women’s Healthcare – Oral Contraceptives
What I bring to the Team• In depth knowledge of four specific Therapeutic segments. • Expertise in tracking Industry trends and events as part of Market Vigilance. • Reasoning based recommendation for improved efficiency. • Excellent communication and presentation skills.
Career Highlights• Have successfully completed a NIH project on Filariasis at the Tuberculosis Research Centre (Chennai).• Completed internship projects on Industrial Microbiology, Cytogenetics and Karyotyping, and a course on “Tools in Bio-
informatics and Vector Designing.”• Worked as a Performance Consultant for South India (covering four states – Tamil Nadu, Andhra Pradesh, Kerala and
Karnataka) with a leading Multinational firm, Bayer Healthcare.• Worked on market research projects such as the “Global Generics Pharmaceutical Market” with Frost & Sullivan. Education• Bachelors in Technology, specialization in Biotechnology, from Anna University, Chennai, India.
Aiswariya Chidambaram
Aiswariya Chidambaram
Research Analyst, Healthcare Practice,Frost & SullivanGlobal,Chennai,India
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Focus Points
Focus Points
Biopharmaceutical Industry in Europe
Summary of Key Market Drivers and Restraints and Challenges
European Biopharmaceutical Contract Manufacturing Market – A snapshot
Biopharmaceutical R&D – What’s in the pipeline?
The rise of Biopharmaceuticals
Anticipating Capacity Demand – A Tricky Speculation
Technology – “The Powerful Tool”
Key Biopharmaceutical CMOs in Europe – An Outlook
Market Potential and Business Opportunities
Potential Threats to Biopharmaceuticals
What can be expected in the future?
Facing the Change / Conclusions
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The Rise of Biopharmaceuticals
“Biopharmaceuticals – The Length and Breadth of
Healthcare in Future”
What are biopharmaceuticals? – Biopharmaceuticals are pharmaceutical drugs based on protein, therapeutic serum, virus, vaccine, blood components or derivatives or gene transfer products, directly administered into the blood stream by injection. They are complex macromolecules with
very high molecular weights compared to small molecules.
Biopharmaceutical Manufacturing – Biopharmaceuticals are generally expressed in mammalian cells (mice, rabbits, etc.) or micro-organisms (yeast, bacteria, etc.). Manufacturing involves highly sterile, aseptic conditions and highly sensitive to changes in environment. Formulations are
predominantly injectables – pre-filled syringes or cartridges.
Source: Frost and Sullivan Why Biopharmaceuticals?
Stronger focus on target diseases, more effective and potent action, potential to cure diseases rather than just treating symptoms, lesser side effects.
Technology
Monoclonal Antibodies
Recombinant Proteins
Protein Therapeutics
Oligonucleotides
Gene Therapy
Applications
Research
Therapeutics
Diagnostics
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The Biopharmaceutical Industry in Europe
Public Biotech Company Data
Sales Revenues $18.465 B
R&D Expenditure $4.828 B
Net income (loss) $.651 B
Market Capitalization $84.394 B
Number of Companies
Public companies 182
Private companies 1,665
Total 1,847
10.33%6.52%
48.9%
34.25%
Monoclonal antibodies
Recombinant Proteins
VaccinesInsulin
Overview of the European Biopharmaceutical Industry
2009 and early 2010 characterized by financial crisis and poor performance of venture capital industry in Europe.
Monoclonal antibodies (mAbs) and recombinant proteins are the two largest segments, growing at rates of 11.8 and 8.2 per cent in 2011.
The future of Biopharmaceutical industry is promising, with biotech companies focusing more on innovation and technological advancements and increasing interest of pharmaceutical companies to enter into the biotech business.
Biopharmaceutical Market: Per cent Contribution of Therapeutic Segments (Europe), 2011
The European Biopharmaceutical Industry grew by 11 per cent from 2009 to 2010.
Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan
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Biopharmaceutical R&D in Europe – What’s in the Pipeline?
0
50
100
150
200
250
Spain Italy France Germany UnitedKingdom
Number of drug candidates
Phase I Phase II Phase III
The Biopharmaceutical R&D expenditure in Europe, grew by 5 per cent from 2009 to 2010.
. As venture capital firms in Europe are interested to invest only in late stage biopharmaceutical companies, start-up biotech companies gain access to funding, predominantly through venture capital firms based at the U.S.
More than 50.0 per cent of the products in the European pipeline account for therapeutic monoclonal antibodies.
More than 1,200 biopharmaceuticals in the pipeline.
More than 50 per cent of the drugs represented by the five major countries.
UK (234) and Germany (150) have the maximum number of drug candidates in the pipeline.
Spain has shown a significant increase of 30 per cent in 2010 from its 2009 pipeline.
Biopharmaceutical Market: Number of Drugs in Various Stages of Clinical Pipeline, by Country (Europe), 2011
Source: Frost and Sullivan
Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan
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European Biopharmaceutical Contract Manufacturing Market – A Snapshot
35%
65%
73%
27%
Multipurpose CMOs only MAb & PAb CMOs
mammalianmicrobial
Biopharmaceutical Contract Manufacturing Market: Per cent Sales Contribution of Segments (Europe), 2011
Biopharmaceutical Contract Manufacturing Market: Distribution of CMOs by Products Manufactured (Europe), 2011
Biopharmaceutical Contract Manufacturing Market: Distribution of CMOs by Manufacturing Services Offered (Europe), 2011
Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan
Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan
56
10
44
49
39
10
40
46
0 10 20 30 40 50 60
Total Contractors
Clinical supply
Clinical only withcommercial
Commercialsupply
No. of CMOsRecombinant proteins Monoclonal Antibodies
The European Biopharmaceutical contract Manufacturing Market is estimated to be over $1.2 billion in 2011, growing at nearly 11 per cent.
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Key Market Drivers and Restraints Summary
Key Drivers
Key Restraints/Challenges
Biopharmaceutical Contract Manufacturing Market: Key Drivers and Restraints Summary (Europe), 2012-2018
Source: Frost & Sullivan
Increasing competition from low
cost Asian CMOs
Increasing competition from low
cost Asian CMOs
Increasing interest of Big pharma companies to
expand into the biotech sector
Increasing interest of Big pharma companies to
expand into the biotech sector
Increasing stringency in regulatory
standards
Increasing stringency in regulatory
standards
Breach of patent and IP related information
Breach of patent and IP related information
Financial crisis and poor performance of the venture capital industry in Europe
Financial crisis and poor performance of the venture capital industry in Europe
Enormous cost and time saving benefits offered by CMOs Blockbuster
biologics worth $30 billion set to
lose patent protection by 2018
Highly capital intensive and risky
sector
Highly capital intensive and risky
sector
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Technology – “The Powerful Tool”
• Customizable design• Enhanced Productivity• Significant operational benefits
• Optimized expression systems• Enhanced cell productivity & viability• Simplified purification process• Improved selectivity
• Minimizing human errors• Maximizing productivity• Improvised product quality
Single Use Technologies are specially designed for
• Muti-product contract manufacturing.
•Easy transfer of operations
•Busy facilities and lean operations.
Upstream technologies
• cell productivity - 2-4 g/L in established production processes
• 4-6 g/L in pre-clinical and clinical manufacturing processes,.
Downstream technologies
•mAbs – filtration & purification resins
•Recombinant proteins - higher selectivity and flow-through mode purification steps.
• Lyophilisation - protein based drugs, preservation and packaging.
• Process Analytical Technologies (PAT) - product driven approach to process based one.
• Standardization of processes.
• Reduced degree of variation.
Upstream & Downstream Lyophilisation & PATDisposables/ SUBs
Innovation
Funding
Expertise
Regulatory compliance
“Any sufficiently advanced technology is indistinguishable from magic” – Arthur C. Clarke
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Anticipating Capacity Demand – A Tricky Speculation
Biopharmaceuticals Market: Demand for Outsourcing of Biopharmaceutical Manufacturing to CMOs (Europe),
2011 - 2018
Source: Frost and Sullivan
Note: All figures are rounded; the base year is 2011. Source: Frost & SullivanNote: All figures are rounded; the base year is 2011. Source: Frost & Sullivan
It is highly essential that CMOs make cautious decisions regarding capacity expansions and choice of contract deals, lest they be hit by over capacity and witness a subsequent erosion of profit margins.
15.9%
16.1%16.2%
16.5%
16.8%
17.0%
17.4%
17.5%
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15.5
16
16.5
17
17.5
Demand for Outsourcing (%)
2011 2012 2013 2014 2015 2016 2017 2018
Year
Biopharmaceuticals Contract Manufacturing Market: Industry Capacity Utilization Rates Forecasts (Europe),
2011 - 2018
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Key Biopharmaceutical CMOs in Europe – An Outlook
Market Share: 20 - 40 per cent • Lonza • Boehringer Ingelheim
Market Share: 5 - 10 per cent
• Rentschler Biotechnologie• Sandoz• Fujifilm Diosynth Biotechnology• Royal DSM
Market Share: < 5 per cent
• Celonic GmbH• BIOMEVA GmbH• ProBioGen AG• Others
Tier 1
Tier 2
Tier 3
Biotech Contract Manufacturing Market: CMO Market Share by Tiers of Competition (Europe), 2011
Source: Frost and Sullivan
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Market Potential and Business Opportunities
Strategic and highly competitive market.
Mammalian Contract Manufacturing - future of CMOs,.
Biosimilars are likely to have a great impact on the market growth.
Potential drug candidates in pipeline.
Increasing interest of Big Pharma companies and multinational generic companies.
Increasing number of newly reported diseases.
Remarkable success of existing biopharmaceuticals.
Advent of newer, innovative technologies.
Strategic alliances between technology providers and CMOs.
Source: Frost and Sullivan
“There is untapped potential for CMOs which are properly positioned, as it is a market, where high growth and rapid rise in profits are anticipated.”
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Potential Threats to Biopharmaceuticals
Transgenic plants
Transgenic animals
Stem cells
CloningOther ThreatsOther Threats
Product failures – pre-clinical and clinical
Capital investment
Financial crisis in Europe
Negative perception of Industry
Regulatory barriers
Intellectual property and patent laws
Careful outweighing of benefits and risks is essential
for CMOs in order to grow and sustain in the
Biopharmaceutical Contract Manufacturing Market.
Source: Frost and Sullivan
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What Can Be Expected in the Future?
TechnologyDevelopment of Transgenic technologies
Stem cell technologies
Cloning technologies
TherapeuticsDevelopment of RNA-i based therapeutics
Development of anti-sense based therapeutics Recombinant protein therapeutics
Monoclonal antibodies
GovernmentRegulatory bodies like EMEA to drive new
product and technology introduction
Increase in approval rates of new biopharmaceuticals and biosimilars.
GlobalizationConsolidations, mergers, acquisitions
Opening and expansion of Asian marketsGlobal capital markets
Transition from “small molecule blockbuster” model to “biopharmaceutical model.
Increase in public awareness, acceptance and approval of biopharmaceuticals.
Increase in outsourcing of biopharmaceutical manufacturing by Big Pharma companies.
Development of “Virtual Pharma”
Differentiation and consolidation strategies adopted by Biotech companies and CMOs.
“A-one-stop-shop” offered by CMOs, promoting a complete portfolio of products and comprehensive range of services.
Large CMOs moving into niche areas of biopharmaceutical manufacturing.
Further development and implementation of transgenic technologies.
Establishment of regulatory pathways for biosimilars and transgenics.
“ The best way to predict the future is to create it” – Peter Drucker
Source: Frost and Sullivan
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Facing the Change
Reacting to Change
Anticipating Change
Leading the
Change
• Develop biopharmaceuticals for key indications.
• Customize according to customer needs and preferences.
• Comply with new government policies.
• Analyze prospects for market globalization.
• Research customer needs, preferences and expectations.
• Monitor new technological developments to predict future.
• Foresee capacity requirements.
• Pioneer new and better technologies.
• Introduce innovative products, that open new market opportunities and spur creation of whole new industries.
• Seek to set industry standards.
• React and respond as needed.
• Defend and protect company’s position in the market.
• Plan ahead for future changes.
• Invest in R&D.
• Instill competitive capabilities.
• Improve product line.
• Strengthen distribution.
• Seize the offensive.
• Be the agent of industry change.
• Influence rules of the game.
• Force rivals to follow.
Strategic Posture Actions Strategy
“ Change is the law of life. And those who look only to the past or present are certain to miss the future.” – John F. Kennedy
Source: Frost and Sullivan
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Conclusions
The future of contract manufacturing in Europe is controlled by mammalian cell manufacturing.
Demand for contract manufacturing and capacity additions is strongly driven by biosimilars and pipeline of biologics.
Interest of Big Pharma companies in the Biopharmaceutical sector is likely to set the consolidation wave high in the industry.
Manufacturing capacity demand – supply gap is likely to shift towards excess demand by 2018.
Given the immense potential and growth opportunities in the Biopharmaceutical Contract Manufacturing Market, particularly mammalian contract manufacturing, the CMOs which are properly aligned are sure to emerge as bread winners.
Source: Frost and Sullivan
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For Additional Information
NameCorporate CommunicationsIndustry(210) [email protected]
Siddharth SahaDirector of Research Healthcare0044 (0) 207 343 [email protected]
Ranjith GopinathanProgram ManagerHealthcare0091 (0) 44 [email protected]
Aiswariya ChidambaramResearch AnalystHealthcare0091 (0) 44 [email protected]