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Dynamics in the Pharma and Biotech Industry

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An analyst briefing delivered by Jennifer Brice, Industry Manager, Pharmaceuticals/Biotechnology.

An analyst briefing delivered by Jennifer Brice, Industry Manager, Pharmaceuticals/Biotechnology.


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  • 1. Dynamics in the Pharma and Biotech Industry Jennifer Brice, Industry Manager, Pharmaceuticals/Biotechnology June 22, 2011
  • 2. Today’s Presenter Jennifer Brice, Industry Manager, Pharmaceuticals/Biotechnology, Frost & Sullivan 2
  • 3. Focus Points• Current Market – Current state of biopharma – Global revenues and market shares – Drug sales by therapeutic categories• Changing Dynamics – Major patent expirations – Therapy category shift – Generic companies sales growth – Biologic patent expiries – Biosimilars market – Pharma/biotech consolidation• Market Opportunities 3
  • 4. Current Market 4
  • 5. Current State of BioPharma• The pharmaceutical and biotechnology industry is in a state of transition.• Reorganization, M&A, consolidation, and portfolio changes are being evaluated in order to maintain growth centers in the face of a myriad of serious challenges.• Overall, companies are looking to align with areas of growth opportunity as well as new business strategy and product development paradigms. 5
  • 6. Global Biopharmaceutical Market Share byPharmaceutical Companies Market Share by Pharmaceutical Companies, 2010 AMGN ABT 2.7% 3.6% BMY 3.5% LLY 4.2% JNJ Other 4.1% 24.8% AZN 6.0% GSK 6.8%% PFE 12.3% SNY 7.5% MRK RHHBY 8.4% NVZ 7.3% 8.8% • Global Pharma Market (2010) - $550 Billion (4.7% growth) • In 2010, Pfizer, Merck, Novartis, Roche, Sanofi-Aventis, and GlaxoSmithKline dominated the worldwide market Source: Cowen & Co 2010, Frost & Sullivan analysis 6
  • 7. Global Biopharmaceutical Market Share by TherapeuticCategories Therapeutic Categories: Drug Sales as a Percentage of the Total Market, 2010 • In 2010, the cardiology therapeutic area (18.3%) produced the most drug sales followed by oncology/hematology (18.0%) and antibiotics/antivirals (14.5%) Source: Cowen & Co 2010, Frost & Sullivan analysis 7
  • 8. Changing Dynamics 8
  • 9. Small Molecule Pharmaceuticals: Major PatentExpirations (U.S.), 2009-2012 2009 2010 2011 2012Product Sales ($MM) Product Sales ($MM) Product Sales ($MM) Product Sales ($MM)Prevacid 3,514 Aricept 1,810 Lipitor 7,493 Singulair 3,327Topamax 2,302 Cozaar/Hyzaar 1,454 Plavix 4,483 Enbrel 3,274Lamictal 2,099 Protonix 1,132 Advair 4,321 Diovan 2,848Valtrex 1,777 Taxotere 1,078 Seroquel 3,772 Lexapro 2,617Flomax 1,485 Arimidex 729 Actos 2,957 Lovenox 2,539Imitrex 1,312 Gemzar 722 Zyprexa 2,670 Viagra 1,046Adderall 1,309 Xalatan 544 Levaquin 1,779 Geodon 989Keppra 1,247 NovoSeven 497 Avapro 843 Detrol 905CellCept 968 Combivir 407 Caduet 485 Provigil 867AmbienCR 899 Mirapex 402 Femara 447 Zometa 796Suboxone 468 CoregCR 311 Xeloda 420 Avandia 676All Others 2,335 All Others 3,260 All Others 2,366 All Others 4,584Totals 19,715 Totals 12,346 Totals 32,036 Totals 24,468 Source: Kenneth Kaitin, Tufts University 9
  • 10. Generic Companies Sales GrowthSales growth for the top 10 generic companies grow at 21.1%:Sales of UnbrandedGenerics by LeadingCorporations $MM % Market Share % GrowthTeva 7,925 21.5 12.8Mylan Labs, Inc. 3,789 10.3 10.3Sandoz (Novartis) 3,457 9.4 53.0Watson Pharma 2,125 5.8 7.6Greenstone (Pfizer) 1,470 4.0 -9.5Par Pharma 1,380 3.7 18.2Hospira Inc 1,173 3.2 20.5Actavis US 992 2.7 93.4Glopal Pharm Corp 980 2.7 255.3Boehringer Ingelheim 878 2.4 23.7Top 10 24,169 65.6 21.1 Source: IMS Health, National Sales Perspective, Sept 2010 10
  • 11. Cardiology Sales of Key CompaniesCompany 2010 Cardiology Sales ($MM) Cardiology drug sales as a percentagePfizer 14,957 of the total market expected to declineAstraZeneca 9,334 by 2015 due to patent expiries by top players and increased emphasis onSanofi-Aventis 9,194 other disease areas:Novartis 8,764Bristol-Myers • Pfizer’s Lipitor (2011) 8,392Squibb • Pfizer’s Caudet (2011)Merck 7,476 • Sanofi-Aventis’ Plavix (2011) • Merck’s Cozaar (2010)GlaxoSmithKline 2,789 • Merck/Schering-Plough’s Zetia (2012)Abbott 2,664 • Merck/Schering-Plough’s IntegrillinRoche 497 (2015) • Novartis’ Diovan and Exforge (2012)Forest Labs 429 • Novartis’ Lescol (2012)Eli Lilly 355 • AstraZeneca’s Atacand (2012)Johnson & • Bristol-Myers Squibb’s Avapro (2011) 63Johnson • Abbott’s Advicor (2013)Other 10,930 • Abbott’s Tarka (2010)Total 75,843 Source: Frost & Sullivan analysis. 11
  • 12. Central Nervous System Sales of Key Companies 2010 Central Central Nervous System drug sales as a percentage Nervous System of the total market expected to decline by 2015 dueCompany Sales ($MM) to patent expiries by top players and increased emphasis on other disease areas:Eli Lilly 9,268AstraZeneca 6,099 • Eli Lilly’s Zyprexa (2011) • Eli Lilly’s Symbyax (2011)Pfizer 5,409 • Eli Lilly’s Cymbalta (2013)Johnson & • Pfizer/Wyeth’s Effexor XR (2010) 3,995Johnson • Pfizer/Eisai’s Aricept (2010)Bristol-Myers • Pfizer’s Geodon (2010) 2,625 • AstraZeneca’s Seroquel (2011)Squibb • AstraZeneca’s Zomig (2013)Forest Labs 2,409 • Bristol-Myers Squibb/Otsuka’s Abilify (2015)Novartis 2,077 • Forest Lab’s Lexapro (2012) • Forest Lab’s Namenda (2013)GlaxoSmithKline 1,997 • Novartis’ Exelon (2012)Merck 1,152 • Novartis’ Comtan (2013) • Merck’s Maxalt (2014)Abbott 658 • Boehringer Ingelheim’s Mirapex (2011)Other 5,559 • Cephalon’s Provigil (2012) • Novo Nordisk’s Novolog (2014)Total 41,248 Source: Frost & Sullivan analysis. 12
  • 13. Respiratory Sales of Key CompaniesCompany 2010 Respiratory Sales ($MM) Respiratory drug sales as aGlaxoSmithKline 11,575 percentage of the total market expected to decline by 2015 dueMerck 7,885 to patent expiries by top players and increased emphasis on otherAstraZeneca 4,099 disease areas:Pfizer 2,007 • Merck’s Singulair (2012) • Sepracor’s Xopenex (2012)Roche 1,246 • Pfizer’s Revatio (2012) • Johnson & Johnson’s LevaquinSanofi-Aventis 1,077 (2010) • Sanofi-Aventis’ Allegra andNovartis 924 Johnson & Johnson’s Zyrtec generics and Merck/Schering-Forest Labs 5 Plough’s OTC Claritin will continue to impede allergy marketOther 595Total 29,413 Source: Frost & Sullivan analysis. 13
  • 14. Therapy Category Shift (Global), 2010-2015 2010 Revenues 2015 Revenues Cardiology Cancer/Oncology/Hematology Cancer/Oncology/Hematology Antibiotics/Antivirals Antibiotics/Antivirals Cardiology Central Nervous System Rheumatology Respiratory Diabetes Source: Cowen & Co 2010; Frost & Sullivan Analysis 14
  • 15. Biologic Patent Expiries (2004-2020) Source: IMS Health, MIDAS, Market Segmentation, June 2010 15
  • 16. Key Biologics and U.S. Patent Expiries Source: IMS Health, MIDAS,, June 2010 16
  • 17. Biosimilars Market• The biosimilars market is complex with many factors that may affect market potential – Products with different administration routes may gain favor over less desirable methods – Biosimilars for chronic diseases may be viewed differently than biosimilars that are used only once – Doctors may be more willing or less willing to prescribe biosimilars depending upon the indication (cancer vs. immunological disorders) – Doctors may not be willing to switch patients already using biopharmaceuticals to a biosimilar – Doctors may only prescribe biosimilars to new patients – While generic medicines will produce significant cost savings, biosimilars are not expected to save much 17
  • 18. Pharma/Biotech Consolidation Continues• Conservative risk/benefit perspective at the FDA = fewer FDA approvals• Prolonged FDA regulatory process = exacerbated pipeline gaps – PDUFA IV requirements for advisory committee reviews Consolidation – Negotiated Risk Evaluation and Mitigation Strategies (REMs) required for most NDA filings• Tougher patent litigation settlements = loss in key franchise Source: Frost & Sullivan 18
  • 19. Pharmaceutical M&A Activity, 1995-2010 Pharmaceutical M&A Activity, 1995-2010 • In 2010, there have been 986 transactions • The number of M&A have slightly increased (+3%); this is the fourth consecutively increase since 2006, and a new record in terms of numbers of transaction Source: IMAA 2011. 19
  • 20. Significant Mergers & Acquisitions in 2009 Merck & Co. - Schering Roche - Pfizer - Wyeth Plough GenentechValue: $68 billion Value: $41 billion Value: $46.8 billionKey Reason: Key Reason: (44% of remaining shares)Imminent loss of Pfizer’s Schering-Plough pipeline Key Reason:revenues due to patent consisting mainly of Roche, through acquiringexpiration of Lipitor biologics, with about 18 the remaining 44% of($13.4bn ) during 2010- drugs in Phase III. shares gets complete2011 Schering-Plough offers control of Genentech, aWyeth’s current portfolio of geographical diversity with leader in biotechnology withmarketed products and 70% of its revenue outside blockbusters such asstrong pipeline of biologics the United States. Avastin and Rituxan.particularly in CNS. Source: Frost & Sullivan 20
  • 21. Top Deals in 2010Target Company Target Country Acquirer Company Acquirer CountryGenzyme U.S. Sanofi-Aventis FranceAlcon Switzerland Novartis SwitzerlandMillipore Corp U.S. Merck KGaA GermanyRatiopharm Germany Teva IsraelValeant Pharm U.S. Biovail Corp CanadaTalecris U.S. Grifols SpainBiotherapeuticsOSI Pharmaceuticals U.S. Ruby Acquisition Inc U.S.Piramal Healthcare Ltd India Abbott Laboratories U.S. Source: IMAA 2011. 21
  • 22. Changing Business Models FIPCO (Fully Integrated Pharma Co.) VIPCO (Virtually Integrated Pharma Co.) Partnerships Sales & Sales & Distribution CSO Distribution Manufacturing CMO Manufacturing Clinical Development CROs Clinical & Regulatory Preclinical Preclinical CRO Support Research Technology R&D Academia, Scientific, Institutions Source: Burrill & Co. 22
  • 23. Market Opportunities 23
  • 24. Current Pharmaceutical Opportunities • Emerging Markets – High unmet needs for treatments – Potential for growth in contract markets (CROs and CMOs) • Personalized Medicine – Advances in a number of molecular profiling technologies, including proteomic profiling, metabolomic analysis, and genetic testing, may allow for a greater degree of personalized medicine than is currently available • Develop/commercialize biosimilars/generics • Social Media • M&As 24
  • 25. Next Steps Request a proposal for or Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. (myfrost@frost.com) 1-877-GoFrost (1-877-463-7678) Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth (www.gil-global.com) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 25
  • 26. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by rating this presentation. Frost & Sullivan’s Growth Consulting can assist with your growth strategies 26
  • 27. Follow Frost & Sullivan on Facebook, LinkedIn,SlideShare, and Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan 27
  • 28. For Additional InformationJennifer Brice Britni MyersIndustry Manager Corporate CommunicationsPharmaceuticals & Biotechnology Healthcare(650) 475-4560 (210) 477-8481Jennifer.Brice@frost.com Britni.Myers@frost.comDaniel Ruppar Chris OlsenResearch Director Director of Business DevelopmentHealthcare Healthcare(210) 247-2428 (650) 475-4561Daniel.Ruppar@frost.com Chris.Olsen@frost.com 28