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Today’s Presenter Yamunah Kandasamy, Research Analyst Frost & SullivanApart from market opportunity analysis, Yamunah has knowledge and experience basecovering following range of sectors, with exposure to end users’ perspective on medicalinvestments such as stem cell harvesting. Medical devices Biotechnology Medical imaging Life Sciences and IT 2
Focus Points• South Korea Biosimilars Market Overview• Challenges, Drivers and Restraints of Biosimilars Market• Competitors’ Profile• Last Word - Conclusion 3
South Korea Biosimilars Market Overview• A new engine of Korea’s economic growth• Biosimilars are generics for biologics or biotechnology drugs• Requires upfront investment and infrastructure for the development, much lesser than biologics but much more than the development of generic drugs• Doctors may be reluctant to prescribe biosimilars, as the developers capabilities, expertise and credentials may not be known to them as much as the innovator drug manufacturing companies• The U.S. market will be tough for Korean firms to penetrate• South Korea has a long history in manufacturing biologicals and a regulatory pathway for biosimilars was introduced in 2009 4
Market Overview—Segmentation Biosimilars Market: Market Segmentation (Korea), 2011 Total Biosimilars Market Human growth Erythropoietin Monoclonal Antibodies G-CSF hormonesMarket Segmentation• Biosimilars, the imitation of biological products follow the same segmentation. They can be broadly divided into therapeutic proteins whose basis are large blocks of amino acids while the other category includes antibody-based therapeutics.• The geographical scope of this research is South Korea, an emerging market with immense potential to become a strong player in the biosimilars market.• Vaccines are not covered in this research. Source: Frost & Sullivan 5
Biosimilars Market Challenges in Emerging Markets Lack of patent protection for high growth products (G-CSF and MAbs) Lack of patent rights in majority of the emerging countries for biologics like enbrel, TNF- alpha inhibitors creates a huge market.Quality consciousnessamong doctors/physicians Huge patient potentialDoctors/physicians are loyal to in ROWinnovator molecules and can EMERGING Breast cancer, non-be very fussy in switchingprescriptions. However, when MARKETS Hodgkins lymphoma (NHL), autoimmuneprice is concerned, a lower deficiencies are out ofprices presents an attractive control and most of theproposal if the similarity is time, do not affordestablished. biologics. Lack of or low reimbursement for high priced biologics Emerging countries typically have poor insurance coverage. Source : Frost and Sullivan 7
Biosimilars Challenges in South Korea• Acceptance by doctors/ physicians to switch prescriptions• Immunogenicity and complexity in establishing similarity with the originator molecule 8
Drivers—Impact and Duration Market Drivers – Biosimilars Market, South Korea, 2011Drivers 1–2 Years 3–4 Years 5–7 YearsStrategic partnerships between Korean biosimilar L M Hcompanies and other company to drive growthAccess to patients in comparison to costcontainment will compensate for lower prices of H M Mbiosimilars Impact Ratings: H = High, M = Medium, L = Low Source: Frost & Sullivan analysis 9
Drivers—Explanation • Strategic partnerships between Korean biosimilar companies and other company to drive growth Samsung Electronics Co., Ltd., the world’s largest electronics company, and its affiliated companies have entered into a strategic partnership with Quintiles, the world’s leading pharmaceutical services company, to support Samsung’s entry into the biopharmaceuticals market. • Access to patients in comparison to cost containment will compensate for lower prices of biosimilars Only a proportion of patients currently have access to expensive life-saving drugs, the availability of lower cost biosimilars will allow more patients to be treated. Also, as access to patients increases, cost containment such as price cuts will compensate for lower prices of biosimilars. 10
Restraints—Impact and Duration Market Restraints– Biosimilars Market, South Korea, 2011Restraints 1–2 Years 3–4 Years 5–7 YearsBiosimilar clinical trials require large capacity forapprovals from FDA/EMEA/PMDA to cater to export H H MmarketsCost of development and marketing necessitatesdeep pockets which in turn requires partnerships H H Mwith big pharmas/regional partners Impact Ratings: H = High, M = Medium, L = Low Source: Frost & Sullivan analysis 11
Restraints—Explanation • Biosimilar clinical trials require large capacity for approvals from FDA/EMEA/PMDA to cater to export markets Before biosimilars drugs can be marketed globally, clinical trials need to be done and approved by FDA/EMEA/PMDA. Biosimilar clinical trials are generally needed in large quantities because the comparability test and samplings need to be done repetitively to ensure consistent results. • Cost of development and marketing necessitates deep pockets which in turn requires partnerships with big pharmas/regional partners Development and marketing cost of biosimilars are high, this creates a necessity for companies to make strategic partnerships with big pharmas/regional partners to have more cash flow. 12
Competitive Landscape Company Core Portfolio Corporate Strategies Samsung Electronics Consumer Electronics/IT Industry Entering biosimilars business (2009) ISU Abxis Antibody therapeutics Biologics/Biosimilars Monoclonal Antibodies Aprogen Biosimilars (NCEs/Biosimilars) NCES (CNS Teva Pharmaceuticals Generics/Biosimilars therapeutics) LG Life Sciences-LG Subsidiary NCEs/Biologics/Biosimilars NCEs/Biosimilars Source: Frost & Sullivan analysis 13
The Last Word — Conclusion: Key Take-Aways By 2020, the familiar crisis of dwindling pipeline will hit the biosimilars as 1 newer and more complex originator molecules need to be identified as target markets With companies like Samsung making a foray into biosimilars, the market will witness newer entrants and changing business models. However, the 2 success will largely depend on their ability to overcome the threat from big pharma’s strong expertise in marketing The Korean market is expected to be largely export driven . Exports are 3 expected to contribute as much as 50% of the total revenues. Source: Frost & Sullivan analysis 15
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For Additional Information Donna Jeremiah Carrie Low Corporate Communications Corporate Communications Asia Pacific Asia Pacific +61 (0) 8247 8927 +603 6204 5910 email@example.com firstname.lastname@example.org Miok Lee Corporate Communications Korea + 82 2 6710 2033 email@example.com 19
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