Pharma and Biotech Industry Outlook - A look at trends and opportunities in this increasingly challenging environment with a focus on the generics landscape
 

Pharma and Biotech Industry Outlook - A look at trends and opportunities in this increasingly challenging environment with a focus on the generics landscape

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    Pharma and Biotech Industry Outlook - A look at trends and opportunities in this increasingly challenging environment with a focus on the generics landscape Pharma and Biotech Industry Outlook - A look at trends and opportunities in this increasingly challenging environment with a focus on the generics landscape Presentation Transcript

    • Pharma and Biotech Industry Outlook A look at trends and opportunities in this increasingly challenging environment with a focus on the generics landscapeOctober 2012rbhuller@frost.com
    • Market Overview 2
    • Lackluster Industry Growth Despite R&D Investment• The massive global branded pharma and biotech industry will generate $1,092.0 billion in revenue by 2015.• Despite significant R&D investment in key areas like oncology, respiratory agents, lipid regulators, antidiabetescompounds, and antipsychotics the industry is delivering only single digit top-line growth. Source: Frost & Sullivan 9837 Changing Dynamics in the Pharma and Biotech Industry, June 2012. 3
    • Generic Pharmaceuticals Market SummaryHow big is the market and how fast What are current market dynamics and what are the external challenges?is it growing? Region: Global Generic drug revenues comprise approximately 15 percent of the world pharmaceutical market and are growing 2-3 times faster than the pharmaceutical market. United States, Germany, France, Revenue Growth ($ Billion) Rate (%) Japan, the United Kingdom, Canada, Italy, and Spain; account for 80.0 percent of the total generic drug sales worldwide. The emerging markets, Brazil, Russia, India, China, and Turkey are2012 154.14 - expected to grow 15-20 percent as compared to the growth rates of mature generics markets at2013 168.84 9.5 only 6-10 percent. Key therapeutic areas for generics penetration include cardiovascular disease,2014 183.70 8.8 oncology, rheumatology, and diseases of the central nervous system. Generics cost 20-90 percent less than branded pharmaceuticals thereby reducing healthcare expenses. Differing regulatory and2015 198.99 7.9 reimbursement processes globally continue to pose a challenge to generics manufacturers.What are the key opportunities and risks for this market? Which companies are successful in this market and why? Opportunities Risks Company (Market Share) • Broad product lines that span• A $150 billion market will be • Market consolidation of generics Teva (18.0%) multiple disease areas open to generics competition makers through alliances, • Strategic acquisitions mergers, and acquisitions only Sandoz (10.0%) from patent expiry of blockbuster • Regulatory approval from EMA, drugs like Lipitor (Pfizer) and strengthen the dominant players. Mylan (6.0%) EDQM, FDA Zyprexa (Eli Lilly). • Branded pharmaceutical Watson (3.0%) companies have developed • Products are high quality• India and China are the largest Stada Arzeimittal counter strategies to prevent • Diversified portfolio includes market opportunities at $10.0 (2.0%) market share erosion like specialty therapeutic areas billion and $26.5 billion developing their own generics Other* (61.0%) • Efficient global distribution channels respectively. internally. *Other includes revenues of remaining market participants. Source: Frost & Sullivan M74E Generic Pharmaceuticals Market- A Global Analysis, December 2011. 4
    • Biosimilars Market SummaryHow big is the market and how fast What are current market dynamics and what are the external challenges?is it growing? Region: Global The Biologics Price Competition and Innovation Act of 2009 (BPCIA) established an abbreviated regulatory pathway for the approval of biosimilars, will pave the way into an untapped U.S. market Revenue Growth ($ Billion) Rate (%) which represents only 15 percent of the global market. The favorable European regulatory environment has allowed a number of biosimilar approvals leading to 40 percent of the global2012 1,034.2 - market. The remaining global market share is driven by India and China biosimilar markets. Clinical2013 1,701.3 64.5 trial requirements for biosimilars are more rigorous than those for conventional generics and add to2014 2,798.7 64.5 development costs and final pricing. Potential skepticism to biosimilars may be overcome with unbiased educational programs for physicians that convey convincing non-inferiority clinical data2015 4,603.8 64.5 for products from reputable companies highly experienced with biologics.What are the key opportunities and risks for this market? Which companies are successful in this market and why? Opportunities Risks Company (Global Market • Cost Share in 2010)• Patent expiries of blockbuster • Products with different • Safety and efficacy data biologics present large market administration routes may gain Sandoz International • Testing in specific populations opportunity. favor over less-desirable (48.4%) methods. • Reputation of the manufacturer• Doctors may be more willing to Teva Pharmaceutical • Doctors may not be willing to (29.3%) prescribe biosimilars for certain switch patients from indications (e.g. oncology) over Other* (22.3%) biopharmaceutical to biosimilar. others (e.g. immunological • Biosimilars are not expected to disorders). provide as significant cost- savings as generics. *Other includes revenues of remaining market participants. Source: Frost & Sullivan Vital Signs June 2012, Global Biosimilars Market. 5
    • Key Market Trends 6
    • Key Market Trends: Therapeutic Areas 7
    • Asia outlook 8
    • Diverse population structures with varying levels of purchasing power 2006 2010 2016 CAGR (2006-2016F) 0.5% 1,400 1.6% -0.5% 1,200 1.3% 0.9% 1.0%Population (million) 0.5% -0.1% 1,000 2.1% -0.2% 800 1.2% -0.2% 600 1.5% 0.7% 2.6% Increasing consumer power 2.7% 0.4% 400 0.9% 0.2% •Rural population, low income, relies on government support. 200 2.3% •Upwardly growing middle class, living in 3.9% tier 2 cities, educated, can pay for some level of healthcare 0 • High income category, first adopters of new technology, services, private HC Asia Pacific Mature markets Sources: World Economic Outlook (WEO), World Bank and countries data. CAGR data is for 2006 to 2016 9
    • Increased Prosperity and Middle Class Consumptionwill Fuel Healthcare Expenditure Middle Class Consumption (2009) Middle Class Consumption (2030) Other Asia India 9% Other Asia 4% Other 14% Other 20% China 26% 2% US Japan 7% India 8% 23% EU 14% US EU 21% Japan China 30% 4% 18%•Middle class consumption in China and India will surpass Origins of Global Middle Class (%)that of EU and US by 2030 100 5 6 2 2 Middle East and North Africa•APAC will contribute to 59% of global middle class 80 28 Sub-Saharan Africaconsumption by 2030, rising from 23% in 2009 53 60•Over half of the middle class will be from the APAC region Asia Pacificby 2020 40 36 Central and South America•Both factors will be a major growth driver for HC 22 20 EUexpenditure and the growth of the HC delivery market asdemand increases across the region 18 10 0 North America 2010 2020 Source: OECD, Smith Barney, Frost & Sullivan 10
    • Ageing Population/ Chronic Disease Prevalence in SEA Ageing of population in Asia Growth of Chronic diseases in Asia Philippines Philippines Malaysia Malaysia India India Indonesia Indonesia China China Thailand Thailand Singapore Singapore Hong Kong Hong Kong Japan Japan 0.0% 10.0% 20.0% 30.0% 40.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 2016 2011 2016 2011 % >=65 year olds of the total population in 8 countries [2011, 2016] % population with at least one chronic disease 2011, 2016 SEA countries still have a relatively young population, but are having an increasing aging population >60 yearsranging from 17%-25% (increase of 3-5% over 2003) resulting in the demand for localised/ improved healthcare facilities to treat chronic and critical illness. While Japan, Australia and Hong Kong have highest proportion of aged, among SEA nations, Singapore and Thailand have the highest proportion of aged populations. Source: Frost & Sullivan analysis 11
    • The Last Word 12
    • Current Challenges Pharma and Biotech Industry: Challenges Analysis, Global, 2012–2018Concept Impact (7 Years) • Greater need for antivirals and anti-parasites • Different regulations in each market (approval, pricing, and so on)“Pharmerging” • Slower growth of biologicsMarkets • High-volume markets • Focus on lower-cost therapies • Blockbusters will no longer be a focus • Different therapeutic categories affected at different rates • Enhanced efficacy • Increased safetyPersonalized Medicine • Price per patient likely to increase • Better clinical studies due to better patient selection • Expense of diagnostic development • Need for new classes of drugsBig Pharma andBiotech Companies • Physicians may be hesitant to switch a patient from branding drugs to biosimilarsDeveloping/ • 30 percent price reduction for biosimilars may not be enoughCommercializing • The price of branded products may match that of biosimilarsBiosimilars and/or • Large pharma and biotech companies likely to focus on bio-betters, not biosimilarsGenerics • Pharma will be scrutinized • There will be more reporting of bad/good experiencesSocial Media • However, social media will help create awareness of diseases as well as provide opportunity for recruiting patients for clinical trials Source: Frost & Sullivan analysis. 13
    • The Last Word 14
    • The Frost & Sullivan Story • Pioneered emerging market & technology research • Partnership relationship with clients, via consulting services and• Founded in 1961 cross-industry events• Over 1,800 Consultants/Analysts, • Visionary innovation support via across 42 global locations on six megatrends research, development continents of the GIL global community• 10,000+ clients worldwide, including emerging companies, the global 1000, and the investment communityGrowth Partnership Growth Consulting Events Services 15 15
    • One Provider Linking Data Collectionwith Strategy Development Market Research Marketing Consulting Strategy Data Collection Analysis Implement & Planning Physicians, Hospitals Market Landscape Corporate Strategy Marketing Patients, Caregivers Market Size, Share, Growth Geographic Expansion Best Practices Suppliers, Manufacturers Technology Growth Innovation Lead Development Focus Groups Economic Product Development Case Studies Observational Research Global Perspective Growth Workshops Online Surveys16 16
    • Healthcare ProgramsCore Growth Markets Life Sciences Advanced MedTech Connected Health Convergence of Therapeutics/ Medical Imaging Modalities Provider Information Technology Diagnostics & Services Analytics Pharma Pipelines Contrast & Radiopharma Health Information Exchange Next Generation Biologics Surgical & Orthopaedic Solutions Revenue Cycle Management Generics/Biosimilars Infection Control Solutions Telehealth Vaccines Wound Management Remote Monitoring Life Science Research Tools Patient Monitoring Solutions Video Telemedicine Next Generation Sequencing Ventilation and Anaesthesia mHealth Contract Outsourcing Sleep Diagnostics & TherapyCore Geographies: Top 7 EU, U.S., Japan and selected emerging markets (BRIC, APAC and Africa), depending on pillarCore Know-How: Market landscaping, end-user insights, technology tracking, benchmarking, visionary innovationCore Delivery Platforms: Online access, analyst interactivity, private analyst briefings, quick response database search Defining how informationEnsuring clients have the tools to Enabling efficient and outcomes technology improves patient care,succeed in the new era of oriented healthcare delivery operational efficiencies, and costpersonalized medicine control17 17
    • TEAM Research SubscriptionsGrowth Partnership Services18 18
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    • Additional Information Donna Jeremiah Director Corporate Communications, Asia Pacific djeremiah@frost.com Tel: +61 (02) 8247 8927 Carrie Low Jessie Loh Manager Executive Corporate Communications, Asia Pacific Corporate Communications, Asia Pacific jessie.loh@frost.com carrie.low@frost.com Tel. (65) 6890 0942 Tel. (603) 6204 5910 20
    • Contact Your Life Sciences TeamJennifer Brice Reenita DasGlobal Program Manager – Life Sciences Global Leader, Growth Partnership Services Healthcare +1 (650) 475 4560 jennifer.brice@frost.com (+1) 408 8579 386 rdas@frost.comGeeta Dhanoa Rhenu BhullerAssociate Director, Growth Partnership Services Vice President, Healthcare– APAC, Healthcare GVP, Pharmaceuticals (+60) 03 62045828 (+65) 6890 0986 geeta@frost.com rbhuller@frost.com 21