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What Underpins the Success of the Biopharmaceutical CMOs in Europe?
 

What Underpins the Success of the Biopharmaceutical CMOs in Europe?

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An analyst briefing about what underpins the success of biopharmaceutical CMOs in Europe.

An analyst briefing about what underpins the success of biopharmaceutical CMOs in Europe.

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    What Underpins the Success of the Biopharmaceutical CMOs in Europe? What Underpins the Success of the Biopharmaceutical CMOs in Europe? Presentation Transcript

    • What Underpins the Success of theBiopharmaceutical CMOs in Europe? Aiswariya Chidambaram, Research Analyst Healthcare October 31, 2011
    • Today’s Presenter: Aiswariya Chidambaram 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.Aiswariya - General Medicine – Antibiotics, Anti-fungals, and Health supplements. - Women’s Healthcare – Oral ContraceptivesChidambaram What I bring to the Team • In depth knowledge of four specific Therapeutic segments.Research Analyst, • Expertise in tracking Industry trends and events as part of Market Vigilance.Healthcare Practice, • Reasoning based recommendation for improved efficiency.Frost & Sullivan • Excellent communication and presentation skills.Global, Career HighlightsChennai, • Have successfully completed a NIH project on Filariasis at the Tuberculosis Research Centre (Chennai).India • 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. 2
    • Focus Points The rise of Biopharmaceuticals Biopharmaceutical Industry in Europe Biopharmaceutical R&D – What’s in the pipeline? European Biopharmaceutical Contract Manufacturing Market – A snapshot Summary of Key Market Drivers and Restraints and Challenges Technology – “The Powerful Tool”Focus Points Anticipating Capacity Demand – A Tricky Speculation 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 3
    • The Rise of Biopharmaceuticals“Biopharmaceuticals – The Length and Breath ofHealthcare in Future”What are biopharmaceuticals? – Biopharmaceuticals are pharmaceutical drugs based on protein, therapeutic serum, virus, vaccine, blood Technology Applications components or derivatives or gene transfer products, directly administered Monoclonal Research into the blood stream by injection. They are complex macromolecules with Antibodies very high molecular weights compared to small molecules. Therapeutics Recombinant Diagnostics ProteinsBiopharmaceutical Manufacturing – Biopharmaceuticals are generally Protein expressed in mammalian cells (mice, rabbits, etc.) or micro-organisms Therapeutics (yeast, bacteria, etc.). Manufacturing involves highly sterile, aseptic conditions and highly sensitive to changes in environment. Formulations are Oligonucleotides predominantly injectables – pre-filled syringes or cartridges. Gene Therapy Why Biopharmaceuticals? Source: Frost and Sullivan Stronger focus on target diseases, more effective and potent action, potential to cure diseases rather than just treating symptoms, lesser side effects. 4
    • The Biopharmaceutical Industry in EuropeOverview of the European Biopharmaceutical Industry Biopharmaceutical Market: Percent Contribution of Therapeutic Segments (Europe), 2011 Public Biotech Company Data Insulin Sales Revenues $18.465 B Vaccines 6.52% Recombinant Proteins 10.33% R&D Expenditure $4.828 B 34.25% Net income (loss) $.651 B Market Capitalization $84.394 B Number of Companies Public companies 182 48.9% Private companies 1,665 Monoclonal antibodies Total 1,847 Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan The European Biopharmaceutical Industry grew by 11 per cent from 2009 to 2010. 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 percent 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. 5
    • Biopharmaceutical R&D in Europe – What’s in the Pipeline? Biopharmaceutical Market: Number of Drugs in Various Stages of Clinical Pipeline, by Country (Europe), 2011 250 More than 1,200 biopharmaceuticals in the pipeline. 200 More than 50 percent of the drugs represented by the five major countries. 150 UK (234) and Germany (150) have theNumber of drug candidates maximum number of drug candidates in the 100 pipeline. Spain has shown a significant increase of 30 50 per cent in 2010 from its 2009 pipeline. 0 Spain Italy France Germany United Kingdom Phase I Phase II Phase III Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan The Biopharmaceutical R&D expenditure in Europe, grew by 5 percent 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 percent of the products in the European pipeline account for therapeutic monoclonal antibodies. Source: Frost and Sullivan 6
    • European Biopharmaceutical Contract ManufacturingMarket – A Snapshot The European Biopharmaceutical contract Manufacturing Market is estimated to be over $1.2 billion in 2011, growing at nearly 11 percent. Biopharmaceutical Contract Manufacturing Market: Percent Sales Contribution of Segments (Europe), 2011 microbial 35% mammalian 65% Note: All figures are rounded; the base year is 2011. Source: Frost & SullivanBiopharmaceutical Contract Manufacturing Market: Distribution Biopharmaceutical Contract Manufacturing Market: Distribution of of CMOs by Products Manufactured (Europe), 2011 CMOs by Manufacturing Services Offered (Europe), 2011 Commercial supply 40 44 27% 73% Clinical only w ith 10 commercial 10 Clinical supply 39 46 Multipurpose CMOs only MAb & PAb CMOs Total Contractors 49 56 0 10 20 30 40 50 60 No. of CMOs Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan Recombinant proteins Monoclonal Antibodies 7
    • Key Market Drivers and Restraints SummaryBiopharmaceutical Contract Manufacturing Market: Key Drivers and Restraints Summary (Europe), 2012-2018 Key Drivers Enormous cost and time saving benefits offered by CMOs Blockbuster biologics worth Increasing interest of Big $30 billion set to pharma companies to lose patent expand into the biotech protection by 2018 sector Highly capital Increasing intensive and risky competition from low Increasing stringency Financial crisis and sector cost Asian CMOs in regulatory standards poor performance of the venture capital industry in Europe Breach of patent and IP related informationKey Restraints/Challenges Source: Frost & Sullivan 8
    • Technology – “The Powerful Tool” Disposables/ SUBs Upstream & Downstream Lyophilisation & PAT Innovation • Customizable • Optimized expression • Minimizing human design systems errors Funding • Enhanced • Enhanced cell • Maximizing Expertise Productivity productivity & viability productivity • Significant • Simplified purification • Improvised Regulatory operational process product qualitycompliance benefits • Improved selectivity “Any sufficiently advanced technology is indistinguishable from magic” – Arthur C. Clarke Upstream technologies Single Use Technologies are specially • Lyophilisation - protein based drugs, • cell productivity - 2-4 g/L in established preservation and packaging designed for production processes • Muti-product contract manufacturing • Process Analytical Technologies • 4-6 g/L in pre-clinical and clinical (PAT) - product driven approach to • Easy transfer of operations manufacturing processes process based one • Busy facilities and lean operations Downstream technologies • Standardization of processes • mAbs – filtration & purification resins • Reduced degree of variation • Recombinant proteins - higher selectivity and flow-through mode purification steps 9
    • Anticipating Capacity Demand – A Tricky Speculation Biopharmaceuticals Market: Demand for Outsourcing of Biopharmaceuticals Contract Manufacturing Market: Biopharmaceutical Manufacturing to CMOs (Europe), Industry Capacity Utilization Rates Forecasts (Europe), 2011 - 2018 2011 - 2018 17.5% 17.5 17.4% 17.0% 17 16.8% 16.5% 16.5 16.2% Demand for 16.1% Outsourcing (%) 16 15.9% 15.5 15 2011 2012 2013 2014 2015 2016 2017 2018 YearNote: 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 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. Source: Frost and Sullivan 10
    • Key Biopharmaceutical CMOs in Europe – An OutlookBiotech Contract Manufacturing Market: CMO Market Share by Tiers of Competition (Europe), 2011 Tier 1Market Share: 20 - 40 percent Tier 2•Lonza•Boehringer Ingelheim Tier 3 Market Share: 5 - 10 percent •Rentschler Biotechnologie •Sandoz •Fujifilm Diosynth Biotechnology •Royal DSM Market Share: < 5 percent •Celonic GmbH •BIOMEVA GmbH •ProBioGen AG •Others Source: Frost and Sullivan 11
    • Market Potential and Business OpportunitiesStrategic and highly competitive marketMammalian Contract Manufacturing - future of CMOsBiosimilars are likely to have a great impact on the market growthPotential drug candidates in pipelineIncreasing interest of Big Pharma companies and multinational generic companies Increasing number of newly reported diseasesRemarkable success of existing biopharmaceuticalsAdvent of newer, innovative technologiesStrategic alliances between technology providers and CMOs“There is untapped potential for CMOs which are properlypositioned, as it is a market, where high growth and rapid rise inprofits are anticipated.” Source: Frost and Sullivan 12
    • Potential Threats to Biopharmaceuticals Cloning Other Threats Product failures – pre- clinical and clinical Transgenic Capital investment animals Financial crisis in Europe Negative perception of Industry Regulatory barriers Careful outweighing of benefits and risks is essential Intellectual property and for CMOs in order to grow and sustain in the patent laws Biopharmaceutical Contract Manufacturing Market. Source: Frost and Sullivan 13
    • What Can Be Expected in the Future? Transition from “small molecule Globalization blockbuster” model to “biopharmaceutical Consolidations, mergers, acquisitions model Opening and expansion of Asian markets Global capital markets Increase in public awareness, acceptance and approval of Government biopharmaceuticals Regulatory bodies like EMEA to drive new product and technology introduction Increase in outsourcing of Increase in approval rates of new biopharmaceutical manufacturing by Big biopharmaceuticals and biosimilars Pharma companies Therapeutics Development of “Virtual Pharma” Development of RNA-i based therapeutics Differentiation and consolidation Development of anti-sense based therapeutics Recombinant protein therapeutics strategies adopted by Biotech companies Monoclonal antibodies and CMOs Technology “A-one-stop-shop” offered by CMOs, Development of Transgenic technologies promoting a complete portfolio of products Stem cell technologies and comprehensive range of services Cloning technologies Large CMOs moving into niche areas of biopharmaceutical manufacturing Further development and implementation of transgenic technologies“ The best way to predict the future is to create it” – Peter Drucker Establishment of regulatory pathways for biosimilars and transgenics Source: Frost and Sullivan 14
    • Facing the Change“ 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 Strategic Posture Actions Strategy • Develop biopharmaceuticals for key indications • React and respond as needed Reacting to • Customize according to customer needs and • Defend and protect company’s Change preferences position in the market • Comply with new government policies • Analyze prospects for market globalization • Plan ahead for future changes • Research customer needs, preferences and • Invest in R&D Anticipating expectations Change • Monitor new technological developments to • Instill competitive capabilities predict future • Improve product line • Foresee capacity requirements • Strengthen distribution • Pioneer new and better technologies Leading • Seize the offensive • Introduce innovative products, that open new the market opportunities and spur creation of whole • Be the agent of industry Change new industries change • Seek to set industry standards • Influence rules of the game • Force rivals to follow Source: Frost and Sullivan 15
    • Conclusions The future of contract manufacturing in Europe is controlled by mammalian cellmanufacturing. Demand for contract manufacturing and capacity additions is strongly driven bybiosimilars and pipeline of biologics. Interest of Big Pharma companies in the Biopharmaceutical sector is likely to setthe consolidation wave high in the industry. Manufacturing capacity demand – supply gap is likely to shift towards excessdemand by 2018. Given the immense potential and growth opportunities in the BiopharmaceuticalContract Manufacturing Market, particularly mammalian contract manufacturing, theCMOs which are properly aligned are sure to emerge as bread winners. Source: Frost and Sullivan 16
    • Next Steps Request a proposal for Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. (enquiries@frost.com) Join us at our annual Growth, Innovation, and Leadership 2012: A Frost & Sullivan Global Congress on Corporate Growth occurring 15 – 16 May, 2012 (www.gil-global.com) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 17
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    • For Additional InformationJanique Morvan Noel AndersonCorporate Communications European Vice PresidentHealthcare New Business Development+ 33 (0) 679 22 4142 +44 (0) 207 343 8389janique.morvan@frost.com noel.anderson@frost.comRanjith Gopinathan Siddharth SahaProgram Manager Director of ResearchHealthcare Healthcare0091 (0) 44 66814242 0044 (0) 207 343 8374ranjith.gopinathan@frost.com siddharth.saha@frost.com 20