• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
First Word Pharma Outlook Q1 2013
 

First Word Pharma Outlook Q1 2013

on

  • 2,277 views

 

Statistics

Views

Total Views
2,277
Views on SlideShare
2,277
Embed Views
0

Actions

Likes
1
Downloads
61
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    First Word Pharma Outlook Q1 2013 First Word Pharma Outlook Q1 2013 Document Transcript

    • PHARMA OUTLOOK Q1 2013
    • 2 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Introduction Evidence from the first quarter of 2013 demonstrates that the pharmaceutical industry remains in a period of notable transition. On the positive side, the FDA approved the highest number of new chemical entities in 2012 for 16 years. FirstWord’s analysis of the top 50 sales growth drivers demonstrates that eight of these newly approved products will generate considerable revenue for the industry over the next five years. But challenges remain. Simple mathematics dictate that approval rates – and the industry’s ability to deliver new innovative products to the regulatory authorities – must be consistently maintained if sizeable revenue declines attributable to patent expirations and generic competition are to be compensated for. Furthermore, the post-patent cliff market landscape continues to evolve and present new hurdles for pharma manufacturers to overcome. Central to this thesis is the notion of what ‘value’ pharmaceutical products now provide to payers and providers; the days of achieving commercial success simply by delivering something new to the market are long gone. Europe continues to lead the way in terms of pricing pressure, but many suggest that the industry is naive to think that elements of this rhetoric and the measures being implemented by payers will not begin to creep into the US in the medium term. How the industry moves with the times to best promote value and innovation is also a critical element in this brave new world. Whether this encompasses new strategies in how products are promoted to physicians, or how the industry embraces the digital world and social media, remains to be seen. Branded manufacturers also face a potential new ‘generic’ foe in the form of biosimilar competition; a threat that remains difficult to measure, but is tangible enough to have prompted numerous defence measures from branded players in recent months. We hope you enjoy this first quarterly supplement from FirstWord Pharma, which provides analysis and insight into a handful of key themes that have developed in recent months. Contents The five year outlook – Pharma’s biggest growth drivers 2012-17 FDA approval rate drives industry growth momentum Smarter cytotoxics represent evolution of oncology treatment European pricing pressures continue – what next for the US pharma market? Independent Medical Education: A Rising Tide Lifts All Boats? Big Pharma’s stance on biosimilars – gamekeeper or poacher? COPD and IBS drugs lead promotional spending among newly launched products It’s about time ... how market forces, technology and industry culture have shaped the current multichannel strategy
    • 3 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 The five year outlook – Pharma’s biggest growth drivers 2012-17 As analysts at Goldman Sachs wrote in a recent report – drugs move pharma stocks. This thesis holds true – now more than ever – as industry players begin to move beyond the patent cliff and an increasing number of new products reach the market (as evidenced by the FDA’s approval of 39 new molecular entities in 2012 – the highest number since 1996). Over the next five years, a broad range of pharmaceutical products are expected to drive industry revenue growth. FirstWord’s analysis of the 50 largest growth drivers – those products expected to deliver the most revenue expansion between 2012 and 2017 – provides a timely snapshot as to how manufacturers are hoping to both overcome the patent cliff and negotiate an increasingly complex global pharmaceutical market. Between 2012 and 2017, the pharmaceutical industry’s 50 largest sales growth driving products will contribute an absolute increase in revenues of approximately $80 billion (according to analyst consensus forecasts compiled by FirstWord). The 15 largest growing products will deliver over 50 percent of this revenue expansion, with five products (Gilead Sciences’ sofosbuvir, Roche’s Perjeta, Merck & Co.’s Januvia, Biogen Idec’s Tecfidera and AbbVie’s Humira) each set to contribute an absolute increase in sales in excess of $3 billion during the 2012-17 period. Product Generic name Company Primary indication Product type Launch year Growth 2012-17 ($m) Sofosbuvir sofosbuvir Gilead Hepatitis C Small molecule 2014(e) 4311 Perjeta pertuzumab Roche HER2+ breast cancer Monoclonal antibody 2012 3496 Januvia sitagliptin Merck & Co. Diabetes Small molecule 2006 3441 Tecfidera dimethyl fumarate Biogen Idec Multiple sclerosis Small molecule 2013(e) 3327 Humira adalimumab AbbVie Rheumatoid arthritis Monoclonal antibody 2003 3087 Eliquis apixaban Bristol-Myers Squibb/Pfizer Venous thromboembolism Small molecule 2011 2878 The 50 biggest pharmaceutical sales growth drivers 2012-17
    • 4 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Product Generic name Company Primary indication Product type Launch year Growth 2012-17 ($m) Eylea aflibercept Regeneron/ Bayer Age-related macular degeneration Monoclonal antibody 2011 2871 Revlimid lenalidomide Celgene Multiple myeloma Small molecule 2004 2833 Stribild elvitegravir/ cobicistat/ emtricitabine/ tenofovir Gilead HIV Small molecule 2012 2651 Xtandi enzalutamide Medivation/ Astellas Prostate cancer Small molecule 2012 2377 Prevnar pneumococcal conjugate vaccine Pfizer Pneumococcus Vaccine 2000 2251 Xeljanz tofacitinib Pfizer Rheumatoid arthritis Small molecule 2012 2136 Lantus insulin glargine Sanofi Diabetes Therapeutic protein 2000 1913 Victoza liraglutide Novo Nordisk Diabetes Small molecule 2009 1900 Kadcyla trastuzumab emtansine Roche HER2+ breast cancer Monoclonal antibody 2013 1638 Afinitor everolimus Novartis Cancer (various) Small molecule 2009 1615 ABT-333/ ABT-450/ ABT-267 n/a AbbVie Hepatitis C Small molecule 2014(e) 1563 Xarelto rivaroxaban Bayer/J&J AFib and DVT/PE (thrombosis) Small molecule 2008 1542 NovoRapid insulin aspart Novo Nordisk Diabetes Therapeutic protein 2000 1518 Actemra tocilizumab Roche Castleman’s disease/ Rheumatoid arthritis Monoclonal antibody 2005 1505 Kyprolis carfilzomib Onyx Multiple myeloma Small molecule 2012 1368 The 50 biggest pharmaceutical sales growth drivers 2012-17 continued
    • 5 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Product Generic name Company Primary indication Product type Launch year Growth 2012-17 ($m) Onglyza saxagliptin Bristol-Myers Squibb/ AstraZeneca Diabetes Small molecule 2009 1362 Peg-Avonex pegylated interferon beta- 1a Biogen Idec Multiple sclerosis Therapeutic protein 2014(e) 1340 Soliris eculizumab Alexion Paroxysmal nocturnal hemoglobinuria Monoclonal antibody 2007 1313 Gilenya fingolimod Novartis Multiple Sclerosis Small molecule 2010 1310 Xgeva denosumab Amgen Bone metastases Monoclonal antibody 2010 1281 Anoro umeclidinium bromide/ vilanterol GlaxoSmithKline Chronic obstructive pulmonary disease Small molecule 2013(e) 1254 Tasigna nilotinib Novartis Chronic myeloid leukaemia Small molecule 2007 1246 Avastin bevacizumab Roche Cancer (various) Monoclonal antibody 2004 1168 Abraxane paclitaxel Celgene Breast cancer Small molecule 2005 1151 Vyvanse lisdexamfetamine dimesylate Shire Attention deficit hyperactivity disorder Small molecule 2008 1145 Apremilast apremilast Celgene Psoriasis Small molecule 2013(e) 1140 Stelara ustekinumab J&J Psoriasis Monoclonal antibody 2009 1125 Bydureon exenatide Bristol-Myers Squibb/ AstraZeneca Diabetes Small molecule 2012 1110 Nesina alogliptin Takeda Diabetes Small molecule 2010 1065 Orencia abatacept Bristol-Myers Squibb Rheumatoid arthritis Therapeutic protein 2005 1013 The 50 biggest pharmaceutical sales growth drivers 2012-17 continued
    • 6 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Product Generic name Company Primary indication Product type Launch year Growth 2012-17 ($m) Daclastasvir/ asunaprevir daclastasvir/ asunaprevir Bristol-Myers Squibb Hepatitis C Small molecule 2015(e) 957 Xalkori crizotinib Pfizer Cancer Small molecule 2011 927 Botox botulinum toxin Allergan Strabismus Therapeutic protein 1990 917 Tysabri natalizumab Biogen Idec Multiple Sclerosis Monoclonal antibody 2004 901 Aubagio teriflunomide Sanofi Multiple Sclerosis Small molecule 2012 883 Brilinta ticagrelor AstraZeneca Prevention of thrombotic events Small molecule 2011 879 Rituxan rituximab Roche Non-Hodgkin’s lymphoma Monoclonal antibody 1997 872 Zostavax herpes zoster vaccine Merck & Co. Herpes zoster Vaccine 2006 845 Vascepa ethyl eicosapentaenoic acid Amarin High triglyceride levels Small molecule 2012 822 Complera emtricitabine/ rilpivirine/ tenofovir Gilead HIV Small molecule 2011 811 Yervoy ipilimumab Bristol-Myers Squibb Melanoma Small molecule 2011 774 Iclusig ponatinib ARIAD Chronic myeloid leukaemia Small molecule 2013 774 Tresiba insulin degludec Novo Nordisk Diabetes Therapeutic protein 2013 774 QVA149 indacaterol maleate/ glycopyrronium bromide Novartis Chronic obstructive pulmonary disease Small molecule 2013 759 Source: Consensus forecasts compiled by FirstWord Pharma; Company reported information The 50 biggest pharmaceutical sales growth drivers 2012-17 continued
    • DIA 2013Advancing Therapeutic Innovation and Regulatory Science 49th Annual Meeting | June 23-27 | Boston, MA | Boston Convention and Exhibition Center SESSION HIGHLIGHTS: • Reinventing the R&D Business Model: Heeding the President’s PCAST Report on Innovation • Leveraging In-Pharmacy Education to Improve Patient Comprehension and Access to Clinical Trials • The State of Clinical Outsourcing: Managing Risk in Outsourced Clinical Trials FEATURED SESSIONS: Collaborating to Streamline Drug Development: Are We Making Progress? Where Research, Medicine and Care Converge: A CMO Roundtable Discussion Register at diahome.org/DIA2013FW Michael Rosenblatt, MD Executive Vice President and Chief Medical Officer, Merck & Co., Inc. Tim Garnett, MD Chief Medical Director and Senior Vice President, Eli Lilly and Company Richard L. Schilsky, MD Chief Medical Officer, American Society of Clinical Oncology Dalvir Gill, PhD CEO, TransCelerate Biopharma Inc Patrick Archdeacon Medical Officer, Office of Medical Policy, CDER, FDA Douglas J. Peddicord, PhD Executive Director, Association of Clinical Research Organizations Christine K. Pierre, RN President, Society for Clinical Research Sites Pamela Tenaerts, MD, MBA Executive Director, Clinical Trials Transformation Initiative (CTTI), Duke Translational Medicine Institute REGISTER BYMAY 17THto be included in the Advance Attendee List Largest, Global Multidisciplinary Event
    • 8 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Which companies are set to benefit? The influence of the Big Pharma and biotechnology peer sets is evenly exerted over the list of key growth drivers. Of the 15 largest growing products, for example, eight are marketed by Big Pharma players and seven by leading biotechnology companies. However, the crossover that exists between these two sectors is very much in evidence; of the eight Big Pharma products, four (Perjeta, Humira, Sanofi’s Lantus and Roche’s Kadcyla) are biologics, while Roche’s status as the most biotech-focused Big Pharma player is intrinsically shaped by its long-term relationship with Genentech (which was fully acquired by the Swiss drugmaker in 2009). Fuelling a Big Pharma revival? Exposure to the patent cliff has not only redefined the parameters that Big Pharma works within, but the companies themselves. Concurrently, the shifting market landscape has lead to an evolution of the growth model at a product level. The archetypical growth driver product is now less likely to be defined by its size, but by how targeted it is, and is less likely to be developed in-house or integrated into the pipeline by large-scale M&A, and more likely to be shaped collaboratively. Most importantly, the next generation of growth drivers have to demonstrate their value to payers – simply being ‘new’ is no longer good enough. Bristol Myers-Squibb holds an interest in six products included among the industry’s 50 largest growth drivers; three of which are/will be marketed exclusively by the US drugmaker (Orencia Daclastasvir/asunaprevir and Yervoy) and three of which are marketed with partners (Eliquis – with Pfizer - and Onglyza and Bydureon – both with AstraZeneca). Combined revenue expansion over 2012-17 from these six products (including revenues that will be split with collaborators) is forecast to be in excess of $5 billion. Roche is in possession of five products included on FirstWord’s list; all which are biologics and four of which are oncology products (where Roche is already positioned as the dominant player). Perjeta and Kadcyla Sofosbuvir Integrated into Gilead’s pipeline via its $11 billion acquisition of Pharmasset, the NS5B nucleotide inhibitor sofosbuvir is firmly established as the most advanced ‘cornerstone’ therapy that will facilitate the treatment of hepatitis C without the need for interferon and ribavirin (both of which commonly cause unpleasant side-effects). Furthermore, in combination with Gilead’s NS5A inhibitor – GS-5885 – sofosbuvir appears poised to provide a once- daily, single pill treatment option that will effectively cure hepatitis C in most patients. In those with harder to treat genotypes, this combination is likely to prove equally effective when prescribed with older therapies. Key to driving expected revenue growth for the sofosbuvir franchise is the ‘warehouse’ effect – i.e. usage of the treatment among patients whom have been ‘held back’ by physicians. According to analysis by FirstWord, US gastroenterologists are currently warehousing around a third of diagnosed patients for treatment with all oral therapies.
    • 9 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 – its two newest approvals, both indicated for HER2-positive breast cancer – are forecast to act as the two largest growth drivers, followed by Actemra which is indicated for the treatment of rheumatoid arthritis. Testament to the longevity of Roche’s oncology mAb (monoclonal antibody) brands, both the Avastin and Rituxan franchises are expected to remain among the industry’s largest growing products over the next five years, despite being launched in 2004 and 1997, respectively (the exclusion of Roche’s other key product – Herceptin – is only dictated by anticipated cannibalisation of sales by Perjeta and Kadcyla). Four products marketed by Novartis will feature among the industry’s largest growing drugs over the next five years, comprising Afinitor, Gilenya, Tasigna and the yet-to-launch respiratory treatment QVA149. By 2017, the Swiss company is forecast to be the industry’s largest player in terms of prescription pharmaceutical revenues. However, while these key growth driver products will play a role in powering this ascent, a lack of any Novartis products among the very largest growth drivers is indicative of the company’s growth strategy, which comprises a focus on delivering a higher number of more targeted therapies to market (with potentially smaller peak sales, but greater ‘best in class’ credentials – the development of “breakthroughs, not blockbusters”), and its broad diversification strategy encompassing generics, vaccines, diagnostics and ophthalmology products. Pfizer also possesses four products on the list, the most prominent of which – the anticoagulant Eliquis – it co-markets with Bristol-Myers Squibb. Its Prevnar vaccine franchise (integrated into the Pfizer portfolio via the 2009 acquisition of Wyeth) is expected to remain an ongoing growth driver, while its oral rheumatoid arthritis treatment (and a potential rival to biologic anti-TNF therapies) Xeljanz is expected to become a blockbuster Perjeta Approved by the FDA in mid-2012 as a first-line treatment for HER2 positive metastatic breast cancer in combination with Herceptin, Roche’s Perjeta (pertuzumab) represents a key launch for the Swiss drug maker. At the crux of Perjeta’s anticipated commercial performance is a simple case of mathematics; combined use of Herceptin (wholesale cost of $4500 per month) with Perjeta (wholesale cost of $5900 per month) increases both the cost and duration of therapy (a typical course of therapy being 18 months). Physician enthusiasm for Perjeta appears high; a survey carried out by Deutsche Bank analysts shortly after launch indicated that a third of oncologists expected to prescribe the combination therapy in the first-line setting by the end of 2012, with cost somewhat blunting use (Roche has spoken about the concept of ‘personalised pricing’ to counter market access concerns tied to the high cost of combinational therapy). Longer term, Perjeta is likely to cement first line status in the HER2 positive setting via combinational use with Kadcyla (trastuzumab emtansine), Roche’s antibody drug conjugate recently approved in the second line setting. Results from the ongoing MARIANNE study read out in 2014; approval in the first line setting would significantly enhance Roche’s insulation from biosimilar competitors targeting the older Herceptin franchise.
    • 10 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 by 2015, according to current analyst forecasts. Its other key growth driver is Xalkori – which extends the industry trend for targeted small-molecule cancer therapies – in this instance for the treatment of non-small-cell lung cancer (NSCLC). Having suffered more than most at the hands of the patent cliff – loss of US exclusivity for its statin therapy Lipitor in November 2011, the company’s nadir – approval of Eliquis and Xeljanz in 2012 has injected much needed new product momentum into Pfizer. Januvia Given its status as a small molecule drug targeting a large primary care market (diabetes), Januvia stands out as something of an anachronism among its key growth driver peers – a throwback to the golden days of the blockbuster that defined Big Pharma a decade ago. That is not to take anything away from Merck & Co., however, particularly as Januvia is forecast to match its historical predecessors in terms of revenue growth; sales are expected to reach around $8 billion by 2017 thereby positioning the drug as one of the biggest selling of all time. A first- in-class launch (it is a DPP-IV inhibitor), Januvia secured this status given Merck’s willingness to streamline some elements of the late stage development process. Analysts remain confident that Januvia will remain the entrenched market leader despite intensifying competition and sales could expand if post-approval outcome studies demonstrate a cardiovascular benefit. Figure 1 Source: FirstWord Pharma 0 500 1000 1500 2000 2500 3000 0 1 2 3 4 5 6 7 BMS Roche Novartis Pfizer Gilead Novo Nordisk Biogen Idec Celgene Number of products in top 50 Avg. rev growth per product ($m)
    • 11 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 A second biotech bubble delivers Biotech stocks are once again booming. In March, the Nasdaq Biotech Index (NBI) reached an all time high, peaking above the ‘bubble’ at the beginning of the last decade. Represented by the likes of Gilead, Biogen Idec, Regeneron, Celgene, Medivation and Onyx – the biotech peer set is forecast to contribute some of the most important growth driver products over the next five years. Three products stemming from the US biotech Gilead are positioned among the top 50 growth drivers, including two among the top 10, one of which – sofosbuvir, expected to become the front-running oral hepatitis C treatment – is forecast to be the largest growing drug franchise across the entire pharma industry over 2012-17. The others are Stribild and Complera, both of which are expected to help Gilead retain its leadership in the HIV market. Combined revenue growth from these three products is forecast at around $7.8 billion over 2012-17, enhancing Gilead’s status among the industry’s elite biotechnology players. Danish drugmaker Novo Nordisk possesses three key growth driving products, all positioned in the company’s core area of diabetes. The company’s market leading GLP-1 receptor agonist Victoza is expected to deliver revenue growth of nearly $2 billion over the next five years, with additional growth of $1.5 billion expected from the NovoRapid franchise. Despite the FDA rejecting Novo Nordisk’s long-acting basal insulin Tresiba earlier in 2013 (and the requirement of a cardiovascular outcomes trial set to delay any launch in the US market by between three and five years), uptake of this product in the European, Japanese and other markets will see this newest addition to the company’s portfolio also add substantial revenue growth through to 2017, according to analysts. Three Biogen Idec products – Tecfidera, pegylated Avonex, and Tysabri – are currently positioned as key industry growth drivers over 2012- 17, with each of these drugs positioned within the multiple sclerosis space. Also leading the biotech charge is Celgene, which will market three key growth driver products over the next five years; the already-marketed Revlimid and Abraxane franchises, and Apremilast, which is expected to launch in 2013. The best of the rest... At the company level, a number of further observations can be made. Among the Big Pharma peer set, Tecfidera Approved in March 2013, consensus among analysts, key opinion leaders (KOLs) and physicians indicates that Biogen Idec’s Tecfidera will emerge as the first- line therapy of choice for multiple sclerosis over the next few years, despite being the third-to-market oral treatment (behind Novartis’ Gilenya and Sanofi’s Aubagio). With global sales expected to reach around $3.3 billion by 2017, Tecfidera is poised to be the ‘biggest’ launch of 2013 and alongside Tysabri – which was fully acquired by Biogen Idec earlier this year – will allow the biotech player to enhance its position in the multiple sclerosis market.
    • 12 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 AbbVie, Bayer, Johnson & Johnson, Merck & Co. and Sanofi each possess two products positioned among the industry’s fastest growing products. AstraZeneca possesses three – two of which are co-marketed with Bristol-Myers Squibb as part of the companies’ diabetes collaboration. AbbVie is in possession of what is expected to be one of the industry’s fastest growing products – Humira – but it is arguably the company’s efforts to gain a foothold in the oral hepatitis C market (via ABT-333/ABT-450/ABT- 267) that will prove most important over the next five years. This stems from the very high rate of dependency on Humira, which accounted for approximately 40 percent of AbbVie’s revenues in 2012. Shaped in part by continued strong growth for Humira and exposure to patent expiries, the flagship franchise is expected to account for close to 60 percent of sales by 2017; thus any additional revenue expansion AbbVie can leverage from its hepatitis C portfolio will prove important. Bayer’s two included key growth drivers are both co-marketed products (Eylea with Regeneron, and Xarelto with Johnson & Johnson), while Sanofi and Merck both possess possess diabetes treatments – Lantus and Januvia, respectively – that are expected to be among the industry’s strongest growing products over the next five years. Particularly Januvia, with forecast sales growth of +$3.4 billion. Sales growth derived from the three AstraZeneca products on the list is not expected to offset the significant revenue decline (caused by high-profile patent expiries) that the UK drugmaker faces over the next five years. However, there is some cause for optimism for new CEO Pascal Soriot with Brilinta and AstraZeneca’s diabetes treatments Onglyza and Bydureon, all highlighted as potential platforms for sales expansion; analysts clearly retain some confidence in these products, although it must be noted that revenues for the diabetes treatments are shared with Bristol-Myers Squibb. Among the Big Pharma peer set, Eli Lilly is a notable absentee among the list of leading industry growth drivers. Clearly a list of 50 products sourced from the entire pharmaceutical industry is far from exhaustive; its purpose is to provide a snapshot of the sector at a certain point. Nevertheless, a lack of products sourced from Eli Lilly also highlights a number of key trends. Humira Among the ten largest sales growth drivers over 2012- 17 AbbVie’s Humira is the oldest product, having first been launched in 2003. Its longevity – reflected by continued strong growth over the next five years – is owed in part to its biologic status but primarily at a faster accumulation of market share across a number of inflammatory conditions (rheumatoid arthritis, psoriatic arthritis and Crohn’s disease) versus rival biologic therapies Enbrel and Remicade. Given anticipated revenue expansion by analysts through to 2017, Humira looks set to become on the industry’s biggest selling products of all time – potentially catching Pfizer’s statin therapy Lipitor. The issue for AbbVie is to limit its dependence on the Humira franchise which currently accounts for around 40 percent of sales (and set to rise to 60 percent by 2017).
    • 13 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Faced with a number of recent and impending (Cymbalta) patent expiries, Eli Lilly is very much viewed by analysts at present as a pipeline story. Furthermore, a number of late- stage compounds are currently forecast to deliver sales in 2017 that position them just beyond the parameters of this list, such as ramucirumab and dulaglutide. The same principle can, of course, be applied to products being developed and/or marketed by other players. GlaxoSmithKline, for example, is represented by just one product on this list (Anoro), despite its recognised pipeline credentials. While the list provides a number of very high-profile examples of ‘overnight’ blockbuster success – sofosbuvir and Tecfidera, for example – lack of a notable presence from companies such as Eli Lilly and GlaxoSmithKline demonstrates that in most cases, new products take some time to generate significant revenues. Which disease areas dominate? The pharmaceutical industry’s top 50 growth drivers over 2012-17 span a broad spectrum of diseases, however, a number of therapy areas dominate. Oncology Oncology accounts for 13 products – or 26 percent of the total list. Combined, these drugs are expected to deliver absolute revenue growth of approximately $18 billion over the next five years. The list of leading oncology growth drivers is comprised of a mix of established and newly launched products, with the FDA having approved 15 new molecular entities for the treatment of cancer in 2012 alone this is not surprising. Recently launched products expected to significantly shape the oncology landscape in terms of revenue growth over the next five years include the aforementioned Roche drugs Perjeta and Kadcyla, in addition to Astellas/Medivation’s Xtandi, Onyx’s Kyprolis and Pfizer’s Xalkori. Novartis’ Afinitor straddles both of these categories, having first been approved in 2009, but with a subsequently broadened indication profile that is expected to drive revenue expansion; approval in the key indication of breast cancer was secured in 2012. Eliquis Management at both Bristol-Myers Squibb and Pfizer hope that the anticoagulant Eliquis will fulfil the multi- billion dollar blockbuster potential that analysts have ascribed to it. For Pfizer in particular, the role of Eliquis and Xeljanz (rheumatoid arthritis) as new product growth drivers is seen as critical given the recent lack of US patent exclusivity for Lipitor. Although the market for next-generation anticoagulant products has yet to deliver the scale of revenues that many had anticipated, analysts have cited Eliquis as a potential best-in-class product that holds the potential to displace warfarin. Others – citing a lack of sufficient additional efficacy, coupled with the cheaper cost and decades-long entrenchment of warfarin - are less confident. The performance of Eliquis over the next 12 months will provide some indication as to the correct assessment.
    • 14 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 As mentioned previously, Roche’s dominant position in the oncology antibody space looks set to be retained, not only due to recent approvals, but the long-duration assets Avastin and Rituxan, both of which are expected to deliver significant revenue expansion through to 2017 despite their initial launches in 2004 and 1997, respectively. Diabetes The rapidly growing market for diabetes therapies will account for eight key growth driver products over the next five years, which are forecast by analysts to deliver combined absolute sales growth of around $13 billion. Merck’s Januvia – the dominant player in the DPP-IV drug class – is forecast to be the strongest growing diabetes treatment over the next five years. With sales of the product set to breach the $8 billion mark by 2017, Januvia is expected to become one of the industry’s best selling drugs of all time – with some analysts suggesting that Merck’s franchise can expand at a more rapid rate than this consensus forecast indicates. Sanofi’s Lantus and Novo Nordisk’s Victoza are both expected to deliver absolute growth of around $2 billion over 2012-17. Sanofi will be the key beneficiary of the FDA’s decision to reject Novo Nordisk’s Tresiba in early 2013, but is likely to see growth slow over the course of the next five years as biosimilar competition emerges. One notable feature of the diabetes market – illustrative of the rapid growth expected in this disease area – is its ability to support multiple key growth drivers in singular drug classes; an opportunity that Bristol-Myers Squibb and AstraZeneca will look to exploit via the Onglyza (DPP-IV) and Bydureon (GLP-1) franchises. Immunology & Inflammation Products indicated for the treatment of various immunology and inflammation diseases are forecast to deliver absolute annual sales growth of around $9 billion over 2012-17. Of this, AbbVie’s Humira franchise is expected to account for approximately a third of this disease area’s revenue expansion, with consensus forecasts indicating that the drug will come very close to matching Pfizer’s statin therapy Lipitor as the biggest selling product of all time (in terms of peak year sales). Pfizer’s own foray into the rheumatoid arthritis space – via a novel oral mechanism of action Eylea Launched in late 2011, Regeneron’s wet age-related macular degeneration (AMD) treatment Eylea emerged over the course of 2012 as one of the most successful new drug launches of all time. This performance has been all the more impressive given that Eylea has competed not only with Roche’s blockbuster AMD treatment Lucentis, but also the widespread use of off-label Avastin which is provided to patients at a significantly lower cost (at approximately $50 per injection some 37 times cheaper than Eylea). Growth for the franchise through to 2017 will be driven by continued uptake in the US market – boosted by approval in additional indications such as diabetic macular edema (DME) – and launch in Europe where Eylea will be marketed by Bayer.
    • 15 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 (kinase inhibitor) – will see the recently approved Xeljanz deliver significant revenue growth (+$2.1 billion) over 2012-17. Other key growth drivers in the immunology and inflammation space include later biologic launches, such as Roche’s Actemra, Bristol- Myers Squibb’s Orencia, and Johnson & Johnson’s Stelara. Multiple Sclerosis Key industry growth drivers indicated for the treatment of multiple sclerosis are forecast to generate combined absolute sales growth of around $7.8 billion over 2012-17, driven by the continued uptake of oral therapies. Of the new generation of oral treatments, Biogen Idec’s Tecfidera is expected to become the best selling product (2012-17 growth of +$3.3 billion), followed by Novartis’ Gilenya and Sanofi’s Aubagio. Biogen Idec’s efforts to dominate all areas of the MS treatment algorithm appear to have the backing of current analyst sentiment – both the company’s pegylated version of Avonex (currently in Phase III trials) and its monoclonal antibody treatment Tysabri (for which the company is pursuing first-line use) are also forecast to add substantial revenue growth over the next five years. Hepatitis C Three product ‘franchises’ are set to dominate the hepatitis C market over Revlimid Continued strong revenue expansion for Celgene’s multiple myeloma treatment Revlimid remains closely tied to approval in Europe as a front-line therapy suggest analysts, while management continues to talk up the financial impact of formal front-line status in the US. Regulatory decisions in both territories will be driven by data from the MM-020 clinical trial, with results expected before mid-2013. Source: FirstWord Pharma Number of products in top 50 Avg. rev growth per product ($m) 0.0 0.5 1.0 1.5 2.0 2.5 0 2 4 6 8 10 12 14 Oncology Diabetes I&I Multiple Sclerosis Hep C Figure 2
    • 16 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 the next five years, and between them they will drive explosive growth. In reality it is Gilead’s sofosbuvir-centred franchise that will generate the majority of revenues; forecast at $4.3 billion by 2017, with competing drug franchises under development from AbbVie and Bristol-Myers Squibb set to generate 2017 sales of around $1.6 billion and $1 billion, respectively. The surge in growth for hepatitis C therapies will be driven by the commercial opportunity of an all-oral regimen applicable for many patients, in addition to withdrawal of interferon and ribavirin from the treatment paradigm. Does drug technology dictate any notable trends? Thirty one of the 50 growth driver products are small molecules, and together are forecast to deliver combined absolute sales growth of $50 billion (average growth of $1.6 billion per product). By comparison, there are 17 biologic products identified as key industry growth drivers with combined absolute annual sales growth of $26.8 billion (also average growth of $1.6 billion per product). Within the biologic classification, 11 of the 50 products are monoclonal antibodies (combined absolute annual growth of $19.3 billion, average growth of $2.4 billion); with the remainder classed as therapeutic proteins (combined growth of $7.5 billion, average growth of $1.3 billion). Roche remains the dominant player in the monoclonal antibody market; Source: FirstWord Pharma Number of products in top 50 Avg. rev growth per product ($m) 0 0.5 1.0 1.5 2.0 2.5 3.0 0 5 10 15 20 25 30 Small molecules 35 Mabs Therapeutic proteins Figure 3
    • 17 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 of the 11 products on the list, the Swiss company markets five (three of which are among the five largest growing mAbs over 2012-17). Furthermore, only three of the 11 products are new launches – Roche’s Perjeta and Kadcyla; and Regeneron/Bayer’s Eylea – and these three drugs are among the four largest mAb growth drivers over the next five years. The remainder are established products that have been available for some time. A similar trend is apparent among therapeutic proteins, where four of the six products are already established brands; the recently approved Tresiba and late-stage pegylated Avonex product being developed by Biogen Idec being the exceptions. In contrast, among the industry’s largest growth drivers there are notably more new launches and pipeline products that are small molecules. Just nine of the 31 small molecules (29 percent) included among the top 50 products were approved before 2010. That over two-thirds of small- molecule growth drivers were approved within the last three years would appear to be encouraging for the pharmaceutical industry (factoring in all 50 products, 21 were approved before 2010), particularly in light of exposure to the patent cliff. There is one caveat of course; a list of ‘growth drivers’ is always likely to demonstrate a tendency towards newer products benefiting from a steeper growth trajectory. The higher proportion of older products among biologic growth drivers demonstrates the longevity of these franchises; indeed Roche’s Rituxan – expected to contribute absolute growth of $872 million over the 2012-17 period – was first launched in 1997. However, fewer new biologic products and a lack of impending launches among the list of leading industry growth drivers also demonstrates the challenges that pharma has faced in accessing this potentially lucrative commercial space; to some extent their efforts have been ‘locked out’ by entrenched first-to-market players, such as Roche in the oncology mAb space, AbbVie, Johnson & Johnson and Amgen in the immunology and inflammation biologics space and dominant diabetes players Novo Nordisk, Sanofi and Eli Lilly in the insulin market. As a result, Big Pharma’s investment in biosimilars development is easily understood. Stribild Investor focus at Gilead Sciences is notably sharpened on the company’s late-stage hepatitis C programme (and with good reason, given its commercial opportunity); but with catalyst news flow for sofosbuvir set to slow over the next 12 months as Phase III trials progress, it is the company’s core position in HIV that will regain some attention. This business should accelerate in 2013, note analysts at JP Morgan, with Stribild, to date, having delivered a better than expected performance since launch during the second half of 2012.
    • 18 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 When were the key growth drivers launched? Twenty of the 50 products have been launched since 2010 (including any drugs expected to reach the market in 2013) – including eight products approved in 2012 and a further eight expected to be approved by the end of 2013. Between them, these 20 products will deliver average growth of +$1.6 billion through to 2017. Over half (26 drugs) of the products were approved/launched pre-2010, which would appear to demonstrate that the industry’s very recent and short-term future output (i.e. 2012/2013) is notable for its growth credentials. Seventeen products were approved/launched between 2005/2010, with the other nine drugs first made available prior to 2005. The longevity of these pre-2005 products is exemplified by the fact that just one of the nine products – Celgene’s Abraxane (first approved in 2005) – is a small molecule. The other eight comprise four monoclonal antibodies (Rituxan, Humira, Avastin and Tysabri), three therapeutic proteins (Lantus, NovoRapid and Botox) and one vaccine (Prevnar). Thus it is not a surprise to see that these nine products will deliver an average increase in revenues of +$1.5 billion over 2012-17, the same average revenue growth expected for the 17 products made available between 2005-2010. An interesting trend to note is the diminishing number of non-small- molecule products in each progressive time period: eight products launched pre-2006, six products launched between 2006-10, four products launched since 2010 and just one non-small-molecule key growth driver set to launch between 2014-17. Despite the investment that many leading companies continue to invest in biologic products, this analysis would appear to demonstrate that it is becoming increasingly difficult to deliver new biologics to the market that will drive significant levels of growth. Xtandi The prostate cancer market continues under significant transformation, driven heavily by uptake of Johnson & Johnson’s Zytiga (one of the key launches of 2011) and more recently Medivation and Astellas’ Xtandi. Medivation CEO David Hung noted that 88 percent of oncologists said they were aware of Xtandi just four weeks after launch and although second-to-market behind Zytiga, the blockbuster potential of Xtandi is clear – as is, say analysts, its future position among the standard of care in the metastatic setting. Focus in 2013 will be on both the quarterly sales uptake trend for Xtandi and Medivation’s efforts to differentiate the brand from Zytiga – central to this strategy is the push to demonstrate overall survival in the pre-chemotherapy setting, where Zytiga gained FDA approval in December.
    • 19 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Conclusions As the pharmaceutical industry moves forward, size is expected to become an increasingly outdated commodity. Smaller companies are expected to prosper commercially to a greater extent than in previous years, while at the same time it is being advocated that some of the largest players slim down in order to become more flexible and profitable. Similarly, there is much talk that the blockbuster model is dying out; certainly the era of the past two decades, where the market supported multiple billion dollar products with a single drug class is a thing of the past; however, this list of growth drivers demonstrates that the blockbuster model has not died but simply been redefined. This list provides a snap shot of the pharma industry over the next five years and is not intended to be exhaustive. Furthermore, the list is likely to undergo revision as events occur and analyst opinions change. One would hope that over the next few years the number of pipeline drugs included in the list increases; given the FDA’s record number of new drug approvals in 2012, such a trend would not be unsurprising. One limitation of any forecast is that there is always greater certainty in projecting revenue growth for products that are already on the market, and less certainty for those that continue to undergo clinical testing and which have to negotiate the regulatory arena. A number of high-risk assets – such as the new generation of PD-1 cancer products, for example – are likely to see revenue forecasts increase as certain clinical milestones are reached. This ‘churn’ – of older products for new – both in terms of dictating which products are expected to be the largest growing over the next five years and in terms of the central R&D mechanics, is the lifeblood of the industry.
    • 20 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 http://firstwordmedtech.com/ FirstWord offers products and services to help Pharma and Medical Technology companies gain a knowledge edge, enabling you to make key business decisions with speed and confidence. Daily personalised news service that keeps pharmaceutical professionals up-to-date with the latest pharmaceutical industry news and intelligence from across the globe. Monitor and track up to 25 terms in each category from a universe of: – 13,000 compounds/products – 3,500 companies – 120 medical conditions – 100 markets and regulatory bodies Access: – 7 years of searchable news archives – ViewPoints articles – Physician Views poll data – Coverage of over 100 medical conferences – 1,200 international news sources – 2,000 medical journals Daily customisable news service delivering the latest news and intelligence for the medical technology and diagnostic industries. Access unlimited coverage on over: – 120 medical conditions in 32 therapeutic areas – 100 regulatory bodies worldwide – 5,000 products – 2,000 companies – 50 medical technology specific conferences These Reports provide insight and the latest thinking from industry experts on important trends and the most challenging issues affecting the pharmaceutical industry today. Highly-focused, relevant, and actionable intelligence reports deliver information vital for competitive advantage on specific areas including: – Pharma Marketing – Pharma Sales – Emerging Markets – Generics and Biosimilars – Market Access – Medical Affairs Reports deliver a deep level of insight into the market impact of current and future therapies for the treatment and diagnosis of major medical conditions. These unbiased and continuously updated FirstWord research reports are delivered in two modules and deliver comprehensive market analysis of: – Current market value and share – Growth drivers – Product-level sales forecasts – Prescribing trends – Generic competition – And more Contact us today: info@firstwordpharma.com
    • 21 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 FDA approval rate drives industry growth momentum 2012 was always marked out as a year of transition for the pharmaceutical industry – primarily due to the fact that this 12 month period marked the very bottom of the patent cliff. It was therefore encouraging that the FDA also approved 39 new molecular entities during 2012, the highest number since 1996. Although Big Pharma in particular will continue to feel the residual effects of high profile patent expiries over the next few years, industry’s recent performance in the regulatory arena has provided room for optimism, and suggested a rediscovery of innovation. Seventeen of the products approved by the FDA in 2012 target novel mechanisms of action, while seven are indicated for diseases where there was previously no therapeutic option. Twelve approvals were for cancer indications – highlighting the continued significance of oncology to the pharma industry – while six were for orphan diseases, demonstrating increased levels of investment towards the development of treatments for rare and ultra rare conditions. Brand name Generic name Company Indication Voraxaze glucarpidase BTG Methotrexate toxicity Picato ingenol mebutate Leo Pharma Actinic keratosis Inlyta axitinib Pfizer Renal cell carcinoma Erivedge vismodegib Roche Basal cell carcinoma Kalydeco ivacaftor Vertex Cystic fibrosis Zioptan tafluprost Merck & Co. Glaucoma Surfaxin lucinactant Discovery Labs Respiratory distress syndrome Omontys peginesatide acetate Affymax Anemia caused by CKD Amyvid florbetapir f-18 Eli Lilly Alzheimer’s disease imaging FDA approvals 2012
    • 22 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Brand name Generic name Company Indication Stendra avanafil Vivus Erectile dysfunction Elelyso taliglucerase alfa Pfizer Gaucher disease Perjeta pertuzumab Roche HER2 + breast cancer Belviq lorcaserin Arena Obesity Myrbetriq mirabegron Astellas Incontinence Prepopik citric acid, magnesium oxide, sodium picosulfate Ferring Colon cleansing Kyprolis carfilzomib Onyx Multiple myeloma Tudorza Pressair aclidinium bromide Forest Chronic obstructive pulmonary disease Vascepa icosapent ethyl Amarin Hypercholesterolemia Zaltrap aflibercept Sanofi Colorectal cancer Stribild cobicistat, elvitegravir, emtricitabine, tenofovir disoproxil fumarate Gilead HIV Linzess linaclotide Forest Irritable bowel syndrome/ constipation Xtandi enzalutamide Astellas/Medivation Prostate cancer Bosulif bosutinib Pfizer Chronic myeloid leukaemia Aubagio teriflunomide Sanofi Multiple sclerosis Choline C-11 choline c-11 Prostate cancer imaging Stivarga regorafenib Bayer Colorectal cancer Jetrea ocriplasmin ThromboGenics Vitreomacular adhesion
    • 23 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 From a commercial perspective, a number of products from the ‘class of 2012’ are expected to emerge as leading industry growth drivers over the next five years; including: Bristol-Myers Squibb/Pfizer’s Eliquis, Gilead’s Stribild, Roche’s Perjeta, Medivation/Astellas’ Xtandi, Pfizer’s Xeljanz and Onyx’s Kyprolis. Products approved in 2012 are expected to generate sales of around $16 billion in 2017, an impressive five-year performance in comparison to recent vintages. However, the industry remains locked in a period of transition; drugs with combined US sales in excess of $35 billion lost patent exclusivity in 2012 and expirations during 2013 will impact products with combined US sales of $20 billion. Furthermore, the industry faces a second notable ‘spike’ in the Brand name Generic name Company Indication Fycompa perampanel Eisai Epilepsy Synribo omacetaxine Teva Chronic myeloid leukaemia Xeljanz tofacitinib Pfizer Rheumatoid arthritis Cometriq cabozantinib Exelixis Thyroid cancer Raxibacumab raxibacumab Human Genome Sciences Anthrax Signifor pasireotide Novartis Cushing’s disease Iclusig ponatinib Ariad Chronic myeloid leukaemia Gattex teduglutide NPS Pharmaceuticals Short bowel syndrome Juxtapid lomitapide Aegerion Homozygous familial hypercholesterolemia Eliquis apixaban Bristol-Myers Squibb Stroke Sirturo bedaquiline Johnson & Johnson Tuberculosis Fulyzaq crofelemer Salix Diarrhoea Source: FDA
    • 24 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 patent cliff in 2015 when products with annual sales in excess of $30 billion will face generic competition. Thus, although approval productivity in 2012 represents a notable improvement on the performance recorded over much of the past decade, the industry faces a notable challenge as it seeks to overcome revenue declines shaped by loss of patent exclusivity. It is imperative, therefore that 2012 marks the beginning of a consistent trend in terms of innovative new product launches, rather than a temporary blip. Building on the FDA’s breathless end to 2012 – the agency approved eight new products in December alone – the first quarter of 2013 has already witnessed a number of prominent regulatory milestones and a handful of important approvals secured. These include Roche’s Kadcyla, Celgene’s Pomalyst and Biogen Idec’s Tecfidera at the hands of the FDA, while Sanofi’s Lyxumia and Novo Nordisk’s Tresiba secured approval in the EU. Approval of Kadcyla further validates the commercial potential of antibody drug conjugates while simultaneously providing Roche an opportunity to enhance its dominance of the HER-2 positive breast cancer market and defend market share from the future competitive threat of biosimilars. Tecfidera is the third oral multiple sclerosis treatment to reach the market (following the previous approval of Novartis’ Gilenya and Sanofi’s Aubagio) but is widely expected to be the most successful; sales of Biogen Idec’s newly approved therapy are forecast to reach around $3.3 billion by 2017. Regulatory clearance for Lyxumia and Tresiba provides further evidence of the rapidly expanding diabetes market, which is expected to support multiple product launches across multiple drug classes over the next five years. However, momentum has been tempered somewhat by the FDA’s decision in February to request a cardiovascular outcomes study for Novo’s Tresiba before approval can be granted, which could delay launch in the US market by between three and five years. Thus although the FDA has shown a desire to get new products to the market – as evidenced by its diligent performance in December – a more cautious stance towards primary care drugs remains intact. A further consideration is that approval is now only the first barrier for pharma to overcome, and the industry is faced with a more complex market access landscape.Thus, while the number of approvals has increased, closer scrutiny of new products is necessary to gain a real insight into how the industry’s track record is improving. The incremental ‘jumps’ in innovation necessary to drive commercial success for new products are increasing – European payers are no longer willing to accept ‘me too’ products or new drugs that offer only a small benefit over existing treatments available at a much cheaper cost, and the consensus of opinion is that neither will their US counterparts for much longer.
    • 25 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Smarter cytotoxics represent evolution of oncology treatment The approval of the antibody-drug conjugate (ADC) Kadcyla in the first quarter of 2013 is representative of the new, smarter targeted cytotoxics that will add to the oncology treatment armamentarium over the next decade. Kadcyla is the first FDA-approved ADC for the treatment of HER2- positive metastatic breast cancer (mBC) and the third ADC approved for an oncology indication. An ADC is a new kind of targeted cancer therapy that can attach to certain types of cancer cells to directly deliver chemotherapy. Specifically, Kadcyla uses ImmunoGen’s Targeted Antibody Payload (TAP) technology to deliver the cancer- killing agent to tumour cells. Kadcyla is made up of the antibody Herceptin (trastuzumab) and the chemotherapy DM1, joined together using a stable linker. Kadcyla combines the mechanisms of action of both trastuzumab and DM1 to treat patients with HER2- positive mBC who have received prior treatment with Herceptin and a taxane chemotherapy, separately or in combination. Kadcyla also secured a broad label from the FDA in terms of line of therapy. Roche’s Genentech unit has more than 25 ADCs in its pipeline, eight of which are in Phase I or Phase II studies for different types of cancer. Traditional cytotoxics are generally non-specific and will kill healthy human cells along with tumour cells. However, by using targeted, antibody- guided cytotoxics, the drug will be delivered specifically to the tumour. Targeted cytotoxics like Kadcyla are quickly replacing non-specific cytotoxics in terms of revenue. In 2010, traditional cytotoxics accounted for 15 percent of sales revenue by therapy type for the top 10 oncology therapies. By 2020, however, targeted cytotoxics are expected to account for 12 percent of the market, representing a partial replacement of traditional cytotoxics. Targeted cytotoxics are not the only new drug class expected to provide value in oncology over the next 10 years. Immunotherapy, for example, will offer curative potential in certain tumour types by activating 57% 20% 15% 9% 65%18% 12% 5% 2010 Total Sales = $34B 2020 Total Sales = $25B Targeted cytotoxics are expected to replace non-specific cytotoxics Cytotoxics account for a small and declining share Cytotoxic Antihormonal Targeted—mAb Targeted—small molecule Targeted Cytotoxics Sources: Evaluate Pharma Database (2000 and 2010 worldwide sales); Datamonitor Top 20 Oncology Therapy Brands. October 2011 (2020 sales estimates, seven major markets). Figure1: Percentage of Sales Revenue by Therapy Type for Top-10 Oncology Therapies By Guru Muralimohan, PhD Campbell Alliance
    • 26 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 the body’s immune system to fight tumours. In the next decade, immunotherapies will produce the next generation of blockbusters, primarily due to their unique mechanism, versatility in combination with other agents and curative potential. As an example of immunotherapy’s potential, Figure 2 shows a Kaplan-Meier curve for Bristol-Myers Squibb’s immunotherapy Yervoy. Whereas the overall survival rate for the control arm goes to zero within a relatively short period, Yervoy’s Kaplan-Meier curve reaches a survival floor in which 20 percent of patients are alive for at least four or five years. The future of oncology also lies in next-generation agents targeting cancer stem cells, cancer cell metabolism, transcription and translation inhibition, and protein processing. These therapeutic options are considered next-generation agents because of the potential for disruptive change in the oncology treatment paradigm. Cancer stem cells are a phenotypically distinct subpopulation of cells with the ability to self-renew and drive tumourigenesis. The stem cell platform includes drugs that act through the Notch, Wnt and Hedgehog pathways, and antibodies that target unique stem cell antigens to eliminate cancer stem cells. The transcription Yervoy (Ipilimumab) Kaplan–Meier Curves for Overall Survival – Metastatic Melanoma gp100Ipilimumab + gp100Ipilimumab Source: Hodi FS et al. Improved Survival with Ipilimumab in Patients with Metastatic Melanoma. N Engl J Med 2010;363:711-723. 100 0 80 50 30 90 70 60 40 20 10 OverallSurvival(%) Months “Survival Floor” 560 8 16 24 32 40 48 Figure 2: Immunotherapy – New Frontiers Floor in Patient Survival With ipilimumab, approximately 20% of late-stage melanoma patients can expect to live five years longer, which is a significant improvement over the previous standard of care. Efforts are underway to identify the 20% of patients who would benefit from the significant survival advantage.
    • 27 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 and translation inhibition platform includes antisense oligonucleotides, which knock down the expression of key genes involved in cancer. Drugs in the protein processing platform regulate proteins involved in cancer; this platform includes therapies that interfere with heat shock proteins and those that inhibit the degradation of key proteins through proteasomes or ubiquitin ligases. Among next-generation approaches, drugs affecting cell metabolism will most likely lead to transformational therapies. These compounds target the unique metabolic needs of cancer cells and prevent cancer cell energy production. The platform includes products that target key enzymes in critical metabolic pathways, such as glycolysis or amino acid synthesis. Key opinion leaders interviewed by Campbell Alliance believe that targeting metabolic adaptation in tumours holds great potential because of its key role in tumourigenesis and adjacencies with tumour genomics and the microenvironment. The rise of targeted cytotoxics, immunotherapies and other next- generation agents is just one way the oncology market will continue to evolve during the course of the next decade. To examine the changes that will likely take place over the next 10 years, Campbell Alliance conducted its second-annual Oncology Index study focused on the theme of maximising value in oncology. Specifically, the study addresses the implications for the biopharmaceutical industry from the standpoint of identifying, developing and delivering value. This report is built on Campbell Alliance’s experience from more than 300 oncology projects in the past three years, during which time we worked with nearly all of the top oncology manufacturers globally and the vast majority of new oncology product launches. Our work covered a broad range of project types, from portfolio strategy to clinical development and commercialisation. This report is also based on interviews with 10 oncology key opinion leaders and clinical investigators, and is supported by Campbell Alliance’s proprietary Dealmakers’ Intentions Survey of 160 in‑licensing and out-licensing professionals in the pharmaceutical and biotech industry. An additional pipeline analysis was conducted using a comprehensive oncology pipeline database that tabulates products by company, phase of development, mechanism of action, indication and technology. A white paper summarising the results of the Oncology Index study is available for download by visiting www.campbellalliance.com/oncstudy. About the authors Guru Muralimohan, PhD, is an engagement manager at Campbell Alliance. He can be reached at gmuralimohan@campbellalliance.com. Campbell Alliance (campbellalliance.com) is the consulting business segment of inVentiv Health, and is the leading management consulting firm specialising in the pharmaceutical and biotechnology industry.
    • 28 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 European pricing pressures continue – what next for the US pharma market? During 2012, pricing, reimbursement and market access became an incrementally more important variable for pharmaceutical manufacturers to consider from a strategic standpoint. A continued impact in 2013 and beyond appears inevitable. This charge was led by Europe, where austerity measures had a significant impact on revenue growth for many Big Pharma players during 2012. The new thesis for pharmaceutical manufacturers looking to gain a favourable price for new products in Europe is clear; demonstrate that your compound is not only novel, but significantly more effective than what is already available. International reference prices have become particularly troublesome for the industry in Europe. If manufacturers are to demonstrate a reluctant but greater affinity to this new market access environment in Europe, the problem of reference pricing needs to be solved, they argue. Value based pricing is incompatible with international reference pricing, says the industry, but recent behavioural patterns among some key European countries continue to overlook this issue, they add. Helping to offset European austerity measures, free pricing remains a unique characteristic of the US pharmaceutical market. However, debate as to how long the status quo can remain has gathered momentum in recent months; the suggestion being that the US pricing landscape will shift noticeably over the next five years. US drug price increases were at a five year high in 2012; this trend – coupled with European pressure – dictates that the pharma industry will need to be well prepared if it is to successfully reduce its reliance on pricing elasticity in the US market, note commentators. Whether the industry is prepared enough is conjecture at this point, but expect the warning signs to continue. An important development last year was the decision by leading physicians from the Memorial Sloan Kettering Cancer Centre to publicly oppose the price set by Sanofi for its colorectal cancer treatment Zaltrap. Lack of public outcry towards this move – recognised as a watershed moment – was equally telling. Until that point, like the awkward moment at a party when the music first starts, no payer had wanted to be the first one publicly dancing all over the concept of ‘free market’ pricing in the US. But guess what – it worked, if you choose to believe general consensus among industry observers. Sanofi announced that the price of Zaltrap in the US was to be
    • 29 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 reduced by 50 percent. “Pharma blinked first,” says Melanie Senior, an analyst at Real Endpoints. The long term implications of the MSKCC editorial in the New York Times and subsequent price cut by Sanofi remain conjecture, but both raise serious questions for pharma. Has a shift in momentum among payers occurred? Sanofi was not only forced to squirm when questioned about its pricing strategy for Zaltrap, but in a follow-up article in the New York Times Leonard B. Saltz – one of the original editorial’s three editors – appeared to seize on the French company’s defensive posturing, suggesting that even at a lower price he did not anticipate the centre using Zaltrap given it is no better than Avastin but may be more toxic. Translation: this is not just about pricing, this is about the need for pharma companies to bring differentiation to the table. If all of this sounds eerily familiar, that’s because the rhetoric is echoing that of the European pricing and reimbursement regulators. The industry may feel that Sanofi has moved too quickly to counter MSKCC’s concerns. However, the company is guilty of a potentially more damaging act, says Senior; by trying to squeeze through an “unjustifiably high price” for Zaltrap, Sanofi may have set the ball rolling for US payers to start behaving like EU pricing regulators – one of pharma’s worst nightmares. The industry will be watching and waiting. One recent catalyst could be Roche’s newly approved Kadcyla. Having initially been approved for patients who have failed treatment with Herceptin its usage in this setting is likely to raise scrutiny over its pricing. Roche has confirmed that the price of Kadcyla has been set at $9800 per month, hence the average price per patient will be $94,000 (based on people taking Kadcyla for 9.6 months). With this cost additional to first- line treatment with Herceptin (which costs approximately $54,000 per patient per year), Kadcyla is not cheap. Furthermore, Perjeta costs around $71,000 per patient per year (thus the cost of Herceptin and Perjeta is currently around $190,000 per patient per year). Rhonda Greenapple, CEO of Reimbursement Intelligence, does not perceive this to be too significant a barrier to uptake in the US market. She told FirstWord, “in the US, access for most oncology products is not an issue at the moment, they are covered. The price is in line with new oncology market entrants and Roche has demonstrated the efficacy and safety to back up the price.” Against the backdrop of the Zaltrap pricing debate, however, approval of Kadcyla –”raises bigger questions about the cost of cancer drugs, even effective ones, which require first-line treatment with an already-expensive drug, then add to that cost further,” Melanie Senior – analyst at Real Endpoints – told FirstWord. “Since it is shown to work, it can’t just be ignored,” adds Senior, “hence the cost question becomes so relevant; more so, say, than for Zaltrap.”
    • 30 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Independent Medical Education: A Rising Tide Lifts All Boats? Why should a pharmaceutical company invest in supporting medical education through the provision of unrestricted grants? This question troubles many in the pharmaceutical industry. When budgets are constrained, why direct funds away from brand- based communications to support education on a more general level which could benefit competitor compounds? Here are four reasons why industry support of medical education is worthwhile: Clinicians Want It On average, physicians spend 14 hours each month consuming independent medical education, and 82 percent of these physicians rated relevance to their clinical practice as very important or extremely important. This should come as no surprise. Given the rapid pace at which medical evidence is published, clinicians need help sifting through the information to ensure they not only know how to prevent, diagnose, and treat disease but also can translate this knowledge into action when in the clinic, leading to improved patient outcomes. By supporting medical education through independent grants, pharmaceutical companies can action on their well-publicised commitments to the medical profession and foster a responsible approach to the provision of education by independent third parties. Access to Clinician Opinions & Feedback The flip side of what medical education can deliver is feedback from healthcare professionals to industry. A standard of medical education is providing learners with the opportunity to evaluate and provide feedback (this is a requirement for all accredited education, and something that PeerVoice includes in every educational activity it produces). 1. Clinicians want relevant education to support and drive improvements in patient care and potentially patient outcomes 2. Education offers unique insights into clinician knowledge, behaviours, and opinions 3. It supports improvements in clinical practice through innovative education 4. It establishes industry as a viable and responsible source of funding for evidence based, needs based education Authors: David Noble, Global Head of Medical Education, PeerVoice, and Jennifer Shelley, Senior Vice President, Medical & Editorial, PeerVoice
    • 31 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 These feedback mechanisms, (via a third party, so there is no direct dialogue between the clinician and pharmaceutical company), can provide industry with both qualitative and quantitative feedback on the impact of the education: what was of most value, what new information was learned, where knowledge and competence gaps persist, and where the need for further education exists. Through these feedback mechanisms, pharmaceutical company supporters are given an opportunity to learn from clinicians to ensure that they continue to fund education where it is of most value, and to inform their own research strategies in terms of compound development, clinical application, and addressing unmet treatment needs. Supporting improvements in clinical practice through innovative education Regardless of who the learner is, most will agree that the didactic lecture in a large-group setting is not the most effective tactic to achieve the outcomes most desired by learners. So whether presented in a live venue or via online portals, effective medical education must incorporate some interactive facets, such as comparative pre- and post- tests, case- or task-based learning, small group discussions, self-directed reflection, simulation, and post- education personal performance or quality improvement plans. Additionally, market research indicates that clinicians rely on a variety of sources for their learning needs: self-directed learning through print and online methods as well as group learning through live sessions – be they truly live or webcast. Continuing to provide healthcare professionals with variety provides physicians with the opportunities to access education despite the many competing demands for their time. Expected learner outcomes also can be better achieved when learners are excited about the faculty, hence the importance of linking community-based practitioners with world-renowned experts. Recently conducted market research confirms that learners rate the faculty as the most attractive element of medical education. Industry funding of education ensures that healthcare professionals are able to access high–quality; interactive education that often supports and evidences innovative change to current clinical practice. Establishes industry as a viable and responsible source of funding for evidence- and needs-based education Much has been written about the pros and cons of pharmaceutical company support of medical education. The overwhelming concern is the undue influence of pharmaceutical companies through funding education. As Maureen Doyle-Scharff, Senior Director, Medical Education Group at Pfizer says in an interview for the
    • 32 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 FirstWord Dossier (Pharma’s Future Role in CME): “Industry actually produces some of the best fair- balanced education out there”, but regardless of this, “the perception is that there is something underlying going on that unfortunately takes away from the power and the effectiveness of the education itself.” This is where the rigours of independent medical education – be that accredited or non-accredited – comes into play. Medical education providers are in a position to uphold the fair and balanced nature of education and protect content from commercial bias by keeping the grant provider at arm’s length from educational content decisions. And clinicians seek out independently developed education. A survey of European physicians found that 79 percent of these physicians rated the independent source of the education as important, very important or extremely important. But the rigour with which independent medical education is developed is very much subject to the credibility of the provider. The level of governance and guidelines overseeing medical education varies across countries. In an effort to standardise expectations in Europe, The Good CME Practice Group (whose membership is drawn from European-based providers of independent medical education) has established key criteria requisite of all medical education created for European clinicians: appropriate, balanced, transparent and effective. These four pillars of credibility form the foundation for all medical education—accredited or non‑accredited. Independent, industry-funded, medical education is here to stay. The relationship between grant investment and product growth is not one that should be directly linked – as this would undermine the whole rationale for a fair and balanced approach. However it is an obvious statement to make that appropriately targeted education will inform healthcare professionals so that they make better decisions on how to treat patients as the science advances. So a rising tide of good needs- based education really should lift all evidenced-based treatment options. About the authors: David Noble is the Global Head of Medical Education at PeerVoice, he can be contacted at david.noble@ peervoice.com. Jennifer Shelley is the Senior Vice President of Medical & Editorial at PeerVoice. PeerVoice is a leading third party provider of multi-media based Independent Medical Education.
    • 33 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Big Pharma’s stance on biosimilars – gamekeeper or poacher? In the opening months of 2013, biosimilars have once again been a readily discussed topic in pharma circles. One element of this discussion is the role of branded players looking to ‘blur the boundaries’ where biosimilars are concerned, an evolving tactic which is likely to develop further over the course of the year. One such example is Amgen, cited in recent months both as a major opponent to biosimilar uptake but also seen to emerge as a future biosimilar player in its own right, via collaboration with the generics manufacturer Actavis. Reported efforts by Amgen and Roche to introduce bills that would restrict the ability of pharmacists to substitute biosimilars for branded biologic products have recently been described by the Generics Pharmaceutical Association as a “pre- emptive strike” to “limit consumer and patient access to safe and effective biosimilars in the future”. Indeed, in what is becoming an increasingly hostile legislative battle in the US, manufacturers of branded biologic products saw their position boosted in March when the Governor of Virginia – Bob McDonnell – signed legislation effectively limiting the interchangeability of biologic medicines. Legislation of this nature could limit the commercial reach of biosimilar products. Indeed, the Biotechnology Industry Organization (BIO) was quick to both commend McDonnell and point out that House bill 1422 and the identical Senate bill 1285 align to all five principles on biologic substitution as set out by the organisation; these being: n Substitution should occur only when the FDA has designated a biologic product as interchangeable n The prescribing physician should be able to prevent substitution n The prescribing physician should be notified of the substitution n The patient, or the patient’s authorised representative, should, at a minimum, be notified of the substitution n The pharmacist and the physician should keep records of the substitution Only time will tell how significant this victory has been for branded players; the bill includes a two year sunset clause – for example – meaning legislation is almost certain to expire before a biosimilar product has been launched in the US market. Nevertheless, the legislation is precedent setting, notes Duncan Emerton – biosimilars practice lead at Datamonitor consulting – and points to a potentially fragmented US
    • 34 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 biosimilars market where a patchwork of varying state-level legislation could have profound implications on the development and commercial strategies of biosimilar developers, he told FirstWord (similar legislation is currently being developed in a number of other states). Of the five key principles on biologic substitution set out by BIO, it is adherence of the legislation to the first of these (substitution should occur only when the FDA has designated a biologic product as interchangeable) that is pivotal, notes Emerton; on the grounds that the regulator may never release guidance on how companies can develop interchangeable biosimilars. Without such protocol – which would not allow the FDA to designate a biosimilar as interchangeable – developers would have a less compelling reason to invest in the space, adds Emerton. Irrespective of legislative means to shape how substitution will work, FirstWord’s own research in this area points to the pivotal role that FDA endorsement of interchangeability will have on physician usage habits for biosimilars; just 14 percent of oncologists polled indicated that they would be very likely to prescribe a biosimilar cancer product not deemed interchangeable by the FDA. However, for a product with this designation, 32 percent of respondents said they would be very likely to prescribe. Furthermore, the rationale for pursuing such measures is clear; recent analysis of the biggest selling pharmaceutical products of all time demonstrated the prominent role of branded biologics and the sustainable revenue streams that these products are likely to deliver post patent expiry. The real question is to what extent branded companies such as Amgen which are also developing biosimilars want to limit the future role of these products or simply raise the barriers to entry. The FDA has yet to pass judgement on the subject of substitutable or interchangeable biosimilars, but consensus indicates that such a status could be conferred on a biosimilar if it is supported with more extensive clinical testing. Which players are better positioned to deliver such products to the market? – experienced branded biologic manufacturers such as Amgen of course. The GPA noted in its commentary on the New York Times article that many companies who are developing biosimilar products also manufacture branded biologics. Focusing on Amgen, analysts at Credit Suisse describe the situation more succinctly – “does the company want to be a game keeper or poacher?” Via its collaboration with Actavis, Amgen’s commitment to biosimilars is clear. Indeed, when the generics manufacturer announced its Q4 results last month it revealed that three of the biosimilar products being developed as part of the collaboration are versions of the cancer treatments Avastin, Herceptin and Rituxan – all of which are manufactured by Roche. The game keeper/poacher analogy is not only relevant to Amgen of
    • 35 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 course, but also the numerous Big Pharma players that are developing both biosimilars and branded biologics. On its recent Q4 conference call with analysts Pfizer confirmed the likely progression of its own Herceptin biosimilar program into Phase III clinical trials later this year. It is also clear to see why the GPA is concerned. As recently noted by Sanford C. Bernstein analyst Ronny Gal, given the proportion of pharmaceutical revenues now generated by biologic products traditional generic drug manufacturers have little choice but to pursue biosimilar development. “Participation is a requirement, not an option” says Gal, however, he concedes that the abundance of competition from credible companies makes for a less compelling risk/reward trade off for participation in the biosimilars market during its “transition years” (2015-20). There is additional risk, nonetheless, that non- participation will see smaller companies left behind. It is perhaps too simplistic a view to suggest that Big Pharma’s involvement in biosimilars is designed exclusively to curtail the efforts of the generics industry. Some may feel that players such as Amgen are hedging their bets and there could be an element of this at play. Gal argues, however, that the presence of credible players will accelerate the adoption of biosimilars and could drive more rapid price declines in markets with effective payer schemes. Similarly Amgen’s own biosimilar strategy – unveiled steadily over the past 18 months – has drawn enthusiasm from some analysts. This is a complex market and therefore only those companies with suitable expertise and capabilities will be successful, they argue. Concurrently, over the past few years the broader view of the biosimilars market has changed. While biosimilar development retains the allure of a ‘must have accessory’ for generic and Big Pharma players alike, the gold rush mentality that has triggered a succession of collaborations in this space has steadily diminished. How much of this change in attitude towards the commercial value of biosimilars has been driven by a combination of lobbying efforts and Big Pharma’s creeping presence in the development space is open to conjecture. The reality is that if the biosimilar opportunity fails to deliver the return on investment once projected, the impact will be felt far less on the balance sheets of Big Pharma companies, many of which will continue to derive considerable revenue streams from branded biologic products.
    • 36 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 COPD and IBS drugs lead promotional spending among newly launched products Of the products launched in the past six months that received the most significant promotional push, Forest Laboratories’ drugs Tudorza, Pressair, and Linzess were by far the most active in terms of promotional spend. According to Encuity Research data, Forest backed both products with spending volumes in the range of $25 million to $30 million per month (Figure 1). Comprising aclidinium bromide inhalation powder, Tudorza became commercially available in December 2012. The long-acting anticholinergic was approved by FDA for the long-term, maintenance treatment of bronchospasm associated with chronic obstructive pulmonary disease (COPD), including chronic bronchitis and emphysema. Tudorza is the first long-acting inhaled anticholinergic approved by the FDA in more than eight years for COPD and is administered twice daily through the $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 TotalPromotionalDollars Tudorza Pressair Linzess Aubagio Bosulif Xeljanz Synribo Iclusig Cometriq Oxtellar XR Forfivo XL Binosto Quillivant XR Jetrea Episil Zuplenz2 Auvi-Q Uceris Minivelle Skyla Copyright ©2013. All Rights Reserved. Confidential Property Encuity Research, LCC Figure 1: Promotional spending for newly launched products 6 month trend ending Jan. 2013 By Jason Fox, Director, Client Services, Encuity Research
    • 37 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 preloaded, multidose Pressair inhaler. In January 2013, promotional spending for Tudorza reached $25.6 million. Linzess also hit the market in December. Forest is co-promoting the product in the United States with Ironwood Pharmaceuticals. FDA approved Linzess as a once-daily oral capsule for adult men and women suffering from irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC). Linzess is the first and only FDA-approved guanylate cyclase-C (GC-C) agonist and acts locally in the intestine. The approval of Linzess also marks the first time in more than six years that a new prescription option is available for adults with these disorders. In January 2013, promotional spending for Linzess reached $29 million. Encuity Research’s Promotional Answer Suite tracks promotional spending across the following healthcare promotional channels: physician details, nurse practitioner/physician assistant (NP/PA) details, meetings and events, e-promotion, and professional journal ads. Along with Kantar Media, Encuity also provides DTC advertising spending. Each of the key newly launched products identified by Encuity in the fourth quarter of 2012 and first quarter of 2013 utilized physician detailing as their primary source of promotional effort, with most of them utilizing meetings and events as a second source (Figure 2). 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Physician Detailing Meeting and Events NPPA Detailing Journal ePromo $50 M $49 M $9 M $5 M $5 M $4 M $3 M $3 M $3 M $2 M $2 M Tudorza Pressair Linzess Quillivant XR Xeljanz Aubagio Minivelle Binosto Vascepa Forfivo XL Auvi-Q Skyla Copyright ©2013. All Rights Reserved. Confidential Property Encuity Research, LCC Figure 2: Promotional Spending Mix for Newly Launched Products 6 Months ending Jan. 2013
    • 38 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 A handful of products used NP/ PA detailing as a second source. Forest spent $31.3 million on physician detailing for Tudorza and $28.5 million on physician detailing for Linzess. Linzess also received the largest e-promotional spend among these newly launched brands, with Forest putting $1.2 million toward video details, online events, and virtual details. The second highest e-promotional spend went to Quillivant XR. Marketer Pfizer spent $707,152 on e-promotion for Quillivant XR in the six months ending January 2013. Total promotional spend on Quillivant XR for the period was $8.8 million. The product became commercially available in January 2013, following an FDA approval in September 2012 for the treatment of attention deficit hyperactivity disorder (ADHD). Quillivant XR is the first once-daily, extended- release liquid methylphenidate for ADHD. As seen in Figure 3, among the products with the highest detail volumes, Minivelle (10.4) and Aubagio (9.8) garnered the most time on average with physicians both at or around 10 minutes per detail. Launched in January 2013 by Noven Pharmaceuticals., Minivelle is an estradiol transdermal system approved by FDA for the treatment of moderate to severe vasomotor symptoms due to menopause, commonly known as hot flashes and night sweats. Aubagio was launched in October by Genzyme, Copyright ©2013. All Rights Reserved. Confidential Property Encuity Research, LCC 0 2 4 6 8 10 12 Industry Ave. Linzess Tudorza Pressair Quillivant XR Xeljanz Minivelle Binosto Aubagio Skyla Auvi-Q Forfivo XL MinutesperDetail 252 K Details 231 K Details 28 K Details 22 K Details 19 K Details 18 K Details 17 K Details 13 K Details 13 K Details 11 K Details 39 M Details Figure 3: Minutes per Detail for Newly Launched Products 6 Months ending Jan. 2013
    • 39 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 a Sanofi company. FDA approved the product as a once-daily, oral treatment indicated for patients with relapsing forms of multiple sclerosis. The greater amount of minutes per detail recorded for Minivelle and Aubagio is likely attributable to the fact that specialty physicians such as OB/GYNs and neurologists generally have a lighter patient load and receive fewer sales calls than primary care physicians and will thus give more of their time to seeing an individual sales representative. These specialists also tend to be more interested in learning about the most innovative products available. In addition, both Minivelle and Aubagio were detailed alone and in the first position for 100% of details, according to data from Encuity’s DetailAnswers audit. This position and the fact that the sales representatives had no competing priorities would support the products’ high minutes per detail. Other key products gaining substantial time with doctors were Skyla (8.9), Linzess (8.3) and Tudorza Pressair (8.2), which all received more than eight minutes per detail. The industry average was 6.6 minutes per detail. Skyla is an Intrauterine Device marketed by Bayer HealthCare Pharmaceuticalsfor the prevention of pregnancy. About Encuity Research Encuity Research is a market research and analytics company dedicated to providing the answers that biopharmaceutical leaders need to make critical decisions at enterprise, portfolio, and product levels. Its service span five key areas: n Custom Quantitative Research and Analytics n Custom Qualitative Research n Syndicated Market Research n KOL Influence Mapping n Promotional Message Tracking The Encuity Answer Suite is a comprehensive suite of syndicated market research audits that includes: n TreatmentAnswers (formerly PDDA) n DetailAnswers (formerly PSA, HPSA, and NP/PA audits) n EventAnswers (formerly PMEA) n eAnswers (formerly ePromo) n ConsumerAnswers (formerly DTCA) n JournalAnswers (formerly PJA) n SampleAnswers (formerly SDA) Encuity Research is a subsidiary of Campbell Alliance. For more information on Encuity and its services, please visit www.encuity.com.
    • 40 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 It’s about time Big Pharma is rapidly expanding the use of digital marketing channels. What is driving this trend and what are the implications for traditional promotion? Several factors combined help understand the current innovative environment. This article will focus on market forces, technology and industry culture. Between 2011 and 2016, the global pharmaceutical industry is at risk of losing as much as $250 billion in sales from patent expirations. As if the threat of looming revenue reductions were not enough, the storm is made perfect as regulators and payers alike take a near zero tolerance stance towards the health outcomes and economic benefits of new molecular entities. Investors beware. The era of blockbuster drugs is being written about as history, and with it big spending on sales force expansion and lavish marketing budgets. Data from market research agency Cegedim Strategic Data (CSD) show dramatic drops in sales force size in the major markets: Since 2010, sales rep levels are down by 16 percent in the US and 13 percent in the EU 5 countries (Italy, France, Germany, Spain and the UK). Despite this, pharma marketing appears to be entering a new period of development and creativity with an emphasis on multichannel marketing and digital promotion. This isn’t merely an assumption based on tech industry hype and over eager Twitter “evangelists” willing it to happen. Rather, the evidence is in the numbers: CSD audits of industry promotional channels reveal a dramatic increase in digital channel spending, with the US seeing investment jump nearly 150 percent since 2010. The EU 5 was up more than 90 percent over the same period. Source: Cegedim Strategic Data Total FTEs % Change Total FTEs % Change 79 402 73 764 - 7.1 % 66 713 - 9.6 % 86 327 84 658 - 1.9 % 74 779 - 11.7 % MAT Q4 2010 MAT Q4 2011 MAT Q4 2012 USA Europe Top 5 MAT Q4 2010 MAT Q4 2011 MAT Q4 2012 Figure 1: Sales force rep equivalents (FTE) MAT Q4 2010 - MAT Q4 2012 Christopher Wooden (christopher.wooden@ cegedim.com) Vice President, Global Promotion Audits, Cegedim Strategic Data (www.cegedimstrategic data.com)
    • 41 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 Market forces: Death of the sales force – greatly exaggerated. For good or ill, blockbuster drugs have defined much of the conversation around pharma marketing. And early on, much of the talk was about sales reps. By the late 90’s, the industry had entered a “rep race” as multi-billion dollar sales were at stake with each new drug approval. Mergers and acquisitions helped to consolidate portfolios, but improved sales force efficiencies were elusive and an exception. In the context of high sales growth and profits, there was little incentive to truly innovate marketing and there were few visionaries willing to challenge the status quo. The situation was clearly not sustainable, but change was going to be painful. More doctors were becoming “no see” as the marketing of “me too” drugs appeared to waste their valuable time. And yet, only when product pipelines began to falter did initiatives to redefine the “share of voice” marketing model begin in earnest. Inevitably, cuts in sales forces started as the edge of the patent cliff came into view. Contrary to expectations, this period did not lead to the quick adoption of online, self-directed detailing or other cost efficient “multichannel” innovations. Furthermore, the sales force –albeit smaller – and the share of voice model remained intact, but now with a heavier emphasis on call value than ever before. Nevertheless, the present and rapid shift to digital marketing does not mean replacing sales reps with “robots.” Instead it is a question of augmenting the traditional sales force with a richer, integrated “customer experience” Source: Cegedim Strategic Data % of Total Spending % Change 0.2 % TotalSpending($m) 0.3 % + 37.6 % e-Meetings + 32.1% e-Mailing + 43.1% e-Detailing + 38.8% % Change 2012/2011 0.5 % + 38.9 % MAT Q4 2010 MAT Q4 2011 MAT Q4 2012 $47 m $65 m $90 m 7 8 14 11 20 58 42 7 33 Source: Cegedim Strategic Data % of Total Spending % Change 1.2 % TotalSpending($m) 1.8 % + 51.4 % e-Meetings + 14.0% e-Mailing + 67.5% e-Detailing + 73.9% % Change 2012/2011 3.2 % + 64.8 % MAT Q4 2010 MAT Q4 2011 MAT Q4 2012 $353 m $534 m $879 m 368 452 59 212 270 52 140 156 57 Figure 3: E-Promotion – Europe top 5 total spending & trends on 3 years Figure 2: E-Promotion – USA total spending & trends on 3 years
    • 42 All Contents Copyright © 2013 Doctor’s Guide Publishing Limited. All Rights Reserved Pharma Outlook Q1 2013 where a cohesive multichannel strategy assures that healthcare providers (HCPs) can easily obtain the information they need. But to accomplish this, the industry has had to wait for… …Technology (and its users) to catch up In the early 2000s as broadband became more widely available and HCPs – like everyone else – started using the Internet to find information, there were predictions that online based platforms would inevitably allow for significant rationalisation of sales forces. Expectations were high as marketing teams offered “content rich” websites with attractive “multimedia” offerings. Some pharma companies made progress and new, improved value was found in this area for CME, corporate PR and investor relations. However, until recently, advances in developing a true multichannel offering could not be fully exploited due to several crucial and related factors: So called “Web 2.0,” or the non-static web has developed sporadically. Mobile devices, with enough speed and power could only leverage these advances in the past few years. The generation of HCPs (and pharma marketing professionals) that are entirely comfortable and conversant with these new tools and possibilities are only now in a position to adopt innovative ways of interacting. Culture: Is it “about time?” Few would argue that the pharmaceutical industry has built a reputation for the innovative use of the internet in communicating its strengths, let alone as a PR or marketing tool. Rather, a conservative approach was the norm as communication continued to focus on HCPs who relied on sales reps as their main point of contact with the industry. As technology has opened up a conversation with all consumers, Big Pharma has in large part shied away in an attempt to avoid false steps, potential bad press and regulatory scrutiny. As the data reveal however, a shift has occurred and communication is no longer a one way “pitch” - but rather HCPs are being invited to not only access the information they need anywhere, anyhow, anytime, but also to share their day-to-day experience among many stakeholders. Online physician communities, blogs, mobile apps and even general social media are now part of the user experience for many, if not all HCPs. Truly innovative companies are now using multichannel strategies to leverage this on-going conversation and better position the value of their products and services. This is all the more essential as the “blockbuster” mentality gives way to “personalised medicine” and real-world data becomes as important - if not more so - than clinical data. Far from replacing reps, the industry is now enabling sales reps to offer much more than ever before. Indeed, the convergence of challenging market forces, evolving technology and a change in attitudes and culture has only reinforced the fact that building a strong value-based relationship with HCPs remains the key to success. It’s about time.