Strategic Positioning and Business Potential for Indian and Japan in the Global Biosimilars Market


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This presentation was delivered at CPhI Japan 2014, held at Tokyo. IT outlines the key trends and dynamics in the global biosimilars market whilst highlighting the business prospects for India and Japan in particular

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Strategic Positioning and Business Potential for Indian and Japan in the Global Biosimilars Market

  1. 1. Strategic Positioning and Business Potential for Japan and India in the Global Biosimilars Market 11th April 2014 Aiswariya Chidambaram CPhI Japan 2014
  2. 2. 2 Focus Points Focus Points Global Biosimilars Market Overview Key Market Drivers and Restraints Summary Biologics Patent Expiry Global Biosimilars Market – Timeline of Key Events Competitive Landscape Analysis Key Companies to Watch Global Evolving Regulatory Environment for Biosimilars Indian Biosimilars Market Overview Strategic Partnerships between Indian and Global Companies Japan Biosimilars Market Overview Japan Biosimilars – Pricing Analysis About Frost & Sullivan Market Opportunities for New Entrants
  3. 3. Source: Frost and Sullivan Partnerships and alliances are the major focus of firms entering the biosimilars market. Non-pharma companies begin to show increasing interest in biosimilars Regional Governments strive to actively promote growth of biosimilars – South Korea to capture 22% by 2020 The global biosimilars market was valued at $876.1 million in 2012, growing at 53.4% Patent expiry of biologics worth $100 B by 2020. 2013 – 2015 considered to be period for significant growth. Highly concentrated market – top 3 players constitute 82% market share Europe is the world’s largest biosimilars market constituting 44%. Europe seems a favourable market due to well established regulatory guidelines and increasing pressure to control spiralling healthcare costs. While the US is under penetrated presenting huge opportunity Global Biosimilars Market Overview
  4. 4. 4 Comparative Analysis: Generics, Biosimilars, and Biologics Moderate (5075%) Low (~30%) BiosimilarsGenerics Biologics MarketingOtherDynamics Probability of Success Time Cost Pricing Marketing Investment Point of Differentiation Barriers to Entry Product Operational Profit Margins Decision Makers Competitors Short (34 years) Long (812 years) Low (~$5 million) High ($350$800 million) Commodity pricing Premium (full pricing) Low High Group purchasing/ medical professional organisations Prescribers, patients High, less differentiated Few, well differentiated Price, breadth of portfolio Product profile, marketing Low (cost efficiency) High (development process) Low (~20%) High (~40%) High (~90%) Moderate (78 years) $100$200 million Lower pricing value Payers, prescribers Moderate Few, partially differentiated Price, product profile, and technology High (capital and development) Mixed (2530%) Product Development Source: Frost & Sullivan
  5. 5. United States (Regulated) 0 Approved Products under New Framework Europe (Regulated) ~ 14 Approved Products Japan (Semi-regulated) 5 Approved Products India (Semi- regulated) ~ 50 Approved Products China (Semi- regulated) ~ 2000 Marketed Products Number of Approved Products in Regulated and Semi- regulated Markets Source: Frost & Sullivan
  6. 6. 6 Global Biosimilars Market – Product Segmentation Segmentation is done based on existing biosimilar products and emerging biosimilar products, which may differ among regions.  Existing Biosimilars: Existing biosimilars market segments include those with approved products in respective countries.  Emerging Biosimilars: Emerging biosimilars market segments include those with products that are being developed, coming up in the future, or waiting for approval. Total Biosimilars Market Existing Biosimilars* EPO G-CSF HGH Emerging Biosimilars Insulin Interferons mAbs Total Biosimilars Market: Market Segmentation, Global, 2012 * Biosimilars are not available in some regions. Source: Frost & Sullivan
  7. 7. 7 Key Market Drivers and Restraints Summary Key Drivers Key Restraints/Challenges Biosimilars Market: Key Drivers and Restraints Summary (Global), 2013-2018 Source: Frost & Sullivan Lack of access to process information may affect product quality Emergence of new market participants expected to drive market expansion Time consuming approval process may slow down market growth Patent expiry of blockbuster biologics worth $79.0 billion by 2015 and 100 billion by 2020 New provisions introduced by governments to reduce medical expenditure Uncertainty and reluctance of physicians to adopt biosimilars
  8. 8. 8 2005 2010 2015 2020 20252000 2030 Epogen 2013 Biologics Market: Key Patent Expirations, US, 2000–2030 Year Lantus 2015 Neupogen 2013 Herceptin 2019 Remicade 2018 Neulasta 2015 Erbitux 2016 Humira 2016 Rituxan 2009 (Expired) Enbrel 2028Avastin 2019 Product HGHandInsulinmAbs EPOand G-CSF Source: Frost & Sullivan Biologics Patent Expiry – US
  9. 9. 9 2005 2010 2015 2020 20252000 2030 Epogen 2004 Biologics Market: Key Patent Expirations, Europe, 2000–2030 Year Genotropin 2008 Neupogen 2006 Herceptin 2014 Remicade 2014 Neulasta 2015 Aranesp 2016 Humira 2018 Rituxan / Mabthera 2018 Enbrel 2029 Product HGHmAbs EPOand G-CSF Source: Frost & Sullivan Biologics Patent Expiry - Europe
  10. 10. 10 Global Biosimilars Market - Timeline of Key Events Regulatory guidelines were the main focus in 2012, with pathways becoming clearer and new products getting approved. Total Biosimilars Market: Timeline of Key Events, Global, 2012 and 2013 Jan–Feb March–April May–June July–Aug Sep–Oct Nov–Dec 2013 January 2012: EMA guidelines released on recombinant interferon beta February 2012: US FDA biosimilar guidelines released June 2012: Finox Biotech initiates phase III clinical trial for Afolia, a recombinant follicle stimulating hormone (r-FSH) July 2012: The Ministry of Food and Drug Safety approves Celltrion’s Remsima™; awaiting European final approval December 2012: EMA guidelines released on recombinant human insulin and mAbs November 2012: First G-CSF biosimilar approval of Mochida Pharmaceuticals and development partner, Fuji Pharma, in Japan September 2012: Sandoz begins phase III clinical trials in the United States for biosimilar epoetin alpha September 2012: Mexico released biosimilar guidelines July 2012: India announced biosimilar guidelines June 2013: First-time EMA gives positive opinion on 2 Mabs: Inflectra and Remsima™ Source: Frost & Sullivan
  11. 11. Competitive Landscape Analysis Biosimilars Market: Top Five Companies by Market Share (Global), 2012 Source: Frost and Sullivan Rank Company 1 2 3 4 5  The top three global biosimilars market participants contributed 82.0% of the total market revenue with Sandoz as a global leader.  Teva Pharmaceutical’s acquisition strategy has allowed the company to stay ahead in the G-CSF sub-segment.  Hospira has been active in the EPO biosimilars sub- segment.  Competition will likely increase as new market participants from emerging countries are penetrating the market. **Sandoz includes Sandoz and Hexal. ***Teva includes Ratiopharm and CT Arzneimittel.
  12. 12. 12 Competitive Landscape Analysis (continued) Source: Frost & Sullivan. SalesandMarketingStrength LowHigh Low HighProduct Development Strength Generics and Specialty Pharma Big Pharma Biotech / Biopharma Potential Entrants Sandoz Teva Hospira STADA Medice CT Arzneimittel Biopartners Mylan Merck Eli Lilly Pfizer Astrazeneca Zydus Cadila Actavis Dr. Reddy’s Boehringer Ingelheim Biocon Cangene Crucell Reliance Life Sciences Companies with a strong integration of marketing and R&D is likely to succeed. Total Biosimilars Market: Competitive Landscape Analysis, Global, 2012 Celltrion Samsung Fujifilm
  13. 13. 13 Government Regulation and Policies The Dynamic and Complex industry nature makes it difficult to formulate and implement uniform regulatory guidelines for approval of new products Divergent Interests Uncertain Long-term Impact Brand innovators fear that the widespread adoption of biosimilars might hamper their growth and have questioned the safety of biosimilars In countries where the regulatory bodies have already approved biosimilars, credibility of such products as equivalent long- term substitutes for originator products is often debated Complex Molecules Molecular complexity of bitech-based products has traditionally driven regulators to treat biosimilars extra- cautiously , often requiring lengthy, expensive clinical trials , restricting small players from entering this space Source: Frost & Sullivan
  14. 14. 14 Global Evolving Regulatory Environment for Biosimilars Region Regulatory Environment • EMEA global leader in providing a formal path for biosimilars approval • Regulatory guidelines vary on a country-by-country basis • Regulation drafted by developed countries other than the US are often based on EMEA approval standards • FDA lags behind the EU in framing clear regulatory policies for biosimilars • The Biologics Price Competition and Innovation Act (BPCIA, 2009, provides a framework for biosimilars approval • FDA is preparing to provide further guidance to companies seeking for approval • In 2009, WHO published Guidelines for Evaluation of Similar Bio-therapeutic Products , providing high-level guidance for national regulatory agencies • Though it targets developing markets , regulators’ ability to evaluate and formally approve products remains limited Source: Frost & Sullivan
  15. 15. 15 Global Evolving Regulatory Environment for Biosimilars (continued) Region Regulatory Environment • A National Biotechnology Regulatory Authority (NBRA) Bill is soon expected to passed hoping to significantly streamline the approval process • The current biosimilar approval process is quite complex requiring approval from multiple government agencies • Hence a clearer regulatory pathway is required to cut costs and time • Despite having the maximum number of approved products domestically, China lacks a specific approval process for biosimilars till date • The bar set by the Chinese SFDA remains lower than that of the US and EU • Guidelines for the Quality, Safety and Efficacy Assurance of Follow-on Biologics was established by the PMDA on March 2009 • Currently existing regulatory policies are not on par with those of the regulated markets Source: Frost & Sullivan
  16. 16. 16 Indian Biosimilars Market Overview What are current market dynamics, and what are the primary challenges? • The Indian biosimilars market as estimated to be worth $58.8 million in 2012 • Large companies develop not only biosimilars but also their own biologics • Medium-size firms struggle to gain a footing in India • Despite leveraging a large share in the global generic market, this segmnet warrants a unique combination of generic and innovative drug industry What are the key opportunities and risks for this market? Which companies are successful in this market and why? Opportunities Risks Leading Companies  Overcome challenges and mitigate high risk and costs associated with drug development and manufacturing  Importance of strategic partnerships has been recognised  Patent expiry of 17 blockbuster biologics between 2011 and 2019  Lower facility and development costs than developed countries  Progress towards achieving better clinical capabilities  Tedious approval (bioequivalence studies), processes and patent litigations  Cold chain distribution – a major hindrance to supply chain Source: Frost & Sullivan
  17. 17. 17 Indian Biosimilars Market - Existing and Pipeline Products Company/Product EPO Insulin HGH Interferon GCSF MAB Enbrel Streptokinase Biocon Intas Biopharmaceuticals Dr Reddy’s Labs Reliance Life Sciences Bharat Biotech Lupin Wockhardt Ranbaxy & Zenotech Labs ShanthaBiotechnics (Sanofi Aventis) Expected Global Biosimilars Market Share (2015) 11% 10% 4% 9% 10% 36% 12% <8% Launched product Pipeline product Sources: Frost & Sullivan, BioPharm International and IBEF.
  18. 18. 18 Strategic Partnerships between Indian and Global Companies Product Development Manufacturing Clinical Trials Partnerships Comments Capabilities driven by strategic alliances with global leaders First Indian company to receive EU-GMP Certification Partnership with GSK to assist in manufacturing and marketing; have a WHO cGMP facility Have multiple cGMP facilities in India in addition to main plant in Ireland Partnership for product development. Evaluating for marketing partners in EU 5 manufacturing facilities across India; emerging capabilities in biosimilars Sources: Frost & Sullivan and IBEF.Strong Weak
  19. 19. 19 Strategic Partnerships between Indian and Global Companies (continued) Product Development Manufacturing Clinical Trials Partnerships Comments Bought 40% stake in Goa- based Mab Pharm & 25% stake in Bio Mabs in China to grow mAb capabilities Subsidiary Shantha West in San Diego has developed 4 mAbs; R&D partnership with International Vaccine Institute Ranbaxy holds 45% stake in Zenotech Labs for marketing biosimilars N/A Recently opened a large biotech park in Aurangabad, designed according to US and EMEA standards Sources: Frost & Sullivan and IBEF. Strong Weak
  20. 20. 20 Way Ahead for Indian Biosimilars Market Strategic partnerships between global and Indian companies are expected to increase significantly over the next five to ten years Sources: Frost & Sullivan and IBEF. Path forward for Indian Biosimilars Establish partnerships with local industry leaders Market to physicians serving the emerging middle class Export to unregulated and semi-regulated markets Huge opportunity for investment in Indian market Establish clear pathway for Regulatory Approval
  21. 21. 21 Japan Biosimilars Market Overview What are current market dynamics, and what are the primary challenges? • Japanese Biosimilars Market was estimated to be $26.2 million in 2012 • Generics constituted 23% by volume and 10% by value in 2012. • Japanese Government strives to reduce healthcare costs and increase use of generics • Biosimilars are considered a sub-category of generics. Till date, 5 products approved in Japan • Slower uptake of generics is mainly due to quality and efficacy concerns • Market is expected to grow gradually driven by patent expiry of biologics, increase in demand and physician acceptance What are the key opportunities and risks for this market? Which companies are successful in this market and why? Opportunities Risks Leading Companies  Sandoz and JCR - early- entrance companies that have approved biosmilar products in Japan since 2009; both filed another biosimilar product for approval.  Nippon Kayaku established a strategic partnership with Celltrion to develop few other mAbs biosmilars.  Patent expiry of original medicines  Government prospective payment system and incentives for physicians, pharmacists  Aging population  Regulatory hurdles  Physicians’ perceptions  Stringent price cut system Source: Frost & Sullivan
  22. 22. 22 Product Component Therapeutic Indication Manufacturer Reference Product Authorization Date Epoetin alfa BS epoetin alfa Anaemia, renal anaemia JCR Pharmaceuticals Espo 20 Jan 2010 Filgrastim BS filgrastim Cancer, hematopoetic stem cell transplantation, neutropenia Fuji Pharma Neulasta 21 Nov 2012 Filgrastim BS filgrastim Cancer, hematopoetic stem cell transplantation, neutropenia Sandoz Neulasta 24 March 2014 Filgrastim BS filgrastim Cancer, hematopoetic stem cell transplantation, neutropenia Teva Neulasta 28 Feb 2013 Somatotropin BS somatotropin Growth Hormone Deficiency, Turner Syndrome Sandoz Genotropin 22 June 2009 PMDA Approved Biosimilars in Japan BS stands for biosimilar. Biosimilars Market: PMDA Approved Biosimilar Products, Japan, 2012 Source: Frost & Sullivan
  23. 23. 23 Market Opportunities for New Entrants Competitive Knowledge Capital Investments Vision and Strategy Scale-up Production Capabilities Clinical and Regulatory Expertise Marketing and Sales Skills • Clearly defined long-term vision, commitment, and strategic fit • Goals for in-house development, marketing, and geographic focus • Competitive intelligence on biologics and biosimilars market • Competitor pipeline analysis and competitor’s R&D investment strategy • Competitive regional benchmarking • Healthy finance infrastructure for high upfront investments • Ability to cope with high manufacturing, maintenance, and promotional costs • Effective sales communication to the scientific community • Effective market activities for commercialization of biosimilars • Continuous promotional activities and marketing relationships with doctors and pharmacists • Technical know-how for clinical development • Regulatory expertise on guidelines such as EMA, FDA, and pharmacovigilance expertise • Stable multi-step reproducible manufacturing facilities • Proper supply chain management • Standard testing control facilities Strategic Factors for New Entrants Source: Frost & Sullivan
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