Are Biosimilars the Road to Certain Success or a High-Risk Venture?


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The biosimilars market is on the verge of transitioning from a state of infancy to an entrenched facet of healthcare. Numerous biosimilars, or follow-on biologics, have been successfully launched in many countries outside the U.S. Lower cost biosimilar versions of more complex biologic therapies, such as monoclonal antibodies, are now eagerly awaited and expected to significantly impact healthcare costs, particularly in the U.S., the largest market for biotechnology. However, residual uncertainties surrounding approval and commercial uptake could considerably influence the true potential of this market.

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Are Biosimilars the Road to Certain Success or a High-Risk Venture?

  1. 1. Are Biosimilars the Road to Certain Success or a High Risk Venture? Global Trends in an Ambiguous Market Debbie Toscano, Senior Industry Analyst Life Sciences October 17, 2013 © 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. Today’s Presenter Debbie Toscano, Senior Industry Analyst Frost & Sullivan Follow me on: @DebToscano •Over 20 years of life sciences industry expertise comprising pharmaceutical R&D and industry research/consulting •Over 15 years in preclinical research and safety pharmacology at Novartis •Author or co-author of published peer-reviewed scientific manuscripts and trade journal articles 2
  3. 3. Focus Points Today’s agenda: • Introduction to the biosimilars market • Global climate of the biosimilars industry • Key drivers and challenges – the good, the bad, and the uncertain • Competitive landscape and anatomy of a winner • A look ahead–potential US market scenarios • Conclusions 3
  4. 4. Biosimilars–A Hot Topic!
  5. 5. Recent Developments in an Emerging Industry • Biosimilar penetration of global markets is still awaiting the largest and most lucrative pharma market – the United States • Much uncertainty surrounds timelines, development costs, end-user acceptance • European approval of the first monoclonal antibody-based biosimilars – significant milestone for the industry • Bottom line: the “biologic safety net” protecting pharma from the patent cliff is becoming less secure Source: Frost & Sullivan 5
  6. 6. Trends in the Biosimilars Market –Today and Tomorrow Current Trends Future Trends 1. Regulatory pathways for approval are gradually being adopted in regions across the globe 1. Technology advancements will allow for improved characterization earlier in development, lowering development cost 2. Multiple strategic partnerships merging biologics with commercial capabilities 2. Increasing competition anticipated to result in greater discounts of biosimilars 3. Biologics market leaders lobbying for regulations to dissuade biosimilar use 3. Increased market size due to greater access to less costly biologic medications and increased penetration Source: Frost & Sullivan 6
  7. 7. Some Factors That May Affect a Biosimilar’s Uptake The biosimilars market is complex with many factors that may affect market potential. These include: Number of Competitors Physician/Patient Adoption Indication (chronic versus acute) Development Costs Biosimilar Market Uptake Sales and Marketing Experience Price Differential from Originating Biopharmaceutical Reimbursement Mode of Administration Source: Frost & Sullivan 7
  8. 8. Poll Question #1 • Which of the following do you think is most important for instilling confidence in a biosimilar product? a) b) c) d) e) The reputation of the manufacturer The geographic location of the manufacturer (i.e. developed versus developing region) The quantity and quality of the clinical data Length of time on the market Recommendation of the physician 8
  9. 9. Poll Question #2 • Do you think that substitution of a biosimilar for a biologic should be at the discretion of the prescribing physician, the patient, or the payer? a) b) c) d) Physician only Payer only Patient only All of the above 9
  10. 10. Global Climate of the Biosimilars Market
  11. 11. Global Distribution of Market Share Total Revenue, Biologics Vs. Biosimilars, Global, 2012 Total Biosimilars Market: Revenue Breakdown by Region, Global, 2012 100 $94 B 90 80 70 Australia 1.0% Europe 44.0% Japan 3.0% South Korea 8.0% $ (Billion) Argentina 2.3% Mexico 3.4% Brazil 6.1% U.S. 12.3% 60 50 40 30 20 China 13.2% 10 India 6.7% $876 M 0 Biologics Biosimilars Biosimilars have penetrated just under 1% of the total biologics market. Source: Frost & Sullivan 11
  12. 12. Regulatory Guidelines for Key Established and Emerging Global Markets Europe: Clear regulatory guidelines in place US: Regulatory guidelines drafted; unclear Mexico: Clear regulatory guidelines in place Brazil: Clear regulatory guidelines in place China: Regulatory guidelines in place, but unclear India: No formal guidelines – biosimilar approvals are on a case-by-case basis Japan: Clear regulatory guidelines in place S. Korea: Clear regulatory guidelines in place Argentina: Clear regulatory guidelines in place Source: Frost & Sullivan 12
  13. 13. Poll Question #3 • Do you think that the biosimilars industry is going to hurt innovation? a) b) Yes No 13
  14. 14. Key Drivers and Challenges: The Good, the Bad, and the Uncertain
  15. 15. Major Drivers– The Good • Multi-billion dollar revenues of successful biologics • Multiple pending patent expiries • Abbreviated development and approval process • Healthcare expenditure reduction incentives • Few competitors Source: Frost & Sullivan 15
  16. 16. Major Challenges–The Bad • Greater financial and time investment compared to conventional generics • Need for biologics manufacturing expertise and capabilities • Inherent risks of biologics (immunogenicity) • Greater risk of non-approval Source: Frost & Sullivan 16
  17. 17. Major Challenges–The Uncertain • Unclear regulatory guidelines for approval in many markets, including the US • Willingness of physicians, payers, and patients to adopt biosimilars • How much to invest in marketing? No “guarantee” of market share if not interchangeable • Level of investment needed for clinical research – particularly for the US • Unknown timeline for finalization of regulatory guidance Source: Frost & Sullivan 17
  18. 18. US Regulatory Activity Biosimilars Market: Timeline of Biosimilars Regulatory Activity, US, 2012 March 23, 2010: Patient Protection and Affordable Care Act signed into law 2010 2011 July 9, 2012: Enactment of the Biosimilars User Fee Act (BsUFA) 2012 February 2012: FDA issues three draft guidance documents on biosimilar product development 2013 Final guidance and applications anticipated First biosimilar approvals anticipated 2014 2015 March 2013: FDA issues fourth guidance document on biosimilar product development - formal meetings between FDA and sponsors/applicants Source: Frost & Sullivan 18
  19. 19. Competitive Landscape and Anatomy of a Winner
  20. 20. Several Blockbuster Monoclonal Antibodies Have Limited Remaining Exclusivity in the US US Patent Terms for Selected Biologics Rituxan Lantus Humira Erbitux Avastin Herceptin Enbrel 2000 2005 2010 2015 2020 2025 2030 Source: Frost & Sullivan 20
  21. 21. …and Competitors are Waiting in the Wings US Patent Terms for Selected Biologics Sandoz; Amgen; Biocad; Celltrion; Boehringer Ingelheim; Pfizer Rituxan Eli Lilly/Boehringer Ingelheim; Biocon/Mylan Lantus Boehringer Ingelheim; Pfizer Humira Erbitux Amgen Avastin Amgen Pfizer; Biocad; Hospira; Biocon; Amgen/Actavis Herceptin Enbrel 2000 Sandoz 2005 2010 2015 2020 2025 2030 Source: Frost & Sullivan 21
  22. 22. Who is Winning the Race? Sandoz: •Global market leader •3 marketed products in 50 countries •5 candidates in Phase 3 Teva: •2 marketed products •#2 spot in global market share Hospira: •2 marketed products •11 candidates in development •First approved biosimilar mAb Source: Frost & Sullivan 22
  23. 23. Other Noteworthy Up-and-coming Competitors Celltrion: •Approved biosimilar mAb •8 mAb in development •Multiple partnerships Biocad: •At least 4 molecules in active development, with 3 in Phase 3 Amgen: •Strong biologics, commercialization capabilities •Plans for development of 6 mAbs in partnership with Actavis Biocon: •Partnered with Mylan for development of 8 molecules including 3 insulin analogs and 4 mAbs In addition, multiple big pharmas have molecules in active development or have announced intentions to enter the biosimilars market: •Pfizer •Sanofi •Boehringer Ingelheim •Eli Lilly •Merck Source: Frost & Sullivan 23
  24. 24. Anatomy of a Winner–Blueprint for Success Quality and cost efficiency of biologic manufacturing capabilities Global market launch experience Advanced analytical characterization capabilities Reputation for producing high quality products Biologics development and commercialization experience Negotiation skills and experience and in dealing with regulatory authorities Source: Frost & Sullivan 24
  25. 25. A Look Ahead–Potential US Market Scenarios
  26. 26. Poll Question #4 • How much of a price discount do you think it will take to encourage use of biosimilars in the US? a) b) c) d) 10% 25% 50% More than 50% 26
  27. 27. Scenario Forecasts–Monoclonal Antibody Segment Scenario Forecasts: Percent Market Share Optimistic Scenario Realistic Scenario Conservative Scenario Revenue ($ Billion) 25.0 25.0 25.0 20.0 20.0 20.0 15.0 15.0 15.0 10.0 10.0 10.0 5.0 5.0 5.0 0.0 0.0 0.0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Innovator Biologics Biosimilars Source: Frost & Sullivan 27
  28. 28. Conclusions and Recommendations
  29. 29. Conclusions and Recommendations • The biosimilars market is still in its infancy, especially the US • Increasing pressure to lower healthcare costs globally is anticipated to drive this market • As patent protection expires for key biologics in the next few years alongside implementation and refinement of regulatory guidance, a second wave of biosimilars is expected to significantly boost total market revenue • However, there are many significant barriers, and not all players will successfully overcome them • Comparison to conventional generics market is inappropriate since biosimilars are not identical copies and will not be automatically substituted (in most cases) Source: Frost & Sullivan 29
  30. 30. Next Steps Develop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities Phone: 1-877-GOFROST (463-7678) Email: 30
  31. 31. Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by “Rating” this presentation. 31
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  33. 33. For Additional Information Jennifer Carson Corporate Communications Industry (210) 247-2450 Debbie Toscano Senior Industry Analyst Life Sciences (212) 402-1818 Jennifer Lazar Brice Global Program Director Life Sciences (650) 475-4514 Ranjith Gopinathan Program Manager Life Sciences +44 (0)20 7343 8351 33