Presentation focus on emerging regions CMOs/CRAMs in the cytotoxic high potency API sector including India & China

1. HPAPI Global Market Opportunity Challenges to HPAPI Manufacturing - India/China & Future HPAPI
Investment, Expertise, Stringent Specification
 Small molecule HPAPI manufacturing is COMPLEX!
 High barrier to entry due to costs
 Sophisticated manufacturing & containment technologies-high level of personnel
training/experience
 Demanding resources required for achieving health safety, environmental approvals-OELs,
Containment validation
 ADC-Antibody Drug Conjugates even More COMPLEX! Cytotoxic molecule Bound to
Monoclonal Antibody for more targeted delivery
 Complex air handling under negative pressure to prevent materials leaking into the
environment, often requiring PPE-Personal Protective Equipment
 Requires fully contained sampling systems and testing methods with sophisticated
engineering controls
 Requires constant medical monitoring on employee operators exposure
 Facility design: single-pass air, airlocks, safe-change filters, misting showers
Oncology
59%
Hormonal
19%
Glaucoma
7%
Others
15%
 Current Generic APIs
 Global API market valued at US $109 Billion in 2011-
growing at 7.9% CAGR next 5 years
 2011 Global API production- 62.4% in-house
pharmaceutical companies, 37.6% CMO outsourced
 Shift to High-Potency APIs
 15% growth shift towards high potency APIs(HPAPI)
manufacturing -CMO/CRAMS capability expansion &
differentiation from generic APIs
 Asia HPAPIs growing 15.4 % between 2009 &
2015.
 Notable Asian CMO/CRAMS -Aptuit, Hovione,
Eisai, Asymchem, Arch Pharmalabs, Nicholas
Piramal, Dishman, Ranbaxy, Dr. Reddy’s
 West India Tech-Transfer-M&A:
State-of-the-art HPAPI Category IV in Bavla, India –
designed by Dishman Group’s Swiss-based Carbogen
Amcis:
category
Occupational Exposure
Limit (OEL)
Toxicity
I ≥ 0.5 mg/m³ Low
II 10 µg/m³ to 0.5 mg/m³ Moderate
III 30 ng/m³ to 10 µg/m³ Potent
IV ≤ 30 ng/m³ Highly Potent
 HPAPI market -$8.9 B in 2011, 80% in N. America/
Europe USA(45.6&)/Europe (35%) (2009), Asia at 9.35% only-
but oncology market growing at 20%
 Oncology cytotoxic therapeutics, hormones prostaglandins.
 WESTERN CMO/CRAMS (for now?)
- USA-SAFC $75 Mil Wisconsin, new Israel bacterial HPAPIs
- France-Novasep US$12.7 mil HPAPI plant- Le Mans-50%
Capacity increase
(SafeBridge Consultants, Inc. 4-Band Assessment)
LOW OCCUPATIONAL EXPOSURE LIMITS REQUIRE COMPLETE CONTAINMENT AND
SPECIAL HANDLING!
 USA Asymchem’s China HPAPI facility (Roche Most
Valuable Partner Award):
But:
 Escalating Labor Costs, increasing Environmental
and Quality Regulatory oversight in China/India
will DRIVE COST UP !
 Plus Productivity from skilled labor is 3x higher in
the West than say India.
Captive -
Proprietary and
Generic API
62%
Outsourced -
Proprietary API
19%
Outsourced -
Generic API
19%
2011
ROW, 7.47%
China, 6.98%
CAGR 12.6%
India, 4.25%
CAGR 10.3%
US$109B
High Potency drugs have become the “darling” for Big Pharma and MNCs globally.
CMOs and CRAMs are following suit, i.e. gearing up to build new, sophisticated drug manufacturing that can handle the stringent demands of cytotoxic API manufacturing.
Today, due to high investment costs, technology and process demands plus sophisticated containment ,that small club of CMOs are predominantly Western, but could India & China not be FAR behind?
Although LOWER COST is not the sole reason for outsourcing manufacturing, it remains a BIG FACTOR in the process. China and India have the “home” advantage plus global growth in pharmaceutical markets are leaning
towards serving emerging regions domestic markets.
 Will history repeat itself? (, i.e. India generics formulation take-over plus China’s Global API production dominance)
“ HPAPI Capable CMOs & CRAMS in Emerging Regions”
“ Here Comes India & China (Again) ?”
Source: Chemical Pharmaceutical Generic Association
Source: GBI Research