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Analysing the market
Biosimilars - will they be worth the effort?
CPhI Worldwide Pre-Show ConferenceCPhI Paris
4th October 2010Peter WittnerPeter Wittner
Interpharm ConsultancyInterpharm Consultancy
22
Analysing the marketUnderstanding what makes Biosimilars uptake more
difficult than generics Interchangeability – the big hurdle
What is the size of the pie? Analysing growth statistics and explaining the gap in performance versus potential
Biotech market is booming but Biosimilars are lagging behind
Identifying the key therapeutic areas for Biosimilars Do the numbers tell us the whole story?
Where are the future opportunities for greatest growth? US, EU or India? Where should you invest?
33
What makes Biosimilars uptake more difficult than generics?
Interchangeability – the big hurdle
44
What is the size of the pie?
How big will the Biosimilars slice be?
Biosimilar
slice
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What is the size of the pie?
+10%
Leading Biological products 2009Brand Generic Company
Enbrel Etanercept Amgen / Wyeth $6,580 $6,490Remicade Infliximab Centocor / Schering Plough $5,934 $5,335Avastin Bevacizumab Genenetech / Roche $5,777 $4,484
Rituxan / MabThera Rituximab $5,653 $5,099Humira Pen Adalimumab Abbott / Eisai $5,488 $4,521
Epogen / Procrit / ESPO Epoetin Alpha $5,033 $5,123Herceptin Trastuzumab Genentech / Roche / Chugai $4,890 $4,384Lantus Insulin glargine Sanofi-Aventis $4,185 $3,130Neulasta Pegfilgrastim Amgen $3,355 $3,318Aranesp Darbopoetin Amgen / Kyowa Hakko $2,871 $3,334
$49,766 $45,218
2009 Sales
2008 Sales
Genenetech / Roche / Biogen-IDEC
Amgen / Ortho / Janssen-Cilag / Kyowa Hakko
Source: La Merie report – Top 20 Biologics 2009
66
What is the size of the pie?Biotech market value is mainly concentrated in
Western markets............
Enbrel Remicade Avastin Humira LovenoxMabthera Lantus$0.0
$0.5$1.0
$1.5
$2.0$2.5
$3.0$3.5
$4.0
$4.5$5.0
$3.0 $3.0 $2.8$2.3 $2.6 $2.5 $2.4
$2.0$1.4 $1.5
$2.0 $1.6 $1.5$1.0
Biological products 2009Sales in $b n. Source: IMS Europe
US
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What is the size of the pie?.... but most of world population and the Biosimilar
consumer base is in low-cost developing markets
14.8%
56.0%
11.9%
3.1%5.0%
8.7%0.5%
World population breakdown
Africa Asia Europe Middle EastNort h Am erica Lat in Am erica
/CaribbeanOceania / Aust ralia
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Why is the biological market growing?
Big Pharma is moving up market Biologicals are higher priced than small molecule
medicines Biologicals are harder to copy = technological barrier
Biologicals pricing – some US figures from GPhA In the US the lung cancer drug Avastin costs about
$100,000 per patient per year The cost for Cerezyme used to treat Gaucher disease,
can run to $300,000 / patient / year Projected savings are between $42- $108 bn over the
first 10 years of a US Biosimilar market
99
What makes Biosimilars uptake more difficult than generics?
Let’s compare with normal genericsLook at what will certainly happen with Atorvastatin
The SPC expires November 2011Based on precedent, around 20 companies will launch on
the day after the expiryAll will have been accepted as “essentially similar” to
Lipitor by the regulatorsAll can therefore be substituted in place of the original
brand and each otherIn other words, there is complete interchangeability
1010
Interchangeability – why is it an issue?
Marketing biosimilars is not the same as marketing generics
The big issue is interchangeability Or perhaps the real issue is the lack of it Prescribers need to be convinced that A = B or
else they will not substitute when prescribing If Biosimilars cannot be prescribed by INN
name, the pharmacist cannot substitute
1111
What makes Biosimilars uptake more difficult than generics?
Interchangeability – experience in EU markets shows that prescribers are reluctant to switch
Most EU countries require prescription of biological products by brand name
Prescribers are therefore waiting until they see a newly diagnosed patient before trying Biosimilar
Result – very slow market penetration by Biosimilars
Amgen claims it has only lost 3% MS to Filgrastim (G-CSF) copies
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What has happened so far?
Source: Amgen Q1 ’10 Earnings Call
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What has happened so far?“Bringing a Biosimilar to market takes up to eight years, with development costs averaging $100-$150 million.
Last year, sales of biosimilars reached just $75 million worldwide compared with $110 billion in sales of biologic drugs”
Greg Perry, EGA, speaking at 8th EGA International Symposium on Biosimilar Medicines, 2nd September 2010 reported by Pharma Times
1414
Biosimilars marketplace
Who will be the major players?In Western markets.....
Only companies with deep pockets! Biosimilars have to be marketed, not just sold That means Teva, Sandoz, Hospira
In Eastern and emerging markets The barriers to entry are lower The market is more a classic generic market -
PRICE! Ranbaxy, Dr. Reddys, Biocon are already there
1515
Biosimilars marketplaceIt is not just the generic companies that are
thinking about entering the market 2008 – Merck & Co announces plans for unit to
copy biotech medicines. Aim is to sell at least six biogenerics by 2017
2009 – Eli Lilly acquires Imclone Systems and announces initiative to develop biosimilars
2009 – AstraZeneca says it is considering participation in biosimilars market
Jan 2010 – Pfizer says it plans to launch biosimilars of leading 10–15 biologicals
1616
Biosimilars – Big Pharma
Pfizer wants to enter China using locally made copy biologicals with Pfizer / Wyeth brand
GSK will buy biosimilars from Biocon (India) for Pharmerging markets
Sanofi-Aventis is also planning to target Pharmerging markets with Biosimilars
Bayer-Schering is selling Gensulin from Bioton (Poland) and Insugen from Biocon in China
1717
Key therapeutic areas for Biosimilars
This is another area where market figures alone will not be a good guide
Market data seems to show MAbs taking a growing market share
But what data will the regulators want to allow you to register your copy?
The rate limiting step in regulated markets is going to be the need for regulators to provide guidelines
1818
Where are the future opportunities for greatest growth?
US, EU or India? US biological prices are under pressure but should
stay highEU – price competition is growing
More Biosimilars entering the market and slow uptake will inevitably push prices down
India – low prices But market entry is easier and volumes are huge
Where should you invest?
1919
Asian markets – India Changes in G-CSF (Filgrastim) prices in
response to competition
2002 2003 2004 2005 2006 2007 20080
1,000
2,000
3,000
4,000
5,000
6,000
InnovatorBiosimilar
Rupees
Source: Biocon presentation, Biosimilars India 2009
2020
Asian markets – India
Substance Average world price
Average Indian price
Differential in %
Human Insulin U$ / 100 IU vial US$6.50 / 100 IU vial 80%
Anti-EFGR Monoclonal
$25,000 per treatment
$6,000 per treatment 75%
Recombinant streptokinase $150 / vial $10 / vial 95%
EPO $200 / 2,000 IU $10 / 2,000 IU 95%
Comparing Indian Biological prices to the rest of the world
Source: Biocon (Biosimilars India 2009)
2121
Where are the future opportunities for greatest growth?
So where should you invest?India / Asia / Latin America for quick returns
Market entry is quicker and cheaper, prices are lower, but compensation is the high volumes
EU/USA for longer term stability and higher margins
Market entry is slower and much more costly, but the compensation will be long-term stability and higher prices
