GBIHC255MR-Biopharmaceutical Manufacturing in India, China ... · Biopharmaceutical Manufacturing in India, ... contract manufacturing partnerships, ... Global pharmaceutical market

Biopharmaceutical Manufacturing in India, China and South Korea Regulatory Framework, Infrastructure Support and Discovery Funding Create an Environment Conducive to Growth

GBI Research Report Guidance

GBIHC255MR / Published OCT 2012 Page 2

© GBI Research. This is a licensed product and is not to be photocopied

GBI Research Report Guidance

The report provides an analysis of the biopharmaceuticals approved in 2010 and 2011, operating dynamics in the biopharmaceutical industry, the current scenario in biopharmaceutical manufacturing, key stakeholders, the value of biopharmaceutical markets, and forecasts for India, China, South Korea, and the global market. Also covered are the trends witnessed in biopharmaceutical manufacturing, the preferred partnership pricing model, contract manufacturing partnerships, a comparative analysis of biopharmaceutical manufacturing in India, China and South Korea, and their competitive landscapes.

Chapter three, titled Overview of the Biopharmaceutical Industry, presents an objective analysis of newly approved biopharmaceuticals, the current scenario in biopharmaceutical manufacturing, factors driving outsourcing to India, China and South Korea, drivers for CRAMS, contract manufacturing benefits, operating cost analysis, manufacturing equipment trends, comparative analysis of new and old equipment, biosimilars in Asia, trends witnessed in biopharmaceutical manufacturing, the contract pricing model, and contract manufacturing partnerships.

Chapter four analyzes biopharmaceuticals in India, the augmentation potential for biopharmaceuticals to grow in India, the biopharmaceutical market drivers and barriers, a regulatory overview, and the competitive landscape.

Chapter five, titled Overview of Biopharmaceutical Manufacturing in China, covers the Chinese biopharmaceuticals market, economic impact, biopharmaceuticals under progression in China, challenges faced by the biopharmaceuticals industry, the contract manufacturing scenario, and the competitive landscape.

Chapter six presents an overview of biopharmaceuticals in South Korea, including the evolution of biopharmaceuticals, drivers, market size, major R&D achievements, South Korea’s strategic advantages over India and China, and the competitive landscape

Chapter seven presents the appendix.

GBIHC255MR / Published OCT 2012

Page 3 © GBI Research. This is a licensed product and is not to be photocopied

Executive Summary

Executive Summary

Biopharmaceuticals Show Consistent Growth in Revenues

The annual revenue for biopharmaceuticals has been consistently growing since 2001, accounting for XX% of the total pharmaceutical market in 2011. The global biopharmaceutical market was valued at $XX billion in 2011 and is expected to grow to over $XX billion by 2020. By 2014, biosimilars are expected to enter the US market, and GBI Research estimates that they have significant potential for growth in the biopharmaceutical sector, reaching $XX billion by 2020.

Biopharmaceutical Manufacturing, Percentage of Biopharmaceuticals in the Global Pharmaceutical Market, 2001-2011

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Glo

bal p

harm

aceu

tical

mar

ket (

$bn)

Biop

harm

aceu

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mar

ket a

s (%

) of g

loba

l pha

rmac

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al m

arke

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Global pharmaceutical market % of biopharmaceutical in global pharmaceutical market

Source: GBI Research; Gao, 2011

GBI Research believes that the next decade will bring about a paradigm shift in biomanufacturing technologies, with improvements in equipment efficiency and the introduction of novel therapies. In pharmerging countries such as India, China and South Korea, the emergence of biosimilars is seen as a key macroeconomic factor for generating revenues by attracting Foreign Direct Investment (FDI) in the start-up of manufacturing units. Efficient manufacturing processes and equipment will reduce production costs, provide economic benefits and decrease healthcare expenditure. The US has the most advanced R&D in biopharmaceutical manufacturing, and most biopharmaceuticals are licensed first in the US. The approval of biopharmaceuticals has contributed significantly to the US economy and has saved many from life-threatening diseases.



Table of Contents

1 Table of Contents

1 Table of Contents................................................................................................................................. 6 1.1 List of Tables............................................................................................................................. 9 1.2 List of Figures...........................................................................................................................10

2 Biopharmaceutical Manufacturing in India, China and South Korea - Introduction ................................12 2.1 Introduction ............................................................................................................................12

3 Biopharmaceutical Manufacturing in India, China and South Korea - Overview of the Biopharmaceutical Industry..............................................................................................................................................13

3.1 Definition and Objective Analysis of Newly Approved Biopharmaceuticals ................................13 3.2 Collective Analysis of Biopharmaceuticals Approved in 2010 and 2011......................................16 3.3 Current Scenario in Biopharmaceutical Manufacturing .............................................................18 3.4 Biopharmaceutical Manufacturing............................................................................................23 3.5 Factors Driving Outsourcing to India, China and South Korea ....................................................24

3.5.1 Comparative Cost Analysis between In-House Biopharmaceutical Production Versus Contract Manufacturing Organizations...........................................................................................24

3.6 Growth Drivers for Contract Research and Manufacturing Services...........................................25 3.7 Contract Manufacturing Benefits..............................................................................................27 3.8 Operating Cost Analysis in Biopharmaceutical Manufacturing ...................................................28

3.8.1 Labor Cost Analysis ..........................................................................................................28 3.8.2 Investment Cost Analysis ..................................................................................................29 3.8.3 Standard Operating Costs.................................................................................................30

3.9 Cost and Timeline Analysis for Therapeutic Monoclonal Antibody Product Development...........32 3.10 Manufacturing Equipment Trends ............................................................................................35 3.11 Comparative Analysis of New and Old Equipment.....................................................................36 3.12 Consolidation in Pharmaceutical Industry has Resulted in Idle Production Lines ........................37 3.13 Biosimilars in Asia ....................................................................................................................39 3.14 CMOs to Benefit by Expanding Operations in Biopharmaceutical Manufacturing.......................39 3.15 Trends Witnessed in Biopharmaceutical Manufacturing............................................................40

3.15.1 Single-Use Bioprocessing and Microbial Technologies to Dominate Biopharmaceutical Manufacturing.................................................................................................................40

3.15.2 Biopharmaceutical R&D and Manufacturing Outsourcing to Rise.......................................40 3.15.3 Market for Biopharmaceuticals to Rise at Brisk Rate .........................................................40 3.15.4 Introduction of Biosimilars to Multiply Biopharmaceutical Manufacturers .........................40 3.15.5 R&D Spend in Biopharmaceuticals Insulated from Economic Downturn..............................41 3.15.6 Downstream Processing Technologies Acting as Bottleneck in Biopharmaceutical

Manufacturing.................................................................................................................41 3.16 Preferred Biopharmaceutical Contract Pricing Model................................................................41 3.17 Contract Manufacturing Partnerships.......................................................................................42 3.18 Comparative Analysis of India, China and South Korea with Reference to Government Initiatives,

Investment and Skills ...............................................................................................................44 4 Biopharmaceutical Manufacturing in India, China and South Korea - Overview of Biopharmaceutical

Manufacturing in India........................................................................................................................45 4.1 Augmentation Potential of Biopharmaceuticals in India ............................................................45

4.1.1 Stem Cells ........................................................................................................................45 4.1.2 Biosimilars .......................................................................................................................45 4.1.3 Vaccines ..........................................................................................................................47

4.2 Biopharmaceutical Revenues in India .......................................................................................48 4.3 Drivers and Barriers for Biopharmaceutical Manufacturing in India ...........................................49 4.4 Proposals to the Government for Promoting Biopharmaceutical Manufacturing........................50 4.5 Pharmaceutical Cluster Development in India...........................................................................50 4.6 Regulatory Overview for Biopharmaceuticals in India ...............................................................51 4.7 Competitive Landscape............................................................................................................52



Table of Contents

4.7.1 Biocon Ltd........................................................................................................................52 4.7.2 Serum Institute of India Ltd...............................................................................................53 4.7.3 Panacea Biotec Ltd...........................................................................................................54 4.7.4 Dr. Reddy’s.......................................................................................................................55 4.7.5 Cipla ................................................................................................................................56 4.7.6 Lupin ...............................................................................................................................57

5 Biopharmaceutical Manufacturing in India, China and South Korea - Overview of Biopharmaceutical Manufacturing in China.......................................................................................................................58

5.1 Market Size for Chinese Biopharmaceuticals.............................................................................58 5.2 Economic Impact of Biopharmaceuticals Approved in China......................................................60 5.3 Biopharmaceuticals under Progression in China........................................................................62

5.3.1 Antibodies........................................................................................................................62 5.3.2 Long-acting Proteins ........................................................................................................62 5.3.3 Gene Therapy Products ....................................................................................................62 5.3.4 New vaccines ...................................................................................................................62

5.4 Challenges Faced by Biopharmaceuticals in China.....................................................................63 5.4.1 Overproduction of Simpler Drugs is Leading to Over-Competition in Domestic Markets ......63 5.4.2 Weak Strategic Planning and Management Skills ..............................................................63 5.4.3 Expression Deficit to Limit the Development and Industrialization of Biopharmaceuticals...63

5.5 Propositions for the Advancement of Biopharmaceuticals in China ...........................................63 5.5.1 Internationalize the Regulatory System to Eliminate Deficiencies for Biopharmaceutical

Products ..........................................................................................................................63 5.5.2 Breakthrough Innovation is Critical for the Success of Biopharmaceuticals.........................63 5.5.3 Set up Industrial Standards and Fortify Manufacturing Capacity........................................63 5.5.4 Augment Communication Between Researchers and Clinicians for Developing

Biopharmaceuticals..........................................................................................................64 5.6 Contract Manufacturing Scenario in China................................................................................64 5.7 Competitive Landscape............................................................................................................65

5.7.1 Hualan Biological Engineering Co., Ltd. .............................................................................65 5.7.2 Shanghai Kehua Biological Engineering Co., Ltd. ...............................................................66 5.7.3 Beijing Tiantan Biological Products Co., Ltd. ......................................................................67 5.7.4 Beijing SL Pharmaceutical Co., Ltd. ...................................................................................68 5.7.5 Shanghai RAAS Blood Products Co., Ltd.............................................................................69

6 Biopharmaceutical Manufacturing in India, China and South Korea - Overview of Biopharmaceutical Manufacturing in South Korea.............................................................................................................70

6.1 South Korean Biopharmaceutical Industry ................................................................................70 6.2 Market Size for South Korean Biopharmaceuticals ....................................................................71 6.3 Evolution of the Biopharmaceutical Industry in South Korea .....................................................72 6.4 Korean Free Trade Agreement with the US...............................................................................72 6.5 Drivers Affecting Biopharmaceuticals in South Korea ................................................................73

6.5.1 Korea/US Free Trade Agreement ......................................................................................73 6.5.2 Punishment Systems and Price Reduction..........................................................................73 6.5.3 Government Initiatives for the Development of the Biopharmaceutical Industry.................73

6.6 Major R&D Achievements in South Korea.................................................................................73 6.7 South Korea’s Strategic Advantage over India and China...........................................................73 6.8 Competitive Landscape............................................................................................................74

6.8.1 Celltrion...........................................................................................................................74 6.8.2 LG Life Sciences................................................................................................................75 6.8.3 Hanwha Chemical ............................................................................................................76 6.8.4 ISU Abxis..........................................................................................................................77 6.8.5 Green Cross......................................................................................................................78

7 Biopharmaceutical Manufacturing in India, China and South Korea - Appendix.....................................79



Table of Contents

7.1 Market Definitions...................................................................................................................79 7.2 Abbreviations ..........................................................................................................................79 7.3 Bibliography ............................................................................................................................80 7.4 Research Methodology ............................................................................................................81

7.4.1 Coverage .........................................................................................................................81 7.4.2 Secondary Research .........................................................................................................82 7.4.3 Primary Research .............................................................................................................82 7.4.4 Expert Panel Validation ....................................................................................................82

7.5 Contact Us...............................................................................................................................83 7.6 Disclaimer................................................................................................................................83



Table of Contents

1.1 List of Tables

Table 1: Biopharmaceutical Manufacturing in India, China and South Korea, Biopharmaceutical Approvals, the US, 2012 ..........................................................................................................13

Table 2: Biopharmaceutical Manufacturing in India, China and South Korea, Biopharmaceuticals Approved, the US, 2011 ..........................................................................................................16

Table 3: Biopharmaceutical Manufacturing in India, China and South Korea, Biopharmaceuticals Approved, the US, 2010 ..........................................................................................................17

Table 4: Biopharmaceutical Manufacturing in India, China and South Korea, Geographical Distribution of Cell Culture Capacity (000’ liters), 2011-2017...........................................................................19

Table 5: Biopharmaceutical Manufacturing in India, China and South Korea, Volume Requirement for Different Biopharmaceuticals, (000’ liters), 2011-2017.............................................................20

Table 6: Biopharmaceutical Manufacturing, Product Demand Distribution in Monoclonal Antibodies (%), Global, 2011 ...........................................................................................................................21

Table 7: Biopharmaceutical Manufacturing, Global Sales of Leading Biologics and Year of Patent Expiry in the US and Europe ..................................................................................................................22

Table 8: Biopharmaceutical Manufacturing, Comparative Cost Analysis Between In-House Biopharmaceutical Production Versus CMOs, Global, 2011 ......................................................24

Table 9: Biopharmaceutical Manufacturing in India, China and South Korea, Contract Manufacturing and the Drug Discovery and Research Market, Global, 2007-2016...................................................25

Table 10: Biopharmaceutical Manufacturing, Labor Cost Analysis Comparison ($), the US, Europe, India, China, 2011.............................................................................................................................28

Table 11: Biopharmaceutical Manufacturing in India, China and South Korea, Investment Range for Manufacturing Plant Locations, Unit Cost per m3 ($), per m3 Reactor Volume, 2011 ................29

Table 12: Biopharmaceutical Manufacturing in India, China and South Korea, Average Cost for Product Development Activity, ($’000) .................................................................................................32

Table 13: Biopharmaceutical Manufacturing in India, China and South Korea, Major Products Manufactured in India, with Segmentation, 2011.....................................................................46

Table 14: Biopharmaceutical Manufacturing in India, China and South Korea, Market for Vaccines in India ($m), 2011-2016 .....................................................................................................................47

Table 15: Biopharmaceutical Manufacturing in India, China and South Korea, Biopharmaceutical Market in India ($bn), 2008-2016............................................................................................................48

Table 16: Biopharmaceutical Manufacturing in India, China and South Korea, Pharmaceutical and Biopharmaceutical Market ($bn), China, 2011-2015.................................................................59

Table 17: Biopharmaceutical Manufacturing in India, China and South Korea, Different Categories of Biopharmaceuticals, Expression System and Indications, China, 2011.......................................60

Table 18: Biopharmaceutical Manufacturing in India, China and South Korea, Innovative Biopharmaceutical Products, Indications, KFDA Approval Year and Company, 1999-2011 .........70

Table 19: Biopharmaceutical Manufacturing in India, China and South Korea, Biopharmaceutical Market, South Korea ($bn), 2011-2016.................................................................................................71

Table 20: Biopharmaceutical Manufacturing in India, China and South Korea, Major R&D Achievements in South Korea............................................................................................................................73



Table of Contents

1.2 List of Figures

Figure 1: Biopharmaceutical Manufacturing, Number of FDA Approved Biopharmaceuticals, the US, 1982-2011.......................................................................................................................................14

Figure 2: Biopharmaceutical Manufacturing, Percentage Share of Biopharmaceuticals in the Global Pharmaceutical Market, 2001-2011.........................................................................................15

Figure 3: Biopharmaceutical Manufacturing, Global, Production Capacity by Company (%), 2011...........18 Figure 4: Biopharmaceutical Manufacturing in India, China and South Korea, Geographical Distribution of

Cell Culture Capacity (000’ liters), 2011-2017...........................................................................19 Figure 5: Biopharmaceutical Manufacturing in India, China and South Korea, Volume Requirement for

Different Biopharmaceuticals, (000’ liters), 2011-2017.............................................................20 Figure 6: Biopharmaceutical Manufacturing, Product Demand Distribution in Monoclonal Antibodies (%),

Global, 2011 ...........................................................................................................................21 Figure 7: Biopharmaceutical Manufacturing, Biopharmaceutical Manufacturing Process, Global, 2012 ...23 Figure 8: Biopharmaceutical Manufacturing, Contract Manufacturing and the Drug Discovery and

Research Market, Global, 2007-2016.......................................................................................25 Figure 9: Biopharmaceutical Manufacturing, Percentage of Outsourcing Non-Core Activities, Global, 2011

...............................................................................................................................................26 Figure 10: Biopharmaceutical Manufacturing in India, China and South Korea, Factors Driving Growth of

CRAMS, 2012..........................................................................................................................27 Figure 11: Biopharmaceutical Manufacturing in India, China and South Korea, Roche Case Study, 2011....29 Figure 12: Biopharmaceutical Manufacturing, Formula for Standard Operating Cost, Global, 2011............30 Figure 13: Biopharmaceutical Manufacturing, Best and Most Likely Case Estimate Scenarios, Labor Cost

($’000), India and China, 2011-2046 ........................................................................................31 Figure 14: Biopharmaceutical Manufacturing in India, China and South Korea, Timeframes in Months for

Various Activities Involved in the Chemistry, Manufacturing and Control Tasks for Monoclonal Antibody Product Development, 2011.....................................................................................33

Figure 15: Biopharmaceutical Manufacturing in India, China and South Korea, Timeframes in Months for Various Activities Involved in the Chemistry, Manufacturing and Control Tasks for Monoclonal Antibody Product Development, 2011 (Continued) ..................................................................34

Figure 16: Biopharmaceutical Manufacturing in India, China and South Korea, Comparative Analysis of Used Equipment Versus New Equipment, Global, 2011............................................................36

Figure 17: Biopharmaceutical Manufacturing, Pharmaceutical Deal Value ($bn) and Number of Deal, Global, 2005-2012...................................................................................................................37

Figure 18: Biopharmaceutical Manufacturing, Market Shares of the Pharmaceutical Companies, Contract Manufacturers and Equity Players (%), Global, 2007-2011........................................................38

Figure 19: Biopharmaceutical Manufacturing, Perfect Partner Relationship, Global, 2011.........................42 Figure 20: Biopharmaceutical Manufacturing in India, China and South Korea, Comparative Analysis with

Reference to Government Initiatives, Investments and Skills, 2011 ..........................................44 Figure 21: Biopharmaceutical Manufacturing in India, China and South Korea, Market for Vaccines in India

($m), 2011-2016 .....................................................................................................................47 Figure 22: Biopharmaceutical Manufacturing in India, China and South Korea, Biopharmaceutical Market in

India ($bn), 2008-2016............................................................................................................48 Figure 23: Biopharmaceutical Manufacturing in India, China and South Korea, Drivers and Barriers for

Biopharmaceutical Manufacturing, India, 2011........................................................................49 Figure 24: Biopharmaceutical Manufacturing in India, China and South Korea, Major Pharmaceutical

Manufacturing Clusters in India, 2011 .....................................................................................50 Figure 25: Biopharmaceutical Manufacturing in India, China and South Korea, Regulatory Framework for

Recombinant Drugs, India, 2011..............................................................................................51 Figure 26: Biopharmaceutical Manufacturing in India, China and South Korea, Biocon, Company Overview,

2011.......................................................................................................................................52 Figure 27: Biopharmaceutical Manufacturing in India, China and South Korea, Serum Institute of India,

Company Overview, 2011 .......................................................................................................53 Figure 28: Biopharmaceutical Manufacturing in India, China and South Korea, Panacea Biotec, Company

Overview, 2011.......................................................................................................................54 Figure 29: Biopharmaceutical Manufacturing in India, China and South Korea, Dr. Reddy’s, Company

Overview, 2011.......................................................................................................................55 Figure 30: Biopharmaceutical Manufacturing in India, China and South Korea, Cipla, Company Overview,

2011.......................................................................................................................................56



Table of Contents

Figure 31: Biopharmaceutical Manufacturing in India, China and South Korea, Lupin, Company Overview, 2011.......................................................................................................................................57

Figure 32: Biopharmaceutical Manufacturing in India, China and South Korea, Pharmaceutical and Biopharmaceutical Market ($bn),China, 2011-2015 .................................................................59

Figure 33: Biopharmaceutical Manufacturing in India, China and South Korea, Contract Manufacturing Market, China ($bn), 2011-2015..............................................................................................64

Figure 34: Biopharmaceutical Manufacturing in India, China and South Korea, Hualan Biological Engineering Company Overview, 2011.....................................................................................65

Figure 35: Biopharmaceutical Manufacturing in India, China and South Korea, Shanghai Kehua Biological Engineering Co. Ltd, Company Overview, 2011 ........................................................................66

Figure 36: Biopharmaceutical Manufacturing in India, China and South Korea, Beijing Tiantan Biological Products Co. Ltd, Company Overview, 2011.............................................................................67

Figure 37: Biopharmaceutical Manufacturing in India, China and South Korea, Beijing SL Pharmaceutical Co., Ltd, Company Overview, 2011 ..........................................................................................68

Figure 38: Biopharmaceutical Manufacturing in India, China and South Korea, Shanghai RAAS Blood Products Co., Ltd, Company Overview, 2011............................................................................69

Figure 39: Biopharmaceutical Manufacturing in India, China and South Korea, Biopharmaceutical Market, South Korea ($bn), 2011-2016.................................................................................................71

Figure 40: Biopharmaceutical Manufacturing in India, China and South Korea, Evolution of Biopharmaceuticals, South Korea ............................................................................................72

Figure 41: Biopharmaceutical Manufacturing in India, China and South Korea, Celltrion, Company Overview, 2011.......................................................................................................................74

Figure 42: Biopharmaceutical Manufacturing in India, China and South Korea, LG Life Sciences, Company Overview, 2011.......................................................................................................................75

Figure 43: Biopharmaceutical Manufacturing in India, China and South Korea, Hanwha Chemical, Company Overview, 2011.......................................................................................................................76

Figure 44: Biopharmaceutical Manufacturing in India, China and South Korea, ISU Abxis, Company Overview, 2011.......................................................................................................................77

Figure 45: Biopharmaceutical Manufacturing in India, China and South Korea, Green Cross, Company Overview, 2011.......................................................................................................................78



Biopharmaceutical Manufacturing in India, China and South Korea – Introduction

2 Biopharmaceutical Manufacturing in India, China and South Korea - Introduction

2.1 Introduction

Biopharmaceuticals normally refers to a field in which genetic, antibody or cell engineering technologies are applied to obtain a product for treating a disease. A constricted definition would be a product obtained by recombinant Deoxyribonucleic Acid (DNA) techniques. The European pharmacopoeia defines biopharmaceutical as products that are generated by the process of extraction and purification after introducing genes to microorganisms by means of viral vectors. The first step of biopharmaceutical research was laid by Watson and Crick in 1953 when they defined DNA’s structure as a double helix. A genetically modified bacterium (Escherichia coli) was used to obtain the first recombinant human insulin in 1982, and thus became the first licensed recombinant biopharmaceutical to receive approval from the US Food and Drug Administration (FDA).

The Contract Research and Manufacturing Services (CRAMS) industry has witnessed astounding success in the last decade, and will continue to enjoy unprecedented attention in years to come as big pharmaceutical companies, in an attempt to reduce their expenditure, have been outsourcing their non-core activities, such as drug manufacturing, to contract players in developing economies such as India and China, which have emerged as key destinations.

Biosimilars are expected to enter the US market in 2014; this could be one of the fastest growing markets in the biologics sector, with estimated sales revenue of $XX billion by 2015. On a long term forecast with conservative estimates, the biosimilars market is expected to reach $XX billion by 2020. Emerging economies such as India and China have developed regulatory approval guidelines that are relatively less stringent in comparison to their western counterparts. Lenient regulations and tax incentives during the initial industrial phase attract industry players to operate within the region. For example, major supporters of the biopharmaceutical industry in India, such as Biocon and Dr Reddy’s Laboratories, and China-based companies, such as Hualan Biological Engineering and Shanghai Kehua Biological, who already are marketing biosimilars in certain geographies, are planning large scale biosimilar product marketing in their regions. Biologics such as Enbrel and Rituxan, which are under exclusivity in western countries, are sold as biosimilars in emerging countries.

The degree of competition in the pharmaceutical industry is progressively escalating, and under these conditions companies need to focus on their strengths and outsource the rest. Strategic partnerships between Contract Manufacturing Organizations (CMOs) and pharmaceutical companies are on rise. However, considering the pros and cons of this industry, sponsors have to be careful in reviewing the outsourcing relationship. Companies should objectively analyze the CMOs with respect to their future partners, rate them on a suitable scale, and conduct research into their relationships with other players so that they can ensure they have selected the right partner.



Biopharmaceutical Manufacturing in India, China and South Korea – Overview of the Biopharmaceutical Industry

3.3 Current Scenario in Biopharmaceutical Manufacturing

The new biological entity market is estimated to grow at a rate of XX% towards 2015. Globally, XX% of biopharmaceutical production is under the management of nine pharmaceutical companies, and more than XX% of that is produced from manufacturing plants located in the US. However, as the demand is projected to escalate in Asian economies, companies are expanding their manufacturing capacities, or strategically investing in these economies to manufacture biopharmaceuticals.

Figure 3: Biopharmaceutical Manufacturing, Global, Production Capacity by Company (%), 2011

Roche

Johnson & Johnson

Boehringer Ingelheim

AmgenLonzaPfizer

Sanofi

Eli Lilly

Novartis

Others

Source: GBI Research; Levine,2011

Roche is the global leader in biopharmaceutical manufacturing, with XX% of the global biologic production capacity. Roche’s manufacturing network comprises XX sites, of which five sites are in Asia, with three in Japan and one each in Singapore and China. Roche produces some of the top blockbuster biologics, such as Rituxan, Avastin and Herceptin, with combined sales of $XX billion in 2011.

Johnson & Johnson has the second largest biologic production capacity, and it is making concerted efforts to enhance the quality of the manufacturing systems at its other sites. To expand its production base, in 2011, Johnson & Johnson acquired Crucell NV, a biopharmaceutical company focused on the R&D and production of vaccines and antibodies.

Boehringer Ingelheim, in an attempt to increase its presence in emerging economies, announced in 2009 its plan to invest $XXm in a phased manner, over a period of several years, in Asia. In 2010, the company invested $XXm in building the Center of Competence in Shanghai, which specializes in the quality control of pharmaceutical raw ingredients procured in China. In 2011 it decided to expand the production site at Zhangjiang Hi-tech Park in Shanghai with an investment of $XXm. The company has manufacturing sites in Biberach, Germany, Vienna and Austria; in addition to this, the company purchased a production site in California from Amgen, and integrated it within the existing production network in 2011.

In order to optimize manufacturing operations, Amgen has started multiple initiatives, including construction of new formulation and fill facilities and the expansion of the bulk protein facilities at their Puerto Rico site, and the expansion of their newly acquired formulation, fill and finish sites in Ireland.

Lonza has XX manufacturing sites spanning three continents, with the majority of its manufacturing capacity established in the US. In Asia, they have facilities in Singapore and China. GBI Research estimates the South Korea based company, Celltrion, is a strong contender for a place in the top nine companies by 2017. Its existing mammalian cell culture and purification capacity is XX liters, and the company is planning to incorporate an additional XX liters in 2012.



Biopharmaceutical Manufacturing in India, China and South Korea – Overview of Biopharmaceutical Manufacturing in India

4.1.3 Vaccines

India has emerged as a major destination for the production of vaccines. Manufacturers in India are trying to compete in uncharted territories (geographical regions where vaccines are not funded by the UN or any charitable organizations) as they are receiving heavy competition from Chinese vaccine manufacturers. Exports constitute XX% of the Indian vaccines market and revenues of private players stood at XX% of the total domestic market in 2011.

In January 2008 the Indian government cancelled the licenses of three vaccine-producing units - Central Research Institute, Bacillus Calmette-Guérin Vaccine Laboratory, and Pasteur Institute of India - on account of non-compliance with Good Manufacturing Practices (GMP). However, in April 2011 the Ministry of Health and Family Welfare (MOHFW) launched a National Vaccine Policy (NVP) that stresses the significance of the vaccine industry in the future. Following suggestions from this policy, and also taking the public interest into account, in June 2012 the government approved plans to revive these units.

Figure 21: Biopharmaceutical Manufacturing in India, China and South Korea, Market for Vaccines in India ($m), 2011-2016

2011 2012 2013 2014 2015 2016

($m

)

CAGR: (2011-2016): XX%

Source: GBI Research

Table 14: Biopharmaceutical Manufacturing in India, China and South Korea, Market for Vaccines in India ($m), 2011-2016

Year 2011 2012 2013 2014 2015 2016 CAGR (%)

Revenues ($m)

Source: GBI Research

The Indian vaccine market recorded revenues of $XXm in 2011, and these revenues are expected to grow at a rate of XX% to reach $XXm by 2016. Major drivers for this phenomenal growth include new emerging infections such as Severe Acute Respiratory Syndrome (SARS), bioterrorism, and the potential for cancer vaccines. The global vaccines market has witnessed resounding growth from 2005 to 2011, with an average growth rate of XX%, which is far greater than the traditional chemical drugs market. Big pharmaceutical players such as GSK, Sanofi, Merck and Pfizer were the major beneficiaries, with the US recording the largest share in the world. However, GBI Research expects the future growth opportunities for the production and sale of vaccines to come from emerging economies such as India and China.



Biopharmaceutical Manufacturing in India, China and South Korea – Appendix

7 Biopharmaceutical Manufacturing in India, China and South Korea - Appendix

7.1 Market Definitions

Biologics: Products derived from living sources, such as humans, animals, bacteria and viruses, such as vaccines, immune globulin, and anti-toxins.

Biosimilars: Officially approved subsequent versions of biopharmaceuticals produced by different companies after patent expiry.

Downstream Processing: Purification of biosynthetic pharmaceutical products from natural sources.

Capacity Bottleneck: A bottleneck is a phenomenon where the performance or capacity of an entire system is limited by a single or limited number of components or resources.

7.2 Abbreviations

ABLE: Association of Biotech Led Enterprises

API: Active Pharmaceutical Ingredient

BLA: Biologic License Application

BMS: Bristol-Myers Squibb

CDSCO: Central Drugs Standard Control Organization

CMO: Contract Manufacturing Organization

COPD: Chronic Obstructive Pulmonary Disease

CRAMS: Contract Research and Manufacturing Services

DBT: Department of Biotechnology

DCGI: Drugs Controller General of India

DLC: District Level Committee.

DNA: Deoxy Nucleic Acid

EDQM: European Directorate for Quality of Medicines

EMA: European Medical Agency

FDA: Food and Drug Administration.

FDI: Foreign Direct Investment

FTA: Free Trade Agreement

GDP: Gross Domestic Product

GEAC: Genetic Engineering Approval Council

GMP: Good Manufacturing Practices.

GvHD: Graft vs Host Disease

HPAPI: High Potency Active Pharmaceutical Ingredient

IBSC: Institutional Biosafety Committee

ICH: International Conference on Harmonization

KBCC: Korea Biotechnology Commercialization Center

KFDA: Korean Food & Drug Administration

KITECH: Korea Institute of Industrial Technology

KORUS: KoreaUS




MOHFW: Ministry of Health and Family Welfare

NAFTA: North American Free Trade Agreement

NVP: National Vaccine Policy

PAHO: Pan American Health Organization

QCP: Quality Control Procedures

RAAS: Rare Antibody Antigen Supply

RCGM: Review Committee on Genetic Manipulation

RDAC: Recombinant DNA Advisory Committee

SARS: Severe Acute Respiratory Syndrome

SBCC: State Biosafety Coordination Committee

SEZ: Special Economic Zones

SFDA: State Food and Drug Administration

SOC: Standard Operating Cost

UNICEF: United Nations International Children’s Emergency Fund

WHO: World Health Organization

7.3 Bibliography

ABLE (2012). Enabling India to become a global hub for biopharmaceutical manufacturing. Association of Biotech Led Enterprises (ABLE). Available from http://ableindia.in. [Accessed July 8, 2012].

Ange W (2011). Contract Manufacturing Partnerships. Identifying the “Best Mix” of the right partners. Available from http://www.contractpharma.com/issues/2011-10/view_features/contract-manufacturing-partnerships/. [Accessed July 7, 2012].

Biopharma (2012) Biopharmaceutical Products in the US and European Markets. Available from http://www.biopharma.com/approvals.html. [Accessed July 2, 2012].

Dash S (2011). Association of Biotech Led Enterprises (ABLE). The collective voice of the Indian biotechnology sector. Available from http://ableindia.in/index_reports.php. [Accessed July 8, 2012].

Gabi (2011). US$54 billion worth of biosimilar patents expiring before 2020. Available from http://www.gabionline.net/Biosimilars/Research/US-54-billion-worth-of-biosimilar-patents-expiring-before-2020. [Accessed June 3, 2012].

Gao et al (2011a). The biopharmaceutical industry in China: history and future perspectives. Available from http://www.google.co.in/url?sa=t&rct=j&q=The+biopharmaceutical+industry+in+China:+history+and+future+perspectives+pdf&source=web&cd=3&ved=0CE4QFjAC&url=http%3A%2F%2Fjournal.hep.com.cn%2Fdatastar%2Fgroupresource%3Fobjectid%3D1F049170-980F-11E1-9170-AA99E3E58009%26sessionid%3D&ei=4-EgUM_NLofzrQfW2YHgDA&usg=AFQjCNHgFvO970bsP3BSv8uhR4YTAMHsAg&cad=rjt. [Accessed July 2, 2012].

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7.4 Research Methodology

GBI Research’s dedicated research and analysis teams consist of experienced professionals with a pedigree in marketing, market research, consulting backgrounds in the medical devices industry and advanced statistical expertise.

GBI Research adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and the Strategic and Competitive Intelligence Professionals (www.scip.org).

All GBI Research databases are continuously updated and revised. The following research methodology is followed for all databases and reports.

7.4.1 Coverage

The objective of updating GBI Research coverage is to ensure that it represents the most up to date vision of the industry possible.

Changes to the industry taxonomy are built on the basis of extensive research of company, association and competitor sources.

Company coverage is based on three key factors: leadership in the key therapeutic areas, leadership in the biotech industry, leadership in generic industry and pure biopharmaceutical players.

GBI Research aims to cover all major news events and deals in the pharmaceutical industry, updated on a daily basis.




The coverage is further streamlined and strengthened with additional inputs from GBI Research’s expert panel (see below).

7.4.2 Secondary Research

Secondary research was carried out on internal and external sources to source qualitative and quantitative information in the report.

The secondary research sources that are referred in this report include, but are not limited to:

Company websites, annual reports, financial reports, investor presentations and SEC filings for the twenty companies covered in this report.

Industry trade journals, scientific journals and other technical literature.

Relevant patent and regulatory databases.

National government documents, statistical databases and market reports.

News articles, press releases and web-casts specific to the companies operating in the market.

7.4.3 Primary Research

GBI Research conducts hundreds of primary interviews a year with industry participants and commentators in order to validate its data and analysis. A typical research interview fulfills the following functions:

It provides first-hand information on the market size, market trends, growth trends, the competitive landscape and future outlook.

Helps in validating and strengthening the secondary research findings.

Further develops the analysis team’s expertise and market understanding.

Primary research involves e-mail correspondence, telephone interviews and face-to-face interviews for each market, category, segment and sub-segment across geographies.

The participants who typically take part in such a process include, but are not limited to:

Industry participants: CEOs, VPs, marketing/product managers, market intelligence managers and national sales managers;

Hospital stores, laboratories, pharmacies, distributors and paramedics;

Outside experts: investment bankers, valuation experts, research analysts specializing in specific medical equipment markets; and

Key Opinion Leaders (KOLs): physicians and surgeons specializing in different therapeutic areas corresponding to different kinds of pharmaceutical drugs.

7.4.4 Expert Panel Validation

GBI Research uses a panel of experts to cross verify its databases and forecasts.

GBI Research’s expert panel comprises marketing managers, product specialists, international sales managers from medical device companies; academics from research universities, KOLs from hospitals, consultants from venture capital funds and distributors/suppliers of medical equipment and supplies.

Historic data and forecasts are relayed to GBI Research’s Expert Panel for feedback and adjusted in accordance with their feedback.




7.6 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means; electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GBI Research.

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