topanin pharma market analysis report
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Market Analysis Report for U.S. XXX- Prepared for
Topanin Pharma
Topanin
Pharma
2
Market Analysis Report- Topanin Pharma
I. Report Highlights
II. Introduction
a. Harrison Hayes Objective and Process
III. U.S. Market Overview
a. Market Size
b. Product Matrix
c. Current pricing structure
IV. Key Yyy Sales Channels
a. Xxx®/Yyy
b. Xxx® LAR
V. Indications Segmentation
a. Acromegaly
b. Carcinoid Syndrome and VIPomas
c. Chemotherapy Induced Diarrhea (CID)
VI. Yyy/Xxx® conversions to Xxx® LAR
a. Primary point of conversion based on prescriber
group
b. Primary point of conversion based on channel
c. Implications for Topanin Pharma
VII. Competitive Landscape
a. Competitive Products
b. Commonly Used Dosage Forms
VIII. Prescriber Groups
a. High Volume Prescribers
IX. Key Recommendations
X. Glossary of Terms
Table of Contents
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Market Analysis Report- Topanin Pharma
I. Report Highlights
The Yyy market in the U.S. in 2006 was $471 million and grew at a compounded annual growth rate (CAGR) of 16.7%.
Xxx®/Yyy IR generated $107.7 million in sales in 2006.
The key channels or market segment of Xxx®/Yyy IR in 2006 were non federal hospitals, mail service and drug stores.
The key channels or market segment for Xxx® LAR in 2006 were clinics, non federal hospitals, mail service and drug stores.
Acromegaly was treated primarily by endocrinologists in 2006 reflecting a market size of $115.26 million with Xxx® LAR
representing 95 % of the market.
Carcinoid syndrome and VIPomas were primarily treated by oncologists in 2006 with a combined market size of $118.5 million of
which Xxx® LAR represented approximately $70 million.
Chemotherapy Induced Diarrhea (CID) was treated by oncologists, GI’s and Internists in 2006 providing a market size of $50.1
million. All revenue was generated through the sale of Xxx®/Yyy IR, with generic Yyy representing $34.1 million.
Of the analyzed prescriber groups, endocrinologists and oncologists reflected the highest conversion rates from IR to LAR.
Of the analyzed channels or market segments, clinics represent the highest conversion rate from IR to LAR.
A moderate degree of competition exists as the market was dominated by Novartis AG in 2006. Generic manufacturers captured
57% of the IR market in 2006 led by Bedford labs with 45% market share.
Harrison Hayes identified 13 development stage products that could directly or indirectly compete with Topanin Yyy.
The most commonly used dosage form for Xxx®/Yyy IR in 2006 was .05 and .1 mg/ml wet ampules.
High Volume Prescriber (HVP) groups for Xxx®/Yyy IR included: Oncologists, endocrinologists, internal medicine, GI’s, and
family practice physicians. These five prescriber groups represented also represented 77% of all prescriptions.
Four High Volume Prescriber (HVP) groups were identified for Xxx® LAR: Oncologists, endocrinologists, internal medicine, and
GI’s. The four groups represented 77% of all prescriptions for LAR.
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Market Analysis Report- Topanin Pharma
II. Introduction:
a.) Harrison Hayes Objective and Process
Harrison Hayes conducted a market analysis on Xxx®/Yyy IR and Xxx® LAR markets in the U.S. for Topanin Pharma.
The analysis focused only on the prescription market as it pertained to the use of Yyy.
The broad objectives of this report were to provide Topanin Pharma with a clear understanding of the IR Yyy market, including trends, opportunities, and potential threats.
Analysis allowed Harrison Hayes to answer key questions pertaining to the market such as: market size, key market segments or channels, segmentation of key patient groups, conversion points from IR to LAR Yyy, the competitive landscape, dosing, product pricing, and key high volume prescriber groups.
Three general sources were utilized to form the basis for meeting the market analysis objectives:
Harrison Hayes conducted an extensive literature search focused on the use of Yyy.
Harrison Hayes acquired quantitative information such as sales and prescription data for Yyy drugs from IMS, serving as the basis for much of the analysis.
Harrison Hayes utilized internal resources that had been collected through our past experience when analyzing similar or related markets.
These resources allowed Harrison Hayes to meet the market analysis objectives and efficiently answer the key questions and prepare the Market Analysis Report.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
Yyy is a somatostatin analogue that is delivered via injection; subcutaneous, intramuscular, or continuous infusion (IV). The
product is an octopeptide that mimics the pharmacology of natural somatostatin.
Yyy has distinct advantages over somatostatin such as: increased inhibition of a variety of hormones including insulin,
growth hormone, and glucagon. Yyy exhibits increased potency by reducing the secretion of fluids in the intestine and
reducing GI motility.
Yyy was first approved by the U.S. FDA in October of 1988; Novartis AG submitted additional label revisions and expansions to continue to maximize the value of its product.
In 1998 Xxx® LAR® was approved as an extended release formulation of Yyy for patients that required maintenance therapy.
Yyy was approved for the treatment of Acromegaly, the treatment of diarrhea, and flushing episodes associated with Carcinoid Tumors, and the treatment of diarrhea in patients with Vasoactive Intestinal Tumors (VIPomas).
Yyy has been used to stop bleeding in patients with esophageal varices, treat pancreatic pseudo cysts, and control GI fistulae.
In the U.S. three general Yyy product categories exist:
Xxx® LAR®, commercialized by Novartis AG, is approved and has no generic competition; The product is an extended release formulation of Yyy that is administered once a month via intramuscular injection as a maintenance therapy for patients.
Branded Generics
Pure Generics of Yyy IR
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size
SALES U.S. OCTREOTIDE
(Figure 1)
$363,576,000
$263,717,649 $316,677,101
$228,767,492
$46,617,000
$133,467,038 $150,237,427
$98,207,701
$61,063,000$45,321,052
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
2003 2004 2005 2006
UN
ITS
SANDOSTATIN LAR
SANDOSTATIN NVR
OCTREOTIDE ACE
7
Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size
Harrison Hayes determined the market size of Yyy in the U.S. to include Xxx® LAR, Xxx® IR, and Yyy IR.
In 2006, the total combined sales of the three product categories were $471.3 million. It is clear from Figure 1 that a significant portion of the market size was attributable to sales of Xxx® LAR.
Sales of Xxx® LAR continued to increase steadily exhibiting a compounded annual growth rate (CAGR) of 16.7% from 2003 through 2006.
Xxx® IR lost substantial market share primarily driven by two key factors:
Xxx® IR lost its patent protection in 2005, resulting in a significant increase in the degree of competition from other manufacturers.
Due to the increased generic competition, significant downward pricing pressure has forced Novartis AG to lower the price of Xxx® IR in order to compete.
The market size for Yyy IR including Xxx® IR in 2006 was approximately $107.7 million, down from $133.5 million in 2003.
Of the $107 million in revenue generated from Yyy Immediate Release, approximately 57% was attributable to generic Yyy IR and the remaining 43% generated from the sale of branded Yyy IR in Xxx®.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size- Market Share
2003 Market Share
(Figure 2)
SANDO LAR
63%
SANDO IR
37%
OCTREO IR
0%
2006 Market Share
(Figure 3)
OCTREO IR
13%
SANDO IR
10%
SANDO LAR
77%
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size- Market Share
The Yyy market size grew steadily from 2003 to 2006, with a single patented product that accounted for majority of the market.
A significant opportunity exists for a company that can compete with both the LAR and IR product categories and a product that is differentiated with patent protection.
It is evident from both Figure 2 and Figure 3 that Xxx® LAR was and remains the dominant product within the Yyy market.
In 2006, the total combined sales of the three product categories were $471.3 million. It is clear from Figure 1 that a significant portion of the market size was attributable to sales of Xxx® LAR.
Since 2003, Xxx® LAR has increased its market share to 77% up from 63% in 2003.
Xxx® IR has steadily lost market share to generic competition and conversion to Xxx® LAR with just 10% in 2006, down from 37% in 2003.
Xxx® LAR and IR are both Novartis AG products, and as such, Novartis AG had a monopoly on the Yyy market with a combined market share of 90% in 2006 down from 100% market share in 2003.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size- Total Prescriptions
TRX U.S. OCTREOTIDE
(Chart 31)
11515
2561419,530 23,20122,124
23,013
30,03835,74335,096
3,638
60,142
56,89457,86754,626
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2003 2004 2005 2006
UN
ITS
SANDOSTATIN LARSANDOSTATIN IROCTREOTIDE IROCTREOTIDE IRTotal
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size- Total Prescriptions
The total number of prescriptions of Yyy based products grew from 54,626 in 2003 to 60,142 in 2006.
The growth in total prescriptions was driven by the increased use of Xxx® LAR and the generic competition of Xxx® IR.
The continued and increased use of Xxx® LAR may be supported due to the products convenient monthly dosing regimen, as compared to immediate release Yyy, and a chronic pool of patients.
The number of total prescriptions is also driven by the marginal increase in IR prescriptions.
Generic Yyy experienced significant growth while Xxx® IR prescriptions fell sharply to 23,013 total prescriptions from 35,096 total prescriptions in 2003.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size- New Prescriptions
NRX U.S. OCTREOTIDE
(Chart 32)
85617,450 7,1725,985
10,877
15,115 15,54212,610
62482,194
25,68621,988
22,99221,100
0
5,000
10,000
15,000
20,000
25,000
30,000
2003 2004 2005 2006
UN
ITS
SANDOSTATIN LARSANDOSTATIN IROCTREOTIDE IROCTREOTIDE IRTotal
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size- New Prescriptions
The number of new prescriptions (NRX’s) is defined as prescriptions written during the calendar year by the treating physician and is not prescription refills.
As anticipated, Yyy IR would have a greater number of new prescriptions as part of the total prescriptions.
On average, the percent of new prescriptions as part of the total prescriptions for Xxx® IR and Yyy IR in 2006 was 47% and 54% respectively.
For Xxx® LAR, the number of new prescriptions as part of total prescriptions in 2006 represented only
33%.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size- Discussion Point I.
It can be speculated that the growth of LAR is far more aggressive than IR for a number of
reasons. First, a high rate of conversions from IR to LAR in key chronic indications such as
VIPomas, Carcinoid Syndrome, and Acromegaly may be responsible for driving the growth of
LAR prescriptions. The chronic pool of patients continues to grow, increasing the demand and
use of Xxx® LAR. Second, many of the chronic patients may be converted from IR to LAR at an
earlier stage as part of their Yyy therapy. For example, an acromegaly patient receiving
subcutaneous (Sub.Q) Yyy IR for six months and converted to Xxx® LAR, may now only be
receiving Sub Q Yyy IR for three months and then convert to LAR. Third and finally, the
reimbursement for self-administered medication such as pump-based/Sub Q Yyy therapy may
not be available, resulting in economics dictating the Yyy modality of choice.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
a.) Market Size- Discussion Point II.
The new prescription (NRX) trends observed from 2003 to 2006 were logical and dictated by the role and
stage of specific therapy based on patient type. It is important for Topanin Pharma to understand the
segmentation of treatment used based on indication. There is a clear relationship between acute and transient
conditions and the use of IR Yyy therapy. In addition, there is a clear relationship between IR Yyy use and
initiation therapy. Typically, patients with acute transient conditions such as Chemotherapy Induced Diarrhea
(CID) receive IR Yyy therapy. Due to the acute nature of the disease, a high percent of patients treated are first
time or treatment naïve patients. This would clearly support the high percent of new prescriptions to total
prescriptions. In addition, patients that are diagnosed with chronic conditions such as acromegaly, VIPomas,
and Carcinoid syndrome are initiated with IR Yyy therapy and then converted to LAR Yyy therapy. The role
the products play based on type of indication dictate the higher number of refills VS new presciptions. The
number of new prescriptions of LAR is significantly lower than those of IR octreatide therapy, again because
patients receiving LAR therapy are chronic patients. These chronic patients receive LAR multiple times
during the year and help maintain the condition of patients.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
b.) Product Matrix
Characteristic Xxx®/
Yyy IR Xxx® LAR Topanin Yyy
Package
Ampule
Single Dose Vials
Multi Dose Vials
Kit Syringe
Kit Vials Single Solid Dosage Cartridge
Dosing Variable based on patient type Limited variability
based on patient type Fixed Solid Dose
Administration
Sub Q,
I.V.(Bolus and/or Continuous
Infusion)
Pump
I.M. Only Intradermal Only
Product Administrator
Self Injected (Sub. Q)
Health Care Professional
(I.V.)
Health Care
Professional Required Self Injected, needle-less
Preparation Direct Uptake for Sub Q
Or I.V. preparation
1 Hour Room Temp
prior to Mix
Mix with Diluent
Uptake in Injection
Repeated rocking
required prior to
injection
Insert Cartridge into Needle-
less Actuator
Storage Refrigeration Required
Protection from Light
Refrigeration
Required
Protection from light
None known
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
b.) Product Matrix- Discussion Point I.
Harrison Hayes created a product matrix highlighting key characteristics of Topanin Yyy when compared to currently used Xxx®/Yyy IR and Xxx® LAR.
The goal of the comparison was two fold. First, clearly provide Topanin Pharma with an understanding of currently available products. Second, highlight
the strengths and weaknesses of the Topanin Pharma actuator when compared to currently available products. The packaging of Topanin Yyy is available
in the form of a single fixed dosed product, while IR is available in ampoules, single dose, and multi-dose packages. LAR is available in the form of both
Kits and vials only. The implications of the packaging availability are strongly evidenced in the dosing of products. IR exhibits the greatest flexibility of
dosing for patients and is far more conducive for patients in the hospital. Hospitalized patients such as active variceal bleeding patients, small bowel
fistulas, severe GI GVHD, and severe pancreatitis are patients that would comprise the core hospitalized patient population, with a smaller number of
VIPomas, Carcinoid Syndrome, and severe CID comprising hospital patients. As a consequence the single package and dosing form may be a limitation
for patients in the hospital due to the lack of required flexibility necessary for patient based on disease type.
The delivery mode of intradermal, needle-less injection for Topanin will increase the ease of use and potentially capture conversions from patients
receiving Sub Q IR to LAR, or patient required to begin Yyy therapy. However, the added advantage of self administration may limit the reimbursement
of product. A medical necessity letter may be required for certain third party payers. The preparation and storage for Topanin Yyy is a clear differentiator
when compared to IR and LAR products. Existing Yyy based products require some form of preparation even if self administered and further have
specific storage requirements such as refrigeration and protection from light. Based on the information available to Harrison Hayes, no specific storage
requirements exist with Topanin Yyy. These differentiating characteristics increase the ease of use and could potential drive product uptake. The
convenience of administration and storage may also drive patients for new starts and conversions.
Topanin should strive to capture revenue generated through Yyy sales in three specific segments. First, Topanin should capture non-hospitalized de novo
patients such as acromegaly patients and CID patients. Second, Topanin should strive to inhibit the conversion of IR to LAR by highlighting the
differentiating characteristics of Topanin Yyy. Finally, Topanin should attempt to capture existing LAR patients and convert them to Topanin Yyy based
on key differentiators such as the benefits of self administration with intradermal, needle-less injections.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
c.) Current Pricing Structure
WHOLESALER MANUFACTURER
Topanin PHARMA
MCKESSON
SALES CHANNEL
VARIOUS
WAC PRICE AWP PRICE
The pricing structure for Yyy therapy products was determined at the wholesale acquisition cost (WAC) level
and average wholesale price (AWP) level. Harrison Hayes evaluated and determined the pricing structure for
various dosage forms with multiple units for Xxx® IR and generic Yyy and Xxx® LAR.
The chart above provides a clear representation of part of the supply chain for pharmaceutical companies within
the U.S. market. In the example above, Topanin Pharma manufactures the product and sets a transfer price to
the wholesaler. This set transfer price is referred to as the wholesale acquisition cost (WAC). A wholesaler such
as McKesson is then responsible for distributing the product through various sales channels. The wholesaler sets
a transfer price to hospitals, pharmacies, mail order service providers, and others at the average wholesale price
(AWP). Since WAC prices were not directly available, Harrison Hayes made the assumption that WAC prices
were 80% of AWP prices or a 20% discount on AWP prices.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
c.) Current Pricing Structure- WAC and AWP (Table 5)
Product- In US Dollars Manufacturer 2005-wac 2006-wac 2007-wac 2005-awp 2006-awp 2007-awp
Yyy IR-Generic
Sol, IJ, 50 mcg/ml 1 ml 10s Bedford 95.888 95.888 119.86 119.86
100 mcg/ml 1 ml 10s 184.896 184.896 231.12 231.12
200 mcg/ml 5 ml 190.624 238.28
500 mcg/ml 1 ml 10s 891.84 891.84 1114.8 1114.8
1000 mcg/ml 5 ml 937.968 1172.46
Sol, IJ (1MLx25 VIALS) Sicor
50 mcg/ml 1 ml 25s 223.504 223.504 279.38 279.38
100 mcg/ml 1 ml 25s 433.248 433.248 541.56 541.56
200 mcg/ml 5 ml 178.712 178.712 223.39 223.39
500 mcg/ml 1 ml 25s 2090.248 2090.248 2612.81 2612.81
1000 mcg/ml 5ml 879.344 879.344 1099.18 1099.18
SOL, IJ (MDV Private Label) Sandoz
Sol, IJ, 50 mcg/ml 1 ml 10s 89.368 89.368 111.71 111.71
100 mcg/ml 1 ml 10s 173.352 173.352 216.69 216.69
200 mcg/ml 5 ml 178.712 178.712 223.39 223.39
500 mcg/ml 1 ml 10s 836.088 836.088 1045.11 1045.11
1000 mcg/ml 5 ml 879.344 879.344 1099.18 1099.18
Sol, IJ (MDV) Abraxis
200 mcg/ml, 5 ml 178.712 223.39
1000 mcg/ml, 5 ml 879.344 1099.18
Xxx® IR
Sol, IJ, 50 mcg/ml 1 ml 10s Novartis 95.336 95.336 95.336 119.17 119.17 119.17
100 mcg/ml 1 ml 10s 184.904 184.904 184.904 231.13 231.13 231.13
200 mcg/ml 5 ml 190.624 190.624 190.624 238.28 238.28 238.28
500 mcg/ml 1 ml 10s 891.832 891.832 891.832 1114.79 1114.79 1114.79
1000 mcg/ml 5 ml 937.968 937.968 937.968 1172.46 1172.46 1172.46
Xxx® LAR
KIT, MR (1&1/2”X19G,PFS) Novartis
10 mg, ea 1509.616 1493.032 1493.032 1887.02 1866.29 1866.29
20 mg, ea 1668.704 1694.096 1804.912 2085.88 2117.62 2256.14
30 mg, ea 2466.88 2504.44 2668.264 3083.60 3130.55 3335.33
* Source: Redbook 2005,2006,2007
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
c.) Current Pricing Structure- Unit Pricing(Table 6)
Product- In US Dollars Manufacturer Unit 2005-
wac
Unit 2006-
wac
Unit 2007-
wac
Unit 2005-
awp
Unit 2006-
awp
Unit 2007-
awp Yyy IR-Generic
Sol, IJ, 50 mcg/ml 1 ml 10s Bedford 10 10 12 12
100 mcg/ml 1 ml 10s 18 18 23 23
200 mcg/ml 5 ml 38 48
500 mcg/ml 1 ml 10s 89 89 111 111
1000 mcg/ml 5 ml 188 234
Sol, IJ (1MLx25 VIALS) Sicor
50 mcg/ml 1 ml 25s 9 9 11 11
100 mcg/ml 1 ml 25s 17 17 22 22
200 mcg/ml 5 ml 36 36 45 45
500 mcg/ml 1 ml 25s 84 84 105 105
1000 mcg/ml 5ml 176 176 220 220
SOL, IJ (MDV Private Label) Sandoz
Sol, IJ, 50 mcg/ml 1 ml 10s 9 9 11 11
100 mcg/ml 1 ml 10s 17 17 22 22
200 mcg/ml 5 ml 36 36 45 45
500 mcg/ml 1 ml 10s 84 84 105 105
1000 mcg/ml 5 ml 176 176 220 220
Sol, IJ (MDV) Abraxis
200 mcg/ml, 5 ml 36 45
1000 mcg/ml, 5 ml 176 220
Xxx® IR
Sol, IJ, 50 mcg/ml 1 ml 10s Novartis 10 10 10 12 12 12
100 mcg/ml 1 ml 10s 18 18 18 23 23 23
200 mcg/ml 5 ml 38 38 38 48 48 48
500 mcg/ml 1 ml 10s 89 89 89 111 111 111
1000 mcg/ml 5 ml 188 188 188 234 234 234
Xxx® LAR
KIT, MR (1&1/2”X19G,PFS) Novartis
10 mg, ea 1510 1493 1493 1887 1866 1866
20 mg, ea 1669 1694 1805 2086 2118 2256
30 mg, ea 2467 2504 2668 3084 3131 3335
* Source: Redbook 2005,2006,2007
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
c.) Pricing Structure- Table 5 and 6 Notes
Table 6 is a direct function of prices laid out in Table 5, yet shows unit pricing. It is evident from
the table that unit prices vary significantly based on dosing strength and delivery form. It is of
particular value for Topanin to determine the dosing strength they will use in the Topanin
actuator. The greater the dosing strength the higher the unit price per ml, and all unit prices for
immediate release Yyy are expressed in price per ml.
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Market Analysis Report- Topanin Pharma
III. Yyy Market Overview:
c.) Pricing Structure- Discussion Point I.
Introduction of Generics
In 2006, generic versions of Xxx® IR were launched in a variety of key dosage forms including both sub-q and I.V. formulations.
Competitive Pricing
Upon introduction of generic Yyy, the generic competition approached pricing with different strategies. For example, Sandoz launched both sub-q and I.V. formulations of Yyy and priced their products at a 6.45% discount to Xxx® IR. Bedford Labs and Sicor (Teva) on the other hand priced their generic Yyy products competitively with Xxx® IR. One possible explanation may be that since Sandoz is the generic subsidiary of Novartis, it was a strategy employed to maintain the maximum transfer from Branded to Generic product within Novartis AG.
Pricing Trends
It would be assumed that in order for Xxx® IR to maintain market share, the price would drop in order to compete. However, the average wholesale price from 2005 to 2007 remained constant with no changes in price.
Xxx® LAR
Xxx® LAR is priced at a significant premium when compared to immediate release formulations of Yyy. This price premium may be due to the convenience of once monthly dosing, thus novel formulation of the product. It is also worth noting that the price of the 20 and 30 mg doses increased from 2005 to 2007 at a rate of 1.5%, while the price of the 10 mg dose remained constant.
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Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels:
a.) Xxx®/Yyy IR
Xxx® IR and Yyy are commercialized by a number of manufacturers and through a number of channels or market segments. As Xxx®/Yyyis the induction therapy or de novo therapy for patients on Yyy therapy, the distribution of revenue generated based on channel is markedly different from Xxx® LAR. The table below reflects the different channels or market segments that Xxx®/Yyy was commercialized through.
CHANNEL 2004 2005 2006 CLINICS $3,837,000 $3,697,000 $3,007,000
NON FEDERAL HOSPITALS
Total $79,870,000 $75,529,000 $46,365,000
SANDOSTATIN® IR $79,870,000 $42,464,000 $6,502,000
OCTRETOTIDE IR 0 $33,065,000 $39,863,000
MAIL SERVICE
Total $16,250,000 $17,414,000 $17,499,000
SANDOSTATIN® IR $16,250,000 $16,473,000 $12,113,000
OCTRETOTIDE IR 0 $936,000 $5,386,000
DRUG STORES
Total $25,886,000 $25,714,000 $22,636,000
SANDOSTATIN® IR $25,886,000 $23,650,000 $15,395,000
OCTRETOTIDE IR 0 $2,064,000 $7,241,000
FEDERAL FACILITIES $4,193,000 $3,688,000 $3,788,000
HOME HEALTHCARE $10,531,000 $10,159,000 $6,020,000
FOOD STORES $4,110,000 $4,556,000 $4,327,000
LONG TERM CARE $4,236,000 $5,116,000 $3,873,000
HMO $194,000 $127,000 $76,000
MISCELLANEOUS $74,000 $136,000 $89,000
Based on Table 2, it is evident that majority of the revenue generated for Xxx®/Yyywas through the
channel or market segment of non federal hospitals. It is also clear that other channels or market
segments generated moderate revenue such as drug stores, mail service and home health care.
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Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels:
a.) Xxx®/Yyy IR con’t.
2006 Sales Based on Channel
(Figure 6)
NON FEDERAL
HOSPITALS
42%
MAIL SERVICE
16%
DRUG STORES
21%
HOME HEALTHCARE
6%
FEDERAL FACILITIES
4%
FOOD STORES
4%
LONG TERM CARE
4% CLINICS
3%
Based on Figure 6, it is evident that the sale of Xxx®/Yyywas dominated by three channels or market
segments. In 2006, non federal hospitals represented approximately 42% of all revenue generated for
Xxx®/Yyy IR. Mail service and drug stores were the two other channels or market segments that also
generated moderate revenue and accounted for 16% and 21% respectively of Xxx®/Yyysales in the U.S.
in 2006. These three channels or market segments accounted for approximately 79% of all revenue
generated in 2006.
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Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels: :
a.) Xxx®/Yyy IR - Discussion Point I.
While three channels represent majority of the revenue generated, each segment treats a specific patient
population with specific formulations and dosage forms that may be particularly insightful for Topanin
Pharma. Patients treated in the non federal hospital setting, are patients that require acute critical care. These
patients receive I.V. bolus or continuous infusion immediate release yyy. The primary patient population that
encapsulates acute critical care patients may include active variceal bleeding patients, small bowel fistulae,
severe GI GVHD, and severe pancreatitis. Harrison Hayes believes that Topanin Pharma will face two severe
hurdles in trying to penetrate this channel. First, patients that are hospitalized require a broad range of I.V.
infused yyy. The dosing regimen varies significantly based on indication and the patient themselves. For
example, esophageal variceal bleeding require I.V. bolus of 25-50 mcg’s followed by continuous I.V. infusion
of 25-50 mcg/hour.2 Second, patients require the activity of yyy to be immediate, and unless Topanin Pharma
can show comparable pharmacokinetic activity to yyy I.V. infusion therapy, its usage will be further
minimized.
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Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels: :
a.) Xxx®/Yyy IR - Discussion Point I. con’t.
Mail Service is the second key channel used to generate sales of immediate release yyy. Majority of these
patients receive Sub-Q injections for self administration. These patients comprise both de novo (newly
diagnosed) and chronic patients that are not considered to be critical care. These patients include acromegaly,
carcinoid, VIPomas, and some CID patients. It may also include patients with HIV induced diarrhea. Mail
Service provides patients with the convenience of direct shipments, easy access to refills, ease of processing
insurance claims/reimbursement, and increased patient education and compliance.
27
Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels: :
a.) Xxx®/Yyy IR - Discussion Point I. con’t.
Harrison Hayes believes that an opportunity exists for Topanin Pharma, as the Topanin actuator may be
more competitive with Sub-Q yyy.
Drug Stores are the final key channel responsible for sales of immediate release yyy and account for 21% of
sales. Patients receiving immediate release yyy through the Drug Store channel are de novo patients leaving
the hospital on Xxx®/Yyytherapy being converted to Sub-Q administration, and patients that are initially
started on Sub Q. Xxx®/Yyytherapy. Patients that receive products from Drug Stores are those considered non
acute critical care patients such as newly diagnosed carcinoid, VIPomas, and some CID patients. Sales in this
channel are driven by convenience of a local pharmacists, as well as third party payer requirements for
reimbursement. For example, a medical insurance company may require that a patient receive their Sub-Q
immediate release yyy through a specific drug store chain in order to receive reimbursement on the product.
28
Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels: :
a.) Xxx®/Yyy IR - Discussion Point I con’t.
2004-2006 $ Change
(Figure 7)
-$40,000,000
-$35,000,000
-$30,000,000
-$25,000,000
-$20,000,000
-$15,000,000
-$10,000,000
-$5,000,000
$0
$5,000,000
CLIN
ICS
NO
N FEDER
AL HO
SPITALS
MAIL SER
VIC
E
DRUG S
TORES
FEDER
AL FAC
ILITIES
HO
ME H
EALTHC
ARE
FOO
D STO
RES
LONG TER
M CA
RE
HM
OM
ISCELLAN
EOUS
channel
Harrison Hayes evaluated the growth of each channel or market segment from 2004 to 2006, to determine which segments represented the highest
growth areas.
Based on Figure 7, it is evident that a serious decline in revenue occurred from 2004 to 2006. Only two channels or market segments experienced any
positive growth. Both mail service and food stores experienced growth, yet grew conservatively below 5% annually. Of the three major channels, only
mail service experienced an increase in revenue generation from 2004-2006. Interestingly, Non Federal Hospitals have lost the greatest market share
and revenue of all channels used to commercialize immediate release yyy. From 2004-2006 sales of immediate release yyy through the Non Federal
Hospital channel have declined by approximately $35 Million.
29
Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels: :
a.) Xxx®/Yyy IR - Discussion Point II
It is likely that the decline in revenue for the key commercial channels for immediate release yyy is attributable to a number of
factors. First, the steep decline in immediate release yyy in the Non Federal Hospital setting may be due to generic competition
and Novartis’ switch in focus to more rapid conversion to Xxx® LAR. In 2006, according to the table above, 85% of revenue
generated through the Non Federal Hospital channel was due to generic Yyy and not Xxx® IR. Sales in Drug Stores declined
marginally and may also be attributable to Novartis’ conversion push to Xxx® LAR. Finally, Mail Service sales increased
marginally yet, no sufficient evidence was identified to support the slight increase in revenue generation.
CHANNEL 2004 2005 2006 CLINICS $3,837,000 $3,697,000 $3,007,000
NON FEDERAL HOSPITALS
Total $79,870,000 $75,529,000 $46,365,000
SANDOSTATIN® IR $79,870,000 $42,464,000 $6,502,000
OCTRETOTIDE IR 0 $33,065,000 $39,863,000
MAIL SERVICE
Total $16,250,000 $17,414,000 $17,499,000
SANDOSTATIN® IR $16,250,000 $16,473,000 $12,113,000
OCTRETOTIDE IR 0 $936,000 $5,386,000
DRUG STORES
Total $25,886,000 $25,714,000 $22,636,000
SANDOSTATIN® IR $25,886,000 $23,650,000 $15,395,000
OCTRETOTIDE IR 0 $2,064,000 $7,241,000
FEDERAL FACILITIES $4,193,000 $3,688,000 $3,788,000
HOME HEALTHCARE $10,531,000 $10,159,000 $6,020,000
FOOD STORES $4,110,000 $4,556,000 $4,327,000
LONG TERM CARE $4,236,000 $5,116,000 $3,873,000
HMO $194,000 $127,000 $76,000
MISCELLANEOUS $74,000 $136,000 $89,000
30
Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels: :
b.) Xxx® LAR
Xxx® LAR is commercialized through a number of channels or market segments. In all, 10 channels or segments are used to
sell the product. Please review the table below for a list of the relevant channels or market segments, and their corresponding
sales from 2004 through 2006.
CHANNEL 2004 2005 2006
CLINICS $127,792,000 $170,608,000 $200,527,000
NON FEDERAL HOSPITALS $55,682,000 $60,023,000 $65,385,000
MAIL SERVICE $31,899,000 $36,846,000 $48,915,000
DRUG STORES $26,381,000 $27,018,000 $27,965,000
FEDERAL FACILITIES $6,088,000 $7,514,000 $8,682,000
HOME HEALTHCARE $6,167,000 $4,823,000 $4,443,000
FOOD STORES $4,291,000 $4,271,000 $4,487,000
LONG TERM CARE $2,138,000 $2,755,000 $2,647,000
HMO $437,000 $370,000 $400,000
MISCELLANEOUS $224,000 $167,000 $126,000
Based on the data reflected in the table above, it is evident that Xxx® LAR product sales were greatest in the clinic
setting. Non federal hospitals, mail service, and drug stores also accounted for a significant portion of product sales.
Clinics are often defined as outpatient channels tied to hospitals.
31
Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels: :
b.) Xxx® LAR con’t
Figure 4 clearly reflects the distribution of sales based on channel or market segment. As previously stated, clinics
account for the majority of revenue generated for Xxx® LAR and accounted for 56% of sales. Non federal hospitals
accounted for 18% of sales, while mail service and drug stores represented 13% and 8% respectively of sales. It is
worth noting that these four channels or market segments accounted for 95% of the total Xxx® LAR sales in 2006. In
the event Topanin Pharma decides to compete directly with Xxx® LAR, marketing efforts should focus exclusively on
clinics, non federal hospitals, mail service, and drug stores.
2006 Sales Based on Channel
(Figure 4)
NON FEDERAL
HOSPITALS
18%
MAIL SERVICE
13%
FEDERAL
FACILITIES
2%
DRUG STORES
8%
HOME
HEALTHCARE
1%
FOOD STORES
1%
CLINICS
56%
LONG TERM CARE
1%
32
Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels: :
b.) Xxx® LAR con’t
Harrison Hayes determined that not only did the clinic market segment or channel represent the greatest portion of
Xxx® LAR sales, but it also represented the channel growing at the most rapid pace. According to Figure 5, revenue
generated through clinics grew at a compounded annual growth rate (CAGR) of 25%. It is worth noting that mail
service and federal facilities were two other market segments or channels that grew aggressively at 24% and 19%
respectively from 2004 to 2006. Federal facilities represented only 2% of revenue generated for Xxx® LAR, yet
experienced rapid growth since 2004. Assuming federal facilities sustain the rate of growth experienced over the last
couple of years; Topanin Pharma should closely monitor this channel and consider integrating this segment as part
of their marketing and commercialization strategy for Topanin Yyy.
-30%
-20%
-10%
0%
10%
20%
30%G
row
th R
ate
CLINICS
N FED HOSP
MAIL SERV
DRUG ST
FED FACIL
HOME HCARE
FOOD ST
LTCHM
OM
ISC
Channel
CAGR SANDO LAR CHANNELS
(Figure 5)
33
Market Analysis Report- Topanin Pharma
IV. Key Yyy Sales Channels:
b.) Xxx® LAR- Discussion Point I
Harrison Hayes recommends that Topanin Pharma focus on key channels
responsible for generating majority of the revenue for Xxx/Yyyand Xxx®
LAR. As such, Topanin Pharma will be able to most effectively integrate
the Topanin actuator at various stages of yyy therapy treatment.
34
Market Analysis Report- Topanin Pharma
V. Indications Segmentation
Harrison Hayes analyzed the various indications currently treated through Yyy therapy.
Four basic disease states exist that utilize yyy as a form of therapy: Acromegaly,
Carcinoid Syndrome, VIPomas, and Chemotherapy Induced Diarrhea (CID). Each
indication has its own set of circumstances that allow the differentiation of treatment from
one patient sub population to the other. Yyy is approved for the control of symptoms in
patients with metastatic carcinoid, vasoactive intestinal peptide-secreting tumors
(VIPomas), and acromegaly. It should be clearly stated that yyy is a broadly used
somatostatin analogue, and as a result a significant portion of product used is considered
off label or investigational. Some of the indications that benefit from the use of yyy are:
AIDS-associated secretory diarrhea (including Cryptosporidiosis), control of bleeding of
esophageal varices, breast cancer, cryptosporidiosis, Cushing’s syndrome (ectopic),
insulinomas, small bowel fistulas, pancreatic tumors, gastrinoma, postgastrectomy
dumping syndrome, chemotherapy induced diarrhea (CID), graft-versus-host disease
(GVHD) induced diarrhea, Zollinger-Ellison syndrome, congenital hyperinsulinism, and
hypothalamic obesity.
35
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
a. ) Acromegaly: Change order to have IR before LAR
ACROMEGALY MARKET 2006
Figure 14
SANDO LAR
95%
OCTREO IR
3%SANDO IR
2%
Harrison Hayes determined the market size of yyy therapy for Acromegaly patients in the U.S. Our process
for determining the market size began with determining the number of units of each product category as a
result of prescriptions written by all prescriber groups. Once the total number of units was computed, we were
able to derive unit cost. Three unit costs were computed beginning with Xxx® LAR, followed by Xxx® IR,
and finally Yyy IR. In 2006, the size of the Acromegaly market was $115.26 million with Xxx® LAR
accounting for 95% of the market.
36
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
a. ) Acromegaly: Retail Market
1591
739
1071
747
1062
702
0
500
1,000
1,500
2,000
2,500
# O
F R
X
2004 2005 2006
YEAR
ENDO RETAIL CHANNEL IR RXNRX Retail
TRX Retail
2271
845
2116
998
2136
723
0
500
1,000
1,500
2,000
2,500
3,000
3,500
# O
F R
X
2004 2005 2006
YEAR
ENDO RETAIL CHANNEL LAR RXNRX Retail
TRX Retail
37
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
a. ) Acromegaly: Mail Service Market
00
447
314
450
397
0
200
400
600
800
1,000
# O
F R
X
2004 2005 2006
YEAR
ENDO MAIL SERVICE CHANNEL IR RXNRX Mail Service
TRX Mail Service
00
2564
1016
3321
1490
0
1,000
2,000
3,000
4,000
5,000
# O
F R
X
2004 2005 2006
YEAR
ENDO MAIL SERVICE CHANNEL LAR RXNRX Mail Service
TRX Mail Service
38
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
a. ) Acromegaly: Long-Term Care Market
00
85
0
59
0
0
20
40
60
80
100
# O
F R
X
2004 2005 2006
YEAR
ENDO LTC CHANNEL LAR RXNRX LTC
TRX LTC
00
54
0
34
0
0
10
20
30
40
50
60
# O
F R
X
2004 2005 2006
YEAR
ENDO LTC CHANNEL IR RXNRX LTC
TRX LTC
39
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
a. ) Acromegaly: Market Observations
After analyzing the Acromegaly Xxx®/Yyymarket, it was evident that endocrinologists primarily
prescribe immediate release yyy through Retail (Drug Stores, etc) and mail order channels. While the
volume of new (NRX) and total (TRX) prescriptions was greatest through Retail, the volume had clearly
declined from 2004. On the other hand, Mail Service grew rapidly from 2004 to 2005, and experienced
modest growth from 2005 to 2006. Much of this strategy may be governed by the contract pricing strategy
of Novartis and other generic competitors.
The three figures clearly show the three channels or market segments through which endocrinologists
prescribe Xxx® LAR. The three channels or market segments are: Retail, mail service and Long Term
Care. Clearly, retail and mail service dominate the market segments not only through the number of total
prescriptions (TRX), but also through the number of new prescriptions (NRX). Interestingly, the total
number of prescriptions by endocrinologists for Xxx® LAR grew the fastest through the mail service
channel or market segment. In 2004, no prescriptions for Xxx® LAR were filled through the mail service
channel or market segment. However, in 2006 just over 4800 prescriptions were filled through the mail
service channel for Xxx® LAR.
40
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
a. ) Acromegaly: Discussion Point I.
Harrison Hayes believes that Topanin Pharma can play a pivotal role in the treatment of
acromegaly patients. Topanin can penetrate the market in two primary ways. First, since
acromegaly patients start yyy therapy via immediate release Sub-Q yyy, the Topanin actuator
can be substituted and begin treating the De Novo (New Patients) pool of acromegaly
patients. Second, endocrinologists start yyy therapy via IR Sub Q. for two weeks and are
required to stabilize hormone levels prior to converting patients to Xxx® LAR. This
provides an ideal penetration point for Topanin Yyy for patients who are about to be
converted to Xxx® LAR. Harrison Hayes believes that this penetration approach can be
further validated via Key Opinion Leader interviews. Without conducting Key Opinion
Leader interviews, it is possible that other prescriber groups such as family practice and
internal medicine specialists are treating acromegaly patients, however through the currently
available information, Harrison Hayes has no way of verifying this assumption.
41
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
b. ) Carcinoid Syndrome and VIPomas
In determining the market size of carcinoid syndrome and VIPomas, Harrison Hayes conducted the
analysis for both indications together. The primary reason for conducting the analysis in this manner was
because both diseases share the same prescriber groups. Harrison Hayes determined that both indications
were treated by oncologists as the primary prescribing group of Xxx®/Yyyand Xxx® LAR. We further
determined that oncologists prescribing Xxx®/Yyywere also targeting patients suffering from carcinoid
syndrome, VIPomas, and Chemotherapy Induced Diarrhea (CID). In order to ascertain the size of the
market for carcinoid syndrome and VIPomas, Harrison Hayes identified the incidence (newly diagnosed
patients) for both indications and CID. The appropriate ratio was computed for the given indications and
was applied specifically to the market size of yyy therapy in oncology.
42
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
b. ) Carcinoid Syndrome and VIPomas con’t.
Harrison Hayes determined through internal sources, other secondary prescriber groups some practitioners
that may have a more passive role in patient management and merely follow patients. Internists for
example, may be Oncologists, GI’s, or Endocrinologist, but are not boards certified and as such are not
classified by specialty. Surgeons may also play a role in the early use of yyy therapy such as use for pre
operative tumor shrinkage prior to resection. Other more passive prescribers included in the analysis were
Family Practice physicians and Gastroenterologists. Additional sub segments include surgeons, GI’s, and
Internists. It should be noted that these secondary prescribers are a minor subgroup of the main
prescribing group in oncologists. Harrison Hayes cannot validate the specific number of prescriptions
written by the secondary prescriber groups for Carcinoid Syndrome or VIPomas. However, we have
attempted to allocate some revenue generated by the additional secondary prescribers based on a flat
percent. Harrison Hayes has assumed that 20% of immediate release prescriptions was attributable to
VIPomas and Carcinoid Syndrome, and 30% of LAR prescriptions was attributable to VIPomas and
Carcinoid Syndrome. The allocation to VIPomas or Carcinoid syndrome is based on the proportional
annual incidence of 30 people for VIPomas and 250 people for Carcinoid Syndrome.
43
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
b. ) Carcinoid Syndrome and VIPomas- Market Size
$109,867,688
$8,284,626$11,053,041
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
Reven
ue
SANDO LAR SANDO IR OCTREO IR
Octreotide Oncology Market 2006
Figure 15
Figure 15 reflects the market size distribution in 2006 based on product category. Xxx® LAR generated
approximately $110 million in revenue in 2006 through oncologists, and represented 87% of the market.
Harrison Hayes calculated the market size for Carcinoid syndrome and VIPomas for the Xxx®/ Yyycategory and
Xxx® LAR category. The market sizes for Xxx®/Yyyfor Carcinoid Syndrome and VIPomas were $961,036 and
$11,532 respectively. The remaining market size was attributed to Chemotherapy Induced Diarrhea (CID). The
market sizes for Carcinoid syndrome and VIPomas for the Xxx® LAR product category was $69.747 million and
$1.39 million respectively.
44
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
b. ) Carcinoid Syndrome and VIPomas- Market Size con’t.
Figure 16 reflects the market size for both indications based on product category. It is evident that the market size is
driven by Xxx® LAR used for the treatment of carcinoid syndrome. The total market for carcinoid syndrome in
2006 was $105.8 million with Xxx® LAR accounting for $98 million. The market size for VIPomas was
considerably smaller and was a direct function of incidence rates. As such, the total market for VIPomas in the U.S
in 2006 was $12.7 million with Xxx® LAR accounting for close to $11.7 million.
Carcinoid
SyndromeVIPomas IR
LAR
$98,096,150
$11,771,538
$7,807,409
$936,889 $-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
$100,000,000
Rev
enu
e
Indication
Carcinoid and VIPomas Market Size 2006
Figure 16
45
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
b. ) Carcinoid Syndrome and VIPomas- Distribution of Revenue
Figures 34 and 35 above clearly show the specific distribution of revenue and units of Xxx® IR and Yyy IR. While
revenue is fairly evenly split between branded and generic immediate release yyy, the number of units vary greatly.
The number of Xxx® IR units is considerably greater than the number of units of generic yyy and may be
attributable to Novartis AG’s commitment to ensuring conversion to Xxx® LAR.
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
VIP Car
INDICATION
IMMEDIATE RELEASE OCTREOTIDE SALES 2006
(Figure 34)
Octreo IR
Sand IR
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
VIP Car
INDICATION
IMMEDIATE RELEASE OCTREOTIDE UNITS 2006
(Figure 35)
Octreo IR
Sand IR
46
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
b. ) Carcinoid Syndrome and VIPomas- Discussion Point I
The treatment of Carcinoid Syndrome and VIPomas is primarily initiated by oncologists. While surgeons may
operate on patients early in the treatment process, it is unlikely that they will be responsible for managing the
patient’s yyy therapy. Harrison Hayes believes that Topanin Yyy may play an important role in treating VIPoma
and Carcinoid patients. Oncologists initiate yyy therapy with De Novo patients by prescribing immediate release,
subcutaneous formulation to patients. It is unlikely that patients will be initiated on Yyy therapy by LAR due to the
potential toxicity issues as evidenced in the product label including severe metabolic changes.4 However, in order to
verify this prescribing trend, Primary market research must be conducted in the future. Patients are converted to
LAR therapy after initiation and stabilization with IR yyy therapy. As in the case with Acromegaly, Topanin Yyy
can be positioned to displace immediate release Sub. Q yyy and limit the conversion to LAR due to the convenience
characteristics of the Topanin actuator. Sales of immediate release yyy for VIPoma and Carcinoid Syndrome
patients will be primarily through the channels of Mail Service and Drug Stores. Some patients that are considered
acute critical care VIPoma and Carcinoid Syndrome patients will receive immediate release yyy through hospitals;
however the formulation will be either I.V. bolus or continuous infusion.
47
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
c. ) Chemotherapy Induced Diarrhea (CID)
Harrison Hayes evaluated the Chemotherapy Induced Diarrhea (CID) market and determined the
size, presciber distribution, and product category distribution.
Based on our research, we believe that CID is primarily treated by Oncologists, Gastroenterologists
(GI’s), and Internal Medicine specialists. Xxx®/Yyyis the primary form of treatment for patients
that suffer from CID. Thus, the market size for CID is the cumulative function of Xxx® IR and
Yyyprescribed by GI’s, the majority of oncologists, and 30% of prescriptions written by internists.
This distribution of prescriptions to CID patients is based on Harrison Hayes internal sources. CID
is primarily treated using IR yyy therapy and administered by oncologists and GI’s.
48
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
c. ) Chemotherapy Induced Diarrhea (CID)- Market Size (revenue)
According to Figure 17, the total amount of revenue generated for the treatment of CID in 2006 was $50.1 million,
with generic yyy representing aproximately $34 million and immediate release Xxx® representing the remaining
$16.1 million. Of the highest prescriber groups, GI’s generate the most revenue for the treatment of CID and
primarily use generic yyy for patients. Generic yyy may be used more through GI’s as Novartis AG may focus more
on prescriber groups where a high conversion rate exists to LAR. Since CID patients suffer from an acute condition,
a limited opportunity exists for the use of LAR. With oncologists and internists there is a more even balance
between the revenue generated for CID patient treatment.
Sando IR
Octreo IR
Sando IR
Octreo IR
Sando IR
Octreo IR
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
RE
VE
NU
E
INTERNIST ONCOLOGIST GI
INDICATION
CID MARKET SIZE 2006
(Figure 17)
49
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
c. ) Chemotherapy Induced Diarrhea (CID)- Market Size (units)
When reviewing the number of units used to treat CID patients, the use of units varied when compared to revenue
generated. For GI’s, a greater number of generic yyy units were used, however the disparity between generic and
branded units was not as great when compared to revenue generated. The number of units used by oncologists and
internists was significantly greater for branded immediate release yyy when compared to generic immediate release
yyy. In total 89,000 units were used to treat CID patients by the respective prescriber groups.
Sando IR
Octreo IR
Sando IR
Octreo IR
Sando IR
Octreo IR
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
un
its
INTERNIST ONCOLOGIST GI
INDICATION
CID MARKET SIZE 2006
(Figure 36)
50
Market Analysis Report- Topanin Pharma
V. Indications Segmentation:
c. ) Chemotherapy Induced Diarrhea (CID)- Discussion Point I
Harrison Hayes believes that an opportunity exists for non-hospitalized CID patients currently
receiving immediate release Sub-Q yyy. Harrison Hayes believes that more I.V. doses of immediate
release yyy are used to treat patients. Furthermore, there is limited conversion from immediate
release to LAR for CID patients due to the nature of the indication being primarily acute care.
Many of the patients that suffer from CID are hospitalized cancer patients. This is a high priority
area for Topanin Pharma due to the volume of IR prescriptions for patients, there will be limited
utility of the Topanin Actuator because of the fixed dose characteristic. It would be ideal initiating
non-hospitalized CID patients on the Topanin Actuator.
51
Market Analysis Report- Topanin Pharma
V. Indications Segmentation: Overall Market Discussion Point
The four primary indications analyzed in this report focusing on yyy therapy generated combined
revenue of $283 million in 2006. Xxx®/Yyy accounted for $63.5 million and Xxx® LAR
represented $219.5 million. Of the immediate release yyy used to treat the four primary indications
evaluated, generic immediate release yyy represented $ 41.8 million or 42.436 thousand units.
Xxx® IR generated $21.8 million in revenue for the four primary indications or 73,898 thousand
units. With a proposed total yyy therapy market of $471 million, it can be concluded that the four
primary indications represent 60% of the market. A logical follow up question can be proposed
inquiring of the remaining 40% of the market.
Harrison Hayes believes that the remaining 40% of the market can be distributed into two
categories. First, a portion of the market can be allocated to other indications that were not
considered the primary four. For example, yyy therapy is also used to treat gastroenteropancreatic
tumors including insulinomas, gastrinomas, and other tumors. Second, Harrison Hayes feels that
other prescribers may be involved in ensuring receipt of yyy therapy for patients, but are not
specialists. Two methodologies exist for further determining the market size for the covered
indication. One could either acquire International Classification of Disease (ICD) data or conduct
primary research targeting various prescriber groups. ICD 9 data may be purchased at a significant
cost to Topanin Pharma, but will provide the specific disease code associated with each prescription
of yyy therapy. The approximate cost of this data is in the range of ten thousand dollars (US
10,000).
52
Market Analysis Report- Topanin Pharma
V. Indications Segmentation: Overall Market Discussion Point
Harrison Hayes believes there are number of key considerations that should be taken into account when Topanin
Pharma reviews this data.
First, prescriber groups may vary significantly in prescribing yyy therapy for patients. However, a clear distinction
exists between prescribers who maintain patients and prescribers who follow patients. Some generalist prescribers
may write a number of prescriptions; however they do not manage patients and have little influence on the type of
yyy therapy for patients.
Second, there is a tremendous amount of off -label use of yyy. Again, Yyy is used to treat the following conditions:
AIDS-associated secretory diarrhea (including Cryptosporidiosis), control of bleeding of esophageal varices, breast
cancer, cryptosporidiosis, Cushing’s syndrome (ectopic), insulinomas, small bowel fistulas, pancreatic tumors,
gastrinoma, postgastrectomy dumping syndrome, chemotherapy induced diarrhea, graft-versus-host disease
(GVHD) induced diarrhea, Zollinger-Ellison syndrome, congenital hyperinsulinism, and hypothalamic obesity.2
Third, Harrison Hayes normalized the units and revenue by determining the total number of generic immediate
release, Xxx® IR and Xxx® LAR units, and the total revenue generated by the three product categories. This
allowed Harrison Hayes to readily convert units into revenue. The conversions are significantly higher than their
respective unit costs based on WAC or AWP, as they capture a segment of prescriber market in hospitals that are not
captured by syndicated data sources.
Harrison Hayes recommends that Topanin Pharma target those indications where the prescriber groups involved in
patient management have a high degree of influence of patient treatment, where Sub-Q immediate release yyy
formulations are actively used, where the Topanin Actuator may have a strong impact in altering conversion trends
from immediate release to LAR to immediate release to the Topanin Actuator, and finally where a large market size
exists.
53
Market Analysis Report- Topanin Pharma
V. Indications Segmentation: Overall Market Discussion Point con’t
INDICATION OPPORTUNITY
ASSEESSMENT
LOW HIGH
MA
RK
ET
SIZ
E
LOW
HIGH
SUB-Q USE
VIPomas
Carcinoid
Acromegaly
CID’s
54
Market Analysis Report- Topanin Pharma
V. Indications Segmentation: Overall Market Discussion Point
The figure in the previous slide depicts two key measures of the indication opportunity for Topanin Pharma.
Harrison Hayes evaluated market size and use of Sub-Q immediate release yyy. Acromegaly and CID appear to be
the two indications that could offer a significant opportunity for Topanin Pharma as an initial penetration strategy.
Acromegaly patients are rarely acute care patients in the hospital and typically receive Sub-Q immediate release
yyy. Initial yyy therapy for acromegaly patients begins with Sub-Q 50 mcg 3 times a day. While the current market
size for immediate release yyy is only $5.6 million to treat acromegaly patients, the conversion to Xxx® LAR is
substantial. According to our analysis, the revenue generated by Xxx LAR is approximately $109.5 million. Topanin
Pharma will have an opportunity to disrupt conversion to LAR due to the differentiating characteristics of the
Topanin Actuator.
CID is a second indication that may be worth exploring for Topanin Pharma. CID patients are treated primarily by
Oncologists and GI’s. Patients will receive various formulations and dosages based on response. Harrison Hayes
believes that a majority of CID patients are initiated on I.V. yyy, but have the potential to be converted to the
Topanin Actuator after initial treatment. In addition, the Topanin Actuator could compete directly with those patients
that receive Sub-Q yyy as their initial yyy therapy. It is important to realize that the treatment of CID using yyy
therapy is an off label use for the product.
Finally, both VIPomas and Carcinoid Syndrome indications may offer an opportunity for Topanin Pharma, but due
to the small market size (primarily driven by the low incidence) use of I.V. immediate release yyy, the ability to
penetrate and disrupt conversion from LAR to Topanin will be more difficult.
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Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
Harrison Hayes analyzed the conversions of Xxx®/Yyyto Xxx® LAR. The conversion analysis
conducted was performed at two key points within the patient treatment and management process.
First, we evaluated the conversion points based on prescriber groups, with a focus on oncologists,
gastroenterologists (GI’s), internists and endocrinologists. Second, we evaluated the conversion
points based on channel or market segment, with a focus on key channels or market segments as
outlined in section III.
Each conversion point was analyzed with the goal of determining a conversion coefficient. The
conversion coefficient would indicate the rate at which Xxx®/Yyywas converted to Xxx® LAR. A
conversion coefficient of 1 would indicate that approximately 100% of IR was converted to LAR,
while a coefficient of 0.2 would indicate that only 20% of IR was converted to LAR.
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Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
a.) Primary Point of Conversion Based on Prescriber Group
ONCOLOGY CONVERSION
Figure 18
0
1000
2000
3000
4000
5000
6000
2004 2005 2006
PR
ES
CR
IPT
ION
S
NRX LARNRX IRTRX LARTRX IR
Conversion within the oncology market reflects a dynamic yet high conversion coefficient between the years 2004 to 2006.
Based on Figure 18, when comparing the total prescriptions of IR to LAR, the coefficient increased form 0.75 in 2004 to > 1
in 2006. As such, Harrison Hayes can state that the rate of conversion within the oncology market was extremely high and
was evidenced by a greater than 100% conversion rate in 2006. This trend may be attributable to carcinoid syndrome and
VIPomas patients that require both IR and LAR yyy therapy. It is possible that significantly more prescriptions of LAR were
written in comparison to IR for these two indications, which would suggest an even higher conversion coefficient. However,
a reason that could possibly support the trend reflected in Figure 18 was the third indication treated by oncologists,
chemotherapy induced diarrhea (CID), was primarily treated with IR and not LAR since CID is an acute condition with a
finite course of treatment. CID prescriptions of IR may be responsible for the current conversion coefficient of 1.16 or
greater than 100%.
57
Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
a.) Primary Point of Conversion Based on Prescriber Group con’t
The conversion coefficient and rate within the endocrinology market or prescriber group was very different from that of oncology. The primary
indication treated by endocrinologists is Acromegaly with patients receiving both IR and LAR as part of their yyy therapy. Like all yyy therapies, the
patient is started with IR and then either stops treatment, remains on IR, or is converted to LAR. Based on Figure 19, the conversion coefficient is > 1
from 2004 to 2006. Therefore, all patients that begin on IR yyy therapy are converted to LAR. A clearly observed trend was a growing conversion
coefficient that peaked at 2.9 in 2006. One explanation for this trend may be that endocrinologists were converting their acromegaly patients from IR
to LAR more rapidly. The course of IR therapy was truncated and patients were switched to LAR. A second explanation for the trend may be
attributable to the chronic nature of acromegaly, where patients may be on LAR therapy for years. With newly diagnosed patients being switched
more rapidly to LAR therapy, combined with the existing population of acromegaly patients on LAR therapy, the observed trend may be logical.
ENDO CONVERSION
Figure 19
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2004 2005 2006
PR
ES
CR
IPT
ION
S
NRX LARNRX IRTRX LARTRX IR
58
Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
a.) Primary Point of Conversion Based on Prescriber Group con’t
Gastroenterologists (GI’s) are primarily responsible for treating patients with CID. The conversion coefficient within the GI
prescriber group was significantly different from oncologists and endocrinologists primarily due to the nature of the
indication. Figure 20 clearly depicts a conversion coefficient well below 1, however, a coefficient that increased year on
year. The conversion coefficient grew from .35 in 2004 to .59 in 2006, or a 59% conversion rate in 2006. Again, one of the
reasons the low conversion rate was observed may be due to the treatment regimen for CID patients. The conversion rate
may be growing due to other indications GI’s are treating with LAR, yet it is unlikely CID patients are receiving LAR
therapy.
GASTRO CONVERSION
Figure 20
0
1000
2000
3000
4000
5000
6000
2004 2005 2006
PR
ES
CR
IPT
ION
S
NRX LARNRX IRTRX LARTRX IR
59
Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
a.) Primary Point of Conversion Based on Prescriber Group con’t
Internists are a combination of physician types including specialists such as GI’s, oncologists, etc. The observed trend within
the internist prescriber group most closely mimics that of GI’s. According to figure 21, the conversion coefficient decreased
from 2004 to 2006. In 2004 and 2006 the conversion coefficient was .63 and .41 respectively. Approximately 40% of IR
patients were converted to LAR in 2006. This trend and low conversion rate may be attributable to the patient types being
treated by internists. It is likely that internists treat a significant number of CID patients and treat other indications that
require both IR and LAR therapy. It is possible that internists also treat acromegaly, VIPomas, carcinoid syndrome and other
indications. This would help support the 3700 LAR prescriptions written in 2006.
INTERNIST CONVERSION
Figure 21
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2004 2005 2006
PR
ES
CR
IPT
ION
S
NRX LARNRX IRTRX LARTRX IR
60
Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
b.) Primary Point of Conversion Based on Channel con’t
CLINIC CONVERSIONS
Figure 22
0
2000
4000
6000
8000
10000
12000
14000
16000
2004 2005 2006
PR
ES
CR
IPT
ION
S
LAR
IR
Clinics represent 56% of sales of Xxx® LAR, however, only contribute 3% of sales for the Xxx®/Yyy market. Based
on Figure 22, the coefficient of conversion for clinics is well above the 1 mark. The observed trend suggests that a
decrease in IR prescriptions occurred from 2004 to 2006, while the opposite occurred for LAR, with observed
increases in prescriptions from 2004 to 2006. In 2006 the conversion coefficient was 12.71, up from 4.75 in 2004.
The primary explanation for this occurrence may be the nature of LAR and the patient populations the product treats.
LAR is a once monthly IM injection that is best suited as a maintenance therapy for chronic patients. As such, clinics
represent an outpatient venue to receive product. It can be concluded that the rate of conversion in the clinic setting
well exceeds 100%.
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Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
b.) Primary Point of Conversion Based on Channel con’t
The second channel or market segment evaluated by Harrison Hayes was non federal hospitals. Non federal hospitals
represented 18% of Xxx® LAR sales and 42% of Xxx®/Yyy sales. Based on Figure 23 it is clear the IR represented
the majority of prescriptions in the non federal hospital setting. This may be due to the acute nature of IR therapy that
is used as the induction or the initial formulation of yyy therapy. The conversion coefficient increased significantly as
the number of prescriptions of IR rapidly declined coupled with the modest growth of LAR prescriptions. The
conversion coefficient in 2004 and 2006 was 0.1 and 0.43 respectively. This rapid decrease in IR prescriptions may
again be attributable to patients more rapidly being converted to LAR therapy.
NON FED HOSP CONVERSIONS
Figure 23
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2004 2005 2006
PR
ES
CR
IPT
ION
S
LAR
IR
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Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
b.) Primary Point of Conversion Based on Channel con’t
The US mail service represented approximately 13% of LAR sales and 16% of IR sales. Based on Figure 24, it can be
observed that significantly more IR was prescribed as opposed to LAR. As a result, the coefficient of conversion is
well below 1, yet grew due to a narrowing gap between the number IR and LAR prescriptions. The coefficient of
conversion in 2006 was 0.49 up from 0.28 in 2004. In conclusion, approximately 49% of conversions occurred in
2006 from IR to LAR.
US MAIL SERV CONVERSIONS
Figure 24
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2004 2005 2006
PR
ES
CR
IPT
ION
SLAR
IR
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Market Analysis Report- Topanin Pharma
VI. Yyy/Xxx® IR Conversions to Xxx® LAR
b.) Primary Point of Conversion Based on Channel con’t
The Harrison Hayes analysis of conversion points and rates have yielded a clearer understanding of which prescriber groups and which
channels or market segments host the maximum conversion from IR to LAR.
Figure 25 reflects the four primary prescriber groups and their respective annual conversion rates. Harrison Hayes can conclude that
endocrinologists and oncologists exhibit the highest conversion rate of IR to LAR. Targeting endocrinologists and oncologists would give a
company the greatest opportunity to disrupt the existing conversion of IR to LAR.
Our analysis of the conversion points and rates for the key channels also yielded vital information if preparing a target product launch.
Clinics by far display the highest conversion rates, which annually exceed 100%. Drug stores, mail service and non federal hospitals display
much lower IR to LAR conversion rates but appear to be growing at a rapid pace.
PRESCRIBER IR-LAR CONVERSION RATES
Figure 25
0%
50%
100%
150%
200%
250%
300%
350%
2004 2005 2006
RA
TE
Oncology
Gastro
Endos
Internists
CHANNEL IR-LAR CONVERSION RATES
Figure 26
0%
20%
40%
60%
80%
100%
2004 2005 2006
RA
TE
DRUG STORES
MAIL SERVICE
NON FED HOSP
CLINICS
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Market Analysis Report- Topanin Pharma
VII. Competitive Landscape
A competitive analysis was completed to determine a variety of key market
opportunities or threats. As part of the competitive analysis, Harrison Hayes analyzed
competitors with marketed product (generic yyy) and products at various stages of
development. In addition, we prepared a summary of the most commonly used dosage
forms for both Xxx® LAR and Xxx®/Yyy IR.
65
Market Analysis Report- Topanin Pharma
VII. Competitive Landscape
a.) Competitive Products in Market and in Development
Prior to 2005, yyy therapy was dominated by Novartis AG. Upon patent expiration of Xxx® IR, a flurry of generic
competitors entered the market. Figure 27 provides an accurate representation of the competitive landscape specifically for
Xxx®/Yyy in the U.S. In 2006 the market was dominated by Novartis AG and Bedford Labs, both pharmaceuticals
companies holding a combined 88% market share. Three other generic manufacturers sell Yyy but represent only 12% of the
market.
2006 IR MARKET SHARE
Figure 27
NOVARTIS
43%
SANDOZ
6%
SICOR PHARM
5% ABRAXIS
PHARM
1%
BEDFORD
LABS
45%
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Market Analysis Report- Topanin Pharma
VII. Competitive Landscape
a.) Competitive Products in Market and in Development
The Xxx®/Yyy market was once dominated by Novartis AG’s Xxx® IR, which held 100 % of the market. In 2005, a variety
of generic manufacturers entered the market with mixed results. Bedford Labs experienced significant growth from 2005 to
2006 and held 45% of the market and was the leading product based on sales of $46.7 million in 2006. Xxx® IR lost
considerable market share, and held only 43% of the market. Other generic manufacturers experienced growth, yet
represented only minor holdings of market share.
IR MARKET SHARE TRENDS
Figure 28
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
2004 2005 2006
SA
LE
S (
000)
ABRAXIS PHARM
BEDFORD LABS
NOVARTIS
SANDOZ
SICOR PHARM
67
Market Analysis Report- Topanin Pharma
VII. Competitive Landscape
a.) Competitive Products in Market and in Development
A variety of compounds were
identified in clinical development
directly targeting key indications
treated by yyy. Some of the
compounds identified were targeted
therapies designed specifically to
attack tumors, while others function
in an indirect manner such as yyy.
The table to the left lists the
identified products in development
that could in the future compete with
yyy either directly as part of the yyy
market or indirectly as part of the
indication market. In total, 13
products were identified with 10 in
clinical development and 9 products
in phase II development and beyond.
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Market Analysis Report- Topanin Pharma
VII. Competitive Landscape
b.) Most Commonly Used Dosage Forms
Harrison Hayes evaluated the most
commonly used dosage forms based on
units prescribed from 2004 to 2006.
The product dosage forms evaluated
were segmented into Xxx®/Yyy and
Xxx® LAR. Table 4 lists the various
product dosage forms for both product
types from 2004 to 2006 expressed in
units.
Based on the table at left, it is clear that
high unit volumes exist for specific
dosage forms for both IR and LAR
products. The top IR products that sold
the highest unit volumes in 2006 were
Vial 0.1 mg/ml x 10, Ampule Wet .05
mg/ml x 20, and Ampule Wet 0.1
mg/ml x 50. With regard to Xxx® LAR
dosage forms, far fewer are available to
prescribers and patients. The kit
syringes accounted for majority of the
units sold in 2006 for LAR. The Kit
Syringe 20 mg and 30 mg sold a
combined 22,700 units out of a total
25,600 units sold for all LAR products
in 2006.
Sandostatin®/Octreotide IR 2004 2005 2006
AMP .05MG 1MLX10 0 33 79
AMP .5MG 1MLX10 0 140 850
AMP WET .05MG/ML 1MLX20 52260 66810 47240
AMP WET .1MG/ML 1MLX50 75990 116900 86420
AMP WET .5MG/ML 1MLX20 12540 18880 14980
VIAL WET Multi Dose .2MG/ML 5ML 0 50 154
VIAL WET MultiDose 1000MCG/ML 5ML 0 0 395
VIAL WET MultiDose 1MG/ML 5ML 8319 9783 7906
VIAL WET MultiDose 200MCG/ML 5ML 0 1137 4865
VIAL WET Multi Dose 5MG/5ML 5MLX1 5418 4532 2692
VIAL WET Sing Dose .05MG/ML 1MLX10UD 0 5420 12770
VIAL WET Sing Dose .1MG 1MLX10 0 9510 22890
VIAL WET Sing Dose .1MG/ML 1MLX10UD 0 0 780
VIAL WET Sing Dose .5MG 1MLX10 0 1080 4100
VIAL WET Sing Dose .5MG/ML 1MLX10UD 0 0 200
VIAL WET Sing Dose 100MCG/ML 1MLX25 0 0 7200
VIAL WET Single Dose 500MCG/ML 1MLX25 0 0 250
VIAL WET Sing Dose 50MCG/ML 1MLX25 0 0 5425
Sandostatin® LAR 2004 2005 2006
KIT SYRINGE 10MG 1 255 1619 1956
KIT SYRINGE 20MG 1 1531 11467 12103
KIT SYRINGE 30MG 1 1931 9253 10689
KIT VIAL 10MG 1 1395 213 76
KIT VIAL 20MG 1 9183 1427 624
KIT VIAL 30MG 1 5739 627 166
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Market Analysis Report- Topanin Pharma
VII. Competitive Landscape
b.) Most Commonly Used Dosage Forms- Discussion Point I
After reviewing the dosage forms for immediate release yyy, it is evident that the 50 and 100
mcg doses are the most commonly used. Since immediate release yyy products are not packaged
in pre-filled dosage forms, Harrison Hayes is unable to determine which products are used for
Sub-Q injections and which are used as part of I.V. immediate release yyy therapy. It is clear
that a fixed dose in the Topanin Actuator of either 50 mcg or 100 mcg would be most convenient
for patients based on the current use of those dosage forms. In addition, it is worth noting that
due to the significant dose ranges for patients based on indication and individual patient
response, Harrison Hayes is unable to accurately determine the cost per dose per patient type
due to the significant variability of dose per individual patient. It is likely however, that the
lower dosage forms are used as Sub-Q injections and the higher dosage forms > 100 mcg are
used as part of I.V. yyy therapy.
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Market Analysis Report- Topanin Pharma
VIII. Prescriber Groups
A key component of the market analysis performed by Harrison Hayes focused on
the various prescriber groups. The analysis of the prescriber groups served a number
of important purposes. For example, in designing a commercial strategy or
licensing strategy for a product, understanding the target market of prescribers
allows one to build a more specialized sales force or target licensees with already
established infrastructure focused on the key prescribers. The analysis of the
prescriber groups also served as the basis for determining the market size of the four
key indications treated by yyy therapy.
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Market Analysis Report- Topanin Pharma
VIII. Prescriber Groups
a.) High Volume Prescribers
An evaluation of the Xxx®/Yyy prescriber groups yielded a more interesting dynamic than the evaluation of LAR prescribers. While it
is clearly understood that internal medicine, GI’s, oncologists, and endocrinologists play a pivotal role in treating and managing
patients on yyy therapy, there appears to be one other key group not previously captured. Based on Figure 30, the four primary
prescriber groups are responsible for 60% of prescriptions of Xxx®/Yyy IR. Family practice physicians were responsible for 10% of
all prescriptions in 2006. This physician group is a combination of physicians much like internists and appear to play a more pivotal
role in the administration of yyy therapy to patients. Without conducting primary market research and speaking with key family
practice physicians, Harrison Hayes is unable to determine the role and indications treated by this physician group. It is also worth
noting that other prescriber groups such as geriatrics and osteopathic medicine specialists also play a role in the treatment of patients
on yyy therapy.
2006 IR PRESCRIBER GROUPS
Figure 30
OSTEOPATHIC
MEDICINE
6%
ENDOCRINOLOG
Y
8% FAMILY
PRACTICE
10%
ONCOLOGY
13%
INTERNAL
MEDICINE
27%
GASTROENTERO
LOGY
14%
SPECIALTY
UNSPECIFIED
5%
GERIATRICS
4%
OTHER
13%
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Market Analysis Report- Topanin Pharma
VIII. Prescriber Groups
a.) High Volume Prescribers- Discussion Point I
Understanding the role and function that each key prescriber group plays in the treatment protocols for patients
receiving yyy therapy is extremely important. The chart above clearly shows the type of role and function each
one of the key prescriber groups plays in treating certain indications.
HVP ROLE IN PATIENT
MANAGEMENT
LOW HIGH
VO
LU
ME
OF
RX
’S
LOW
HIGH
PRESCRIBER INFLUENCE
ENDOS
ACRO
INTERN
MULT
ONC
VIP&CAR
GI’S
CID FAMILY
MULT
ONC
CID
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Market Analysis Report- Topanin Pharma
VIII. Prescriber Groups
a.) High Volume Prescribers- Discussion Point I
Gastroenterologists
GI’s play an important role in use of immediate release yyy to treat a variety of indications. GI’s may use immediate
release yyy to treat the following indications: CID, AIDS Associated Diarrhea, Pancreatitis, Post Gasterectomy (Dumping
Syndrome), and other bowl mobility disorders. GI’s have a strong influence over the type of treatment these patients
receive as it pertains to the stated indications. Interestingly, all the indications stated above utilize yyy therapy in an off
label manner.
Oncologists
Oncologists play an extremely important role in the use of immediate release yyy. Oncologists may prescribe immediate
release yyy for the following indications: CID, VIPomas, Carcinoid Syndrome, Pancreatic Tumors, Acute and Chronic
GVHD. Oncologists are one of the key prescriber groups that have a high level of influence on the immediate release
regimen patients receive.
Endocrinologists
Endocrinologists also play a key role in the use of immediate release yyy for various indications. Endocrinologists may
use immediate release yyy for the following indications: Acromegaly, Hypothalamic Obesity, Congenital Hyperinsulinism.
Endocrinologists have a high influence on the treatment regimen given to the above stated patients.
Internal Medicine
These high volume prescribers (HVP’s) play differing roles in the treatment of patients based on the indication. Harrison
Hayes believes that internal medicine HVP’s treat the following indications: Variety of Secretory Diarrhea, including CID,
HIV Induced Diarrhea, AND Other General Follow Ups from Referring Oncologists to include VIPomas and Carcinoid
Syndrome. Internal Medicine prescribers have a moderate amount of influence in treating patients. We believe their
influence may be higher in treating CID patients, and lower with treating VIPoma and Carcinoid Syndrome patients.
Family Practice physicians are high volume prescribers that have little to no influence on the immediate release yyy
treatment regimen. These prescribers merely follow patients from referrals from Oncologists and Gastroenterologists.
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Market Analysis Report- Topanin Pharma
VIII. Prescriber Groups
a.) High Volume Prescribers- Discussion Point I.
Our review of the prescriber groups providing yyy therapy to patients yielded interesting results. The treatment of patients
with Xxx® LAR revealed four primary groups that accounted for 77% of the market. More specifically, endocrinologists
represented 31% of total prescriptions, oncologists represented 20% of total prescriptions, internal medicine represented
15% of total prescriptions and GI’s represented 11% of total prescriptions. The remaining market was highly fragmented
with numerous prescriber groups involved in either managing the patient or following the patient as recommended from
the primary patient manager.
2006 LAR PRESCRIBER GROUPS
Figure 29
OTHER
2 %
PED IA TR IC S
1%
EN D OC R IN OLOG
Y
3 1%
ON C OLOGY
2 0 %
IN TER N A L
M ED IC IN E
15%
GA STR OEN TER O
LOGY
11%
OSTEOPA THIC
M ED IC IN E
3 % GEN ER A L
SU R GER Y
3 %
N U R SE
PR A C TIT ION ER
2 %
SPEC IA LTY
U N SPEC IF IED
5%
FA M ILY
PR A C TIC E
4 %
HEM A TOLOGY
3 %
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Market Analysis Report- Topanin Pharma
VIII. Prescriber Groups
a.) High Volume Prescribers- Discussion Point II.
The chart above clearly reflects the role the prescriber plays in prescribing Xxx® ® LAR for various indications.
HVP ROLE IN PATIENT MANAGEMENT
LOW HIGH
VO
LU
ME
OF
RX
’S
LOW
HIGH
PRESCRIBER INFLUENCE
ENDOS
ACRO
INTERN
MULT
ONC
VIP&CAR
GI’S
VIP and
CAR
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Market Analysis Report- Topanin Pharma
VIII. Prescriber Groups
a.) High Volume Prescribers- Discussion Point II.
Gastroenterologists
Prescriptions written for Xxx® LAR by GI’s are primarily used to treat the following indications: VIPomas, Carcinoid
Syndrome, and Pancreatic Tumors. GI’s however are far less influential with the treatment regimen for the above
indications and are referred from the primary prescriber group, oncologists. While GI’s have a high influence in treating
CID patients with immediate release yyy, their influence is low with respect to Xxx® LAR prescriptions.
Oncologists
This group of prescribers has a high influence on the use of Xxx® LAR for the following indications: VIPomas, Carcinoid
Syndrome, and Pancreatic Tumors, and Other Off Label Use. Oncologists are a group of prescribers that have a high level
of influence in the treatment regimen received by patients for immediate release yyy and Xxx® LAR. As such,
Oncologists are a key prescriber group involved in the conversion of patients from IR to LAR.
Endocrinologists
Patients that receive Xxx® LAR from endocrinologists are primarily acromegaly patients. Endocrinologists have a high
level of influence in the treatment regimen received by acromegaly patients for Xxx® LAR. Endocrinologists are a
prescriber group that reflects a high level of influence on the treatment of acromegaly patients for both immediate release
and LAR yyy therapy, and subsequently is a prescriber group that reflects the highest conversion rate from immediate
release to Xxx® LAR.
Internal Medicine
This group of prescibers functions to support follow up from other referred physicians. In particular, internal medicine
prescribers may treat VIPomas, Carcinoid Syndrome, Acromegaly, and Other Off Label Indications. Internal medicine
prescribers had a moderate level of influence when treating patients with immediate release yyy, but it is believed they
have a very low level of influence with treatment regimens using Xxx® LAR.
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Market Analysis Report- Topanin Pharma
IX. Key Recommendations
Harrison Hayes believes that Topanin Pharma should implement a targeted development and
commercialization strategy in order to ensure product approval and penetration within the market.
Since yyy is used extensively in an off label fashion, and used by numerous practitioners, it is
extremely difficult to quantify the market size of specific indications based on dosage form, channel or
market segment or prescriber group.
Harrison Hayes recommends that Topanin Pharma focus on market segments where a high
requirement on dosing flexibility does not exist.
Prescriber groups that actively manage De Novo and Chronic patients should be targeted such that the
Topanin Actuator may be adopted not only as the initiation therapy, but can also be used to divert
conversion from immediate release yyy to Xxx® LAR to the Topanin Actuator. Further, prescriber
groups that exhibit a high degree of influence on patient ocrteotide therapy management should be
targeted.
We recommend that the key channels that Topanin Pharma should create commercial infrastructure to
support focus on Mail Service and Drug Stores.
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Market Analysis Report- Topanin Pharma
IX. Key Recommendations
Topanin Pharma should obtain Primary Market Research by conducting interviews with Key Opinion
Leaders (KOL’s) in oncology, endocrinology, gastroenterology and pharmacy. These KOL’s could also be
utilized by Topanin Pharma to form a Scientific Advisory Board (SAB).
Topanin Pharma must complete well designed pharmacokinetics (PK) and pharmacodynamics (PD)
studies to support efficacy and safety of Topanin Yyy versus current standards of care. This should
solidify early product uptake and conversion efforts of Topanin Yyy from Xxx®/Yyy IR. Also, these
studies may support the delay to LAR starts, eliminate conversion to LAR, and perhaps support
conversion from LAR to Topanin Yyy.
Topanin Pharma should identify and collaborate with a select pharmacy mail service that can assist in
Topanin Yyy uptake, billing, reimbursement, conversions, and provide patient education.
Topanin Pharma should become actively involved in disease management and patient education.
Topanin’s focus should include support groups such as the Carcinoid Cancer Foundation™ and the
Pituitary Foundation. In addition, Topanin Pharma should investigate the impact of the case manager’s
role in disease management.
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Market Analysis Report- Topanin Pharma
X. Glossary of Terms
a.) Reimbursement/Managed Care
Managed Care Organization
A Healthcare provider (or group of medical service providers) who contracts to provide a wide variety of healthcare services to enrolled members
through participation providers.
Health Maintenance Organization (HMO)
A health plan, either for-profit or not-for-profit, that provides comprehensive managed care health services to its members for a fixed, prepaid
premium. Members must use participating providers and are enrolled for a fixed period of time.
Pharmacy Benefit Manager (PBM)
An organization that provides administrative services in processing and analyzing prescription claims for pharmacy benefit and coverage
programs. PBM services can include contracting with a network of pharmacies; establishing payment levels for provider pharmacies; negotiating
rebate arrangements; developing and managing formularies, preferred drug lists, and prior authorization programs; maintaining patient compliance
programs; performing drug utilization review; and operating disease management programs. Many PBMs also operate mail order pharmacies or
have arrangements to include prescription availability through mail order pharmacies.
Prior Authorization
A formal process requiring a provider obtain approval to provide particular services or procedures before they are done. This is usually required
for nonemergency services that are expensive or likely to be abused or overused. A managed care organization will identify those services and
procedures that require prior authorization, without which the provider may not be compensated.
Risk Contract
A contract between a payer such as Medicare or Medicaid and a managed care organization or other managed care entity under which the entity
agrees to provide, or arrange for the provision of, a specified set of services to enrolled beneficiaries in exchange for a fixed monthly capitation
payment on behalf of each enrollee. By entering into such a contract the managed care organization is assuming the financial risk for costs of care
to enrolled individuals.
Capitation Payment
A type of payment made under a risk contract, generally to a managed care organization (MCO). The payment is made on a monthly basis at a
fixed amount on behalf of each individual enrolled in the MCO. In exchange for the capitation payment, the MCO agrees to provide or arrange
services covered under the contract with the plan.
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X. Glossary of Terms
a.) Reimbursement/Managed Care con’t.
Carve Out
A term used informally to describe the services excluded from a risk contract (generally a managed care organization) to which Medicaid
beneficiaries would otherwise be entitled. A common “carve out” involves mental health services. A state Medicaid agency may nonetheless
continue to pay for these services on a fee-for-service basis.
Diagnosis-Related Group (DRG)
Diagnosis-Related Group (DRG) is a system to classify hospital cases into one of approximately 500 groups, also referred to as DRGs, expected to
have similar hospital resource use, developed for Medicare as part of the prospective payment system. DRGs are assigned by a "grouper" program
based on ICD diagnoses, procedures, age, sex, and the presence of complications or comorbidities. DRGs have been used since 1983 to determine
how much Medicare pays the hospital, since patients within each category are similar clinically and are expected to use the same level of hospital
resources. DRGs may be further grouped into Major Diagnostic Categories (MDCs).
Centers for Medicare and Medicaid Services (CMS)
The agency in the U.S. Department of Health and Human Services responsible for administering the Medicaid, Medicare, and State Children’s
Health Insurance programs at the federal level. CMS was formerly known as the Health Care Financing Administration (HCFA).
Disproportionate Share Hospital (DSH) Payments
DSH Payments are made by either Medicare or a state’s Medicaid program to hospitals that serve a “disproportionate share” of low-income or
uninsured patients. These payments are in addition to the regular payments such hospitals receive for providing care to Medicare and Medicaid
beneficiaries. Medicare DSH payments are based on a federal statutory qualifying formula and payment methodology. For Medicaid DSH, there
are certain minimum federal criteria, but qualifying formulas and payment methodologies are largely determined by states.
340B Drug Discount Program
Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in the Medicaid program to provide discounts
on covered outpatient drugs purchased by specified government-supported facilities (called "covered entities") that serve vulnerable patient
populations. Covered entities include public hospitals and community health centers.
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X. Glossary of Terms
b.) Pricing/Cost
Wholesale Acquisition Cost (WAC)
The price paid by a wholesaler for drugs purchased from the wholesaler’s supplier, typically the manufacturer of the drug. On financial statements,
the total of these amounts equals the wholesaler’s cost of goods sold. Publicly disclosed or listed WAC amounts may not reflect all available
discounts.
Average Wholesale Price (AWP)
A national average of list prices charged by wholesalers to pharmacies. AWP is sometimes referred to as a “sticker price” because it is not the
actual price that larger purchasers normally pay. For example, in a study of prices paid by retail pharmacies in eleven states, the average
acquisition price was 18.3 percent below AWP. Discounts for HMOs and other large purchasers can be even greater. AWP information is publicly
available.
Federal Supply Schedule (FSS)
The collection of multiple award contracts used by federal agencies, U.S. territories, Indian tribes and other specified entities to purchase supplies
and services from outside vendors. FSS prices for the pharmaceutical schedule are negotiated by the VA and are based on the prices that
manufacturers charge their “most-favored” non-federal customers under comparable terms and conditions. Because terms and conditions can vary
by drug and vendor, the most-favored customer price may not be the lowest price in the market. FSS prices are publicly available.
Medicaid Best Price
The lowest price paid to a manufacturer for a brand name drug, taking into account rebates, chargebacks, discounts or other pricing adjustments,
excluding nominal prices. Best price is a variable used in the Medicaid rebate statute to calculate manufacturer rebates owed to state Medicaid
agencies. Prices charged to certain governmental purchasers are statutorily excluded from best price including prices charged to the VA, DOD,
Indian tribes, FSS, state pharmacy assistance programs, Medicaid, and 340B covered entities. Best price data is not publicly available.
340B Price
The maximum price that manufacturers can charge covered entities participating in the Public Health Service’s 340B drug discount program. The
340B discount is calculated using the Medicaid rebate formula and is deducted from the manufacturer’s selling price rather than paid as a rebate.
Compared to a drug’s AMP, covered entities receive a minimum discount of 15.1% for brand name drugs and 11% for generic and over-the-
counter drugs and are entitled to an additional discount if the price of the drug has increased faster than the rate of inflation. Covered entities are
free to negotiate discounts that are lower than the maximum allowable statutory price.
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