bc biotech association vancouver, march 2006 it ain’t easy deborah brown general manager &...

BC Biotech Association

Vancouver, March 2006

It Ain’t Easy

Deborah BrownGeneral Manager & Regional Vice President

Serono Canada Inc.

Vancouver, March 2006

2 Vancouver, March 2006BC Biotech Association

Biotech in CanadaA quick overview

• Almost 500 companies (over 1/3rd from spin offs)• Revenues of $3.8 billion• R&D expenditure nearly $1.5 billion• Directly employs 12,000 skilled workers• Biotech Human Resources Council estimates biotech

activities support 2500 organizations and over 200,000 jobs

• Market cap of Canada’s biotech companies estimated to be over $15 billion (70% represented by ~10 companies)

Source: Statistics Canada, Uses and Development Survey 2003


A typical biotech is . . .

• Private• Works in human therapeutics with an R&D focus • Three-quarters of all companies have fewer than 50

employees• Does not have a commercialized product • Has less than 12 to 18 months of funding


Pillars of Biotech Success …

Intellectual Property & Protection

Access to marketFinancing


“Biotechnology is an industry driven by science”

“Biotechnology today is all about money."

Dr. Tony Brooks, Formerly of PricewaterhouseCoopers LLP

Paradox


Serono

• Global biotech leader, 3rd largest in terms of revenues

• Largest European based biotech

• Based in Geneva, Switzerland

• 100 years old as of March 10, 2006

• Almost 5,000 employees, revenues of $2.5B in 2005

• 4 therapeutic areas and an emerging TA in oncology

• Blockbuster drug, Rebif, for Multiple Sclerosis


The Major Biotechnology Leaders

Lead Productas % of

Sales

AmgenAmgen

GenentechGenentech

ChironChiron

GenzymeGenzyme

MedImmuneMedImmune

GileadGilead

2004 Revenues US$m2004 Revenues US$m

4,621

2,201

1,726

1,325

1,141

2,210

10,550

2,458

26%

46%

50%

68%

38%

17%

63%

84%

26%

46%

50%

68%

38%

17%

63%

84%

Market cap (US$) as of

Dec 31, 2004

81,479

57,141

10,158

22,218

14,397

6,228

15,148

6,743

81,479

57,141

10,158

22,218

14,397

6,228

15,148

6,743

SeronoSerono

Biogen-IDECBiogen-IDEC


Biotech Ranking Update – H1 2005

CompanyH1 2005 Revenues

($m)

Revenues y.o.y.

Growth

Sales as % of Revenues

Lead Product as %

Sales

Lead Product H1 2005 Sales

($m)

Lead Product

Amgen 21.9% 96.7% 21.2% 1230.0 Epogen

Genentech 42.1% 82.3% 38.9% 956.0 Rituxan

Genzyme 24.7% 100.0% 35.6% 462.0 Cerezyme

Serono 11.7% 91.0% 53.2% 618.8 Rebif

Biogen Idec 10.5% 95.7% 66.2% 755.4 Avonex

Gilead 47.2% 91.7% 47.9% 406.9 Viread

Chiron 8.8% 70.3% 18.9% 109.5 TOBI

MedImmune 2.7% 99.2% 88.1% 523.0 Synagis

Cephalon 24.5% 95.3% 42.7% 230.0 Provigil

Celgene 51.3% 78.7% 90.0% 182.8 Thalomid258

566

598

826

926

1,193

1,278

1,298

2,988

6,005

Data Source: Company SEC filings / Bloomberg / Analyst reports


Strong Financial Performance

• Over the last 5 years, total revenues doubled with a compounded annual growth rate (CAGR) of 16%

• Net income CAGR over the last 5 years of 22%

1,1331,240

1,3771,538

2,019

1999 2000 2001 2002 2003 2004

183

301 317 321

390

1999 2000 2001 2002 2003 2004

Total Revenues ($M) Net Income ($M)Guidance

2’370 - 2’420 Guidance492 - 497


4 Therapeutic Areas, 13 products

• #1 MS product outside the USA and fastest growing MS drug in the USA

• World’s #1 brand in the field of fertility

• Unique portfolio of state-of-the-art fertility products

• Fastest-growing product in the GH business

• The only GH therapy registered for AIDS wasting

• First biological therapy for psoriasis to receive EC marketing autorisation


Fostering a partnership culture


Commercial Market Environment

•Slow (!) regulatory approvals

•Limited and deteriorating market access

•Biosimilars on the horizon

•Declining physician numbers

Negative Forces

Positive Forces

• Favourable economic environment

• Improved patient advocacy

• Biotech addressing unmet needs


1. Low odds of clinical success2. Regulatory inefficiency3. High expectations of new biotech entrants4. Market access barriers5. Heavy expenses to service niche specialty areas6. Too few or too many therapeutic areas7. Competing against large pharma with more resources

Barriers to Success


Probability of Clinical Success

• No guarantees, even at Phase III • Auto-immune diseases are multi-factorial• Few blood pressure cuffs • Placebo-controlled trials – the paradox• Lengthy ethics approvals • Phase IV gets bigger and bigger, and GCP

standard


• Accept the unique nature of bioscience inventions and resource accordingly and/or adopt international standards and reviews in regulatory practices

• This includes:– eliminating the backlog of new technologies – launching the creation of an Orphan Product policy that

encourages and supports the development of treatments for unmet medical needs

– establishing a directive to ensure government processes and policies do not delay or discourage introduction and adoption of new biotechnologies like vaccines.

Inefficient Regulatory System


Health Canada Performance is Poor

0 200 400 600 800 1000 1200

Submission Approval Time (days)

20002001200220032004

CanadaAUS

EU Swiss

USA 2

00

4

B

iolo

gic

s

Performance (HC Biologics vs World)

1,033 day avge


Improved Biologics Performance Anticipated???

0 200 400 600 800 1000 1200

Submission Approval Time (days)

20002001200220032004

20002001200220032004

Dru

gs

B

iolo

gic

s

Performance Times (Biologics vs Drugs)


High Expectations

• Breakthrough disease areas – they want cures• Many are injectables which increase

expectations on:• Training• Supply provision• Ongoing support = Call Centers

• Improved administration, tolerability, efficiency = lifecycle management!


Standard Expectations for Biotech Drugse.g. The Clear Support Program

CSP “Get Back to Living Kit”

Overall Objectives:1. Assist patient in self-injection2. Ensure proper technique is

applied consistently for every injection

3. Provide helpful tools


Who Pays and Will They?

Reimbursement

Private60%

Public40%

NewCommon

Drug Review

CDR Recommendation6 months post submission

Provincial Drug PlanDecisions

4-12 months post CDR recommendation

Open80%

Conseildu

Médicament

Québec Decision

Managed20%

• Special authorization • Annual cap• Lifetime cap• Mimic provincial plan


1.The expenses of servicing niche specialty areas are heavy

2.Too few therapeutic areas3.Too many therapeutic areas

Cheaper by the dozen?


Biotechnology Lifecycle


Too Few

PROS• Efficient opex• Intimacy with market• Superior offerings vs.

pharma

CONS• Too vulnerable to a new

competitor• Very difficult to build

infrastructure for sales ops, CHE, market access, medical services, QA/QC, business development etc.


Too Many

PROS• Have resources to build

shared services infrastructure

• Can leverage best practice across therapeutic areas

• Less vulnerable to one TA

CONS• Difficult to feed each

therapeutic area• Compete against big

pharma and their opex


Patient and Physician Expectations

PsO sufferer or Caregiverseeking Tx

CLEAR SUPPORT Program(Raptiva DTP Pt Support Program)

Dermatologist&

Derm RN

Raptiva Rx(“patient”)

PEP ProgramPsoriasis education & awareness

(DTC Program)


Education/ Value Added an Expectation

Sponsors of Whitaker-McFarlin MS Colloquium:

•Accredited by the University of Minnesota / Endorsed by CMSC and IOMSN

•Content overview:

•Epidemiology, Diagnosis, and Natural History (clinical and MRI)

•Disease Modifying Therapies

•Symptom Management

•Whole Patient Management: Practical Case Studies

Sponsors ofMS Fellows Program:•Each award is a two year fellowship ($50,000/year)

•Two will be awarded to applicants from across the US, one will be awarded to a Harvard applicant

Sponsors ofJohn Hopkins CME Programs:

•“Maximizing Long-Term Outcomes in Multiple Sclerosis”•Steering Committee: Peter Calabrese, MD and Doug Kerr, MD (Co-Chairs), Pat Coyle, MD, Doug Goodin, MD, Norm Kachuk, MD

Sponsors of MS Teleconnections:•200 CME teleconferences

•Accredited by Medical Education Collaborative


Outsized on: Salesforce size Promotional spend Lobbying power Legal, sales operations, market research, business

analysis, competitive intelligence, manufacturing capability, GXP expertise, medical services, broad CRA teams.

Bundling power

Competing with the Big Boys


It Ain’t Easy, but It’s Worth It

“Advances in genetic engineering will not only have dramatic implications for people and society, they will reshape vast sectors of the world economy. The

boundaries between many once-distinct businesses, from

agribusiness and chemicals to health care and pharmaceuticals to energy and computing will blur, and out of their convergence will emerge what promises to be the largest industry in the world: the life sciences industry.” Enriquez & Goldberg, HBR March-April 2000


Thank You &Good Luck!

TM

www.biotech.ca

bc biotech association vancouver, march 2006 it ain’t easy deborah brown general manager &...

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