hale & tempest moving beyond the commodity market: what future is there in added value generics,...
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Hale & Tempest
Moving Beyond the Commodity Market: What Future is there in added Value Generics, Niche
Products and Biosimilars?
Dr. Brian W Tempest
www.briantempest.com
14th EGA Annual Conference – Paris, France
June 3rd 2008
Hale & Tempest
double digit growth to single growth focus on 7 developed markets to 7 emerging markets
primary care to specialists small molecules to biotech molecules
a slump in R&D innovation - the next 5 years being similar
$84b patent expiries in 2010, 2011, 2012
48 M&As in 2007 at a value >$50m 15 out of 18 top companies have announced restructuring
Big Pharma in Transition
Hale & Tempest
Generic Competition is Rising CPHI Attendees, Milan, 2nd – 4th Oct’07
1. China 467 – 33%
2. India 189 – 13%
3. Germany 96
4. Italy 80
5. USA 75
6. UK 55
7. France 55
8. ROW 387
Total 1404
As registered on July 25, 2007
Hale & Tempest
Generics – USA Filings
USA ANDA filings by India % Share of USA DMF filings
India China 2004 27% 9% 2005 37% 10% 2006 44% 14%
Q1’07 48% 17% Q4’07 48%
Source: US FDA / J P Morgan, 2 may 2007
Source: US FDA, Credit Suisse
0
50
100
150
200
250
300
2002 2003 2004 2005 2006
Hale & TempestSources: 1. IMS Midas, March 20052. Earth Trend Data Tables 2005
82% of the world population accounts for only 12% of the Global pharmaceutical sales
Region Pharma Sales Population
North America
Europe
Japan
$255 b 47%
$158 b 30%
$59 b 11%
332 5%
725 11%
128 2%
Asia/Africa/Aus
Latam
88%
$41 b 8%
$20 b 4%
18%
4711 73%
558 9%
12% 82%
Worldwide $533 b 100% 6454 100%
Hale & Tempest
Competition is rising, India feels confidant and strong Cost containment in European countries Importance of Branded Generic countries Focus in the hospital Injectables sector
Zhejiang Huahai Pharma Co –first tentative ANDA
FTC deals in 06/07 at 45 are double 05/06 & 04/05
M&A - 30% of added value from synergy
Indian Manufacturing units to double 2010 on 2000
Generics Sector in Transition
Hale & TempestSources: Goldman Sachs 2007
Top 5 Global Pharmaceutical Markets 2020
Rank Country Size
1.
2.
3.
4.
5.
USA
China
Japan
France
India
$ 475b
$ 125b
$ 61b
$ 51b
$ 43b
Hale & Tempest
KSR vs. Teleflex USA Supreme Court decision USA Bilateral FTAs amended –Columbia, Peru, Panama
Compulsory Licensing by Thailand, Canada under WTO German reimbursement review, UK PPRS, Poland, Hungary
FDA setting up 5 offices in China & then India, ME, SA,EU
Brazil generics booming , Japan generics rising
Impact of wholesaler brands and pharmacy chains West Europe vs. Central/East Europe vs. South Europe
Pharma Markets in Transition
Hale & Tempest
Added Value Generics, Niches & Biosimilars
Branded Generics Recombinant DNA technology/Biosimilars - 20% of CTs Injectables & Hospitals OTC - brands last forever NDDS - once a day technology Chemistry e.g. hormones, penems, peptides - 5% of CTs Natural Products - 5% of CTs Fermentation technology, China power costs- 8% of CTs Aerosols, Implants, Patches Para 4 180 days USA exclusivity/first day EU launches CRAMS - $24b global market in 2006, $48b in 2010 with
India forecasting $1b and $3b share
Hale & Tempest
Branded Generics- the analyst’s view
“Branded Generics are the most profitable place to be in generics and there are a few markets with better branded characteristics than those of …”
Frances Cloud Nomura September 14 2007
Hale & Tempest
Different Global Generic Market Sizes $bn
Region Sandoz
2006
IMS
2008USA 23 68
West Europe 14 19
East Europe 13 NA
Japan 3 3
Latam/Canada 10 3 (Canada only)
ROW 37 7
Total 100 100
Hale & Tempest
Biosimilars
•Most Companies expect Europe to be the stepping stone to the USA. Clarity on EPO,GCSF, HGH,I with Interferon, LMW Heparin to comeMonoclonals next on the agenda
• USA regulations will not be clear until at least 2009. Biosimilars are expected not to be AB rated so field forces will be required for marketing.
•Generics market size $30b USA & $25b Europe. Indian Companies will be active players . Chinese & Korean Companies are already active .
•Some Big Pharma Companies are interested in this sector
• The earlier Biosimilar products may not be as profitable as some forecast owing to hospital discounts. Monoclonals will probably be more profitable.
• Need to be there
Hale & Tempest
In Summary
Big Pharma, Generics & Pharma Markets are all in Transition - with lots of Change
Relatively easy to achieve Generic Sales
But Profits and Cash are Challenging
Everybody will be looking for profitable niches