“UK Pharma – The UK Challenges”

Malcolm Skingle CBE DSc PhD

Director – Academic Liaison

Drug Discovery

15th October 2012

Franco-British Bilateral Symposium

on clinical research

The Royal Society

The Challenges for UK Pharma

UK is an expensive place to fund a post-doc (FEC)

Clinical trial recruitment rates are patchy

Life Science clusters eg Boston are attracting the

major Pharma investments

The science bases in the developing world are getting

stronger

Governments entice knowledge intensive companies

with Start up grants & tax credits

The Global Pharma perspective

Research costs are increasing

Patent expiry & increasing generic competition

Pricing & reimbursement

Increasing regulatory hurdles

Late stage/product failures

Fewer Blockbuster drugs

Post–genome scientific challenges are too great for a single organisation

Partnerships are the only sensible way forward

The Innovation Ecosystem

Academia / NHS

Biotech Pharma

R&D for a New Medicine: 10+ years, $1 bn+

Sources: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org; CBO, Research and Development in the Pharmaceutical

Industry, 2006

Indefinite

Drug

Discovery Preclinical Clinical Trials

Regulatory

Review Scale-Up to

Manufacture

Post-

Marketing

Surveillance

1

Approved

New

Medicine

0.5 – 2 Years 6 – 7 Years 3 – 6 Years

Number Of Patients / Subjects

Phase I

Phase II

Phase III

5 250 ~ 5,000 – 10,000

Compounds

Pre

-Dis

covery

20 – 100

100 – 500 1,000 – 5,000

IND

Subm

itte

d

ND

A S

ubm

itte

d

… a big challenge for addressing both developed & developing world diseases

Two decades of struggle

Global Competition

Developing Science Bases are getting stronger

Attempts to lure Pharma R&D overseas

e.g. Government incentives to stimulate their respective

science base e.g Singapore, Ireland, Denmark

Pharma companies are re-structuring

Increased externalisation, re-alignment of their

workforces

Consolidation of the Pharma Industry

Merck

Merck

Hoffman

Roche

LaRoche Syntex

Hoechst Roussel

Marion

Merrill Dow

RhonePoulenc

Sanofi

Synthelabo

Marion Merrill Dow

RhonePoulenc & Fisons

Hoechst

Sanofi-Synthelabo

Hoechst Roussel

RhonePoulenc & Fisons

Sanofi-Synthelabo

Sanofi-Synthelabo

Aventis

Sanofi-Aventis

Squibb

Meyers

Bristol

DuPont Pharma

Squibb

Bristol-Meyers

DuPont Pharma

Sandoz

Geigy

Ciba

Sandoz

Ciba-Geigy

Novartis

Glaxo

Wellcome

French

Smith

Kline

Beecham PLC

GlaxoWellcome

French

Beecham PLC

SmithKline

Beecham PLC

SmithKlineFrench

GlaxoWellcome

SmithKline Beecham

Glaxo SmithKline

Pfizer

Parke-Davis

Warner Lambert

Monsanto

Upjohn

Pharmacia

Pfizer

Warner Lambert

Monsanto

Pharmacia Upjohn

Pfizer

Pharmacia

Pfizer

1980

2010

33 Companies

7 Companies

Bristol-Myers Squibb

Bristol-Myers Squibb

Wyeth

Pfizer

Genentech

Genentech

Hoffman LaRoche

Genentech

A.H. Robbins

Schering-Plough

Amer. Cyanamid

AHP

Amer. Cyanamid

AHP

AHP (Wyeth)

Roche

33

7 Pharma

20

10

Pharma in 80’s

8

Macro economics &

Globalisation

Leading sectors for business R&D investment (UK 2008-10)

0 5 10 15 20 25 30 35

Car & Parts

Post & Telecoms

Computing/IT

Aerospace

Pharma

(a) 2010 (b) 2008

UK Pharma spent 4.64 billion on R&D in 2010

Percent

The pharmaceutical sector represents nearly a 1/3rd of UK business R&D (UK 2010)

Source: ONS

UK business R&D investment , share of UK total, by sector 2010

Emerging Markets & Asia Pacific Drives GSK Strength

US Pharma £7.6bn

($11.9 bn)

Europe Pharma £6.5bn

($10.2bn)

Rest of World £1.0bn($1.5bn)

2010 Turnover £28.4bn/$44.0bn (-1%)

Emerging Markets Ph

£3.6bn ($5.5bn)

Japan/AP Ph £3.1bn

($4.8bn)

Consumer £5.0bn

($7.3bn) US growth rate impacted by

losses to generics

+7%

+9%

+22%

-6%

-11%

CER growth rates

Europe growth rate impacted by

losses to generics and gov’t

austerity measures

ViiV £1.6bn($2.4bn)

-3%

Rank Country

1 USA

2 Japan

3 Germany 4 France 5 Italy 6 UK

7 Spain

8 Canada 9 Mexico

10 China 11 Brazil 12 South Korea 13 Argentina 14 India 15 Australia

Leading pharmaceutical markets by total sales 2001

Leading pharmaceutical markets by total sales 2011

Rank Country Growth %

2011

1 USA 3

2 Japan 5

3 China 16

4 Germany 2

5 France 1

6 Brazil 17

7 Italy 2

8 Spain -2

9 Canada -1

10 UK 2

11 Russian Federation 12

12 India 17

13 Australia 5

14 South Korea 6

15 Mexico 3

30 Russia

The pharmaceutical markets for the BRIC countries are the fastest growing among the leading pharmaceutical markets

Source: IMS MIDAS 2006 sales data, Total Pharmaceutical Market * Extrapolations from 2006 to 2020 based on IMS projection and % of 2006 sales

China,

$82B

India,

$44B

Russia,

$38B

Brazil,

$60B

Mexico,

$60B

Korea,

$66B

Turkey,

$52B

US, $276B

Europe,

$123B

US,

$364.18B

Europe,

$162.30B

$526.48B

$400B

$55B

Year: 2006 Year: 2020*

Assuming 2% growth

per year

Emerging Markets will outgrow Developed Markets

Sources: National trade associations. OHE analysis

Science base attracts R&D spend

0

10

20

30

40

50

60

UK market UK R&D US market US R&D

UK/US Global PharmaMarket share & World R&D spend

2.46%

37.64%

•Global Pharma sector

Population USA 310m (4.5%) cf UK 62m (0.9%)

China 1.34b (19.3%) & India 1.22b (17.5%)

Changing Trends in Pharma R&D • Re-purposing initiatives

• Smaller data rich clinical trials

• Increased focus on rare diseases

Easier entry to CTs; increase knowledge to other disorders

• Desire to treat diseases of the developing world

• Increased externalisation

CROs, universities & research institutes, biotechs

• Diversification through tapping into other sectors

e.g. McLaren collaboration

• Increasing focus on Biopharmaceuticals

e.g. 20% of GSK pipeline by 2015

Rapidly Changing Market Biologicals gaining market share

What’s good about UK science base

Excellent Pharma engagement with other UK

funders & government depts

Research Councils have a strong industry focus

e.g. User panel, BioScience for Industry, IPA’s, MICA’s

BIS/OLS drive towards collaborative R&D

Large multi-disciplinary projects, cluster formation

CASE Studentship scheme

Lambert Boilerplate agreements

Conclusions:

Breadth & cost of capabilities mean that a single

company can no longer retain all the capabilities

required for the whole R&D process

Pressures on Pharma have driven companies to

share risk & reward through collaboration

Companies are working with each other, academia

& SMEs to share resources, data etc

Entrepreneurial academics realise the benefits of

closer relationships with Pharma

We are looking for

innovation wherever

it may originate