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Dr. Brian W Tempest briantempest 14 th EGA Annual Conference – Paris, France

Moving Beyond the Commodity Market: What Future is there in added Value Generics, Niche Products and Biosimilars?. Dr. Brian W Tempest www.briantempest.com 14 th EGA Annual Conference – Paris, France June 3rd 2008. www.briantempest.com. Healthcare pressures to 2050.

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Dr. Brian W Tempest briantempest 14 th EGA Annual Conference – Paris, France

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  1. 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

  2. www.briantempest.com

  3. Healthcare pressures to 2050

  4. Healthcare Reform & Transition is Everywhere

  5. Healthcare Reform & Transition is Everywhere

  6. Big Pharma R&D Productivity is Falling

  7. Big Pharma Sales Concentration...

  8. But the Product Pipeline is not with the top 10

  9. Big Pharma Generic Exposure

  10. A 20- Year Historic Low

  11. 45,000 Pharma Jobs

  12. Big Pharma in Transition 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

  13. Generic Competition is Rising CPHI Attendees, Milan,2nd – 4th Oct’07 As registered on July 25, 2007

  14. Generics – USA Filings USA ANDA filings by India % Share of USA DMF filings IndiaChina 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

  15. Indian Healthcare’s 1987 Companies

  16. Asia roaring Ahead

  17. A Recent M&A Success

  18. 82% of the world population accounts for only 12% of the Global pharmaceutical sales • Sources: • IMS Midas, March 2005 • Earth Trend Data Tables 2005

  19. Generics Sector in Transition 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

  20. Germany Reimbursement Uncertainty

  21. South Europe Investment

  22. Top 5 Global Pharmaceutical Markets 2020 Sources: Goldman Sachs 2007

  23. Wholesaler Brand Ranked 2nd in UK

  24. Pharmacy Chains

  25. Pharma Markets in Transition 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

  26. In this Era of Transition there is a Serious Search for Profitable Sectors

  27. Impact of Competition on Price

  28. 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

  29. 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

  30. Different Global Generic Market Sizes $bn

  31. Europe’s largest Branded Generic market

  32. Biologics Share of Patent Expiries

  33. Biotech Share of Patent Applications

  34. Biosimilars • Most Companies expect Europe to be the stepping stone to the USA. Clarity on EPO,GCSF, HGH,I with Interferon, LMW Heparin to come • Monoclonals 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

  35. Irinotecan – 7 first day launches in USA

  36. 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

  37. Thank You

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