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Biotechnology in Europe and Elsewhere – an Overview

Biotechnology in Europe and Elsewhere – an Overview. Simon Smith Partner, Blake Lapthorn Linnell 16 May 2006. European Biotechnology. Employed approximately 73,600 people (82,400 including Switzerland) Had 420 new drugs in clinical development or awaiting approval

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Biotechnology in Europe and Elsewhere – an Overview

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  1. Biotechnology in Europe and Elsewhere – an Overview Simon Smith Partner, Blake Lapthorn Linnell 16 May 2006

  2. European Biotechnology • Employed approximately 73,600people (82,400 including Switzerland) • Had 420 new drugs in clinical development or awaiting approval • Generated €16.3 billion of revenue • Raised €1.3 billion of equityinvestment in 2003 • Formed 100 new companies

  3. European Biotechnology • As in previous years, the UK was thesingle biggest contributor to this picture. In 2003 the UK sector: • Comprised 455 companies • Employed approximately 22,400people • Had 224 new drugs in clinical development or awaiting approval – half the European total

  4. European Biotechnology • The industry in the UK: • Generated £3.6billion of revenue - a 19% increase over the 2001-2002 period • Raised £392 million of equity investment • Formed 36 new companies

  5. Korean Biotechnology • Grew from $1.4 billion in 2002 to $1.95 billion in 2004, an average YoY increase of 22.5% • The medical sector accounts for about 60% of Korea’s biotechnology industry • Approximately 600 companies • Employ approximately 12,138 people, 54.4% of who are in R&D, and 45.6% in production

  6. Australian Biotechnology • Approximately 370 biotechnology companies and 600 medical device companies • 54 biotechnology firms listed on the ASX • Approximately 6000 people employed • Market capitalisation of Australian biotechnology firms listed on the Australian Stock Exchange (ASX) is A$7.132 billion (US$5.439 billion)

  7. Indian Biotechnology • 265 firms registered in India, over 75% of which were incorporated in the last five years • The top five companies were homegrown; Indian firms account for 62% of the biopharma sector and 52% of the industry as a whole • Aiming to grow the industry to $5 billion in revenues generated by 1 million employees by 2009

  8. Early stage pharma and biotech alliances • Capital resources • Clinical development • Regulatory assistance • Manufacturing • Sales & Marketing • Innovative drugs • New technologies Pharma Biotech

  9. Early stage pharma and biotech alliances • Capital resources • Clinical development • Regulatory assistance • Manufacturing • Sales & Marketing • Innovative drugs • New technologies Pharma Biotech

  10. Combining pharma-biotech expertise • Pharma • Access to technology • Access to products • Biotech/Drug Delivery Company • Discovery/development resources • Commercialisation resources • Combined innovation/value • Validation of scientific approach • Leverage time to market • Ability to bring projects forward that could not exist without partnership • Creation of new IP/technology/products

  11. Challenges Declining success rates in new drug development Rising cost of drug development and commercialisation Increasing pressure on return Increasing price sensitivity and growing reimbursement pressures Greater regulatory scrutiny Opportunities Rising disease incidence globally High unmet, medical needs eg Alzheimer’s, oncology etc.. New technologies for research and development Expanding success, income and insurance coverage in key emerging pharma markets Greater patient engagement in health care decisions Challenges and Opportunities

  12. The Market for Early Stage Research Deals Preclinical Phase I Phase II Pre-registration Launched

  13. Recent Novartis early stage deals

  14. Recent Novartis early stage deals

  15. But Bear in Mind Collaboration Can Be a Stepping Stone…

  16. Merck licensing strategy results in high value alliances • Over $9.5 billion, or 44% of Merck’s sales, are attributed to alliance products and patents Licensed products or patents 44% of total sales • Key products: • Fosamx • Cozaar/Hyzaar • Nexium • Varivax • Recombivax HB 2005 Revenues : $22 billion • In addition, through the partnership with Schering-Plough, Merck shares in the profits of ZETIA and VYTORIN sales: $2.4 billion in 2005

  17. Partnerships - of increasing importance to Merck

  18. Questions? simon.smith@bllaw.co.uk

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