Biosimilars – A sophisticated market with attractive growth …€¦ · 8 | Biosimilars...

1 | Biosimilars presentation for DVFA – 8 June 2010

Biosimilars – A sophisticated market with attractive growth potential

Christopher Klein PhD, Head Licensing Biopharmaceuticals

DVFA, Frankfurt, 8 June 2010


Agenda

Biologics and their market potential

Biosimilars and Sandoz contribution

Biosimilars players and positioning

Challenges and outlook


Biologics have revolutionized modern medicine –and will continue to do so

Today / future

Human genome

Stem-cell research

Gene therapy

1990s to today

Leading biotechbrands emerge

1950s

DNA moleculedecoded

Genetic codecracked

1960s

Basic biotechnology

enabled

1970s

! Offer real hope for many unmet needs, particularly complex diseases

! Bind to specific targets – simply not possible with other medicines

! Contribute significantly to improved survival rates, enhanced longevity, and better quality of life

Source: Company websites and annual reports Note: All trademarks, logos and pictures are the property of the respective owners

Commercial biotech firms

founded

1980s


Biologics are more complex than small molecules…

Monoclonal Antibody (IgG)

simple biologic small chemical molecule

Calcitonin

complex biologic

ASPIRIN®

Molecular weight = 180 Daltons0 amino acids

Molecular weight = 150,000 Daltons~ 1300 amino acids

- w/host cell modifications(glycosylations, etc)

- produced in mammalian cells

Molecular weight = 3,455 Daltons

~ 32 amino acids

- w/o host cell modifications- produced in yeast, bacteria


…and are produced from genetically engineered living organisms (not chemical synthesis)

Modify host cells(e.g., bacteria, mammalian yeast) to produce recombinant proteins

Extract, refold, purify – generate drug substance

Formulate to stable finished drug product (vial, syringe, cartridge)

Grow cellsunder controlled conditions (fermentation)


Biologics sales were US$ 93 billion in 2009, expected to grow twice as fast as small molecules…

Global Pharma Market2004–20151

US$ billion

549725

911

93

166

2009

818

601

2004

52

2015

1,077

Small moleculesTherapeutic proteins

CAGR (Percent)

6.412.4

5.7

2004–09 2009–15

4.710.1

3.9

1 Vaccines not includedSource: IMS Health 2007 & 2009, PharmArc, Sandoz

! U.S. represents ~50% of current sales

! Majority of current sales from mega blockbusters

! Monoclonal antibodies (mAbs) are largest and fastest growing segment

! ~30% of Pharma / biotech pipeline are biologics

Key market characteristics


… but growing costs threaten to limit patient access (US example)

“A breast cancer patient’s annual cost for Herceptin is $37,000…

People with rheumatoid arthritis or Crohn’s disease spend $50,000 a year on Humira…

…and those who take Cerezyme to treat Gaucher disease….spend a staggering $200,000 a year…

“…the top six biologics already consume 43% of the drug budget for Medicare Part B”

Estimated daily treatment costs1

in US$ per day

Small molecule drugs

Biopharma-ceuticals

1 Source: NY Times, March 2010

22

1

The “Biologics Boondoggle”


US$ 64 billion in global biologics sales will be off patent by 2015

17

64

103

76

93

2009

166

2015

Patented

Off patent

Worldwide biologics salesUS$ billions

1 Sales extrapolated from 2014 Evaluate Pharma sales figuresSource: IMS Health 2007 & 2009, Evaluate Pharma, Sandoz analysis

CAGR+10.1%

CAGR+25.3%

! Off patent market projected to grow 2x as fast as patented through 2015

! ~40% of global biologics sales will be off patent by 2015

! US represents 43% of global off patent sales in 2015

Key takeaways

1


What is a biosimilar (or follow-on biologic)?

• A biologic approved via a stringentregulatory defined pathway demonstrating comparability

Overview

• Successor to a biologic medicine that has lost exclusivity

• Not a simple generic due to complexity: size, structure and manufacturing

Regulatory definition

Comparabilityapproach

• Highly analogous structure(via robust analytical characterization)

• Comparable quality, safety and efficacy (via clinical trials)

Description

140

120

100

80

60

40

20

0

Min

mA

U

Zarzio®

Neupogen®

GCSF Peptide Mapping

Association rate Disassociation rate

0 200 400 600 800 1000 1200 1400re

l. re

spon

se (R

U)

time (s)

1 nM Zarzio #482004031 nM Zarzio #482004041 nM Zarzio #482004051 nM Neupogen #N1113AG1 nM Neupogen #N1144AE1 nM Neupogen #N1114AJ

80

60

40

20

0

-20

Association rate Disassociation rate

0 200 400 600 800 1000 1200 1400re

l. re

spon

se (R

U)

time (s)

1 nM Zarzio #482004031 nM Zarzio #482004041 nM Zarzio #482004051 nM Neupogen #N1113AG1 nM Neupogen #N1144AE1 nM Neupogen #N1114AJ

80

60

40

20

0

-20

Determination of Receptor Binding:Surface plasmon resonance spectroscopy

Rigorous analytical characterization


Sandoz designs processes from the start to specifically ensure quality and consistency

Proving biosimilarity with comparability to reference product at all stages

PK/PD

Preclinical

Biological characterization

Physicochemical characterizationDe

sign

spe

cific

atio

n

Clinical Trials

Valid

atio

n

Analytics

Processdevelopment

! Appropriate clinical trials to show safety / efficacy

! Design manufacturing processes to ensure comparability

! Science-based process development to delivertarget quality

! Characterization to prove that product is safe and efficacious


Biosimilars are recognized around the world as safe and effective medicines

EU draft general guidelinesadopted

Sandoz OMNITROPE®

first biosimilarapproved and launched in EU

2004 2005 2006 2007 2008 2009

Sandoz first EPO approvedand launched in EU

Filgrastim1

approved in EU

Sandoz OMNITROPE®

first biosimilar-type medicine approved and launched in US

Japan regulatory guidelines

Sandoz OMNITROPE® first biosimilar approved and launched in Japan & Canada

2010

US regulatory pathway

“We are confident that if a product … gets an MA from the Commission... the product is as safe and effective as any other product authorized by the Commission."

- Nicolas Rossignol, former administrator of EC pharma division2

1 First competitor product (Sandoz product approved Feb 2009)2 Source: Speech at EGA Biosimilars conference 2008, quoted in Scrip

Sandoz OMNITROPE®

first biosimilar – type medicine approved in Australia


Development approach for biosimilars is closer to originators than generics

Generics1 Biosimilars1 Originators1

Development Investment

Time to market

# of patients for approval

US$ 2 – 3m US$ 100 - 150m US$ 800m

2 – 3 yrs 7 – 8 yrs 8 – 10 yrs

20 – 50 pts ~ 500 pts 800 – 1000 pts

1 Industry average


Sandoz is the world leader in developing, manufacturing and commercializing biosimilars

Commercial experience:! Broad global presence ! Strong M&S capability! Unparalleled market experience with biosimilars

Six decades of biotech manufacturing know-how:! World leader in fermentation technologies since 1946! Interferon alpha – first recombinant made in EU in 1980! Three state-of-the-art EU plants for recombinant proteins

Development expertise:! Pioneer - developing biosimilars since 1996! Four development sites, multiple clinical trials ongoing ! 8-10 molecules in development, including mAbs


2006 2007 2009

Solid biotechnology cooperation business

! US$ 118m in 2009 biosimilars sales

! >30% of new hGHpatient starts in key EU countries (e.g., France, Italy)

! #1 German biosimilar company

!#1 EPO biosimilar: 18.7% short-actingnephrology MS1

! #1 filgrastimbiosimilar: 16.6% short-acting MS2

1 Pharmacy market share (Euros) for Feb 2010 - including both Epoetin Alpha Hexal & Binocrit2 Pharmacy market share (Euros) for Feb 2010

Introduced in May 2006, first biosimilaron EU market

(hGH)

Introduced in October 2007, first complex biosimilar

(epoetin alfa)

Third Sandoz biosimilar, EU approval in February 2009

(filgrastim)

Sandoz biosimilars:#1 with three marketed products

2008 2010


Sales

Sandoz: a global leader in generics

! Global no.2

! No.1-3 in roughly half of global market

! Present in > 130 countries

! Strong portfolio of ~1.000 compounds

! Rich pipeline with > 800 projects

! Global development center network

! More than 30 manufacturing sites globally

! Leader in differentiated generics

! Pioneer of biosimilars

! Global headquarters near Munich, Germany

Sandoz key figures 2009Net sales: USD 7.5 billion

Net income: USD 1.1 billion

Employees worldwide: 23,000

60%40%Established

markets

Emerging markets


Sandoz: a Novartis Group Company

InnovativeMedicines

Reducing economic burden

Self-care

Factors that drive… patient needs Novartis portfolio

Pharmaceuticals

Vaccines and Diagnostics

Sandoz(Generics)

Consumer Health (OTC, Animal Health and

CIBA Vision)

Full rangeof healthcareoptions

Innovative medicines

Prevention

Affordable options

Self-care


Current players in biosimilars and related field can be grouped into three main categories

Large generics

Biopharma

Emergingmarkets

ExamplesMajor characteristics

• Pursuing partnerships to expand capabilities / portfolio

• Mixed approach to biosimilars; some are aggressively entering while others are opposing

• Competitive in local markets• Pursuing partnerships to enter

EU/US


Biopharma pursuing different approaches to biosimilars

Significant interest On the sidelines Opposing

• All have intrinsic biologic capabilities

• Developing portfolio primarily through deals

• Establishing focused units with investment

• No current activity

• Capability and interest does exist for some players

• Forcibly against biosimilars

• “Inherently different”

• “Put biotech reputation at risk”

• “No substitution”


Biosimilars to be differentiated from alternative approaches…

“Copy biologics”

• Used for “bio-differents“• Copy of marketed

biotech drug on amino-acid level

• Key parameters not engineered for similarity (e.g. glycosylation, potency)

• No or very limited comparative clinical data

• Available in less regulated markets

• Usually not of sufficient quality for highly regulated markets

Biosimilar

• Off-patent version of marketed biotech drug

• Quality and registration requirements tightly regulated in EU/US/JP

• Development engineers comparability with reference in all phases

• Leverage prior knowledge to limit scope of clinical trials (aiming at class label based on one pivotal study)

• Corresponds to US FoB/ FoPP, Japan SEPP, Canada SEB1

Bio-better

• Usually describes biotech drug copying established target…

• …but differentiated from genuine biosimilarthrough efficacy, safety or convenience advantage

• Requires individual testing of indications and big marketing spend to position drug

• May be launched before patent expiry of originator

1 Follow-on Biologics / Follow-on Protein Products, Subsequent-Entry Protein Product, Subsequent-Entry Biologic


… which are indeed applied by industry players

Originator •First-in-market biologic, patent protected•Approved as NCE

• Following first originator, but slightly modified• Approved as NCE

Secondentry

Biosimilar

“Copy biologic“

•Close copy of reference drug•Extensive comparability across all development phases according to EU/US/etc.

•Copy of reference drug•Not developed according to EU/US guidelines

• BINOCRIT®

• NEORECORMON®

• EPOGEN® / EPREX®

• ARANESP®

Example ESA

Bio-better •More favorable efficacy, safety or convenience•Full development program

• Various AsianEpo products

EPOGEN® and ARANESP® registered by Amgen, EPREX® registered by Johnson & Johnson, NEORECORMON® registered by Roche, BINOCRIT® registered by Sandoz


Originators also create “biosimilars” as they modify their original manufacturing processes

• Originators often make changes to their manufacturingprocesses after launch

• Originators do no or limited clinical testingto confirm impact of process change on product efficacy/safety

• Regulators well equipped to manage manufacturing changes

Current situation summary Totally new fermentation process

Different Master Cell Bank1 and only similar resultsto previous approach

• Pharmacokinetics: 25% higher AUC in single-dose study in dogs

• Antigenicity: higher antibody response in dogs

• Quality attributes: comparable (not identical)

• Pharmacodynamics: comparable (not identical)hemodynamic parameters

• Human safety, efficacy, and immunogenicitywere all comparable (not identical)

However… no clinical studies concluded with the commercial scale product (only 2,000L scale tested, not 15,000L)

Source: 2008 EPAR Variations Report1Creating Master Cell Bank for bioreactors instead of roller bottles


Key industry challenges – and Sandoz positionChallenge Typical perception Sandoz position

Challenging / new regulatoryenvironment

The process is the product -“Each monoclonal antibody is

unique...”

“…so is each patient population & indication.”

! Pragmatic regulations: biosimilarsapproved w/ rigorous criteria

! One common originator reference product used for Ph III clinical trials

! Approval should be granted when common MoA underlies multiple indications

Lack of mechanisms topromote use of biosimilars

“Why should I bother?”-- Physician

! Working with stakeholders to ensure that patient access is expanded

! Mechanisms in place to optimize benefit of lower cost biologics

Strong and entrenched opposition from originators

“The biotech industry’s reputation should not be put at risk by premature approval of

biosimilars”– Amgen

! Biosimilars approved in developed markets (e.g., US/EU) are safe, effective medicines that are rigorously tested

! Only high quality biosimilars that meet regulatory standards should be approved


Sandoz Biopharmaceuticals: Our Vision

We will dramatically increase worldwide patient access to essential, high quality biopharmaceuticals by advancing our global leadership position in follow-on biologics

Biosimilars – A sophisticated market with attractive growth …€¦ · 8 | Biosimilars...

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