Disruptive Technologies and Business Models Driving Industry Transformations
2016 Global Life Sciences Predictions
May 2016
2
Section Slide Number
Mega Trends 03
Transformation in Global Life Sciences Ecosystem 04
Ten Big Market Themes For Life Science Companies 05
Key Trends in Life Science Research Tools 06
Key Trends in Clinical Diagnostics 09
Key Trends in Pharmaceuticals 12
Concluding Thoughts 19
About Frost & Sullivan 20
Contents Contents
3
Mega Trends-Behavioural Shifts are Redefining the Market
Beyond Oncology for
Companion Diagnostics
Monetization for Chronic
Disease Care Coordination
“Beyond the pill” for
Pharma
Globalization Necessitates
Supply Chain Innovation
Regenerative Medicine
Promise Fuels Investment
Launch of Clinical mHealth
Apps
4
Transformation in Global Life Sciences Eco-system New demand spaces and shifting payment landscape are transforming fortunes of Research Tools, Clinical
Diagnostics, and Pharmaceutical companies
Life Science Research Tools
and Lab Products Diagnostics Pharmaceuticals
Ma
rke
t P
laye
rs
Dis
rup
tive
Co
mp
an
ies
P
rod
ucts
Consumables Lab Supplies Clinical
Instruments
Diagnostic
Tests
Services Companion
Diagnostics
Therapeutics CDMOs
5
Ten Big Market Themes for 2016
Rapid Growth in Single-cell
Genomics Research
Better defined regulatory
pathways will boost
Biosimilars Market
CRISPR/Cas9 Technology
Hot Amongst multiple
Industry participants
Cardiovascular, Oncology-
next wave of Cell Therapy
products
Liquid Biopsy Provides
Attractive Investment
opportunities
Biologics Contract
Manufacturing on the rise
Molecular POCT-Lucrative
M&A Opportunities Prevail
Hybrid Models drive BI
embedded in Clinical Trial
Informatics
Immunotherapies on the
fast trajectory
Social Media as an enabler
for Outreach Programs
09
07
10
04
03
02
05
01 06
08
Key Trends in Life Science Research Tools
7
0
10
20
30
40
50
0
50
100
150
200
250
2013 2014 2015
FY Total Cost 84.0 129.0 203.0
Growth Rate 53.6 57.4
Gro
wth
Rate
(%
)
FY
To
tal C
ost
($M
)
National Institutes of Health – Funding of Projects
Mentioning Single-cell Genomics, 2013-2015
Note: Grants included mentioned “single cell” and “genomics” or “single cell” and “sequencing”. All figures are rounded. Source: Frost & Sullivan; NIH RePORTER
Early 2016 will stand as a very significant transition for the single-cell genomics market as the
competitor base will nearly double this year. A number of life science research tools companies have
announced the launch of new products, or partnerships to enter the quickly growing market.
Single-cell genomics is a hot topic among life
science research tools companies, as they
race to enter the market in 2016. Fluidigm,
Thermo Fisher Scientific, and WaferGen
Bio-Systems were already positioned in the
market when Bio-Rad, Illumina, Qiagen,
and 10x Genomics announced their own
plans to enter this burgeoning market. Frost
& Sullivan expects the market entry rush to
continue through 2016.
An analysis of NIH-funded projects
mentioning single cell genomics from 2013–
2015 finds that funding totals are growing
rapidly each year. This funding soar mirrors
the rise of microRNA and epigenetics-based
research between 2005–2010 that caused a
similar urgency for companies to launch new
products to take advantage of market growth.
Rapid Growth in Single-cell Genomics Research and
Funding Drives New Market Entries in 2016
8
0
100
200
300
400
500
600
700
0
50
100
150
200
250
300
350
2013 2014 2015
FY Total Cost 12.5 87.0 288.0
Growth Rate 596.0 231.0
Gro
wth
Ra
te (
%)
FY
To
tal C
ost
($M
)
National Institutes of Health – Funding of Projects
Mentioning CRISPR/Cas9, 2013-2015
CRISPR/Cas9, a gene editing technique, can make targeted modifications to DNA accurately, cost-
effectively, and reliably. This technique catapulted onto the research scene in 2014 and companies
are flocking to provide research tools and develop therapeutics using the technology.
An analysis of NIH-funded projects mentioning
CRISPR/Cas9 from 2013–2015 finds
astronomical growth of this promising gene
editing technology. From 2013 to 2014 funding
grew 7x, and from 2014 to 2015, funding more
than tripled. Academic researchers are not the
only end users adopting CRISPR/Cas9, as the
technique is having a major impact in
therapeutics as well. The technology overcomes
may of the challenges with RNAi, TALENs, and
ZFN genome editing tools, promising to be a
market worth hundreds of millions over the next
few years.
Key companies along the spectrum of
CRISPR/Cas9 products and therapeutics include
Caribou Biosciences, Thermo Fisher Scientific,
Sigma-Aldrich, New England BioLabs, Clontech,
GeneCopoeia, OriGene, CRISPR Therapeutics,
and Editas Medicine, among others.
CRISPR/Cas9 Technology Hot Amongst Research Labs and
Therapeutics Companies
Note: Grants included mentioned CRISPR, CRISPR-Cas9, or CRISPR/Cas9. All figures are rounded. Source: Frost & Sullivan; NIH RePORTER
Key Trends in Clinical Diagnostics
10
Liquid Biopsy technologies such as NGS, qPCR and dPCR will focus increasingly on Therapy Selection
and Diagnosis
GRAIL (Illumina) - $300 million
Iniviata - $45 million Series A
Exosome $60 million; Series B
Guardant Health $100; Series D
2016 Recent
rounds of funding
IVD Market (Global)
~$60 Bn + CAGR (2016-2020) = 8%
Liquid Biopsy Technologies (Global)
~>$1 Bn + CAGR (2016-2020) =
20%
Risk
assessment
& Screening
Diagnosis Therapy Selection
$15 Bn $20 Bn
Staging and Prognosis
Monitoring
Near term
opportunities for
the application of
liquid biopsy
include oncology
and non invasive
prenatal testing
Market Size
Gro
wth
Pro
sp
ec
t fo
r L
iqu
id B
iop
sy T
ec
hn
olo
gie
s
Liquid Biopsy - An Increasingly Crowded Technology
Market Provides Attractive Investment Opportunities
ctDNA
Technologies
CTC
Technologies
High
Low
NIPT
WW~$3
.75 bn
Oncology
WW-22bn
Infectious
Testing
WW-$9.47 bn
11
High
Low High
Oncology
WW-$22bn
Infectious
Disease
WW-9.478 bn
Cardiac
WW-$1.6
Bn
Diabetes
WW ~
$16.8 Bn
Molecular POCT - Traction in Public and Private Funding
Followed by Lucrative M&A Opportunities Prevail
IVD Market (Global)
~$60 Bn + CAGR (2016-2020) = 8%
POCT Market (Global)
~$8.3 Bn + CAGR (2016-2020) = 9%
Molecular
POCT Device
Companies
(Roche)
HCIT
Capabilities
Market Attractiveness
Mark
et
Siz
e
Market Trends
• Attractive pipeline products
for molecular POCs keep
the innovation curve high,
as the market moves
toward true portability.
• This area opens
opportunities for partnership
with non-HC firms to
develop mobile solutions
and data enhancement
devices to aid coordinated
care from various sites.
• Requirement for cheap
disposable consumables
generates interest amidst
chip providers.
• Infectious disease testing
(such as Sepsis, HIV, and
Ebola) and cardiac remain
the near term most
opportunistic segments for
molecular POC applications
while oncology may be a far
- term opportunity .
Key Trends in Pharmaceuticals
13
Immunotherapies on the Fast Trajectory Checkpoint Inhibitors stress tested as Magic Bullet for cancer treatment
• Lack of solid outcomes and benefits with solid tumors have pushed pharma to invest in
immunotherapies- most valuable pharma R&D assets in 2016.
• Major segments include checkpoints, adoptive therapies, and vaccines. High value
assigned to checkpoint agents- development of robust companion diagnostics remains the
weak link.
• Growth trajectory will be moderated based on:
• Responder groups- Significant subset (>70%) do not respond to best agents
• Toxicity and Efficacy results- Severe toxicity for marketed CTLA4 products
• High costs (>100,000 per annum) and increasingly used in combination therapies
Checkpoints Adoptive Cell Therapy Vaccines
14
0.0
20.0
40.0
60.0
80.0
100.0
120.0
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2014 2015 2016 2017 2018 2019 2020
Revenue 1,673.3 2,672.8 5,659.3 9,672.6 16,050.7 24,088.2 30,381.6
Growth Rate 59.7 111.7 70.9 65.9 50.1 26.1
Year
Total Biosimilars Market: Revenue Forecast, Global, 2014-2020
Re
ve
nu
e (
$ M
illio
n)
Gro
wth
Ra
te (
%)
-
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Patent Expiries, Better Defined Regulatory Pathways and
Escalating Healthcare Costs Will Boost Biosimilars Market
2016 will be most watched with the launch of Remicade and Enbrel Biosimilars
15
Note: Highest stage of development depicted.
*Other includes acute radiation syndrome and diabetes; does not include orphan drugs.
Cardiovascular, Ocular Therapies and Oncology Will Be the
Next Wave of Cell Therapy Products
Source: Frost & Sullivan
Phase 3
Phase 2
Phase 1
Marketed
AC607
(Allocure)
MESENDO
(TCA)
AMIMultiStem
(Athersys)
ALD-201
(Aldagen)
SB623
(SanBio)
MSCs
(Stemedica)
ALD-401
(Aldagen)
PDA001
(Celgene)
CD34+ cells
(Baxter)
MultiStem
(Athersys)
Revascor
(Mesoblast)
MyoCell
(Bioheart)
Ixmyelocel-T
(Aastrom)
HSSC
(Neuralstem)
MA09-hRPE
(Advanced Cell
Technology)
HSC835
(Novartis)
NiCord
(Gamida)
CLT-009
(Cellerant
Therapeutics)
HuCNS-SC
(StemCells, Inc.)
Autologous stem
cells (TCA
Cellular Therapy)
HuCNS-SC
(StemCells, Inc.)
CLT-008
(Cellerant
Therapeutics)
StemEx
(Gamida)
MPCs
(Mesoblast)
Chondrogen
(Osiris
Therapeutics)
Prochymal
(Osiris
Therapeutics)
MultiStem
(Athersys)
PDA001
(Celgene)
PDA001
(Celgene)
GBT009
(Garnet)
GBT009
(Garnet)
PLX-PAD
(Pluristem)
ALD-301
(Aldagen)
Prochymal
(Osiris/Genzyme)
Adipose-Derived
Regenerative
Cells (Cytori)
Stempeucel
(Stempeutics)
C-Cure
(Cardio3
Biosciences)
VC-01l
(ViaCyte)
ChondroCelect
(TiGenix NV)
Anterogen
(Cupistem)
Orthofix
(Remestemcel-L)
Cap – 1002 (Capricor)
Prochymal (Osiris
Therapeutics)
16
Outsourcing of Biologics Manufacturing to Emerging
Markets is Becoming Increasingly Attractive
Biologics and Final Dose Formulation (small molecules)
Contract Manufacturing Market: Revenue Forecast, Global, 2011-2020
0
5
10
15
20
25
30
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Biologics 1.86 2.06 2.30 2.63 3.03 3.41 3.81 4.27 4.72 5.19
Small Molecules 12.69 13.43 14.27 15.25 16.45 17.83 19.49 21.37 23.45 25.80
Reve
nu
e (
$ B
n)
Biologics
CAGR (2015-2020) = 11.4%
Small molecules
CAGR (2015-2020) = 9.4%
US 50.4%
Europe 27.8%
Asia 19.4%
ROW 2.3%
2015
US 47.1%
Europe 25.9%
Asia 24.5%
ROW 2.5%
2020
Biologics CMO Market: Regional Sales, Global Biologics CMO Market: Growth Rates, Global
Region Growth rate (CAGR),
2015-2020
The United States 9.9%
Europe 9.8%
Asia 16.6%
ROW 12.9%
17
Trial
Performance
Mgmt
Resource &
drug supply
optimization
Patient
Recruitment
&
Retention
BI Embedded in Clinical Trial Informatics on the Rise
with Hybrid Business Models
Site Monitoring Analytics (R&D) accelerating time to outcomes will lead to wider adoption of Adaptive Trials
and Risk Based monitoring.
Operational
Trial design
simulation
• Expected
mean trial
length and
cost
• Optimal trial
size prediction
• Devising
retention
strategies
• Optimized
CRA
resourcing
• Just-in-time
supply
• Actionable
intelligence on
trial execution
Traditional BI
vendors
Hybrid BI
vendors
• Perpetual License
based procurement
• Customized
Implementation
• Client server based
web interfaces
• Structured,
homogenous data
• Pay per use models
• Out of box &
Configurable
• Cloud, Mobile,
Social
• Structured,
unstructured,
heterogeneous data
Company to
watch out
Contains records from nearly 100 million patients from multiple healthcare providers. Draws on
a wide variety of data about each patient, including symptoms, genomic data, test results,
diagnoses, treatments and outcomes to be used for Trial Design
End goal of CT Analytics : Creating predefined operational changes based on real-world accumulated data(Adaptive)
and quantitative risk profile for monitoring trials(RBM)
18
Company to
watch out
Social Media as an Enabler for Patient Engagement
and Physician Outreach
Growth
Drivers
Drug Discovery
“ R&D Pain areas “
Pharmacovigilance
“AE monitoring”
Sales and Marketing
“ Sentiment Monitoring “
• Identification of unknown AE of
the drug
• Monitor and track the sentiments
towards a drug
• Facilitate Pharma to proactively
respond to the issues that could
impact business
• Identification of Key opinion
leaders
• Receive early warnings for market
developments
• Manage and preserve brand
equity
• Patient Recruitment and protocol
development for clinical trials
• Identify rare genetic diseases
4,401 tweets out
of 6.9 million
resembled ADR-
a report by FDA
90% of side
effects are not
reported
Healthcare
Tweets-
1,100,087,485 and
counting
11% of caregivers
and 6% of
patients share
experiences
online
FB generates
500+ TB of data
every day
57% physicians,
26% patients
generate AE
reports
Teradata® Unified Data Architecture.™ to increase the efficiency, productivity, and cost-
effectiveness of life sciences analytics, including real-world outcomes research based on Social
Media data
The Data Deluge on Social Media
19
Concluding Thoughts
Source: Frost & Sullivan
2016
Global
Lifesciences
Market
How will you
monetize Innovative
Therapeutics,
Biosimilars &
Molecular Diagnostics
to align with Value
based Care Models?
How will you
effectively create
Patient Engagement
Platforms, through
site of care evolution
outside the hospital?
Who will be your
partners in the
new era of Open
Innovation?
Where is your
organization most
vulnerable to
pending disruptions
and transformation in
Contract Research
and Manufacturing?
What are the
opportunities for new
business models and
services in Liquid
Biopsy, Single Cell
Genomics and
CRISPR/Cas9?
About Frost & Sullivan
21
More than 2,000 analysts and consultants globally curate insights from 40+ industries.
Insights that single focused information companies and strategy consultancies may miss
Market Intelligence,
Growth Consulting &
Implementation
Expertise
We are also able to support
you to grow your business or
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Frost & Sullivan has successfully
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on relevant global markets
Approach & Techniques
designed to address your
specific needs
Benefits in
Partnering with
FROST & SULLIVAN
through this Service
Frost & Sullivan is uniquely positioned to help clients
understand industry transformations
22
2016 Global Life Science Program Coverage
Emerging
Technologies
Pharma &
Biotech
Research
Tools
Clinical
Diagnostics
Pharmaceuticals & Biotech
• Generics 2.0
• Cell Therapy
• Oncology
• Diabetes/Metabolic Diseases
• Neurology
Clinical Diagnostics
• Molecular Diagnostics
• Point of Care Testing
Research Tools
• Next Gen. Sequencing
Services
• Next Gen. Sequencing
Informatics
Emerging Technologies:
• CRAMS
• Biologics & Biosimilars
• Bioprocessing
2,3
4
1
3
1
2
4
23
Limited in terms of countries covered
and analyst expertise on the ground.
Global research often written from a
US base
Content only and/or limited
interactivity with analysts
Typically only a supply side
perspective
Typically only support MI and
Marketing
Focus only on a single sector of the
life sciences industry, limiting breadth
of coverage and depth of perspective
Frost & Sullivan Transformational Health Others
Our Core Value Proposition vs Others
Unparalleled breadth and depth of coverage of life sciences
value chain: Life Sciences research --> Clinical Development -->
Marketed Therapeutic Product--> Diagnostics
Highly qualified analyst teams (e.g. PhDs, Physicians and ex
Industry) on the ground in 40+ countries including 25 Emerging
Markets
Our reports are just the beginning of our market thought
leadership. We provide “any time” “any place” analyst access so
that our clients can connect with our team for market briefings, ad
hoc market/competitive insights or secondary research needs
allowing us to maintain partnerships with 7 of 10 leading Life
Science companies.
Map convergence of Pharma, Diagnostics
Medical Device, ICT, Consumer, Retail, Supply chain
Our portfolio of market, technology, competitive and economic
information supports not only MI / Marketing, but Bus Dev,
Corporate Strategy/ Innovation, R&D, etc.
Life Science Focus Areas
Global Expertise based
on Global Teams
Real Time
Interactivity
Actionable
Insights
Support of Multiple
Corporate Divisions
24
Customized Solutions for Strategic Needs
End-to-end Research Coverage Consulting Focus
NEW CHANNELS and MARKETS
PRODUCT DEVELOPMENT
M&A, ALLIANCES SUPPORT
SCENARIO PLANNING
STRATEGY DEVELOPMENT
IMPLEMENTATION
PROCESS OPTIMISATION
Market Analytics
• Industry projections (revenues, pricing)
• Competitive dynamics
• Customer segmentation/penetration
• Technology trends
One-on-One Analyst Interaction/Briefings
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Workshops: Insights to Implementation
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and proven corporate and business strategies,
processes, and tools to help companies implement
growth processes at best practice levels.
Non Exhaustive Client List Companies Span across Pharma, Diagnostics and Research Tools in the 4 Targeted Therapeutic Areas.
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