disruption and maturity: the next evolution of biologics
TRANSCRIPT
Copyright © 2017 QuintilesIMS. All rights reserved.
Disruption and maturity: the next evolution of biologics
Sarah Rickwood, Vice President, Thought
Leadership
2
1. Continued growth, but increasing maturity
2. Huge clinical potential
3. Exciting science
4. An immature market
Could replace the next slide making the point about maturity
Four facts about the biologics market
3
Biologics has trended consistently above the growth of
the global market, in good times and bandThe US is overwhelmingly the most important market
Source: QuintilesIMS MIDAS MAT Q2 2016; Share of growth in LC$. Brazil and Mexico non-retail included
Global biologic sales and trends
2011-16
-2%
0%
2%
4%
6%
8%
10%
12%
14%
0
50
100
150
200
250
2011 2012 2013 2014 2015 2016G
row
th, L
CU
S$
Bio
log
ic s
ale
s (U
S$
bn
)
Biologics Sales Biologics growth
Small molecule growth Global Pharma growth
58%
17%
6%8%
11%
US EU5
Japan Pharmerging
RoW
66%
11%
4%
9%
9%
Biologics – 2016 Share of sales
Biologics – Share of 5 yr growth
4
As the largest biologics market, the US is also leading
maturation
0
10
20
30
40
50
60
20
09
20
08
20
13
20
10
20
14
20
12
20
11
20
15
18%13%
20%21% 23%
16%
42%
11%
32%
2%8%7%
3%
12%10%
53%
Ne
t sa
les a
dju
stm
ent (%
)
Autoimmune
Diabetes
US: Diabetes and Autoimmune Net sales adjustment *
Biologics: Highly competitive indications
and targets
• Autoimmune: (RA, Psoriasis)
• Diabetes: (LA Insulin, SA Insulin, GLP-1)
• Oncology: (Checkpoint inhibitors, EGFR)
• Respiratory: (IL5, IL-13)
• Dyslipidaemia: (PCSK9)
Several biologic molecules with the
same MoA. Me-too’s?
Some typical biologic TAs are seeing
small molecules competition
Higher promotional spending
requirements
Source: IMS Institute for Healthcare Informatics, MIDAS Dec 2015, annual company reports; *Diabetes and
Autoimmune definition includes biologics and biosimilars
5
Several therapy of the biologic market have now
reached maturity – we are in a new era
Low High
Maturity of top 5 biologic Therapy areas
Lo
w
Pa
tie
nt p
op
ula
tio
n p
en
etr
ation
Market/patient need satisfaction
Autoimmune
Oncology
Vaccines
Blood
coagulation
Diabetes
6
Four trends to create the biologics market beyond 2020
Biologic TA expansion
Biologic M&A
Disruptive Drugs and
Technologies
Biosimilars
2016
Biologic
Market
2020+
Biologic
Market
7
Four trends to create the biologics market beyond 2020
Biologic TA expansion
Biologic M&A
Disruptive Drugs and
Technologies
Biosimilars
2016
Biologic
Market
2020+
Biologic
Market
8
Oncology will be increasingly dominant, but new TAs
for biologics proliferateHalf of the biologic pipeline falls outside of the top 5 biologic TAs
Source: QuintilesIMS MIDAS MAT Q4 2015
Biologic sales and PII+ pipeline by Therapy Area 2015
32%
50%
8%
15%
31%
20%
7%
10%
18%
5%3%
2015 Sales
US$bn
$221Bn
2015 Pipeline
(PII - Reg)
n = 848
0%
Autoimmune
All Others
Oncologics
Vaccines
MS
Diabetes
9
Over the next five years biologics will enter indications
not typically treated with biologics
Source: QuintilesIMS R&D Focus Q4 2015; Thought Leadership analysis
9
9
10
12
12
13
14
14
14
21
25
27
31
36
42
0 5 10 15 20 25 30 35 40 45
Osteoporosis
Stroke
Osteoarthritis
Malaria
COPD
Heart failure
Pain
Ebola
Parkinson’s
Allergy
HIV
Asthma
Alzheimer’s
No. of pipeline candidates for indication
Uveitis
Dengue fever
Biologic pipeline: non-traditional biologic indications(Pre-Clin to Reg)
Total 25%
biologic
pipeline
Common Factors
• Dominated by small molecules –
highly genericised
• High patient population
• Aim to treat severe subsections
of these indications
• High cost per patient cause
payer concern
• Mixed experience to date with
pioneer biologics taking this
route (Xolair in respiratory,
Praluent in hyperlipidemia)
• Biologic specific challenges
such as patient targeting,
infrastructure and administration
10
However, there remains a sales challenge for the
biologics entering non traditional areas
Source: IMS Health MIDAS Q4 2015; Top recent launches are top launches within the last 5 years
0
10
20
30
40
50
60
M0 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12
Mon
thly
sale
s (
LC
US
$ M
n)
Months post launch
Opdivo
Yervoy
Cosentyx
Keytruda
Trulicity
Prolia
Repatha
Praluent
Nucala
To
p re
ce
nt
Non
-trad
bio
logic
s
US launch: Top recent biologic launches vs. biologics in non-traditional therapy areas
11
New biologics will see profound change in the next five
years..
Souce: QuintilesIMS The next frontier for biologics: Non-traditional Therapy Areas
Incre
menta
l effic
acy
Narrow Broad
Lo
wH
igh
Patient population
Respi
biologics
PCSK9
inhibitors?
Osteoporosis
biologics
Alzheimer’s
DMARD
biologic?
What happens now Xolair
is joined by Nucala,
Cinquair, and
benralizumab?
What happens now
Repatha has shown a 27%
reduction in heart attach
risk in patients with
atherosclerosis?
What happens when Prolia
is joined by
romosuzumab?
12
Four trends to create the biologics market beyond 2020
Biologic TA expansion
Biologic M&A
Disruptive Drugs and
Technologies
Biosimilars
2016
Biologic
Market
2020+
Biologic
Market
13
The pipeline has focused on mAbs, but novel
therapeutic classes are in trials
Source: QuintilesIMS R&D Focus Dec 2014. Biologic compounds only, Phase II through Registration
Pipeline Biologics by Technology Class,
(Ph II – Registered)
0 50 100 150 200 250
Gene therapy 45
Peptides 78
Vaccine 165
mAbs 225
Other non recomb. proteins 90
Other recomb. proteins 61
Interferon/cytokines 14
mAb Drug Conjugate 17
Cell therapy 29
Antisense/RNAi 44
Pre-reg/Reg
Phase III
Phase II
Total
768
15% of
biologic
pipeline
14
Delivery can also be innovative
Intravenous Subcutaneous Inhaled Implanted
IntranasalTransdermal
(micro needle)
Quick dissolving
filmOral
15
Timescale of costs: unusual compression of cost
Upfront cost of treatment vs lifetime benefit
Individual benefit vs societal benefit
Outcome uncertainty with new and very novel therapies
New innovations (often lead by biologics) will challenge
the funding status quo
16
Increasingly, alternative funding mechanisms must be
explored
Time from therapy initiationP
atie
nt se
ve
rity
Annuities
• Upfront payment to
manufacturer by 3rd party
which then receives
annuities from healthcare
system for use of product
• Still questions of where risks
and product responsibility lie
Differential
pricing Population that see
clinical benefit, but
are not yet severe
Severe population
who would be
eligible now
Annuity payments
• Widens access to patients
who would have treatment
restricted
• Could have no data tracking
requirements- severe
population size agreed before
• Can have multiple tiers
Standard
price
Price closer
to COGS
Performance
related price
Drug failure, patient
death etc.
Payment
for drugProposed efficacy
durationLost value
Time from therapy initiation
• Based on agreed RWE upon
study completion
• Risks if agreement poorly
judged or product does not
perform as expected
17
M&A continues as a key biologic market driver
Biologic TA expansion
Biologic M&A
Disruptive Drugs and
Technologies
Biosimilars
2016
Biologic
Market
2020+
Biologic
Market
18
The price to acquire a biologic product tripled between
2012 and 2016
Source: Pharma Deals Nov 2016; 2016 no. of deals extrapolated to the expected full year figure
Value and number of biologic pipeline product deals 2006-2016Deals must be product focused, Most commonly these are Licensing, Collaborative R&D, Technology sharing and M&A
Key drivers in
biologic asset
demand
• Exciting innovative
products with
scientific
developments
• Biologics have
become a
established business
model
• High availability and
low interest rates of
capital
• Competition for the
best biologic assets
is driving up prices
•
69
56
39
182324
313336
21
0
10
20
30
40
50
60
70
80
0
50
100
150
200
250
300
350
400
2016
(F)
No. o
f bio
logic
de
als
Dea
l u
pfr
on
t va
lue
(U
S$
mn
)
59
2015201420132012201120102009200820072006
Average deal upfront paymentNo. of biologic product deals
19
The increase in deals came from early stage assets
Source: QuintilesIMS Pharma Deals Q4 2015
5390
151
82
623
4882
260
143
1,015
0
200
400
600
800
1,000
1,200
No, o
f b
iolo
gic
de
als
Phase 3Phase 2
-9%
+72%
+74%
+63%
Pre-reg/regPhase 1Discovery/
Preclinical
-9%
2011-20152006-2010
Number of biologic product deals by phase of primary product2006-10 vs 2011-15
71% of deal growth is in
Discovery/ Preclinical
Early deal drivers
• Increased competition for
deal making leaves fewer
low-hanging late stage
assets
• High cost of deals pushes
towards early stage
development assets
• Pharma has greater
comfort in early stage
biologic deals
• To balance early stage
risk, milestones make up
more of the deal value
20
Four trends to create the biologics market beyond 2020
Biologic TA expansion
Biologic M&A
Disruptive Drugs and
Technologies
Biosimilars
2016
Biologic
Market
2020+
Biologic
Market
21
Key blockbuster biologics would have reached a phase
of relief for payers (if they were small mol.)The lack of released funding could disrupt innovative medicine funding
Loss of
exclusivity
Pro
du
ct lif
ecycle
sa
les
The biologic lifecycle funding challenge
Launches
~2000LoE
~2010-152020
For the next five years biosimilars
will not have huge relief for payers
Funding for
new launches
not released
Biologic
Small
molecule
e.g. Lipitor
e.g. Remicade
22
Half the top biologics have lost protection in Europe
Source: QuintilesIMS MIDAS Q4 2015; Lovenox excluded
Europe Top 10 Biologics sales by region EU expiry date
Adalimumab (Humira) 2018
Etanercept (Enbrel) Expired
Trastuzumab (Herceptin) Expired
Infliximab (Remicade) Expired
Bevacizumab (Avastin) 2019
Rituximab (Mabthera) Expired
Ranibizumab (Lucentis) 2022
Insulin Glargine (Lantus) Expired
Aflibercept (Eylea) 2025
Darbepoetin Alfa (Aranesp) 2016
1 20 43
1.374% 26%
1.486% 14%
1.872% 28%
1.973% 27%
0.876%
24%
1.081% 19%
Sales 2015 (US$ Bn)
65% 35%
2.070% 30%
2.269% 31%
3.672% 28%
1.9
EU5 Other EuropeMolecule no
longer protected
Biosimilar delay
factors:
• Cost
• Complexity in
development
• Patent
Uncertainty,
Europe wide/local
• Regulatory
difficulties and
uncertainties
23
No country has high penetration in all biosimilars, UK
and Italy lead EU5
Source: QuintilesIMS MIDAS MTH Nov 2016
High
uptake
Low
uptake
Europe: Biosimilar share of molecule treatment days
EU
5
Hig
h
pe
ne
tra
tio
n
EU
Biosimilar treatment day share (November 2016)
Country infliximab insulin glargine etanercept
UK 60.9% 1.1% 30.8%
France 27.7% 0.5% 0.7%
Germany 26.7% 4.9% 16.2%
Italy 46.0% 11.6% 0.8%
Spain 32.9% 6.6% 0.2%
Finland 92.1% 0.9% -
Norway 95.6% 1.8% 69.0%
Poland 97.7% 31.5% 0.0%
Denmark 97.8% 4.0% 78.7%
24
For Infliximab, the top 5 European countries do not
lead
Source: QuintilesIMS MIDAS MTH November 2016 ; Denmark data from MIDAS Monthly Restricted database; Latvia
excluded because only biosimilar manufacturers present in market
0%
20%
40%
60%
80%
100%
M0 M10 M20 M30
In
flix
imab
bio
sim
ilar u
pta
ke (
treatm
en
t d
ays)
Denmark Poland Norway Italy UK
Spain Germany France Finland Croatia
98%
96%
46%
61%
33%
28%
27%
EU5
Tender
system
markets
Other European
countries
98%
92%
Europe: Infliximab biosimilar market share in treatment days
25
But national data can hide a more complex subnational
picture
Source: QuintilesIMS UK data Q4 2015
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15
Infliximab biosimilar usage by hospital trustOnly includes trusts using >50% biosimilar
Bio
sim
ilar
sh
are
of tr
ea
tmen
t d
ays
26
Infliximab usage increases post biosimilar entrance
Source: QuintilesIMS MIDAS Q2 2016
25
0
5
15
20
10
30
13%
8%
Q2
2015
Q4
2015
+27%
100%
Q2
2012
20
100%100%
Q2
2013
21
100%
Q4
2012
21
27
Q2
2016
29
69%
16%
15%
Tre
atm
en
t d
ays
(M
illi
on
s)
79%
25
90%
6%
4%
Q4
2014
24+15%
98%
Q2
2014
23
99%
Q4
2013
22
RemicadeRemsimaInflectra
Europe: Treatment increase as a result of biosimilar usage
Country
Infliximab
TD %
increase Q2
2012- Q2 14
Infliximab
TD %
increase Q2
2014- Q2 16
France 16% 35%
Germany 25% 22%
Spain 0% 25%
Italy 6% 9%
UK 27% 27%
Norway 19% 56%
Finland 12% 45%
Europe 15% 27%
Biosimilar
introduction
in Europe
27
Insulin biosimilars low penetration in EU5 countries
Source: QuintilesIMS MIDAS MTH November 2016, Denmark data from MIDAS Monthly Restricted database
Europe: Insulin glargine biosimilar market share in treatment days
0%
5%
10%
15%
20%
25%
30%
35%
M0 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16
Ins
ulin
gla
rgin
e b
ios
imil
ar
up
tak
e (
tre
atm
en
t d
ays
)
Spain Germany UK France Italy
Poland Slovakia Czech FinlandOther European
countries
12%
1%
7%
0.5%
5%
EU5
25%
32%
12%
High penetration
markets
28
Oncology will be next
Source: EMA website June 2016; Launched biosimilars have not been included
Europe: Recent biosimilar filings
Originator Name
(molecule name)
Therapeutic
area
Total pending
EMA applications
Originator
protection
expiry
European
Revenue
2016 (Bn €)
Enbrel (etanercept) Autoimmune 2 Aug-2015 €2.0 Bn
Lantus (insulin glargine) Diabetes 1 May-2015 €1.1 Bn
Herceptin (trastuzumab) Oncology 2 Jul-2014 €1.8 Bn
Mabthera (rituximab) Oncology 2 Feb-2013 €1.7 Bn
Humira (adalimumab) Autoimmune 3 Apr-2018 €3.4 Bn
Neulasta (pegfilgrastim) Oncology 4 Aug-2017 €0.5Bn
29
Each country has its own story, but only one direction
Stakeholders are making decisions which will have
lasting impact
Countries can increase usage while reducing costs
Early planning of follow-on innovation is key
Biosimilar conclusions
30
Disruption and maturity: the next evolution of biologics
• The impact of biosimilars will bring market growth dynamics in line with small molecules
• The competitive field has expanded, we have entered the era of me-too biologics
• Select biologic markets are relatively satisfied
• Players are more comfortable with biologic deal making and are willing to take greater risks
A market reaching maturity
• Biologics entering new high potential TA’s
• Biosimilar entrance will disrupt the top biologic players, refreshing the score sheet
• Breakthrough innovation in the pipeline threatens current treatment paradigms
A market awaiting
disruption