Emerging Trends in Healthcare and Drug Development

Kurt Nielsen, Ph.DSenior Vice President of InnovationNovember 15, 2010New Orleans, LA

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The Drug Development Challenge

Reduce Cost

138318

802

1318

1975 1987 2001 2006

Year

Dev

elop

men

t Cos

t fo

r N

CE

Exceed Standards forRegulatory Approval

$600 Billion In

vested

Improve Safety & Efficacy

The results so far…

No substantial increase in NME approvals.

No substantial increase in R&D productivity in the last 60 Years!

Increase Speedto Market

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People over 65 are living longer

• Cost of therapy and increasing quality of life are important to patients and payors

• 30 % increase in cardiovascular deaths (24MM) and 63% increase in incidence of diabetes expected (450MM) by 2030

20 20

40

80

1920 1940 1960 2004

Year

• 1920: only 20% of the increase in life expectancy was over the age of 65

• 2008: 80% of the increase in life expectancy was over the age of 65

% increase in LE over the age of 65

Chronic Disease is an Ever Increasing Burden on Global Healthcare Costs

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Big Challenges Remain in Many Therapeutic Areas

• Chronic and Infectious Disease

• Dramatic increases in Diabetes and Cardiovascular Disease

• 1.3 Million New Cases of Tuberculosis to be treated in next 5 years

• Malaria remains endemic

• 50% increase in new cancer cases to 16MM by 2014 with 70% in developing world

Need for therapies that Improve Quality of Life and are cost-effective

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Cost is Important to Payors and the Patients

• Healthcare Costs has Outpaced GDP growth for 30 years

• Comparative Effectiveness Research (CER)

— CMS & NICE0

1

2

3

4

5

1977 1990 2000 2007

Index

of

Exp

enditure

s FederalStatePrivateGDP

• Cost of Medical Benefit vs. Drug Benefits may lead to increased scrutiny of outcomes from pharmacotherapy

• Tiered Co-pays and co-insurance provide incentive for patients to participate in healthcare decisions

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Pharmaceutical Market Growth

• Global market growth from $800BB to $1.1trillion in 2014

— 15%+ growth in biologics and emerging markets

• 2.5x growth in population age range from 65-70 thru 2050

— 60% increase in developing countries

• Chronic and infectious disease burden will grow

• Improvements in adherence and compliance

• Increasing utilization at lower cost

Growth will be Driven by

Demographics and Cost of

Therapy

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The Role of Pharmaceutical Sciences

ConsumerHealth

Increase overall success rate from 1 in 100 and improve clinical success above 15%

Prescription

Rx

Devices and Diagnostics

PharmaceuticalSciences

Biologics or Small Molecules

Drug Development

Drug Discovery

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In vitro and In silico Prediction Tools are Critical to Success

• Tools for ADME and Clinical Pharmacology will grow in importance for safety and efficacy

• Structure Activity Relationships (SAR) can drive improvements in safety and efficacy

• Predictive In silico tools reduce cost and increase speed of development

• More computing power is affordable

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Optimize Bioavailability Using Particle Engineering

• Discrete set of technology levers for drug developers to optimize bioavailability

• API form, size and habit thru structured particles in a wide variety of dosage forms

Optimize BA

ImproveSolubility

Improve Permeability

API Synthesis / Salt Formation

Softgel

Liquid filled capsules

Melt Extrusion

Nano particles / Nano crystals

Spray Drying

Particle milling /micronization

Novel Excipients/ Surfactants

Absorption & permeability

Enhancer

Lipids

API DESIGN / SELECTION & ENHANCEMENT

API SIZE REDUCTION

SOLID DISPERSION

LIQUID – LIPID SYSTEMS

• Several companies are perceived by the marketplace as being technology leaders

• Technologies applicable to oral, sterile and inhaled dosage forms

Technology Leader in Class Others

Particle Milling / Micronization Micron Several

Melt Extrusion / Melt Dose / Melt Granulation Bend

Rottendorf, Lifecycle Pharma

Misc. Lipid Systems / Self Emulsifying

N/A PHARES, Eurand, Liposine

Liquid Filled Capsules / Systems Capsugel and Qualicaps Swiss Caps,

PharmaForm, SOLIQS

ISP, Hovione, Agere

Banner

Elan

Bend

Catalent

Nanoparticles

Spray Drying

Softgels

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Improving Drug Safety and ADME

• Reduction of Adverse Events

— Solubility enhancement

— CYP P450 enzymes

— Transporters

— Elucidate and reduce drug-drug interactions

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The Symphony of the Genome, Proteome and Transcriptome

• Availability of Data will help drive Innovation

— In less than 30 years Genbank has over 98 Million sequences

— Over 64,000 searchable protein structures

— Genome Wide Association Studies (GWAs)

— Single Nucleotide Polymorphism (SNPs)

— Increasing Importance of Gene Regulation

• Recent Articles on Genomics

— “Association of Risk Reducing Surgery in BRCA1 or BRCA2 Mutation Carriers with Cancer Risk and Mortality” (JAMA)

— “Melanoma: An Unlikely Poster Child for Personalized Cancer Therapy” (NEJM)

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Areas to Watch Over the Next 5 Years

• Oral delivery of vaccines and complex molecules

• Global emergence of complimentary, preventive and integrative medicine

• Payors and patients demands for better outcomes at lower cost

• R&D focused on predictive tools to increase long term productivity

• Early attention to minimizing product COGS

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To Patients, We Can Make a World of Difference

At Catalent, we:

• Focus on the patient experience through better medication delivery

• Produce products in rapidly growing areas of unmet need, from cystic fibrosis to vaccines to pain management. We are at the intersection of patient therapy

• Innovate to meet our customer’s unique market needs

Innovating to meet patient needs drives our thinking

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