Single Use Technology in the Pharmaceutical industryParis, February 2014

The single-use technology (SUT) market is estimated to more than quadruple in the coming years, which will pull the need for compatible bioreactors of volume lower than 2000L

2

Disposables and related market estimates; the good manufacturing practice (GmP) market for single-use technology (SUT) today is estimated at us $150 million (for plastic tubing, manifolds, and connectors used with stainless steel systems).

For bioreactors, the market is almost equally divided between SIP and SUT. Most of the bioreactors in place have a volume inferior than 2000L.

“There’s been a shift from blockbuster drugs produced in massive quantities to niche-busters, so we’re moving toward smaller volumes at the same time that titers in bioreactors are getting higher”.

145,0

+107%

Biotherapeutics overall

300,0

0,50,6

5,3

1,32,8

12,5

+136%

R&D-support single-use systems

Total SUT marketUpstream (bioproduction)

+367%+160%

2016 est.2011Evolution of Biotechnology & Equipments Markets – 2011 to 2016, est., $ Billions -

Sources : contractpharma.com

Disposable Bioreactors have seen a peak of interest in late 2011, as well as a few months ago

3

Disposable bioreactors online queries – 2004-2013, % of maximum search volume -

Sources : Google Trends

The SUT still have many limitations which limit their implementation in the pharmaceutical industries

Manufacturing disposable equipment having high-quality/high-tech control systems at the same time is a big challenge, since these manufacturing processes need different core competencies.

Single-use sensors still have a lack of performance and, therefore, sometimes do not meet the needs for high-performance process control. Also finding materials free from leachables/extractables is still a challenge.

Manufacture single-use bioreactors that encompass microbial culture with, for example, high oxygen demand or a larger pH range is a challenge. The limits here are clearly the higher requirements for material stability and higher performance sensors, similar to nondisposable solutions.

Customers need to be open to redeveloping and optimizing their processes to the technology, which will result in an increased overall yield.

Single-use bioreactors are relatively expensive and have to be handled correctly to avoid damage. Construction of the bags requires mechanical welding of the seams and this needs to be of the highest quality in order to ensure that welds do not come apart and result in lost sterility and consequently loss of the entire run.

The complete lack of standardization renders the implementation of SUT, or any change in the production process more complex than necessary.

Customers are asking for more detailed characterization of films, raw materials, and other plastic components with the goal of better assessing the patient risk associated with production single-use bioreactors.

4Sources : genengnews.com

Substituting products are rare, however new competitors could emerge

Risks for GPC activity:

“Virtual R&D”.

Mutualization of R&D by CMOs growing larger.

Integration of bioreactor design and production in pharmaceutial companies / CMOs.

Low required investment to enter the market

5

The pharmaceutical market undergoes a financial transition which renders the development of new therapeutics even riskier than in the past

„The cost of developing an asset has remained relatively static while the likely revenues have declined. The cost of developing an aset, from discovery to launch, has increades slightly by four per cent from $1,089 milion to $1,137 in 2012. Average inflow per asset is forcast to decline by 14% relative to 2010 to reach a figure of $2,166 million in 2012.“

6Sources : Deloitte Life Science innovation Report

EU companies

EU comp.

EU companies

Only 5 out of the 12 biggest pharmaceutical companies have enough molecules in the pipeline to stay financially healthy in 2017

7

4,1 Bn€

12,0 Bn€

7,4 Bn€7,3 Bn€7,5 Bn€

6,5 Bn€

5,3 Bn€

Novo Nordisk

Johnson &

Johnson

3,0 Bn€

Bayer

9080

67

Novartis Merk Eli Lilly Astra-zeneca

Bristol-Meyers

Pfizer Sanofi Roche GlaxoSmith-Kline

6553

373528

56

218

603,2 Bn€

3,0 Bn€ 3,0 Bn€

5,3 Bn€

Number of drugs in developmentIncremental revenues from new pipeline 2012-2017

Drug pipeline & associated estimated revenues– 2012-2017est, # of drugs, Bn€ -

Sources : Businessweek

The number of clinical trials is still growing, but might reach a peak despite efforts made by goverments to facilitate drug devlopment

8

+26%+27%

+52%

+16%+19%+19%

49,3

2006

35,9

+30%

2005

25,0

2004

12,1

+15%

2003

10,3

2002

8,6

2001

7,0

2000

5,6

2007 2011

+15%+21%

2009

66,4

101,3

2010

119,4

+14%

83,5

20122008

138,8

+18%

Y-to-Y GrowthRegistered studies (thousands)

Evolution of number of clinical trials – Thousands of clinical trials, 2000-2012 -

Sources : clinicaltrials.gov

The market share of biopharmaceuticals is growing but is controlled by only a few key companies

9

451 477 509 540 572 602 632 664 695 727 750

2004

59959

(10%)

2003

56051

(9%)

2002

52346

(9%)

2001

48938

(8%)

2011

889

139(16%)

2010

69(11%)

128(15%)

2009

812

117(14%)

2008

770

106(14%)

2007

72795

(13%)

2006

68482

(12%)

2005

641

855Rest of PharmaBiopharmaceuticals

Evolution of the Pharmaceutical Market– Billion USD, 2001-2011 -

Biopharmaceutical Global Production Capacity – Share of production capacity, 2011 -

21%

6%8%

9%

9%

6%

7%

Others

Novartis 5%

Eli Lilly 5%

Sanofi

PfizerLonza Amgen

Boehringer Ingelheim

Johnson & Johnson

Roche25%

Sources : GiResearch

The top CMOs are based in Germany, Switzerland and the USA, and have made a growth of 9,9 % between 2011 and 2012

10

Top 10 CMO ranking– Million USD, # of Employees, 2012-

Of the top 27 european companies by R&D investment, 6 are Pharmaceutical companies, and account for 23% of the total investment in 2010.

11

In the pharmaceutical sector, the top 3 countries investing in R&D are :

United KingdomFranceGermany

BASF

Novo Nordisk

STMicroelectronics

Banco SantanderMerck DE

Philips ElectronicsRenault

SAPVolvo

FiatFinmeccanica

Peugeot (PSA)Boehringer Ingelheim

Alcatel-LucentBMW

EricssonEADS

AstraZenecaBayer

Robert BoschSiemens

GlaxoSmithKlineSanofi-Aventis

DaimlerNokia

Volkswagen

3,20

2,772,56

Continental1,41

2,452,40

1,40

1,971,94

1,34

1,801,73

1,27

1,731,701,63

3,02

1,53

3,08

3,824,244,384,39

4,854,94

6,26

3,21

Top 27 European Investors in R&D– Billion Euros, 2011 -

Sources : The 2011 EU Industrial R&D Investment Scoreboard

Although the number of approvals is similar in Europe and in the U.S.A., France is less and less involved in new drug development

The Food and Drug Administration (FDA) approved the same number of new drugs in 2010 and 2011 as the Medecines Agency (EMA), +/-1. However, France is less and less chosen by the EMA as reviewer in centralized procedures.

Also, only 7% of AMM filing belonged to France in 2010 vs. 14% in 2009.

12Sources : LEEM

There is a cyclical tendency that might reflect the intensive financial needs of the pharmaceutical industry

13

22

363435

26

38

32

2622

3026

36

4341

45

50

2628

39

30

21

2624

1822

20

36

2117

2427

35

30

39

53

29

2125

2011 20121999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20101993 1994 1995 1996 1997 1998

NME/NBE filingsNME/NBE approvals by the FDA

Filings of NME/NBE and approvals by the FDA– # of filings & approals, 1993-2012 -

Sources : FDA Filling and approval file Allyprime