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March 20th 2013
Outsourcing Dynamics for Bioavailability
Deepika Pramod ChopdaResearch Analyst - Life SciencesFrost & Sullivan
Bioavailability Challenge 2013
2
Focus Points
Challenges and Market Demands around Bioavailability
Overview—Current Scenario surrounding Bioavailability
Source: Frost & Sullivan analysis.
Shifting Trends–Bioavailability Outsourcing- CRO’s and CMO’s
Focus Points
Key Strategies and Conclusions
3
Overview—Current Scenario surrounding Bioavailability
Source: Frost & Sullivan analysis.
Overview
Introduction
Demand
Competition
Outsourcing
Bioavailability is the rate of an active pharmaceutical ingredient absorbed from a drug product to an extent of it being available at the site of action.
Rise in disease incidence rate triggers the demand for new and improvised drug development, which directly accounts for the development of first stage of laboratory trials starting from bioavailability.
Despite the growth promising factors, this segment is effected by pricing pressures due to high laboratory procedure costs, in an economically constricted scenario.
Outsourcing has increasingly become a strategic move for most pharmaceutical and biotech companies intensifying the market opportunities for companies offering contract services primarily for cost effective reasons
4
Need for Bioavailability
Bioavailability – Need ?
To provide and estimate the
fraction of orally administered
drug dose that is absorbed into
the systemic circulation when
compared to the bioavailability for
a solution, suspension or
intravenous dosage form that is
completely available.
Useful information to
establish drug dosage
regimen and support drug
labeling, such as distribution
and elimination
Bioavailability studies
provide information on
performance of drug
formulation
Source: Frost & Sullivan analysis.
5
Focus Points
Bioavailability- Challenges and Demands
Source: Frost & Sullivan analysis.
Focus Points
6
Bioavailability- Challenges
• Controlling drug solubility and permeability is a
major challenge faced by the drug development
industry.
• Weak stability of the dissolved drug at the
physiologic pH.
• Intense presystemic metabolism
• Lengthy drug development programs due to high
inter-patient response variability increases costs,
thus poses as a challenge
• Controlling drug solubility and permeability is a
major challenge faced by the drug development
industry.
• Weak stability of the dissolved drug at the
physiologic pH.
• Intense presystemic metabolism
• Lengthy drug development programs due to high
inter-patient response variability increases costs,
thus poses as a challenge
Challenges
Source: Frost & Sullivan analysis.
BCS Class I ~ 5%
BCS Class IV~20%
BCS Class II~70%
BCS Class III~5%
So
lub
ilit
y
Permeability High Low
High
Low
Note : BCS- Biopharmaceutics Classification System
Ref: L.Benet, Predicting drug disposition by Application of BDDCS, AAPS, 2008
New Chemical Entities
Response of Poor Water Soluble Drugs
7
Addressing the Challenges
Biological Approach
Pharmaceutics Approach
Pharmacokinetic Approach
Dissolution Enhancement
Source: Frost & Sullivan analysis.
8
Bioavailability- Demands
• Comprehensive availability of products and
technologies supporting bioavailability
enhancement.
• Partnerships and collaboration between drug
discovery research companies and
manufacturing companies for improved drug
performance.
• Develop polymers to enhance drug solubility.
• Comprehensive availability of products and
technologies supporting bioavailability
enhancement.
• Partnerships and collaboration between drug
discovery research companies and
manufacturing companies for improved drug
performance.
• Develop polymers to enhance drug solubility.
Demands
Source: Frost & Sullivan analysis.
Enhancing Bioavailability enhancing represented using a pro-drug design
Rev. Bras. Cienc. Farm. vol.40 no.3 São Paulo July/Sept. 2004
9
Addressing Demands
Using Hot Melt extrusion
Use of Spray-dried
Dispersions
Using Particle size Reduction
concept
Collaborations with contract research/man
ufacturing organizations
Source: Frost & Sullivan analysis.
10
Focus Points
Shifting Trends–Bioavailability Outsourcing- CRO’s and CMO’s
Source: Frost & Sullivan analysis.
Focus Points
11
Market Overview
Outsourcing Research /
Manufacturing
Outsourcing has increasingly become a strategic move for most pharmaceutical and biotech companies.
With manufacturing costs contributing to a major chunk of expenditure, pharmaceutical and biotech companies are considering contract manufacturing
The European Pharmaceutical Contract Manufacturing Market was estimated to be $11.20 billion in 2012, growing at rates of 10.4 per cent The European Contract Research market generated $6.58 billion in 2012, growing at rates of 8.5 per cent respectively.
. More than 80 per cent of the CMOs in Europe are located in the West – which includes Germany, the United Kingdom, France, Spain, Italy, and the Scandinavian and Benelux countries. ▪ Rise in CROs in the Eastern European and the Asian regions hinder Western European market growth due to economic constraints.
Contract Manufacturing Organizations (CMOs) and Contract Research Organizations (CROs) are equipped with the required expertise, resources, technology, and tools as a viable option to save cost and time. Independent services for pharmaceutical and biotechnology markets.
Source: Frost & Sullivan analysis.
12
Research and Development
Discovery Research
Pre-clinical Development
Clinical Development
Drug Substance Production
Primary Process Development
Drug Substance Production
Formulated Drug Production
Dosage Form Develop- Ment
Dosage Form Production
Packing/ Ass-embly
Log-istics
More Important
Less Important
Outsourced Services
• Discovery Research
• Chemical Synthesis
• Pharmacology & Toxicology
• Clinical Trials
• Analytics
• Regulatory Support
• Process Development
• Formulation Development
• Drug Substance Production
• Dosage From Production
• Packaging
• Logistics
Outsourcing activities are well established along the whole pharmaceutical R&D and production value chain, from discovery research to packaging and logistics. Most of the outsourced services are used in one or more process steps of the value chain. In contrast to the traditional companies or Fully Integrated Pharmaceutical Companies (FIPCO), emerging pharmaceutical companies are focused on selected stages of the pharmaceutical value chain.
Shifting Trends of Pharmaceutical Outsourcing
Source: Frost & Sullivan analysis.
Pharmaceutical R&D and Production Value Chain —The Shifting Trends of Pharmaceutical Outsourcing
13
FIPCO (Fully Integrated Pharma Co.)
ResearchTechnology
Manufacturing
Clinical andRegulatory
Sales andDistribution
CSO
CMO
CROs
Partnerships
Academia, Scientific, Institutions
R&D
Preclinical Support
Clinical Development
Manufacturing
Sales and Distribution
Preclinical CRO
VIPCO (Virtually Integrated Pharma Co.)
Source: Burrill & Co. and Frost & Sullivan analysis
Changing Business Models
Pharma/Biotech Industry: Changing Business Models (Global), 2012
14
Why Outsource ?
Why Outsource Bioavailability?
Increased drug demand from
pharmaceutical and biotech
marketExclusive product
offerings and services
Strict regulatory approvals
Use of metrics-driven processes for clinical trials and drug testing
Efficiency in time
Access to state-of-the-art research tools
to develop niche products
Increase in R&D
expenditure
Source: Frost & Sullivan analysis.
15
• The cost of developing drug had increased to $1,318.0 million in 2006 from $802.0 million in 2001.
• Increasing R&D expenditure, coupled with lower NCE approvals, resulted in continuous decline in R&D productivity.
• R&D productivity declined from 51.0 percent in 2000 to a historic low of 17.0 percent in 2009.
• R&D investment increased manifold during these years, but the number of NMEs launched every year remained almost stable.
Pharmaceutical Market: Cost of Developing Drugs, Global, 1975, 1987, 2001 and 2006
Pharmaceutical Market: New FDA Approval and R&D Spending, Global, 2000-2011
Co
st
of
De
vel
op
me
nt
($ M
illio
n)
R&
D S
pen
din
g (
$ B
illio
n)
Year
Nu
mb
er
of
Ne
w F
DA
Ap
pro
va
ls
Year
Note: *Total NMEs + Biologicals
Source: Frost & Sullivan analysis.
Rising Cost of Drug Development and Declining R&D Productivity
1975 1987 2001 20060
200
400
600
800
1,000
1,200
1,400
138
318
802
1,318
16
Breakdown of Outsourced Drug Development Activities
Fill-finish operations
Toxicity testing
Validation services
Plant maintainance services
Testing for Product characterisa-tion
Contract Research (laboratory)
Testing for other bio assays
Testing for lot release
Downstream operations
Upstream operations
0 5 10 15 20 25 30 35 40
34.5%
26.6%
23.1%
21.1%
20.7%
18.3%
18.1%
17.5%
15.0%
15.2%
Upstream produc-tion operations
Downstream Pro-duction Operations
Validation services
Fill-finish opera-tions
Testing for product characterisation
0 5 10 15 20 25 30 35
30.1%
27.8%
24.5%
24.8%
18.3%
Bioavailability Outsourcing : Per cent Breakdown of activities being outsourced (Europe), 2011
Bioavailability Outsourcing : Growth rates of segments likely to witness higher levels of outsourcing (Europe), 2012- 2018
Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysisNote: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis
18
Bioavailability Outsourcing—Key Success Factors
Source: Frost & Sullivan analysis.
Competitive
Knowledge
Capital
Investments
Vision
&
Strategy
Scale-up
Production
Capabilities
Clinical &
Regulatory
Expertise
Marketing
& Sales
Skills
• Clearly defined long-term vision commitment and strategic fit.• Goals for in-house development marketing, and geographic focus.
• Competitive intelligence on bioavailability enhancement
• Competitor pipeline analysis competitor’s R&D investment strategy.
• Competitive regional benchmarking.
• Effective communication to the scientific community• Effective market activities for commercialization of biosimilars• Continuous promotional activities and marketing relationship with doctors, pharmacists etc.
• Technical know-how for
clinical development• Regulatory expertise on
guidelines such as EMEA,
FDA and pharmacovigilance
Expertise
• Stable multi-step reproducible manufacturing facilities
• Proper supply chain management• Standard testing control facilities
Success
• Healthy finance infrastructure for high upfront investments
• Ability to cope with high manufacturing, maintenance, and promotional costs
19
Conclusion
The Last Word- Significance of Bioavailability
Dictating PK behaviour is essential for enhancing
bioavailability
Dictating PK behaviour is essential for enhancing
bioavailability
Partnerships with CRO‘s to reduce costs and
improve process efficiency
Partnerships with CRO‘s to reduce costs and
improve process efficiency
Drug dissolution- rate determining step for oral
absorption
Drug dissolution- rate determining step for oral
absorption
Alliances and jointly developed programs for
bioavailability enhancement- growing
trend
Alliances and jointly developed programs for
bioavailability enhancement- growing
trend
To build therapeutic efficacy in a drug
To build therapeutic efficacy in a drug
Bioavailability is the most important factor to
control drug formulation
Bioavailability is the most important factor to
control drug formulation
A shift towards outsourcing for bioavailability is expected to build in the future to shorten the duration of drug action for faster and effective results accomplished by market
expertise
Source: Frost & Sullivan analysis.
20
For Additional Information
Deepika Pramod ChopdaResearch AnalystFrost & Sullivan – Life [email protected]
Thank You!Please contact for additional information.
Ranjith GopinathanProgram ManagerFrost & Sullivan – Life [email protected]