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NexGen Consulting Group, LLC New Era for Biosimilars: What the future holds
Presented by Larry Singer, R.Ph., MBA, JD
President, NexGen Consulting Group, LLC www.nexgen.org
http://www.linkedin.com/company/nexgen-consulting-group-llc
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Introduction Larry J Singer, President, NexGen Consulting Group, LLC
Key topics: Biosimilars at a Glance: Where we started
Global Trends 2020: Where we are going
Innovation and Growth: Drivers of the Next Big Wave
Risk Environment & Changing Regulatory Landscape
Building Stakeholder Value
Q&A
New Era for Biosimilars: What the future holds
New Era for Biosimilars: What the Future Holds - Agenda
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New Era for Biosimilars: What the Future Holds – Presented by:
Larry Singer has been President, NexGen Consulting Group, LLC for the past 15 years. He has over 35 years of experience in biotech, pharma, consumer products and medical devices. His background includes extensive experience in biopharm product and process development, manufacturing, supply chain management, and new product launches. NexGen‘s clients include companies such as Biogen, Salix Pharma, LG Lifesciences (Korea), Kaketsuken (Japan), Red Swan Pharma (Netherlands), Kodak Healthcare, InterMune, and many others. Mr. Singer holds a B.S. in pharmaceutics, an MBA in supply chain management, and a Juris Doctorate in intellectual property management.
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New Era for Biosimilars: What the Future Holds
Biosimilars at a Glance:Where We Started
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Biosimilars at a Glance: Where We Started
2015Major products from the current cliff include:• Remicade• Neulasta• Lantus
2019Major products from the 2019 cliff include:• Avastin• Lucentis• Herceptin
Patent Cliffs: 2015 & 2019 Two Large Cliffs Exist for Expiry of
Major Numbers of Patents: 2015 and 2019
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Biosimilars at a Glance: Where We Started
Biosimilar Patent Expiries at a Glance
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Biosimilars at a Glance: Where We Started
Where We Started: c2008 – 2010 Initial thought: all biologic products were targets for biosimilars.
Basic assumptions:
Global market Common regulatory pathway Current analytical methods would support reverse engineering Easy to achieve
And most importantly: Biosimilars would sell at or near
originator prices
Total originator worldwide market in excess of $25B
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Global Trends 2020:Where We Are Going
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Global Trends 2020: Where we Are Going
The USA, EU, Japan and Korea represent the largest R&D investments in Biosimilar development
The same geographic sectors also represent a large portion of the spend/profit
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Global Trends 2020: Where We Are Going
As with other drugs, the USA will likely represent the largest payor/reimbursement market
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While the Regulatory Pathway is Somewhat Defined:
The EMEA & FDA are essentially requiring functionally identical molecules
BLAs have been rejected for improved side effect profiles relative to the innovator
Current analytical methods are not necessarily enough
Global Trends 2020: Where We Are Going
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The revenue size of the global Biosimilar market remains undefined, but it is likely far less than originally projected
But why? The target products are in place Markets are defined So is pricing
Is that really the case?
Global Trends 2020: Where We Are Going
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Is That Really the Case?
The target products are in place Markets are defined So is pricing
Global Trends 2020: Where We Are Going
Although the list of target products remains the same, there were initial oversights
Creating biosimilars turned out to be more difficult than first estimated
The majority of (originator) development & manufacturing IP remain trade secrets
Trade secrets, unlike patents, can last indefinitely
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Is That Really the Case?
The target products are in place Markets are defined So is pricing
Global Trends 2020: Where We Are Going
Pricing & reimbursement are not what was originally expectedFor example, Infliximab biosimilar is already in a price war with the originator
There is a scientific bent that from a market perspective, biosimilars are fundamentally different (better?) than small molecule generics
Driven by the difficulty in creating biosimilars relative to small molecules
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However:Biosimilar developers will find that pricing and reimbursement will be unrelated to the degree of difficulty of development
Why? Exactly like small molecule generics,
the only thing upon which biosimilars can compete is price
This is identical to small molecule generics Eventually, biosimilars and their
originators will find themselves locked in price wars
Global Trends 2020: Where We Are Going
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So Where Does This Leave Us? The Biosimilar market out towards 2020 and beyond will mirror small
molecule generics:
Few, large volume producers
Intense price pressures on both Biosimilar and originator organizations
Consolidation of the small players
MUCH slimmer profit margins on both sides
Global trends 2020: Where We Are Going
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What Else Are We Expected to See? Originators will step up advertising budgets in
the short term
Payor organizations will be unimpressed
So will the medical community
Legislation Mandating Interchange will appear
Several USA states have already proposed mandatory interchange
Global Trends 2020: Where We Are going
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Many biologic products require cold chain distribution (unlike small molecules)
Very expensive and technically complex
Some as low as minus 70
This Creates Additional Price Pressures for Both the Innovator and Biosimilar Manufacturers
Cold Chain: Another Twist in Costing
Global Trends 2020: Where We Are Going
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This will raise the complexity and cost for organizations entering the Biosimilar field who are unfamiliar with:
- cold chain logistics- storage- development (e.g., master
and working cell banks, etc.)
Cold Chain: Another Twist In Costing
Global Trends 2020: Where We Are Going
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Innovation and Growth:Drivers of the Next Big Wave
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Innovation and Growth: Drivers of the Next Big Wave
Innovators
VS.
Biosimilar organizations
• Will reduce manufacturing costs to stay competitive
• Will seek patent extensions through new indications –
This will utimately fail
• Will also seek to reduce manufacturing costs and will be more effective at doing so than innovators
• Will utilize disposables
• Will attempt to "live with fixed stainless steel"
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Allied organizations will see a rise in business
Worldwide capacity for fixed stainless steel will drop – slowly, as innovators consolidate, bring in contract business and shutter facilities
Manufacturing using disposable technology will become the norm
Worldwide contract filling capacity will decrease and costs will rise
Worldwide contract finishing (package and label) capacity will decrease and costs will rise
Innovation and Growth: Drivers of the Next Big Wave
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Allied organizations:Rise in business
Fixed stainless steel:
Worldwide capacity to drop
Manufacturing using disposable technology:
Will become the norm
Contract filling:
Worldwide capacityto decrease
Costs to rise
Contract finishing(package & label):
Costs to rise
Worldwide capacityto decrease
Innovation and Growth: Drivers of the Next Big Wave
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New Era for Biosimilars: What the Future Holds
Risk Environment & Changing Regulatory Landscape
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Risk Environment & Changing Regulatory Landscape
FDA and EMA regulations are becoming more clear
Molecule similarity remains a major challenge – how similar is sufficient?
What degree of tolerance do the agencies have for a similar but higher incidence known side effects?
Long-term market exposure (patient years) has yet to be established
How will the agencies react to changes, even if they are minor?
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New era for biosimilars: What the future holds
Building stakeholder value
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Building Stakeholder Value
The final Take Away:
USA & EU remain the largest income markets, however:this will only be the case for patent protected molecules
Biosimilar organization relative margins will ultimately drop in a manner similar to those of small molecule generics
Supporting organizations (i.e., manufacturers of disposable technology) will see their market shares, profitability and stakeholder value rise
Overall, generics are generics:- it is a mistake (driven by scientific pride) to assume that biosimilars will not be subject to the same price pressures as small molecule generics
NexGen Consulting Group, LLCNexGen Consulting Group, LLCBoston & San Francisco USA
[email protected]://www.nexgen.org
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