BIOTECHNOLOGY IN EUROPE: KEY TRENDS

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1 BIOTECHNOLOGY IN EUROPE: KEY TRENDS Eva Edery, Senior Principal, IMS Health Global Pharma Strategy EGA Symposium on Biosimilars, London, May 27

2 Agenda Global pharmaceutical trends Biotech market dynamics Future Outlook 2

3 The global pharmaceutical market stabilizes in 26 with 6.5% growth USA uplift benefits global growth; Europe slows down 7 Global Pharmaceutical Sales and Market Growth 35% 6 3% SALES US$ (BILLION) % 2% 15% 1% 5% % GROWTH RATE % GLOBAL SALES GLOBAL NORTH AMERICA EUROPE JAPAN EMERGING MARKETS Source: IMS Health MIDAS MAT December 26 3

4 Growth and sales dependent on USA and emerging markets Top 5 Europe struggling; Japan suffers from biannual cut Strategic Markets: 26 growth BRIC* 5% % share of 14% 9% sales $ 6% 26% 45% 26 BRIC* 9% % share of growth $ 9% 23% 54% 14% 2% Top USA +8.1 Canada +7.6 Japan -.7 Germany +.6 France +4.1 Italy +3.8 UK +4.1 Spain +7.4 China Brazil USA West Europe Japan Source: IMS Health: MIDAS, MAT Dec 26. (*) BRIC: Brazil/Russia/India/China Emerging Markets RoW 4

5 Global biotech sales reach US$65B but growth moderates to 18%-European growth slowing down SALES US$ BIL % growth (const.us$) Global biotech sales Europe biotech Global growth European growth Source: IMS Health: MIDAS, MAT Dec 26 5

6 North America dominates biotech sales Europe increases its share 7 6 N America Japan Latin America Europe Africa/Asia/Australia 3% 6% SALES US$BN % 8% 25% 29% 62% 1 64% Source: IMS Health, MIDAS, MAT Dec 26 6

7 Europe biotech sales and growth highly reliant on top 5 EU Germany & Italy underperforming the market European biotech sales: Sales and growth by country (US$) % Regional contribution (const.us$) % share Germany France % share % growth Italy Spain UK Belgium Sweden Turkey NL Austria Denmark Switzerland Poland % growth (const.us$) Turkey 5% Sweden 3% Rest 21% Belgium 2% UK 1% Spain 12% 29% Germany 16% France 23% 62% Italy 8% Source: IMS Health, MIDAS, MAT Dec 26 7

8 2% of global blockbusters from biotech Over 4% of biotech blockbuster volume sales from Europe 19 Biotech Blockbusters US$bn Total 15 Aranesp (Amgen) 5. Enbrel (Amgen/Wyeth) 4.5 NUMBER OF BLOCKBUSTER PRODUCTS Total 44 Biotech Other Erypo/Procrit (J&J) 3.7 Remicade (J&J/SP) 3.6 Neulasta (Amgen) 3.2 Mabthera/Rituxan (Roche) 3.2 Epogen (Amgen) 3.1 Herceptin (Roche) 2.5 Lantus (Sanofi-Aventis) 2. Avastin (Roche) 2. Humira (Abbott) 1.8 Avonex (Biogen Idec) 1.7 Neorecormon (Roche) 1.5 Neupogen (Amgen) 1.4 Rebif (Serono) 1.3 Novorapid (Novo Nordisk) 1. Humalog (Lilly) 1. Betaferon (Bayer/Schering AG) 1. Source: IMS Health, MIDAS, MAT Dec 26 Synagis (Abbott) 1. 8

9 Agenda Global pharmaceutical trends Biotech market dynamics Future Outlook 9

10 Biotech driving nearly a third of global growth % CONTRIBUTION TO GROWTH Global market 6.5 Biotech % Oncology % % GROWTH CONSTANT US$ Source: IMS Health, MIDAS, MAT Dec 26 1

11 And a third of pipeline projects come from biotech Oncology is the largest area Biotech pipeline by therapy area R&D PRODUCTS BY LATEST PHASE 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Phase II Phase III Pre-reg/Reg Oncology* Cancer Vaccines Vaccines HIV CNS All Other Biotech Source: IMS Lifecycle R&D Focus Dec 26; Oncology is L1&L2, Cancer vaccines are vaccines with cancer indications 11

12 Highly concentrated market among top 1 corps Underperformance for half of key players % Growth Constant US$ Rank US$mn MAT Dec 26 % Market Share CAGR 1-5 Global Biotech Market 1 Amgen 65,23 15, Roche/Genentech 12, Johnson & Johnson 6, Novo Nordisk 4, Lilly 3, Sanofi-Aventis 2, Abbott 2, Serono 1, Schering Plough 1, Wyeth Top 1 1,796 53, Source: IMS Health, MIDAS, MAT Dec 26 12

13 Europe: Roche continues steaming ahead driven by oncology franchise Diabetes players losing ground 25 Biotech: Top 1 corps =77% share Roc he Novo Nordisk MARKET SHARE % ($ CONST.) Amgen Wyeth Merc k Serono S-Plough Lilly S-Aventis J&J Abbott Source: IMS Health MIDAS December

14 Global: Oncology and anti-tnf key drivers of growth Top 1 Therapy Classes US$mn % Market Share 26 % Growth Constant US$ Const US$ CAGR 1-5 Global Biotech Market 65, B3C Erythropoietin Products 13, L1X All Other Anti-neoplastics 8, A1C Human Insulin+Analogues 8, M1C Spec Anti-rheumatic Agent 6, L3B Interferons 6, L3A Immunostim Ag Ex Intfron 5, L4A Immunosuppressive Agents 3, H4C Growth Hormones 2, B2D Blood Coagulation 2, G3G Gonadotrophins Total top 1 58, Source: IMS Health, MIDAS, MAT Dec 26 14

15 Europe: oncology targeted therapies; anti-tnf and immunosuppressants drive growth Insulins and EPOs hold a third of sales:key targets for biosimilars % share of European biotech sales (const.us$) Human Insulin Epos Oncology targeted therapies Interferons Anti-TNF Blood Coagulation Immunostimul. (excl interf) Immunosuppressants Growth hormones Gonadotrophins -4 % share % growth European biotech growth Source: IMS Health, MIDAS, MAT Dec 26 15

16 HTA fast global penetration: even in innovative areas like cancer Impact has been particularly felt in Germany and UK $14 billion sales subjected to formal and informal HTAs Mandatory Optional Upcoming None 16

17 Insulins: IQWIG in Germany stopped reimbursement of insulin analogues in type 2 diabetes Impact of IQWIG decision 29th Sept 26 the IQWIG/G- BA ruling; Type 2 patients to receive short acting insulin only in exceptional cases or if no extra cost Absatzentwicklung Retail sales for Apothekeneinkauf short acting (DPM incl. PI) insulin von analogues kurzwirksamen Insulinanaloga start sickfund contracts Turnover still to recover Resulting in leading diabetes players signing discount contracts with the large health insurers Glitazones currently under review by IQWIG/G-BA Unit Units Sales in Tausend ( ) HUMALOG NOVORAPID APIDRA New drugs likely to undergo similar scrutiny before reimbursement assured 2 1 DEC/6 NOV/6 OCT/6 SEP/6 AUG/6 JUL/6 JUN/6 MAY/6 APR/6 MAR/6 FEB/6 JAN/6 Source: IMS Health, Pharmascope Germany, 26 17

18 And biosimilar in the insulin space cannot be ignored as payors look for tradeoffs in managing cost growth POLAND: HUMAN INSULIN SALES, VOLUME (S.U MN) POLAND: HUMAN INSULIN MARKET SHARE %, VOLUME (S.U MN) 16 7 SALES S.U MN MARKET SHARE % Novo Nordisk Lilly Bioton Group Novo Nordisk Lilly Bioton..and will affect regulated European markets before 28 Omnitrope launched in Germany in 26 Dynepo (ESA from Shire) launched at 3% discount but is an original brand Source: IMS Health: MIDAS MAT Dec 26 18

19 Global: half of biotech sales among top 1 brands EPOs struggling Top 1 Products US$mn 26 Sales % Market Share 26 Global Biotech Market 65,23 1. % Growth Constant US$ Const US$ CAGR 1-5 Aranesp (AMG) 4, Enbrel (AMG/WYE/TAK) 4, Erypo/Procrit (J&J) 3, Remicade (J&J/S-P) 3, Neulasta (AMG) 3, *** Mabthera/Rituxan (ROC) 3, Epogen (AMG) 3, Herceptin (ROC) 2, Lantus (S-A) 2, *** Avastin (ROC) 1, Total top 1 32,878 Source: IMS Health, MIDAS, MAT Dec

20 Erythropoeitins FDA black box warning March 27 Impact on sales is yet unknown New guidance: use the lowest dose possible to maintain haemoglobin level necessary to avoid need for transfusions EPO drugs can result in a higher chance of death for cancer patients, and not shown to improve outcomes of chemo. In advanced head & neck or metastatic breast cancer can contribute to increased rates of tumor growth. No requirement to change treatment for reimbursement Guidance is not likely to change current treatment practices Source: IMS Market Insights; IntrinsiQ 2

21 Top 1 global brands: Europe contribution to growth varied Europe main driver for Erypo; only driving 12% of Aranesp sales SHARE OF GROWTH % Top 1 Biotech BB: Abs Positive Growth from Europe Aranesp Enbrel Erypo Remicade Neulasta Mabthera Herceptin Lantus Avastin Source: IMS Health, MIDAS, MAT Dec 26 21

22 7 Key 7 major biotech molecules with $1bn potential biosimilar exposure Leading Substances Epoetin Alfa Interferon Beta 1A Human Insulin Brands Erypo/Procrit/Epogen Marketer 26 US$mn % of Sales Expired or Expiring 6-1 Avonex/Rebif Biogen Idec/Serono 2,682 1% Ins. Protaphane HM/ Novolin N/ Actraphane HM/ Humulin NPH/ Humulin Mix/ Insuman Comb Johnson & Johnson/ Amgen Novo Nordisk/ Lilly/ Sanofi-Aventis 6,579 8% 1,976 99% Somatropin Genotropin/ Humatrope/ Norditropin/Asellacrin Pfizer/Lilly/Novo Nordisk/Serono 1,523 1% Filgrastim Neupogen Amgen 1,25 1% Interferon Beta 1B Betaferon Bayer/Schering AG 836 1% Epoetin Beta Neorecormon Roche 646 1% Source: IMS Health, MIDAS MAT Dec 26; SMR Team Analysis, 27 22

23 Agenda Global pharmaceutical trends Biotech market dynamics Future Outlook 23

24 Pharma forecast to grow 5-8% CAGR to 211 USA will remain the key market; Western Europe loses ground 211 % share of sales $ % share of growth $ Strategic Markets: CAGR Top 1 5-8% BRIC 8% 1% 19% 47% 9% 24% BRIC 13% 7% 24% 5% 18% 46% 2% USA 6-9% Canada 7-1% Japan 2-5% Germany 4-7% France 3-6% Italy 43% 2-5% UK 5-8% Spain 3-6% 24% China 13-15% Brazil 7-1% USA West Europe Japan Emerging Markets RoW Source: IMS Health: MIDAS, MAT Dec 26; Market Prognosis Global Forecast, March 27 update 24

25 Biotech market expected to growth 12-15% CAGR to 21, reaching over $1 Bn Key Events 12 SALES US$ BN Oncology main driver of growth Expanded indications Nine biotech launches expected in 27 Fertile biotech pipeline Biosimilar Epos and interferons expected in Europe in 28, but not in US before (f) Source: IMS MIDAS, Therapy Forecaster, Market Insights, Sep 26 25

26 THANK YOU Eva Edery Senior Principal, IMS Health Global Pharma Strategy