Biomanufacturing Capacity for Biosimilars: Is there enough?

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1 Biomanufacturing Capacity for Biosimilars: Is there enough? Cambridge Healthtech Institute s Third Annual BIOAnalytical Summit 2012 Mar Baltimore, MD BioProcess Technology Consultants

2 Increasing Sales of Biopharmaceutical Products

3 Biologic Products Current and Future Ref: Stout, J. BPI Conference 2011

4 What Are Biosimilars? Successor to an innovator product for which patent protection no longer applies Complex molecules manufactured by recombinant DNA technology Comparable with the innovator product in terms of quality, efficacy, and safety EU draft general guidelines adopted First biosimilar somatropin approved and launched in EU First biosimilar EPO approved and launched in EU First biosimilar filgrastim approved and launched in EU Somatropin first biosimilar approved worldwide (Australia) Japan regulatory guidelines First biosimilar somatropin approved and launched in Japan & Canada US regulatory pathway

5 Biosimilars Are Reality and Growing Today relatively simple proteins tomorrow, more complex proteins Biosimilar products currently approved in Europe Product Name Active Substance Company Abseamed Medice Arzneimittel Pütter Binocrit Epoetin alfa Sandoz Epoetin alfa Hexal Hexal Biograstim CT Arzneimittel Filgrastim Hexal Hexal Filgrastim Ratiopharm Ratiopharm Nivestim Filgrastim Hospira Ratiograstim Ratiopharm Tevagrastim Teva Generics Zarzio Sandoz Omnitrope Sandoz Somatropin Valtropin BioPartners Retacrit Hospira Epoetin zeta Silapo Stada Ref: General/Biosimilars approved in Europe

6 Adoption Rates of Biosimilars in Europe Country Biosimilar Share of Innovator Product Sales (March 2011) Somatropin (1) Erythropoietin (5) Filgrastim (6) Austria 6% 50% 52% France 20% 11% 42% Germany 12% 65% 45% Greece N/A 67% 53% Italy 12% 7% 18% Poland 7% 62% 38% Romania 34% 58% 77% Spain 15% 16% 24% Sweden 21% 63% 45% UK 4% 9% 80% EU Total 13% 18% 38% 6

7 Biosimilar Development Is Lengthy And Expensive Generics* Biosimilars* Innovator* US$ 2 3m US$ m US$ 800m Development Investment 2 3 yrs 7 8 yrs 8 10 yrs Time to market pts ~ 500 pts pts # of patients for approval *Industry average Ref: Visser, J. BPI Europe 2010

8 Monoclonal Antibodies Will Be The Next Wave Many blockbuster MAbs will be off patent in the next few years Biosimilar MAbs already available in India and China Monoclonal antibody products soon to be off patent: Product Name Active Substance Company Avastin Bevacizumab Roche/Genentech Enbrel Etanercept Amgen Erbitux Cetuximab Eli Lilly Herceptin Trastuzumab Roche/Genentech Humira Adalimumab Abbott Lucentis Ranibizumab Roche/Genentech Remicade Infliximab Johnson & Johnson Rituxan Rituximab Roche/Genentech Ref: 25 biotechdrugs the next biosimilars targets

9 Product Demand Greatest for Monoclonal Antibodies Demand for existing commercial antibody products will nearly double by 2016 ~8.3 metric ton ~13.4 metric tons (2010) (2016) Product Demand for Commercial Antibody Products 2010 requirements for each of the top five monoclonal antibody products ranged from metric ton All others (27) 26% Remicade 17% 2010 demand for all other monoclonal antibody products combined was approximately 2.5 metric tons Anticipated demand for new monoclonal antibody products approved between now and 2016 is expected to be <5 metric tons/year/mab Herceptin 12% Enbrel 13% Rituxan 16% Avastin 16%

10 Demand for Biomanufacturing Capacity Growing Driven by growing market for approved products, large number of products in clinical development, and growing interest in biosimilars Volumetric requirements will almost double by 2016, leaving companies and markets without capacity scrambling for resources

11 Distribution of Mammalian Cell Culture Capacity

12 Geographic Distribution of Cell Culture Capacity Perfusion capacity adjusted to equivalent fed batch capacity where appropriate

13 Balance of Supply and Demand Assumes no increase in current titers Perfusion capacity adjusted to equivalent fed batch capacity where appropriate

14 Product Companies Control ~70% of Capacity 4,500 3,600 Installed Capacity 2,700 1, CMO XS Product Co. Perfusion capacity adjusted to equivalent fed batch capacity where appropriate

15 Ten Companies Control >75% of Capacity 2010 Rank 2016 Rank Company 2010 Volume (1,000s L) 2016 Volume (1,000s L) 1 1 Roche J&J Boehringer Ingelheim Amgen Lonza Pfizer Sanofi Aventis Novartis Lilly Biogen Idec Celltrion 140 All Others 614 1,070 Perfusion capacity adjusted to equivalent fed batch capacity where appropriate

16 Capacity Distribution by Bioreactor Scale

17 Source of Uncertainty When Developing a Mfg Strategy 17

18 Drivers for Build, Buy, Acquire Decision Core Competency Assessment We re Good At It Not Many Others Are Is Buy an Option? Technology Requirements Scale Capacity Availability Supply vs. Demand Strategic Fit Pipeline Competitive Advantage Development Stage Risk Management Control Cost and Probability of Failure Financial Considerations Return on Capital Cost of Capital Operating Costs

19 Product Lifecycle Drives Make vs. Buy Decisions Make Make or Buy Buy Buy or Make Product Launch Product Launch RISK Manufacturing costs set at decision point RISK Manufacturing costs set at decision point Development Uncertainty Market Uncertainty Maturity Development Uncertainty Market Uncertainty Maturity Product Life Cycle Product Life Cycle Maximizing Control Conserving Capital Make strategy during highest risk period to maximize control of supply Buy strategy during highest risk period to conserve capital Buy strategy may make sense once product lifecycle stabilizes, risk decreases, and control less important Make strategy may be attractive once product lifecycle stabilizes, capital becomes more available, and risk reduced

20 Biopharmaceutical Industry Moving to Outsourcing CMO s are a long term sustainable strategy Many large pharmaceutical companies are moving away from internal manufacturing and relying on CMO s Outsourcing to an experienced CMO presents a faster, more economical approach to market entry Strategic outsourcing improves flexibility and minimizes capital outlays allowing Access to new or different technology as well as expertise and experience Reduces development time and provides maximum flexibility during development Risk mitigation and financial flexibility Maintain low overhead and minimize cash flow Minimizes company infrastructure Eliminates capital investment in manufacturing assets

21 Advantages to Outsourcing The vast and complicated development activities required for biologics are often best outsourced, including Cell line construction, banking, and characterization Process development, formulation development, analytical methods development GMP manufacturing In House CMO Product availability months months Capital Investment Required $10+ Million <$1 Million Technology transfer/ process development $1 2.5 Million $1.5 3 Million Cost per lot $1 5 Million $1 5 Million Company commitment (FTE) Risk of process failure Company CMO/Company

22 Trends in Biomanufacturing Facilities of the Future Designed for modern, state of the art processes Cell culture titers of titer >5 g/l Smaller bioreactors will produce similar quantities to today s six pack facilities Multi product capabilities and flexibility will become increasingly important Expanded use of new technologies to reduce capital investment, increase flexibility, and compress timelines Disposable technologies will become increasingly prevalent Continuous processing, PAT and other modern manufacturing methods will be incorporated into bioprocessing

23 Thank You! Patricia Seymour BioProcess Technology Consultants, Inc. 12 Gill Street, Suite 5450 Woburn, MA 01801

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