Opportunities, critical success factors for Indian biosimilar players

1. Biosimilars : Strategic Outlook
Debashish Kar, Ph.D.
Head-Regulatory & Bioequivalence

2. Drivers of Biosimilars
Biosimilars : Landscape
Contents
Challenges to Overcome
Way Forward

3. Global Therapeutic Overview
0%
2%
4%
6%
8%
10%
12%
-10% -5% 0% 5% 10%
Anti-hyperlipidaemics
Anti-bacterials
Bronchodilators
Anti-hypertensive
Oncology
Anti-diabetics
Anti-rheumatics
Anti-virals
Bone-calcium regulators
vaccines
Key Drivers
Avastin, Rituxan (Roche),
Erbitux (BMS/LLY/ Merck KgaA)
Glivec (NVS).
Patent Expiries
Taxotere (SAN), Eloxatin (SAN),
Arimidex (AZN), Gemzar (LLY)
Key Drivers
HPV vaccines (GSK & MRK),
Pneumo. (WYE,NVS & GSK) &
Herpes zoster vaccine (MRK). Plus
strong influenza sales.
Key Patent Expiry
Angiotensin II antagonists segment
Diovan (NVS) in 2012, Cozaar (MRK)
2010, Avapro (BMY/ SAN) in 2012
Key Patent Expiry
Lipitor (PFE) in 2011
% Sales Growth: CAGR 2008-14
WWMarketShare%
Bubble = WW Sales in 2014
$70bn
$29bn
$23bn
$26bn
$15bn $15bn
$28bn
$37bn
$34bn
Analysis of Top 10 Therapy Areas in 2014, Market Share & Sales Growth (2008-14)
Oncology potentially outperforming market by both volume &
value growth in the space

4. 1. Global biologics market is estimated to be ~ $ 108 billion from 200 products. Annual
growth of 7.8% expected to be $160 billion by 2016. (Source:- Reported by Evaluate Pharma)
2. Top 10 products contribute for 50 % of the market share.
Innovative Biological

5. Shifting R&D Pipeline
Major Pharma/Biotech Players
The most comprehensive biosimilars pipeline-
775 candidate biosimilars development
pipeline, from preclinical through marketed.
The most comprehensive biosimilars pipeline-

6. Biosimilars : what’s the buzz ?
High level of interest across the industry throughout the value chain

7. Global Market : Size & Potential
MarketPotential
In the worst-case scenario, with an estimated price erosion of biologics of up to 30% , potential market
worth ~$40bn remains very appealing & attractive spread across next five years
Year
Estimated Revenue of Patented
Drugs
Only Biologics
2010 $23bn $2bn
2011 $36bn $1bn
2012 $44bn $8bn
2013 $22bn $17bn
2014 $14bn $9bn
2015 $16bn $20bn
Total $155 $59bn
2010-2015 : Golden period of Biosimilars space to derive advantages from patent expiry
Mc Kinsey report
As per the latest report, Mc Kinsey & Co. expects the average patent expiry at $39.6bn per annum between 2010-2015 as
compared to just $14.2bn in last decade and $16.5bn per annum between 2016-2020. This indicates that 2010-2015 is a
golden period for Global Biosimilars space
Source : US FDA website, Bloomberg, HDFC Securities Institutional Research

8. Income Growth
Medical
Infrastructure
Insurance
Penetration
Increased
Prevalence
Others
40%
20%
14%
14%
12%
Ref: IMS world review , McKinsey India pharma demand
model-best case
Biosimilars : Indian Positioning
Global pipeline at different clinical stages
Ref: From pipeline to
market. R&D Directions.
2009;15(6):4-89.
20
25
25
25
32
38
38
46
82
9
6
20
13
19
31
13
32
68
Brazil
India
Italy
Canada
UK
Germany
China
France
Japan
2005
2015
Top 10 Pharma markets expt. US : 2015
Values in $billion
Drivers for 5X Growth from 2010
Ref. Mckinsey India
pharma outlook 2015
Goldmine to be explored
Indian companies to add $20bn by 2015
Value will be
driven by -
Derm
a.
Blood
Dis
GI
Resp.
Meta.
Dis.
Cardio
Pain,I
nfla
Infec.
CNS
Onco
66
83
97
137
166
191
204
229
329
831

9. 1. Global biosimilars market ≈ $19.4 billion by 2014, growing at an expected
CAGR of 89.1% from 2009 to 2014.
2. By 2015, sales of biosimilars in US are expected US$1.9-2.6 billion, up from
US$378 million in 2011.
3. The Indian biosimilars (excluding vaccine) market in 2008 was around
about $ 200 million, $ 700 million in 2010 and with an expectation to reach
around about $ 1 billion plus by 2012 at 30% CAGR.
4. The Indian biologics market consists primarily of vaccines, monoclonal
antibodies, recombinant proteins and diagnostics.
5. The main players of biosimilars in India :
 Dr. Reddy’s Ltd.
 Biocon Ltd.
 Cipla Ltd.
 Intas Biopharmaceuticals Ltd. and
 Wockhardt Ltd. .
Biosimilars –Indian Positioning (Cont)
(Source:-Ariyanchira, 2010).
(Source:-IMS –December 2011)
(Source:-Biosimilar News Oct-2011)

10. Indian companies & biosimilar
Company Biosimilar Classification Status
Turn over $
million(201
0)
Overseas
Revenue $
million
Dr. Reddy
Grafeel Filgrastim Approved in 2001 and sold in 7 countries
336.00
239.00(71%
of total)
Reditux
Monoclonal antibodies mAB
Approved in 2007 and sold in 7
countries,exploring for others
Cresp Darbepoetn alfa Launched in 2010 and sold in India only
Peg-grafeel
Pegfilgrastim
Launched in 2011 and is the only single source
pegfilgrastim in world
Intas
(Ahmadabad)
Neukine
Filgrastim
Neukine® (rHu GCSF) was the first drug
introduced by Intas in India domestic market
and few international markets.
69.00
23.50 (34% of
total)Neupeg
PEGylated G-CSF India and semi-regulated markets of Europe,
Asia-Pacific, Middle East, Russia & CIS, South
and Central America and Africa.
Intalfa Interferon alpha 2b
Epofit Erythroproietin
Biocon
Eripro Erythroproietin
India and semi-regulated markets
126.00
63.00(50 % of
total)
Biomab Monoclonal antibodies mAB
Nufil Filgrastim,G-CSF
Insugen Human Insulin India and china
Wockhart
Wepox Erythropoietin India and semi-regulated markets
168.00
116.70(70%
of total)
wosulin Recombinant insulin
Sheffield Bio-Science and Wockhardt
Announce Worldwide Exclusive Partnership to
Supply Recombinant Insulin to Cell Culture
Market
Cipla
Avastin,Herce
ptin & Enbrel
Monoclonal antibodies mAB
India and semi-regulated markets 291.00
159.00(55%
of total)
Source:- Reported by Genomic network –Oct 2011

11. Biosimilars : SWOT Analysis
Based upon India Brand Equity Foundation , www.ibef.org
The Biosimilars industry is fast-growing and has a strong economic value proposition . However, there are a
number of competitive threats that make a well-developed strategy critical to any company wishing to
develop in this sector
Weaknesses
Cost of Biosimilars products to consumers in emerging
markets is still relatively high unlike small molecules
generics .
Extensive funding is required due to emerging rigorous
regulatory requirements.
Lack of widespread awareness and credibility of industry.
Strengths
Lower price point and similar effectiveness to originator
products.
Shorter time to market than originator products.
Higher probability of Return on Investment (ROI) than
with new product R&D.
Due to rapidly increasing healthcare costs, there is high
consumer demand for discounted high quality treatments
Opportunities
Large and growing market for biosimilar products.
Emerging regulatory frameworks provide structured
approval guidelines.
High-revenue bio-pharmaceutical projects that have less
equivalent Biosimilar approved/available in their
portfolio
Threats
Future regulations for Biosimilars is still being defined
Particularly in US ,few Biosimilars have been formally
approved , resulting in little precedence for future rulings.
The industry will require greater focus on new
investments for future growth

12. Biosimilars : Landscape
Contents
Way Forward
Drivers of Biosimilars
Challenges to Overcome

13. Biosimilars : Big Savings worldwide
$49 $51 $55
$60
$65 $69
$78
$86
$101
$121
$0
$20
$40
$60
$80
$100
$120
$140
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Savings to U.S. Health Care System
by Generics
 $734 bn in savings to the U.S.
health care system over the
past decade (1999-2008)
 $121 bn of savings in 2008
alone
 Biologics spending in US to
exceed $100bn in 2011
• Shapiro study (Clinton under secy. of commerce) : Biogenerics of top 12 biologic categories with patent expiring
would save $67-108bn over 10 years and up to $378bn over 20 years
• Even an assumption of long term consolidated global savings will be enough to understand upcoming gravity shift
Based upon Economic Analysis of Generic Medicines 1999-2008 ; GPhA analysis 2009
$bn

14. Biosimilars : Drivers & Inhibitors
Expiring
biologics Patents
Fastest Growing
market segment
Mounting cost
containment pressure
Promising Biosimilars
development
Opposition from
Innovators
Unclear approval
guidelines
Cost & Complexity
of development
Lack of time on
market
Biosimilars
Market
Based upon qualitative analysis on dynamics of developed markets

15. Biosimilars –Why India or Indian Company?
1. Indian generics Companies have gross margins closer to 50%. Straightway 50–60% discount.
2. Dr. Reddy’s launched a Biogeneric of Roche’s Rituxan/Mabthera at 50% discount to Roche’s
price in India.
3. The most obvious reason is cost arbitrage.
Development cost for a biosimilar molecule requires 10 to $20 million, as compared to $50 to
$100 million in developed countries. (Source:-Frost and Sullivan, 2011)
4. India is one of the major contributors in the world biogeneric market along with the china.
5. Out of 50 biotech drugs, 13 are available in India and 7 drugs are indigenously developed and
produced by the Indian companies.
6. Market share in India for biosimilars is 75%. 40 biologicals marketed in India, of which 30 are
biosimilars
More Over
 Highest number of US FDA approved plants outside the US.
 Compliance with GCP guidelines is an rise with Indian Companies.
 Highly qualified human resource availability. Low capital and operational cost.
 Pharma sector highly competitive in bioprocessing skills.
 Excellent genomic research opportunity.

16. Indian : Save Time & Cost

17. Biosimilars : Landscape
Contents
Way Forward
Drivers of Biosimilars
Challenges to Overcome

18. Biosimilars : The Competency Matrix
High capital investment
Specialist Marketing
Pharmacovigilance studies
Clinical Trials
Regulatory Experience
Legal/IP Expertise
Low cost manufacturing
Competencies of Innovators
Competencies of Generics business
Competencies of Biosimilars Business
TraditionalGeneric
Players
TraditionalInnovators
Low High
LowHighStrength
Biotechnology Expertise
Based upon qualitative analysis on dynamics of developed markets

19. Challenges & Success Strategy
Challenges Strategy
 High development cost
 Clinical complexity
 Stringent guidelines
 Partnership for cost effective
development
 Well designed trials & protocols
 Strong developmental
capabilities in India
Development
Big US/EU Pharma
Indian Pharma
 High promotional spend
 Uptake by stakeholders
 Market competition
 Patent Barriers
 Regulatory Barriers
 Competition from Brands
 Enter marketing agreements
 Right product for right indication
 Low cost manufacturing
 Gain legal expertise
 strong product positioning
 Gain experience in emerging
markets
Profitability
Marketing
Strengths meter
 Technical Barriers
 Lack of Manufacturing facilities
 Cost Barriers
 Early planning & analysis
 Team up with companies having
expertise
 Access to GMP facilities
Manufacturing
Based upon qualitative analysis on dynamics of developed markets

20. Biosimilars : Landscape
Contents
Way Forward
Drivers of Biosimilars
Challenges to Overcome

21. Biosimilars : Potential Uptake
Favorable for Biosimilars
Non-favorable for Biosimilars
Biosimilars uptake seems to come from hospital settings with
challenges of pricing & promotions to face from innovators
Based upon qualitative analysis on dynamics of developed markets

22. Way forward to a successful
Biosimilars Venture
Cost effective development
& manufacturing
Access to GMP facilities &
expertise
Clinical/Regulatory
expertise
Effective & right size
field force
Relationship with
stakeholders
Early entrants
Globally joint efforts are required to improve worldwide availability, affordability
and access to the therapies needed for humankinds

23. Investing in Biosimilars Outpaces Benchmark Returns from R&D
Internal Rate of Return (IRR) Biosimilar vs. industry benchmark
11.5 %
Median IRR
Industry benchmark
(R&D ) IRR of 12 Top
R&D PharmaCos)
-10 -5 0 5 10 15 20 25 30
2010 (publicly available document)
10-year IRR
Most likely interval
for biosimilars IRR
6.4% - 15%
Biosimilars IRR
(Number of competitors
in the market)
Time-to-market
(First mover vs. Follower)
Value chain optimization,
especially on R&D and
Manufacturing
Degrees of competition
(Numbers of competitors
into the market)
Critical
Source: IMS analysis. Benchmark from Deloitte & Thomson Reuters Research 2011
ALTHOUGH RISKY, THE
EXPECTED
PRODUCTIVITY OF
INVESTING IN
BIOSIMILARS MATCHES
OR OUTPACES
BENCHMARK RETURNS
FROM R&D

24. New Global Pharma/Biotech
Outsourcing Trends
Outsourcing is in demands in recent years, many major Pharma/Biotech companies have remodeled
their traditional drug R&D operations to de-risking their R&D efforts
Latest New Technologies And Services
Pharma/Biotech companies are focusing more on new services such as biosimilar characterization and
antibody screening, and cell-line development primarily through collaboration with specialty biotech CROs.
Focusing On Emerging Markets/CRO
The new model of "more achievements for less cost" has forced many drug companies to investment into
these emerging countries especially true in India and China .
The global Pharma outsourcing industry will experience fast growth in the next five years, $85 B
in 2011 to as much as $150B by 2015 with a CAGR of about 12% .
Total CRO market value, which is about $40.5B in 2011 will grow up to $65B by 2015 with a
CAGR of about 13% . The biology-related services, preclinical and clinical development will
account for about 75% of total outsourcing .
Financial Outlook
Focusing On CRO
1.Vertical growth, partnerships (including joint ventures) or
2. Acquisitions with major Pharma/Biotech players .

25. * Information presented here is available in public domain.