Pie basic

1
What are the real opportunities for
biosimilars/ follow-on-biologics - an analysis on
EPO
Global Generic Medicines Summit Health Network
Communications London, 27th - 28th February
2007 Elmar Schäfer CEO BioGeneriX AG Mannheim,
Germany
2
The Global Market

• Biologics are growing at twice the rate of
  Small Molecules (Rx Market)

Source IMS Health, BioGeneriX Projection
3
Pipeline Products
Biopharmaceuticals Global Market
in absolut Numbers
In clinical Trials
On the Market
Source Merrill Lynch
4
Share of New Approvals (US)
5
The Innovation Gap (US)
Source FDA/ ErnstYoung, Global Report 2005
6
Pipeline Products

• Biologics growing at twice the rate of Small
  Molecules
• In 2010 nearly 50 of all new approved
  Pharmaceuticals will be of biotechnological Origin

Pharmaceuticals in Development
100 1.280
40 of Products in Phase III Trials are Biologics
Source IMS 2003 / Dataminitor
7
Top Global Biologics 2005
Sales
in b
8
Patent Situation in Europe SPC-Dates
Patent Expiry including SPC
2005
2006
2007
2009
Supplementary Protection Certificate Source
BioGeneriX AG/ IMS/ Patent Databases
9
The German Generics Market - What happens after
Patent Expiry Omeprazole-Performance (Volume)
after Generic Launch
The share of generics in a patent free market in
Germany is 68
Source IMS Health
10
Development Costs and Pricing (in m)

• Possible Cost Savings for Health Care Systems in
  Germany (based on manufacturer Price for EPO)

Source BioGeneriX AG/ Arzneiverordnungsreport
2004
11
Example EPO Potential Global
Cancer Patients
100 20.500.000 (35 growth)
12
Example EPO Potential Europe

• 58,6 of all Cancer Patients are treated by
  Chemotherapy
• 8 of them are on EPO-Treatment
• EPO-Sales in Cancer in 2005 approx. 1.186 m

Treated Cancer Patients Europe
100 4.510.000
approx. 75 suffer from Anemia 1.982.145
Patients
None 7,8
158.572 Patients
Surgery 33,6
Chemotherapy 58,6
1.823.573 Patients
13
Passing Barriers to Compete in the FoB Market
Entry strategy

• Barriers
• Patents
• Biotech expertise and biotech production
• Partnering
• Capital
• Regulatory
• Market access

patent department defines development strategy
partnership with a leading biotech CMO In-house
biotech experts with external support
development/ licensing agreements, risk
management
sustainable business model to allow long term
investment
streamline needs for centralized procedure
Specialist sales force in global key markets
co-marketing with one or two strong international
partners
Source Team
14
Hurdles for Biogeneric Products in Germany

• No generic approach, i.e. proof of bioequivalence
  in an abbreviated process is not accepted by
  EMEA/FDA
• The European comparability guideline indicates
  that a complete new filing and clinical trials on
  a case by case basis are required
• No clear regulatory framework
• Biopharmaceuticals are defined by their
  production process? any change can impact safety
  and efficacy and therefore demands new approval
• Very difficult patent situation
• Development time at least twice as long
• Development costs 8-100 times higher!

15
Development Costs
16
Development Costs and Pricing (in m)
Development Costs for FOBs can easily be 100
times higher than for Generics
below Innovator Price
below Innovator Price
Source BioCentury/ BioGeneriX AG
17
Development Timelines EMEA

• From the first Steps until Launch it could take
  approx. 5-8 Years

Process/ Analytics
Approval
Clinics
Cell Biology
1-2 Years
1 Year
2-4 Years
1 Year
Source BioGeneriX AG
18
Regulatory Aspects Authority Expectations for
biosimilar Erythropoietins

• Comparative single-dose Pharmacokinetic Study
• Equivalence Trials
• Patients with Renal Anemia
• Titration Phase Study
• Maintenace Phase Study
• Primary Endpoints Hb-Level and Dosage
• One-Year Immunogenicity
• Risk Management Plan
• Extrapolation to other approved Indications
  possible

Source BfArM / BioGeneriX AG/ EMEA
19
FUTURE OUTLOOK on FOBs

• The biogeneric industry initially saw numerous
  companies, but a lot have failed gt limited
  number of competitors
• Successful FoB companies have a profound
  expertise in biotechnology, financial strength,
  patent knowledge and access to pharmaceutical
  marketing infrastructure
• Cost leadership might become an issue, depending
  on the price erosion witnessed (number of
  competitors), but this is unlikely to occur in
  the beginning
• No marginal costing, no commodity pricing
• Originators in Europe seem not to defend their
  markets by patent disputes, but rather by
  building up regulatory hurdles, marketing tools,
  and switches to second generation products. No
  early entry deals were done up to now.
• Generic industry is likely to reduce investments
  due to margin pressure in their main business

20
Conclusions

• Big Growing Market (9,24 on a global Basis)
• High Prevalence, High Number of Untreated
  Patients (untreated Dialysis 46 - Cancer 95)
• High Margins
• High Investments (20-80 m)
• High Authority Expectations and Demands