Overview of Drug Discovery and Pharmaceuticals

1
Overview of Drug Discovery and Pharmaceuticals

• Yasmin Crawford, C.E.O

2
Global Pharma Sales growth in single digits
through to 2009

• Constrained by payers and providers as they
  grapple with ageing population
• Supported by more cautious/sceptical regulators
• With increasing patient acceptance of generics
• Except in areas of specific unmet medical need
  supported by evidence based medicine
• More scrutiny of products pre and post launch
• US is critical to the success but increasingly
  susceptible to cost containment with Medicare

3
World Pharma Market

• 10 major markets support growth above 6
• US will continue to dominate but with lower
  growth
• Major driver for growth still volume

4
Drug Discovery

• Fewer NCEs launched to market!
• 2004 (30) 2007 (lt20)
• Approx 8000 active products in preclinical to
  phase IV
• 1600 oncology products in registration in US
  2006, Phases I-IV
• GSK (130) and Sanofi Aventis (110) hold the
  largest number of molecules under RD
• Biotechnology accounts for over 25 of the
  product pipeline
• Few blockbusters across therapeutic segments
• Markets changing towards technological
  improvements
• Acquisition of smaller specialist companies
• Manufacturing forced to tailor their capabilities
• adapted from IMS data 2005

5
Biological Industry ripe for attack!

• Global Biotech Market tops 45billion
• Fastest Growing sector
• Makes up 25 of pharma RD portfolio
• Launch of first EPO biosimilar June 2007
• Pathway to approve biosimilars launched in the US
  in June 2007
• Based on 8 Generics Markets(IMS)

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Generic Injectable Market, an opportunity

• Overall Hospital sector main growth driver from
  2005
• Generics in Europe capture 60 of branded sales
  in 6months for off patent molecules
• Global Generic Market 45billion
• European Market expected to boom to 35.9billion
  by 2013
• Western European Injectable Market, 3billion
• 5 Major Markets - UK 24, FR 23, GE 17, IT
  SP11
• Largest therapeutic areas, Oncology 29,
  infection 26, Cardiology 11 Pain 9
• Generic Sales will rise at least at 10 per year
• 80 Rx written generically in the UK
• Overall generic growth rising at 15 at least
  twice that of the branded market
• Improved regulation speeds product to market and
  allows development whilst the patent is still
  enforced

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Major pending Patent Expiry, examples

• Oncologics
• Irinotecan (2009),Gemcitabine (2009), Docetaxol
  (2009
• Biologics
• EPO (launched 2007), G-CSF (2008/9), Copegus
  (2009), Humira (2013), Enbrel (2015)
• Anti-infectives
• Meropenem (May 2009), Moxifloxacin (2014)
• Anaesthetics
• Desflurane (2009), Ropivacaine (2010)
• Others
• Tacrolimus (2009), Quetiapine (2012)

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Investment Opportunities

• Small molecules
• Re-Formulation/Re-Packaging
• Niche Products
• Hospital Products
• New proven Technologies
• Bioequivalence reduced patient numbers
• Time to market shorter
• Improved Regulation
• New line extensions
• Products withdrawn from the market
• More flexible Manufacturing available

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Types of investments and Listed Successes

• Most recent acquisitions in the generics
  industry
• Matrix invested in Focus pharmaceuticals, mainly
  tablet generic pharma company for 3.2m, debt
  equity(11)
• Generic Trade sales made by Indian Companies for
  Distribution routes into Europe and UK
• Typical Generic pharma P/E ratios are 20-30x,
  Hikma plc (LSE) trades at 29x, Teva (NYSE) 20x
• Larger pharma acquiring technology and more
  specialist niche RD companies

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2009 and on.

• China moves into top 10 markets
• Blockbuster numbers growing for niche markets
  that do not require mass marketing efforts
• Expansion of Medicare will bring cost benefit to
  centre stage
• Parallel import trade has slowed in Europe and
  the USA but whilst price variation exists there
  is a possibility of renewed growth, providing
  there is efficient supply chain management.
• Major generics start to cannibalise other brands
  in class in Europe so all products in class at
  risk ?

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Elegant Science, is it enough?

• Payers want clear directional evidence that links
  costbenefit to appropriate targets
• Providers want clarity and simplicity as well as
  player endorsement
• Patients will want proof that polypharmacy is
  safe
• Pharma needs to improve its credibility and
  tolerate generics
• Communication amongst all players will take a
  quantum leap of faith!

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Overview of Drug Discovery Pharmaceuticals

• Yasmin Crawford, C.E.O