BAPA Convention

1
Bangladesh A Potential Destination for Drug
Discovery Outsourcing (DDO)

• BAPA Convention
• New York
• August 8 10, 2008
• Motasim Billah, PH.D.

2
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• Why do pharma companies outsource drug discovery
  and development (RD) activities?
• Why is India leading in a rapidly emerging
  offshore DDO (discovery and Development
  outsourcing) business?
• Can Bangladesh play a role in this business and
  how?

3
Pharma Industry Snapshot

• Pharma market
• 650 billion in 2006
• CAGR of 10 over 1999 2006
• Projected to reach 900 billion in 2011
• Profit margin of 18 20
• Pharma RD
• Pharma lifeline
• Nearly 100 billion spend/year
• Over 50 billion by top 40 firms
• 15 18 of annual revenue

4
The Drug Discovery Development Process
Source PhRMA
5
Pharma RD Challenges

• Increasing RD cost
• 1.2 billion per marketed drug
• Doubling every 5 7 years
• 11 15 years from discovery to launch
• Dry drug pipeline
• Tougher FDA EMEA
• Expansion of regulation-mandated testing
• Complex review process
• Intensified threat from generics
• Annual revenue worth over 65 billion loosing
  exclusivity over next 4 years
• Growing investor wariness

6
Pharma Strategy

• Goal
• Bolster pipeline with innovative drug candidates
• Reduce development TIME COST
• Strategy
• Leverage genomics and other technological
  advances
• 5,000 new drug targets, most not validated
• Make deals
• Acquisition, partnership and collaboration
• Companies, academia, research organizations
• Outsource RD activities to low cost offshore
  countries
• India and China two popular destinations

7
DDO - A Boom in the Making

• Discovery Development Outsourcing (DDO) market
• 7.3 billion in 2006
• Projected to reach 19.8 billion in 2011
• Offshore DDO is essential, not an option
• Cost savings up to 60
• High quality service with speed
• Pharma of all sizes inking deals with offshore
  CROs
• India and China two major beneficiaries
• Fierce competition among CROs brewing

8
Major Pull Factors for Offshore DDO

• Intellectual property rights (IPR) protection
• Drives innovation and risk-taking
• Data privacy and security protection
• Provides competitive advantage
• Compliance with international regulatory
  standards
• Mandated by FDA EMEA
• Offshore countries provide none of the above to
  Western pharmas full satisfaction

9
Pre-Clinical Drug Discovery Steps
Requires BS, MS PhD Biologists Chemists
10
Drug Discovery Activities and Skills
11
Pre-Clinical Drug Discovery Services

• Biology Services
• Protein, antibody gene preparation
• Gene protein expression
• Structural analysis
• Animal models
• Assay development
• Primary screening
• Secondary screening
• DMPK, ADME, TK
• Other services

• Chemistry Services
• Building blocks
• Compound synthesis
• Libraries
• Process research
• Computational support
• Chemical analysis
• Other services

12
Biology Labs at GVK Biosciences, India
Sourcehttp//www.gvkbio.com/photo_gallery.php
13
Where does Bangladesh Stand in KPO Business?
Source ITC/UNCTAD/WTO Report on KPO, June 2007
14
Top Indian CROs

• Nicholas Piramal
• Dr. Reddys Laboratories
• Wockhardt
• Jubilant Organosys
• Panacea Biotec
• Orchid Chemicals Pharmaceuticals
• Advinus Therapeutics
• Reliance Life Sciences
• GVK Biosciences

15
Why Does India Lead in DDO? - (1)

• A large pool of highly talented, well-qualified
  professionals
• Excellent reputation of Indian educational
  institutions
• English proficiency and cultural ties
• Reverse brain drain
• Established relationship with western pharma
• Drug manufacturing hub
• Clinical trials
• World-class IT expertise

16
Why Does India Lead in DDO? - (2)

• A highly proactive government
• Working with domestic and western pharma to
  address concerns related to
• Privacy, safety and transparency
• Intellectual property rights (IPR)
• International regulatory standards
• Enactment in 2005 of IPR law to be compliant with
  TRIPS
• Technology corridors (Bangalore, Hyderabad,
  Karnataka, etc)
• Political stability

17
The Bangladesh Advantage

• A large young workforce
• Hungry for work
• Availability of low cost labor
• India and China are getting expensive
• A fairly large number of science graduates
• Highly talented and easily trainable
• Familiarity and ties with western culture
• Large number of western educated professionals
• A highly trained NRB professional community
• Growing awareness of opportunities in Bangladesh
• Proximity of India and China
• Forcing Bangladesh govt into action

18
What Does Bangladesh Need to Do? - (1)

• Produce highly skilled professionals
• Establish world-class Centers of Excellence in
  Biomedical Sciences
• Mandate English proficiency for graduation
• Incentivize reverse brain drain
• Build management skills
• Mitigate infrastructure deficiencies
• Build self-sustaining technology parks
• ICDDRB is a prototype

19
What Does Bangladesh Need to Do? - (2)

• Improve business environment
• Enact privacy legislations and patent protection
  laws
• Obtain certification for regulatory standards
• Adopt business-friendly governmental policies
• Enhance country image
• Ensure capital availability
• Cooperation between Bangladesh govt, banks,
  pharma, NRBs and entrepreneurs
• Recognize issues
• Leverage Indian/Chinese experience
• Formulate implement a comprehensive strategy
• A proactive role for Bangladesh pharma advised

20
Concluding Thoughts

• Bangladesh has the potential to become a player
  in highly lucrative DDO business
• Many issues remain including
• Intellectual property rights (IPR)
• Data privacy and security
• Regulatory standards
• Perception
• Begin with services not encumbered by IPR and
  standards
• No time to loose
• Fierce competition among CROs
• Survival kit innovation, quality, speed and
  credibility
• An opportunity for NRBs
• Help Bangladesh
• Get rich

21
A Dream . Or Not

• Contract research activities will help Bangladesh
  build
• Proprietary drug discovery capabilities
• Proprietary technology platforms
• Confidence with Western pharma
• Indian firms are moving up the lucrative value
  chain, for example
• Glenmark Pharmaceuticals (Mumbai) signed deals
  worth 600 million with Eli Lily, Forest
  Laboratories and Teijin Pharma for developing and
  marketing compounds discovered by Glenmark