Sourcing Skilled Researchers for the Pharmaceutical Industry

1
Careering towards the Knowledge Society

• Sourcing Skilled Researchers for the
  Pharmaceutical Industry
• Brendan OCallaghan
• (Tyco Healthcare Dublin)
• Nov 30th, 2005

2
Tyco International

• Global, Diversified Mfg
• 260,000 employees
• 40bn revenues

• Tyco in Ireland
• 12 companies
• 8 Manufacturing Plants
• 5 Healthcare
• 2 Electronics
• 1 Fire Security
• 3,000 employees

3
Agenda

• Background to Irelands Pharma Sector
• Industry Challenges
• Global Perspective
• Ireland Specifics
• Pharma Sector RD
• Future Industry Focus
• Adding Value
• The Way Forward
• Conclusions

4
Irelands Pharmaceutical Industry

• 1 Location for Pharmaceutical Investment in EU
• 14 of the top 15 Global Pharma companies ( 26 /
  50 )
• 12/25 Blockbuster Drugs made in Ireland
• Capital Replacement value 40bn
• Continued Significant Growth
• 1bn / yr Capital, 1000 jobs
• 24,000 Direct Employment
• 50 graduates
• Exports 37bn 40 of Nett Exports
• Largest Corporation tax payer (gt 3bn)

5
Industry Breakdown
45
38
40
35
27
30
18
25
20
15
10
5
API
Proprietary Finished
Generic Finished
6
Companies
7
Why Locate in Ireland ?

• Traditional Model
• Corporate Tax Rate
• Low Cost Manufacturing
• Entry to EU Market
• English Speaking
• Expatriate Ease
• Site Availability

• New Reality
• Tax Financial Incentives
• Established Pharma Cluster
• Strong Local Management
• Availability of Skilled Workforce
• Excellent Compliance Record
• Reputation for Delivery
• Political Stability
• Industry / Academic Collaboration

8
Constant Re-Investment
7 Plants
6 Plants
4 Plants
3 Plants
4 Plants
2 Plants
2 Plants
9
Industry Growth

• 1999-2003
• 10 Compound Annual Growth Rate
• Annual Sales
• 2003 575bn
• Small molecule 82 Large Molecule (Bio) 18
• 2008 820bn (43)
• Biopharma
• 2003 102bn
• 2008 162bn (59)
• 2012 30 of all new drugs will be Biopharma

10
RD Spend, Billions
Typical RD Spend 15-20 of Sales
11
FDA NME Approvals, 1996 - 2003
NME 10-12 yrs, 800M
12
Decline of European Pharma RD

Estimated 40 of US Researchers are European
13
Industry Challenges

• Innovation
• High cost of RD only 30 of marketed drugs
  give ROI
• Dearth of new blockbusters
• Late stage Phase III failures
• Post Marketing Recalls Withdrawals
• Revenues
• Patent expiration / Growth of Generics
• 2002 105 off-patent 50 sales from Generics
• 2005 152 off patent 60 Generics
• Government pricing pressures
• Parallel imports
• Increasing regulatory environment
• High Profile Manufacturing Marketing Issues
• MA activity continuing consolidations

14
Ireland Specific Challenges

• Rising Costs
• Intense Competition
• Tax Rates Puerto Rico 2
• Singapore 0
• Switzerland 0 for 10 yrs
• Ireland 12.5
• RD Supports PR 200 Volume based credit
• Singapore 100 Volume based credit
• Ireland 20 Incremental credit
• Low Cost Countries
• Availability of Skills

15
Pharma Product Life Cycle
Patent Exclusivity ( 20 yrs )
8-10 yrs
2 yrs
5 yrs
5 yrs
Reg. Review
Launch Manufacture
Lead Selection
Pre Clinical
Phase I
Phase III
Phase II
Traditional
Manufacturing
Start Earlier
Finish Later

• Start Earlier, Finish Later
• Receiver to Co-Creator
• Must Have Clear Competitive Advantage over
  Sister Sites

16
Moving Up the Value Chain

• Manufacturing as the Foundation
• Delivery
• Compliance
• Return on Investment
• Research Capability
• Research Infrastructure
• Workforce Skills
• Quality vs Quantity

Reliability Repeatability
17
Pharma RD Value Chain
Reg. Review
Launch Manufacture
Lead Selection
Pre Clinical
Phase I
Phase III
Phase II
Traditional Manufacturing
rD
M
R
Rd
DM
Process Optimisation
Process Development Scale Up
Route Selection / Synthetic Pathway
Drug Discovery
18
Focussed on a Healthy Future

• IDA Strategy for RD, 2005 2008
• 75 of companies with Process Development
  capability
• 5 of employees
• 3 significant Industry / Academic Research
  Partnerships
• First stand alone corporate RD centre
• 9 RD Capability schemes approved
• 3 Technology Platform companies
• Skills Required
• Traditional
• Organic / Analytical Chemists, Chemical Engineers
• Emerging Needs
• Physical Chemists, NanoTechnologies, PAT
• Pharmaceutics, Medicinal Chemists
• BioChemists, BioChemical Engineers,
  Microbiologists

19
The Way Forward

• From Manufacturing to DM / rD / Rd
• Supply of talented scientists critical
• Increased Government focus on Pharmachem RD
• Action Plan from Task Force on the Physical
  Sciences
• SFI equal support to Pharmachem Biotech
• 70 of drugs sold in 2008 will be small
  molecule
• Financial supports must be attractive vs.
  Competition
• Third level sector industry must work together
• Industry Relevant Research
• Industry Savvy students - Graduates Post
  Graduates
• Improved Support from Industry

20
Industry / 3rd Level Initiatives

• Skills
• Primary / post-Primary Focus
• Internships during PhD program
• Relevant post Graduate top-up courses
• BSc to MSc programs, New / Emerging Technologies
• Targeted Process Development initiatives
• Shared Learning
• Research Seminars / Workshops
• Direct Industry / 3rd Level Research Partnerships
• Access to Infrastructure / Resources / Databases
• Ensure IP not a barrier

21
Research Based Pharma Industry

• Life expectancy increased by 33 in 70 yrs
• Dramatic successes
• Diptheria, Whooping Cough, Measles, Polio
• 8 out of 10 childhood leukaemias surviving
• 50 fall in deaths from childhood cancers
• 5 year survival rate for Breast Cancer up 80
• Average hospital stay reduced 30
• New Medicines in Development
• Age related diseases 800
• Cancer 400
• Heart Disease / Stroke 146
• HIV / AIDS 83
• Diabetes 24

22
Conclusion

• You must have more and more capabilities on
  site, its not enough just to have Irelands
  lower tax rate, because other jurisdictions have
  lower tax rates.

The technical capability and the people become
a far more critical piece .. B.
OLeary (IDA)