R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... ·...

49
2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China R&D: Life Line for pharmaceutical companies: A GM perspective Joseph Cho CEO, Astellas Pharma China Vice Chairman, RDPAC

Transcript of R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... ·...

Page 1: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

R&D: Life Line for pharmaceutical companies: A GM perspective

• Joseph Cho

• CEO, Astellas Pharma China

• Vice Chairman, RDPAC

Page 2: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Disclaimer• This is not a thorough research report by a consultant.• This is the personal perspective of a General managers with 33

years of working experience in the pharma industry– 20 years in Taiwan (sales, marketing, drug registration, clinical trial,

business development)– 13 years in Hong Kong and mainland China– 20 years of working and engagement in industry groups in Taiwan

(IRPMA), Hong Kong (HKAPI) and China (RDPAC).

• Some thought exchanged with government officials and experts in the industry and acadmics.

• Information supported by colleagues in the company, friends in IMS, colleagues in RDPAC and lessons from top management and colleagues in Astellas Pharma Group

Page 3: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Protection of IPR:Essential for financing drug R&D

Page 4: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

13.0

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

石石・ガガ (16)タタタ (4)電電 (13)鉄鉄・金金 (10)通通 (12)メメメメ・写写 (9)エエエエメエエエ・機機 (44)家家家家 (15)パパパパパパメ (13)自自自・自自自自家 (44)化化 (50)航航・防防 (17)健健 (23)電電・電電 (45)ITハパハハハメ (115)パソソハハメ、ITサパサガ (59)医医家・タババ (61)対対対対対対 (600)

出所:医薬産業政策研究所(2003)「財務データからみた製薬企業の10年」 リサーチペーパーシリーズ N0.13

Increasing R&D cost ratio in pharma and Bio industry

Page 5: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

formulations

Formulation patent

Substance

formulation

Drug Substance patent

Automobile, Automobile, Automobile, Automobile,

Electronics appliancesElectronics appliancesElectronics appliancesElectronics appliances

Pharmaceuticals

a product is composed of a product is composed of a product is composed of a product is composed of

hundreds and thousand of patenthundreds and thousand of patenthundreds and thousand of patenthundreds and thousand of patent、、、、

impact of a single patent limited.impact of a single patent limited.impact of a single patent limited.impact of a single patent limited.

Existence of a patent may not Existence of a patent may not Existence of a patent may not Existence of a patent may not

hinder the develop of other hinder the develop of other hinder the develop of other hinder the develop of other

patentspatentspatentspatents

One Basic patentOne Basic patentOne Basic patentOne Basic patent((((substancesubstancesubstancesubstance))))

High royalty feeHigh royalty feeHigh royalty feeHigh royalty fee

Giving up of new drug development Giving up of new drug development Giving up of new drug development Giving up of new drug development

due to patent infringementdue to patent infringementdue to patent infringementdue to patent infringement

Characteristics of patent for pharmaceuticals

Page 6: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Pre-clinicalClinical

trialScreening

2~~~~3Y 3~~~~5Y 5~~~~10Y

No. of compounds

5555~~~~10101010

compundscompundscompundscompunds

10,00010,00010,00010,000

1111compocompocompocompo

undundundund

10,00010,00010,00010,000

5,0005,0005,0005,000~~~~

10,00010,00010,00010,000

compoundscompoundscompoundscompounds

Cost of JYCost of JYCost of JYCost of JY 80808080 BillionBillionBillionBillion////1111 NNNNCECECECE

Mode of action,

AMDE

pharmacokinetics,

Pharmaco dynamics

formulation

Clinical trialClinical trialClinical trialClinical trial

P1P1P1P1→→→→P2P2P2P2→→→→P3P3P3P3

Efficacy and safety Efficacy and safety Efficacy and safety Efficacy and safety

in humanin humanin humanin human

PK PDPK PDPK PDPK PD

Optimizing

Candidate

compounds

Investigation

RA

2~~~~3Y

totaltotaltotaltotal 10101010~~~~20202020YYYY

Ap

ply

ap

pro

val

lau

nc

h

regulatory

Drug discovery

development)

505050500,0000,0000,0000,000~~~~

1001001001000,0000,0000,0000,000

compoundscompoundscompoundscompounds

Library Synthesized Developed compounds Product

Page 7: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Pre-clinical ClinicalDiscovery

screening

2~~~~3Y 3~~~~5Y 5~~~~10Y

Animal

studies

Formu

lation

Clinical Clinical Clinical Clinical

trialstrialstrialstrials

P1P1P1P1→→→→P2P2P2P2→→→→P3P3P3P3

CMCCMCCMCCMC

Optimizing

Invention

research

Basic

research review

2~~~~3Y

Ap

plic

atio

n

ap

pro

val

Review

Pate

nt

ap

plic

atio

n

Lau

nch

ing

of N

CE

Lau

nch

of g

en

eric

s

10~15years for R&D

Exclu

siv

e p

erio

d

10~~~~

15Y

α

Patent 20Yr+α(Max.5Yr)=exclusivity(Max.25Yr)

※※※※αααα=extended IPR

Page 8: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Specific Challenges in China pharma market for innovative drugs - market access

• In China, import or manufacture approval does not mean market accessible.– Pricing approval in provinces/cities– Listing into formulary of target hospitals– Winning in hospital bidding/price negotiations– Reimbursement by health insurance– Distribution to retail outlets

• Reduction of 5-7 years of real patent life • Generics may be launched prior to original products• Ensuring sufficient market exclusive period vital for R&D

investment return• Early entry to the market essential

Page 9: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

How important is R&D?

• Emergence of a company.– If you have a break through new drugs.

• Rapid Growth of the Company– If you have a series of successful new product launch.

• Can keeping the company alive– When IPR of main products subsides.

• Change of healthcare practice– The case with H2 blockers for gastro-tectomy

• If R&D flops : – Likely lay off, – change of company, jobs and positions for many people, – Loss of investment, – Death of patients and

• Company no long exist: as shown next few slides

Page 10: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Relationship between R&D investment and No. of new drugs launched

RRRR

2222

RRRR= = = = 0.83280.83280.83280.8328

0

5

10

15

20

25

30

0 10,000 20,000 30,000 40,000 50,000 60,000

■Mega Mega Mega Mega

◆MajorMajorMajorMajor

●Japan

※新薬数は新規化合物 R&D expense (US $Million))))

上市新

上市新

上市新

上市新薬数

薬数

薬数

薬数

Page 11: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

18.418.418.418.438.438.438.438.46.76.76.76.7

5.65.65.65.636.436.436.436.4

32.232.232.232.215.415.415.415.4

11.611.611.611.623.023.023.023.0

12.212.212.212.2

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%2003200320032003年年年年1993199319931993年年年年

売上原価売上原価売上原価売上原価 償却費償却費償却費償却費 販売管理費販売管理費販売管理費販売管理費 研究開発費研究開発費研究開発費研究開発費 営業利益営業利益営業利益営業利益

EU companies::::Merger、、、、scale up、、、、restructure

COG reduction、、、、R&D increase、、、、S&M increase

Page 12: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

0403020100999897969594939291908988878685

Roche

Genentech

JR Geigy

Ciba

Ciba-Geigy Ciba-Geigy

Sandoz

Novartis Novartis

Roche

Syntex Boehringer Mannheim

94949494買収買収買収買収 97 97 97 97 買収買収買収買収90 90 90 90 資本参加資本参加資本参加資本参加

Chugai

02 02 02 02 買収買収買収買収

96 96 96 96 合併合併合併合併

70707070合併合併合併合併

ICI

Astra

Zeneca

AstraZeneca99 99 99 99 合併合併合併合併

93939393 医薬品事業部医薬品事業部医薬品事業部医薬品事業部門門門門分離独立分離独立分離独立分離独立

Rhone-Poulenc Rhone-Poulenc Rorer

W.H.RorerFisons

Hoechst

Aventis

Roussel-Uclaf

Hoechst

Marion

Marion Merrell Dow

90909090 買収買収買収買収

95959595買収買収買収買収

99 99 99 99 合併合併合併合併

95959595 買収買収買収買収

89898989

acquisition of a acquisition of a acquisition of a acquisition of a

majority holdingmajority holdingmajority holdingmajority holding

68686868

Sanofi

Sterling

Sanofi SI

Synthelabo

Sanofi-Synthelabo94949494

99999999合併合併合併合併

Prescription drug部門部門部門部門

Sanofiーーーー

aventis04040404買収買収買収買収

Merrell Dow

Glaxo Glaxo Wellcome

Glaxo SmithKline

SmithKline Beecham

SK Beckman

Beecham

Wellcome

95959595合併合併合併合併

00000000 合併合併合併合併89898989合併合併合併合併

Page 13: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Key Acquisitions in 2008~2009 in the industry

Page 14: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Key Acquisition cases in Jan.~Feb. 2010 in the industry

StrategyStrategyStrategyStrategy( ( ( ( bilbilbilbil. USD. USD. USD. USD

))))Target Corp.acquiring Corp.TimeTimeTimeTime

Page 15: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Leading MNC’s portfolio by development status

Most of leading MNCs have a big discover products base.

Source: Thomason Pharma

Page 16: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Some thoughts about drug discovery

Page 17: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

科学科学 科学科学 技術革新技術革新技術革新技術革新

新薬誕生新薬誕生新薬誕生新薬誕生

1800 1900 1950 1960 1970 1980 1990 2000 2010 ((((年年年年))))

Aspirin

(Rheumatoid

Arthritis)

Β antagonist(Angina・Hypertension)

α Antagonist(Hypertension・BPH)

H2 Antagonist(Pepti-ucler)

Ca antagonsit(Hypertension・Angina)

ACE inhibitor(Hypertension・Cardiac Failure)

HMG-CoA reductase(Hyperlipidemia)

Insulin(DM)Growth hormone

Epoch making Epoch making Epoch making Epoch making Epoch making Epoch making Epoch making Epoch making

New drugs New drugs New drugs New drugs New drugs New drugs New drugs New drugs

VaccinesVaccinesVaccinesVaccinesVaccinesVaccinesVaccinesVaccines

GeneGeneGeneGeneGeneGeneGeneGene--------chipschipschipschipschipschipschipschips

Organic Organic Organic Organic ChemistryChemistryChemistryChemistryNaturalsNaturalsNaturalsNaturals

PharmacologyPharmacologyReceptor

Ion Channel

Enzyme

BiotechnologyBiotechnologyBiotechnologyBiotechnologyRecombined Recombined Recombined Recombined GenesGenesGenesGenesCell fusionCell fusionCell fusionCell fusionAntibodyAntibodyAntibodyAntibody

Pioneer Pioneer Pioneer Pioneer technologytechnologytechnologytechnology

GenomicsGenomicsGenomicsGenomicsGenomicsGenomicsGenomicsGenomics

First Golden Period 2nd golden period 2nd golden period 2nd golden period 2nd golden period

-薬理学会公開講座「夢のくすり、今のくすり」1998年.京都市-

Pate

nt E

xpiry

Pate

nt E

xpiry

Pate

nt E

xpiry

Pate

nt E

xpiry

Page 18: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Key steps to new drug discovery

New treatment inspired by identified mechanism of diseases

-information from papers, patients, healthcare professionals.

Establishment of physical reactions and life syndromes of target diseases.Establishment of Methodology for screening

- Papers and laboratory observations

Creation of new drugs via new technology (organic chemistry, Bio-technology, Antibody, Vaccines)

-Team works of multi-disciplines in life science

発 想発 想

発 見発 見

発 明発 明

Innovation

(Inspiration)

(Discovery )

(Invention)

Page 19: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

New challenges for drug discovery:The diseases, the causes and life styles

• Why some diseases occurs – In some ethnics– In some ages– In a gender– In a geographic location– In some weather conditions– In some occupations

• What are the causes– Extrinsic– Intrinsic

• What is the prognosis for different types of patients? How long will the disease last and how long does it takes to recover? The role of new drugs in the healing process.

• How to diagnose • How to prevent from occurring?• How change of life styles affect the treatment• The recurrence and the causes.• Can we prevent it from occurring?• How to test anti-bodies, biologics for human use in animals? • Scaling up of new biologics and genomic product?

Page 20: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

The relationship between the level of satisfaction with medical treatment and the level of contribution that medication makes to treatment (Japan)

Contribution of medication to treatment(%)(%)(%)(%)

Diseases mainly taken care of by PCPsNote: Questionnaire for Japanese doctors ( :15/10/1999-22/12/1999; postal survey; 128 responses;) Source: Japan Human Science Foundation: 2000 report on survey into basic technology in Japan, “Outlook on

medical needs in 2010”; internal Astellas data; BCG analysis;

Herpes virus infectionTuberculosisDermatophytosisMRSA infection Chlamydia infectionCandidiasisStomach cancerAIDS Colon cancerLiver cancerLung cancer Breast cancerUterine cancer

Prostate cancerLeukemiaFibroid

Diabetes mellitusDiabetic neuropathy Diabetic retinopathyDiabetic nephropathy

HyperlipidemiaSchizophrenia DepressionAnxietyParkinson’s disease

Alzheimer’s diseaseSenile dementiaMultiple sclerosisEpilepsy

Autonomic ataxiaNeuromuscular disturbance and myopathyMyocardialinfarction Arrhythmia

Hemorrhagic strokeCerebral infarctionAsthma

Atopic dermatitis Pressure soresRheumatoid arthritisOsteoarthritis SLESpondylosis Low back painOsteoporosisGout Peptic ulcer

Cirrhosis Hepatitis BHepatitis C Nephrosis syndromeChronic glomerulonephritisChronic renal failureProstate hyperplasiaEndometriosisGlaucoma

Cataracts0102030405060708090100

0 10 20 30 40 50 60 70 80 90 100Level of satisfaction with medical

treatment(%)(%)(%)(%)Chronic pelvic painStress urinary incontinenceTransplantation Chronic obstructive pulmonary diseaseIrritable bowel syndromeOcclusive peripheral arterial disease

Satisfaction is relatively high for diseases in the PCP market

HypertensionAngina PectorisAllergic rhinitisUrinaryincontinence

Page 21: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

New challenges of clinical research for unmet needs

• More aging population with many underlying diseases who use many drugs.

• Difficulty in conduct clinical trials for infants.• Diagnostic method and parameters not established. • Need to provide long term efficacy and safety.• Not just for efficacy and safety, need to justify the value

with health-economic models, accepted by the payers and, healthcare professionals and patients.

• How to justify value to quality of life and extension of life expectancy not in years.

• Early engagement in clinical trial design of marketing for proper positioning of the new drug

Page 22: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

6 phases of failed clinical development project

• Enthusiasm

• Disillusionment

• Panic

• Search for guilty

• Punishment for the innocent

• Praise and honors fir non-participants

Page 23: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

The Global Scenario Envisioned by Astellas

� Progress of policies to control health expenditure� New healthcare reforms in EU, USA and Japan all

focusing in cost containment.� Who should pay for the drug and technology innovation?

Government? Insurance? Patient?

� Decrease in market growth rate� Market growth in EU, Japan and USA decreased to 5% of

below, except pharmerging markets led by China.

� Increased complexity of the market� Many diseases cared by primary care professionals are

getting satisfactory treatment by medicines while good remedies for chronic diseases, CNS, DM, RA and diseases related to auto-immune system remains few.

Page 24: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

The total number of blockbusters produced by the top 10 drug companies, the number of blockbusters being delivered to the market and

the number of blockbusters with expiring patents

* The number of products delivered to the market for 2001-2010 is based on risk-adjusted estimates Note: Blockbusters are those drug products with peak sales of US$500 million or more based on 2001 prices. The ranking of the top 10 drug

companies was based on the 2001 market; since that time some of those companies have been amalgamated through the M&Aprocess.

Source: FDA, Lehman Brothers, Paine Webber, Scrip, BCG analysis

Stagnation of new deliveries and the expiration of patents will simultaneously brake market growth.

Number of blockbusters

launched,

Number of blockbusters with expiring patents

Number of blockbusters

0000

5555

10101010

15151515

20202020

25252525

1986198619861986 1988198819881988 1990199019901990 1992199219921992 1994199419941994 1996199619961996 1998199819981998 2000200020002000 2002200220022002 2004200420042004 2006200620062006 2008200820082008 2010201020102010

0000

20202020

40404040

60606060

80808080

100100100100

120120120120

((((Launch Year ))))

Result Result Result Result Forecast Forecast Forecast Forecast

Total number of blockbusters sold

on the market

Number of blockbusters delivered to the market annually

(average over 3 years*)

Number of blockbusters expiring annually after average patent term

(average over 3 years)

Page 25: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

a. Super-scale players: 2-3 companies

– Focusing on the conventional market, they compete with size as their advantage.

– In order to resist the pressure of falling earnings brought about by decreasing market growth rates, they buy out their competitors (achieving cost synergies) and advance the process of consolidation between superior companies.

– Global market share of the top player is 20-30%.

b. Specialized players: many

– As the market becomes increasingly complex, they capitalize on a single strength unrivaled by others.

– A diverse range of specialized players exists and new players will continue to enter the market.

c. Global category players: 5-10 companies

– They have global reach, and construct top-level franchises in multiple highly specialized therapeutic areas/diseases.

– While not greatly affected by the declining growth of conventional markets, they can sustain their level of growth by taking advantage of the increasing market complexity.

d. Local players

– Develop business in local markets by focusing on generics.

■■■■ There will be four basic types of players in the future market

Page 26: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Brief on China Pharma market

• About 400M covered by urban worker’s and resident insurance.

• About 800M covered by New Rural Cooperative health program for primary care

• Market size reached RMB 210 Billion with growth of 27% in 2009.

• Progress of new healthcare reform has profound impact on the industry.

• Healthcare technology assessment to be used for price negotiation for expensive drugs

Page 27: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Total China hospital market Reached 243.9 billion RMB in 2009

Local companies were driving the increase of china pharma MKT.

Source: IMS 4Q09

75,668.4 84,712.7108,308.8

139,897.3

178,947.031,482.435,987.1

43,192.1

52,083.9

64,947.2

243,894.2

191,981.2

151,500.9

120,699.8107,150.8

0

50,000

100,000

150,000

200,000

250,000

300,000

MA

T R

MB

(m

io)

JV + IMPORT 31,482.4 35,987.1 43,192.1 52,083.9 64,947.2

LOCAL 75,668.4 84,712.7 108,308.8 139,897.3 178,947.0

CHPA 107,150.8 120,699.8 151,500.9 191,981.2 243,894.2

MAT4Q05 MAT4Q06 MAT4Q07 MAT4Q08 MAT4Q09

5 yr CAGR=22.8%

Page 28: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Leading MNCs Ranking in past decade

Besides company merging, new product launching is another engine for MNCs to improve ranking in China market.

Page 29: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Page 30: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

New products play an important role to China business

0%

5%

10%

15%

20%

25%

2005 2006 2007 2008 2009

Ne

w p

rod

uc

t s

ha

re in

Ch

ina

bu

sin

es

s

PFIZER GROUP

ASTRAZENECA GROUP

BHC GROUP

SANOFI-AVENTIS GP.

ROCHE GROUP

NOVARTIS GROUP

GLAXOSMITHKL GROUP

NOVO NORDISK GROUP

M.S.D. GROUP

ELI LILLY GROUP

ASTELLAS GROUP

New product= launched within 5 years

Page 31: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Leading therapy class by Country in past years

Page 32: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Affluence is changing lifestyle and prevalence of chronic condition such as diabetes, hypertension and cerebro-vascular is rising rapidly.

0 5 10 15 20 25 30

Injury and poisoning

Psychotic disorders

Infectious Diseases

Malignant tumors

Neurological Diseases

Eye Diseases

Geriatric Chronic Bronchitis

Arthritis

Gallbladder Disorders

Acute Gastritis

Genitourinary Diseases

Cerebrovascular Diseases

Diabetes

Heart Diseases

Hypertension

2003

1998

1993

Source: MOH statistics yearbook 2008

Urban Patient Number (Mil)

7.4%

6.9%

-3.3%

7.0%

1.4%

0.9%

-2.2%

-1.0%

0.5%

-0.5%

2.4%

8.6%

16.7%

4.8%

12.5%

7.4%

6.9%

-3.3%

7.0%

1.4%

0.9%

-2.2%

-1.0%

0.5%

-0.5%

2.4%

8.6%

16.7%

4.8%

12.5%

CAGR93-03

Page 33: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

The elderly is taking a growing share of the China Total population giving another evidence to the increase of the chronic disease.

Source: National Bureau of Statistics

Population composition by age

0

20

40

60

80

100

120

Sh

are

of

To

tal p

op

ula

tio

n %

>65 5.58 7.09 9.35

15~64 66.81 69.99 72.78

0~14 27.7 22.9 17.88

1990 2000 2007

Page 34: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Antibiotics lost its share in the last decade while share of TCM and Oncology's are increasing drastically

Top 10 TCs in 2008

0%

5%

10%

15%

20%

25%

30%

35%

SYS. ANTIBACTERIALS

TCM

ONCOLOGICS

INTRAVENOUS SOLUTIONS

CEREB.+PERIPHE.VASOTHERAP

ANTI-ULCERANTS

ANTI-HYPERTENSION

CARDIAC THERAPY

IMMUNOSTIMULATING AGENTS

DRUGS USED IN DIABETES

Market share (%)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

CAGR (%)

1999 Value Share 2008 Value Share CAGR99-08

Chronic diseaes

Source: IMS 4Q08

Page 35: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

In 6 of top 10 TCIII in China market, the sales of generic product is even bigger than the origin product (red line)

Source: IMS

Page 36: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Comparison of Pharma Industry of China and India

• Similarity– Production of low cost, low concentration of industry

– Mainly produce Generics

– Small share of independent innovation research and the proportion of drugs

• Difference– The manufactures in china always copy low-tech product and

compete in the market with low price but seldom choose high-tech product

– The India manufactures choose a better way– innovative copy and get their own patent so that get more profit.

Page 37: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Pharma R&D in China

• Majority of pharma industry have been focusing on copying in past few decades.

• China has decided to become an innovative state in 2007.

• Many budget allocated for life science, RMB 6.6Billion allocated to various projects since late 2008.– Projects included all types of collaboration of industry and

research institutions and healthcare institutions.

– Grant amount usually less than 200M per institute.

• R&D is encouraged by the government but not sufficient for return to investment for pharma R&D due to regulatory and risk sharing system in China.

Page 38: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Key barriers for Pharma R&D in China under current registration system

•Requesting Pharma R&D may not be equipped with the production facilities

• Pharma R&D have to transfer the technology to drug manufacturer, the right and benefits are not well protected

Key benefits of market authorization system for Pharma R&D in China

•Pharma R&D can be the Marketing Authorization Holder without production facilities

•Pharma R&D can collaborate with drug manufacturer for toll manufacturing with/without mandatory technology transfer

•Reasonable amount of return back to R&D as incentive for stimulating sustainable R&D

•Pharma R&D can focus on R&D with their key competence 38

Marketing Authorization System

Page 39: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

About clinical trial in China

Page 40: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, ChinaChina Is Underrepresented Relative To Other CountriesBased On Its Population And Market Size

Source: Clinicaltrials.gov; Global Insight; IMS; team analysis*CAGR Cumulative Annual Growth Rate

Phase III trials sponsored by industry

32

54

25

26

26

36

28

25

CAGR* of trials

(2003-2007)

89

92

99

58China

106India

100Czech

144Poland

128Russia

Argentina

Brazil

Mexico

9

4

963

378

90

250

48

85

Number of trials

(2007)

Number of trials per 100 million population (2007)

8

6

3

11

44

23

17

34

Number of trials per

$1bn drug sales (2007)

Page 41: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Global Clinical Trial in China• According to SFDA record during Jan 2004 and Apr 2008, the

average evaluate time of global clinical trial is 7 month.

Page 42: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Benefits

• Submission to and review by relevant regulatory authorities at the same time• Broader regulatory oversight and experiences

• Earlier availability of innovative drug therapy to emerging market population; ultimately leads to reduction in “drug lag”

• Enables science-based approach to better define intrinsic and extrinsic factors (risk-based) • Identify clinically meaningful ethnic differences & discuss next

steps• Registration dossiers to include higher percentage of Asian data

• Advance knowledge, experience and competence of drug clinical development of investigators / medical community

42

Simultaneous Global Development

Page 43: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Simultaneous Global Development-2

Challenges• Longer CTA approval times (agency & ethics committee)

& start-up times

• Other general barriers (not inclusive of all countries)• Lack of harmonization – requirements, processes

• Unique requirements, outside international standards (e.g., country-specific Quality data)

• Lack of formal mechanism for agency consultation

• Inflexibility to CTA amendments (protocol & quality changes)

• Uncertainty of ICH/WHO GCP enforcement

• Inefficient/outdated review processes, lack of transparency

• Unpredictable requests

• Intellectual property concerns

• Insufficient resources within regulatory agencies

Page 44: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Global development could speed up product launch in China.

Page 45: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

• Separation administration of CTA and NDA

• Implementation of Special Review Procedures

• Speed up the approval process for clinical trial of innovative products

• Enhancement of clinical trial administration by allocating the responsibilities to all stakeholders

• Introduction of Marketing Authorization System

• Communication and interaction among stakeholders

• Harmonization, the principle of “ sameness” will direct the development path

45

RDPAC’s suggestion on SGD

For SGD, it is a race to change! Who will be left behind ?

Page 46: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Source: RDPAC Drug Registration Timeline Survey

Trend – Increasing IMCT in China

Page 47: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

- 47 -

Drug Development Model in China

Yeste

rda

yT

od

ay

Global Development CPP R-CTA Review Clinical Trial IDL Review

4 YearsApproval

Outside China

ApprovalIn China

A Linear Development Model Following International Approval

≥4 years drug lag

A Parallel Development Model

Global Development CPP R-CTA Review Clinical Trial IDL Review

Clinical TrialGCTA Review IDL Review

2 Years

CPP

CPP = Certificate of Pharmaceutical ProductR-CTA = Regional Clinical Trial ApplicationIDL = Import Drug LicenseGCTA = Global Clinical Trial Application

≥2 years drug lag

Page 48: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

- 48 -

The Road To Enlightenment…Follow The Lights

Page 49: R&D: Life Line for pharmaceutical companies: A GM perspective 1/PLENARY SESSION/P 04... · pharmaceutical companies: A GM perspective • Joseph Cho • CEO, ... Roche Genentech JR

2nd DIA China Annual Meeting | May 16-19, 2010 | Beijing, China

Many thanks for your kind attention!

[email protected]

www.astellas.com.cn

www.rdpac.org

49