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R&D: Life Line for pharmaceutical companies

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Who will be left behind ? Source: RDPAC Drug Registration ... screening 2 3Y 3 5Y 5 10Y Animal studies Formulation Clinical trials P1 P2 ... – PowerPoint PPT presentation

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Title: R&D: Life Line for pharmaceutical companies


1
RD Life Line for pharmaceutical companies A
GM perspective
  • Joseph Cho
  • CEO, Astellas Pharma China
  • Vice Chairman, RDPAC

2
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

3
Protection of IPR Essential for financing drug
RD
4
Increasing RD cost ratio in pharma and Bio
industry
???????????(2003)???????????????10??
???????????? N0.13
5
Characteristics of patent for pharmaceuticals
Pharmaceuticals
Automobile, Electronics appliances
Formulation patent
Substance
Drug Substance patent
formulations
formulation
a product is composed of hundreds and thousand of
patent?impact of a single patent
limited. Existence of a patent may not hinder the
develop of other patents
One Basic patent(substance) High royalty
fee Giving up of new drug development due to
patent infringement
6
development)
total 1020Y
Drug discovery
Clinical trial
regulatory
Screening
Pre-clinical
23Y
510Y
23Y
35Y
launch
Investigation
Clinical trial P1?P2?P3 Efficacy and safety in
human PK PD
Optimizing Candidate compounds
Mode of action, AMDE pharmacokinetics, Pharmaco
dynamics formulation
Apply
approval
RA
1compound 10,000
510 compunds 10,000
5,000 10,000 compounds
500,0001000,000 compounds
No. of compounds
Developed compounds
Library
Synthesized
Product
Cost of JY 80 Billion/1 NCE
7
Exclusive period
Launching of NCE
Launch of generics
Discovery screening
Pre-clinical
Review
Clinical
35Y
23Y
510Y
23Y
Application
approval
Basic research
Optimizing Invention research
Animal studies Formulation
Clinical trials P1?P2?P3 CMC
1015Y
review
a
1015years for RD
?a extended IPR
Patent application
Patent 20Yra(Max.5Yr) exclusivity(Max.25Yr)
8
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 RD investment return
  • Early entry to the market essential

9
How important is RD?
  • 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 RD 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

10
Relationship between RD investment and No. of
new drugs launched
?????
RD expense (US Million)
??????????
11
EU companiesMerger?scale up?restructure
COG reduction?RD increase?SM increase
12
Astra
AstraZeneca
93 ???????????
99 ??
ICI
Zeneca
13
Key Acquisitions in 20082009 in the industry
14
Key Acquisition cases in Jan.Feb. 2010 in the
industry
15
Leading MNCs portfolio by development status
Most of leading MNCs have a big discover products
base.
Source Thomason Pharma
16
Some thoughts about drug discovery
17
2nd golden period
First Golden Period
??????
Pioneer technology Genomics
Biotechnology Recombined Genes Cell
fusion Antibody
Pharmacology Receptor Ion Channel Enzyme
Epoch making New drugs Vaccines Gene-chips
Organic Chemistry Naturals
Insulin(DM) Growth hormone
? antagonist(AnginaHypertension) a
Antagonist(HypertensionBPH) H2
Antagonist(Pepti-ucler) Ca antagonsit(Hypertension
Angina) ACE inhibitor(HypertensionCardiac
Failure) HMG-CoA reductase(Hyperlipidemia)
Patent Expiry
????
Aspirin (Rheumatoid Arthritis)
1800
1900
1950
1960
1970
1980
1990
2000
2010
(?)
- ?????????????????????1998?.??? -
18
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

? ?
(Inspiration)
? ?
(Discovery )
? ?
(Invention)
Innovation
19
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?

20
The relationship between the level of
satisfaction with medical treatment and the
level of contribution that medication makes to
treatment (Japan)
100
Peptic ulcer
Hypertension
Contribution of medication to treatment ()
90
Angina Pectoris
Gout
Diabetes mellitus
Tuberculosis
Hyperlipidemia
Asthma
Arrhythmia
80
Chlamydia infection
Candidiasis
Allergic rhinitis
Herpes virus infection
Epilepsy
70
Dermatophytosis
Anxiety
Leukemia
Myocardial infarction
Depression
MRSA infection
60
Prostate hyperplasia
Prostate cancer
Schizophrenia
Parkinsons disease
SLE
50
Glaucoma
Low back pain
Atopic dermatitis
Irritable bowel syndrome
Pressure sores
Rheumatoid arthritis
Chronic obstructive pulmonary disease
Endometriosis
40
Osteoporosis
Autonomic ataxia
Nephrosis syndrome
AIDS
Transplantation
Cerebral infarction
Occlusive peripheral arterial disease
Hepatitis C
Hemorrhagic stroke
Stress urinary incontinence
30
Breast cancer
Urinary incontinence
Diabetic neuropathy
Fibroid
Chronic glomerulonephritis
Osteoarthritis
Spondylosis
Cataracts
Uterine cancer
Diabetic nephropathy
Hepatitis B
Diabetic retinopathy
Cirrhosis
Chronic pelvic pain
20
Neuromuscular disturbance and myopathy
Chronic renal failure
Stomach cancer
Lung cancer
Colon cancer
Liver cancer
Multiple sclerosis
Alzheimers disease
10
Senile dementia
Level of satisfaction with medical treatment ()
0
0
10
20
30
40
50
60
70
80
90
100
Satisfaction is relatively high for diseases in
the PCP market
Diseases mainly taken care of by PCPs Note
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
21
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

22
6 phases of failed clinical development project
  • Enthusiasm
  • Disillusionment
  • Panic
  • Search for guilty
  • Punishment for the innocent
  • Praise and honors fir non-participants

23
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.

24
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
120
Number of blockbusters launched, Number of
blockbusters with expiring patents
Number of blockbusters
Result
Forecast
100
Total number of blockbusters sold on the market
80
Number of blockbusters delivered to the market
annually (average over 3 years)
60
40
20
Number of blockbusters expiring annually after
average patent term (average over 3 years)
0
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
(Launch Year )
Stagnation of new deliveries and the expiration
of patents will simultaneously brake market
growth.
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 US500 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 MA process.
Source FDA, Lehman Brothers, Paine Webber,
Scrip, BCG analysis
25
There will be four basic types of players in
the future market
  • 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.

26
Brief on China Pharma market
  • About 400M covered by urban workers 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

27
Total China hospital market Reached 243.9 billion
RMB in 2009
5 yr CAGR22.8
Local companies were driving the increase of
china pharma MKT.
Source IMS 4Q09
28
Leading MNCs Ranking in past decade
Besides company merging, new product launching is
another engine for MNCs to improve ranking in
China market.
29
(No Transcript)
30
New products play an important role to China
business
New product launched within 5 years
31
Leading therapy class by Country in past years
32
Affluence is changing lifestyle and prevalence of
chronic condition such as diabetes, hypertension
and cerebro-vascular is rising rapidly.
33
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
34
Antibiotics lost its share in the last decade
while share of TCM and Oncology's are increasing
drastically
Chronic diseaes
Source IMS 4Q08
35
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
36
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.

37
Pharma RD 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.
  • RD is encouraged by the government but not
    sufficient for return to investment for pharma
    RD due to regulatory and risk sharing system in
    China.

38
Marketing Authorization System
  • Key barriers for Pharma RD in China under
    current registration system
  • Requesting Pharma RD may not be equipped with
    the production facilities
  • Pharma RD have to transfer the technology to
    drug manufacturer, the right and benefits are not
    well protected
  • Key benefits of market authorization system for
    Pharma RD in China
  • Pharma RD can be the Marketing Authorization
    Holder without production facilities
  • Pharma RD can collaborate with drug manufacturer
    for toll manufacturing with/without mandatory
    technology transfer
  • Reasonable amount of return back to RD as
    incentive for stimulating sustainable RD
  • Pharma RD can focus on RD with their key
    competence

38
39
About clinical trial in China
40
China Is Underrepresented Relative To Other
Countries Based On Its Population And Market Size
11
Phase III trials sponsored by industry
CAGR of trials (2003-2007)
Number of trials (2007)
Number of trials per 1bn drug sales (2007)
Number of trials per 100 million population (2007)
32
China
54
106
India
11
25
100
Czech
963
44
26
144
Poland
378
23
26
128
Russia
90
17
36
Argentina
250
34
28
Brazil
48
25
Mexico
85
Source Clinicaltrials.gov Global Insight IMS
team analysis CAGR Cumulative Annual Growth
Rate
41
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.

42
Simultaneous Global Development
  • 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
43
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

44
Global development could speed up product launch
in China.
45
RDPACs suggestion on SGD
  • 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

For SGD, it is a race to change! Who will be
left behind ?
45
46

Trend Increasing IMCT in China
Source RDPAC Drug Registration Timeline Survey
47
Drug Development Model in China
A Linear Development Model Following
International Approval 4 years drug lag
Yesterday
Global Development
CPP
R-CTA Review
Clinical Trial
IDL Review
Approval Outside China
4 Years
Approval In China
2 years drug lag
A Parallel Development Model
Today
Global Development
CPP
R-CTA Review
Clinical Trial
IDL Review
GCTA Review
Clinical Trial
IDL Review
CPP
2 Years
CPP Certificate of Pharmaceutical Product R-CTA
Regional Clinical Trial Application IDL
Import Drug License GCTA Global Clinical Trial
Application
- 47 -
48
The Road To EnlightenmentFollow The Lights
- 48 -
49
  • Many thanks for your kind attention!
  • Joseph.cho_at_cn.astellas.com
  • www.astellas.com.cn
  • www.rdpac.org

49
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