Specialty pharmacy Market overview By: John Sugrue

What is a specialty drug? May have special handling and/or storage requirements Usually not oral medications Could need healthcare provider administration May require regular monitoring (electrolytes, drug levels, etc…) Often requires a prior authorization through patient’s insurance

Common Specialty Conditions Cancer Anemia Multiple Sclerosis Hepatitis Cystic Fibrosis Psoriasis Rheumatoid Arthritis Hemophilia

Orphan Drug Act - 1983 Orphan Drug – meets the needs of a disease in which less than 200,000 people are afflicted. Provides incentives for drug companies to develop drugs for rare conditions Less than 10 specialty drugs were developed between 1973 and 1983 Since then, over 400 specialty drugs have been FDA approved http://www.fda.gov/ForIndustry/DevelopingProductsforRareDiseasesConditions/ucm2005525.htm

Top 3 56% Top 4 65% Diplomat 2%

Top 3 56% Top 4 59% Diplomat 3%

Top 3 57% Top 4 64% Diplomat 3%

Growth Since 2010, specialty pharmacy estimated revenue has grown from $39.2 billion to $98.3 billion (↑ 251%) Diplomat has grown from $600 million to $3.4 billion (↑ 567%) in the same time frame Report from IMS Health – within the past 10 years, spending has gone from $70 to $425 billion. http://www.wrbcorp.com/blog/bringing-the-specialty-pharmacy-market-into-the-billions/

Q2 results for Diplomat Released on 8/9/16 Total revenue was $1.09 billion (35% increase from last year’s 2nd quarter) 3% increase in prescriptions dispensed CEO Phil Hagerman states that this growth is more than it appears. Moved away from high volume, low revenue compounding at the end of last year. http://www.drugstorenews.com/article/diplomat-reports-q-results-including--total-revenue-gain?nocache=1

New FDA Drug Approvals - 2015 Most novel new drugs approved since 1992 45 new drugs and 9 biologics 16 of these were considered to be in a new class Of these new approvals, nearly half are considered specialty drugs. 25 for rare diseases 13 oncology drugs 4 hemophilia drugs 1 for von Willebrand Disease https://issuu.com/diplomatrx/docs/specialty_drug_approvals_2015_highl_7a4d31141f4d2f?e=15248128/32508071

Hemophilia Drug Approvals - 2015 4/29/15 – Ixinity (Recombinant Factor IX) – Indicated for Hemophilia B Other brand names already available: BenefIX, Alprolix, Rixubis 9/15/15 – Nuwiq (simoctocog alfa) – Indicated for Hemophilia A First derived from a human cell line Other brand names: Advate, Recombinate, Xyntha etc... https://issuu.com/diplomatrx/docs/specialty_drug_approvals_2015_highl_7a4d31141f4d2f?e=15248128/32508071

Hemophilia Drug Approvals - 2015 10/20/15 – Coagadex (Coagulation factor X) – Indicated for factor X deficiency First and only product indicated for this condition. 11/13/15 – Adynovate (PEGylated Factor VIII) – Indicated for Hemophilia A Attachment to polyethylene glycol extends the half-life (requires less frequent dosing) 12/8/15 – Vonvendi (recombinant von Willebrand factor) https://issuu.com/diplomatrx/docs/specialty_drug_approvals_2015_highl_7a4d31141f4d2f?e=15248128/32508071

Hemophilia Drug Approvals - 2016 3/4/16 – Idelvion (recombinant factor IX linked with albumin fusion protein) Longer acting factor IX 3/16/16 – Kovaltry (octocog alfa) – Indicated for Hemophilia A Another option for factor VIII replacement 5/27/16 – Afstyla (recombinant factor VIII single chain) Longer acting factor VIII https://www.primetherapeutics.com/en/news/prime-insights/drug-pipeline.html

ACE910 (emicizumab) Recombinant humanized bispecific antibody Binds to activated factor IX and X and mimics the action of factor VIII Subcutaneous drug that has a half life of 4-5 weeks Pharmacokinetic simulation suggested during weekly prophylaxis, peak and trough levels would only differ by ~5%. Out of the 64 patients in dose-escalation study, 2 were positive for anti-ACE910 antibodies Uchida N, Sambe T, Yoneyama K, et al. Blood. 2016 Mar 31; 127(13): 1633–1641.

ACE910 (emicizumab) Results from a study in patients with severe hemophilia A: 18 Japanese patients with severe hemophilia A enrolled All received once weekly SQ injection of ACE910 (12 weeks) 13/18 patients had no bleeding events 3 of whom had frequent bleeds before trial Less factor replacement was needed to cure a bleeding event No antibodies were developed Shima M, Hanabusa H, Taki M, et al. N Engl J Med 2016 May 26; 374:2044-2053

Questions?

References Developing Products for Rare Diseases & Conditions [Internet]. Silver Spring, MD. 2016 [2016 Sep 13]. Available from: http://www.fda.gov/ForIndustry/DevelopingProductsforRareDiseasesConditions/ucm2005525.htm. Fein A. Pharmacy Market Share for Specialty Drugs, 2010 [Internet]. Pembroke Consulting. 2011 [2016 Sep 13]. Available from: http://www.drugchannels.net/2011/12/pharmacy-market-share-for-specialty.html. Fein A. The Top 10 Specialty Pharmacies of 2014 [Internet]. Pembroke Consulting. 2015 [2016 Sep 13]. Available from: http://www.drugchannels.net/2015/03/the-top-10-specialty-pharmacies-of-2014.html. Fein A. The Top 10 Specialty Pharmacies of 2015 [Internet]. Pembroke Consulting. 2016 [2016 Sep 13]. Available from: http://www.drugchannels.net/2016/03/the-top-10-specialty-pharmacies-of-2015.html. Bringing the Specialty Pharmacy Market into the Billions [Internet]. WRB Communications. 2016 [2016 Sep 13]. Available from: http://www.wrbcorp.com/blog/bringing-the-specialty-pharmacy-market-into-the-billions/. Fein A. Our 2020 Outlook for Specialty Pharmacy Revenues [Internet]. Pembroke Consulting. 2016 [2016 Sep 13]. Available from: http://www.drugchannels.net/2016/04/our-2020-outlook-for-specialty-pharmacy.html. Diplomat reports Q2 results, including 35% total revenue gain [Internet]. Drug Store News. 2016 [2016 Sep 13]. Available from: www.drugstorenews.com/article/diplomat-reports-q-results-including--total-revenue-gain?nocache=1. Diplomat Publishes New Report on Specialty Drugs Approved in 2015 and Expected for 2016 [Internet]. Flint, MI. PRNewswire. 2016 [2016 Sep 13]. Available from: http://www.prnewswire.com/news-releases/diplomat-publishes-new-report-on-specialty-drugs-approved-in-2015-and-expected-for-2016- 300200604.html. Uchida N, Sambe T, Yoneyama K, et al. A first-in-human phase 1 study of ACE910, a novel factor VIII-mimetic bispecific antibody, in healthy subjects. Blood. 2016 Mar 31; 127(13): 1633–1641. Shima M, Hanabusa H, Taki M, et al. Factor VIII–Mimetic Function of Humanized Bispecific Antibody in Hemophilia A. N Engl J Med 2016 May 26; 374:2044-2053.