Biosimilars in Developing Countries: Key Issues Dr. Brian W Tempest www.briantempest.com Ad Hoc Expert Group Meeting UNCTAD, Geneva, Switzerland 21 January 2015

Dr Brian Tempest advises Companies, Banks, High Net Worth Individuals and Investment Funds on their Strategy in the Emerging World based on his wide experience in China, Japan, South East Asia and India where he has lived for the last decade. Brian is the Editor of the prestigious Journal of Generic Medicines. Previously he worked for Ranbaxy Laboratories since 1995 holding the position of Managing Director and Chief Executive Officer until 2005. He was then Chief Mentor and Non Executive Director until 2008 when he retired. He is one of the few westerners to have led a Sensex Nifty 50 Indian blue Chip MNC and as a result has a valuable insight into India. Brian has also worked for Glaxo as Regional Director Far East and Regional Director Middle East & Africa from 1985 to 1992. Brian has worked in the Pharmaceutical Industry for the last 44 years and has managed Healthcare businesses in North America, South America, Europe, Africa, Middle East, Australasia, China, Japan and India. He has also led many sessions at Investor Meetings held around the world from Tokyo to Las Vegas. He is now a Non Executive Director of Religare Capital Markets, Fortis Healthcare , SRL Diagnostics and Glenmark Pharmaceuticals. He is a member of the SCRIP Global awards panel. Brian speaks at global conferences and more information on these presentations can be found on his website www.briantempest.com. He is also an international advisor to UNCTAD and MAPE Brian has a PhD in Polymer Chemistry from Lancaster University in 1971 and in 2009 he became Chairman of the Advisory Board for the Lancaster University Management School, UK. He is a Fellow of the Royal Society of Medicine and a Fellow of the Royal Society of Chemistry and is a Chartered Chemist. He is also Executive Chairman of Hale & Tempest Co Ltd

Biosimilars Which Way?

Sanofi R&D - 72% Biologics & 50% mAbs source: Pharma Times 15 January 2015

Biosimilar Share to 2018 source: EvaluatePharma 2012

Biologics in 2016 Source: Cowen

Medicines getting More Expensive - USA source: Evaluate 2014

USA Most Expensive Medicines source: Evaluate 2014

Top 5 Approved Drugs in H1 - 40% mAbs source: Evaluate 2014

USA BTD 2013 source: Evaluate 2014, 7 nibs, 3 mAbs out of 33

Top 10 Biologics in 2013 $68b source: Evaluate 2014

Big Pharma Profit Margins from Biologics source: Fiscal Year 2011 Roche 2014

India Disease Profile source: Planning Commission India, Gyan Research 2014

Monoclonal Antibodies Complexity source: Roche 2014

Three Waves of Biosimilars source: SG EGA conference 2013

Biosimilars EU Patents Source:

EU SPCs ending each month for mAbs source: Generics Bulletin 8 August 2014

12 year data exclusivity in USA source: An Outlook on US Biosimilar Competition, 2014

Patents on Global Biologic Sales source: Biosimilars: A guide to Regulatory & IP Issues Jan 2015

Biosimilar Challenges for USA Approval source: Roche 2014

Biosimilar Regulatory Pathways source: Roche 2014

Volume Effect from Biosimilars source: IMS December 2011

Biosimilar Uptake in Europe source: Roche 2014

Biosimilars & Big Pharma source: Pfizer presentation January 2015

Biosimilar Global Sales vs Forecast source: Roche 2014

Global Biosimilars source: Edelweiss 2014

Biosimilar Leading Companies source: Novartis 2014

700 Biosimilars under Development source: PharmaTimes 30 September 2014

Sandoz Business Model source: Pharmacloud June 2012

Celltrion Manufacturing Facility source: Celltrion website, 140,000L expanding to 230,000L capacity

India R&D Expenses as % Sales source: Edelweiss 2014

India Biologics source: Edelweiss 2014

Biosimilars 1% of DRL Sales source: Edelweiss Research 2014

DRL Biosimilar Regulatory Challenges source: Roche 2014

First Herceptin Trastuzumab Biosimilar source: ET January 14 2014 Rs 40,000 per 440mg vial, Roche halved price at Rs 55,000

Licensed in from USA source: Biopharma Reporter 3 Dec 2014

Biosimilar Alliances – to share the risk Serum Institute & NeuClone Richter & Stada – mAbs Celltrion, Korea -Hospira, Egis, Hikma, BB, etc Biocon & Mylan, USA, mAbs Teva & Lonza, EU – dissolved July 2013 Biocon Idec+Samsung, Japan - now Merck US Actavis/Watson & Amgen, USA Fuji Film & Kyowa Hakko Kirin DRL & Merck-Serono, Germany - mAbs Bionovis (Brazil) & Merck Serono

Biosimilar Alliances source: Roche 2014

nibs (tyrosine kinase inhibitors) - small molecules which may replace mAbs Axitinib, Pfizer; Cediranib, AZ - cancer Pazopanib, GSK; Regorafenib, Bayer - cancer Sorafenib, Bayer(Nexavar) -cancer Sunitinib, Pfizer; Toceranib, Pfizer - cancer Vandetanib, AZ; Semaxanaib, Sugen - cancer Crizotinib (Xalkori) Pfizer, lung cancer, 2013 sales $0.3b with growth >100% Tofactinib, Pfizer, RA

Bayer Comments source: February 2 2014 Bayer

Strengths of Manufacturing Biosimilars in Developing Countries Huge Savings In 2016 11 out of top 20 pharma products will be biologics

Weaknesses of Manufacturing Biosimilar in Developing Countries Up front investment between $100m and $200m It takes many years before the products will be available Existing pharmaceutical manufacturing assets are unlikely to be relevant It is unfortunate that there is a variation in the nomenclature and regulatory pathway around the world. Biosimilars are sufficiently complex without these extra burdens

Opportunities of Manufacturing Biosimilars in Developing Countries Will allow independence of other countries for their complex medicines Once in the monoclonal segment other monoclonal antibodies will be available Substitution by the pharmacist should be allowed by local laws Timelines for development are so long that most patents will have expired by the time biosimilars are ready

Threats of Manufacturing Biosimilars in Developing Countries 12 year rate of return with huge investment Innovator companies are very protective Many global alliances between many companies - a single country model difficult Many products not in public area so there will be greater competition than expected Branded products in developing countries need a team of salesmen Doctors don’t like changing ill patients over Price cuts could be large

Some Recommendations for Developing Countries considering Biosimilars Regulatory pathways - use working pathways Manufacturing may be based on regional clusters, government agencies or PPP Product substitution by pharmacists allowed Financial incentives should be offered instead of direct shareholding Accept that prices will not fall below a certain level Nomenclatures of biosimilars should be same

Thank You brian.tempest@clara.co.uk www.briantempest.com