HPAPI growth driven by virtual and mid-sized pharma, with biosimilars expanding rapidly in Europe SUMMARY of part ii:
Gil Y. Roth, President, Pharma and Biopharma Outsourcing Association:
• Forecasts CDMO mega-mergers in the next year – combining API heavy firms with finished product ones.
o Cautions that such mergers may not be successful
• CDMOs will advance continuous manufacturing and other new manufacturing technologies faster than in-house pharma
• Contract manufacturers to be the missing link in facilitating R&D into less profitable orphan and tropical disease drugs
• In terms of the FDA, CDER, and other stakeholders CDMOs will now be viewed as partners, not just service providers
• CDMOs to advance complex generics with new formulation technologies
Vivek Sharma, CEO at Piramal Enterprises Ltd
• Forecasts HPAPI market to grow to over $25Bn by 2023 driven by oncology products, with outsourcing accounting for $6Bn of manufacturing from predominantly mid-sized and virtual pharma (with no captive resources)
• Increasingly we will see some CDMOs consider using investment arms to take equity stakes in targets they manufacture
o For late-stage products CDMOs to consider risk-sharing in exchange for larger cut of commercial volumes
o In early development, some CDMO’s may consider receiving lower compensation upfront, in lieu of future payments tied to a fund raising event
• The use of biotech APIs to gradually increase from its base of 15% market share
Dr. Minzhang Chen, CEO at STA Pharmaceutical, a WuXi AppTec company
• The Chinese pilot plan for Marketing Authorization Holder (MAH) will see a growing number of big pharma and Chinese biotechs driving growth in the Chinese CDMO space
• In the next 2-5 years we will see patented drugs emerging from China for global patients, with a number of Chinese biotechs running late stage research programmes currently
• Over the next 5 years regulations and guidelines from the China FDA will be more aligned with those in USA and EU.
• Chinese CDMOs with facilities in both the US and China will play a key role in bridging the two largest global markets
o Enabling companies outside China to bring their products to China faster, or perhaps more significantly Chinese biomedical research companies to bring their products to the USA
Ravi Limaye, President, Marketing at Biocon
• Expected patent expiration of 12 biologics by 2020, will lead to potential biosimilars sales of $25-35 billion
• New biologic treatments will be available for severe asthma, chronic eczema, atopic dermatitis, and familial hypercholesterolemia
• Developed markets continue to have the highest number of biosimilar molecules in development – estimated at 29 in Europe, 19 in the US and seven in Japan
• Nearly 25 Indian companies operating in the biosimilar space are marketing close to 50 products in the Indian market.
• Warns that global regulations and guidelines need to evolve if biosimilars are to make as much of an impact as small molecule generics have in the past 25 years, including interchangeability and naming conventions
Amsterdam, 04 October 2016:CPhI Worldwide, (#cphiww) organised by UBM EMEA, announces the findings of part ii of the 2016 CPhI Annual Report, which focuses on the immediate and short-term trends in pharmaceutical outsourcing. Four experts – Gil Roth, Vivek Sharma, Dr Minzhang Chen and Ravi Limaye – examine the implications on growth prospects and drag factors across the EU, China, India and the USA.
The overall findings reveal that recent outsourcing trends are now accelerating, with acquisitions of not only larger contract manufacturers adding specialist technologies from smaller niche companies, but increasingly, we will see larger API-led firms trying to merge or partner with finished product specialists of similar size. In terms of product classes, ADCs, HPAPIs and biosimilars are anticipated to see rapid growth in Western markets. In China and India, biosimilars are also predicted to grow steadily, with harmonisation to FDA standards also anticipated. Perhaps most strikingly, it is also forecast Chinese biotech companies will increasingly try to partner with CDMOs based in western markets to bring future products to market.
Gil Roth, President of the Pharma and Biopharma Outsourcing Association argues this is a key time for the industry as many of the largest players are looking holistically at how they can bring in new services and meet future drug development challenges – with even mega-mergers likely to be attempted. Beyond acquisitions, the other major progression is in the nature of relationships with pharma, as increasingly CDMOs are viewed as strategic partners not services provides. As such, he predicts that in the near future we will see more risk-sharing approaches to development work, with contract providers taking more risks, but also, getting greater potential profits as a result. He added, ‘what we will also see is that the industry is extremely well placed to help commercialise orphan products, tropical diseases and complex generic thanks to the new wave of manufacturing technologies being implemented.’
One other major growth area particularly in Western markets is HPAPI’s, Vivek Sharma, CEO at Piramal Enterprises Ltd envisages the industry will grow rapidly thanks to the pipeline of targets emerging from mid-sized pharma and biotechs, with no captive in-house resources. Echoing Roth’s perspective, Vivek predicts increasingly we will see ‘some CDMOs consider using investment arms to take equity stakes in targets they manufacturer’. For late-stage products, CDMOs will consider risk sharing in exchange for a larger cut of commercial volumes, and in early development, some will accept lower compensation upfront, in lieu of future payments tied to a fund raising event. Overall, he states that the majority of growth in HPAPIs work will be undertaken by large CDMOs, with a proximity to Europe and the USA – with 80% of products for oncology, and bio APIs now increasingly from there 15% market share.
Dr. Minzhang Chen, CEO of STA Pharmaceutical, a WuXi AppTec company, outlines a very positive future for both CMOs and Chinese research companies, stating that in the next2-5 years we will see patented drugs emerging from China for global patients, with a number of Chinese biotechs running late stage research programmes. There is also going to be increased convergence between China FDA and FDA/EU standards over the next 5-years, with the pilot plan for Marketing Authorization Holder (MAH) opening up further opportunities.
As a result, Chinese CDMOs with facilities in both the US and China will play a key role in bridging the two largest global markets. Enabling companies outside China to bring their products to China, or perhaps more significantly, Chinese biomedical research companies to bring their products to the USA.
The report also forecasts biosimilars are going to have a much larger global significance in both Western and emerging markets. Ravi Limaye, President, Marketing at Biocon antipicates rapid growth in this market, with 12biologic exclusive licenses expiring by 2020, leading to global sales of $25-35 billion. Moreover, he states that Europe remains the main market for biosimilars in development (29), but increasingly we will see the rise of biosimilars in the USA (19 products) and Japan with seven products under development. However, he tempered his growth predications by cautioning that still much work is needed to standardise interchangeability and naming conventions if biosimilars are to have the same impact as small molecule generics have had in the last 25-years.
Chris Kilbee, Group Director Pharma at CPhI Worldwide: “The outsourcing sector continues to grow apace globally, as evidence by our own developments and growth at ICSE. What is most significant is that they are now an integral component of the drug development and manufacturing process. Not simple service providers, but the strategic partners pharma needs to bring its products to market. We will see further outsourcing growth, specifically for newer niche technologies, and this is where CPhI will continue to play an essential role in facilitating these meetings and bringing pharm closer together.”
For a copy of the full articles in the CPhI Annual Report 2016 – released at CPhI Worldwide in Barcelona (4-6th October) – please visit http://www.cphi.com/europe/cphi-annual-report
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Notes to editors
About CPhI
CPhI drives growth and innovation at every step of the global pharmaceutical supply chain from drug discovery to finished dosage. Through exhibitions, conferences and online communities, CPhI brings together more than 100,000 pharmaceutical professionals each year to network, identify business opportunities and expand the global market. CPhI hosts events in Europe, Korea, China, India, Japan, Southeast Asia, Istanbul and Russia, and co-locates with ICSE for contract services, P-MEC for machinery, equipment & technology, InnoPack for pharmaceutical packaging and BioPh for biopharma. CPhI provides an online buyer & supplier directory at CPhI-Online.com.
For more information visit: www.cphi.com
The UBM EMEA annual schedule of Pharmaceutical events includes: CPhI, ICSE, P-MEC and InnoPack Worldwide (4-6 October, 2016, Fira de Barcelona Gran Via, Barcelona, Spain); CPhI & P-MEC India (21-23 November, 2016, BEC and BKC Exhibition and Convention Centres, Mumbai, India), Pharmapack Europe (01-02 February, 2017); CPhI Istanbul (8-10 March, 2017 at the IFC Istanbul Expo Center, Istanbul, Turkey); CPhI, P-MEC and Innopack South East Asia (22-24 March, 2017 at the Jakarta International Expo- Jakarta, Indonesia); CPhI Russia (28 March – 30 March, 2017 at JSC VDNH (VVC), Pavilion 75, Hall A, Moscow); CPhI, ICSE, P-MEC, BioPh and InnoPack Japan (19-21 April, 2017 at the Big Sight Exhibition Centre- Tokyo); InformEx (16-18 May, 2017); CPhI China and P-MEC (20-22 June, 2017 at SNIEC, Shanghai, China); CPhI Korea (23-25 August, 2016);
About UBM EMEA
UBM EMEA connects people and creates opportunities for companies across five continents to develop new business, meet customers, launch new products, promote their brands, and expand their market. Through premier brands such as TFM&A, Internet World, IFSEC, MD&M, CPhI, Cruise Shipping Miami, the Concrete Show, and many others, UBM Live exhibitions, conferences, awards programs, publications, Websites, and training and certification programs are an integral part of the marketing plans of companies across more than 20 industry sectors.
