Transcript PowerPoint Presentation - Life Sciences

It Ain’t Easy
Deborah Brown
General Manager & Regional Vice President
Serono Canada Inc.
BC Biotech Association
Vancouver, March 2006
Biotech in Canada
A quick overview
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Almost 500 companies (over 1/3rd from spin offs)
Revenues of $3.8 billion
R&D expenditure nearly $1.5 billion
Directly employs 12,000 skilled workers
Biotech Human Resources Council estimates biotech
activities support 2500 organizations and over 200,000 jobs
• Market cap of Canada’s biotech companies estimated to
be over $15 billion (70% represented by ~10 companies)
Source: Statistics Canada, Uses and
Survey 2003
BC Development
Biotech Association
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A typical biotech is . . .
• Private
• Works in human therapeutics with an R&D focus
• Three-quarters of all companies have fewer than 50
employees
• Does not have a commercialized product
• Has less than 12 to 18 months of funding
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Pillars of Biotech Success …
Intellectual Property & Protection
Financing
BC Biotech Association
Access to market
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Paradox
“Biotechnology is an industry driven by science”
“Biotechnology today is all about money."
Dr. Tony Brooks,
Formerly of PricewaterhouseCoopers LLP
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Serono
• Global biotech leader, 3rd largest in terms of revenues
• Largest European based biotech
• Based in Geneva, Switzerland
• 100 years old as of March 10, 2006
• Almost 5,000 employees, revenues of $2.5B in 2005
• 4 therapeutic areas and an emerging TA in oncology
• Blockbuster drug, Rebif, for Multiple Sclerosis
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The Major Biotechnology Leaders
Market cap
(US$) as of
Dec 31, 2004
Lead Product
as % of
Sales
81,479
26%
57,141
46%
2,458
10,158
50%
2,210
22,218
68%
14,397
38%
6,228
17%
15,148
63%
6,743
84%
2004 Revenues US$m
10,550
Amgen
4,621
Genentech
Serono
Biogen-IDEC
Genzyme
Chiron
Gilead
MedImmune
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2,201
1,726
1,325
1,141
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Biotech Ranking Update – H1 2005
Lead
Revenues
Lead
Sales as % of
Product H1
y.o.y.
Product as %
Revenues
2005 Sales
Growth
Sales
($m)
H1 2005 Revenues
($m)
Company
Amgen
6,005
Genentech
2,988
Lead
Product
21.9%
96.7%
21.2%
1230.0
Epogen
42.1%
82.3%
38.9%
956.0
Rituxan
Genzyme
1,298
24.7%
100.0%
35.6%
462.0
Cerezyme
Serono
1,278
11.7%
91.0%
53.2%
618.8
Rebif
Biogen Idec
1,193
10.5%
95.7%
66.2%
755.4
Avonex
Gilead
926
47.2%
91.7%
47.9%
406.9
Viread
Chiron
826
8.8%
70.3%
18.9%
109.5
TOBI
MedImmune
598
2.7%
99.2%
88.1%
523.0
Synagis
Cephalon
566
24.5%
95.3%
42.7%
230.0
Provigil
851.3%
78.7%
Celgene
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90.0%
182.8
Thalomid
Vancouver,
March
2006
Data Source: Company SEC filings / Bloomberg / Analyst reports
Strong Financial Performance
Net Income ($M)
Total Revenues ($M)
Guidance
2’370 - 2’420
Guidance
492 - 497
2,019
390
1,538
1,377
1,133
1,240
301
317
321
2000
2001
2002
183
1999
2000
2001
2002
2003
1999
2004
2003
2004
• Over the last 5 years, total revenues doubled with a
compounded annual growth rate (CAGR) of 16%
• Net income CAGR over the last 5 years of 22%
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4 Therapeutic Areas, 13 products
• #1 MS product outside the USA and fastest
growing MS drug in the USA
• World’s #1 brand in the field of fertility
• Unique portfolio of state-of-the-art fertility products
• Fastest-growing product in the GH business
• The only GH therapy registered for AIDS wasting
• First biological therapy for psoriasis to receive EC
marketing autorisation
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Fostering a partnership culture
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Commercial Market Environment
Positive Forces
•
Favourable economic environment
•
Improved patient advocacy
•
Biotech addressing unmet needs
•Slow (!) regulatory approvals
Negative Forces
•Limited and deteriorating market access
•Biosimilars on the horizon
•Declining physician numbers
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Barriers to Success
1.
2.
3.
4.
5.
6.
7.
Low odds of clinical success
Regulatory inefficiency
High expectations of new biotech entrants
Market access barriers
Heavy expenses to service niche specialty areas
Too few or too many therapeutic areas
Competing against large pharma with more resources
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Probability of Clinical Success
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No guarantees, even at Phase III
Auto-immune diseases are multi-factorial
Few blood pressure cuffs
Placebo-controlled trials – the paradox
Lengthy ethics approvals
Phase IV gets bigger and bigger, and GCP
standard
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Inefficient Regulatory System
•
•
Accept the unique nature of bioscience inventions and resource
accordingly and/or adopt international standards and reviews in
regulatory practices
This includes:
– eliminating the backlog of new technologies
– launching the creation of an Orphan Product policy that
encourages and supports the development of treatments
for unmet medical needs
– establishing a directive to ensure government processes and
policies do not delay or discourage introduction and
adoption of new biotechnologies like vaccines.
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Health Canada Performance is Poor
Biologics
2000
2001
2002
2003
2004
2004
Perform ance (HC Biologics vs World)
Canada
AUS
EU
Sw iss
USA
1,033 day
avge
0
200
400
600
800
1000
1200
Submission Approval T ime (days)
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Improved Biologics Performance
Anticipated???
Biologics
2000
2001
2002
2003
2004
Drugs
Perform ance Tim es (Biologics vs Drugs)
2000
2001
2002
2003
2004
0
200
400
600
800
1000
1200
Submission Approval T ime (days)
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High Expectations
• Breakthrough disease areas – they want cures
• Many are injectables which increase
expectations on:
• Training
• Supply provision
• Ongoing support = Call Centers
• Improved administration, tolerability, efficiency =
lifecycle management!
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Standard Expectations for Biotech Drugs
e.g. The Clear Support Program
CSP “Get Back to Living Kit”
Overall Objectives:
1. Assist patient in self-injection
2. Ensure proper technique is
applied consistently for every
injection
3. Provide helpful tools
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Who Pays and Will They?
Reimbursement
Private
60%
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Public
40%
Managed
Open
20%
80%
Special authorization
Annual cap
Lifetime cap
Mimic provincial plan
New
Common
Drug
Review
CDR Recommendation
Conseil
du
Médicament
Québec
Decision
6 months post submission
BC Biotech Association
Provincial Drug Plan
Decisions
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4-12 months post CDR recommendation
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Cheaper by the dozen?
1. The expenses of servicing niche
specialty areas are heavy
2. Too few therapeutic areas
3. Too many therapeutic areas
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Biotechnology Lifecycle
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Too Few
PROS
• Efficient opex
• Intimacy with market
• Superior offerings vs. pharma
BC Biotech Association
CONS
• Too vulnerable to a new
competitor
• Very difficult to build
infrastructure for sales ops,
CHE, market access, medical
services, QA/QC, business
development etc.
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Too Many
PROS
• Have resources to build
shared services infrastructure
• Can leverage best practice
across therapeutic areas
• Less vulnerable to one TA
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CONS
• Difficult to feed each
therapeutic area
• Compete against big
pharma and their opex
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Patient and Physician Expectations
PsO sufferer or
Caregiver
seeking Tx
Dermatologist
&
Derm RN
Raptiva Rx
(“patient”)
CLEAR SUPPORT Program
(Raptiva DTP Pt Support Program)
PEP Program
Psoriasis education & awareness
(DTC Program)
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Education/ Value Added an
Expectation
Sponsors of Whitaker-McFarlin
MS Colloquium:
Sponsors of
MS Fellows
Program:
•Accredited by the University of
Minnesota / Endorsed by CMSC and
IOMSN
•Each award is a two year
fellowship ($50,000/year)
•Content overview:
•Two will be awarded to
applicants from across the US,
one will be awarded to a
Harvard applicant
•Epidemiology, Diagnosis, and Natural
History (clinical and MRI)
•Disease Modifying Therapies
•Symptom Management
•Whole Patient Management: Practical
Case Studies
Sponsors of
John Hopkins
CME Programs:
Sponsors of MS
Teleconnections:
•“Maximizing Long-Term
Outcomes in Multiple Sclerosis”
•Steering Committee: Peter
Calabrese, MD and Doug Kerr,
MD (Co-Chairs), Pat Coyle, MD,
Doug Goodin, MD, Norm
Kachuk, MD
BC Biotech Association
•200 CME teleconferences
•Accredited by Medical
Education Collaborative
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Competing with the Big Boys
Outsized on:
Salesforce size
Promotional spend
Lobbying power
Legal, sales operations, market research, business
analysis, competitive intelligence, manufacturing
capability, GXP expertise, medical services, broad
CRA teams.
Bundling power
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It Ain’t Easy, but It’s Worth It
“Advances in genetic engineering will not only have
dramatic implications for people and society, they will
reshape vast sectors of the world economy. The boundaries
between many once-distinct businesses, from agribusiness
and chemicals to health care and pharmaceuticals to
energy and computing will blur, and out of their
convergence will emerge what promises to be the largest
industry in the world: the life sciences industry.”
Enriquez & Goldberg, HBR March-April 2000
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TM
Thank You &
Good Luck!
www.biotech.ca
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