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The Sustainability of Generics

The Sustainability of Generics . Dr. Brian W Tempest www.briantempest.com Centre for Doctoral Training in Healthcare, University of Oxford, UK 8 March 2012.

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The Sustainability of Generics

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  1. The Sustainability of Generics Dr. Brian W Tempest www.briantempest.com Centre for Doctoral Training in Healthcare, University of Oxford, UK 8 March 2012

  2. 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 has 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 41 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. He is now Independent Chairman of Religare Capital Markets PLC , a Non Executive Director of Fortis Healthcare the leading Asian Healthcare Company, a Non Executive Director of SRL the largest Indian Diagnostic Company and a Non Executive Director of Glenmark Pharmaceuticals. He is a member of the SCRIP Global awards panel and is on the Editorial Board of the Journal of Generic Medicines. Brian speaks at global conferences and more information on these presentations can be found on his website www.briantempest.com. 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 now Chairman and Senior Partner of Hale & Tempest Co Ltd

  3. Healthcare Pressures Forever - 2050

  4. Healthcare will explode further in Asia

  5. Consolidation in Generics 2003 - 2010

  6. Structural Changes - Big Pharma

  7. Fewer New Molecules Approved

  8. 2010-21 FDA NCEs Source: Fiercebiotech 22 Jan 2011 2011-34 (15 Big Pharma)

  9. Eventually the cost of capital consumed showed a poor return • “Nobody endured these lessons harder than Pfizer. The company built the world’s largest pharmaceutical research centre in Connecticut, USA , a 160 acre site with more than 5,000 employees at its peak and 2.7m sq ft of research space. But the only major drug to come out of the sprawling facility in the past 20 years was the smoking cessation treatment Chantix” Source; Pharmatimes February 2012

  10. Approvals & Reimbursements Source: Pharmatimes UK August 2011

  11. US 2010 False Claims Fines Chemistry World Jan 2011 2011 False Claims Fines - Pfizer $2.3b, Lilly $1.4b, J&J $1.b

  12. Top Five US Industries for layoffs in 09/10 Source Challenger, Gray & Christmas

  13. Merck – No 1 Layoffs in 2011 source FiercePharma

  14. Big Pharma Strategies • Share repurchase - AZ, Pfizer, Sanofi Aventis • Shedding businesses – Pfizer $1.9b nutrition, $3.6b animal health, £2.4b Capsugel • Eye Care - Novartis & Alcon • Consumer Healthcare – Sanofi Aventis, GSK • OTC – P&G with Teva • DPI Inhaler – Pfizer & Mylan • Generics – Pfizer, Sanofi Aventis, AZ • Pharmemerging – GSK, Abbott, Daichi Sankyo

  15. M&A Deals in Pharmemerging Markets Source: Company Filings, Mape Securities

  16. Structural Changes - Generic Companies

  17. Pricing Pressures Source: Watson

  18. European Generic Prices Source Ranbaxy

  19. Mylan won’t follow “irrational behavior” Source : Generics Bulletin 5 August 2011

  20. India Pharma Stock has consistently outperformed Global Peers Bloomberg

  21. Emerging Market Equities in last 12m Source: 30 Jan 2012 Business Standard

  22. Rising CompetitionSource: JM Financials 24 August 2011, Deutche Bank 8 July 2011 • With generic Lotrel higher strengths there was an unexpected excessive number of generics approved after the exclusive period ended • Increased competitive activity with para 4 filings. Multiple players for small opportunities. • Small new Indian players in para 4 - Macleods for Lipitor, Hetero for Nexium

  23. India & China Generic Companies Source – FT

  24. Top 25 Global Generic Companies Source: Generics Bulletin 10 June 2011

  25. Next 24 Global Generic Companies Source: Generics Bulletin 10 June 2011

  26. USA Generics Filings Source: Deutsche bank July 2010

  27. Pending ANDAs source: Deutsche Bank Jan 2012

  28. US Litigation Risks are Substantial • Patent Challenges on rise - 65 FTFs in 2009 • Generic success rate at 48% (76% with deals) • 3 courts hold 69%, with 36% success e.g. NJ • 4 courts never ruled against generics e.g. NY • At Risk launches on the rise - 6 in 2009 • Teva has 12 of the 28 At Risk launches 2002/9Source RBC Capital Markets January 15 2010 • Recent At Risk launch damages include – Apotex $0.44b, Sun $0.9b, Teva $1b+ Famvir • Teva rethinking At Risk strategy

  29. China Pharma Industry Capex Plans Source: Stravencom

  30. India Pharma Industry Capex Plans Source: MAPE

  31. FDA DMFs from China 3Q 2011

  32. FDA DMFs from India 3Q 2011

  33. Indian Generic FDA ANDA Approvals

  34. Indian Companies Changing Hands Source Mint Research December 13 2011

  35. Frost & Sullivan forecast the Global Generic Market at $231b in 2017 FiercePharma

  36. 70% of Top products will be Biologic-2016 Source: Sandoz EGA Conference 2011

  37. Biosimilar Patent Expiries $17b in 2015 Source: Sandoz

  38. Biosimilar Patent Expires $64b in 2015 Source: IMS

  39. Number of mABs entering the clinic annually rose to 54 in 2008 Source: Tufts

  40. How much is a Biosimilar worth? Source: Datamonitor

  41. Biosimilar Partnerships – New Faces • Cipla & Biomab, China $165m 12 products • Richter & Stada – mABs • Celltrion, Korea & Hospira, Egis, Hikma, BB • Biocon & Mylan, USA • Teva & Lonza, EU • Biocon Idec & Samsung, Japan • Watson & Amgen, USA • Fuji Film & Kyowa Hakko Kirin • Baxter & Momenta, USA • Actavis & Bioton,Poland • Pfizer & Hisun, China

  42. A New World Order in Generics is Coming with New Faces

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

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