bridging the information gap of japan pharma mp ppt

MPAdvisors

Schedule (IST):

• 4:00PM: Welcome note & introduction of speakers and brief about Webinar – Tarun Shah of MP Advisors

• 4:05PM: ‘Opportunities in Japan Pharma – Post Turbulent Times’, by Dr. Kimura, CEO of Life Sciences Management Inc.

• 4:20PM: ‘Tools for Procuring Japan Pharma Information’ and introduction & functionality of • MP-Japan Pharma database’, by Devesh Singh of MP Advisors• 4:35PM: Japan – Current Manufacturing Practices & Likely Changes’, by Dr. Garugu, CEO, NuLink

Co. Ltd. • 4:50PM onwards: Q&A Session

日本の製薬会日本の製薬会

Bridging the Bridging the ‘‘InformationInformation--GapGap’’ of Japan Pharma: of Japan Pharma: Sources & Tools!Sources & Tools!

An Interactive WebinarAn Interactive WebinarJuly 25th, 2011

6:30 AM (NY), 11:30AM (London), 4:00PM (Delhi), 6:30PM (Beijing), 7:30PM (Tokyo)

Webinar - Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

Japan Japan PharmaPharma: : Opportunities Post Turbulent TimesOpportunities Post Turbulent Times

ByHiromichiHiromichi Kimura, Ph.D.Kimura, Ph.D.

CEO of Life Science Management, Inchttp://www.lsm-jp.com/index_e.html

Bridging the Bridging the ‘‘InformationInformation--GapGap’’ of Japan of Japan PharmaPharma: Sources & Tools!: Sources & Tools!

An Interactive WebinarAn Interactive Webinar

July 25th, 2011

http://www.lsm-jp.com/index_e.html


Japan Japan PharmaPharma: Key Thoughts: Key Thoughts

• Japanese Pharma market is stable if not rapidly growing; it remains second largest and one of the most predictable markets in the world

• Japanese Pharmas have poured enormous amount of money, $40B into foreign Pharmas in last 3 years – will continue this trend for a while.

• Because the Japanese government has been committing to double the Japanese generic market, everyone is chasing to grab growth opportunities in Japanese generic market.


Overview of Japanese Overview of Japanese PharmaPharma

($b)

1st Tier- Innovation- New Market Development

2nd/3rd Tier- Seeking for Survival Strategy

Generic Pharmas- Growth Opportunity Note: 2009, $1=\80

Global Sales of Japanese Pharmaceutical Companies


11stst Tier: M&ATier: M&A

Company Acquired company

Acquisition date

Cash Paid ($b) Purpose of Acquisition

Takeda Millennium May-08 11.1 Oncology

Daiichi SankyoPlexxikon Feb-11 0.81 Oncology

U3 Pharma May-08 0.30 Oncology/Biologics

Astellas OSI Pharma May-10 4.60 Oncology

EisaiMGI Pharma Jan-08 3.90 Oncology/Vaccine

AkaRx Jan-10 0.25 Leukemia/Oncology

Company Acquired company

Acquisition date

Cash Paid ($b) Purpose of Acquisition

Takeda Nycomed May-11 14.0 EU/Emerging Country

Daiichi Sankyo Ranbaxy Oct-08 4.6 Emerging Country/Generic

Investment for New Market DevelopmentInvestment for New Market Development

Investment for New Technology and Therapeutic AreasInvestment for New Technology and Therapeutic Areas

Note: $1=\80, 1Rupee = $0.023


22ndnd Tier: Seeking for Survival StrategyTier: Seeking for Survival Strategy

Oncology: Looking for alliance partners Kyowa Hakko Kirin, Nippon Kayaku

Trying to go beyond critical massShionogi, Dainippon Sumitomo

Domestic focused companiesOno, Kyorin, Mochida, Kissei, Nippon Shinyaku

Company Sales(2010, $M)

MKT Cap($M)

% of Domestic Sales

% of Long- listed

Focus Areas

Ono 1133 4,233 97% 80-90% Bioactive Lipids, enzyme inhibitors

Kyorin 867 980 97% 50% Respiratory, otolaryngology & urology

Mochida 627 853 Over 90% 80% Diabetes, obesity, chronic pain

Kissei 537 741 Over 90% 62% Genitourinary ,metabolism & endocrinology

Nippon Shinyaku

529 582 Over 90% 50% Urology, hematology, obstetrics & gynecology


Generic Pharma: Growing Opportunities (1)Generic Pharma: Growing Opportunities (1)

($b) Japan Rx Drug Market (Sales)

Gx Market:CAGR 16.4%

Total Rx Market:CAGR 2.0%

Almost doubled in 4 years

Note: $1=\80 Precondition: NHIP (Yakka) is stable during the term

The Japanese government has been committing to increase the Japanese generic market to 30% of Total Rx Drug in Volume


Japanese Pharmas:1st Tier: Establish a subsidiary dealing with Generic

• Takeda-Aska, Daiichi Sankyo-DS Espha, Eisai-Elmed Eisai2nd Tier: Move to generic company

• Meiji, Kissei, Nippon Chemiphar

Overseas Pharmas: M&A/Alliances for entry to JapanTeva: Acquired Taiyo Phama

• $500M for 57% of stake of Taiyo.Sanofi Aventis: JV with Nichiiko

• Sanofi:51%, Nichiiko: 49%

Generic Generic PharmaPharma: Growing Opportunities (2): Growing Opportunities (2)

1Bridging the ‘Information-Gap’ of Japan Pharma: Sources & Tools!

!

!

Introducing Japan Pharma Database [MPIntroducing Japan Pharma Database [MP--JPDJPD®®]]& Addressing Unanswered FAQ& Addressing Unanswered FAQ

July 25th, 2011

日本の製薬会社日本の製薬会社



Devesh SinghDevesh SinghSr. Analyst (Japan Pharma), MP Advisors

[email protected]

http://www.mpadvisor.com/

mailto:[email protected]


Procuring Data & Info.: Japan Specific Challenges Procuring Data & Info.: Japan Specific Challenges

Formulating aFormulating a competitive landscapecompetitive landscape of various therapeutic classesof various therapeutic classes in in Japan is challenging Japan is challenging vizviz a a vizviz the US and EU markets due to:the US and EU markets due to:

1. Operations of various MNCs who generate significant amount of revenue but do not disclose their sales – Market Research Agencies have their limitations; no projections

2. Disclosure of Clinical trial data – is limited/not detailed and is shared after a long gap.

3. Lack of equivalent sites such as clinicaltrials.gov, FDA’s Orange book, etc. – company reports, various categories of CT data available at scattered sources. Mostly in Japanese.

4. Very Difficult to get patent expiry info. from JP cos - Multiple patent extension, NO reliable Source in public domain

5. Large contribution of ‘Japan Only’ products - difficult to make competitive landscapes for overseas companies

6. Difference in clinical practices – e.g. GERD (H2 blockers vs. PPI’s)

7. Language


‘‘Japan OnlyJapan Only’’ Products: Specific Challenges Products: Specific Challenges

Drug Originator Licensee JP Launch sales

Radicut Mitsubishi Tanabe Not licensed 2001 28.0

Coniel Kyowa Hakko Not licensed 1991 21.00

Gasmotinpp

Sumitomo Takeda 1998 20.70

Anplag Mitsubishi Tanabe Not licensed 1993 16.9

Ceredist Mitsubishi Tanabe Not licensed 2000 16.3

Prorenal Ono Dainippon Sumitomo 1988 15.4

Depas Mitsubishi Tanabe Not licensed 1984 11.6Ebastel Sumitomo Meiji Seiku 2005 9.20

CompanyKey products sales

(¥b)

JP focused products sales (sold in JP

only) (¥b)

Weight of JP focused products

(%)

Mitsubishi Tanabe 201.10 91.3 45.4%Dainippon Sumitomo 190.80 72.5 38.0%Kyowa Hakko 106.60 22.8 21.4%Kyorin 83.25

‘Japan Only’ Products

Dependence on ‘Japan Only’ Products

Source: MP Advisors, Company reports



Multiple Patent Extension: Japan Specific Challenges Multiple Patent Extension: Japan Specific Challenges

Japan US EU

Introduction 1988 1984 1993

Maximum period

5 years 5 years 5 years

No.of extension

Multiple possible

Only once Only once

No.of patent eligible for extension

Multiple possible

Only one Only one

Multiple Patent Extension: Relative Standing


• Basic patent term can be extended multiple times e.g. by adding new indications• Related patents (method of use, mfg. etc.) can also be extended multiple times• JGPMA request to JPO to Limit the extension to only one patent and only once

CASE STUDY: Multiple patent extension of levofloxacin (~¥44b FY 03/10 A): Launched in Nov-93; JPO gives two entries for Cravit, showing application in 1990 (reg # 2523210) & 1993 (Reg. # 3244983 )!

1st staphylococcus and other 30 bacterium June 20062nd Anthrax, Pest, etc. October 20063rd Typhoid Fever , Paratyphoid Fever November 20074th Legionella June 2011

Most recently Levofloxacin received mfg. approval for 500mg/100ml IV bags & 500mg/20ml injections in Oct, 2010


Making Of MPMaking Of MP--JPDJPD®® (Secondary Data)(Secondary Data)A number of reliable secondary sources continuously scrutinized

Brands/ Company/ Sales

• Crecon consulting Inc.

• Japan Pharmaceutical reference (JPR)

• Company reports

• Drugs in Japan-2011 [本医薬品集フォーラム／監修

]

Patents & R&D/Pipeline

• IPDL (Industrial Property Digital Library)

• Japan Pharmaceuticals Information Center (JAPIC CTI)

• UMIN Clinical Trials Registry (UMIN-CTR) – in case physician belongs to university hospitals

• JMA CCT – in case physician belongs to private hospitals

Regulatory Related

• Korosho / Kosei-roudou-sho (MHLW)

• Kiko (PMDA)

• Kokuho Chuoukai (NHI)

• Chuikyo (Central Social Insurance Medical Council)


Making Of MPMaking Of MP--JPDJPD®® (Primary Data)(Primary Data)Primary data enriched thru ~25yrs of experience base

Primary Data Sources:

HISTORIC DATA POINTS

• MP proprietary financial models (15+ companies; all majors)

• In-house library of clinical data points from global companies

PROJECTING FUTURE

• Analyst’s projections of sales thru 2016 (~350 key products, ~60% of total market)

• Analyst views on NCE/NBE pipeline (viz. based on clinical data analysis, competitive landscape)

• Data acquired through interviewing management, supply chain etc - patent expiries (~250), issues related to ongoing trails etc.

• Interviews with ‘key opinion leaders’, regulators (views on price cuts, expected regulatory changes and incorporating them in projections)


MPMP--JPDJPD®® : Addressing FAQ: Addressing FAQ

Replace name of any product/ pipeline candidate/ thx. class/ comReplace name of any product/ pipeline candidate/ thx. class/ company/ time pany/ time line etc. (from 1000+ products, 100+ companies & 450+ pipeline line etc. (from 1000+ products, 100+ companies & 450+ pipeline candidates) candidates) –– Illustrative Examples OnlyIllustrative Examples Only

1. What % of sales of Toyama chemical is exposed to generics and what additional % will add-in in next 4 years?

2. There are rumors that MSD is taking over Santen – what could be the rational and synergies between the two for products & pipeline?

3. How many products of Abbott are actually owned by Japanese mfg. & which are these companies?

4. Which companies lead the Chinese medicine market and how it is evolving?

5. How the anti-diabetic market in Japan is evolving? How DPP IV & SGLT-2 inhibitors classes are shaping up & how they going to impact GLP-1 analog class?

6. Does anti-inflammatory segment offer opportunities of API/intermediate supply?

7. What are the opportunities for generic companies in anti-Parkinson's market?

8. What are opportunities for the generics manufacturers in next 5 years – within this what are the opportunities for generic drugs from metabolic & cardiac thx classes?

9. Which companies will hold their patent protected revenues in 2020?

Make 1000Make 1000’’s of such questions and MPs of such questions and MP--JPDJPD®® will answer them!will answer them!

1

Current Manufacturing Practices & Forecasting Current Manufacturing Practices & Forecasting Changes in PracticesChanges in Practices

By

HisamaroHisamaro GaruguGarugu



July 25th, 2011

2

Pressure Points For Acquiring Mfg. Synergies From Overseas Pressure Points For Acquiring Mfg. Synergies From Overseas

Optimizing Cost: Optimizing Cost: A number of pressure points force Japanese companies to search for methods to reduce cost, as little scope of further cost optimization exist from within Japan -

• High medical expenditure & govt.’s pro-generic policies• No control on price & biennial price cuts• Lower margins vs. US/EU/ Indian companies – further deteriorating • Increasing long-listed drugs contribution

De-Risking of Mfg. Facilities:

• Post natural disaster (in March 11), need of decentralizing mfg. capabilities (outside Japan) has intensified

Japanese Pharma Need of Growing Global:

• Improved technological capabilities in developing countries • Other Jap industries (e.g. automobile) has already been utilizing costs

synergy thru overseas alliances – Pharma is legging but will have to join

3

23.1

8.46.96.5

6.37.1

9.5

13.1

17.8

14.5

4.4

6.86.6 6.25.2

6.7

4.2

9.77

6.3

0.0

5.0

10.0

15.0

20.0

25.0

1992

A

1994

A

1996

A

1998

A

2000

A

2002

A

2004

A

2006

A

2008

A

2010

E

Year

% v

alue

Yakka-sa (%)

Price cuts (%)

Price-Cuts are Regular Exercise – But the Threshold is Reached!

Source: MP Advisors, MHLW

‘Yakka-sa’ vs. Price Cuts

Biennial Price Cuts Biennial Price Cuts –– Continuing Pressure to Optimize CostContinuing Pressure to Optimize Cost

A

4

Company HQ Name / Nature of Affected Production Facilities / products

Astellas Tokyo Nishine (Harnal & antibiotics) & Takahagi (bulk of Harnal)

Daiichi Sankyo Tokyo Onahama (API) & Akita (formulation)

Eisai Tokyo Kashima plant & Tsukuba labs (R&D Center)

Chugai TokyoUtsunomiya (major plant that makes – Actemra, Neutrogin and Epogin)

Shionogi OsakaKanegasaki plant - Bulk chemical manufacturing , antibiotic, analgesics for cancer pain

Kyowa Hakko Kirin2 Tokyo Takasaki plant & Fuji plant

Nich-Iko Toyama Yamagata factory & Saitama factory

Yamagata Towa Osaka

Sawai Osaka Kanto

Out of total major facilities, 2 are located in affected areas – Kashima (Redicut) & Askana (Ursho).

Mitsubishi Tanabe Osaka

DeDe--Risking of Mfg. FacilitiesRisking of Mfg. Facilities

Source: MP Advisors, Company Reports

Japanese Mfg. Plants Affected During Tsunami/Earthquake in March. 11

5

1/31/3rdrd of Current Market* Approaching Patent Expiriesof Current Market* Approaching Patent Expiries

~200 products going off patent in next 4yrs (worth ~¥2tr today) will come under generic pressure & their manufacturer will look for cost optimization to remain competitive – foreign alliance for API/intermediates will be one such measure…

Screenshot from MP-JPDB’s Company Analysis Section

Source: MP- Japan Pharma Database

* Excluding long-listed products sales

6

Near term impact (Already in force) Long term impact (>2yrs+)

• Biannual Price Cuts • Patients Co-payment

• Reversal Of ‘Check Box’ In Rx Form • Freedom To Stock One Generic Brand

• DPC Expansion • DPC For Out-patients

• Higher Dispensing Fee • Free Pricing For Generic Drug

• Mandatory Approval Of All Strengths • Freedom From Product Detailing

Reforms That Will Increase The Use Of Generic Drugs

Near term impact (Already in force) Long term impact (>2yrs+)

Reforms That Will Foster Innovation

• Increased Number Of Reviewers • Cost Based Pricing

• Better Infrastructure & Support for Clinical Trials • No Price Cuts During Patent Period

Reforms That Will Foster Innovation

Series of Reforms to Shape FutureSeries of Reforms to Shape Future

7

All Generic manufacturers* must be able to supply all strengths of drugs for which a generic or original drug is legally available in order to maintain stable supplies. This is irrespective of the profitability of a particular drug or dosage form

*This is a great burden on a generic drug suppliers in Japan.

Countermeasures:

• Tie up with local competitors to save cost and time like TOWA, SAWAI and NICHI-IKO at the R & D stage

• Branded and Generic Companies look to expand through partnership and M&A with outside firms in order to increase generic product lines, increase production values and stable supply

New Govt. Supply Rules for Generic ManufacturersNew Govt. Supply Rules for Generic Manufacturers

8

Master File System for Drug Substance Master File System for Drug Substance

• Foreign manufacturer of drug substance (~API/intermediate) has to apply for MF registration through an in-country caretaker with an address within Japan

• MF registration application form, notification, and other related documents shall be written in Japanese.

• Before filing MF, it is necessary for a foreign manufacturer to obtain a foreign manufacturer accreditation

9

GMP InspectionGMP Inspection

GMP Inspection has been indispensable for marketing approval since revision of pharmaceutical Affairs Law in 2005.

Applicant: Marketing authorization holder Inspector: PMDA

GMP Inspection conducted for marketing approval or approval of partial changes. - Applicants must submit application documents more than 6 months prior to approval.

Periodical GMP Compliance Inspection - Periodical GMP Inspection is conducted every five years following marketing approval. - Generally, Periodical GMP Inspection and Renewal of Accreditation of Foreign

Manufacturer are applied at the same time more than 6 months prior to expiry date of accreditation.

On-site Inspection: Conducted for about 3 days at foreign manufacturer’s site by PMDA

Document Review: The documents submitted by applicant are reviewed by PMDA In the case the documents are insufficient, Additional documents are requested.

10

Evolving Trends in Mfg. AlliancesEvolving Trends in Mfg. Alliances

• Korea and Taiwan are already enjoying formulation production alliances with Japanese pharma

• Japan Pharma Inc setting up plants in India

• Otsuka had a plant since many years• Eisai has a API to Formulation integrated plant in South India• Daiichi Ranbaxy, Ajinomoto-Granuls India etc.

• API come from several countries – Korea and Europe are major ones. China and India just started.

• Finishing/packaging are v. imp. whether API or Formulation – snow white, not off-white!

11

Future OpportunitiesFuture Opportunities

•The growth rate of generics subset of the market has been increasing over the past three years and this trend is projected to continue. Govt. is pushing for increased usage of generics due rising healthcare cost.

•Govt. aims to increase usage of generic drugs to 30% by 2012.

•The Japanese Generic market being backed by the Govt. This is encouraging growth by relaxing registration procedures and providing incentives to doctors to prescribe generics.

•PMDA has set the goals to reduce review time for priority, standard and generic drugs.

bridging the information gap of japan pharma mp ppt

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