Showing posts with label Biosimilars. Show all posts
Showing posts with label Biosimilars. Show all posts

Thursday, November 7, 2013

Les Propheties Pharmaceuticale : Prophesying on where the pharmaceutical outsourcing is headed

It is either an after-effect of all that powwow with the old-worldly Chippewa (the ‘real-Indians’, who aren’t Indian really ;-)) in the round house OR, it’s the paradoxical audacity stemming from my ironic inability to predict my own future!! - Either way…….,

......I have this compelling urge to play an oracle for once & mouth some prophecies!

My prophesying though is limited to pharmaceutical manufacture, outsourcing & is inspired by what’s going on right now all around in the pharmaceutical industry. While on first-look most of the recent happenings appear to be standalone in nature, there is a tangible pattern that isn’t too tough to decipher. My attempt is merely to speculate on what this pattern means for pharmaceutical manufacturing scenario, a few years from now, albeit a little prophetically.

Listed below are a some of my observations, statements & surmises (not still prophecies....), in no particular order, based on a handful but trend-indicative news alerts that I received over the past two weeks;
  • Big pharma shutting-down small molecule manufacturing sites but investing in Biologics facilities - Merck, Pfizer, Novartis, AstraZeneca etc in shutting-down mode & Roche, Genzyme (Sanofi) et al in investment spree
  • CMOs & Pharma companies scramble to strengthen ADC manufacturing capabilities in an apparent response to the visible thrust by drug developers to biologify (sic) unsuccessful small molecule candidates as ADCs & reposition them as targeted therapy candidates - SAFC, Lonza & Roche strengthening ADC capacities
  • Indications that compulsory license issuance in developing countries is driven more by ‘access to cost-effective first-line therapies’ than ‘access to later-generation therapies’  - Indian Patent office Upholding CL for Imatinib & rejecting CL application for Dasatinib
  • Federal complicity (vis-à-vis’ regulatory) with the innovator belief that biosimilar is an Oxymoron – The recent passage of SB-598 bill constraining use of biosimilars by State of California
  • Regulators mellowing, but playing-safe with approval of biosimilars? - The first ever biosimilar approval by EMEA is for Remicade (infliximab) indicated in the ‘relatively non-fatal” auto-immune disorders
  • Geographical re-alignment and consolidation of biosimilar manufacturing assets - Dr. Reddy’s  signing a deal for getting it’s biosimilars manufactured & marketed within the USA by Merck-Serono; Lonza’s scrapping of biosimilar venture with Teva and it’s going slow on India expansion; DSM launching a large-scale biosimilar facility in Australia et al
  • The increased focus of Big-pharma on having a lean & integrated supply chain for their off-patent assets – As indicated by the on-going race of backward-integration by formulation CMOs & forward integration by API CMOs
  • Drug Discovery & Development (primarily chemistry, biology & clinical) service providers progressively getting consolidated within NA, EU with clinical development centers in low-cost countries – As indicated by the flurry of activity each passing day
  • Clinical API synthesis tending to be retained within the shores by the partly to de-risk late-stage regulatory risks & mostly to engage residual in-house R&D facilities – As indicated by the outsourcing strategy adopted by most Big & Mid-sized pharma
  • Spurred-on by increasing regulatory wariness, high focus by the outsourcer' on ensuring supply chain integrity for key Intermediates and starting material for both marketed as well as developmental drugs – As indicated by the uncharacteristically massive press-coverage of  WuXi successfully facing a FDA pre-approval inspection for the ‘Intermediate’ of a new drug under review for approval

While the observations tell a story of their own, here’s my promised prophecy in the form of three quatrains, which very unlike the good old Nos’, I went about decoding myself – so much for my quest to be understood in my lifetime!

Quatrain 1

The Indian &/or Chinese CMO/ CDMO/ CROs will see the outsourcing getting limited to;
·        Manufacture of generic, low-tech (applicable to DP) small molecule, high volume & predominantly disease-maintenance/ management therapeutics (as against curative therapeutics)
·        Manufacture of (ideally integrated) potent, cytotoxic therapeutics    
·        Non-GMP/ GMP manufacture of key intermediates requiring large capacities/ ~ economies of scale of both patent-case & generic APIs for big/ mid-sized pharma
·        Large-scale manufacture of OTCs & Medicinal Products (components of med devices)
·        Early development (preclinical through PIII) of investigational drugs belonging to small/ mid & big-pharma (since this stage demands a lean-cost model)
·        Late-stage development (leading to NDA) of investigational drugs for small/ virtual biotechs
Quatrain 2

The North American, European CMO/ CDMO/ CROs will see the consolidation of the following opportunities in their favor;
·        Manufacture of Biologics, Biosimilars(authorized?)  
·        Manufacture of high-tech, specialty small-molecule APIs (ADCs, PDCs et al); formulations & devices
·        Late-stage development (leading to NDA) of investigational drugs for Mid & Large-sized pharma
·        Integrated Drug-discovery, development for Big pharma
Quatrain 3

Finally & a tad controversially – the Indian pharmaceutical players (& probably Chinese too) in general will aggressively pursue;
·        Compulsory licensing opportunities for the first-line therapies of small-molecule drugs for the NON-orphan disease segments
·        Biosimilar/ biogeneric development (for potential global alliances) and for eventual direct commercialization (with likely alliances again..) within India – with emphasis on curative biologics for non-fatal disease segments not addressed by small-molecule therapeutics    

As is evident, this list of predictions is by no means exhaustive & is only a brief compilation based on some core-opportunity types focused on within the outsourcing domain.

I know Nostradamus has more detractors than believers, so go ahead and flame me, I’m all game! ............ Only, make sure your rebuttals are in Quatrains too…., Just kidding :-)


Wednesday, March 6, 2013

Will Mylan's acquisition of Agila benefit Accel Partners?

Okay, the story goes like this....

Way back in 2007, Accel partners committed to invest & invested over the next three years 1.5mio USD in a Bangalore based start-up called Inbiopro. This investment turned into ~10% shareholding (guestimate) when Strides Arcolab acquired 70% stake in Inbiopro in 2010. It’ll be useful to slip-in here that somewhere in 2011/12 Strides separated out Inbiopro from Agila as a separate business entity called Agila Biotech.

Now, post the Mylan deal, Strides Arcolab committed to invest USD100mio into Agila Biotech, Given this impetus if Agila Biotech vigorously pursues the commercialization of its pipeline of 8 biosimilars, its valuation could go up to anywhere between USD200-500mio** in the next five years, depending upon how many registrations are successful. At which time if Strides again succeeds in finding a buyer for Agila Biotech (Mylan again, given its Biosimilar ambitions?), it is likely this will turn out into a USD20-50 million exit for Accel Partners, i.e from a decent 13x to a good 33x ROI.

My take away from this is, scout around for start-ups that have chosen 'quicker to market innovations' as their research focus, invest in them early on & work closely on the selection of a local partner & monetize during the multinational acquisition - Not a bad mantra for a decent-value exit in a market like India :-)

**The valuation guestimates are based on the expected worth of approvals (EU/ NA) which are primary assets in this context.