Industry Report - Drug Delivery Partnership Strategies.pdf

1 Drug Delivery Partnership Strategies Case studies in effective licensing, collaboration, and therapeutic differentiation Reference Code: BI00019-008 Publication Date: March 2012 2 About the author Steven Seget is Principal at Delphi Pharma, and provides independent strategic consulting services to the pharmaceutical and biotechnology industries. Steven previously managed the strategic healthcare consulting function at Datamonitor and has an MBA from the London Business School. Delphi Pharma provides strategic, financial and marketbased solutions to clients, focusing primarily on the portfolio management, licensing, and pricing and reimbursement functions. Delphi Pharma combines an extensive research network, applied analytical expertise and an established track record to deliver high value results and measurable impact to its clients. Disclaimer Copyright © 2012 Informa Ltd This report is published by Informa (the Publisher). 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Table of Contents About the author 2 Disclaimer 2 Executive summary 9 An introduction to drug delivery partnerships 9 The drug delivery value chain 9 Partnering trends in drug delivery technology 10 Drug delivery partnerships for lifecycle management 11 Drug delivery partnerships for novel drug delivery applications 12 Drug delivery partnerships for complex development compounds 13 Best practices for effective drug delivery partnering 14 Chapter 1 An introduction to drug delivery partnerships 16 Summary 16 Introduction 17 Report objectives 17 Report methodology 17 Report structure 18 Chapter 2 The drug delivery value chain 20 Summary 20 Introduction 21 Drug delivery technologies in context 21 4 Oral drug delivery 22 Topical/transdermal drug delivery 23 Transmucosal drug delivery 23 Inhalation drug delivery 23 Injection drug delivery 24 Other novel drug delivery technologies 24 Platform versus applied technologies 25 Drug delivery development 26 Drug delivery productivity 26 Branded drug delivery products 27 Generic drug delivery products 31 In-house versus external technology development 34 The drug delivery partnership model 35 Drug delivery partnerships for lifecycle management 36 Drug delivery partnerships for novel drug delivery applications 37 Drug delivery partnerships for complex development compounds 38 Chapter 3 Partnering trends in drug delivery technology 40 Summary 40 Introduction 41 Global partnering trends 41 Product versus technology 42 Partnering trends by level of collaboration 46 Trends by partners 49 Partnering trends in context 53 Future partnering trends 57 Chapter 4 Drug delivery partnerships for lifecycle management 60 5 Summary 60 Introduction 61 Market expansion and generic defense strategies 61 Case study: Suboxone sublingual film line extension 61 Case study: Vyteris repositions as a contract research organization 63 Case study: Mylan acquires dry-powder delivery technology from Pfizer 65 Key challenges and critical success factors 66 Timing versus flexibility 66 Proof of concept versus risk management 67 Collaboration versus assigned responsibilities 67 Additional expert insights 68 Chapter 5 Drug delivery partnerships for novel drug delivery applications 69 Summary 69 Introduction 70 Competitive market differentiation strategies 70 Case study: Intermezzo delivers new indication 70 Case study: Flutiform partner runs out of patience 72 Case study: Alkermes acquires a new position in drug delivery space 75 Key challenges and critical success factors 76 Partner funding versus partner expertise 77 Focused application versus consolidated portfolio 77 Common objectives versus competitive repositioning 78 Additional expert insights 78 Chapter 6 Drug delivery partnerships for complex development compounds 81 6 Summary 81 Introduction 82 Innovative drug development strategies 82 Case study: Vecturas partnering-based evolution down-stream 82 Case study: Alkermes delivers game changing value in tripartite development partnership 84 Case study: ThermoDoxs drug delivery device, clinical and commercial partnering network 86 Key challenges and critical success factors 88 Technology value versus partnering rewards 88 Commercial validation versus evolving down-stream 89 Partner of choice versus complementary partner objectives 89 Additional expert insights 89 Chapter 7 Best practices for effective drug delivery partnering 92 Summary 92 Introduction 93 Maximizing therapeutic value 93 Delivering effective differentiation 94 Enabling complex development programs 96 Strategic partnering 97 Appendix 100 Methodology 100 MedTrack partnering deals database 100 Primary research 100 Glossary/Abbreviations 101 Bibliography/References 101 7 Table of figures Figure 1: Drug delivery product approvals in US, 2001-10 27 Figure 2: US branded drug delivery product sales in top 200 products, 2009-10 28 Figure 3: Branded drug delivery product cost/prescription in US, 200910 29 Figure 4: Leading branded drug delivery products by US sales, 2010 30 Figure 5: Generic drug delivery product sales in US, 200910 32 Figure 6: Generic drug delivery product cost/prescription in US, 200910 33 Figure 7: Leading generic drug delivery products by US sales, 2010 34 Figure 8: Drug delivery partnerships for lifecycle management 37 Figure 9: Drug delivery partnerships for novel drug delivery applications 38 Figure 10: Drug delivery partnerships for complex development compounds 39 Figure 11: Drug delivery partnership deals, 200010 42 Figure 12: Product versus technology-based drug delivery deals, 200010 43 Figure 13: Product versus technology-based drug delivery deal values, 200010 44 Figure 14: Leading drug delivery partnership technologies, 200110 46 Figure 15: Drug delivery partnerships by degree of collaboration, 200010 48 Figure 16: Drug delivery partnership values by degree of collaboration, 200010 49 Figure 17: Drug delivery partnerships by partner, 200010 50 Figure 18: Drug delivery partnership values by partner, 200010 51 Figure 19: Top 10 pharma companies by number of drug delivery deals, 2000H1 2011 52 Figure 20: Leading drug delivery partners by number of deals, 2000H1 2011 53 8 Table of tables Table 1: Drug delivery development and approval 26 Table 2: Branded drug delivery product prescriptions in US, 200910 28 Table 3: Leading branded drug delivery products by US sales, 2010 31 Table 4: Generic drug delivery product prescriptions in US, 2009-10 32 Table 5: Key drug delivery partnership deals, 200011 45 9 Executive summary An introduction to drug delivery partnerships ? While many delivery technologies have become ubiquitous amongst leading pharma companies, the more novel delivery technologies have continued to be proprietary to a burgeoning group of drug delivery specialists. ? In many fields, the application of effective drug delivery technology has become as important as having an effective active ingredient, which has resulted in drug delivery companies increasingly becoming involved in longer-term, strategic partnerships and playing an active role in bringing drugs to market. ? The effectiveness of different partnership structures is both technology and context specific and driven largely by the strategic imperatives of both parties. However, with innovative drug delivery technologies playing an increasingly important role in extending lifecycles, differentiating products and unlocking the value of new compounds with challenging delivery requirements the ability to successfully partner with the right model will be a key requirement for future growth and success in the space. ? This report will outline key trends and critical success factors associated with partnering and licensing for drug delivery technologies. It will present a contextual analysis of the importance of drug delivery technologies and the use of the partnership model to bring value-added therapeutics to market. ? Key trends in drug delivery partnerships will be analyzed to identify the current and future use of different partnering models. Key challenges and success factors for different partnering models in different contexts will be illustrated through detailed case studies and expert commentary. The drug delivery value chain ? Drug delivery technologies attempt to modify the process of administration, and in particular the drug release profile, absorption, distribution and elimination, in order to deliver enhanced benefits to the patient and wider stakeholders such as caregivers and payors. 10 ? In addition to incremental enhancements, drug delivery technology also plays an essential role in the delivery of new pharmaceutical and biologic payloads that cannot be administered effectively through conventional routes. New drug delivery solutions are also targeted at improving the ease of administration to improve compliance, while also reducing the total healthcare costs. ? Drug delivery enhanced products account for around a third of sales for leading branded drugs in 2010. Sales of branded drug delivery products have remained flat in 2010, while prescriptions have contracted sharply, suggesting average prescription prices have increased due to price rises and the introduction of new, high value drug delivery products. ? Compared with the branded market, drug delivery products make up a much smaller share of the generics market, accounting for just 12% of sales. However, generic drug delivery products enjoy a significant price premium over standard generics, with an average implied cost per prescription three times higher than that of standard generics. ? As with biotechnology, drug delivery development has largely been undertaken by smaller companies with a primary focus in the area. As a result, innovation in drug delivery technology has tended to flourish externally to the business of developing and marketing new pharmaceuticals and biologics. ? There is no single drug delivery partnership model that can be applied across all drug delivery partnerships. Partnering around drug delivery technology can occur at different stages of the drug development and commercialization lifecycle, requiring varying levels of collaboration and involving multiple different partners and their respective interests. Partnering trends in drug delivery technology ? The number of drug delivery partnership deals has been in decline since 2006, largely as a result of a sharp decline in product-based drug delivery deals. However, between 2003 and 2010, the average value of a drug delivery partnership increased four-fold, with the vast majority of this value growth generated by product-based deals. It appears clear that the second half of the 2000s, characterized by challenging financial and commercial conditions, has resulted in a more selective approach to drug delivery licensing with budgets allocated across fewer, but higher value deals. 11 ? Perhaps surprisingly, it appears that the degree of intended collaboration between drug delivery technology partners has declined over the past five years. Indeed, many of the more recent high value drug delivery agreements have involved a much clearer distinction between each partners responsibilities, despite complex and lengthy development planning. However, as collaboration has made way for pragmatic licensing and development agreements, big pharma has become an increasingly important source for high value licensing investment in novel drug delivery technologies. ? Key drug delivery partnering trends identified by the expert panel assembled to research this report include increased screening and cherry picking of drug delivery opportunities by big pharma, the impact of improved generics and biosimilars on drug delivery partnerships, a switch in focus from small to large molecule drug delivery opportunities, a greater range of drug delivery technology opportunities, with distinct differences across technologies, and an increased focus on product-based drug delivery technology deals. Drug delivery partnerships for lifecycle management ? New formulations of existing drugs provide two key assets to a product marketer, namely a differentiated product and potential market exclusivity. Successful drug delivery partnerships in lifecycle management provide drug delivery companies with a proof of concept, as well as much needed licensing revenues. ? The case of Suboxone sublingual film is a classic example of how partnering for a new drug delivery technology can successfully prolong the product lifecycle for a drug facing generic competition. Even though the therapeutic differentiation appears to be small, the improved ease of use helped maximize the commercial results of the drug delivery partnership. ? The story of Vyteris transition into a specialist drug delivery contract research organization (CRO) provides a sideways view as to how drug delivery partnerships can make or break a drug delivery company. The unsuccessful partnership with Ferring ultimately resulted in a realignment of objectives for Vyteris cemented through the merger with CRO company MediSync Biosciences. 12 ? While the names involved in the deal might appear surprising, the Pfizer/Mylan drug delivery partnership deal follows the basic model of the pharma company in-licensing technology from a drug delivery company in order to create differentiated line extensions for existing products. However, in this case the drug delivery company is Pfizer, the worlds biggest integrated pharmaceutical company, and the pharma company is Mylan, one of the most aggressive generic competitors. The partnership is one of the best illustrations of the blurred line between the branded and generic sectors and the impact this has on drug delivery licensing. ? Key learnings from the lifecycle management case studies involve a series of necessary trade-offs, including timing versus flexibility, proof of concept versus risk management, and collaboration versus assigned responsibilities. Drug delivery partnerships for novel drug delivery applications ? Drug delivery partnerships targeted at novel drug delivery applications put drug delivery companies in a more senior position, compared with lifecycle management opportunities. The drug delivery technology tends to be more transformational, providing potential competitive market differentiation, rather than incremental benefit. Partnerships