The Small- and Large-Molecule Divide in the Global Oncology Market


From DCAT Value Chain Insights (VCI)

By Patricia Van Arnum posted 06-03-2014 13:24

  

Biologics-based drugs drove growth in the global and US oncology markets during the past decade, but small molecules have been the recent engine of growth in new product introductions and the pharmaceutical industry’s oncology pipeline.

Evaluating growth prospects is a key part of the strategy of any company, but it is particularly important for pharmaceutical companies that must contend with a long and uncertain new product development cycle as they position products for regulatory approval and eventual commercialization. For contract manufacturers and suppliers, the task is commensurately challenging to select developmental projects that will continue to progress, and hopefully, will result in larger volume requirements with the commercialization of a given drug candidate. Anticancer drugs historically have been a good bet as they fit a therapeutic area for which there is unmet medical need and reside in a market with overall strong growth. Although the oncology market still represents the largest therapeutic area on an absolute basis for both the US and top five European Union (EU) countries (France, Germany, Italy, Spain, and the UK), a recent analysis by the IMS Institute for Healthcare Informatics shows that growth in the global oncology market has slowed over the past five years due to fewer breakthrough therapies for very large patient populations, patent expiries, reductions in the use of supportive care medicines, and stronger payer management. Moreover, the share of biologics, which drove growth over the past decade in the global oncology market, has declined slightly and now represent less than half of the oncology market as recent new drug launches have been concentrated in small molecules, including kinase inhibitors. And that may continue as small molecules also surpass biologics in the oncology pipeline.

Overview of the oncology market
The global oncology market represents the largest therapeutic area on value basis, but growth has slowed during the past five years. Growth in global spending on cancer drugs, including those used for supportive care, increased at a compound annual growth rate (CAGR) of 5.4% during the past five years, reaching $91 billion in 2013, compared with $71 billion in 2008 and a CAGR of 14.2% from 2003 to 2008, according to a recent analysis, Innovation in Cancer Care and Implications for Health Systems, by the IMS Institute for Healthcare Informatics. For purposes of the analysis, spending is reported at ex-manufacturer prices and does not reflect off-invoices, discounts, and rebates. Supportive care products includes anti-emetics, chemoprotectants, cancer pain, immunosupportive agents (e.g., hematopoetic growth factors), erythropoetins, and therapeutic cancer vaccines. The recent lower growth rate reflects fewer breakthrough therapies for very large patient populations, as well as patent expiries, reductions in the use of supportive care medicines, and stronger payer management.

Oncology spending remains concentrated among the US and the five largest European countries (France, Germany, Italy, Spain, and the UK), which together account for 65% of the total market; the US, the top five EU countries, and Japan collectively account for 75% of the global oncology market. The rising prevalence of cancer and greater patient access to treatments in pharmerging nations, however, has propelled oncology to the fifth-largest therapy area in those markets, according to IMS. For purposes of the analysis, IMS defines pharmerging countries as China, Brazil, Russia, India, Mexico, Turkey, Venzeula, Poland, Argentina, Saudi Arabia, Indonesia, Colombia, Thailand, Ukraine, South Africa, Egypt, Romania, Algeria, Vietnam, Pakistan, and Nigeria. By 2017, IMS projects that oncology will be remain the largest therapeutic area in developed markets with spending of between $74 billion and $84 billion (see Table I) and move into the number four spot in spending in pharmerging markets (see Table II).


Table I: Spending by Therapeutic Area in 2017, Developed Markets
Top 20 Classes = 71% of total; others represent 29%

Therapeutic Area Sales in 2017 (constant exchange rates, US dollars)

Oncology $74–84 Billion
Diabetes $34–39 Billion
Anti-TNFs $32–37 Billion
Pain $31–36 Billion
Asthma/Chronic Obstructive Pulmonary Disorder $31–36 Billion
Other Central Nervous System Drugs $26–31 Billion
Hypertension $23–26 Billion
Immunostimulants $22–25 Billion
HIV Antivirals $22–25 Billion
Dermatology $22–25 Billion
Antibiotics $18-21 Billion
Cholesterol $16–19 Billion
Anti-Epileptics $15–18 Billion
Immunosuppressants $15–18 Billion
Antipsychoitics $13–16 Billion
Antiulcerants $12–14 Billion
Antidepressants $10–12 Billion
Antivirals, excluding HIV $8–10 Billion
ADHD (Attention Deficit Hyperactivity Disorder) $7–9 Billion
Interferons $6–8 Billion

 Source: IMS Health Thought Leadership, September 2013, as reported in Innovation in Cancer Care and
 Implications for Health Systems: Global Oncology Trend Report
, IMS Institute of Healthcare Informatics, May
 2014.


Table II: Spending by Therapeutic Area in 2017, Pharmerging Markets
Top 20 Classes = 45% of total; others represent 55%

Therapeutic Area Sales in 2017 (Constant exchange rates, US dollars)

Pain $22–25 Billion
Other Central Nervous System Drugs $20–23 Billion
Antibiotics $18–21 Billion
Oncology $17–20 Billion
Hypertension $14–17 Billion
Diabetes $10–12 Billion
Dermatology $10–12 Billion
Antiulcerants $9–11 Billion
Cholesterol $6–8 Billion
Asthma/Chronic Obstructive Pulmonary Disease $3–5 Billion
Anti-Epileptics $3–5 Billion
Antivirals, excluding HIV $3–5 Billion
Immunosuppressants $3–5 Billion
Allergy $3–5 Billion
Antidepressants $3–5 Billion
Antiplatelets $3–5 Billion
Antipsychotics $2–3 Billion
Heparins $1–2 Billion
Erectile dysfunction $1–2 Billion
Immunostimulants $1–2 Billion

Pharmerging markets are: China, Brazil, Russia, India, Mexico, Turkey, Venezuela, Poland, Argentina, Saudi Arabia, Indonesia, Colombia, Thailand, Ukraine, South Africa, Egypt, Romania, Algeria, Vietnam, Pakistan, and Nigeria

Source: IMS Health Thought Leadership, September 2013, as reported in Innovation in Cancer Care and Implications for Health Systems: Global Oncology Trend Report, IMS Institute of Healthcare Informatics, May 2014 .


Although cancer therapies represent an important engine of growth for the global pharmaceutical market, the market has seen key shifts behind that growth, according to the IMS report. From 2003 to 2008, growth was consistently above 15% for therapeutic agents, reflecting the launch of key biologic products, such as Avastin (bevacizumab) and the expansion of the breast-cancer drug Herceptin (trastuzumab). The years spanning 2004 to 2006, however, represented the last big period of major oncology approvals, such as Avastin and its line extensions, Erbitux (cetuximab), and small-molecule approvals Sutent (sunitinib), Nexavar (sorafenib), and Tarceva (erlotinib). Most product launches between 2005 and 2009 addressed smaller patient populations and saw lower adoption rates than earlier products, which was reflected in overall lower sales. Also, safety issues regarding the use of erythropoietin-stimulating agents in 2007 resulted in a decline in their use. More recently, sales growth of key biologics, MabThera/Rituxan (rituximab) and Herceptin slowed in 2013 relative to previous periods.

The result is that biologic products now represent less than half of the oncology market, a slight decline over the past 10 years, as new drug launches have been concentrated in small molecules, including kinase inhibitors, according to the IMS report. In 2003, the global oncology market was evenly split (50%/50%) between small molecules and biologics. Since 2008, biologics’ share of the global oncology market has declined slightly, in part driven by less supportive care products and new small-molecule product introductions. In 2008, small molecules accounted for 51% of the global oncology market and biologics 49%; in 2013, small molecules’ share of the global oncology market had increased to 53% and biologics had declined to 47%, according to the IMS report.

Even though small molecules have advanced their share of the global oncology market, the share of certain type of drugs, cytotoxics and hormonal therapies, have declined as the share of targeted therapies have increased. In 2013, targeted therapies represented 46% of the global oncology market (down from 48% in 2003), supportive care products 24% (up from 11% in 2003), cytotoxics 20% (down from 26% in 2003), and hormonal therapies 10% (down from 15% in 2003). In the top seven countries (France, Germany, Italy, Japan, Spain, the UK, the US), the oncology market was valued at $68 billion in 2013. Targeted therapies accounted for 48% (down slightly from 49% in 2003), supportive care products 24% (up from 11% in 2003), cytotoxics 19% (down from 26% in 2003), and hormonal therapies 9% (down from 14% in 2003). In pharmerging countries, the oncology market was valued at $11 billion in 2013, with targeted therapies representing 35%, supportive care products 27%, cytotoxics 30%, and hormonal drug therapies 8%, according to the IMS report.

Pipeline development
In terms of the industry’s pipeline, oncology drugs are a key target for new drug development with more than 30% of all preclinical and Phase I development projects being targeted to cancer (see Table III). Although only 9% of drugs pending with regulators are for cancer, more than one quarter of new molecular entities in the past three years in the US were cancer medicines, according to the IMS report. Table IV outlines approvals of new molecular entities and original biologics license applications for oncology drugs approved by FDA’s Center for Drug Evaluation and Research from 2010 to 2014 to date. FDA approved 24 small molecules, nine biologics, and two antibody-drug conjugates during this period. Although sales for certain recently launched oncology drugs have rivaled those of earlier blockbusters, many new drugs are targeted to small patient populations and face strong competition, resulting in comparatively modest sales levels, notes the IMS report.


Table III: Total Number of Drugs in Pipeline and Number and Percentage of Oncology Drugs in the Pipeline

Number of active products in pipeline to date = 6,234

Preclinical

3,088
Phase I

1,082
Phase II

1,438
Phase III

449
Pre-registration/Registered

177

1,026
33%

352
33%

369
26%

102
23%

16
9%

   Number and % of oncology products in phase    Total drugs in pipeline

Molecular Type for Oncology Drugs in the Pipeline
           
Preclinical

Non biologics
(small molecule)
62%

Biologics 38%
Phase I

Non biologics
(small molecule)
59%

Biologics 41%
Phase II

Non biologics
small molecule)
56%

Biologics 44%
Phase III
           
Non biologics
(small molecule)
62%

Biologics 38%
Pre-registration/Registered

Non biologics
(small molecule)
63%

Biologics 37%

 Source: IMS Institute for Healthcare Informatics, February 2014 as reported in Innovation in Cancer Care and Implications for Health Systems: Global Oncology Trend Report, IMS Institute for Healthcare Informatics, May 2014.


Table IV: Oncology drugs approved as new molecular entities (NMEs) and original biologics license applications (BLAs) by FDA's Center for Drug Evaluation and Research*

2014 Oncology NMEs and BLA Approvals (as of June 2, 2014)
Company Drug: Proprietary name (active ingredient) Indication Molecule type
Eli Lilly Cyramza (ramucirumab) Advanced stomach cancer or gastroesophageal junction adenocarcinoma Biologic
Janssen Biotech Sylvant (siltuximab) Multicentric Castleman’s disease, a rare disorder similar to lymphoma Biologic
Novartis Zykadia (ceritinib) A certain type of metastatic non-small cell lung cancer Small molecule
2013 Oncology NMEs and BLA Approvals
Company Drug: Proprietary name (active ingredient) Indication Molecule type
Bayer Healthcare Xofigo (radium RA-223 dichloride) Symptomatic metastatic castration-resistant prostate cancer Small molecule (radiotherapy)
Boehringer Ingelheim Gilotrif (afatinib dimaleate) Metastatic non-small cell lung cancer whose tumors express specific types of epidermal growth factor receptor gene mutation as detected by an FDA-approved test Small molecule
Celgene Pomalyst (pomalidomide) Multiple myeloma Small molecule
GlaxoSmithKline Tafinlar (dabrafenib mesylate); Melanoma in tumors expressing the BRAF V600E gene mutation Small molecule
GlaxoSmithKline Mekinist (trametinib dimethyl sulfoxide Unresectable melanoma or metastatic melanoma with BRAF V600E or V600K mutations Small molecule
Janssen Biotech and Pharmacyclics Imbruvica (ibrutinib) Mantle cell lymphoma Small molecule
Navidea Biopharmaceuticals Lymphoseek Kit (technetium Tc-99m tilmanocept) A radioactive diagnostic imaging agent that helps locate lymph nodes in patients with breast cancer or melanoma Small molecule
Roche/Genentech Gazyva (obinutuzumab); In combination with chlorambucil to treat chronic lymphocytic leukemia Biologic
Roche/Genentech Kadcyla (ado-trastuzumab emtansine HER2-positive metastatic breast cancer Antibody drug conjugate
2012 Oncology NMEs and BLAs
Company Drug: Proprietary name(active ingredient) Indication Molecule type
Amgen/Onyx Pharmaceuticals Kyprolis (carfilzomib) Multiple myeloma who have received at least two prior therapies Small molecule
ARIAD Pharmaceuticals Iclusig (ponatinib) Chronic myeloid leukemia and Philadelphia chromosome positive acute lymphoblastic leukemia Small molecule
Astellas Pharma Xtandi (enzalutamide) Metastatic castration-resistant prostate cancer for patients who have previously received docetaxel Small molecule
Bayer Healthcare Pharmaceuticals Stivarga (regorafenib) Metastatic colorectal cancer Small molecule
BTG International Voraxaze (glucarpidase) Toxic levels of methotrexate (common cancer drug) in blood due to kidney failure Biologic
Exelixis Cometriq (cabozantinib) Progressive, metastatic medullary thyroid cancer Small molecule
Mayo Clinic PET Radiochemistry Facility Choline C 11 Injection Positron emission tomography (PET) imaging agent used to help detect recurrent prostate cancer Small molecule
Pfizer Inlyta (axitinib) Advanced kidney cancer Small molecule
Pfizer Bosulif (bosutinib) Chronic myelogenous leukemia Small molecule
Roche/Genentech Erivedge (vismodegib) Metastatic basal-cell carcinoma or locally advanced basal-cell carcinoma Small molecule
Roche/Genentech Perjeta (pertuzumab). In combination with trastuzumab and docetaxel for treating HER2-positive metastatic breast cancer Biologic
Sanofi Zaltrap (ziv-aflibercept) In combination with a FOLFIRI (folinic acid, fluorouracil and irinotecan) chemotherapy regimen to treat adults with colorectal cancer Biologic
Teva Pharmaceutical Industries Synribo (omacetaxine mepesuccinate) Chronic myelogenous leukemia Small molecule
Teva Pharmaceutical Industries Neutroval (tbo-filgrastim)* To reduce neutropenia in patients with non-myeloid malignancies. Biologic
2011 Oncology NMEs and BLAs
Company Drug: Proprietary Name (Active Ingredient) Indication Molecule type
AstraZeneca Caprelsa (vandetanib) Metastatic medullary thyroid cancer Small molecule
Bristol-Myers Squibb Yervoy (ipilimumab) metastatic) melanoma Biologic
Janssen Biotech Zytiga (abiraterone) In combination with prednisone for treating metastatic castration-resistant prostate cancer Small molecule
Jazz Pharmaceuticals Erwinaze (asparaginase Erwinia chrysanthemi) Acute lymphoblastic leukemia Biologic
Pfizer Xalkori (crizotinib) Late-stage non-small cell lung cancers express the abnormal anaplastic lymphoma kinase (ALK) gene. Small molecule
Roche/Genentech Zelboraf (vemurafenib) Metastatic or unresectable melanoma in patients with the BRAF V6000E gene mutation Small molecule
Seattle Genetics/Takeda Adcetris (brentuximab vedotin) Hodgkin lymphoma and systemic anaplastic large cell lymphoma Antibody drug conjugate
2010 Oncology NMEs and BLAs
Company Drug: Proprietary Name (Active Ingredient) Indication Molecule Type
Eisai Halaven (eribulin) Metastatic breast cancer Small molecule
Sanofi Jevtana (cabazitaxel) Metastatic prostate cancer Small molecule
Includes both oncology drugs and supportive care therapies
  • Amgen acquired Onyx Pharmaceuticals in 2013.
  • Astellas Pharma partnered with Medivation Inc. for Xtandi (enzalutamide).
  • Janssen Biotech is part of Johnson & Johnson. Janssen Biotech and Pharmacyclics are partnered for Imbruvica.
  • Roche Glycart AG, a wholly owned, independent research unit of Roche, discovered Gazyva. In the US, Gazyva is part of a collaboration between Genentech and Biogen Idec.
  • Roche licenses technology for Kadcyla under an agreement with ImmunoGen.
  • Sanofi developed Zaltrap (ziv-aflibercept) with Regeneron Pharmaceuticals.
  • Seattle Genetics developed Adcetris (brentuximab vedotin) in collaboration with Takeda Pharmaceutical Company; Seattle Genetics has US and Canadian commercialization rights and Takeda has commercialization rights in the rest of the world.
  • Teva’s Sicor Biotech received approval for Neutroval as an original BLA..
Source: FDA’s Center for Drug Evaluation and Research


While much of the oncology pipeline is focused on lung and breast cancer, tumor types with lower prevalence such as ovarian, leukemia, stomach and liver cancers also are being actively pursued. Overall, small molecules account for a larger percentage in the oncology pipeline than biologic-based drugs in all phases of development (see Table III). Small molecules account for 62% of preclinical oncology drug candidates, 59% of Phase I oncology drug candidates, 56% of Phase II, 62% of Phase III, and 63% of drugs of oncology drug candidates under regulatory review (see Table III).

Part of the biologics oncology market, particular in pharmerging markets, will be served by biosimilars. The introduction of regulatory pathways for biosimilars and increased production capacity around the world are driving a new competitive dynamic in the $40+ billion biologics portion of the oncology market, noted the IMS report. However, the potential role of biosimilars in developed countries will be limited by the expected flow of patent-protected innovative products that will displace older, off-patent products subject to biosimilar competition. These agents already play a role in the supportive care segment of the oncology market in Europe, and are expected to do the same in the US in the near term. In low- and middle-income countries, non-original biologics, defined as those based on an original molecule not introduced by its manufacturer in a particular market, are expected to play a significant role in oncology and already capture 60% or more of certain recombinant and synthesized biologics. On a global basis, biosimilars are expected to generate between $6 billion and $12 billion in oncology sales by 2020, increasing the level of competition but accounting for less than 5% of the total biologics market at that time, according to IMS.

Payer considerations
As pharmaceutical companies seek to advance their oncology pipeline and marketed drugs, they are doing so in an increasingly more difficult payer environment, a factor to consider in their choices in new drug development. The IMS report points out that payers have intensified their scrutiny of the value of these medicines relative to their incremental benefits over existing treatments. At the same time, the average cost per month for a branded oncology drug in the US is now approximately $10,000, up from an average of $5,000 a decade ago. Concentrated or single-payer health systems and those using health technology assessments to evaluate the value of treatments tend to pay less than US prices for medicines. The pricing discount mechanisms used in major European markets typically drive net prices down by approximately 20-40% compared with US list prices, according to the IMS report.

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