IMS Health Reports Global Biotech Sales Grew 12.5 Percent in 2007, Exceeding $75 Billion

NORWALK, Conn.--(BUSINESS WIRE)--June 17, 2008--Global prescription sales of biotech drugs increased 12.5 percent in 2007 to more than $75 billion, according to a new report by IMS Health (NYSE: RX), the world's leading provider of market intelligence to the pharmaceutical and healthcare industries. The global biotech market grew at nearly double the rate of the global pharmaceutical market, which increased 6.4 percent in 2007.

"The biotech market has expanded dramatically during the past five years, consistently exceeding overall pharmaceutical market growth two-to-three fold," said Murray Aitken, senior vice president, Healthcare Insight, IMS. "Recent innovations, the continued expansion of approved indications for existing products, and the gradual uptake of biotech products outside the U.S. have fueled that growth, and improved the quality of life for millions of patients across a growing number of disease areas."

During the past five years, the range of biotech products and their use in multiple therapy areas have steadily increased, creating a major source of market growth. Twenty-two biotech products generated sales exceeding $1 billion in 2007, compared with just six products in 2002. Last year, targeted oncology therapies, auto-immune agents, anti-diabetic agents, and pure vaccines represented both the majority of the market and majority of growth. The U.S. remains the largest market for biotech products, representing 56 percent of total sales last year. The five major European countries have steadily increased their share of this market over the past five years, to 24 percent in 2007. Japan's share of the market has declined slightly and now represents 5 percent of global biotech sales.

New Reality for Biotech Products

IMS expects that, during the next five years, the global biotech market will more closely parallel the traditional pharmaceutical marketplace, reflecting changing industry dynamics.

"After 20 years of what some would call a 'charmed life,' biotech is now facing a new reality," said Aitken, who noted that biotech market growth last year moderated from the 18.2 percent rate experienced in 2006. "Loss of exclusivity and competition from biosimilars, crowded therapy areas with weaker sales growth, payers showing more reluctance to fund innovative drugs without compelling value propositions, and safety concerns for some therapies will all contribute to a more moderate growth environment through 2012. Yet, we expect the biotech sector to remain one of the most robust segments of the marketplace with a continued strong flow of innovative products to the market."

The IMS 2008 Global Biotech Perspective report identifies the following key market dynamics influencing future market growth:

    --  Continued strong flow of innovative products. The depth and
        breadth of the biotech R&D pipeline has never been stronger.
        Biotech products currently represent 25 percent of the total
        pharmaceutical pipeline. Although only three new biotech
        products were launched in 2007, a sharp reduction from 2006,
        the near-term pipeline is robust and includes six products
        that are expected to be launched by the end of 2009 that will
        potentially reach $1 billion in sales. These include
        innovative treatments for respiratory synctial virus, melanoma
        and osteoporosis.

    --  Intensifying scrutiny by payers to demonstrate the
        effectiveness and value of biotech products. As new innovative
        biotech therapies are introduced, the level of scrutiny by
        payers around the world regarding their value will continue to
        intensify. Health technology assessment agencies are
        increasingly being used to assess the value of all
        biopharmaceutical products and recommend their inclusion on
        reimbursement lists at both the national and regional levels
        in countries that include the U.K., Spain, Italy, Canada and
        Germany. In the U.S., health plans also are more rigorously
        assessing both the clinical efficacy and economic rationale
        for using new products relative to existing, less expensive
        treatments.

    --  Greater impact from product safety issues. The challenge of
        balancing patient safety with efficacy of treatment is
        particularly acute in many of the therapy areas where biotech
        products have become an important part of treatment protocols.
        The impact of last year's regulatory reviews and a labeling
        change by the FDA for erythropoeisis stimulating agents (ESAs)
        led to fewer patients using ESAs, as well as an adjustment in
        reimbursement guidelines by the Centers for Medicare and
        Medicaid Services. ESA sales growth declined 9 percent in
        2007, compared with a 12 percent increase in sales in 2006.
        And this month, the FDA released an early safety communication
        indicating that it is evaluating anti-TNF treatments as a
        potential cause of lymphoma and other cancers in children
        taking the drugs to treat juvenile idiopathic arthritis or
        Crohn's disease.

    --  Growing competition among biotech products. In several key
        therapy areas, there is a growing level of competition between
        biotech products and alternative treatments, as well as among
        biotech products. Market expansion increasingly will be
        predicated on the ability of companies that bring biotech
        products to market to use biomarkers or other means of
        differentiating treatment response in patient segments.

    --  Emerging competition from biosimilars. Biosimilars, or
        follow-on biologics produced by companies other than the
        originator, are expected to have only a modest impact on the
        market over the next 5-10 years. The introduction of
        biosimilar epoeitin alfa in European markets in 2007, for
        example, has had a negligible impact in the market to date.
        And biosimilar omnitrope, introduced in 2006, has captured
        less than 1 percent of the somatropic human growth hormone
        market. Yet, they represent a shift in the biotech marketplace
        that over time will bring emerging competition from
        biosimilars following the loss of exclusivity of original
        products. The regulatory approval process for biosimilars in
        the U.S. remains subject to legislative action and
        implementation by the Food and Drug Administration, and is
        expected to be resolved in the near-term.

Added Aitken, "In today's market environment and for the foreseeable future, companies with biotech products in their portfolios will succeed only if they meet increasingly demanding regulatory standards, deploy effective commercial models that are accompanied by compelling evidence of their products' value, and develop pricing and market access strategies that ensure that patients have access to the benefits that these new products deliver."

Top-Line Market Statistics and Summaries

IMS charts detailing biotech market performance by categories that include geography, therapy classes and top blockbuster products can be viewed on the IMS website at http://imshealth.com/biotechmarket.

About the IMS 2008 Global Biotech Perspective

The IMS Global Biotech Perspective is an annual report that summarizes sales performance of biotech medicines and major therapeutic classes, and highlights the key market dynamics that are expected to impact future growth. The report is developed by IMS's team of biotech experts -- supported by the company's robust global information assets, advanced analytics and consulting capabilities. In this report, biotech products are defined as those pharmaceuticals or vaccines that have been produced in living organisms and manufactured by recombinant DNA technology. As of the end of 2007, 134 products fit this definition. Plasma-extracted proteins that are not synthesized via recombinant techniques are excluded. All references to the "biotech market" and "biotech products" are based on the defined set of products, regardless of the company originator or marketer of the products. Reference to the "biotech pipeline" refers to products not yet launched.

IMS Data Sources: All sales information in this report is based on the IMS Health MIDAS database, which includes sales in audited segments in more than 70 countries, and which covers 94 percent of the global pharmaceutical universe. Retail and hospital channels are included where available, and include ethical and over-the-counter drugs. The unaudited market is not estimated within the IMS MIDAS database. Sales are in U.S. dollars at the ex-manufacturer price level. All growth rates used in this report are calculated using constant exchange rates.

About IMS

Operating in more than 100 countries, IMS Health is the world's leading provider of market intelligence to the pharmaceutical and healthcare industries. With $2.2 billion in 2007 revenue and more than 50 years of industry experience, IMS offers leading-edge market intelligence products and services that are integral to clients' day-to-day operations, including portfolio optimization capabilities; launch and brand management solutions; sales force effectiveness innovations; managed care and consumer health offerings; and consulting and services solutions that improve ROI and the delivery of quality healthcare worldwide. Additional information is available at http://www.imshealth.com.


    CONTACT: IMS Health
             Gary Gatyas, 610-834-5338
             ggatyas@us.imshealth.com

    SOURCE: IMS Health

Posted: June 2008


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