India taking Malaysia’s biotech to new ASEAN heights; Tufts Center says globally “Old Model” needs up-date

20110712-stockpick

India is making a great deal of investments into Malaysia‘s biotech industry, to take advantage of Malaysia’s push to become a knowledge based economy. Singapore is on the same path but is attracting global giants. Yet while Thailand is not known as a biotech hub, it also has a thriving biotech industry, that have produced globally renowned results such as in AIDS/HIV research and medicine.

And yet, Tufts Center for the Study of Drug Development, says “Globally” the “Old Model” needs up-dating.

Fierce Biotech says:

Pharma outfits have engineered all kinds of newfangled strategies to streamline aspects of drug R&D, yet many of these approaches fail to fix broken areas of development that cost companies billions of dollars.

Ken Kaitin, director of the Tufts Center for the Study of Drug Development, delivered this sobering assessment a day before his group delivered this morning its Outlook 2013 on research, regulatory and reimbursement issues facing the industry.

“You can’t change your R&D model and find new leads for compounds to bring into the clinic and plug them into the old process for developing new products and expect that your company is going to do better,” Kaitin told FierceBiotech in an interview.

Kaitin’s group expects pharma outfits to emphasize academic collaborations in 2013 in a continued march back to campus to find new drug leads. Yet he also highlighted an up to $6 billion annual problem that stems from unnecessary procedures in clinical trials. New discovery tie-ups with academics, of course, won’t rid that waste.

Which comes back to the growing problem of the rising cost of drug R&D. In 2007, Kaitin says, Tufts analyzed the situation and estimated that the average cost of bringing a new drug through development was $1.3 billion. Based on recent studies we know that figure has jumped, and part of the problem is the high rate of failures in the clinic. Expect Tufts to update its highly cited R&D cost figures later this year, he notes.

To reduce failures, Kaitin’s group expects pharma to cut the guesswork or trial-and-error approaches in favor of biomarkers, modeling and simulation, dynamic study designs and other methods to boost success in trials. He’s also pushing for companies to expand the use of adaptive trials, which have seen more action in the first and second phases of clinical development than Phase III where failures and waste cost the most. He prescribes more adaptive protocol designs in late-stage studies.

Not surprisingly, he also noted the growing influence of payers on pharma research.

“Companies are increasingly going to have to demonstrate value in their products. And that has been a challenge for many years for many companies but I think it’s getting much more critical for companies not to just demonstrate safety and efficacy for new products but also demonstrate value.”

Get ready for a standoff between biopharma and payers.

“Payers are currently stressed by a relatively few number of very expensive medicines that are on the market,” Kaitin says. “But when you look at the portfolio of many companies, a large number of them are focusing on targeted therapies for severely debilitating and life-threatening diseases. And their expectation is that when those products reach the market, they’re going to be able to charge premium prices for those products, which may in fact break the bank of many of these payers.”

“So I think there’s going to be a standoff at some point,” Kaitin says, “where the payers are going to have to make some very clear decisions about what products they are going to cover and reimburse.”

Many “neglected” diseases aren’t so neglected anymore as pharma outfits plow billions of dollars into development of targeted therapies for niche cancer indications and rare genetic diseases. Given the growing number of new cancer drugs winning approvals, the Tufts group predicts that payers will take a tougher stance on reimbursement for oncology therapies with small benefits for patients.

The bottom line: Pharma companies need to continue to adapt their R&D games to control rising costs and lower failures in the clinic and after approvals.

  • On Malaysia and Singapore goals, TecTura says:

Malaysia

Malaysian government has identified biotechnology as one the core technologies to accelerate the transformation of the country into a knowledge-based economy by the year 2020. The Malaysian Biotechnology Corporation (BiotechCorp) is the leading agency responsible for the coordinated implementation of the National Biotechnology Policy (NBP). The most important Malaysian biologic manufacturers include Bioven, CCM Duopharma, Inno Biologics and Ninebio. The National Pharmaceutical Control Bureau (NPCB) has adopted the Guidance Document and Guidelines for the Registration of Biosimilars, making Malaysia only the second country, after Australia, in the Asia Pacific region to adopt regulations for biosimilar registration. There have been a number of competitive strategies completed over the last 12 months: Agila Specialities has agreed to establish a biopharmaceuticals facility at S*Bio-XCell park; US-based Viropro has acquired Alpha Biologics; and Indian-based Avesthage, in partnership with Inno Biologics, has manufactured clinical grade darbepoetin alfa, its biosimilar version of Amgen’s Aranesp. As a result of this initiative, a number of new biopharmaceutical research companies have emerged.

Singapore

The biologic sector is growing, with several large multinational companies such as Baxter, GlaxoSmithKline, Lonza and Roche announcing significant investments to set up major biologics facilities that amount to US$2.0 billion in capital expenditure. In October 2010, the Biomedical Sciences Executive Committee announced that the government would be increasing its investment in biomedical sciences research over the period 2011 to 2015. In 2010, major developments in the Singaporean biologic sector included: Institut Mérieux’s investment and collaboration agreement with A*STAR on TB drug research; Emergent Biosolutions’ and Temasek Life Sciences Ventures’ joint-venture to develop and manufacture influenza vaccines; Japanesebased Fujitsu Laboratories opened its first biomedical research facility, a joint-venture with A*STAR; and S*Bio and Onyx Pharmaceuticals expanded their development collaboration and option and license commercialization agreement for S*Bio’s novel JAK2 inhibitors.

  • Business Standard:

Indian pharma companies make Malaysia a hub to tap Asean

Sharmistha Mukherjee & Sushmi Dey /

New Delhi

Jan 06, 2013, 00:35 IST

Malaysia is fast emerging as a major manufacturing hub for Indian pharmaceutical companies, especially for exports to South-East Asian countries.

Malaysia is seen as a cost-competitive country. It is drawing Indian companies with a 10-year tax holiday, duty exemptions, customised incentives for large investments, access to Asean markets through free-trade agreements and no restrictions on equity. Such incentives, and the reliable infrastructure there, have encouraged Indian drug makers to make the move, at a time when emerging markets hold the promise of growth.

Ranbaxy, Cipla, Dr Reddy’s Labs, Biocon and Strides Arcolab have started operations there, while others may follow soon.

ASEAN ATTRACTION

Malaysia is seen as a cost-competitive country. It is drawing Indian companies with a 10-year tax holiday, duty exemptions, customised incentives for large investments, access to Asean markets through free-trade agreements and no restrictions on equity.

Malaysian pharma market pegged at around $3 billion, growing at 10-12 per cent annually. Investments from Indian pharma and biotech companies in Malaysia so far is estimated to be over $1 billion. There are over 100 Indian companies, including 61 Indian joint ventures, operating in Malaysia. Malaysian investment in India is estimated to be $ 7.8 billion.

Ranbaxy — one of the early entrants in Malaysia with a drug manufacturing facility through subsidiary Ranbaxy Malaysia Sdn Bhd — is now working on a second unit. The company recently announced approval for setting up its second plant in the country with an investment of $40 million (Rs 220 crore today).

“We believe that Malaysia is a promising market, and looking at the potential we recently announced our plans to set up our second manufacturing facility in the country,” Ranbaxy Chief Executive Officer and Managing Director Arun Sawhney said. “The new facility will further enhance our production capacity, and in addition to catering to the local market, will also be developed as a hub for Asean.”

He said the Malaysian government provides free medication in all its hospitals and polyclinics — for innovator and generic products. Upon patent expiry, there is a switch from innovator drugs to generics. “The government of Malaysia provides a favourable climate to the generic pharmaceutical industry.”

Biocon and Strides Arcolabs have announced investments in Malaysia in the past six months. Biocon is setting up its first overseas facility in Malaysia, while Strides entered into an agreement with Bio-XCell of Malaysia in 2011 to build a facility to manufacture biopharmaceuticals and sterile injectibles. Biocon claims that its proposed facility in Malaysia will be Asia’s largest integrated insulin production unit.

Lupin is eyeing Malaysia as a favoured market for future. “Lupin is the largest supplier of anti-tuberculosis drugs to the country and we would look at ramping up our presence in other therapy segments as well,” said Chief Financial Officer Ramesh Swaminathan.

The government of Malaysia is looking at providing benefits in the form of faster registration of products and market access opportunities under the umbrella of specified entry point project, which is attracting Indian pharma companies. The opportunity for a market take-off agreement was a key facet of the public-private partnership for Ranbaxy’s project.

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