ISA’s Food and Pharmaceutical Division 2nd Process Analytical

Technology Conference

May 16, 2006

Standards

Certification

Education & Training

Publishing

Conferences & Exhibits By Mike Nager

Source: ISA Roster

ISA’s Food and Pharmaceutical Division – Key Benefits

Over 1600 automation professionals in the Pharmaceutical, Food, and Packaged Consumer Products fields.

Key issues of validation, PAT, packaging safety, aseptic processing, clean rooms, cGMPs. Also:

• Peer and Business Networking• Education and Professional Development

Spain, 13

Canada, 11

China, 7

Mexico, 6

Japan, 56

USA, 233

Germany, 29France, 27UK, 19Italy, 18

Source 2/2005 Scrip Magazine

$608B World Pharmaceutical Market

75% → Pharma revenue to face generic competition (Datamonitor)

70% → Drugs that won’t recoup development costs (PHRMA)

40% → Equipment Utilization Rate (FDA)

25% → Manufacturing costs as part of revenue (FDA)

18% → Pharma profit margin vs 4.5% for CPG (FDA)

15% → Utilization level of manufacturing cap. (FDA)

5-15% → Scrap Rate(IQPC) @ $3.5M/batch(AMR)

Pharmaceutical IndustryWhere are we today?

(IBM)

Room to Improve

0 2 4 6 8 10

Cox-2 Inhibitors 1999

Invirase 1995

Rocombinate 1992

Difulcan 1990

Mevacor 1987

AZT 1987

Seldane 1985

Prozac 1985

Capoten 1980

Tagemet 1977

Inderal 1968

Top Line Pressure from Competition & Generics – End of the Blockbuster

(PWC Consulting)

$49B → 2004 R&D Spending (PHRMA)

$25B → ’00-’04 Lost Revenue Patent expiration (Forrester)

$15B → 2005 Lost Revenue Patent expiration (Forrester)

$30B → Lost Revenue due counterfeiting (WHO)

$16B → 2005 Free Samples (PHRMA)

1.2B → Average number of records per company (IMS)

Bottom Line ErosionProfits under Pressure

0

1000

2000

3000

4000

5000

6000

7000

8000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

Just one added cost:Pharma Direct to Consumer Advertising

Business Insights

200 → Days of inventory in pharma supply chain (AMR Research)

60 → Days of inventory in CPG supply chain (AMR Research)

25 → Average number of transfer points in supply chain between manufacturer and consumer (IMS)

Pharmaceutical IndustryNumbers

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2σ 3σ 4σ 5σ 6σ

Yield

Cost of Quality

Quality and the Cost of Quality

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2σ 3σ 4σ 5σ SEMI 6σ

Yield

Cost of Quality

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2σ PHARMA 3σ 4σ 5σ SEMI 6σ

Yield

Cost of Quality

(PWC Consulting)

74% → Execs who believe the need to improve operational excellence is paramount (MBT Magazine)

$12.5M → Amount a $5B pharma company will save by reducing manufacturing costs 1%( MBT Magazine)

$4.6B → Savings of top 10 pharma companies if improved from 2.5 Sigma to 5.5 Sigma (faster to market,

faster inventory turns and capital cost reductions) ( Phillipe Cini, Tunnell Consulting)

$10B → Savings top 30 companies would save by achieving 4.5 Sigma (IBM)

Savings Potentials

Manufacturing Defects

Cost more than just lost batches!

It’s been done before!

(IBM)

It’s a system to understand and control the manufacturing process, which is consistent with our current drug quality system: quality cannot be tested into products; it should be built-in or should be by design.

Source: FDA

Why Process Analytical Technology?

ISA has the expertise to help pharmaceutical and biotech companies increase manufacturing efficiencies to meet today’s market challenges of increasing costs and downward pressure on sales.

Conclusion

• Process Analyzers and sensors to provide process ‘signatures’

• Process Control used to ‘steer’ final products towards their desirable end-points

• Multivariate mathematical tools for simulation, statistical design, pattern recognition

• Knowledge Management for continuous process improvement

The Four Tools of P.A.T.Now Alex Habib will introduce P.A.T.