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NEW PHASE OF MAB BIOSIMILAR KNOCKS THE DOOREMERGENCE OF BIOGENERIC ERA IN JAPAN

Remicade biosimilar “NK” - Will it follow Norway or else for market penetration?Potential Best Opportunity in Biosimilar Space in Japan-

RA biosimilar Or Onco biosimilar or Biosimilar of Lantus or Biosimilar of Nesp!

Total Pages of Report : 65 Price : $4,000

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TABLE-1JAPAN BIOSIMILAR

Launch timeline and our view on each Potential biosimilar opportunity, Key players, and Key challenges

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Originator Product Name

Thearpy Area/Key Indication

FY2013 Originator

JP sales (¥b)

Overall Oppurtunity of

biosimilar

RemicadeAutoimmune/RA,UC,CD

Nippon Kayaku, Nichi-Iko

**

Lantus Metabolic/Diabetes Sanofi

Autoimmune/RA,UC,CD

Daiichi Sankyo, Mochida

**

Rituxan Oncology/Multiple MyelomaChugai/Zenyakukogyo Sep-01 26.2Daiichi Sankyo, Nichi Iko

**

HerceptinNippon Kayaku **

AvastinOncology/CRC,NSCLC,BC, Malignant glioma, Ovarian

FujiFIlm KHK *

NESPNephrology/Renal anemia

Autoimmune/RA,UC,CD

Eisai/Abbive 08-Apr 28FujiFIlm KHK **

Note: **good, *** Best

JP MA holder Launch Year Expected launch of Biosimilar

Expected No. of Players in Biosimilar

Innovator strategy against Biosimilar

Therapy Factor JP specific Factor Negative Positive

Mitsubishi Tanabe Dec-01 75

Remicade BS "NK"- Already launched in Dec-2014. Remicade BS "Nichi-Iko"- 2016

3 Reasonable (Simponi)RA contributes 50% sales, IV infusion - Use in Hospital -high

Use in DPC hospitals- very less, due to frequency of dosage- may have better prospects to get covered under high cost medical care benefit programme compared to Enbrel & Humira

Mitsubishi Tanabe

Dec-03 15 2015 - Eli-Lilly 1 WeakDevice acceptance will play key role

Use in DPC hospital is high & marketd by LLY - has better prospects for JP market.

Sanofi Eli-lilly ***

Enbrel Takeda/Pfizer Mar-05 452016/17- Daiichi Sankyo, Mochida/LG lifescience around same time,

3 Weak

As fusion protein, yeild is a challenge, profit margin may remain challanging if not substantial volume share achieved

Vs. Remicade moderately covered for high cost medical care benefit programme due to dosing schedule, Can be used withough MTX so prefered RA biologics at Outpatient level in JP.

Takeda/Pfizer KK

Daiichi Plans to launch Rituxan biosimilar in FY2017

5Moderate (Pipeline of new drugs for MM -Crowded- Ixazomib, Pomalidomide)

As treat Multiple Myeloma- Switch/Use in New patients for biosimilar by Oncologist/Heamatologist difficult

As covered in High cost medical care benefit programme, reduce co-pay diference when biosimilar used- Govn measure must to promote use of biosimilars

Chugai/Zenyaku Kogyo

Oncology/BC,GC Chugai Jun-01 30.9Nichi-Ikko in 2017-2018, Meiji in 1H 2017

5

Moderate(Post MARRINE data, Use of Herceptin will increase with Perjeta in first line, Herceptin Subcu formulaiton approval )

Use of biosimilar for treating Breast cancer, Gastric Cancer looks difficult- Robust Clinical trial is must

As covered in High cost medical care benefit programme, reduce co-pay diference when biosimilar used- Government Meausres Must to promote use of Biosimilars

Chugai

Chugai Jun-07 75 Fuiji-KHK in 2018 3Moderate (Pipeline of new VEGEF inhibitors)

Use of biosimilar for treating various Cancer looks difficult- Robust Clinical trial is must

If launched by KHK-Fujifilm with robust PhIII clincal data in JP patients- may result in biosimilar use for Various Onco indications

Chugai

KHK Jul-07 55 Kissei in 2018 2 ModerateFavorable as indicated for anemia treatment - support therapy

As used much In DPC hospitals ,expect better penetration, Will follow trend line of Erythropoeing use in Japan (57% volume market share)

KHK Kissei ***

HumiraFujifilm KHK expect Humira biosimilar launch in 2017-2018

4 Weak

Humanized mab- very well accepted - Originator's key growth driver- to challenge originator Abbivie in market is a key challenge

Vs. Remicade moderately covered for high cost medical care benefit programme due to dosing schedule, prefered RA biologics at Outpatient level in JP.

Abbive/Eisai

Key challenge for biosimilar companies Companies impacted

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Table 2JAPAN BIOSIMILAR

OPENING OPPORTUNITIES IN BIOSIMILAR SPACE

Source: MP Advisors, Company Reports Continued...

Brand Drug Company Manufacturer Indication Launch Year

Patent Exp

Sales FY 03/14 A

(¥b)

Patent Expired DrugsEpogin epoetin alfa Chugai Chugai Anemia Apr-90 Exp 10.5

Espo epoetin alfaKyowa Hakko Kirin Kyowa Hakko Kirin Anemia NA Exp 3.4

Feron NA Daiichi Sankyo Toray

Chronic Hepatitis C infection Sep-85 Exp 9

Sumiferon interferon alfa-n1Dainippon Sumitomo Dainippon Sumitomo HCV NA Exp 5

Feron interferon beta Toray Toray HCV Sep-85 Exp 2Epoetin alfa epoetin alfa Kissei JCR Anemia NA Generic 5.5

Total 35.4Patent Expiry (2012-2016)

Synagis palivizumab Abbott JP Abbott JP Respiratory Apr-02Expired (2012) 31

Remicade infliximabMitsubishi Tanabe Mitsubishi Tanabe

Rheumatoid arthritis Dec-01 Expired 75

Enbrel etanercept Takeda PfizerRheumatoid arthritis Mar-05 2015 45

Lantus insulin Glargine Sanofi Sanofi Diabetes Dec-03 Expired 15

Avonex interferon beta-1a Biogen Idec Biogen Idec

Relapsing Multiple sclerosis NA 2016 3.6

Herceptin trastuzumab Chugai ChugaiHer2 breast cancer NA

2014-2015 30.9

Rituxan rituximab Chugai Zenyaku NHL NA 2016 26.2

Betaferon interferon beta-1b Bayer BayerMultiple sclerosis Nov-00 2015 6

Total 232.7Patent Expiry (2017-2018)

Avastin bevacizumab Chugai Chugai NSCLC Jun-07 2017 75.4

Humira adalimumab Eisai Abbott JPRheumatoid arthritis Jun-08 2018 28

NESP darbepoetin alphaKyowa Hakko Kirin Kyowa Hakko Kirin Anemia Jul-07 2018 55

Pegasyspeginterferonalfa-2a Chugai Chugai HBV & HCV Dec-03 2018 5.5

Orencia abatacept BMS BMSRheumatoid arthritis Sep-10 2018 9.3

Mircera

methoxy polyethylene glycol-epoetin beta Chugai Chugai

Anemia in chronic kidney disease Jul-11 2018-19 22.5

Total 195.7

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Long-acting Version of G-CSF is approved, but remains to be seen how will it prevent biosimilar

uptake: Kyowa Kirin is trying to differentiate Gran from biosimilars by taking advantage of its brand

strength, the product’s long track record, and by launching the improved, long-acting G-CSF drug

KRN125 (Pegfilgrastim). It launched G-Lasta in Sep 2014 and it received 5% new drug price premium.

• GRAN is administered daily, while G-LASTA is administered just once per chemotherapy

cycle. No generic version of this formulation can be launched until its re-examination period.

For Sandoz, Late entry did not result in any NHI reimbursement price discount as similar pricing

was given to each BS at one point of time:

When launched in May-2013, Each of the four Filgrastim BS received same price which is ~ 30-45%

discount to the originator price- while in April- 2014 at the time of biennial price cut , all launched BS

received ~8-12% price cut vs. Originator who received 5% price cut. This demonstrates JP NHI reim-

bursement policy is very different from other geographies. Again when Sandoz launched its Filgrastim

biosimilar, it got the price equivalent to the at that time price of other biosimilars- so late entry into the

market did not result in any reimbursement price disadvantage vs. its peers and only loss to the late

entrant would be lost sale of the late entered year and market late launch disadvantage in gaining market

share. Based on this, we think there is a fair chance that Sandoz can repeat the EU story of being leader

in Filgrastim market despite entering late.

Table 6JAPAN BIOSIMILAR- NHI REIMBURSEMENT PRICING

GRAN BIOSIMILAR PRICING TRENDFilgrastim: Originator vs. Biosimilar

Strength Originator's Price- May-

Nov 2013

Biosimilars Price May-13

(M,NK,F,Teva)Discount

Originator's Price- Price Revision -April-2014

% price cut to

originator

BS Price- Price

Revision-April-2014

%price cut

to BS

BS price of

Sandoz- biosimilar launched in Nov-14

75 μg/0.3 mL （most widely used strength） 10055 6882 31.6% 9481 5.7 6143 10.7 6143150 μg/0.6 mL 20048 10871 45.8% 18900 5.73 9987 8.13 9987300 μg/0.7 mL 24926 17179 31.1% 23475 5.8 15093 12.1 15,093

Source: MP Advisors, Company reports, NHI price in Yen

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• The sponsor should analyze the lack of efficacy possibly due to expression

of antibodies.

Remicade biosimilar:

• PMS studies are recommended for ulcerative colitis and Crohn’s disease indication as PhIII

trial has not been carried out for these two indications.

The label of biosimilar will be XXX BS dosage form strength, and company name. For Infiximab-

which was recently approved in July-14, the Brand name is Infiximab BS for IV infusion 100mg “NK”.

Findings from JP Approval of First complex mAb of Japan- Remicade biosimilar-

For Biosimilar developments in Japan- Extrapolation of the indication is allowed if the re-exam-

ination period has expired

Remicade biosimilar of Nippon Kayaku/Celtrion received approval on Jul-2014 in three key indications

–i.e. RA, Crohn’s disease and Inflammatory bowel disease. Remicade in Japan is approved for a total

of six indications (Table 9) of which re-examination period of RA and CD has already expired, while

Re-examination period for Ankylosing spondylitis will expire in 2020 and Remicade biosimilar will get

indication extrapolation at that time. Sales from remaining indications contribute <10% to the current

sales of Remicade (¥75b- FY2013). Half of Remicade sales come from RA indication, and ~30-35%

from UC/CD.

NK filed for approval in Sep-2013 and it took ~ 11months to get an approval. NK did filing based on

clinical studies done by its partner Celtrion in EU and Korea + a Ph1/2 RA study done in Japan.

Details of the clinical studies submitted for Remicade biosimilar “NK” approval (Table 7, 8) -

NK’s partner Celtrion started clinical studies of CT-P13 in Oct-2010. CT-P13 pilot study was carried

out in Philippines in 19 RA patients for 102 wks. Celtrion also did PhIII PLANET RA and PLANET

AS study in S. Korea and EU for Regulatory submission in respective territories. Currently, Celtrion

started PhIII UC study in July 2014 for US/EU geography- as Health Canada has not approved Remi-

cade biosimilar in CD without trial and EU physician are reluctant to prescribe Remsima in Crohn’s

disease. Celtrion is also doing one switch study of Remsima for US approval to demonstrate inter-

changeability.

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patient’s perspective, use of generics does not result in much overall benefit vs. in high cost

healthcare benefit programme- upfront payment required to be done by patients and then it gets

reimbursed. This might persuade some patients who are not capable of paying high upfront

medical fees to go for biosimilar use. .

• Reforms are under way to increase use of generics of drugs coming under the High cost health-

care system- In Aug-2014, MHLW had decided to do a survey to know the rate of generic drug

use under high cost healthcare system, based on which in the coming days, MHLW will propose

some plan for increasing use of generics in this patient population. Any major change in the

Next NHI price revision in favor of increased use of generics under high-cost healthcare system

can change current expectation of biosimilar penetration in Japan.Remicade biosimilar approved only for three indications and not all - Re-examination

period for Ankylosing Spondylitis and Bachet’s disease indication is expiring in Japan in

April-2020 and Jan-2017 respectively. Remicade biosimilar is approved only for RA, UC and

CD indications in Japan. Generic drugs which are not approved for all indications in Japan are

covered by the reference brand drug referred to in Japan as mushi-kui (bug eating) and medical

institutions tend to shun these generics. This is mainly for small molecules but as Remicade is

used extensively in hospital settings, it might have a negative impact on the uptake of Remicade

biosimilar.

Use of Remicade in DPC hospital: As per MTPC, Remicade is used in only 40 DPC hospitals

out of 1500 and that makes biosimilar use limited as DPC hospitals are one of the key growth

drivers for generic penetration and biosimilar use in Japan.

Originator Remicade NHI price cut in April-2016 NHI price Revision- In April-2014 NHI price revision, Remicade received 10.9% price cut (including tax adjustment) mainly due to market expan-sion re-pricing rule ( Sales exceeded the initial forecast- and thus the price cut) and based on this in FY2014, MTPC expects Remicade sales of ¥68b, a decline of ~12% from last year sales (¥75b). As increase in consumption tax is delayed by 18 months to 2017 by the government, it is not decided yet whether there will be a new NHI price revision in Oct-2015 or not. In the scheduled next NHI Price revision (either in Oct-15 or April-2016), for Remicade there will be no new drug premium as its biosimilar is launched and based on that ~12-15% price cut is expected for Remicade. This will result in negative NHI price revision for Remicade biosimilar also. We expect ~12-15% negative NHI price revision for Remicade biosimilar in the next scheduled price revision.

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the other hand, EPO/Filgrastim biosimilar penetration is on the higher side as they are a support

therapy and physician have experience for using them for years. When we compare autoim-

mune market vs. Oncology market- we think autoimmune market is more physician friendly for

biosimilar use vs. oncology due to disease severity, doctor’s experience of using mAb for treat-

ing autoimmune disease vs. Oncology disease, nature of the disease etc.

• Prescribers experience of handling autoimmune class of Mabs will result in faster uptake

of RA Mabs vs. Oncology Mabs where the target customers are scattered- and complexity

to treat patient is high - As in case of autoimmune class- the difference in MoA and patient

pattern/treatment algorithm (RA,UC, CD, Psoriasis) is pretty well defined vs. Onco Mab space-

where in the disease itself is very notorious and prescribers/patients will have risk-averse strate-

gy for changing originator to use biosimilar Mabs.

Competitive Landscape of Autoimmune biosimilar in Japan- Market dynamics will be different

for Remicade/Enbrel/Humira biosimilar despite targeting similar key markets - RA, UC, CD

Out of the five key complex Mabs treating autoimmune disease - 3 mAb’s biosimilar are in develop-

ment i.e Remicade, Enbrel and Humira, while for Orencia and Actemra, not much development in the

biosimilar space in Japan is noted. Table 9 and 10 detail IP and competitive landscape of Autoim-

mune/RA biosimilars in Japan- based on which, we expect limited competition in Remicade biosimilar

space followed by Enbrel and then Humira.

Again, all three drugs coverage in reimbursement system varies to some extent; where in currently

Remicade comes under more high cost healthcare system due to its ordinary dosing schedule vs. Enbrel

and Humira. Subsequent price cuts due to biosimilar entry of Remicade may change this scenario in the

coming future. Physician acceptance on indication extrapolation without results from all key indica-

tions will be important for this class of biosimilar for market penetration. Total market size of Autoim-

mune Mabs in Japan is around ¥200b and we expect biosimilar will be able to take at least 20% volume

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Table 9JAPAN BIOSIMILAR-

IP LANDSCAPE OF BIOSIMILARS FOCUSING ON AUTOIMMUNE DISEASEPOTENTIAL OPPORTUNITY

JP Originator Brand Name (US brand

name)

Generic Name

MA Holder/s Manufacturer Indication

First Approval

Date Launch Reexamination

Period Expiry JP Key Patent No. MP Pat Exp

Originator Sales

FY2014

Remicade Infliximab Mitsubishi Tanabe

Mitsubishi Tanabe

Crohn's disease (Orphan), RA (Aug 2003), Refractory uveoretinitis associated with Bechet’s disease (Orphan- Jan-2007), maintenance Crohn’s (Nov 2007- orphan drug), RA structural damage (Jul-2009), Plaque Psoriasis (Jan-2010), Ankylosing spondylitis (April-2010, orphan drug)

Dec-01 May-02

June-2013 (including

higher dosage regimen) forRA, CD and

UC, Jan-2014 for psoriasis

and April-2020 for AS

JP2109193 (April-2009)

Expired FOB

already approved in 2014

75

Enbrel Etanercept Takeda / Pfizer Pfizer

RA (Jan-2005), Polyarticular-course JIA (July-2007), 10mg SC, 25mg SC injection (Feb-2010), RA structural damage (March-2012)

Jan-05 Mar-05 Jan-13

JP2721745 (TNF receptor production- Sep-2015), JP2728968 (IgG fragment binding-Sept 2015), JP2960039 (2721745 divisional patent-Sept-2015)

Sep-15 45

Humira Adalimumab Eisai / Abbott Abbott

RA (2008), Plaque Psoriasis and Psoriatic arthritis (Jan-2010), Crohn's disease & Ankylosing spondylitis (Oct-2010), JIA (Jul, 2011 with additional dosage form 20mg SC 0.4ml), RA structural damage (Aug-2012), Bechet's disease (May 2013)

Apr-08 Jun-08 Apr-16

JP386118 (RA-2018, AS-2019, Psoriasis & SJIA-2020, Crohn's disease-2021), JP4404181 divisional patent ( psoriasis -2017, CDAS-2018, SJIA-2018)

Aug-18 28

Continued….

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Table 10JAPAN BIOSIMILAR-

COMPETITIVE LANDSCAPE- BIOSIMILARS FOCUSING ON AUTOIMMUNE DISEASE

JP Originator

Brand Name (US

brandname)

Various Biosimilar companies launch

Plan

JP Originator's sales- FY 03/14- ¥b

JP Competitive landscape - Company Name/Originator-partnership/Expected launch

Total no of Biosimilar

Players expected

As of Dec-2014

Availability of next gen follow on

biologics by innovator

Remicade Nippon Kayaku's Remicade biosimilar is already approved

76.3, Remicade 50% of sales comes from RA, while 35% of sales come from Crohn's disease indication

Remicade biosimilar from NK already approved for Crohn’s disease, Ulcerative colitis and RA while Remicade biosimilar of PFE is in PhIII development. Nichi Iko plans to file Remicade biosimilar in 2QFY2015 and thus launch is expected in 2016 in Japan- while in US Nichi-Iko plans to file in 2017. NK filed for Remicade biosimilar in Sep-2013 and received approval in July 2014. Its listing happened in Nov-2014 and the price it listed is 67% to originator price (89536 vs. 59814).

3 Yes Simponi SC form vs.

Remicade IV

Enbrel Diiachi expects approval of Enbrel biosimilar in FY2016

45.4 (5.1%)

Yoshindo/Lupin will start CT in FY2014, Mochida/LG Lifescience Daiichi started PhIII trial in 2014 (Coherus bioscience), Mochida Enbrel biosimilar -LBEC0101 is in preparation for Phase III in Japan.

3 No

Humira

Fujifilm KHK aim to launch Humira biosimilar in 2017-2018. Abbvie KK expect patent to expirearound 2019- and expect biosimilar version to enter soon after PE.

¥28.8b (YoY-20%), FY-2014 forecast ¥30.5b

Total 4 companies developing Humira biosimilar- Mochida did JV with LG Lifescience this October for Humira biosimilar, Pfizer Humira biosimilar is in PhIII, and Fujifilm-KHK Humira biosimilar is in PhI development (info of PhIII trial listed on CT.gov- but status is 'not yet recruiting', in Ph I), Meiji- Dong A - Humira biosimilar in preclinical phase.

4 No

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GENE TECHNO SCIENCEJP Biopharma Rising star concentrating on

Developing new biopharmaceuticals and biosimilar

Established in 2001, a JP university rooted rising star company Gene Techno science developed two

type of biopharmaceutical portfolio- One is for developing biopharmaceuticals for rare or difficult

disease (GND-001, antialpha-9 integrin antibody, PC- key late stage compound) and second for biosim-

ilar business. In biosimilar business, Gene techno science developed Filgrastim biosimilar with Fuji

Pharma and it received approval in May-2013. It is now aiming to maximize overseas Filgrastim

licensing opportunity by partnering it with US/EU/Asia partners. It is also developing peg-Filgrastim

biosimilar and aims to supply in overseas market along with Japan. While Other pipeline biosimilars of

Gene techno science are mentioned in Table 21. Other than Filgrastim, five biosimilar are in early phase

of development.

Toyobo had biosimilar contract business worth ¥1b+ in 2013 and it expect to generate ¥10b+ revenue

by 2015. Toyobo has also entered a joint business agreement with a US company to strengthen this

business and has introduced advanced production technologies.

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Table 21Gene Techno Science

BIOGENERICS STATUS

Code Nonproprietary Name Status Indication Partner

GBS-001 (Filgrastim) Approved in May-2013

Supportive care

Co developed with Fuji pharma and licensed out to Fuji pharma and Mochida for marketing

GBS-004 (Bevacizumab) PC Oncology -

GBS-005 (Adalimumab) PC RA -

GBS-008 (palivizumab) PC Respiratory

GBS-010 (Peg-filgrastim) PC Oncology Supportive care

GBS-011 (Darbepoetin alfa) PC Anemia Sanwa Kagaku- Dong A ST for

codevelopment

Source: MP Advisors, Company Reports

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