MAb Sector Growth Will Continue to Far Outstrip That of Small Molecules
LONDON October 12 2007- The dynamics of the monoclonal antibody (mAb) market have changed significantly over the past two decades since the launch of Johnson & Johnsonâ€™s Orthoclone OKT3. Far removed from these shaky beginnings, mAbs currently generate global revenues of around $20 billion and represent the fastest-growing segment within the pharmaceutical industry, expected to achieve a compound annual growth rate (CAGR) of 14% between 2006-2012, easily outstripping the growth rate of 0.6% in the more traditional, small molecules market. And with key individual mAb product franchises forecast to record peak sales growth through horizontal indication broadening and the launch of new products in the next few years, this rapid expansion is expected to continue, according to independent market analyst Datamonitor*.Â
mAb market evolution â€“ from mouse to human
The evolution of antibody technology has acted as a major driver of the growth in the mAbs market, distancing todayâ€™s blockbuster products from the commercially-unsuccessful murine mAbs which were the primary focus of early-stage antibody development. While chimeric and humanized mAbs currently dominate the market this technology evolution continues, as the number of fully human mAbs to reach the market increases.
Although the first mAb drug - Johnson & Johnsonâ€™s Orthoclone OKT3 murine antibody product launched in 1986 - was not a commercial success due to immunogenicity issues, murine antibodies were widely perceived to hold therapeutic potential. Therefore, the launch of Orthoclone did support further development of mAb technology, which ultimately led to safer and more efficacious antibodies of higher human composition.
mAb market reaching its inflection point
The mAb market was ushered into its â€˜take offâ€™ phase by the 1997 launch of Rituxan/MabThera** (rituximab) for non-Hodgkinâ€™s lymphoma (NHL). Rituxan/MabThera represented the first mAb product to succeed commercially in a high-revenue/high-growth market (oncology) and provide significant enhancements in the efficacy of treatment versus existing non-mAb therapies, says Datamonitor pharmaceutical markets analyst John Bird. â€œAs a result, Rituxan/MabThera rapidly became established as the gold-standard therapy for NHL and the first launched mAb product which went on to achieve blockbuster status.â€
Buoyed by the rapid success of rituximab, mAb drug developers have proceeded to launch a raft of mAb products in subsequent years, a trend driven by advances in technology allowing for the development of mAbs with higher human composition (known as humanized and fully-human mAbs). Fuelled by key mAb launches â€“ Avastin, Herceptin, Remicade, MabThera/Rituxan, Humira and Erbitux â€“ the market is presently at an inflection point of maximum sales growth, demonstrated by absolute sales growth of almost $14billion forecast to be generated by mAb products between 2006 and 2009 â€“ 60% of the forecast 2006-12 growth.
Over this period, the rapid expansion in mAb revenues will be driven by a number of key individual product franchises recording peak sales growth and the launch of new products, such as UCB-Celltechâ€™s Cimzia (certolizumab pegol) for Crohnâ€™s disease and rheumatoid arthritis. Furthermore, a number of key mAb products are the subject of horizontal indication broadening strategies. This trend is expected to further enhance revenue growth, Bird says. â€œThe most notable example of this strategy is Genentech and Rocheâ€™s Avastin (bevacizumab). Given its broad-spectrum mode of action â€“ it targets angiogenesis â€“ it can be used across a wide range of tumor types.
â€œSimilarly, the labeling of mAbs positioned in the arthritis, inflammation and immune disorders (AIID) market (Remicade and Humira) has aggressively been broadened to include various indications, such as rheumatoid arthritis, Crohnâ€™s disease, psoriatic arthritis and ulcerative colitis. Furthermore, indication broadening has also spanned multiple therapy areas, with Rituxan/MabThera approved initially for NHL (oncology) and subsequently for rheumatoid arthritis (AIID),â€ he says.
Although by no means representing an end of mAb market sales expansion, revenue growth will begin to slow by 2012. Competition between rival mAb products will begin to slow sales growth for some franchises (Humira sales growth at the expense of Remicade for example), while some second-generation product launches (such as MedImmuneâ€™s Numax) will cannibalize sales of first-generation mAb products (MedImmuneâ€™s Synagis). â€œUltimately, organic revenue expansion in any market is finiteâ€, Bird says, â€œand this will prove the case in the mAb segment, despite the indication broadening opportunities available for many brands.â€
â€˜Big 5â€™ dominance challenges notion of entry into mAb sector will result in big sales
However, despite the undoubted success of mAbs, entry into the market isnâ€™t necessarily a guarantee of financial success. Just five monoclonal antibody products â€“ Avastin, Herceptin, Humira, Remicade and Rituxan â€“ accounted for 80% of total mAb revenues in 2006. The commercial dominance of these â€˜big fiveâ€™ is expected to continue out to 2012, with the same products forecast to account for 70% of 2012 mAb revenues.
Datamonitor expect that Genentech/Roche will retain their stranglehold over the mAb market out to 2012, due to ownership of three of the â€˜big fiveâ€™ products. Oncology and AIID will remain the mAb segment therapeutic focus, simply because they are the disease areas addressed by the â€˜big fiveâ€™.
The â€˜big fiveâ€™ will also account for around 60% of absolute revenue growth 2006?, Bird says. â€œA striking difference is observed between average 2006 product revenues for the big five, at $3.1 billion, and average 2006 product revenues for all other marketed mAbs, at $261million.
â€œThese findings challenge the sweeping strategic assertion that entry into the mAb segment is a panacea for achieving high growth and high product revenues. It is clear from Datamonitorâ€™s research that only the owners of the largest products will secure the largest rewards,â€ he says.
Analysis of the mAb market by company reveals a clear two-tiered structure. Four â€˜establishedâ€™ players sit at the top end of the market â€“ Genentech, Roche, Abbott and Johnson & Johnson â€“ each of which generated mAb revenues in excess of $2 billion in 2006, says Datamonitor pharmaceutical markets analyst Joshua Owide. â€œAn additional tier of four â€˜emergentâ€™ players â€“ Biogen IDEC, Amgen, Novartis and UCB Pharma â€“ is also evident.
â€œDatamonitor expects this â€˜second tierâ€™ to expand their market presence out to 2012, with each forecast to record absolute annual mAb sales growth in excess of $1 billion over the period 2006-12,â€ he says.
mAbs insulated from generic threat
In terms of the wider pharmaceutical market, it is clear that the key factor influencing sales growth over the period 2006-12 is generic competition. Exposure to patent expiries and generic competition will underpin the tepid CAGR in sales of 2.2% forecast out to 2012. Furthermore, while exposure to generic competition will act as a notable â€˜brakeâ€™ on sales growth over the period 2006-11, an increased intensity in generic competition â€“ known as the â€˜patent cliffâ€™ â€“ will drive an overall decline in market revenues over the period 2011-12, equal to a year-on-year decline of -7.3%. The â€˜patent cliffâ€™ will be caused by a raft of blockbuster drugs losing patent exclusivity over this short time period.
Analysis of total prescription pharmaceutical sales growth over the period 2006-12 by product type demonstrates that, however, it will be small molecule drugs which are exclusively impacted by the â€˜patent cliffâ€™. The emergence of biosimilar â€“ or bio-generic â€“ competition has begun, however, over the period 2006-12 this threat is only applicable to first generation therapeutic protein products. Most importantly, mAb products will remain completely insulated from the threat of generic competition over 2012, a trend owed to robust patent protection and a lack of a regulatory pathway suitable to support biosimilar mAb approvals and launches, Bird says. â€œIn addition to occupying a sector of the market that is insulated from generic competition, mAbs have the advantage of primarily addressing high unmet need therapy areas such as oncology and AIID.â€
Thus, players that sit within the mAb segment will fare better once the â€˜patent cliffâ€™ is reached, Owide adds. â€œmAb revenues will either allow overall sales growth to continue over 2011-12 â€“ as is forecast for Roche/Genentech â€“ or mitigate against the impact of the â€˜patent cliffâ€™ â€“ as is forecast for Johnson & Johnson,â€ he says.
With their insulation from the negative force of generic competition combined with high exposure to the twin positive forces of high unmet need and â€˜novel target spaceâ€™, Datamonitor expects mAbs to continue to be the fastest growing product type â€“ excluding vaccines â€“ out to 2012, Bird says. â€œIn contrast, small molecules face an unattractive combination of high exposure to generic competition, no major focus on areas of highest unmet need and little access to novel target space; all conspiring to make this product set the slowest growing to 2012.â€
Notes for editors * Monoclonal Antibodies Parts I&II. ** In-licensed from Biogen IDEC (then Biogen) and developed/marketed in collaboration by Genentech and Roche
Datamonitorâ€™s reports Monoclonal Antibodies Parts I&II provide a detailed analysis of the monoclonal antibody segment, encompassing market dynamics, key therapy areas, technology and target types through to 2012, evaluating the strategies companies are using to capitalize on this lucrative market.
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