¥200b worth of biologic products is going off patent by 2015 and this value
exceeds ~ ¥500b if we include products that will see their patent expiries by
2021 in Japan. There are a number of reasons to believe that follow-on-biologics
or biosimilars will not replicate the lethargic growth story of generic –
preliminary because the much higher cost of biologic therapy brings significant
burden on patients despite relatively low co-pay in Japan – and this will push
individuals and DPC Hospitals to use biogeneric products to a greater extent
unlike generic drugs. Secondly, the regulatory supports are going to be
stringent enough to ensure quality measures and leave ~no room for imported
products, thus eliminating the ‘not made in Japan’ factor from prescriber’s and
user’s mindsets.
Anticipating this opportunity and favorable macro forces as compared to
generics, a number of companies aim to exploit this – Japan has seen a flood
like consolidation and partnering activities in biosimilar space. While a dozen+
companies have already laid their road map for biosimilars space, at this time
we see Sandoz, JCR, Meiji Seika Pharma, Fuji Film Kyowa Kirin Biologics, Nippon
Kayaku, Nichi Iko, Yoshindo etc. to be amongst the key players in biogenerics
business in Japan.
In this piece, we attempt to evaluate the future competitive landscape of the
biosimilars space in Japan, assess the overall attractiveness of the same, and
try to identify the key determinates to succeed in this space.
Investment Thesis
Opening biosimilar opportunity in Japan in next decade
Key local players
Consolidation trend in biogeneric space
Expected market penetration - Does it will repeat the lethargic growth story of
small molecule generics in Japan?
Evolving Biogeneric landscape in Japan
Launched biogenerics in Japan and their uptake trend
Top 10 small molecules vs. Top 10 biologics in Japan
Likely launch schedule of select biosimilars
Japan Specific Hurdles & Drivers
Biogeneric opportunity , its likely profitability vs. risk profile
Development cost of biosimilars vs. small molecules
Price difference vs. small molecules and DPC hospitals business are key drivers
-Co-pay Slabs in Japan
-Saving through biosimilar use
-Pricing of key biologics in Japan
Regulatory Guidelines: Stringent Enough to Restrict Scope of Import
Korosho guidelines- Key difference vs. US, EU
JP requirement of
-Reference Product
-Interchangeability/Substitution
-Pharmacovigilance
-PMS for biosimilar
Select Japanese Companies venturing into biogeneric space – Their strategy
and Pipeline
JCR Pharmaceuticals
Meiji Seika Pharma
Fuji Film Kyowa Kirin Biologics
Nichi-Iko
Mochida
Nipro Pharma
Yoshindo
Nippon Kayaku
Sawai
Towa
Daiichi Sankyo
UMN Pharma
Kissei
Kyowa Hakko Kirin
Toyobo Biologics
Annexure-I - Consolidation Activities in Biosimilar Space in Japan
Annexure-II - Biosimilar Guidelines adopted by various countries
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