HPAPI DS/DP manufacturing - trends in the pharma industry, a presentation delivered at Informex 2015 by CPS' Dr. Aaron Heiss, Senior Technology Manager.

1. HPAPI DS/DP Manufacturing – Industry Trends
Dr. Aaron Heiss, Senior Technology Manager

2. Agenda
● HPAPI and Cytotoxics: Definitions
● Trends in the Pharma Industry:
● API Market/Growth
● HPAPI Market/Growth
● HPAPI Market Growth Drivers
● Consolidation/Investments
● DS and DP: An Integrated Versus Non-Integrated Approach
● Dr. Reddy’s CPS HPAPI Offering: An Integrated Approach
● Summary

3. HPAPI and
Cytotoxics:
Definitions

4. High Potency Active Pharmaceutical
Ingredients (HPAPIs)
Definitions
HPAPIs or high potency intermediates may have:
● Biological activity at approximately 150 μg/kg of body weight or below in
humans (therapeutic daily dose at or below 10 mg).
● An occupational exposure limit (OEL) at or below 10 μg/m3 of air as an 8 h
time-weighted average.
● High selectivity and/or with the potential to cause cancer, mutations,
developmental effects, or reproductive toxicity at low doses.
● Or, by default, a novel compound of unknown potency and toxicity.

5. Definitions
Cytotoxics are a subcategory of high potency drugs:
● Pharmacological agent that inhibits the proliferation of cells within the body.
● Agent that possesses destructive action on certain cells, that may be
genotoxic, oncogenic, mutagenic, teratogenic, or hazardous to cells.
● Most commercial anti-cancer drugs are cytotoxic.
● Cytotoxic drugs are high potency but not all oncology drugs are cytotoxic.
High Potency Active Pharmaceutical
Ingredients (HPAPIs)

6. Trends in the
Pharma
Industry
API
Market

7. API Market
● Global API market estimated at $107B in 2011, with CAGR of 5.6% between
2008-2012. CAGR of around 8% expected between 2012-2017.
● APAC’s contribution showing rapid growth and total revenues for APAC
expected to reach $60B by 2016.
North America
32%
Asia
26%
Europe
31%
RoW
11%
North America
27%
Asia
34%
Europe
29%
RoW
10%
Statistics from 2011 Projections for 2016
Ref: http://www.marketsandmarkets.com/Market-Reports/API-Market-263.html
Frost & Sulivan report, 2009, Global Active Pharmaceutical Ingredients Market: An Outlook
91
107
154
0
50
100
150
200
2008 2011 2016
Revenues($B)
Year
CAGR
5.6 %
CAGR
~8 %

8. API Market Growth
What does it mean for the pharmaceutical industry and
for patients?
● Demand for quality API is increasing.
● Pharma companies looking for low risk investments.
● North America and Europe – close to consumers, highly-skilled workers and
high-levels of regulatory compliance.
● Costs of goods higher in North America and Europe, leading to decreasing
market shares.
● Asia becoming major player from a supply and consumer perspective.
● Quality of treatment improving, along with quality of life in Asia.

9. HPAPI Market

10. HPAPI Market
Chart adapted from Mehrotra, S. 2010. Chemistry Today. 28:43-45, with additional information from Bowman M. 2013.
CHEManager. Oct 22, and Bowman, M. 2013. Chemicals Magazine. July 30.
● 25% of drugs in development are high potency.
● HPAPI - approximately 10% of global API market.
● Fastest growing segment of pharmaceutical market.
● HPAPI market value expected to reach $17.5B by 2018, with projected
CAGR of 9.9% between 2012 and 2018.
5.9
7.5
12.1
17.5
0
5
10
15
20
2005 2009 2015 2018
Revenues($B)
Year
CAGR
6.3%
CAGR
8.4%
CAGR
9.9%

11. HPAPI Market
● North America and Europe have largest share of the market.
● APAC share of HPAPI market likely to have highest growth rate.
● APAC’s HPAPI market forecast to be worth more than $1.9B by 2016, with a
CAGR of 15.4% between 2009 and 2015.
Statistics from 2009
Ref: http://www.chemeurope.com/en/studies/2131/the-future-of-high-potency-active-pharmaceutical-ingredients-hpapis-
market-forecasts-and-growth-opportunities-to-2015.html
Region Revenues
($ B) 2009
Projected
Revenues ($ B)
2016
North
America
3.4 6.6
Europe 2.5 4.9
APAC 0.7 1.9
Rest of
the World
0.9 1.8
North America
46%
Asia
9%
Europe
35%
RoW
10%
Projections for 2016
North America
43%
Asia
13%
Europe
32%
RoW
12%

12. HPAPI Market Growth Drivers –
Economic
Why is HPAPI drug development growing faster in Asia?
● West is “mature” market, yet NCEs are still making this market attractive.
● Security of supply is important as innovators shed overhead and use CMOs.
● Localization of the market (esp. large population such as India and China).
● Improving economic conditions for the world.
● Inexpensive COGs for the Western market.
Japan
India
China

13. HPAPI Market Growth Drivers -
Clinical
● Growth mainly due to advances in oncology research.
● Production of targeted therapies (i.e. biologics).
● More effective treatments, less side effects.
● Approximately 60% of HPAPIs being developed for treatment of cancer.
● HPAPIs in development for respiratory disorders, glaucoma and hormone
imbalances.
Ref: Mehrotra, S. 2010. Chemistry Today. 28:43-45
http://www.prnewswire.com/news-releases/hpapis-and-cytotoxic-drugs-manufacturing-market-2014---2024-270812821.html
Oncology
59%
Hormonal
19%
Glaucoma
7%
Others
15%
Statistics from 2009
Chemotherapy
30%
Hormone
therapy
16%
Target therapy
49%
Immunotherapy
5%

14. HPAPI Market Growth Drivers -
Oncology
● Cytotoxics segment of the pharma market growing at CAGR 12.6% globally.
● $85B in sales globally in 2014.
● 1.67M new cases in 2014 (USA).
● 580K die in the USA; 6M worldwide deaths.
● High value treatment.
● 5 year survival rate improved over last 40 years.
● Faster approval by agencies.
● Large proportion of HPAPI and cytotoxics production
is currently outsourced.
Ref: http://www.drugs.com/news/global-market-cancer-therapies-slated-growth-through-2013-8407.html
http://www.prnewswire.com/news-releases/the-cancer-drugs--treatments-market---data-analysis--forecasts-to-2023-232842321.html
Oncology Drugs
Value:
$85B (2014)

15. HPAPI Market Growth
What does it mean for the industry?
● Oncology products can be personalized, creating an expensive
infrastructure for emerging pharma.
● Centralized, multi-use facilities at a third party is a cost effective way of
lowering overheads at the innovator.
● Risk is transferred from pharma to provider.
Goal: Pharma solutions to improve patient’s lives.

16. Consolidation
in the
Industry

17. Streamlining within the Pharma
Industry
● Increase in consolidation within the industry both for innovator
companies and CMOs.
● A growing list of contract businesses are strengthening their offering by
investing in or acquiring HPAPI DS and/or DP capabilities or facilities.
● Since 2006, there have been more than 60 investments to add new
facilities and/or expand existing capabilities.

18. Consolidation - Pharma and
Emerging Biotech
Company Acquired Year
Pfizer Wyeth for $63B 2009
Roche Genentech for $46.8B 2009
Novartis Alcon for $51B 2010
Gilead Sciences Pharmasset Inc. for $11B 2011
Amgen Onyx for $10.4B 2013
GSK Okairos for $325M 2013
Actavis Forest Laboratories and Allergan 2014
GSK and Novartis Horizontally joined forces to form a
combined healthcare unit
2014
Merck KGaA Sigma-Aldrich for $17B 2014
Roche InterMune for $8.3B 2014

19. Consolidation - CMOs
Company Acquired company Year
Patheon Banner Pharmacaps for $255M 2012
Aspen (Generics and
manufacturing)
Merck’s API manufacturing for $1B 2013
AAIPharma Cambridge Major Laboratories 2013
Aenova Haupt Pharma 2013
Capsugel Encap 2013
DSM Merged with Patheon to become DPx in a
$2.65B deal
2013
AMRI Cedarburg for $38.2M 2014
Johnson Matthey API site in Scotland 2014
Siegfried Hameln Pharma 2014
Sun Pharma Ranbaxy for $3.2B 2014

20. Recent Investments for HPAPI
Capabilities by CMOs
Company Invested Year
SAFC Invested more than $75M in HPAPI capabilities 2008
Pharmatek Opened new HPAPI facility 2008
Dishman Opened new HPAPI plant in Netherlands 2009
Lonza Invested $27M to expand HPAPI capabilities 2011
Aesica Invested $4.6M in a new HPAPI facility 2012
Carbogen Amcis Opened new HPAPI facility in Ahmedabad 2013
Evonik Invested in new HPAPI facility in Germany 2013
Novasep Invested $3M in expansion of HPAPI facility in
France
2013
SAFC Expanded/invested in HPAPI and ADC facilities 2013
Patheon Upgraded UK HPAPI facility 2014
Wuxi PharmaTech Invested in new HPAPI facility in Shanghai 2014

21. Consolidation
What does it mean for innovator companies and CMOs?
● Many innovator companies are turning to CDMOs to meet raising demands.
● Pharma companies are using CDMOs that have the capabilities they need -
ranging from R&D and pre-clinical through to commercialization.
● CMOs/CDMOs are investing or acquiring facilities and capabilities to meet
these needs.
● This allows pharma companies to transfer risk to the vendor.

22. DS/DP: An
Integrated
Versus Non-
integrated
Approach

23. Addressing Industry Needs
Integrated DS/DP is one way of addressing the needs of pharma companies.
Mission:
● Deliver quality medicines to patients.
Needs/goals of pharma companies:
● Increase efficiency.
● Decrease cost.
● Improve timing.
● Equal or better quality (always!).
A streamlined
approach to
manufacturing
helps to
mitigate risk

24. Integrated DS and DP
Integrated Non-integrated
Easier path of communication within
single organization.
Multiple organizations mean more
points of contact.
Project scope changes can be made
without impacting overall project
timeline.
Changing project scope can have a big
impact on the overall project
timeline.
DS process optimization and
manufacturing activities coordinated
with DP inputs.
Technology transfer from one
organization to another can increase
risk and delay projects.
Single touch-point for all processes. Management of projects is split
between DS and DP sites.

25. Integrated DS and DP: Benefits
Benefits
Reduced
costs
Streamlined
project
management
Overlapping
facilities
Ease of
technology
transfer
Security
of
supply
Shortened
time-lines
Consistent
quality
Reduced
risk

26. Things to Consider When Evaluating
an Outsourcing Provider of HPAPI
• Experience
• Facilities
• Capabilities
• Integrated processes and services
• Quality control measures - QbD
• Clear communication
• Speed
• Security of supply
• Reproducibility
• Regulatory history
• Trust
• Good reputation

27. Dr. Reddy’s
CPS HPAPI
Offering: An
Integrated
Approach

28. Dr. Reddy’s CPS HPAPI Offering: An
Integrated Approach
Enabling Production of HPAPIs
● End-to-end services – from development to commercial manufacture of
steroids (including androgens, estrogens, glucocorticoids, fluorinated
steroids and steroid hormones), prostaglandins and cytotoxics.
● Specialized facilities and capabilities for high containment processing.
● Integrated manufacturing chain – DS/DP.
● Formulation and dosage facilities for highly potent compounds.
● Facilities across the world ensure speed and security of supply.
● Experience in successful commercialization of medicines.
Process
development
Clinical
development
Commercial
launch

29. “We supply high
potency DS and DP to
all major markets
worldwide through
our FDA approved
manufacturing
facilities”

30. Dr. Reddy’s CPS HPAPI Offering: An
Integrated Approach
Facilities and capabilities for HPAPI manufacturing
● Development capability in steroids based at DRL site in Mexico.
● Development capability in prostaglandins located at Chirotech Technology
Centre, Cambridge and manufacturing facility at Mirfield DRL site.
● Multiple high potency suites at facilities in India for manufacturing
cytotoxics at various scales.
● Experience with multi-step, complex chemistry.
● Full analytical, quality and regulatory support
on each site.

31. Case study:
Integrated
DS/DP

32. Customer description
Specialty pharma company.
Customer need
Complex chemical compound.
Robust product with enhanced solubility.
Challenges/critical issues
Poorly (aqueous) soluble material.
Unstable salt to base transition.
Polymorphism issues.
Deliverables
API delivery, formulation for animal studies, stable
composition, and CT supplies for Phase 1.
Context
Case
Study:
DS+DP
Project
API Process Development and
Formulation Development for
Phase I CT Supply

33. Chemistry approach/tools
API and formulation development parallel to reduce
total development (3 months).
Multiple development strategy.
Focus on developing IR dosage form.
Timelines
Project to be delivered within 3-6 months.
Key activities
Preparing stable salt with desired polymorphism.
Dissolution method development.
Enhancing solubility.
Approach
Case
Study:
DS+DP
Project
API Process Development and
Formulation Development for
Phase I CT Supply

34. Process/chemistry impact
Successfully delivered API which ensured on-time
development of formulation.
Successful in-vivo studies.
Succeeded in achieving suitable Phase 1 candidate.
Timeline impact
DS-DP knowledge saved time to develop project on fast
track and saved 3 months.
On time delivery.
Impact
Case
Study:
DS+DP
Project
API Process Development and
Formulation Development for
Phase I CT Supply

35. Summary

36. Summary
Result/customer benefit of integrated DS/DP
manufacture of HPAPI:
• A streamlined manufacturing process.
• A holistic service – DS/DP manufacture from
development to commercialization.
• Delivery of cost and time-efficient results.
• Quality products.
• Reduced risk.
• Exceeding customer expectations.

37. Thank you

38. Seven of the top 8 best selling drugs of 2013 were Biologics.
Rank Biologic Indication
1 Humira (AbbVie) Rheumatoid Arthritis
2 Remicade (Johnson & Johnson and
Merck & Co.)
Rheumatoid Arthritis
3 Rixtuxan (Roche and Biogen Idec) Non-Hodgkin’s Lymphoma
4 Enbrel (Amgen and Pfizer) Psoriasis
5 Lantus (Sanofi) Diabetes
6 Avastin (Roche) Metastatic Colorectal Cancer
7 Herceptin (Roche) HER2-positive breast cancer and HER2-positive
metastatic gastric cancer