CHAPTER 1 EXECUTIVE SUMMARY

4

Scope

4

Big Pharma peer set

6

Biologics to drive Big Pharma sales growth

7

mAbs act as key growth component

9

The technology lifecycle

11

Small molecules

12

Therapeutic proteins

12

mAbs

12

Vaccines

12

Competitive forces

14

Generic competition

15

Pricing leverage - addressing unmet patient need

16

Access to drug technology supply chain

16

CHAPTER 2 OVERVIEW OF BIG PHARMA PEER SET

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Key findings

21

The Big Pharma peer set

23

Product type definitions

24

Small molecules

24

Biologics

24

Monoclonal antibodies

25

Therapeutic proteins

25

Generic competition vs. bio-similars

26

The marriage of Big Pharma and biotech

26

Amgen - 'The one that got away from Big Pharma'

26

Report overview

27

CHAPTER 3 SEGMENTATION ANALYSIS OF BIG PHARMA BY DRUG TYPE

35

Key findings

35

Structure of Chapter 3

37

Overview of Big Pharma peer set

38

Sales by company

38

Sales by therapy area

43

Sales by drug type

47

Small molecules

48

The blockbuster growth model

48

Biologics

50

Vaccines

50

Biologics to drive peer set growth

52

Sub-segmentation of the biologics market

53

Therapeutic proteins overview

54

Monoclonal antibodies overview

55

Therapeutic protein sales by therapy area

58

Product analysis

63

Company analysis

63

mAb sales by therapy area

65

Product analysis

68

Company analysis

70

Conclusions

73

CHAPTER 4 THE COMPETITIVE FORCES ACTING ON DIFFERENT DRUG TYPES

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Key findings

74

Introduction

76

Growth rate trajectories by product type

76

Relative positioning of product types in technology lifecycle

78

Exposure to generic competition

88

Other competitive forces

103

Adressing unmet patient need & pricing leverage with healthcare providers

105

Introduction

105

Access to technology supply chain

113

Introduction

113

CHAPTER 5 ROCHE AND NOVARTIS - GROWTH BY BIOLOGICS VERSUS SMALL MOLECULES

117

Key findings

117

Case Study: Roche and Genentech

118

Roche leads in drug type diversification...

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...sharpest focus on mAbs

119

Roche ahead of the game...

119

...will drive strongest peer set growth 2004-10

119

Roche - best in (mAb) class

119

Genentech partnership

120

Unprecedented success in mAb therapies

121

The key products

121

Roche's long-term strategy rewarded

127

Roche/Genentech licensing agreement

128

mAb growth underplays Roche's revival

130

Case study: Novartis - the non biologics growth strategy

131

Novartis' generics strategy

132

Bio-similars market beckons

133

Shift into vaccines

136

Small molecule success stories

136

List of Tables

Table 1: Overview of Big Pharma peer set

23

Table 2: General characteristics of small molecule drugs vs. biologics

25

Table 3: Big Pharma revenues by company, 2001-10f ($m)

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Table 4: Big Pharma ethical drug revenues CAGR by company (%), 2001-10f

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Table 5: Change in annual big pharma ethical drug sales ($m), 2001-04, 2004-07 and 2007-10

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Table 6: Big Pharma revenues by therapy area ($m), 2001-10f

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Table 7: Big Pharma ethical drug revenues CAGR by therapy area ($), 2001-10f

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Table 8: Change in annual Big Pharma ethical drug sales by therapy area ($m), 2001-04, 2004-07 and 2007-10

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Table 9: Big Pharma revenues by drug type ($m), 2001-10f

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Table 10: Big Pharma revenue CAGR by drug type (%), 2001-10f

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Table 11: Change in annual Big Pharma ethical drug sales ($m), 2001-04, 2004-07 and 2007-10

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Table 12: Big Pharma biologics revenue by product type ($m), 2001-10f

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Table 13: Big Pharma revenue CAGR by biologic product type (%), 2001-10f

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Table 14: Change in annual Big Pharma sales by biologic product type ($m), 2001-04, 2004-07 and 2007-10)

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Table 15: Big Pharma therapeutic protein revenues by therapy area ($m), 2001-10f

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Table 16: Big Pharma therapeutic protein revenue CAGR by therapy area (%), 2001-10f

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Table 17: Change in annual Big Pharma therapeutic protein revenues ($m), 2001-04, 2004-07 and 2007-10

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Table 18: Leading Big Pharma therapeutic protein drugs revenues ($m), 2004-10

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Table 19: Big Pharma mAb revenues by therapy area ($m), 2001-10f

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Table 20: Big Pharma mAb revenue CAGR by therapy area, 2001-2010f (US$ m)

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Table 21: Change in annual Big Pharma mAb revenues by therapy area ($m), 2001-04, 2004-07 and 2007-10

67

Table 22: Leading mAb products by 2010 revenues ($m), 2004-10

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Table 23: CAGR by drug type (%), 2001-10f

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List of Figures

Figure 1: Pfizer will retain its market leading position, but Roche and Novartis will record the strongest sales growth out to 2010

6

Figure 2: CAGR by product type (%), 2001-04, 2004-07 and 2007-10

8

Figure 3: Biologics are expected to act as the primary growth driver for the Big Pharma peer set, accounting for c60% of absolute annual sales growth over 2004-10

9

Figure 4: mAbs - the 'second wave' of product technology to emerge from the biotech sector - will overtake therapeutic protein sales (within the Big Pharma peer set) by 2008 ($bn)

10

Figure 5: Respective positioning of drug types in the technology lifecycle during 2001-10 - mAbs positioned just after inflection point, small molecules significantly more mature (Ymax = Year of inflection point (maximum growth rate)

11

Figure 6: Respective Technology Lifecycles for each product type based on real (company-reported and Datamonitor forecast) data

13

Figure 7: Overview of competitive forces driving drug type revenue performance

14

Figure 8: A breakdown of small molecule absolute annual sales growth by lifecycle phase indicated considerable drag from patent expiries - causing small molecule sales growth to treadmill

15

Figure 9: Big Pharma ethical drug sales split by Biologics and Non-Biologics revenues illustrates the dominant position expected to be held by Roche in 2010 (%)

17

Figure 10: The business strategies of Roche and Novartis are clearly different but share a similarity in so far that they have shifted a notable focus away from the branded small molecule market

20

Figure 11: Big Pharma ethical drug revenues by company ($bn), 2001-10f

40

Figure 12: Change in annual big pharma ethical drug sales ($bn), 2004-10

42

Figure 13: Big Pharma ethical drug revenues by therapy area ($m), 2001-10f

44

Figure 14: Change in annual Big Pharma ethical drug sales by therapy area ($bn), 2004-10

47

Figure 15: Big Pharma Ethical Drug Revenues by Product Type ($bn), 2001-10f

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Figure 16: Change in annual Big Pharma ethical drug sales by product type ($bn), 2004-10f

53

Figure 17: Big Pharma Biologics Revenue by Product Type ($bn), 2001-10f

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Figure 18: Change in annual Big Pharma sales by biologic product type ($bn), 2004-10

57

Figure 19: Big Pharma therapeutic protein revenues by therapy area ($bn), 2001-10f

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Figure 20: Change in annual Big Pharma therapeutic protein revenues ($bn), 2004-10

62

Figure 21: Big Pharma therapeutic protein revenues by company ($bn), 2001-10f

64

Figure 22: Big Pharma mAb revenues by therapy area ($bn), 2001-10f

66

Figure 23: Annual Change in Big Pharma mAb Revenues by Therapeutic Area ($bn), 2004-10f

68

Figure 24: Big Pharma mAb revenues by company ($bn), 2001-10f

70

Figure 25: Big Pharma Ethical Drug Revenues by Company and Biologic/Non Biologic Split 2001 and 2010

72

Figure 26: Annual Increase in Big Pharma Sales by Product Type, 2004-2010 ($ bn)

73

Figure 27: CAGR by product type (%), 2001-04, 2004-07 and 2007-10

77

Figure 28: Position of drug types in Big Pharma technology lifecycle during time period, 2001-10

79

Figure 29: Technology lifecycle/sales growth curve by product type based on reported and forecast data ($m), 2001-10

80

Figure 30: Idealized growth curve by product type for 2001-10 time window

81

Figure 31: Evolution of mAb technology lifecycle by growth phase

83

Figure 32: Evolution of statin class technology lifecycle

87

Figure 33: Intensity of generic erosion in relation to position of product type in technology lifecycle

89

Figure 34: Breakdown of small molecule absolute annual sales growth by launch, core and expiry ($bn), 2004-10

91

Figure 35: Breakdown of therapeutic protein absolute annual sales growth by launch, core and expiry ($bn), 2004-10

98

Figure 36: Breakdown of mAb absolute annual sales growth by launch, core and expiry ($bn), 2004-10

101

Figure 37: Intensity of generic competition by product type

103

Figure 38: Key competitive forces determining respective CAGR for small molecules, TPs, mAbs and vaccines

104

Figure 39: Absolute annual mAb sales growth by company ($bn), 2004-10

118

Figure 40: Annual change in Roche sales by product type ($bn), 2004-10

120

Figure 41: Roche absolute annual growth tree by technology and leading product ($m), 2004-10

122

Figure 42: Roche absolute annual mAb sales growth by product ($m), 2004-10

127

Figure 43: Differing Growth Strategies for Roche and Novartis

138