January 31, 2023 PAO-01-23-RT-02
It’s difficult to discuss international markets without talking about Asia and China in particular. Now that Legend Bio has proven that clinical data out of China is replicable and that that data can support an FDA-approved autologous CAR-T, we should see research and development continue to grow in China. According to ARM’s H1:2022 report, the Asia-Pacific market is home to the second largest number of CGT clinical trials and initiated more trials than any other region in the first half of 2022 (Asia Pacific – 61; North America – 51; Europe – 16; other regions – 16). Furthermore, according to the same report, China was the fastest-growing country in terms of the number of new CGT developers launching in the first half of 2022.
At eClinical Solutions, we are seeing strong demand in Europe for our clinical R&D data cloud. We entered the market in January 2020 and in 2022 have acquired large clients in the top 50 segment and are seeing strong demand from large companies, along with mid-market biopharma and mid-market CROs. In 2023, we will focus on expanding our European team and client base geographically with emphasis on the UK, France, Germany, and Nordic regional markets. The demand growth stems from exponential increases in clinical data volume and variety, along with industry pressure to reduce new therapy cycle times and regulatory expectations for risk-based quality management methods. This is driving EU life sciences companies to invest in modern data infrastructure and analytics capabilities.
Although we see an increasing number of NCE (new chemical entity) developments in generic-focused regions, we think that significant developments are anticipated in the U.S. and Europe. North America has an advantageous mix of an open society, talent, and available capital. We are also seeing an increasing number of start-ups offering disruptive approaches, which will definitely play a big role in future developments. In Europe, especially France, Switzerland, and Germany, we will also see developments in biotech and pharma companies, as well as academic labs.
That being said, some interesting developments are happening in other regions, such as in South Korea and in Australia. Although the Indian market is known for generics on the international stage, innovators are looking to broaden their scope outside of their surrounding regions.
All global markets should see strong development in the near future, especially in the novel modalities space, which includes ADCs, mRNA therapies, and gene therapies across different delivery systems. These modalities are evolving at a fast pace, and we continue to see increased activity levels, both preclinically and at the clinical stage across the globe.
From a regional perspective, we continue to observe strong pipeline growth in well-established Western regions, especially the United States, while APAC is an even faster growing, emerging region —particularly China, South Korea, and Japan. At the same time, the APAC region also advances traditional modalities, such as mAbs and other recombinant proteins, at an accelerated rate.
To effectively address the increasing demand across modalities and regions, we provide technical and regulatory expertise across modalities and regions to help our clients navigate the development and regulatory pathway, and liaise with our global contract testing, development, and manufacturing organization (CTDMO) network.
Independent of geographical location, we see increased interest in our integrated offering for biosafety testing, product characterization, process and analytical development, clinical and commercial manufacturing across complex value chains such as ADCs, Viral Vectors or mRNA/LNP programs. Providing all services under one organizational roof allows our clients to accelerate and decomplexify their programs which is valued by emerging biotechs and larger organizations alike.
North America is currently the biggest market and the biggest manufacturer for CGT. It is likely to remain the main market as Americas has the largest number of projects in clinical development in gene therapy viral vectors.
In the past, Asia was very focused on CAR-T manufacturing and gene-mediated cell therapy. Now, we see AAV manufacturing for gene therapy rapidly growing in China, India, and South Korea, with infrastructure quickly developing as well. These countries will be strong players for the years to come.
Finally, Europe has a ton of expertise in LV and AAV design and shows solid development of LV and AAV projects, with increased manufacturing capacities and new CDMOs coming up in the last year. However, the strength of Europe is probably its expertise in RNA therapeutics, with BioNTech, the originator of the mRNA-based COVID vaccine located in Germany, there are lots of developments in western Europe around this topic.
I believe China is the most significant developing market for therapeutics. While the North American market still accounts for about half of total global revenue, and the Middle East is seeing a lot of growth, China’s huge population is aging. The median age has risen considerably since 2010 and is projected to increase by another eight years by 2040. The relative wealth of a country like China means that its aging population is adopting a more sedate Western lifestyle. This is accompanied by increases in chronic diseases — cancers, diabetes, and cardiovascular disease among them — that are going to drive up pharmaceutical revenues. We’re seeing more drugs being marketed in China, and, as it gets easier to export regulatory dossiers there, the appetite to expand into the Chinese market keeps increasing.
In terms of regions that are contributing significant technological developments and developing new products or new modalities, most of the development is still done in the US and driven by large biopharma companies. China is also seeing a lot of investment in this area. South Korea is definitely a market to watch going forward, especially in mRNA and cell and gene therapy. The country is opening up its entire import/export structure, and there's considerable investment from that country to acquire North American footprint and capacity.
Global business industries that are requiring the adoption of digital transformational technologies the most include: healthcare, manufacturing, and transportation and logistics. This is why it is so exciting to be a CDMO at this time, with technology transformation bringing significant near term business creation opportunity.
The global plasma-derived therapies (PDTs) market is on the rebound and expected to see significant growth in the coming years — and all eyes are on the European plasma market. PDTs are unique among other biopharmaceutical products in that they rely completely on plasma donated from human donors as their starting material. The result is an extremely complex and fragile supply chain. Traditionally, the United States has been the leading supplier of both plasma donations and finished PDT product. This is the result of U.S. donor compensation matched with heightened donor restrictions in other parts of the world. Currently, the United States collects enough plasma and produces enough product to meet domestic patient need, and the surplus is exported to other countries, with European countries being the primary beneficiaries.
Europe has become reliant on the United States to meet the patient need for PDTs. That need is projected to continue seeing steady growth for the foreseeable future, and, if European countries do nothing to increase plasma collections and PDT production, the deficit between supply and demand and reliance on the United States will continue to grow with it. The desire for self-sufficiency was fueled by the COVID-19 pandemic, which had major impacts on plasma collection in the United States. European countries are working diligently to course correct and have started to lay the groundwork for self-sufficiency by revising outdated legislation that put undue restrictions on plasma collection and usage, opening more donation centers, and increasing local production capacity.
When looking at the international markets, with a focus on Asia Pacific, we continue to see China at the forefront of development for advanced therapies; however, there is significant impact from the ongoing impact of the pandemic. With the economy weakening, so to have we seen a significant slowdown on investments and therefore growth in China.
In contrast to this, the India biopharma market shows significant growth potential. India is already the largest vaccine manufacturer globally and is one of the most important markets for the development and manufacture of low-cost biosimilars and generics. A lot of capability and infrastructure is there to manufacture products at huge scales, leading to significant cost savings. The biologics CDMO market is also expected to grow significantly in the next 3–4 years, of which India contributes a significant proportion (there are around 100 FDA-approved manufacturing sites in India).
Although India is considered mainly for biosimilar/ manufacturing capabilities we are now seeing more and more established Indian biopharma, as well startup companies, focused on advanced therapies, such as cell and gene therapy (CGT). It will be interesting to see how CGT develops here and whether there will be ways to leverage their extensive manufacturing knowledge and capabilities to offer cost-effective solutions, something which is a big challenge for CGT globally.
The United States will continue to lead in the development of novel biopharma technologies due to well-established research universities and an almost unmatched supply of venture capital. Europe will continue to be the second most innovative region with a number of state-of-the-art biopharma companies funding cutting-edge research. Another region to watch would be China where the number of biologics authorized to market is starting to outpace the US. China will continue on its biopharma growth path due to recent favorable changes in policies and regulations for new medicines.
In many areas, the United States has tended to be the area where new innovations were tried first. A large market, single framework for privacy, strong reimbursement, and more all contributed to a perspective that companies needed to initiate or move innovations there or risk missing the ability to participate or lead in new innovations.
Interestingly, the COVID-19 pandemic forced new operating and cooperative models to be put into place in many parts of the world. Whereas China took an approach that mandated controls and segregations, the European community looked for broader use of health data and sharing of those data across countries and regions. In China, we have actually seen a slowing in innovation and, by contrast, are seeing a substantial increase in European innovation. Recent, large-scale influxes of refugees integrated with prior populations have resulted in a highly heterogeneous region in terms of race, ethnicity, and economic status. As a consequence, there is this significant opening of new data access, which in turn is supporting data science–centric AI companies. It is also furthering the emergence of new companies with advanced digital solutions that offer new ways of working in compliance with EU privacy regulations and aligned to the ethos of data openness, responsibility, and intra-company collaboration.
In the viral vector market and especially for AAV gene therapy, the North American and especially the U.S. market is the locomotive driving all other markets. This is predicted to continue. Biovian focuses on AAV and adenovirus development and manufacture, and the North American market represents ~70% of all available development projects in discovery, preclinical, and phase I.
The biopharmaceutical ATMP (advanced therapy medicinal products) market has a great potential to develop significantly. The continuous increase has been supported over the last decades by both fast-growing biotech fundings and steady increase of annual R&D spending. Accelerated regulatory pathways are also encouraging launch of new clinical programs. The majority of the ATMPs entering the clinic today address unmet clinical need and possess promising therapeutic potential.
The FDA and EMA are encouraging the development of biologics and ATMPs through accelerated and facilitated regulatory pathways, which are also contributing to the increasing number of launches of new clinical programs.
The U.S. and European markets continue to be strong markets for biologics development and manufacturing. Locally, we see the highest proportion of emerging and small companies, which are at the forefront of innovation. In particular, the Boston/Cambridge and Bay Area biotech hubs continue to grow and bring new molecules to the clinic in double-digit growth rates. We expect to see continued growth of complex therapeutics including bi-specific antibodies, new molecular format complex proteins, and bioconjugates.
Another notable market is China, representing the second largest pharmaceuticals market globally; the market is estimated to grow to 145–175 BN USD in 2022. Today, approximately 25% of mammalian biologics come from Chinese-originating companies focusing on unmet medical needs and –– besides biosimilars and standard monoclonal antibodies –– on complex therapeutic modalities. With more than 800 innovative molecules currently under development in China, we see a continued focus on developing and implementing sophisticated and robust technology solutions enabling the manufacturing of a broad range of molecules.
Despite a global economic downturn, we are seeing corporate investment and public–private collaborations in particular countries in Europe and Asia:
We strongly believe the near future will bring significant development in both developed markets and in emerging markets, though probably in different areas.
Developed markets, such as the United States and the EU, have matured digitized players that are constantly searching for new technologies to support their digital journey (data science, artificial intelligence, blockchain), but, on the other hand, they also have significant numbers of new biotech players who are just starting to investigate their digital road map.
Then there are emerging markets, such as China and India, with a material market share and significant potential for digital development.
Each company that sets its sights on these markets should adapt its business model in such a way that enables them to embrace innovative technologies. They’ll also need to prioritize their portfolio market by market, adjust products and services to their target markets, and build appropriate partnership in those markets.
The live biotherapeutic products market is growing rapidly, and I believe this will continue in the foreseeable future. This poses opportunities and challenges to the pharma industry. Success will come to those companies that choose the right therapeutics, manage regulatory compliance and expectations, and identify the right CDMO partner for GRAS (generally recognized as safe) organism engineering and large-scale, cost-efficient cultivation.
My money is on Portugal: the combination of a well-educated workforce together with near-shore costs makes it very attractive for both and R&D and manufacturing bases for the life sciences, as well as software development for vendors. A number of companies I have spoken to have mentioned that previous initiatives in Asia are being considered for replacement with Portugal, since it also has the advantage of being in the EU, together with good food, great weather, and wonderful people! I think India is also growing from a focus on generics toward R&D.
The Asia-Pacific region is where substantial investment and focus is occurring both on the development and commercial side of the business.
The EU and the United States are currently at the forefront but moving with different speeds. Over the last decade, several European legislative initiatives have called for the implementation of new digital regulatory initiatives (e.g., the clinical trial regulation with its EU portal and database, the human and veterinary Medicinal Product dictionaries), as well as, more recently, the modernization of the human electronic application forms and various portal-based regulatory interaction applications. In 2021, the EMA set out a digital transformation strategy as well as a new lean, agile way of working, to deliver value more often more quickly across the network. The expectations are high, but the jury is still out on whether this approach will deliver on the EU commission’s ambitions for a “Digital Europe,” and whether this approach will work well enough to mobilize national agencies, industry, and other stakeholders. Recent crises, like the pandemic and the war in Ukraine, have put topics like expedited regulatory pathways and medicines shortage management high on the agenda. Meanwhile the U.S. FDA has announced their own technology and data modernization plans (TMAP and DMAP) and is working fiercely behind the scenes on data-driven initiatives, such as KASA, an algorithmic risk assessment aid to perform reviews more efficiently and effectively. The FDA is also actively engaged with the WHO on ISO IDMP and will likely announce their plans for implementation by the end of this year. Last but not least, it will be interesting to watch how Accumulus Synergy, a global not-for-profit organization, realizes their vision of creating a global, seamless collaboration platform for industry and regulators to transform the way therapies are getting approved.
The pandemic has changed the international life sciences landscape, with local government lockdown policies and supply chain issues driving much of this change. Outside of the United States, we are growing our business in several markets across Europe and Asia, as well as carefully watching developing markets in Africa. While Europe has positive prospects, these are currently being constrained by geopolitical circumstances and high inflation in the region. Within Asia, China is still a market to watch when it comes to breakthrough developments –– we expect to see positive changes ahead if COVID lockdowns ease and impact life science facilities less. Additionally, China’s government remains committed to investing in healthcare and research via its Five-Year Plan. Aside from China, India and Japan are also top global spenders on R&D. India specifically represents 60% of the world’s current vaccine production making it the world’s largest manufacturer. These developments are likely to impact how we best serve and reach our global customers as we support their needs in rapidly changing areas, such as cell and gene therapy, 3D cell culture, and bioproduction scale-up.
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