Judith Kulich, Cody Powers, Amer Dzankic, Mark Rayward-Smith and Renuka Agarwal co-wrote this blog post with Ben Hohn.
The emerging pharma landscape continues to grow in Europe. ZS research shows that around 900 companies are focused on novel therapeutic development, and more than 50% of these companies are concentrated in the U.K., France, Germany and Switzerland, with oncology representing the greatest number of assets (around 30%) as a therapeutic area.
Since 2011, there have been 10 first launches in Europe (defined by ZS as the first asset launch of the company that they are launching themselves, either solo or with a co-promotion partner). First launch companies are an important subset of emerging pharma companies because they reflect changing market dynamics—such as the increased ability for emerging pharma companies to raise funding—that make it possible for companies to launch an asset themselves vs. out-license pre-commercialization. We expect this number of first launches to increase as around 55% of European emerging pharma companies are development-stage companies (pre-commercialization). ZS research shows that around 80 companies have pipeline assets in the filed or pivotal trial stages that, if approved, could be the first launches for these companies.
The growth that we expect to see in the number of first launches is partially driven by the increase in the number of orphan drug approvals. Given the reduced commercial footprint needed to launch in these indications, we tend to see many first launches concentrated in orphan and rare indications. ZS research shows that of those 10 first launches in Europe, 60% were in orphan indications over a period when the number of orphan drug approvals more than quadrupled from 2011 to 2018.
When companies are considering a first launch, there are a few key strategic questions that can be helpful for them to consider:
1. Can we “go it alone” and launch ourselves without a commercial partner?
2. Should we partner and, if so, for which regions (Europe, the U.S., Japan/Asia)?
3. What have companies like us done?
4. What best practices and innovations should we aspire to?
5. What needs to be done pre-launch and when? Which elements are considered table stakes and which elements will help us differentiate?
On the partnering question, we found that most of the 10 first launch companies chose to go it alone in Europe rather than co-promote, with the exception of Sialanar, which out-licensed Proveca to Anthrop Pharmaceuticals in the Nordic region but is fully commercializing the product in the rest of Europe. Note that uniQure launched Glybera independently in 2012, subsequently out-licensed European commercialization to Chiesi in 2013, and then regained rights when the asset was withdrawn in 2017.
While most of these companies “went it alone” in Europe for their first launches, it’s likely that many of them will pursue partnerships for their ex-Europe launches. Given the resources needed to staff and set up operations outside of their home country, as well as the local market expertise needed to navigate pricing and regulatory environments, many companies choose to partner when launching their first product outside of their home country. For example, in the case of U.S.-based first launch companies, we found that 60% out-licensed or co-promoted in Europe after launching their first product in the U.S.
It’s worth noting that, like Glybera, almost all of the 10 European first launches (with the exception of Feraccru) were in rare indications, defined in Europe as indications affecting around 250,000 patients or fewer (in the U.S., this is defined as affecting around 200,000 patients or fewer), with six in ultra-rare indications, defined in Europe as affecting about 10,000 or fewer patients (in the U.S., this is defined as affecting around 7,000 patients or fewer). While companies launching in ultra-rare indications may have reduced initial commercial needs—making a go-it-alone approach more financially feasible—they face other challenges in post-launch growth and expansion given small patient populations and high price points. In the case of Glybera, uniQure decided not to pursue EMA marketing approval renewal given limited usage post-launch and the costs associated with renewal, including increased patient monitoring, a phase IV clinical trial, annual regulatory inspections and increased risk management precautions. Contrastingly, in the U.S., we found that less than half of all first launches from 2011 to 2018 were in rare indications, with around 30% in ultra-rare indications.
Overall, we expect the emerging pharma landscape—and the first launch landscape in particular—to continue to grow in Europe given increasing investment in the European biotech sector, an increasingly favorable regulatory environment (12 medicines received PRIME eligibility in 2019, compared to the seven in 2016), and a continued focus on orphan and rare indications. It’s worth noting that many of these companies may still seek to launch their first or second product themselves, or raise capital, in the U.S. Since 2012, almost one in three European biotechs have filed for an IPO on U.S. exchanges, and roughly 98% of follow-on offerings have been on U.S. stock exchanges. While this may have been driven by a historically limited European biotech capital market, and may change as this market becomes more robust, we should still expect to see these companies tap into U.S. financing.
As the European market evolves, emerging pharma companies will need to adopt a flexible and evolving approach to launch, enabling them to drive maximum value for patients and other key stakeholders.
For more on this topic, ZS experts will be speaking about European emerging pharma companies—with a focus on European first launches—at the BIO Europe conference in Hamburg, Germany, on Nov. 11th.
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