Table of Contents

The Pharmaceutical Market Outlook to 2018
Executive summary 12
Key challenges 12
Key opportunities 13
Analysis of the top 10 global pharma companies 14
Pfizer 15
GlaxoSmithKline 16
Merck and Co. 17
Roche 18
The future 19

Chapter 1 Key challenges 22
Summary 22
Introduction 23
Challenges facing R&D 24
Falling R&D productivity 24
Late stage pipeline attrition 27
Economic pressures 28
Regulatory hurdles 29
Competition from generics 33
Patent challenges 34
Biosimilars 35
Impact of challenges on pharma and its responses 37
Restructuring of R&D operations 37
Outsourcing sales 40
Mitigation strategies for genericization 41

Chapter 2 Key opportunities 44
Summary 44
Introduction 45
Opportunities 45
Biotech still growing 45
New emerging markets 49
Asia 50
Demise of the blockbuster drug and emergence of the nichebuster 52
New technologies to boost niche drugs 55
Biomarkers 55
Theranostics 56
Drug repositioning 58

Chapter 3 Analysis of the top 10 global pharma companies 62
Summary 62
Introduction 63
Top 10 companies 63
Product mix (small molecule/biologic) 68
Therapy area mix 69
Growth in oncology drugs 70
Geography of product sales 72
Asia 73
South America 74
R&D profiles 76
Growth strategies 79

Chapter 4 Pfizer 82
Summary 82
Introduction 83
Is bigger better? 83
Challenges 83
Patent expiration of Lipitor 83
Torcetrapib 84
Exubera 85
Strategy 85
New CEO 85
Job cuts and plant closures 86
New opportunities for global growth 86
Pipeline 86
Opportunities in emerging markets 87
Reducing costs where possible 88
Looking to Biotech 88
Mergers and acquisitions 89
Encysive Pharmaceuticals 89
Serenex 89
Coley Pharmaceutical 89
CovX 90
Pipeline 92
Sutent 95
Lyrica 96

Chapter 5 GlaxoSmithKline 98
Summary 98
Introduction 99
Challenges 99
Generic competition 99
Seretide/Advair 99
Avandia 100
Wellbutrin 100
Zofran 101
Imigran 101
Lack of therapy area diversification 101
Business Strategy 102
Financial Strategy 102
GSK’s new strategic priorities 103
Recently marketed products 104
Tykerb 104
Cervarix 105
Mergers and acquisitions 106
Sirtris Pharmaceuticals 106
Reliant Pharmaceuticals 107
Domantis Ltd 108
Pipeline 109
Bosatria (mepolizumab) 110
Ofatumumab 110
Zunrisa/Rezonic 110

Chapter 6 Merck & Co. 112
Summary 112
Introduction 113
Challenges 113
Vioxx 113
Generic competition 114
Zocor 114
Fosamax 115
Cozaar/Hyzaar 115
Vaccines 115
Gardasil 116
Manufacturing problems 116
5 year strategy 117
Cost cutting measures 121
Boosting revenue 121
Utilizing emerging markets 121
Licensing 122
Mergers and acquisitions 123
NovaCardia 123
Sirna Therapeutics 123
Abmaxis 124
GlycoFi 124
Pipeline 125
telcagepant 125
Cordaptive/Tredaptive 126

Chapter 7 Roche 130
Summary 130
Introduction 131
Challenges 131
The networked pharma model 131
Current strategy 133
Mergers and acquisitions 134
Arius Research 134
Mirus Bio Corporation 134
Piramed Limited 135
Alnylam Pharmaceuticals 135
Roche and Genentech 136
Pipeline 138
Ocrelizumab 138
Omnitarg 138

Chapter 8 The future 144
Summary 144
Introduction 145
Future growth 145
Biotech partnerships and acquisitions 146
Pipeline 150
Personalized medicine 151
Predictive medicine 152
Pharmacogenomics 152
Molecular diagnostics 152
Biomarkers 153

Chapter 9 Appendix 156
Primary research methodology 156
Index 157

List of Figures
Figure 1.1: Number of NMEs and BLAs approved by the US FDA 24
Figure 1.2: Pharma R&D spend 2004 – 2009e 26
Figure 1.3: Biotech R&D spend 27
Figure 1.4: Biotech funding 29
Figure 1.5: Drug patent expiries in the US, 2008-2012 34
Figure 1.6: Barr Pharmaceuticals Paragraph IV patent challenges 35
Figure 1.7: Estimated Last Patent Expiry Dates of Selected Proteins 36
Figure 1.8: Global Expenditure on R&D and Contract Research 40
Figure 2.9: Biotech drugs in development by therapeutic category* 48
Figure 2.10: Market share of blockbuster drugs (%), global. 52
Figure 3.11: Competitive dynamics of the top 10 companies, 2006-7 65
Figure 3.12: Molecule type by company type, 2006-7 68
Figure 3.13: Therapy area analysis, 2006-7 69
Figure 3.14: Competitive dynamics of the leading cancer drugs, 2007 71
Figure 3.15: Sales by geography, 2006-7 75
Figure 3.16: Percentage of developmental products in each phase of clinical development 76
Figure 3.17: Number of products in clinical development 77
Figure 3.18: Therapeutic focus of the leading pharmaceutical companies’ R&D portfolios 78
Figure 5.19: GSK sales by therapy area, 2007 102
Figure 6.20: Aligning sales teams around customers 119
Figure 6.21: New commercial models, more effective and efficient 119
Figure 7.22: The networked pharma model 133
Figure 7.23: Roche’s pipeline by phase and type 141
Figure 7.24: Roche’s pipeline by partnerships 142
Figure 8.25: What is your prediction of the annual growth rates in the following sectors in the next 5-10 years? a) Pharma 146
Figure 8.26: What is your prediction of the annual growth rates in the following sectors in the next 5-10 years? Biotech 147
Figure 8.27: In the next 5-10 years how will the number of alliances between the following sectors change? 148
Figure 8.28: In order to improve R&D productivity, how will the number of deals in the following categories change in the next 5-10 years? 149
Figure 8.29: Please rate how attractive a move into each of the following sectors would be. 150
Figure 9.30: Which is your principal activity? 156

List of Tables
Table 1.1: Drug safety concerns, 2007 31
Table 1.2: Total generic sales in the US/5EU ($m), 2007 33
Table 2.3: Global biotech leading therapy classes 2007 46
Table 2.4: Recent pharma acquisitions of biotech companies 47
Table 2.5: Sales in 7MM and pharmerging markets ($m), 2003-07 49
Table 2.6: Sales in key Asian markets ($m), 2003-07 50
Table 2.7: Market share of blockbuster drugs, global. 52
Table 2.8: Sales contributions ($m) to the top 10 companies from their 5 leading products, 2007 54
Table 2.9: FDA NME drug approvals, Jan –August 2008 55
Table 2.10: Breakdown of R&D investment in 2005 58
Table 3.11: Total pharma sales of the top 10 corporations ($m), 2003-7 64
Table 3.12: Top 10 branded pharmaceuticals, 2006-7 66
Table 3.13: Total pharma sales, top 20 molecule analysis 67
Table 4.14: Pfizer’s acquisitions and divestments 2005-2008 91
Table 4.15: Pfizer’s Pipeline Phase 2, 2008 93
Table 4.16: Pfizer’s Pipeline, Phase 3 and filed 94
Table 4.17: Pfizer’s projected submission, 2010-2012 95
Table 5.18: GSK’s M&A activity 2005-2008 106
Table 5.19: GSK’s phase 3 pipeline 2008 109
Table 6.20: Merck’s M&A activity 2005-2008 125
Table 6.21: Merck’s Pipeline 2008 127
Table 7.22: Roche’s M&A activity 2005-2008 136
Table 7.23: Roche’s pipeline, phase 3 and filed, 2008, 139
Table 7.24: Roche’s oncology pipeline, phase 3 and filed, 2008 140