Oncology Global Strategic Marketing

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Best Practices, LLC Strategic Benchmarking Research

Oncology Global Strategic Marketing:Benchmarking Budget Levels & Service Scope

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Topics Included

Research Objective & Study Methodology

Study Overview

Best Practices, LLC conducted this benchmarking study to establish meaningful benchmarks for the resource levels and the services scope of Global Strategic Marketing (GSM) organizations supporting Oncology products and programs.

Total investment for Oncology-GSM

Distribution of budget across 6 key functional areas and across product development phases

Commercial spend - % budget allocated at launch & post-launch phases

Total # FTEs supporting GSM functions

Distribution of FTEs across 8 major activity areas

% FTEs dedicated to developing and “rest of world” marketsUse of outsourcing and off-shoring# products, labels & programssupported

Key Ratios: GSM investment/Oncology Sales, FTEs/$100M revenue, GSM $/product, & GSM $/pipeline program

Research Objective: Oncology-Global Strategic Marketing (GSM) organizations today face increasing regulatory, regional and competitive challenges in a crowded market.

This study seeks to help Oncology-GSM leaders understand the investment levels, marketing activities, timing and structures needed to successfully steer products and pipeline programs through the complex Oncology marketplace.

Research findings provide industry metrics that will serve as a reference point for GSM leaders in budgeting and strategic planning.

Methodology: Best Practices, LLC developed a customized survey tool to capture industry data and deployed it to a representative sample of 17 pharmaceutical companies with Oncology programs and portfolios.

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Participating Companies & Data Segmentation

Large Companies:• Abbott• Astellas• AstraZeneca• Baxter Oncology GmbH • Bayer• Boehringer Ingelheim • Bristol-Myers Squibb• Eisai Inc• Merck Serono• Onyx Pharmaceuticals• Sanofi• Takeda

Emerging Companies:

•Exelixis•Gilead Sciences, Inc.•MedImmune•Monogram Biosciences•Selvita S.A.

Benchmark participants included GSM leaders supporting Oncology organizations at 17 companies. The study included both large, established and small, emerging Oncology companies to provide broadest insights. Data is presented for large and emerging company segments throughout the report.

Participating Companies

http://www.merckserono.com/en/

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Key Findings 2: Normalized Metrics & Ratios

GSM Spend per Pipeline Program Averages > $800K at Big Companies: Large company GSM spend per Oncology program in the pre-launch phases ranges from under $100K to $2 million, with an average of $805,231. The average for emerging companies is $201,894.

Large Company GSM Supports Average of 16.4 Oncology Pipeline Programs: GSM organizations in the large company segment support an average of 16.4 pipeline programs, while emerging companies support an average of 9.4.

GSM Spend per In-Market Oncology Product Averages $6.2M: GSM spend per in-market Oncology product ranges from $200,000 to more than $16 million, with an average of $6.2 million.

Average per-Label GSM Spend Tops $2.8M: GSM spend per Oncology label ranges from $66,667 to $8.3 million across the benchmark class. On average, the GSM investment per label is $2.8 million.

GSM Supports Average of <2 Oncology Products & <4 Labels: Large company GSM organizations support an average of 1.75 in-market Oncology products and 3.75 labels. Emerging company GSM predominantly supports development programs rather than products, and the averages reflect that position, with 0.8 products and one label supported.

Total Oncology-GSM Spend Averages Nearly 1% of Sales: GSM investment as a percentage of total Oncology sales averages just under 1% for the largest companies (over $1 billion Oncology revenue) in the benchmark class. Their GSM investment ranges from 0.1% to 2.5% of sales.

Commercial Investment as Percentage of Sales Averages 0.84%: GSM investment for commercial phases averages 0.84% of total Oncology product sales for the large company segment. The ratio ranges from 0.03% to 2%.

The following key findings, observations, insights and metrics emerged from this benchmarking study.

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Key Findings 5: GSM Leadership & Future Investment Trends

ONCOLOGY-GSM LEADERSHP

GSM Often Has Full Lifecycle Involvement: A majority of Oncology-GSM groups maintain a leadership role in the Launch and Post-Launch phases of product development.

GSM Key Leadership Areas Are Market Intelligence & Marketing: In the early phases of product development, Oncology-GSM most often takes a lead role in Market Intelligence activities. After Phase II, Marketing is the area where GSM most frequently leads.

INVESTMENT TRENDS

Up to 73% Expect Increased GSM Funds for Pipeline Marketing: Budget increases are anticipated by as many as 73% of benchmark participants for activities supporting the Oncology pipeline. Activities most often expected to gain are ad boards, marketing and market intelligence. Few project any decreases.

Up to 42% Expect GSM Increases for In-Line Product Marketing: More benchmark participants anticipate GSM investment level decreases and fewer anticipate increases for in-line products than for pipeline products. Marketing is projected to as the top area for funding increases, and the top area for cuts is Congresses. Interestingly, companies are evenly split at 33% on whether funding for Ad Boards will go up, down or remain unchanged.

The following key findings, observations, insights and metrics emerged from this benchmarking study.

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Marketing Activities Take Biggest Share of Total GSM SpendAt large companies, the top two activity areas—Marketing and Market Intelligence—account for 51% of the total Oncology-GSM budget. Emerging companies focus even more on those two key areas, with a combined 68% of total funds channeled there.

N=12

Percentage of GSM Investment Allocated to Key Activity Areas

Q. What percentage of the total Oncology-GSM investment was allocated to each activity category during the last fiscal year?

Large Companies

N=5

Emerging Companies

OTHER: Websites, Training, Strategic CouncilTraining, E-media

Personalized Healthcare

Marketing31%

Market Intelligence

20%

GlobalCongresses/Convention Management

20%

Thought Leaders/KOLs11%

Advisory Boards

9%

Advocacy

5%Other4%

Thought Leaders/KOLs10%Market

Intelligence 31%

Ad Boards11%

Marketing37%

Congresses/ Conventions

13%

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Product Strategy Has Biggest Share of GSM Marketing SpendSpending patterns are similar for the large and emerging company segments, with product strategy consuming more than 70% of total GSM budgets and speaker training taking the smallest share at only 4%.

N=11

Marketing Activities: Investment Allocation Breakout

Q. Estimate the percentage of the Marketing Activities budget category that was allocated to each of the following activity sub-categories during the last fiscal year.

Large Companies Emerging Companies

N=4

WebsitesMarket Access/ Reimbursement

Publications21%

PR, Media

9%

Speaker Training

1%

Product Strategy

72%Product Strategy includes branding,

product campaigning& strategic marketing

planning.

Other3%

Product Strategy

70%

PR, Media

9%

Pubs12%

Speaker Training

5%

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77%

77%

85%

79%

71%

71%

15%

8%

8%

14%

21%

14%

8%

15%

8%

7%

7%

14%

Pre-Clinical

Phase I

Phase II

Phase III

Launch

Post-Launch

Lead Support None

N=14

Role in Market Intelligence Activities by Development Phase

% Responses

Q. For Market Intelligence activities, please indicate the type of role that Oncology Global Strategic Marketing plays in at each development phase.

Market Intel Activities Most Often Involve GSM Leadership

Market Intelligence Activities

Activities included in survey definition:

Pricing, Health Economics, Market Access, Market Research, Forecasting, & Business/ Competitive Intelligence

Market Intelligence is the area where GSM organizations most frequently take on a lead role, with a large majority leading at all product development phases. At Phase II, 85% of participating GSM organizations take the lead for Marketing Intelligence activities.

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Additional Activities Led or Supported by Oncology-GSM

Q. In the past fiscal year, what other important activities (not listed in survey) were led or supported by Oncology GSM? (List additional GSM activities conducted at each phase.)

Pre-Clinical: Phase I: Phase II: Phase III: Launch: Post-

Launch Personalized Healthcare /

Payer evidence x

Forecasting x x x x

M&S cost planning x x x x

Training x x

Educational programs x

E-media x

Benchmarked GSM-Organizations lead or support a variety of additional activities not included in the survey. These range from developing e-media to developing payer information around personalized healthcare.

Additional GSM Activity Involvement by Phase

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Voices from the Field: Key Success Factors in Oncology-GSM

Verbatim Responses from Benchmark Partners

Q. What issues will be critical for Oncology Global Strategic Marketing to address in the next 24-36 months to ensure the success of products your organization hopes to bring to market?

Global Issues

Collaboration

New Technology,

Markets, Stakeholders

Market Access

Other Success Factors

“Close co-operation between global, regions and countries – ‘common language’ & common targets.”

“Ensure development of global brand and quick execution globally.”

“Proper leadership in building the oncology organization (including other functional areas, such as Medical Affairs).”

“Develop a strong global Medical Affairs organization.”

“Seek appropriate Commercial input on clinical development plans.”

“Gain KOL support earlier than launch phase-- especially if new technology is involved.”

“Understanding the impact of biomarkers and diagnostic capabilities.”

“Personalized medicine, cost of therapy.”

“Define the right target audience, including new stakeholders (e.g., on biomarkers).”

“Patient segmentation, efficacy and safety requirements, personalized care, payer & market access requirements.”

“Market access is becoming more and more critical.”

“Segment the market so positioning is performed for all market segments.”

“Accelerate uptake through EAP at launch.”

“Strategic planning is vital.”

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About Best Practices, LLC

Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics and winning

strategies of world-class companies.

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