Copyright © 2012 Quintiles

John KiernanManaging Director

Quintiles Ireland LimitedVice President Quintiles Commercial

Ireland & the NordicsGlobal Bio Pharma Summit

NCC Dublin, Ireland31st October 2012

2

Three Areas

1. Pharmaceutical Research & Development

2. The changing health landscape

3. The New Healthcare Model for the Future.

3www.glasbergen.com

Copyright © 2012 Quintiles

Clinical Research & Development

The Challenges & the Opportunities

5

The development of new medicines has contributed enormously to life expectancy and to the quality of life of mankind over the past 60 years.

6

Life ExpectancyGlobally

7

Life ExpectancyBetween 10 and 30 years added in past 50 years.

“New drugs are no small part of this medical miracle” – Mark McClellan, FDA*

*Source: CDC

8

New medicines contribute 40% to 60% of gains in life expectancy: 1988-2000

• Source: Lichtenberg, National Bureau of Economic Research, June 2003

0.120.23

0.30

0.570.45

0.76

0.56

1.07

0.62

1.37

0.70

1.65

0.79

1.96

0.0

0.5

1.0

1.5

2.0

2.5

Num

ber of Y

ears

Incre

ased L

ongevity

1988 1990 1992 1994 1996 1998 2000

Increase in Longevity Due toNew Drug Launches

Total Increase in Longevity

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The therapeutic revolution• 1,095 Novel Drug Therapies: 1963-2011

Sources: FDA; Dorland Healthcare Information, 2004

Beta blockers

Cancer drugs, ACE inhibitors

Antipsychotics, Antidepressants, Antivirals (Herpes; HIV), First monoclonal antibody (OKT)

Alzheimer’s drugs, Smoking cessation drugs, Asthma (corticosteroids), Statins (cholesterol reducers)

First cancer vaccine (HPV), First gene therapy (neck cancer)

1960s

1970s

1980s

1990s

2000s

10

Source: Lichtenberg, National Bureau of Economic Research

11

Global Research Based Pharmaceutical Industry

Global Sales $825bn

Annual Global Spend on R&D $68bn

Proportion outsourced to CROs 44%

Global Revenues for CROs c.$28.2bn

CRO Employees globally c.120,000

Bio Pharma R&D Employees Ireland c.2,000

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Life Cycle of an Innovative Medicine

Pharmaceutical Healthcare Facts and Figures 2012

Estimated cost of development $1.3bn to $1.8bn.

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Rising costs threaten healthcare advances…

Clinical Drug Development: • Time: 7 to 10 years• Cost: $1.3 billion per approval• Success Rate: 8% for candidates entering Phase I

U.S. Health Expenditure: • 13.6% of GDP in 2000• 18.2% of GDP in 2011

Ireland Health Expenditure: IPHA , 3rd Oct • 13,317m 2012• 9.5% GDP (2009)

14

Changing New Health Landscape

Divergent economic conditions

Rise of new markets

Socio-demographic

shifts

Strained healthcare

environment

Challenging biopharma

environment

Promise of technological

(r)evolution

15

The current environment

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The Current Environment for BioPharmaRegulatory Pressures:

Complexity of technology/innovation

Approval Times

Intense FDA/EMA Scrutiny

Ethical Concerns & Patients needed

Numerous Regulatory Agencies

Health Technology Assessment

Real World evaluation

Financial Pressures:

Costs

Capital Constraints

Demand for Value

Payer Pressure

ROI

Development Pressures:

Stakeholders Scrutiny

Patient Access Demands

Commercialization Stakeholders

R&D Timelines

Productivity

Patent Cliff

Product Pipelines

17

Other factors impacting BioPharmaPopulation changesNew technologies and Screening proceduresEscalating health care costsPublic expectations and patient empowermentInformation sources…internet, TV…Disease areasPersonalisation of medicineGlobal economic environmentMarket AccessReal world analysis and value determination.

18

Map of All Studies in ClinicalTrials.gov25th October 2012

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Map of European StudiesOctober 25th, 2012

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Clinical Trials - GloballyCurrently 134,668

  Total OpenUnited States 64766 19339Canada 10128 3213Germany 9462 2842France 8251 3118UK 7119 2271Italy 5386 1758Spain 4808 1743Netherlands 4308 1324Belgium 4057 1141

  Total OpenDenmark 3403 1061Sweden 2816 740Norway 1899 536

  Total OpenIreland 691 209

Source: www.clinicaltrials.gov

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Clinical Trials - USA• Currently 64,766

Source: www.clinicaltrials.gov

  Total Open

California 17765 4306

Texas 14759 3445

New York 14733 3667

Florida 11726 2436

Maryland 10957 2905

Ohio 10564 2376

  Total Open Population

Rhode Island 2282 491 1m

New Hampshire 1392 338 1.3m

Vermont 1298 248 0.6m

Hawaii 1283 253 1.4m

Ireland691 / 209 / 4.6m

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• More than half the clinical trials being conducted worldwide are happening in North America>United States / Canada 56%

26% in EuropeIreland

is 1.9% European total

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Greater Stakeholder CooperationCulture of innovation & collaboration

• Academia• Industry• Government• Health Service> Clinical research is an integral part of medical education.

• Patient> Patient advocacy> Awareness

Bourne out of a greater level of trust, confidence and a belief that all stake-holders have a shared goal of delivering improved health outcomes for patients

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What is a CRO?

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What is a Clinical Research Organization?

• A contract research organization (CRO) is a service organization that provides support to the pharmaceutical and biotechnology industries in the form of research & development services outsourced on a contract basis.

• A CRO can provide such services as biopharmaceutical development, preclinical research, clinical research, and clinical trials management. Many CROs (but not all CROs) specifically provide clinical-study and clinical-trial support for drugs and/or medical devices. CROs range from large, international full-service organizations to small, niche specialty groups. CROs that specialize clinical-trials services can offer their clients the expertise of moving a new drug or device from its conception to FDA/EMA marketing approval, without the drug sponsor having to maintain a staff for these services.

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ClinicalPhase I

Healthy Volunteers

Clinical Phases II - III

Patients

Sales & Marketing

Prescribers

Central Laboratories

Bio-sample AnalysisGlobal Product Development commercial services

Phase I and Labs Clinical Development

Services

Consulting

Strategic Research

Services

Commercial

SRS

Patients

New Chemical

Entity

discoverydiscovery

Global

Data

Management

DM

Clinical TrialData

Medicinal Product Continuum

Outcomes /Real World data

Uncertainty

Confidence in drug & disease indication.

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Market size and Growth

2010 2011 2012 2013 2014 20150.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

0%

10%

20%

30%

40%

50%

60%

70%

33%38%

44%

50%

58%

66%

22.8026.22

30.15

34.68

39.8843.87

CRO Market Share of global R&D

Value

Bill

ion

s o

f d

olla

rs

Ref: ACRO – Association of Clinical Research Organizations

Ref: CRO Market Outlook to 2016 / Business Insights

CRO market by drug phase ($bn), 2010

0

5

10

15

20

25

30

35

40

45

2010 2011 2012 2013 2014 2015 2016

$bn

US Western Europe Eastern Europe ChinaIndia Other Asia Latin America Other

23.225.5

28.2

31.2

34.6

38.3

42.6

0

5

10

15

20

25

30

35

40

45

2010 2011 2012 2013 2014 2015 2016

$bn

US Western Europe Eastern Europe ChinaIndia Other Asia Latin America Other

23.225.5

28.2

31.2

34.6

38.3

42.6

Source: Business Insights

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Market size and Growth

• A significant portion of R&D budgets are used for outsourcing services offered by the CRO industry, approximately $20 billion in 2010.

• This figure is expected to grow at 15% p.a. over the next 4 years and will increase further with the broadening of the spectrum of services outsourced to cover the entire value chain.

• Currently the bio-pharmaceutical industry outsources approximately 33% of it’s R&D* spend globally and this is anticipated to grow by 15% annually over the next 5 years.

* It is estimated that in 2010 over 60% of all biopharmaceutical product development spend was outsourced.

29

CRO Global Employment Numbers

2008 2010 2011 2012 2013 2014 20150

20000400006000080000

100000120000140000160000180000

66000

100000110000

121000133100

146410

161051

Employees

Ref: ACRO – Association of Clinical Research Organizations

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End-to-end Development Solutions

• Portfolio Planning• Biomarker Development• Global Regulatory Strategy• Central Laboratory Services• Cardiac Safety Services• Data Management• Biostatistics

Full Service CRO / PSC (Pharmaceutical Services Company)

Fully Integrated Biopharma Services Provider

Coaching

Integrated Full Suite of Clinical Services

Translational Research

Modeling and Simulation

Clinical Trial Management Phase I, II & III

Regulatory Agency Submission

Phase IV

Disease Management & Rx to OTC Switch

Go-to-Market Post Approval Services

> Life Cycle Safety> Medical Device Services> Post-Marketing Surveillance> Rx to OTC Switch> Finance Policy Consulting> Outcomes Research> Health Economics

Market Research, Commercialisation & Global Market Access

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The Challenge: Reinvent Healthcare Models

Clinical Drug Development • Time: up to 10 years• Cost: >$1.3 billion per approval• Success Rates: as low as 8%

Healthcare Delivery• Lacks population level safety evaluation• Lacks population level treatment outcomes

2010 Health Expenditure: US 17.6% of GDP

EU 9.6% of GDP

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Going DEEPER:

Understanding Disease Causality• Genetics• Proteomics• Cellular lineages and

environments

Going BROADER:

Understanding Real-world Outcomes

• Large Population Databases• Data Analytics

Two Frontiers

Evidence-based medicine

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Data, Data Everywhere

New data resources and tools to use them will be the

means to improve health outcomes and reduce costs

EXPANDING

DATABASES

Genetics Databases

Observational & EHR Databases

SOPHISTICATED

ANALYTICS

to ask “What If”

questions

MODELING &

SIMULATION

to test treatment

and cost options

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Emerging Model: Research-Care Convergence

Leveraging data across all sectors to improve decision-making…

• Evidence-based drug design• Evidence-based therapeutic evaluation• Evidence-based policy and economics

Healthcare must measure standards of care

and cost—and then exceed them—or pay

more and more for sub-optimal solutions.

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Convergence in Three Arenas

Therapeutic Innovation• Targeted therapeutics• Personalized medicine

Patient Care • Outcomes evaluation in real-world populations• Comparative effectiveness/ optimal interventions

Health Management• Cost-effectiveness / value-based pricing• Improved resource allocation • Prevention / positive health behavior programs

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Future FocusCultural

Change in Medical

Education

Greater Stakeholder Cooperation

Evidence / Value based

medicine

Real world

research outcome

s

Better Patient

Engagement

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Thank Youjohn.kiernan@quintiles.com

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