Convegno Science Generation Bioscienze ed economia Vittorio Chiesa

Convegno Science Generation Bioscienze ed economia Vittorio Chiesa Università degli studi di Milano-Bicocca FAST Milano, 14 marzo 2003 Vittorio Chiesa, 2003

Index 0 The healthcare context 0 The role of biotech 0 A worldwide overview on biotech industry 0 The Italian situation Vittorio Chiesa, 2003

Index 1 The healthcare context 0 The role of biotech 0 A worldwide overview on biotech industry 0 The Italian situation Vittorio Chiesa, 2003

The healthcare context • Increasing level of competition • Patent expiration • Industry performance indicators decline Vittorio Chiesa, 2003

Increasing level of competition Inderall® 1965 Lopresor® 1975 Tagamet® 1977 Zantac® 1983 Capoten® 1980 Vasotec® 1985 Seldane ® 1985 Hismanial® 1989 AZT® 1987 Videx® 1991 Mevacor® 1987 Pravachol® 1991 Prozac® 1988 Zoloft® 1992 Dillucan® 1990 Sporanox® 1992 Recombinate® 1992 Invirase® 1995 Kogenale® 1993 Norvi® 1996 Celebrex® 1999 Vioxx® 1999 Vittorio Chiesa, 2003

Patent expiration ü Generic products strongly penetrate (50% of prescription drugs in US) ü Revenues decrease by 75% in three months since outpatenting ü 40 bln $ of revenues will disappear in the next 5 years 2001 Number of expiring patents 53 2002 41 2003 58 2004 Vittorio Chiesa, 2003 46

Performance indicators decline Although R&D expenses grow continuously 1992 1997 2001 11 bln$ 18 bln$ 35 bln$ • New drug approval decreases • Post-marketing product withdrawals grow • Sales growth declines (9% in the ‘ 90 ies vs. 5. 3% foreseen in the first decade of the 2000) Vittorio Chiesa, 2003

The traditional paradigm is over • Development of blockbusters (at least 1 bln$ of revenues) • General-purpose products • Aggressive marketing Vittorio Chiesa, 2003

A new paradigm is required: targeted treatments • Disease-centric approach to drug discovery • Cover of secondary care • Combination of products and services (selfdiagnosis, patient training and education, disease management) • Targeted marketing Vittorio Chiesa, 2003

The new paradigm means stronger market pressure • Earlier contacts with regulatory authorities • Continuous evaluation and stringent reviews • Shifting balance of power (to MCO) • Pricing fixed on the basis of medical results Vittorio Chiesa, 2003

The new paradigm is challenging • Higher costs of development (clinical trials) • Lower selling volumes per drug • Lower price but • Higher number of new and more effective drugs Vittorio Chiesa, 2003

Index 0 The healthcare context 1 The role of biotech 0 A worldwide overview on biotech industry 0 The Italian situation Vittorio Chiesa, 2003

The new paradigm means a new approach to R&D Approval Drug Discovery Development Understanding the disease at molecular level in drug discovery Vittorio Chiesa, 2003 Production & Commercialization Modeling and simulation in drug development

The new paradigm means a great opportunity for biotech companies Small Biotech Big Pharma Drug Discovery Drug Production Approval & Development Commercialization Enabling technology providers Vittorio Chiesa, 2003 Midsize Pharma

Index 0 The healthcare context 0 The role of biotech 1 A worldwide overview on biotech industry 0 The Italian situation Vittorio Chiesa, 2003

The biotech industry in US and EU Data 2001 in millions $ Vittorio Chiesa, 2003

Biotech in Europe Number of Companies Vittorio Chiesa, 2003

Biotech clusters in Europe Vittorio Chiesa, 2003

What is a cluster • A cluster is “a geographical concentration of actors in vertical and horizontal relationships, showing a clear tendency of co-operating and of sharing their competences, all involved in a localized infrastructure of support” • In a cluster co-exist small biotech firms, R&D labs of large firms, universities and research centres, financial institutions, service companies, public support structures Vittorio Chiesa, 2003

Advantages from clustering • Sharing of knowledge, competencies and practices • Availability of skills • Collaboration • Support infrastructure Vittorio Chiesa, 2003

Growth mechanisms of a cluster Excellent Scientific Base The trigger is facilitating the generation of new science-based companies Vittorio Chiesa, 2003 Generation of Start-ups and Spin-offs Growth of the scientific base Establishment of large firm sites Reinforcement of relations between Industry and Science

How clusters were born • In US and UK, there were the conditions for the growth of a cluster: – excellent scientific base – strong enterpreneurial culture – propensity of finance to risky investments • In other countries (Germany, France, Scandinavian area) the public support helped create the conditions for the growth of a cluster Vittorio Chiesa, 2003

Index 0 The healthcare context 0 The role of biotech 0 A worldwide overview on biotech industry 1 The Italian situation Vittorio Chiesa, 2003

Biotech industry in Italy and Lombardy Vittorio Chiesa, 2003

What is missing for a biotech cluster in Lombardy Scientific Base Biodevelopment Companies International cases • Biom. AG in Munich • Genopole in Evry (France) • Scientific and Technology Park in Heidelberg • Innovation Agencies and University Liaison Offices in Scandinavian countries Vittorio Chiesa, 2003 Generation of Start-ups and Spin-offs Mission of a Biodevelopment Company • supporting researchers willing to found a new company • supporting the management of the project • attracting funds • hosting the companies in their embryonic phase

What we are doing • A EU funded project (Cleverbio) to study growth mechanisms and practices of biotech clusters and make a feasibility study for a biodevelopment company • A project funded by Fondazione Cariplo to build a network of bioincubators (University of Milano. Bicocca, Parco Tecnologico Padano, European Institute for Oncology - IFOM) Vittorio Chiesa, 2003