Agchems Stellar Growth Sustainable or Not?

Transcription

1 Agchems Stellar Growth Sustainable or Not? The Crop Protection & Fine Chemicals Forum Gran Via Exhibition Centre, Barcelona, Chemspec Europe Dr Nigel Uttley Enigma Marketing Research 16th June 2009

2 Presentation Coverage an overview of the recent rapid growth in sales and the major drivers which influence the agrochemical or crop protection industry the important influence that Intellectual Property Rights and stringent registration systems play in maintaining market share for R&D based companies and restricting generic competition where are the opportunities for contract manufacturers and intermediate suppliers?

3 Presentation Coverage an overview of the recent rapid growth in sales and the major drivers which influence the agrochemical industry

4 Global Industry by Sector Total = $ 87.05bn (2008) Conventional Seeds $15.95bn GMO Seeds $8.1bn Crop Protection $41.88bn Non-Crop $21.16bn

5 Non Crop Sector, $21.16bn Forestry 3.8% Industrial 3.4% PCO 7.5% Turf 8.1% Public Health 2.7% Timber Treatment 5.8% Self-applied 63.3% Seasonal 5.4%

6 GMO Seeds - $8.1bn First introduced in 1995 mainly herbicide tolerant seeds Roundup (glyphosate) Ready crops (soybean, maize, cotton, canola, sugar) Others glufosinate, imidazolines Sales now at $8.1 billion

7 Conventional Seeds $15.95bn Monsanto and DuPont major players Others include Vilmorin, KWS, AgReliant Genetics Seed treatments specialised application of agrochemicals

8 Global Industry by Sector Total = $ 87.05bn (2008) Conventional Seeds $15.95bn GMO Seeds $8.1bn Crop Protection $41.88bn Non-Crop $21.16bn

9 Sales of Agrochemicals for Crop Protection $25 billion static at approximately $30 billion stellar growth to $41.88 billion

10 Major Drivers Population increase Growth of renewable energy requirements Falling stocks of soft commodities Rising Prices Increase in availability of agricultural land Improved yields

11 Major Players Ciba (CH) Syngenta (Ciba + Sandoz = Novartis + Zeneca) (CH/UK) Monsanto (USA) Bayer CropScience (AgrEvo + R-P = Aventis) (D) DuPont (USA) BASF (Cyanamid) (D) AgrEvo (D) Dow AgroSciences (Rohm & Haas) (USA) Zeneca (UK) Monsanto (USA) Bayer (D) DuPont (USA) Rhône-Poulenc (F) Makhteshim Agan (Israel) Dow (USA) Sumitomo (J) Cyanamid (USA) Nufarm (Australia) BASF (D) Arysta (merger of Nichimen and Tomen) (J) Sandoz (CH) Sumitomo (J) FMC (USA) FMC (not now R&D based) (USA) United Phosphorus (India) Cheminova (DK)

12 Sales of Major Players Company Sales in US$ millions % increase Comments Syngenta 7,285 9, Bayer CropScience 7,458 8, BASF 4,297 5, Monsanto 3,599 4, Dow AgroSciences 3,779 4, Top 6 companies combined sales of $30,561 million = 73%. DuPont 2,369 2, Makhteshim-Agan 1,895 2, Nufarm 1,209 1,509* 24.8 Arysta 1, FMC 890 1, United Phosphorus * 20.0 Top 6 off-patent companies combined sales of $7,689 million = 18.4% Cheminova *Estimates for Nufarm and United Phopshorus

13 Products Based on IPR Proprietary or patented Off-patent two types Generic Proprietary off-patent

14 Proprietary Off-patent Has some proprietary technology (such as a new delivery system, surfactant or safener, or is linked to GMO crops) Is a mixture product containing a patented active ingredient has data protection issues which have prevented generic manufacturers entering the market

15 Market Share by Product Type Generic (27.5% $11.52bn) Proprietary (31.3% $13.11bn) Proprietary offpatent (41.2%, $17.25bn)

16 Decline in New Active Substances number of new active substances receiving an ISO Common name per annum

17 Proprietary off-patent is the battleground between R&D-based companies and generic companies Generic (27.5% $9.2bn) Proprietary (31.3% $10.5bn) Proprietary offpatent (41.2%, $13.8bn)

18 Presentation Coverage the important influence that Intellectual Property Rights and stringent registration systems play in maintaining market share for the R&D companies and restricting generic competition

19 How to get a generic to market

20 How to Choose the Right Generic to Develop Market potential Synthesis/technology/manufacturing issues Intellectual Property Rights (IPR) status Registrations issues Economics

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32 Assessment of Market Potential Straight or mixtures Market price Competition from other products Geographic spread Market segmentation

33 Manufacturing Aspects Manufacturing process easy or difficult? Intermediates available or restricted? Patents active ingredient, process and formulation patents Synthetic pathway same as originator, does this give similar impurity profile?

34 Patents (IPR) and Patent-term Extensions Intermediates Process Chiral Active Substance Formulation Mixtures

35 Agrochemical Mixtures Herbicide + herbicide (dicamba + phenoxies) Fungicide + fungicide (azoxystrobin + chlorothalonil) Seed treatments Insecticide + insecticide (clothianidin + beta-cyfluthrin) Insecticide + insecticide + fungicide (imidacloprid + carboxin + captan)

36 Mixture Products with Azoxystrobin hexaconazole fenpropimorph fenoxanil + etofenprox cyproconazole fludioxonil + metalaxyl-m chlorothalonil propiconazole difenoconazole fipronil

37 Benefits of Mixture Products Segment the market and create greater number of branded products making it harder for generics to take market share Use of patent protected active ingredients restricts market entry by generics Many mixture products have received patent protection in their own right

38 Patent-term Extensions Supplementary Protection Certificates SPCs with EU Effectively extend patent protection for a marketed product by up to 5 years

39 Example 1: Extended Patent Rights (SPCs) for ASs in EMR s report on New Generic Agrochemicals post 2009 acetamiprid acibenzolar-s-methyl amicarbazone azoxystrobin bifenazate cafenstrole carfentrazone-ethyl cinidon-ethyl clothianidin cyazofamid cyclosulfamuron cyprodinil emamectin benzoate ethoxysulfuron famoxadone fenamidone fenhexamid florasulam flufenacet flupyrsulfuron-methylsodium indanofan indoxacarb iprovalicarb isoxaflutole kresoxim-methyl mefenpyr-diethyl mesotrione picolinafen picoxystrobin propoxycarbazone pyraflufen-ethyl quinoxyfen silthiofam spinosad spiroxamine sulfentrazone thiacloprid trifloxystrobin triticonazole tritosulfuron zoxamide SPC exists No SPC

40 Example 2: Extended IPR (SPCs) and Data Protection for ASs in EMR report Cyazofamid (ISK Biosciences). The basic patent expired March 2008 but the SPC extends market exclusivity to Mesotrione (Syngenta). The basic patent expired December 2005 but there is an SPC extending protection to 2010.

41 Example 3: Mixture Product SPCs - Cyprodinil cyprodinil EU patent expires in 2008 H N cyprodinil N N CH 3 SPC for a mixture with picoxystrobin expires 2013 F F F N picoxystrobin O C H 3 O O O CH3

42 Example 4: Mixture Product SPCs - Picolinafen Picolinafen EU patent expires 2011 F F F O N O S N Na + O N H N O CH 3 N O CH 3 Mixture with flupyrsulfuron-methylsodium SPC expires 2017 F F H 3 C F O O flupyrsulfuron-methyl-sodium O N O H N F picolinafen

43 Registration Issues for example, EU Directive 91/414 Field trials Toxicology Environmental Protected data Data compensation

44 Supported Active Substances on Lists 1, 2, 3, 4 and NAS List No. of Active Substances (ASs) Annex I status Pending applications Not supported or rejected applications TOTAL New ASs

45 The EU Registration System as a Barrier to Market Entry Category Number of active substances (% of total) Main data submitter 1 24 (41.4) Task force or more than one main data submitter Comments No market exclusivity Competition exists Generic scenario 2 34 (58.6) Only one data submitter All additional submissions either withdrawn or incomplete therefore market exclusivity exists. Proprietary scenario

46 Example 1: Data Protection List 1 fluroxypyr Annex I 1 December 2000 data protection ended 30/11/2005 lambda-cyhalothrin Annex I 1 January 2002 data protection ended 31/12/2006 chlorothalonil Annex I 1 March 2006 data protection ends 28/02/2011

47 Example 2: Data Protection New Active Substances in EMR report acetamiprid acibenzolar-s-methyl amicarbazone azoxystrobin bifenazate cafenstrole carfentrazone-ethyl cinidon-ethyl clothianidin cyazofamid cyclosulfamuron cyprodinil emamectin benzoate ethoxysulfuron famoxadone fenamidone fenhexamid florasulam flufenacet flupyrsulfuron-methylsodium indanofan indoxacarb iprovalicarb isoxaflutole kresoxim-methyl mefenpyr-diethyl mesotrione picolinafen picoxystrobin propoxycarbazone pyraflufen-ethyl quinoxyfen silthiofam spinosad spiroxamine sulfentrazone thiacloprid trifloxystrobin triticonazole tritosulfuron zoxamide Data protection extends beyond patent expiry Data protection does not extend beyond patent expiry Not on Annex I

48 Presentation Coverage where are the opportunities for contract manufacturers and intermediate suppliers?

49 Outlook for Suppliers to R&D Sector decrease in the number of opportunities for new active ingredients opportunities for the manufacture of older products increase in demand resulting from global growth of the agrochemical industry stable long term business as a result of strong post patent expiry defence strategies

50 R&D Companies Small number of R&D companies EU & US - BCS, DAS, DuPont, BASF and Syngenta (Monsanto only GMOs) Japan several relatively small companies (Nippon Soda, Nihon Nohyaku, ISK Biosciences, Nissan, Sumitomo Chemicals etc)

51 Other Opportunities Generic/Marketing Sector Company acquisitions now global players New product development from existing active ingredients Product acquisitions from R&D companies

52 The Future? Increasing demand for agrochemicals Increasing share of off-patent products Strong post-patent defence strategies from innovator companies Consolidation of the off-patent/generic sector to achieve critical mass Increasing market share by companies not involved in R&D on new actives

53 Your Focus New business - target R&D companies and larger generic/marketing companies Existing business - understand the impact of registration systems and IPR an essential part of a SWOT analysis Agchems Stellar Growth Sustainable or not?

54 Dr Nigel Uttley Enigma Marketing Research Tel: (44) Fax: (44)