Commercial Perspectives: Multiple Sclerosis

A Datamonitor Report Commercial Perspectives: Multiple Sclerosis How to Find Opportunities in an Unremitting Market Published: Jun-04 Product Code: Providing you with: In-depth profiles of current market-leading brands, including major events impacting each brand during 2003 Analysis of potential strategies to help maximize and protect revenues Use this Report to... Benchmark pipeline multiple sclerosis drugs against currently marketed products and assess their future market potential Global sales (US, Japan, France, Germany, Italy, Spain, UK) for leading multiple sclerosis drugs from 1999 to 2003, with projections for future performance to 2012 Analysis of various lifecycle management strategies, using case studies, and an evaluation of their future applicability www.datamonitor.com/healthcare

Commercial Perspectives: Multiple Sclerosis How to Find Opportunities in an Unremitting Market Introduction The multiple sclerosis market is highly lucrative and competitive, with only five marketed drugs, worth $2.8 billion in 2003. However, the dynamics of the market will shift from 2005 onwards with the launch of Antegren (natalizumab), a novel monthly drug. Beta-interferons will also face generic threat in Europe, and the launch of oral multiple sclerosis therapeutics will negatively impact current injectable drug sales. Key findings and highlights Datamonitor forecasts that revenues of currently marketed drugs will peak at $3.6 billion in 2006 and decline thereafter. Nevertheless, the uptake of newly launched novel drugs, driven primarily by Antegren, will ensure continued revenue growth to 2012, even exceeding $6 billion. Therefore, branded manufacturers who have traditionally maximized their revenues through product differentiation and innovative lifecycle strategies, including product reformulation and improved delivery mechanisms, will need to consider more innovative strategies to maintain and maximize future revenues. Reasons to buy The multiple sclerosis market has continued to grow, with revenues increasing by 23.4% in 2003, in a market valued at $2.8 billion. Biogen-IDEC's Avonex remains market leader, although with the continued, rapid up-take of Rebif in the US, Avonex s days at the top are numbered. Manufacturers are seeking co-development and marketing agreements to increase their market share. Consequently, Serono s multiple sclerosis franchise is forecast to become a blockbuster in 2006, and remain so over the forecast period, while the launch of Antegren in 2005 will ensure growth of Biogen-IDEC's blockbuster franchise to 2012. Efficacy remains the primary unmet need of multiple sclerosis treatment. Despite numerous clinical trials, no drug has been approved for the treatment of primary progressive MS, the most aggressive form of MS. Moreover, Datamonitor does not believe any of the currently marketed drugs will gain an indication in this niche market. Assess leading multiple sclerosis drugs and identify key success factors within this sector Understand key market drivers and predict the future performance of key compounds Benchmark pipeline multiple sclerosis drugs against currently marketed products and assess their future market potential For more information... Contact Lynda Lynch PhD, CNS Business Unit Director tel: +44 20 7675 7159 fax: +44 20 7576 7016 email: hcinfo@datamonitor.com

www.datamonitor.com/healthcare Sample pages from the analysis MARKET SEGMENTATION & DEFINITION Table 5 summarizes the profiles of the current marketed, disease modifying therapies for MS. Table 5: Comparison of marketed MS brands Brand Rebif Avonex Betaseron Copaxone Novantrone GLOBAL MARKET OVERVIEW Generic Interferon Interferon Interferon beta Glatiramer Mitoxantrone beta 1a beta 1a 1b acetate Indications RRMS RRMS & first RRMS SPMS RRMS RRMS SPMS attack of MS (EU), relapsing PRMS (FAMS) (US), forms of RRMS RRMS and and SPMS (US) CDMS (EU) Continued development of pipeline drugs Formulation 22/44mcg s/c 30mcg im There 250mcg are currently s/c 20mg two s/c pipeline 10, drugs 12.5, 15ml in Phase III, which are potential follow-up injectable drugs to Copaxone, both of which infusion are administered orally. Pre-filled Yes Yes Yes Yes No syringe Teva is currently developing an oral version of Copaxone, under license from Dose 3 tw 1 tw Autoimmune. every 2 days However, daily in 2001, every the company 3 announced disappointing results from frequency an interim analysis of its multicenter GLOBAL months CORAL trial, MARKET involving the OVERVIEW oral form of Copaxone Storage Room Refrigerate in over Room 1,600 patients Room with RRMS. Room Teva is currently conducting additional clinical temperature temperature temperature temperature studies with higher doses of oral glatiramer acetate. Side effects Flu like symptoms and injection site reactions Nausea, alopecia, Similarly, Aventis is developing an menstrual oral version of teriflunomide, which is currently in discovery for MS. In February 2004, disorders, teriflunomide Figure UTI 5 entered illustrates Phase the annual III in Germany. revenues of MS drugs from 1999 2003. US launch 2002 1996 1993 1997 2000 EU launch 1998 1997 Datamonitor 1995 predicts 2000 that if both N/A these Figure products 5: perform Annual well comparative in their respective class contribution to the MS market growth, Japanese N/A N/A Phase 2000 III trials, their N/A launches N/A are expected during 1999 2003 2007 08. As such, these launch formulations have the propensity to be the first non-injectable MS therapeutics to Market share 17 38 reach 21 the market, 22 which will be a 2 huge advantage over current Beta-interferons MS drugs and even 2003 (%) other pipeline drugs such as Antegren and Campath, Rebif which are Avonex expected Betaseron to receive Copaxone Novantrone good uptake on launch. 3,000 Source: MIDAS Prescribing Insights, IMS Health, April 2004, Copyright, reprinted with permission. D A T A M O N I T O R Promotion of Copaxone as both a first- and 2,500 second-line treatment In June 2003, a prospective study demonstrated 2,000 that patients who failed with Avonex Currently there are five marketed disease and switched modifying to Copaxone MS drugs, experienced the three a betainterferons Avonex, Rebif and Betaseron, 85 patients in addition who had to failed Copaxone Avonex (glatiramer treatment after 1,500 18 24 months of treatment were significant reduction in relapses. In the trial, acetate) and Novantrone (mitoxantrone). switched to Copaxone and followed for 36 42 months. Results demonstrated that patients experienced a 58% reduction in relapse 1,000 after the switch, with mean annual Datamonitor has assessed the five drugs based upon the following criteria: efficacy in reduction of relapses from 1.13 annually to 0.47 (p = 0.0001) reducing relapses; side-effect profile; dosing and storage convenience; cost; patient (www.tevaneuroscience.com). 500 coverage; marketing strength; and overall performance. Drugs were rated upon their Datamonitor believes that this study is very encouraging 0 for Teva, because now, in addition to Copaxone s status as a first-line therapeutic, Teva 1999 has proven clinical 2000 data 2001 2002 2003 Commercial Perspectives: Multiple Sclerosis to which could be used to encourage Page physicians 29 to use Copaxone as a second-line Datamonitor (Published 06/2003) N/A Annual revenue This report is a licensed product and is not to be photocopied treatment after failure with beta-interferons. However, Teva has to be careful 34.6 not to 43.6 25.1 22.6 growth (%) infer that its product should not be reserved only for second-line treatment. Nevertheless, Datamonitor believes that with the correct marketing campaign, this data could be used to help quell the future Source: competition MIDAS from Prescribing Antegren. Insights, IMS Health, April 2004, Copyright, reprinted with permission. D A T A M O N I T O R Revenue ($m) As can be observed in Figure 5, the MS market is continually growing, with a mean annual growth rate of approximately 30% from 1999 2003. Beta-interferon drugs form Commercial Perspectives: Multiple Sclerosis the bulk of the market revenues, attributed to 77% of the market share in 1999 and Datamonitor (Published 06/2003) 74% in 2003. Page 93 This report is a licensed product and is not to be photocopied Commercial Perspectives: Multiple Sclerosis Datamonitor (Published 06/2003) Page 36 This report is a licensed product and is not to be photocopied...we cannot assume that the biological mode of action of any of the products would be inappropriate or a benefit for primary progressive multiple sclerosis...the problem could be because the drugs don t work, or that the trials that have been done were incorrectly designed to show that benefit, or both... Datamonitor Key Opinion Leader

Commercial Perspectives: Multiple Sclerosis How to Find Opportunities in an Unremitting Market Table of contents EXECUTIVE SUMMARY Scope of the analysis Datamonitor insight into the multiple sclerosis market MARKET SEGMENTATION AND DEFINITION Strategic scoping and focus Market definition Diagnostic definitions Marketed drugs The gold standard in MS - Comparison of key brands GLOBAL MARKET OVERVIEW Multiple sclerosis market analysis - Seven major market forecast - R&D MS drugs Rebif - Rebif strategic analysis - Rebif revenues to date Avonex - Avonex strategic analysis - Avonex revenues to date Betaseron/Betaferon - Betaseron strategic analysis - Betaseron revenues to date Copaxone - Copaxone strategic analysis - Copaxone revenues to date Novantrone - Novantrone strategic analysis - Novantrone revenues to date Alfaferone PORTFOLIO AND LIFECYCLE MANAGEMENT Portfolio management - Market attractiveness Positioning of the major MS market players - Portfolio analysis Lifecycle management - MS product lifecycle - Optimizing peak sales and revenue protection strategies - Threatening generic penetration STRATEGIC PRODUCT POSITIONING Physician-focused product positioning - Physician definition Brand imaging - Product-specific websites and promotional literature - Company health information websites - Independent MS websites - Treatment guidelines - The cannabis debate Pricing and reimbursement - Reimbursement - Pricing data for key products across the seven major markets APPENDIX Key Opinion Leaders Bibliography - Conference abstracts - Journal articles Websites Report methodology - Date of research completion About Datamonitor - About Datamonitor Healthcare - Datamonitor Healthcare's research and analysis methodologies Datamonitor Healthcare's therapy area capabilities - About the CNS analysis team - Key therapy team members - Disclaimer For more information... Contact Lynda Lynch PhD, CNS Business Unit Director tel: +44 20 7675 7159 fax: +44 20 7576 7016 email: hcinfo@datamonitor.com

www.datamonitor.com/healthcare TABLES Table 1: Drug revenues, 2003 Table 2: Key parameters of the MS market to 2012 Table 3: Market forecast for currently marketed MS products to 2012 Table 4: Classification of MS Table 5: Comparison of marketed MS brands Table 6: MS market forecast, 2003-2012 Table 7: R&D drugs, 2004 Table 8: Rebif: key facts Table 9: Key Rebif events, 2003-2004 Table 10: Avonex: key facts Table 11: Key Avonex events, 2003-2004 Table 12: Betaseron: key facts Table 13: Key Betaseron events, 2003-2004 Table 14: Copaxone: key facts Table 15: Key Copaxone events, 2003-2004 Table 16: Novantrone: key facts Table 17: Key Novantrone events, 2003-2004 Table 18: Total CNS and MS drug performance of the MS manufacturers, 2003 Table 19: Growth in ethical, CNS and MS drug revenues for the MS manufacturers, 2002-2003 Table 20: Overview of multiple sclerosis pipeline and key players' marketed drugs Table 21: Biogen-IDEC's MS portfolio to 2012 Table 22: Serono's MS portfolio to 2012 Table 23: Oral formulations in the late-stage MS pipeline, 2004 Table 24: Future biogeneric threats Table 25: Health information websites Table 26: Key themes pursued by major MS manufacturers at the AAN, 2004 Table 27: Selected market pricing data for MS drugs FIGURES Figure 1: Key drivers in the MS market to 2012 Figure 2: Types of MS Figure 3: Timeline: the launch dates of MS therapies, 1993-2002 Figure 4: Figure 5: Comparison of MS brands Annual comparative class contribution to the MS market growth, 1999-2003 Figure 6: Revenue growth of MS drugs, 1999-2003 Figure 7: MS market forecast, 2003-2012 Figure 8: SWOT analysis of Rebif, 2004 Figure 9: Rebif revenues and growth, 1999-2003 Figure 10: Rebif forecast, 2004-2012 Figure 11: SWOT analysis of Avonex, 2004 Figure 12: Avonex revenues and growth, 1999-2003 Figure 13: Avonex forecast, 2004-2012 Figure 14: SWOT analysis of Betaseron, 2004 Figure 15: Betaseron revenues and growth, 1999-2003 Figure 16: Betaseron forecast, 2004-2012 Figure 17: SWOT analysis of Copaxone, 2003 Figure 18: Copaxone revenues and growth, 1999-2003 Figure 19: Copaxone forecast, 2004-2012 Figure 20: SWOT analysis of Novantrone, 2003 Figure 21: US Novantrone revenues and growth, 1999-2003 Figure 22: US Novantrone forecast, 2004-2012 Figure 23: Figure 24: Figure 25: Competitive attractiveness of the MS market, 2003-2012 Comparative attractiveness of beta-interferons versus other drug classes, 2003-2012 Positioning of MS drug manufacturer portfolios, 2002-2003 Figure 26: Global sales of Betaseron, 1993-2003 Figure 27: Figure 28: Figure 29: Figure 30: Figure 31: Figure 32: Figure 33: Figure 34: Figure 35: Figure 36: Medical professionals diagnosing MS Medical professionals treating MS Avonex: strong all week long Rebif: promotion of efficacy Betaseron: BETA nurses Copaxone's leading message Novantrone: patient resources MultipleSclerosis.com homepage MSIF website sponsors Pricing strategies in the MS market...i think patients will not give up injectable drugs for an oral product that turns out to be less effective. That will be the first question they ask. But if you can find an equally effective or more effective oral product, it's going to wipe the other ones off the face of the map... Datamonitor Key Opinion Leader

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