Commercial Insight: Herpes and Respiratory Antivirals - Leaders Rise and Fall

Datamonitor - 10/20/2005

Introduction
Within the herpes and respiratory antiviral subcategory HSV/VZV products have been key growth drivers, accounting for 77% of a market worth $2,190m in 2004. Despite lost of US branded Valtrex in 2009, the continued uptake of flu and post-transplant CMV antivirals along with the anticipated launch of first-in-class RSV antiviral, A-60444 will to some extent offset revenue loss by 2014.

Scope
Market overview by geographical area and disease indication, with value analysis of clinical and commercial factors underlying product performance
Assessment of country-specific drivers and resistors likely to impact the herpes and respiratory antiviral market
Case study analysis of the key players in the market and further the success of follow-up products Valtrex for HSV/VZV and Valcyte for CMV
Future market outlook per disease indication and individual products taking into account key market events in particular, patent expiries
Highlights
The anti-infective vaccine market is poised for explosive growth, leading to a shift of R&D focus from antiviral therapy to preventative vaccination and hence a dwindling herpes and respiratory antiviral pipeline. However, clinical unmet needs mainly in CMV, VZV related post-herpetic neuralgia (PHN) and RSV maintain the call for new products.

Capitalizing on the Zovirax legacy, a large number of indication expansions and effective marketing strategies by ID leader GSK, sales of follow-up product Valtrex have experienced accelerated growth. In 2004, Valtrex achieved blockbuster status, selling $1,090m in the seven major markets.

Currently available RSV therapies are sub-optimal and expensive, being reserved for 'at risk' immunocompromised patient groups such as neonates. With successful development and positioning of first-in-class RSV small molecule inhibitor A-60444, Arrow/Novartis could establish a new treatment paradigm in RSV.

Reasons to Purchase
Identify key environmental opportunities and threats that will impact the use and uptake of new and existing products
Select effective lifecycle management strategies through best-in-class case study analysis of key players in the market
Understand and capitalize on clinical unmet needs in the market, either through lifecycle management of marketed drugs or new product development

About the Infectious Disease pharmaceutical analysis team

Objective of the analysis

Datamonitor insight into the herpes and respiratory antivirals market

Market definition for this report

Pathogens and disease indications

Herpesviruses

Herpes simplex virus (HSV)

Varicella zoster virus (VZV)

Cytomegalovirus (CMV)

Respiratory viruses

Influenza (flu)

Respiratory syncytial virus (RSV)

Unmet needs in the herpes and respiratory antiviral market

Current market situation

Higher pricing fuels double-digit growth

Herpes products dominate

Brands account for the majority of sales

Herpes drug Valtrex propels GSK to market leader

Activity in the herpes and respiratory antiviral pipeline is low

Indication expansion favored over new drug development

Novartis and Medivir take the lead in the herpes and RSV antiviral pipelines

Influenza and RSV are the main vaccine pipeline drivers

Future market outlook

Current and future opportunities and threats in the herpes and respiratory antiviral market

Global opportunities and threats

Opportunities

Threats

US: opportunities and threats

Herpes and respiratory antiviral market overview

Opportunities

Threats

Japan: opportunities and threats

Herpes and respiratory antiviral market overview

Opportunities

Threats

France: opportunities and threats

Herpes and respiratory antiviral market overview

Opportunities

Threats

Germany: opportunities and threats

Herpes and respiratory antiviral market overview

Opportunities

Threats

Italy: opportunities and threats

Herpes and respiratory antiviral market overview

Opportunities

Threats

Spain: opportunities and threats

Herpes and respiratory antiviral market overview

Opportunities

Threats

UK: opportunities and threats

Herpes and respiratory antiviral market overview

Opportunities

Threats

Summary of environmental issues affecting the herpes and respiratory antiviral market size

Assumptions and events

Events excluded from the forecast

Product-specific events

Valtrex (valacyclovir)

Zovirax (acyclovir)

Valcyte (valganciclovir)

Tamiflu (oseltamivir)

Relenza (zanamivir)

Patent expiries

General assumptions for the assessment of generic incursion following patent expiry

Overview of patent expiries expected to occur in the forecast period

Cytovene - effective switching to Valcyte discourages generic manufacturers from market entry

Valtrex is expected to suffer the same fate as predecessor Zovirax

Famvir - attractive target in the US

Vistide - limited use and toxicity likely to deter generic competition

Relenza - poor historic and anticipated future performance in the influenza prescription market is unlikely to attract generic incursion

Valcyte

New drug launches

Valomaciclovir - efficacy in treating PHN provides competitive edge

A60444 - first-in-class RSV antiviral with blockbuster potential

CS8958 (R118958) - too similar to Relenza to be successful?

Limitations of data

Standard units

Japanese market data

Regional launch dates for new products

Forecasts CHAPTER 5 COMMERCIAL IMPACT AND LIFECYCLE MANAGEMENT: CASE STUDIES

Introduction

Portfolio management of the top herpes and respiratory antiviral players

Modest market with few significant players and little new product development

GSK is both ID and herpes market leader

Roche - strong present and future position in CMV and influenza

Novartis - pioneer of the RSV antiviral market?

Achieving and maintaining market leadership

Valtrex - leading in herpes simplex and herpes zoster

Cytovene and Valcyte - gold standards in the CMV transplant market

APPENDIX A - MARKET DATA AND MAJOR BRAND KEY FACTS

Definition of the Pacific Rim

Market forecast data

Global herpes and respiratory antiviral market forecasts, 2005-20

M5EU herpes and respiratory antiviral market forecasts, 2005-20

US herpes and respiratory antiviral market forecasts, 2005-20

Pacific Rim herpes and respiratory antiviral market forecasts, 2005-2014

France herpes and respiratory antiviral market forecasts, 2005-2014

Germany herpes and respiratory antiviral market forecasts, 2005-2014

Italy herpes and respiratory antiviral market forecasts, 2005-2014

Spain herpes and respiratory antiviral market forecasts, 2005-2014

UK herpes and respiratory antiviral market forecasts, 2005-2014

Global herpes and respiratory antiviral market data

HSV and VZV antivirals market data

CMV antivirals market data

Influenza antivirals market data

RSV antivirals market data

APPENDIX B

Bibliography

Journals

Clinical guidelines

Datamonitor reports

Clinical trial data

Miscellaneous

Press releases

Websites

Report methodology

Disclaimer

List of Tables

Table 1: Herpes and respiratory antivirals analyzed and forecasted within this report

Table 2: Infectious agents and indications covered in this report

Table 3: The human herpesviruses (HHV) fall into three sub-families

Table 4: Prevalence of HSV-2 in the seven major markets

Table 5: Marketed HSV antivirals

Table 6: Marketed VZV antivirals

Table 7: Marketed CMV antivirals

Table 8: Populations targeted for influenza vaccination, 2003, US

Table 9: Marketed influenza antivirals

Table 10: Marketed RSV antiviral

Table 11: Price per standard unit for seven herpes and respiratory antivirals, seven major markets, 2000-04

Table 12: Valtrex is the first herpes and respiratory antiviral among the top four to lose patent protection in the seven major markets

Table 13: Key players in the herpes and respiratory antiviral market, 2004

Table 14: There is currently a limited number of antivirals in clinical development

Table 15: Activity in the antiviral vaccines pipeline is high

Table 16: Herpes and respiratory antiviral sales in the US by disease indication, 2000-04

Table 17: Herpes and respiratory antiviral sales in the Pacific Rim by disease indication, 2000-04

Table 18: Herpes and respiratory antiviral sales in France by disease indication, 2000-04

Table 19: Key French herpes and respiratory antiviral product patent expiry dates

Table 20: Herpes and respiratory antiviral sales in Germany by disease indication, 2000-04

Table 21: Value in the German herpes and respiratory antiviral market has been driven by price increase

Table 22: Seroprevalence of HSV-1 and HSV-2 in the old (1984 and 1998) and new (1998) German federal states

Table 23: Herpes and respiratory antiviral sales in Italy by disease indication, 2000-04

Table 24: Herpes and respiratory antiviral sales in Spain by disease indication, 2000-04

Table 25: Herpes and respiratory antiviral sales in UK by disease indication, 2000-04

Table 26: List of key events, September 2004-October 20

Table 27: Patent expiries expected to occur in the forecast period

Table 28: Zovirax sales in the US following patent expiry in April 1997

Table 29: Overview of the three herpes and respiratory pipeline drugs expected to be launched in the forecast period

Table 30: Market potential for A-60444 in the seven major markets

Table 31: New drug launches in the herpes and respiratory antiviral market have been limited to two products in the period 2000-04

Table 32: Earliest and US patent expiries of currently marketed herpes and respiratory antiviral drugs, seven major markets

Table 33: Overview of total ethical revenues, and ID and herpes and respiratory antiviral sales for the top three antiviral players, seven major markets, 2004

Table 34: GSK's herpes and respiratory antiviral portfolio is focused on HSV/VZV products

Table 35: GSK's pipeline vaccines in Phase III or NDA filed

Table 36: Roche's herpes and respiratory antiviral portfolio

Table 37: Famvir: key events

Table 38: Price comparison between Zovirax, Valtrex and Famvir for the treatment of herpes zoster and genital herpes

Table 39: Zovirax: key events

Table 40: Price per standard unit ratios, seven major markets, 2000-04

Table 41: Valtrex: key events

Table 42: Formulations, dosing and cost of therapy, Zovirax versus Valtrex

Table 43: Valtrex (valacyclovir) product patent expiry dates, seven major markets

Table 44: Cytovene: key events

Table 45: Valcyte: key events

Table 46: Valcyte and Cytovene are the least toxic CMV products on the market

Table 47: Average therapy prices for marketed CMV drugs in the treatment of CMV retinitis in AIDS patients with normal renal function

Table 48: Definition of the Pacific Rim in terms of countries and distribution channels

Table 49: Global herpes and respiratory antiviral market forecasts, 2005-2014

Table 50: MEU5 herpes and respiratory antiviral market forecasts, 2005-2014

Table 51: US herpes and respiratory antiviral market forecasts, 2005-2014

Table 52: Pacific Rim herpes and respiratory antiviral market forecasts, 2005-2014

Table 53: France herpes and respiratory antiviral market forecasts, 2005-2014

Table 54: Germany herpes and respiratory antiviral market forecasts, 2005-2014

Table 55: Italy herpes and respiratory antiviral market forecasts, 2005-2014

Table 56: Spain herpes and respiratory antiviral market forecasts, 2005-2014

Table 57: UK herpes and respiratory antiviral market forecasts, 2005-2014

Table 58: Historical sales used for the forecasts, seven major markets, 2001-04

Table 59: Valtrex: key facts

Table 60: Famvir: key facts

Table 61: Zovirax: key facts

Table 62: Zostex: key facts

Table 63: Arasena-A: key facts

Table 64: Valcyte: key facts

Table 65: Cytovene: key facts

Table 66: Vistide: key facts

Table 67: Foscavir: key facts

Table 68: Tamiflu: key facts

Table 69: Relenza: key facts

Table 70: Flumadine: key facts

Table 71: Amantadine (molecule): key facts

Table 72: Virazole: key facts

List of Figures

Figure 1: Unmet needs in the herpes and respiratory antiviral market

Figure 2: Market share of the leading anti-infective drug classes, ATC 'J' code, seven major markets, 2004

Figure 3: Historic timeline of herpes and respiratory antivirals

Figure 4: Double digit-growth in the herpes and respiratory antiviral market has been driven by price increases

Figure 5: Herpes and respiratory antiviral sales by geographic region, seven major markets, 2000-04

Figure 6: Compound annual sales growth rates (CAGR) by geographical region, seven major markets, 2000-04

Figure 7: Herpes and respiratory antiviral sales and market share by indication, seven major markets, 2000-

Figure 8: Leading brands and market share by viral infection, seven major markets, 2004

Figure 9: In the herpes and respiratory antiviral market, brands dominate by sales, while generics lead in terms of volume use

Figure 10: Market share of the top three herpes and respiratory antiviral players, key brands and total sales, seven major markets, 2004

Figure 11: In 2004, the six leading herpes and respiratory antiviral products accounted for 86% of the seven major markets

Figure 12: Growth up to 2014 will be fuelled mainly by CMV and respiratory antivirals

Figure 13: In 2004, generic sales market share across the seven major markets was low

Figure 14: Common herpesvirus infections and disease manifestations in immunocompromised patient sub-groups

Figure 15: Valtrex sales between 2000 and 2004 in the seven major markets have been growing at a CAGR of 33.1%

Figure 16: Total number of AIDS cases, seven major markets, 1993-2003

Figure 17: Generic acyclovir has captured significant market share across the seven major markets (2004 sales)

Figure 18: Leading herpes and respiratory antiviral brands by value, US, 2000 and 2004

Figure 19: Brand versus generic sales, US, 2000-

Figure 20: Online DTC advertising for Valtrex (valacyclovir)

Figure 21: Online DTC advertising for Tamiflu (oseltamivir)

Figure 22: Herpes and respiratory antiviral sales by indication, Pacific Rim, 2000-04

Figure 23: Leading herpes and respiratory antiviral brands by value, Pacific Rim, 2000 and 2004

Figure 24: Valtrex (valacyclovir) sales and volume use, Pacific Rim, 2000-04

Figure 25: Brand versus generic sales, Pacific Rim, 2000-04

Figure 26: Generic ganciclovir versus Denosine/Cymevene volume use, Pacific Rim, 2000-04

Figure 27: Leading herpes and respiratory antiviral brands by value, France, 2000 and 2004

Figure 28: Brand versus generic sales, France, 2000-

Figure 29: Leading herpes and respiratory antiviral brands by value, Germany, 2000 and 2004

Figure 30: Brand versus generic sales, Germany, 2000-

Figure 31: Generic versus branded acyclovir sales in Germany, 2000-04

Figure 32: Herpes and respiratory antiviral sales and volume use, Italy, 2000-04

Figure 33: Leading herpes and respiratory antiviral brands by value, Italy, 2000 and 2004

Figure 34: Brand versus generic sales, Italy, 2000-

Figure 35: Zovirax versus generic acyclovir sales in Italy, 2000-

Figure 36: Leading herpes and respiratory antiviral brands by value, Spain, 2000 and 2004

Figure 37: Brand versus generic sales, Spain, 2000-

Figure 38: Sales and volume use of anti-herpes agents (HSV and VZV only) in Spain, 2000-04

Figure 39: Branded versus generic acyclovir sales in Spain, 2000-04

Figure 40: Leading herpes and respiratory antiviral brands by value, UK, 2000 and 2004

Figure 41: Branded versus generic sales in the UK, 2000-04

Figure 42: Branded versus generic acyclovir sales in the UK, 2004

Figure 43: Summary of environmental issues affecting the herpes and respiratory antiviral market

Figure 44: Forecasted effect of patent expiry on Valtrex sales in the US

Figure 45: Forecasted effect of patent expiry on Famvir sales in the US

Figure 46: The key unmet need in shingles is chronic pain (PHN)

Figure 47: Estimation of the RSV antiviral market potential in the US

Figure 48: Herpes and respiratory antiviral sales market share of the top three players, 2000 and 2004

Figure 49: GSK's ID portfolio consists mainly of antivirals

Figure 50: GSK's herpes and respiratory antiviral portfolio

Figure 51: GSK SWOT analysis

Figure 52: Outlook for GSK's herpes and respiratory antiviral portfolio

Figure 53: Roche's ID portfolio is split equally between antibacterials and antivirals

Figure 54: Roche's herpes and respiratory antiviral portfolio

Figure 55: Cytovene and Valcyte US sales, 2000-04

Figure 56: Comparison of Tamiflu and Relenza sales, seven major markets, 2000-

Figure 57: A clinical comparison of Tamiflu versus Relenza

Figure 58: Roche SWOT analysis

Figure 59: Outlook for Roche's herpes and respiratory antiviral portfolio

Figure 60: Novartis's ID portfolio is dominated by antifungals

Figure 61: Famvir's market share in the HSV/VZV antiviral market has remained below 20%, seven major markets, 2000-04

Figure 62: Total promotional expenditure for Famvir has been significantly lower than for Valtrex, US drugstores, 2000-04

Figure 63: In 2004, 83.1% of Famvir prescriptions in seven major markets* were due to infections caused by herpes zoster

Figure 64: Novartis SWOT analysis

Figure 65: Outlook for Novartis's herpes and respiratory antiviral portfolio

Figure 66: Volume use of Valtrex, Zovirax and generic acyclovir, seven major markets, 2000-04

Figure 67: Valtrex, Zovirax and generic acyclovir sales, seven major markets, 2000-04

Figure 68: Valtrex, Zovirax and generic acyclovir sales, US, 2000-04

Figure 69: Valtrex: key success factors

Figure 70: Valcyte, Cytovene and generic ganciclovir sales, seven major markets, 2000-04

Figure 71: Valcyte, Cytovene and generic ganciclovir volume use, seven major markets, 2000-

Figure 72: CMV products sales market share, seven major markets, 2000-04

Figure 73: Total quarterly promotional expenditure for Cytovene and Valcyte in US drugstores, 2000-04

Figure 74: Comparative analysis of marketed CMV products