The Global AntiInfectives Market Outlook

THE GLOBAL ANTI-INFECTIVES
MARKET OUTLOOK TO 2011

By Fox Analytics
Fox Analytics
Fox Analytics brings together experienced private consultants working in the field of
market research, analysis, modeling and forecasting in order to deliver custom
solutions, insights and analysis in pharmceuticals and healthcare markets.
Copyright © 2006 Business Insights Ltd

This Management Report is published by Business Insights Ltd. All rights reserved.
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Table of Contents
Anti-infectives Market Outlook to 2011
Executive Summary 14
Patient potential 14
Global market analysis 15
Pipeline analysis 16
Competitive landscape 17
Chapter 1 Epidemiology of Anti-infectives

market 20
Summary 20
Introduction 21
Bacterial infections 22
Overview 22
Respiratory tract infections 22
Urinary tract infections 23
Skin and skin structure infections 23
Diagnosis, treatment and management 25
Epidemiology 27
Forecast epidemiology 30
Viral infections 36
Hepatitis 36
Overview 36
Epidemiology 39
iii
Influenza 43
Overview 43
Epidemiology 46
Herpes 47
Overview 47
Epidemiology 51
Vaccines 55
Tetanus, diphtheria, pertussis 55
Overview 55
Epidemiology 57
Mumps, measles and rubella 58
Overview 58
Epidemiology 60
Polio 61
Overview 61
Epidemiology 63
Fungal infections 63
Overview 63
Epidemiology 65
Chapter 2 Global market analysis 70

Summary 70
Introduction 71
Market analysis by country 72
Licensing trends 73
Market analysis by drug class 74
Leading brands dynamics 77
Key events in the anti-infectives market 81
Safety warning issued for Sanofi-Aventis’ Ketek (telithromycin) 81
Serious adverse effects reported with the use of penicillins 81
Launch of new innovative class of drugs 81
Wyeth’s Prevnar gains from being the first vaccine to reach blockbuster status
in 2005 82
Increased competition within the hepatitis B market 82
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Arrival of generic competition to market leading products in the anti-
infectives’ market 83
Anti-virals 84
Leading brands of anti-viral treatments 85
Key brands analysis 87
Anti-Virals sales forecasts to 2011 95
Vaccines 96
Vaccines sales forecasts to 2011 106
Anti-bacterials 107
Leading brands of anti-bacterial treatments 109
Macrolides 112
Beta-lactams 119
Other anti-biotics 125
Key brand analysis 126
Penicillins 134
Market dynamics 134
Cephalosporins market analysis 143
Market dynamics 143
Tetracyclines market analysis 149
Market dynamics 149
Fluroquinolones 152
Market dynamics 152
Anti-bacterials sales forecasts to 2011 160
Anti-fungals 163
Leading brands of the anti-fungal market 164
Market dynamics 164
Anti-fungals sales forecasts to 2011 176
Total anti-infective market sales forecasts to 2011 177
Chapter 3 Pipeline analysis 180

Summary 180
Introduction 181
Key trends in R&D 181
The therapeutic area pipeline 183
v
Leading drugs in development 185
Profiles of key pipeline products 186
Phase III compounds 186
Albuferon (albinterferon alpha 2b) 186
Maribavir 188
Ceftobiprole 189
Drugs in registration 191
Arbelic (telavancin) 191
Zeven (dalbavancin) 193
Mycograb (efungumab) 195
Recently marketed drugs 197
Tygacil (tigecycline) 197
Doripenem 200
Baraclude (entecavir) 201
Tyzeka/Sebivo (telbivudine) 203
Noxafil (posaconazole) 205
Eraxis (anidulafungin) 207
Pipeline forecasts 209
Factors affecting forecasts 209
Anti-infectives pipeline forecasts 209
Chapter 4 Competitive landscape 212

Summary 212
Introduction 213
Company market shares 213
GlaxoSmithKline 218
Overview 218
Sales focus by drug class 218
Marketed product portfolio 219
R&D pipeline analysis 221
Strategic and growth analysis 222
Drivers of growth 222
Resistors of growth 222
Pfizer 223
Overview 223
Novartis 228
Overview 228
vi
Sanofi-Aventis 233
Overview 233
Merck 238
Overview 238
Johnson & Johnson 242
Overview 242
Roche 246
Overview 246
Wyeth 249
Overview 249
Abbott 253
Overview 253
vii
Schering-Plough 258
Overview 258
Chapter 5 Appendix 264

IMS data 264
J1 Systemic antibiotics 264
J2 systemic agents for fungal infections 264
J3 systemic sulphonamides 264
J5 Antivirals for systemic use 264
J7 Vaccines 264
Index 265
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List of Figures
Figure 2.1: Global anti-infectives market share by geography, 2005 72
Figure 2.2: Sales of types of anti-infectives brands, 2004-5 73
Figure 2.3: Competitive dynamics of the drug classes in the global anti-infectives market, 2004-5
76
Figure 2.4: Competitive dynamics of the drug classes in the global anti-infectives market, 2004-5
80
Figure 2.5: Competitive dynamics of the leading anti-viral treatments in the global anti-infectives
market, 2004-5 86
Figure 2.6: Competitive dynamics of the leading vaccines in the global anti-infectives market,
2004-5 97
Figure 2.7: Competitive dynamics of the global anti-bacterial market by drug class, 2005 108
Figure 2.8: Competitive dynamics of the ten leading brands in the anti-bacterial drug class, 2005
111
Figure 2.9: Competitive dynamics of the ten leading brands in the anti-fungal drug class, 2005 166
Figure 3.10: Prevailing R&D approaches, 2006 181
Figure 3.11: The anti-infectives pipeline by indication and stage of development, 2006 183
Figure 3.12: Leading recently launched products and late-stage R&D in the anti-infectives market,
2005 185
Figure 4.13: Competitive dynamics of the leading players in the global anti-infectives market, 2005
217
Figure 4.14: GSK’s anti-infectives sales, 2005 218
Figure 4.15: Pfizer’s anti-infectives sales, 2005 224
Figure 4.16: Novartis’ anti-infectives sales, 2005 229
Figure 4.17: Sanofi-Aventis’ anti-infectives sales, 2005 234
Figure 4.18: Merck’s anti-infectives sales, 2005 238
Figure 4.19: Johnson & Johnson anti-infectives sales, 2005 242
Figure 4.20: Roche’s anti-infectives sales, 2005 246
Figure 4.21: Wyeth’s anti-infectives sales, 2005 250
Figure 4.22: Abbott’s anti-infectives sales, 2005 254
Figure 4.23: Schering-Plough’s anti-infectives sales, 2005 258
List of Tables
Table 1.1: Estimated prevalence of infective diseases across seven major pharmaceutical markets,
2005 21
Table 1.2: Estimated incidence of community acquired pneumonia infections across seven major
markets, 2005 27
Table 1.3: Estimated incidence of uRTIs caused by streptococcus infection across seven major
markets, 2005 28
Table 1.4: Estimated incidence of community acquired urinary tract infections across seven major
markets, 2005 29
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Table 1.5: Estimated incidence of bacterial skin and skin structure infections across seven major
markets, 2005 30
Table 1.6: Forecast epidemiology of CAP across the seven major markets, 2005-11 31
Table 1.7: Forecast epidemiology of uRTIs caused by streptococcus infection across the seven
major markets, 2005-11 32
Table 1.8: Forecast epidemiology of urinary tract infections across the seven major markets,
2005-11 33
Table 1.9: Forecast epidemiology of skin and skin structure infections across the seven major
markets, 2005-11 35
Table 1.10: Estimated prevalence of HBV and HCV across the seven major markets, 2005 39
Table 1.11: Forecast epidemiology of HBV and HCV across the seven major markets, 2005-11 41
Table 1.12: Estimated prevalence of influenza across the seven major markets, 2005 46
Table 1.13: Estimated seroprevalence of HSV-1 and HSV-2 across the seven major markets, 2005
51
Table 1.14: Forecast seroprevalence of HSV-1 and HSV-2 across the seven major markets, 2005-
11 53
Table 1.15: Estimated vaccine coverage and incidence of DPT across the seven major markets,
2005 57
Table 1.16: Estimated vaccine coverage and incidence of MMR across the seven major markets,
2005 60
Table 1.17: Estimated vaccine coverage and incidence of polio across the seven major markets,
2005 63
Table 1.18: Estimated incidence of systemic fungal infections in across seven major markets, 2005
65
Table 1.19: Forecast epidemiology of systemic fungal infections across the seven major markets,
2005-11 66
Table 2.20: Breakdown of the global Anti-infective market by drug class, 2001-05 74
Table 2.21: Leading brands in the global Anti-infectives market, 2004–05 77
Table 2.22: Breakdown of the global anti-viral market by drug class, 2001-05 84
Table 2.23: Leading anti-virals in the global anti-infectives market, 85
Table 2.24: Anti-virals sales forecast, 2005-11 95
Table 2.25: Leading vaccines in the global anti-infectives market, 96
Table 2.26: Vaccines sales forecast, 2005-11 106
Table 2.27: Breakdown of the global anti-bacterial market by drug class, 2001-05 107
Table 2.28: Leading Anti-bacterials in the global anti-infectives market, 109
Table 2.29: Leading macrolides in the global anti-infectives market, 112
Table 2.30: Overview of Pfizer’s Zithromax franchise 113
Table 2.31: Leading ‘other’ beta-lactams in the global anti-infectives market, 119
Table 2.32: Leading ‘other’ anti-biotics in the global anti-infectives market, 125
Table 2.33: Leading penicillins in the global anti-infectives market, 134
Table 2.34: Leading cephalosporin brands in the global anti-bacterials market, 2004–05 143
Table 2.35: Leading tetracycline brands in the global anti-bacterials market, 2004–05 149
Table 2.36: Leading fluoroquinolones brands in the global anti-infectives market, 2004–5 152
Table 2.37: Anti-bacterials’ sales forecast, 2005-11 160
Table 2.40: The global anti-fungal market by drug class, 2001-05 163
Table 2.41: Leading anti-fungals brands in the global anti-infectives market, 2004–5 164
Table 2.42: Anti-fungal sales forecast, 2005-11 176
Table 2.43: Therapeutic sales forecasts by drug class, 2005-11 177
Table 3.44: Anti-infectives pipeline forecasts, 2006-11 209
Table 4.45: Leading players in the global anti-infectives market, 2004-5 213
Table 4.46: GSK’s anti-infectives product portfolio, 2004-5 219
Table 4.47: GSK’s anti-infectives R&D product pipeline, 2006 221
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Table 4.48: Pfizer’s anti-infectives product portfolio, 2004-5 225
Table 4.49: Pfizer’s anti-infectives R&D product pipeline, 2006 226
Table 4.50: Novartis’ anti-infectives product portfolio, 2004-5 230
Table 4.51: Novartis’ anti-infectives R&D product pipeline, 2006 231
Table 4.52: Sanofi-Aventis’ anti-infectives product portfolio, 2004-5 235
Table 4.53: Sanofi-Aventis anti-infectives R&D product pipeline, 2006 236
Table 4.54: Merck’s anti-infectives product portfolio, 2004-5 239
Table 4.55: Merck’s anti-infectives R&D product pipeline, 2006 240
Table 4.56: Johnson & Johnson anti-infectives product portfolio, 2004-5 243
Table 4.57: Johnson & Johnson’s anti-infectives R&D product pipeline, 2006 244
Table 4.58: Roche’s anti-infectives product portfolio, 2004-5 247
Table 4.59: Roche’s anti-infectives R&D product pipeline, 2006 248
Table 4.60: Wyeth’s anti-infectives product portfolio, 2004-5 251
Table 4.61: Wyeth’s anti-infectives R&D product pipeline, 2006 252
Table 4.62: Abbott’s anti-infectives product portfolio, 2004-5 255
Table 4.63: Abbott’s anti-infectives R&D product pipeline, 2006 256
Table 4.64: Schering-Plough’s anti-infectives product portfolio, 2004-5 259
Table 4.65: Schering-Plough’s anti-infectives R&D product pipeline, 2006 260
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12
Executive Summary
13
Executive Summary
Patient potential
Bacterial infections are extremely common, with an estimated incidence of 218m or
an incidence rate of 3.0% in the seven major markets in 2005 for the three most
common forms of bacterial infection: respiratory, urinary tract and skin.
Skin infections, with an incidence rate of 4.2% resulted in an incidence of 29m

individuals affected in 2005. Although such infections are largely superficial, they
can cause complications if untreated.
Respiratory tract infections are extremely common, affecting an estimated 1.6% of

the population of the seven major markets in 2005, or 119m. Lower respiratory
infections, whilst having a lower estimated incidence at 7m are associated with high
levels of mortality, whilst upper respiratory tract infections feature high estimated
incidence at 112m, but low mortality.
Urinary tract infections are common, with an estimated incidence of 68m,

translating to an incidence rate of 9.4% in 2005. Urinary tract infections typically
affect post-pubescent females and the elderly, and represent one of the
Invasive fungal infections, although rare, feature high levels of mortality. The
incidence of invasive fungal infections in the seven major markets in 2005 was
305m resulting in an estimated incidence rate of 0.05%.
Viral infections are exceptionally widespread, with the seroprevalence of herpes

estimated at 56.0% in 2005. A range of other viral infections are also prevalent in
the populations of the seven markets, with hepatitis affecting up to 2.3% of the
population in 2005.
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Global market analysis
The global anti-infectives market expanded at a CAGR of 8.0% for the period of
2001-05 representing total sales of $48,546m in 2005. Growth in this market
remains relatively low with the strong presence of generic competition and low
number of new product introductions shaping the market’s dynamics.
Anti-bacterials occupied the leading position in the anti-infectives market in 2005

with a share of 69.9% having captured $33,919m in sales for the same year.
The major growth driver in this drug class are the macrolides and the beta-lactams
drug classes which together reported combined sales of $7,963m or some 23.5% of
total anti-bacterial sales.
Of the competing drug classes in this market, the strongest growth in 2005 was
experienced by anti-virals, reported at 23.4% representing sales of $4,480m, an
increase from year previous sales of $3,629m.
Roche’s Tamiflu experienced dramatic growth attributable to the increased

awareness of the possibility of an Avian flu pandemic in 2005. Tamiflu garnered
sales of $638m in 2005, an increase of $425m from year previous sales of $213m.
Anti-fungals was the only drug class to record negative growth in 2004-5 reported
at -4.4% having witnessed a decline of $207m from 2004 sales of $4,646m to
$4,439m in 2005. This decrease in growth rates has been attributed to the low
levels of product proliferation and innovation in this drug class.
Vaccines recorded a strong growth rate of 9.4% in 2004-05 representing sales of

$5,708m in the same year. Pure vaccines dominated the vaccines market accounting
for some 32.9% of total sales in 2005.
The anti-infectives market is forecast to expand at a CAGR of 4.8% over the

forecast period, with sales estimated at $60,664m in 2011. Anti-virals are forecast
to outperform the market CAGR by some 1.8% expanding at a rate of 6.9% over
2005-11.
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Pipeline analysis
As commercial opportunity in anti-fungals and anti-bacterials has become
progressively more limited due to heightened competition, increasing
genericization and comparatively short treatment regimens, the anti-virals market
currently represents a plethora of commercial opportunity driven by large
populations, long-term treatment regimens and significant unmet need.
Current R&D endeavors within the vaccine market primarily focus on reformulated
seasonal influenza and H5N1 avian influenza vaccines, as well as innovative
vaccines for “neglected” diseases such as Japanese encephalitis and leishmaniasis.
Due to the anticipated launch of several promising compounds across the 3 major
anti-infectives classes, sales growth attributable to the performance of these
pipeline products is forecast to contribute strongly to the overall anti-infectives
market, with estimated CAGR of 96.8% over the 2006-11 period.
BMS’ Baraclude, indicated for the treatment of hepatitis B is forecast to emerge as

a serious competitive threat to Gilead’s Hepsera, offering patients a greater
reduction in viral load levels as well as a promising resistance profile. However, the
recent launch of Novartis/Idenix’s hepatitis B treatment, Tyzeka (telbivudine), is
likely to impede on Baraclude’s market penetration over the forecast period.
Wyeth’s Tygacil (tigecycline) is the first market entrant in a new class of anti-
biotics, the glycylcyclines, and is indicated as a single-agent, IV therapy for the
treatment of complicated intra-abdominal infections and skin and skin structure
infections. Tygacil has also demonstrated potent activity against MRSA, MSSA
and VRE, and is forecast to accrue an estimated $815m in 2011.
16
Competitive landscape
The ten leading companies in the anti-infectives market contributed towards some
56.0% or $27,177m towards the total market valued at $48,546m in 2005.
The top three leading companies apart, the competitive dynamics between the
leading companies in this market remain highly fragmented with differences in
market share reported at between 0.1% and 0.2%.
GSK, the top grossing company registered a poor growth rate of 4.7% in 2005
having garnered sales of $5,393m for the same year. GSK also recorded the a very
poor CAGR among all ten companies reported at -0.2% for 2001-05.
The loss of patent protection on key anti-bacterial Zithromax’s franchise resulted in

infinitesimal growth reported at 1.5% for Pfizer’s anti-infective portfolio in
2005.Pfizer has since realigned its strategy choosing to invest in the development
of a strong anti-virals with products forecast to launch post 2011.
Of these leading companies, the highest CAGR for 2001-05 was recorded by
Novartis reported at 19.3%, with a sales growth rate of 10.6% registered for 2004-5
thus outperforming the market growth rate by some 2.6%.
Sanofi-Aventis witnessed a growth rate of 13.6% in 2005, some 1.4% higher than
that of its rate of expansion over the 2001-05 period reported at 12.2%. Having
captured sales of $2,390m in 2005, Sanofi-Aventis represented 4.9% of the market,
positioning it number 4
Although Wyeth occupied the number 8 position among the leading companies, it
registered the highest growth rate of 18.2% representing sales of $2,018m in 2005.
Schering-Plough recorded the worst performance amongst the leading companies

2005, with sales declining at a rapid 18.8% in 2004-5 in addition to a negative
CAGR of 13.1% recorded for the period of analysis. With sales of $964m in 2005,
17
Schering Plough recorded a mere 2.0% of the market, placing it at number ten
amongst the leading companies.
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CHAPTER 1
Epidemiology of anti-infectives
area
19
Chapter 1 Epidemiology of Anti-
infectives market
Summary
Bacterial infections are extremely common, with an estimated incidence of 218m

at a rate of 3.0% in the seven major markets in 2005 for the three most common
forms of bacterial infection: respiratory, urinary tract and skin.
Skin infections, with an incidence rate of 4.2% resulted in an incidence of 29m

individuals affected in 2005. Although such infections are largely superficial,
they can cause complications if untreated.
Respiratory tract infections are extremely common, affecting an estimated 1.6%

of the population of the seven major markets in 2005, or 119m. Lower respiratory
infections, whilst having a lower estimated incidence at 7m are associated with
high levels of mortality, whilst upper respiratory tract infections feature high
estimated incidence at 112m, but low mortality.
Urinary tract infections are common, with an estimated incidence of 68m,

translating to an incidence rate of 9.4% in 2005. Urinary tract infections typically
affect post-pubescent females and the elderly, and represent one of the
Invasive fungal infections, although rare, feature high levels of mortality. The
incidence of invasive fungal infections in the seven major markets in 2005 was
305m resulting in an estimated incidence rate of 0.05%.
Viral infections are exceptionally widespread, with the seroprevalence of herpes

estimated at 56.0% in 2005. A range of other viral infections are also prevalent in
the populations of the seven markets, with hepatitis affecting up to 2.3% of the
population in 2005.
20
Introduction
This chapter provides a background to the anti-infectives therapeutic area in terms of

the major indications covered in the report, an overview of each of the indications,
diagnosis, management and treatment, incidence and prevalence data, and forecast
epidemiology data to 2011. The major indications covered in this report include viral
infections (excluding HIV/AIDS), as well as bacterial and fungal infections.
Table 1.1 provides estimates of the incidence and/or prevalence of various diseases
profiled in this chapter of the report.
Table 1.1: Estimated prevalence of infective diseases across seven major

pharmaceutical markets, 2005
Country Viral Bacterial Fungal

seroprev. (000s) inc. (000s) inc. (000s)
France >40,640 19,341 24

Germany >62,648 26,892 42
Italy >46,482 18,399 28
Spain >26,222 13,196 19
UK >18,132 19,081 31
EU5 >194,124 96,909 143
US >170,047 84,344 118

Japan >42,048 36,983 45
Total >406,219 218,236 306
Source: Author’s research, various epidemiological studies Business Insights Ltd
Although there remain many weaknesses in epidemiological surveys investigating the

prevalence of various infective diseases, there is consensus that viral infections are the
most common disorder, followed by bacterial infections, of systems such as the lungs,
the skin, and urinary tract.
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Bacterial infections
Overview
Bacterial infections are caused by a range of bacteria species and infections may afflict
tissues and organs throughout the human body. The most common sites of infection are
those that are exposed directly to bacteria, such as the lungs, the skin, and the urinary
tract, the epidemiologies of which are analyzed in this section. Outside of these
common sites of infection, CNS infections, intra-abdominal infections, cardiac and
bone infections also occur, but collectively, these are estimated to affect a small
number of patients each year, typically those patients which have had invasive surgery
or have contracted the disease in the hospital setting.
Respiratory tract infections
Respiratory tract infections can occur in the lower or upper respiratory tract. In lower
respiratory tract infections, which comprise of infections located below the vocal cords,
the most common sites of infection are the bronchi and the lobes of the lungs. Viruses
represent the most common pathogens causing infections in the lungs, but bacteria
species such as the common Streptococcus pneumoniae and Mycobacterium
tuberculosis can cause tuberculosis (TB) and pneumonia, both of which are associated
with high rates of mortality.
Bacterial lower respiratory tract infections are common, particularly in children, the
elderly and immunocompromized patients. In developed pharmaceutical markets,
pneumonia is a more common condition than TB, with substantial differences in
species occurring in community acquired pneumonia (CAP) and nosocomial infections.
Upper respiratory tract bacterial infections (URIs) are less common, with the vast
majority of URIs being caused by viruses. The most common sites of bacterial
infection are the pharynx, which is typically colonized by streptococcus spp., the
middle ear and the sinuses, with S. pneumoniae among the most common colonizing
species of bacteria.
22
Urinary tract infections
The urinary tract is a common site for bacterial infections, particularly in patients
which are using a catheter, in women, particularly those that are sexually active,
diabetics, the elderly, patients with a malformed urinary tract and patients which are
using a catheter. Most commonly urinary tract infections (UTIs) are caused by
Escherichia coli spp., and to a lesser extent Staphylococcus spp., but may be caused by
sexually transmitted organisms such as Chlamydia and Mycoplasma spp.
The symptoms of a UTI can include a higher frequency of urination, urges to urinate,
burning sensations whilst passing urine, urinary incontinence, foul smelling urine and
the presence of blood in the urine. UTIs exhibit a high frequency of reoccurrence, but
are typically confined to the bladder and urethra. However, infection may spread to the
kidneys, requiring hospitalization, and potentially posing greater risks for the spread of
infection.
Skin and skin structure infections
Skin and skin structure infections (SSSIs) are caused by many bacteria species, and can
occur spontaneously, or on account of a wound, ulcer or burn. The most common
uncomplicated SSSIs present limited problems for diagnosis and treatment, but
following a lack of treatment, bacteria may entry to underlying tissues, circulatory or
lymphatic systems, causing complicated infections such as bacteremia, which are
associated with high rates of mortality. Bacterial infections are associated with a
variety of symptoms and treatment outcomes, which vary according to the bacterial
species and the area of the body which is infected. Some of the most common forms
and symptoms of bacterial infections of the skin are:
Cellulitis and erysipelas
Cellulitis is one of the most common forms of bacterial infection, and is mostly
commonly caused by streptococci bacteria, although other species of bacteria have also
been associated with the condition. Cellulitis typically occurs within an open wound or
a subcutaneous abscess, but infections are relatively common in patients that have
23
received a bite from an animal or have used a contaminated jacuzzi or spa. Cellulitis
typically occurs in the lower extremities, and is associated with increased redness,
changes in the textural nature of the skin, irritation, and inflammation. Occasionally,
cellulites can lead to the formation of erysipelas, inflamed raised lesions of the skin,
which can be suggestive of infection of the lymphatic system.
Folliculitis
Folliculitis, the infection of hair follicles by S. aureus and P. aeuroginosa, is associated

with mild swelling and inflammation of the hair follicle, often resulting in the
development of a pustule. A common cause of infection is via use of a contaminated
jacuzzi or spa. The condition is seldom complicated and resolves quickly.
Impetigo and Ecthyma
Impetigo is a skin infection caused by streptococci or staphylococci colonizing broken

skin, typically following injury. Risk factors are humid and warm climates and poor
hygiene. Impetigo typically appears as a cluster of vesicles that may rupture and secrete
fluid produced by bacterial metabolism, which in turn commonly forms a crust.
Ecthyma is a form of impetigo which is characterized by ulceration.
Abcesses
Cutaneous abcesses are typically caused by bacterial that naturally occur on the surface
of the skin such as staphylococcus aureus and result in a localized build-up of pus in
the infected area, accompanied by pain an inflammation. Cutaneous abcesses are
common I the perineal area, and in these cases infections typically feature organisms
that are found in the feces of the patient.
Subcutaneous abcesses represent serious infections that can cause tissues necrosis.
Such infections typically occur in the perineal area and the extremities of the body.
Subcutaneous abcesses are often caused by the migration of bacteria from a prior
cutaneous infection, with symptoms resembling that associated with cellulitis. If left
untreated, the infection can lead to gangrene and bacteremia.
24
Carbuncles and furuncles
Furuncles appear as raised boil-like lesions that may contain pus and necrotizing tissue.
They are typically caused by infection with staphylococcus bacteria. Carbuncles are
clusters of connected furuncles caused by subcutaneous infection. Both carbuncles and
furuncles typically appear on the neck, face, buttocks or breasts Risk factors are poor
hygiene, humidity, diabetes, immunocompromization, and some forms of acne.
Lymphadenitis and lymphangitis
Lymphadentis, the infection of lymph nodes by bacteria, typically streptococci,

commonly occurs as a secondary infection associated with disease such as tuberculosis,
cytomegalovirus infection, herpes infection, syphilis and mononucleosis amongst other
diseases. Lymphadenitis can be caused by fungal or viral infection, although bacterial
infections are common causes. Lymphangitis, the infection of peripheral lymphatic
channels, has a similar etiology to lymphadenitis, with a primary infection being the
most common cause. If left untreated, prognosis can be poor, with a likelihood of
bacteremia, and leukocytosis.
Diagnosis, treatment and management
Diagnosis of lower respiratory tract infections is achieved by means of a sputum

sample or swab and corresponding culture, diagnosis can be rapid and is an aid in the
selection of antibiotic therapy. X-ray and other imaging techniques can be useful tools
to provide assessment of the extent of the infection. The treatment of lower respiratory
tract infections is linked to the species of bacteria which is identified by culture,
although broad spectrum antibiotics, taking into account patient’s allergies and history
of treatment are typically prescribed.
For upper respiratory tract infections, the causes are typically viral in nature, with an
estimated 95-98% of upper respiratory tract infections being caused by viruses rather
than bacteria. However pharyngitis is the exception, with streptococcus spp. being
implicated in an estimated 15-20% of all infections. In cases of pharyngitis, a bacterial
25
culture may be taken in order to determine the pathogen causing the infection, and
antibiotic treatment chosen accordingly. The most common antibiotic therapies that are
prescribed for the treatment of all respiratory tract infections are penicillins,
fluoroquinolones and macrolides.
Urinary tract infections are typically diagnosed through interview and examination of
symptoms associated with the presenting patient. A urine sample may be taken,
analysis of which may provide identification of the bacterial species responsible for the
infection. Recurrent infections, or any infections in men, may require pyelography or
ultrasonography in order to determine whether any abnormalities or lesions exist,
which may be provoking an infection. In men, examination of the prostate may be
necessary in order to assess whether this organ is promoting infection, particularly in
older me.
Treatment of urinary tract infections varies according to the bacterial species that has
been identified. Fluoroquinolones and penicillin products are the most popular
treatments, although cephalosporins may play an important part in treatment,
particularly in the hospital setting.
Diagnosis may be undertaken by visual examination, but in rare bacteria spp., a

bacterial culture coupled with examination of patient history, including potential for
exposure and travel may provide insight into the primary organism responsible for the
infection.
Treatment is with topical antibiotics if possible, although oral antibiotic therapy is

typically recommended in moderate to severe infection, particularly those that are
associated with a higher risk of spread or invasion into neighboring tissues. Imaging
techniques may be employed to gauge the extent of the bacterial infection, and assess
risk, thus further informing treatment choice. Complicated skin and skin structure
26
infections are characterized by a high level of unmet need in treatment, with
clindamycin, erythromycin, and doxycycline being used in the first-line and
fluoroquinolones and cephalosporins featuring prominently in second-line treatment of
these conditions.
Epidemiology
Table 1.2 summarizes the estimated incidence of lower respiratory bacterial infections,
using the most common indication, community acquired pneumonia as a market.
Table 1.2: Estimated incidence of community acquired pneumonia infections

across seven major markets, 2005
Country Incidence (000s) Incidence (%) Share in 2005 (%)
France 567 0.94% 8.0%

Germany 1,022 1.24% 14.5%
Italy 543 0.94% 7.7%
Spain 355 0.88% 5.0%
UK 465 0.77% 6.6%
EU5 2,953 0.98% 41.9%
US 3,253 1.10% 46.2%

Japan 841 0.66% 11.9%
Total 7,047 0.97% 100.0%
Source: Arch. Intern. Med., 1997; ERS 2002; Hak et al., 2005; UK HPA, 2007; CDC 2007; WHO 2007;
Eurosurveillance 2007; Viegi et al., 2006; various other sources Business Insights Ltd
There is limited comparable data across bacterial species causing respiratory tract
infections, although data points to wide variation across countries, even in the context
of Western Europe. The incidence of some forms of pneumonia, is variable among the
population at large over longitudinal studies according to disease surveillance
measures, but higher risk populations are considered to be the elderly, children,
immunocompromized, and individuals in the institutional setting.
27
For infections of the upper respiratory tract, an estimated 95-100% of individuals
acquire at least one upper respiratory tract infection each year, although the vast
majority of these infections are viral in nature. The estimated incidence of upper
respiratory bacterial infections, using the most common pathogen, streptococcus, is
summarized in the table below.
Table 1.3: Estimated incidence of uRTIs caused by streptococcus infection

France 9,455 15.6% 8.4%

Germany 12,386 15.0% 11.0%
Italy 8,623 14.8% 7.7%
Spain 6,030 14.9% 5.4%
UK 9,390 15.5% 8.4%
EU5 45,884 15.2% 40.9%
US 47,215 16.0% 42.1%

Japan 19,020 14.9% 17.0%
Total 112,118 15.6% 100.0%
Source: Principi et al., 1990; UK HPA, 2007; CDC 2007; WHO 2007; Hak et al., 2005; Eurosurveillance
2007; various other sources Business Insights Ltd
Due to a lack of comprehensive studies, and the low rates reporting, diagnosis and
treatment which are associated with pharyngitis, it is difficult to estimate the incidence
of the disease. Therefore estimates are based on US studies, adjusted for demographics
in order to reflect the increased incidence of pharyngitis among children as opposed to
adults. Age and annual climatic conditions represent the most significant risk factors
for an increased annual incidence of pharyngitis, of which only a small proportion
(approximately 15-20%), are caused by streptococcus species.
Estimates of the incidence of urinary tract infections across the seven major markets
are summarized in Table 1.4 below.
28
Table 1.4: Estimated incidence of community acquired urinary tract
infections across seven major markets, 2005
France 6,771 11.2% 9.9%

Germany 10,022 12.2% 14.7%
Italy 6,793 11.7% 9.9%
Spain 4,817 11.9% 7.1%
UK 6,687 11.1% 9.8%
EU5 35,090 11.6% 51.4%
US 21,455 7.3% 31.4%

Japan 11,770 9.2% 17.2%
Total 68,315 9.4% 100.0%
Source: Stamm et al., 2001; Kunin et al., 1997; Bouza et al., 2001; UK HPA, 2007; CDC 2007; WHO 2007;
Eurosurveillance 2001; Foxman et al., 2002; various other sources Business Insights Ltd
The prevalence of urinary tract infections is estimated to be similar among the seven
major markets, although due to a greater incidence of the condition in the elderly, the
institutionalized, patients using a catheter, and women, incidence rates vary from
country to country. In community acquired urinary tract infections, age and gender are
the most important determinants of the incidence of the condition, which favors
countries with the highest number of elderly, such as Germany Spain and Italy.
29
Estimates of the incidence of skin and skin structure infections across the seven major
markets are summarized in Table 1.5 below.
Table 1.5: Estimated incidence of bacterial skin and skin structure infections
France 2,548 4.2% 8.4

Germany 3,462 4.2% 11.4
Italy 2,440 4.2% 8.0
Spain 1,994 4.2% 5.6
UK 2,539 4.2% 8.3
EU 5 12,683 4.2% 41.6
US 12,421 4.2% 40.8

Japan 5,352 4.2% 17.6
Total 29,005 4.2% 100.0
Figures not inclusive of acne
Source: UK HPA, 2007; CDC 2007; WHO 2007; Eurosurveillance 2007 Business Insights Ltd
There is limited epidemiological data available on skin and skin structure infections
due to the wide range of conditions, and difficulties in detection and surveillance
except in the hospital setting and in patients which have been afflicted by rare
conditions such as necrotizing infections. However, the incidence of skin and skin
structure infections is more believed to be more common in children, the elderly and
institutionalized patients, particularly those that feature limited levels of mobility,
although there are no studies available to assess the incidence of the sub-indications
within this category by country and by demographic.
Forecast epidemiology
This section provides forecasts on the incidence of the three major bacterial infections
that are analyzed in this report.
30
Table 1.6 summarizes the forecast incidence of CAP over the period 2005-11.
Table 1.6: Forecast epidemiology of CAP across the seven major markets,
2005-11
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
France
Incidence (000s) 567 570 572 574 577 579 582
Incidence rate (%) 0.94% 0.94% 0.94% 0.94% 0.94% 0.94% 0.94%
Germany
Incidence (000s) 1,022 1,023 1,025 1,026 1,027 1,028 1,030
Incidence rate (%) 1.24% 1.24% 1.24% 1.24% 1.25% 1.25% 1.25%
Italy
Incidence (000s) 543 544 546 547 548 549 550
Incidence rate (%) 0.94% 0.94% 0.94% 0.94% 0.94% 0.94% 0.94%
Spain
Incidence (000s) 355 356 357 358 359 360 361
Incidence rate (%) 0.88% 0.88% 0.88% 0.88% 0.89% 0.89% 0.89%
UK
Incidence (000s) 465 467 469 471 473 474 476
Incidence rate (%) 0.77% 0.77% 0.77% 0.77% 0.77% 0.77% 0.77%
EU
Incidence (000s) 2,953 2,961 2,968 2,976 2,984 2,992 2,999
Incidence rate (%) 0.98% 0.98% 0.98% 0.98% 0.98% 0.98% 0.98%
US
Incidence (000s) 3,253 3,287 3,321 3,355 3,389 3,424 3,459
Incidence rate (%) 1.10% 1.10% 1.10% 1.10% 1.10% 1.11% 1.11%
Japan
Incidence (000s) 841 842 844 845 847 848 850
Incidence rate (%) 0.66% 0.66% 0.66% 0.66% 0.66% 0.66% 0.66%
Total
Incidence (000s) 7,047 7,090 7,133 7,176 7,220 7,264 7,308
Incidence rate (%) 0.97% 0.97% 0.97% 0.98% 0.98% 0.98% 0.98%
Eurosurveillance 2007; Viegi et al., 2006; Principi et al., 1990; UK HPA, 2007; CDC 2007; WHO
2007; Hak et al., 2005; various other sources Business Insights Ltd
There is an absence of factors exerting an influence on any one national market among
the seven major pharmaceutical markets and as such, forecasts of the incidence of
31
upper and lower respiratory tract infections are forecast to remain in line with
demographic changes over the forecast period, with the largest populations present in
the US, Germany and Japan, and with Germany and Italy forecast to maintain the
highest incidence rates of the major markets. Table 1.7 summarizes the forecast
incidence of upper respiratory tract infections over the period 2005-11.
Table 1.7: Forecast epidemiology of uRTIs caused by streptococcus infection

across the seven major markets, 2005-11
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
France
Incidence (000s) 9,455 9,505 9,548 9,591 9,634 9,677 9,721
Incidence rate (%) 15.6% 15.6% 15.6% 15.6% 15.6% 15.7% 15.7%
Germany
Incidence (000s) 12,386 12,384 12,404 12,424 12,444 12,464 12,484
Incidence rate (%) 15.0% 15.0% 15.0% 15.1% 15.1% 15.1% 15.1%
Italy
Incidence (000s) 8,623 8,614 8,629 8,643 8,658 8,673 8,687
Incidence rate (%) 14.8% 14.8% 14.8% 14.8% 14.9% 14.9% 14.9%
Spain
Incidence (000s) 6,030 6,026 6,041 6,056 6,071 6,086 6,102
Incidence rate (%) 14.9% 14.9% 14.9% 14.9% 15.0% 15.0% 15.0%
UK
Incidence (000s) 9,390 9,406 9,444 9,481 9,519 9,557 9,596
Incidence rate (%) 15.5% 15.5% 15.5% 15.6% 15.6% 15.6% 15.6%
EU
Incidence (000s) 45,884 45,935 46,065 46,196 46,326 46,458 46,589
Incidence rate (%) 15.2% 15.2% 15.2% 15.2% 15.2% 15.3% 15.3%
US
Incidence (000s) 47,215 47,815 48,317 48,825 49,339 49,857 50,374
Incidence rate (%) 16.0% 16.0% 16.0% 16.1% 16.1% 16.1% 16.1%
Japan
Incidence (000s) 19,020 19,004 19,023 19,042 19,061 19,080 19,099
Incidence rate (%) 14.9% 14.9% 14.9% 14.9% 14.9% 14.9% 14.9%
Total
Incidence (000s) 112,118 112,754 113,406 114,063 114,726 115,395 116,063
Incidence rate (%) 15.5% 15.5% 15.5% 15.5% 15.5% 15.6% 15.6%
Eurosurveillance 2007; Viegi et al., 2006; Principi et al., 1990; UK HPA, 2007; CDC 2007; WHO
2007; Hak et al., 2005; various other sources Business Insights Ltd
32
The US, Japan and Germany are forecast to feature the largest patient populations for
uRTIs over the forecast period, with the highest incidence rates forecast to continue to
be in the US, France and the UK. The total incidence in 2011 of uRTIs is forecast at
$116m.

Table 1.8: Forecast epidemiology of urinary tract infections across the seven
major markets, 2005-11
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
France
Incidence (000s) 6,771 6,810 6,849 6,888 6,927 6,967 7,006
Incidence rate (%) 11.2% 11.2% 11.2% 11.2% 11.3% 11.3% 11.3%
Germany
Incidence (000s) 10,022 10,053 10,084 10,116 10,147 10,178 10,210
Incidence rate (%) 12.2% 12.2% 12.2% 12.3% 12.3% 12.3% 12.4%
Italy
Incidence (000s) 6,793 6,819 6,844 6,869 6,895 6,920 6,946
Incidence rate (%) 11.7% 11.7% 11.8% 11.8% 11.8% 11.9% 11.9%
Spain
Incidence (000s) 4,817 4,838 4,860 4,882 4,904 4,926 4,948
Incidence rate (%) 11.9% 12.0% 12.0% 12.0% 12.1% 12.1% 12.2%
UK
Incidence (000s) 6,687 6,719 6,751 6,784 6,816 6,849 6,882
Incidence rate (%) 11.1% 11.1% 11.1% 11.1% 11.2% 11.2% 11.2%
EU
Incidence (000s) 35,090 35,239 35,388 35,538 35,689 35,840 35,992
Incidence rate (%) 11.6% 11.7% 11.7% 11.7% 11.7% 11.8% 11.8%
US
Incidence (000s) 21,455 21,674 21,895 22,119 22,344 22,572 22,800
Incidence rate (%) 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3%
Japan
Incidence (000s) 11,770 11,811 11,853 11,894 11,936 11,977 12,019
Incidence rate (%) 9.2% 9.3% 9.3% 9.3% 9.3% 9.4% 9.4%
Total
Incidence (000s) 68,315 68,724 69,136 69,551 69,969 70,390 70,811
Incidence rate (%) 9.4% 9.4% 9.4% 9.5% 9.5% 9.5% 9.5%
Source: Stamm et al., 2001; Kunin et al., 1997; Bouza et al., 2001; UK HPA, 2007; CDC 2007; WHO 2007;
Eurosurveillance 2001; Foxman et al., 2002; various other sources Business Insights Ltd
33
Table 1.8 summarizes the forecast incidence of urinary tract infections over the period
2005-11.
There is an absence of factors exerting an influence on any one national market among
the seven major pharmaceutical markets and as such, forecasts of the incidence of
urinary tract infections are forecast to remain in line with demographic changes over
the forecast period, with the largest populations present in the US, Germany and Japan,
and with Germany and the US forecast to maintain the highest incidence rates of the
major markets.
34
Table 1.9 summarizes the forecast incidence of skin and skin structure infections over
the period 2005-11.
Table 1.9: Forecast epidemiology of skin and skin structure infections across
the seven major markets, 2005-11
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
France
Incidence (000s) 2,548 2,560 2,572 2,584 2,596 2,608 2,620
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
Germany
Incidence (000s) 3,462 3,467 3,471 3,476 3,480 3,485 3,489
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
Italy
Incidence (000s) 2,440 2,446 2,453 2,459 2,465 2,471 2,477
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
Spain
Incidence (000s) 1,694 1,699 1,705 1,710 1,715 1,720 1,725
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
UK
Incidence (000s) 2,539 2,548 2,558 2,568 2,578 2,588 2,599
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
EU
Incidence (000s) 12,683 12,720 12,758 12,796 12,834 12,872 12,910
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
US
Incidence (000s) 12,421 12,548 12,676 12,805 12,936 13,068 13,200
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
Japan
Incidence (000s) 5,352 5,364 5,376 5,389 5,401 5,413 5,426
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
Total
Incidence (000s) 30,455 30,632 30,810 30,990 31,171 31,353 31,536
Incidence rate (%) 4.2% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%
Source: Achilles study, various years; Badiaga et al., 2005; Magaziner et al., 1991; Sladden et al., 2003;
various other sources Business Insights Ltd
35
There is a limited range of data to suggest forecast changes in incidence rates among
the seven major markets, barring that of demographic factors, namely an ageing
population across several of the markets, and as such incidence rates are forecast to
remain relatively stable, and aligned to population size and demographics.
Viral infections
Hepatitis
Overview
Hepatitis is defined as an inflammation, or swelling, of the liver, which can be either

acute or chronic in nature resulting from a viral infection, exposure to chemicals, drug
overdose, or induced by a period of increased alcohol consumption. The majority of
hepatitis cases are due to viral infections and are summarized below:
Hepatitis A and E: Both forms of hepatitis A and E are transmitted through fecal-
oral contamination, causing an acute form of hepatitis that does not have a chronic
stage. In addition, although rare, hepatitis A may also be spread by blood-born
infection. Hepatitis E is less common than hepatitis A, occurring more frequently in
developing countries, and currently there is no vaccine for hepatitis E.
Hepatitis B: Hepatitis B (HBV) is caused by a hepadnavirus, and can either be

acute or chronic in nature. Transmission of hepatitis B can occur through blood,
exposure to bodily fluids such as blood, semen, vaginal secretions, or saliva, or in
utero. As such, hepatitis B is the most prevalent form of hepatitis, with chronic
hepatitis developing in approximately 15% of patients who are unable to eliminate
the virus after an initial infection. Globally, it is estimated that hepatitis B results
in 500,000 to 1,200,000 deaths per year worldwide due to complications arising
from chronic hepatitis, as well as cirrhosis and hepatocellular carcinoma.
Hepatitis C: This form of hepatitis is transmitted through exposure to blood and can
remain asymptomatic for a period of 10-20 years, with chronic infection occurring
in an estimated 55-85% of infected individuals and of which, 70% develop chronic
36
liver disease. Hepatitis C (HCV) represents the leading indication for liver
transplants and patients with alcoholic liver disease often also have hepatitis C.
Hepatitis D (with B): Hepatitis D occurs only in patients co-infected with hepatitis
B, and can occur during the initial hepatitis B infection or at any point after. As
such, transmission of hepatitis D mirrors that hepatitis B, but the vertical
transmission from mother to child is less frequent. In addition, hepatitis D is
believed to occur most often among people injecting drug users. The presence of
hepatitis D significantly elevates a patient’s risk of full-blown liver failure.
Hepatitis G: This strain of hepatitis is believed to be transmitted by blood and

sexual contact, and is most commonly seen in injecting drug users, hemophiliacs
and hemodialysis patients. However, as hepatitis G does not appear to be replicated
in the liver, there is clinical skepticism regarding whether this strain causes
hepatitis or is associated with hepatitis.
The most common symptoms associated with these various forms of hepatitis include
loss of appetite, fatigue, fever, joint/body aches, abdominal pain and vomiting. In more
serious cases, symptoms may include dark urine, pale-colored bowel movements, and
jaundice (yellowing of the skin or of the eyes).
Diagnosis of viral hepatitis is multi-stage procedure, based on symptoms, physical

examination as well as blood tests, referred to a liver function tests (LFTs), which
assess the general state of the liver by measuring levels of liver enzymes, albumin,
bilirubin, total proteins and prothrombin time. In addition, more specific liver tests
such as viral serologic tests or autoimmune tests are used to determine the specific
etiology of liver-related diseases. Acute viral hepatitis is often easier to diagnosis than
chronic hepatitis, particualrly hepatitis B and C, as patients are often asymptomatic or
present with mild non-specific symptoms.
37
Blood tests evaluating a patient’s liver enzyme (aminotransferase) levels are among the
most widely utilized tests for detecting hepatitis. More specifically, levels of the
enzymes aspartate aminotransferase (AST) and alanine aminotransferase (ALT), which
are contained within liver cells, are measured. Elevated levels of AST and ALT in the
blood are indicative liver damage, however, AST is less liver-specific than ALT and
elevations of AST may also be indicative of cardiac or muscular injury. There are also
specific blood tests available that allow the precise diagnosis of hepatitis A, hepatitis B,
hepatitis C and hepatitis D through the detection of antigen levels.
The current standard of care for treating HCV is the combination of pegylated
interferon plus ribavirin. Pegylated interferon is a long-acting form of interferon, which
is typically injected once a week and maintains a more constant level of interferon in
the blood, reducing the ability of HCV to replicate. Ribavirin, an oral anti-viral, is used
in combination with interferon to treat HCV, but is not effective against HCV as a
monotherapy. There is currently no vaccine for HCV, as there are for HAV and HBV.
The most common side effects of combination interferon and ribavirin therapy include
mild flu-like symptoms, muscle and joint pain, nausea, headaches, fatigue, loss of
appetite, dry skin, anxiety, depression, and insomnia.
Hepatitis B can be prevented with a vaccine, and is considered part of the standard
infant vaccination series, but is also given to adolescents and adults who were not
vaccinated as children. While current treatment standards also include the use of a
pegylated interferon or interferon alfa-2a, nucleoside/nucleotide analogs are the most
common anti-virals prescribed to inhibit HBV replication, and predominantly include
lamivudine, adefovir, entecavir and telbivudine.
38
Epidemiology
Table 1.10 below details the prevalence of both the chronic HBV and HCV patient
populations across the seven major markets in 2005.
Table 1.10: Estimated prevalence of HBV and HCV across the seven major
markets, 2005
HBV
Country Prevalence (000s) Prevalence (%) Share in 2005 (%)
France 394 0.7% 8.3%

Germany 511 0.6% 10.7%
Italy 697 1.2% 14.6%
Spain 444 1.1% 9.3%
UK 180 0.3% 3.8%
EU5 2,226 0.8% 46.6%
US 1,250 0.4% 26.2%

Japan 1,300 1.0% 27.2%
Total 4,776 0.7% 100.0%
HCV
France 522 0.9% 4.4%

Germany 247 0.3% 2.1%
Italy 4,610 7.9% 38.6%
Spain 1,049 2.6% 8.8%
UK 302 0.5% 2.5%
EU5 6,730 2.4% 56.4%
US 3,200 1.1% 26.8%

Japan 2,000 1.6% 16.8%
Total 11,930 1.6% 100.0%
Source: CDC, IASR, EuroSurveillance Business Insights Ltd
In 2005, the HBV prevalent population across the seven major markets was estimated
at 4.8m, significantly smaller than the estimated 11.9m individuals suffering from
HCV. This difference in prevalence is likely attributable to the wide availability of a
hepatitis B vaccine since 1982 and the recommendation of the European Region of the
39
World Health Organization to implement a universal HBV immunization program in
1992.
In Japan where higher HBV and HCV prevalence rates exist, respectively estimated at
1.0% and 1.6% in 2005, hepatitis-associated cancer (hepatocellular carcinoma) has also
shown to be more prevalent. In Japan, where hepatocellular carcinoma (HCC) is a
leading cause of cancer dearth, as opposed to the US in which HCC accounts for only
an estimated 2% of cancer deaths, there is an clinically established link between HCC
patients in Japan and the high prevalence of HBV and HCV. In one study of 330
Japanese patients with HCC, viral hepatitis markers (HBV and HCV) were found in
98.2% of the patients, which may account for the high prevalence rates of HBV and
HCV.
Injecting drug use is also one of the most important risk factors for HCV infection in
the countries of the seven major markets, which is believed to contribute to the
prevalence of HCV, particularly in the US and Western Europe. It is estimated that
approximately 75-80% of injecting drug users in the US and Western Europe are
infected with HCV, contributing to the respective prevalence rates of 2.4% and 1.1% in
2005.
Table 1.11 below details the forecast epidemiology of both the chronic HBV and HCV
patient populations across the seven major markets over 2005-11.
40
Table 1.11: Forecast epidemiology of HBV and HCV across the seven major
markets, 2005-11
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
HBV
France
Prevalence (000s) 394 400 406 413 419 425 431
Prevalence rate (%) 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7%
Germany
Prevalence (000s) 511 519 528 536 544 552 560
Prevalence rate (%) 0.6% 0.6% 0.6% 0.7% 0.7% 0.7% 0.7%
Italy
Prevalence (000s) 697 703 709 715 720 726 732
Prevalence rate (%) 1.2% 1.2% 1.2% 1.2% 1.2% 1.3% 1.3%
Spain
Prevalence (000s) 444 448 452 456 460 464 468
Prevalence rate (%) 1.1% 1.1% 1.1% 1.1% 1.1% 1.1% 1.20%
UK
Prevalence (000s) 180 186 192 198 204 210 217
Prevalence rate (%) 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.4%
EU5
Prevalence (000s) 2,226 2,257 2,287 2,317 2,348 2,378 2,408
Prevalence rate (%) 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8%
US
Prevalence (000s) 1,250 1,280 1,310 1,340 1371 1,402 1,433
Prevalence rate (%) 0.4% 0.4% 0.4% 0.4% 0.4% 0.5% 0.5%
Japan
Prevalence (000s) 1,300 1,312 1,325 1,338 1,351 1,363 1,376
Prevalence rate (%) 1.0% 1.0% 1.0% 1.0% 1.1% 1.1% 1.1%
Total
Prevalence (000s) 4,776 4,849 4,922 4,995 5,069 5,143 5,217
Prevalence rate (%) 0.7% 0.7% 0.7% 0.7% 0.8% 0.8% 0.8%
HCV
France
Prevalence (000s) 522 552 583 613 644 675 706
Prevalence rate (%) 0.9% 0.9% 1.0% 1.1% 1.1% 1.2% 1.2%
Germany
Prevalence (000s) 247 289 330 371 412 453 494
Prevalence rate (%) 0.3% 0.4% 0.4% 0.5% 0.5% 0.6% 0.6%
41
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
HCV (continued)
Italy
Prevalence (000s) 4,610 4,639 4,668 4,697 4,726 4,755 4,784
Prevalence rate (%) 7.9% 8.0% 8.0% 8.1% 8.1% 8.2% 8.2%
Spain
Prevalence (000s) 1,049 1,069 1,089 1,110 1,130 1,150 1,170
Prevalence rate (%) 2.6% 2.6% 2.7% 2.7% 2.8% 2.8% 2.9%
UK
Prevalence (000s) 302 333 363 393 424 455 485
Prevalence rate (%) 0.5% 0.5% 0.6% 0.6% 0.7% 0.7% 0.8%
EU5
Prevalence (000s) 6,730 6,881 7,032 7,184 7,336 7,487 7,640
Prevalence rate (%) 2.4% 2.4% 2.4% 2.4% 2.5% 2.5% 2.5%
US
Prevalence (000s) 3,200 3,349 3,500 3,652 3,805 3,960 4,115
Prevalence rate (%) 1.1% 1.1% 1.2% 1.2% 1.2% 1.3% 1.3%
Japan
Prevalence (000s) 2,000 2,096 2,191 2,287 2,382 2,478 2,573
Prevalence rate (%) 1.6% 1.6% 1.7% 1.8% 1.9% 1.9% 2.0%
Total
Prevalence (000s) 11,930 12,326 12,723 13,122 13,523 13,925 14,328
Prevalence rate (%) 1.6% 1.7% 1.8% 1.8% 1.9% 1.9% 1.9%
Source: Author’s analysis, CDC, IASR, EuroSurveillance Business Insights Ltd
While the forecast period is expected to be characterized by expanded use of the

hepatitis B vaccine, the overall prevalence of HBV is forecast to increase moderately,
in line with population dynamics. In 2011, it is estimated that an estimated 5.2m
hepatitis B sufferers across the seven major markets, translating into an overall
prevalence of 0.8%.
In the US, it is estimated that the disease burden from HCV is likely to rise
considerably over the next 10–20 years increasing demands on liver transplantation.
Within the five major markets of the EU, the increasing number of immigrants, often
from regions with high HBV and HCV prevalence rates, is likely to impact the hepatitis
42
epidemiology of these countries, resulting in moderate increases in overall prevalence.
The HCV prevalence across the seven major pharmaceutical markets is estimated at
14.3 in 2003, or a prevalence rate of 1.9%.
Influenza
Overview
Influenza is an acute respiratory illness that affects the upper and/or lower respiratory
tract and is caused by an influenza virus. Influenza is highly contagious, causing
significant morbidity and mortality, particularly among children, the elderly and those
with immunosuppressed-related conditions. It is transmitted through respiratory droplet
transmission when infected individuals cough or sneeze, but can also be transmitted by
saliva, nasal secretions, feces and blood.
The manifestation of symptoms characteristically occurs between 18 and 72 hours after

being infected, with the most common symptoms including sudden onset of high fever,
myalgia, headache and severe malaise, non-productive cough, sore throat, and rhinitis.
However, the symptoms of influenza among certain individuals, particularly the young
and elderly and those with co-morbid conditions such as pulmonary and cardiac
disease, can become exacerbated leading to secondary bacterial pneumonia or primary
influenza viral pneumonia. As such, it is estimated that deaths of adults over the age of
65 years account for approximately 90% of deaths attributed to pneumonia and
influenza.
The current circulating influenza viruses are divided into two groups, A and B, with
influenza A containing two subtypes, A(H3N2) and A(H1N1). Influenza A is the most
virulent pathogen, causing moderate-to-severe illness and affecting the specturm of the
patient population, while influenza B usually causes mild illness and primarily affects
children. New epidemic influenza A strains arise every 1 to 2 years by the introduction
of selected point mutations within two surface glycoproteins: haemagglutinin (HA) and
neuraminidase (NA). Referred to as antigenic drift, these prominent changes in the
43
antigenicity of the influenza A virus prohibit the development of long-term immunity
to the virus and are the basis for the annual occurence of influenza.
Diagnosis of influenza is primarily based on the patient’s presentation of symptoms,

with fever, body ache and pain, malaise and cough as the principal indications guiding
clinical diagnosis. There are also a variety of tests available to detect influenza
including rapid diagnostic tests, which provide results within 30 minutes, and viral
cultures, providing results in 3-10 days. While rapid influenza tests provide results that
facilitate the administration of treatment, these tests do not allow for the differentiation
between subtypes and strains of the influenza virus.
Influenza vaccines are a central cornerstone in the prevention of influenza and are
reformulated annually due to the virus’ ability to mutate, reflecting the strain which is
aniticipatd to circulate during the following influenza season. Vaccination against the
prevalent influenza virus is currently recommended for all individuals in high-risk
groups, including those aged 65 years or older, those with chronic illnesses, patients
immunocompromised from disease or concomitant therapy, and children younger than
59 months. Among the elderly-population, it is believed that vaccination against
influenza reduces related morbidity by 60% and mortality by 75%, with similar
efficacy seen in healthy adults, reducing influenza-related mortality by 70-90%. While
the effectiveness of an influenza vaccine is directly correlated to the age of
immunocompetence of the patient as well as the target specifity of the vaccine to the
particular viral strain, the use of an influenza vaccine has been found to greatly reduce
healthcare costs and losses in productivity associated with illness due to influenza.
Antiviral drugs can be used to treat influenza, with M2 inhibitors and neuraminidase
inhibitors being particularly effective. Neuramindase inhibitors, used to treat both
influenza A and B, prevent the influenza virus from budding form the host cell, thus
halting the spread of the virus in the body. Common side-effects associated with this
drug class include nose and throat discomfort, headache and cough. M2 inhibitors, also
44
referred to as adamantanes, prevent the influenza virus from infecting cells by blocking
a viral ion channel. M2 inhibitors, however, are only effective against type A influenza
and are associated with severe adverse events including delirium and seizures which
occur more frequently in elderly patients on higher doses. In addition, resistance to M2
inhibitors has become a significant issue mitigating their effectiveness and use in the
treatment of influenza, with resistance in isolates of A(H3N2) estimated to have
increased to 91% in 2005.
45
Epidemiology
The estimated prevalence of influenza across the seven major markets is detailed below
in Table 1.12.
Table 1.12: Estimated prevalence of influenza across the seven major

markets, 2005
Country Prevalence (absolute) Prevalence (%) Share in 2005 (%)
France 3,090 0.01% 0.2%

Germany 1,418 0.002% 0.1%
Italy 971 0.002% 0.1%
Spain 960 0.002% 0.1%
UK 1,950 0.003% 0.1%
EU5 8,389 0.003% 0.5%
US 23,549 0.01% 1.5%

Japan 1,500,000 1.2% 97.9%
Total 1,531,938 0.21% 100.0%
Source: CDC, IASR, EISS Business Insights Ltd
In 2005, influenza was estimated to affect approximately 1.53m individuals across the
seven major markets, translating into a prevalence of 0.21%. In Japan during 2005,
approximately 1.5m cases of influenza were reported by sentinel clinics, constituting
the largest epidemic in Japan in the past 11 years. With comparatively low prevalence
rates ranging between 0.003% (UK) and 0.01% (France and the US), the US and the
major markets of the EU experienced a rather moderate influenza season, indicative of
widespread vaccination programs that effectively match the virus.
Influenza outbreaks are highly dependent on environmental factors, particularly

temperature, which therefore impact the disease’s yearly incidence. As such, while it
can be ascertained that annual outbreaks of influenza will occur, it is difficult to
forecast the epidemiology of influenza over 2006-11 due to uncertainities in
contributing environmental factors.
46
Herpes
Overview
Herpes simplex is a viral infection caused by the Herpes Simplex Virus (HSV),
belonging to the herpesviridae family of DNA viruses, which are characteristically
latent, reoccrurring infections. Once the herpes virus has infected the human body, the
virus is permanently present and becomes periodically active when the immune system
is depressed or when stress is increased.
Herpes is further classified into HSV Type 1 (HSV-1) and HSV Type 2 (HSV-2),
which are predominantly manifested in the orafacial and genital regions, respecitvely.
Both subtypes have the ability to remain latent for several years, which contributes to
the chronic nature of infection, and may reappear (referred to as an outbreak) at
various points over a patient’s lifetime, typically the result of physical and/or
psychological stress. When establishing latency, HSV-1 does so in the trigeminal
ganglion (nerve cells found near the ears), while HSV-2 establishes latency in the
sacral ganglion (nerve cells found at the base of the spine), hence accounting for the
differece in outbreak areas. HSV-1 and HSV-2 are further differentiated in terms of
methods of transmission, epidemiology, and biochemical/biological characteristics.
HSV-1 is typically transmitted via contact with oral secretions during periods of viral
shedding where the virus shifts to the surface of the skin, but can HSV-1 can also
spread from the mouth to the genitals during oral sex. Primary HSV-1 infections are
often asymptomatic, but in children less than 5 years of age, symptoms often manifest
as gigivostomatitis (infection of the mouth and gums) or pharyngitis (sore throat).
Following an incubation period ranging from 2-12 days, patients typically develop a
fever, sore throat and pharyngeal edema with erythema, which and may be
accompanied by the development of blisters on the mucosa of the mouth and throat and
lesions on the face and gums, with symptoms of HSV-1 characteristically persisting for
10-14 days. Immunocompromised patients, such as those receiving a renal, cardiac or
bone marrow transplant or those with HIV, have a greater risk of developing severe
HSV infections. Common symptoms among this patient population may include
47
respiratory and gastrointestinal infections including pneumonia, esophagitis and
hepatitis.
There are several triggers believed to be cause an outbreak of HSV-1, particularly

physical or psychological stress and anxiety. In addition, injury to facial structures
through trauma, surgery and sunburn are also established catalysts for recurrent
outbreaks of HSV-1, as well as concurrent infections such as upper respiratory
infections. In some cases, HSV-1 can recur in the eye (ocular herpes), which is a
potentially serious infection that can lead to blindness and in very rare cases HSV-1
can spread to the brain (herpes encephalitis), which can lead to death. HSV-1 can also
cause a finger infection (herpes whitlow), or "wrestler's herpes” (herpes gladiatorum),
which infects the chest or face.
HSV-2 is transmitted through contact with genital secretions, but similar to HSV-1,
cross-infection can occur, passing from one person's genitals to another person's mouth,
resulting in oral herpes. As such, unlike HSV-1 where the majority of patients acquire
the virus during childhood, the majority of HSV-2 is encountered after childhood,
when people become sexually active.
HSV-2 patients can remain asymptomatic, with symptoms including a

tingling/numbness in the lower extremities and lower part of the body between the
genitals and perineum. HSV-2 manifests as genital or anal ulcers that may be
accompanied with fever, headache, muscle ache and malaise. Symptoms are often more
severe in women and may include vulvovaginitis with blisters developing into painful
ulcers that may also affect the rectal area.
HSV-2 is the most common cause of neonatal herpes as women have higher rates of
HSV-2 infection than men, with an estimated risk of 80% for susceptible females
contracting HSV following a single contact. Studies for the US have shown that the
risk of acquiring genital herpes increases with the number of sexual partners. For
example, the risk of contracting HSV-2 among heterosexual women living with one
48
partner is approximately 10%, with the risk increases concordantly with the number of
sexual partners (40%, 60% and more than 80% as the number of partners increases
from 2-10, 11-50, or more than 50, respectively). For heterosexual men, however, there
is zero probability for acquiring HSV-2 with a single life-time partner, with risk
increasing to 20%, 35% and 70% accordingly to the aforementioned risk groups.
HSV-2 can lead to meningitis (inflammation of the membranes of the brain or spinal
cord) or to retention of urine in the bladder. Unlike HSV-1, there is limited clinical
evidence supporting the exact triggers of recurrent outbreaks of HSV-2. It is believed
that factors such as menstruation, sexual activity and diet may be factors in the onset of
HSV-2 outbreaks as opposed to stress and anxiety-related influences.
Diagnosis of HSV-1 and HSV-2 can be made most easily during the time of an active
herpes outbreak; however, limited patient presentation has resulted in a large
undiagnosed patient population. Both forms of HSV can be diagnosed by culturing the
sample from a swab taken from a lesion, however, as viral shedding last only a few
days and lesions may have disappeared by the time a patient presents, the results of the
culture return as negative despite the presence of HSV. Additionally, this swab test
does not differentiate between HSV-1 and HSV-2. Serologic tests are also utilized in
the detection of HSV, more specifically by measuring antibody levels. More recently,
type-specific serologic tests are being used to confirm a visual diagnosis of herpes. For
example, the POCkit test is a highly type-specific and accurate test for HSV-2, which
can be easily performed at a doctor’s office, delivering results within 10 minutes. A
similar and even more accurate, sensitive and type-specific test is the Western Blot,
which can distinguish between HSV-1 and HSV-2 antibodies with extremely high
accuracy approaching 99%. Another newer gold standard diagnostic test, the
polymerase chain reaction (PCR) test, which measures HSV DNA, is perhaps more
sensitive than a viral culture and can differentiate between the two types of HSV, but
this test is not routinely used because of the associated higher cost.
49
The majority of HSV-2 (genital) infections remain largely undetected and undiagnosed,
with a high percentage of people becoming infected from an undiagnosed partner. This
is further compounded by the asymptomatic nature of first-episode infections of HSV-2
as well as a tendency for individuals to delay or avoid presenting to a physician due to
fear or embarrassment.
The standard treatment for herpes is anti-viral therapy, which aims to either treat
outbreaks as they happen (episodic treatment) or to prevent or delay recurrent
outbreaks (suppressive treatment). The most common anti-virals utilized in the
treatment of herpes include acyclovir, valacyclovir and famciclovir, formulated as
tablets. For the treatment of oral HSV symptoms, topical ointments of acyclovir and
penciclovir are commonly prescribed. Additionally, for those patients experiencing
repeated herpes outbreaks, HIV antiretroviral therapy is another therapy option, as
combination ARV therapy has been shown to significantly reduce the prevalence of
active herpes among patients with HIV.
50
Epidemiology
Table 1.13 below details the estimated seroprevalence of HSV-1 and HSV-2 across the
seven major markets in 2005.
Table 1.13: Estimated seroprevalence of HSV-1 and HSV-2 across the seven
major markets, 2005
HSV-1
France 40,640 67.0% 10.0%

Germany 62,648 76.0% 15.4%
Italy 46,482 80.0% 11.4%
Spain 26,222 65.0% 6.5%
UK 18,132 30.0% 4.5%
EU5 194,124 64.3% 47.8%
US 170,047 57.5% 41.9%

Japan 42,048 33.0% 10.4%
Total 406,219 56.0% 100.0%
HSV-2
France 9,402 15.5% 8.8%

Germany 10,716 13.0% 10.1%
Italy 3,196 5.5% 3.0%
Spain 1,452 3.6% 1.4%
UK 2,539 4.2% 2.4%
EU5 27,304 9.0% 25.6%
US 75,412 25.5% 70.8%

Japan 3,823 3.0% 3.6%
Total 106,539 14.7% 100.0%
Source: JAMA, Sex. Trnsm. Inf. Journal Business Insights Ltd
The prevalence of HSV-1 and HSV-2 infections overall and by age varies considerably
within inter-country and intra-country dynamics, and among population sub-groups. As
with HSV-1, there is an age-related increase of the HSV-2 seroprevalence; however,
this increase starts later in life, with the onset of sexual activity. In the US, for example,
the seroprevalence of HSV-2 increases from approximately 6% at 12-19 years of age to
approximately 30% by the age of 30-39 years. HSV-1 infection, which is acquired
51
during childhood and adolescence, is markedly more widespread than HSV-2, which is
represented in the contrasting prevalence rates of 56.0% and 14.7%, respectively in
2005.
The seroprevalence of HSV-2 across the seven major markets varies significantly, with
seroprevalence in the 5 major EU markets significantly lower than that of the US, at
9.0% and 25.5% respectively. Large inter-country differences in the seroepidemiology
of HSV-2 exist within the five markets of the EU, with prevalence rates ranging from
3.2% in Spain to 15.5% in France.
There is a relative paucity of data on HSV-1 and HSV-2 for Japan, for both the general
population and high-risk groups. Data, however, suggests that seroprevalence of HSV-
1 and HSV-2 tend to be lower in Asian countries than that of the US and Europe.
Accordingly in 2005, it was estimated that seroepidemiology of HSV-1 affects
approximately 33.0% of the Japanese population, while HSV-2 affects an estimated
3.0% of the population.
52
Table 1.14 below details the forecast seroprevalence of both the chronic HSV-1 and
HSV-2 patient populations across the seven major markets over 2005-11.
Table 1.14: Forecast seroprevalence of HSV-1 and HSV-2 across the seven
major markets, 2005-11
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
HSV-1
France
Prevalence (000s) 40,640 40,792 41,006 41,220 41,435 41,651 41,867
Prevalence rate (%) 67.0% 67.0% 67.1% 67.3% 67.4% 67.6% 67.7%
Germany
Prevalence (000s) 62,648 62,730 62,813 62,895 62,977 63,060 63,142
Prevalence rate (%) 76.0% 76.1% 76.2% 76.4% 76.5% 76.6% 76.8%
Italy
Prevalence (000s) 46,482 46,541 46,599 46,657 46,715 46,773 46,831
Prevalence rate (%) 80.0% 80.1% 80.1% 80.2% 80.4% 80.5% 80.7%
Spain
Prevalence (000s) 26,222 26,303 26,384 26,465 26,546 26,627 26,708
Prevalence rate (%) 65.0% 65.1% 65.2% 65.4% 65.5% 65.7% 65.8%
UK
Prevalence (000s) 18,132 18,254 18,375 18,497 18,619 18,742 18,865
Prevalence rate (%) 30.0% 30.1% 30.2% 30.4% 30.5% 30.6% 30.7%
EU5
Prevalence (000s) 194,124 194,619 195,176 195,734 196,293 196,852 197,413
Prevalence rate (%) 64.3% 64.3% 64.4% 64.5% 64.7% 64.8% 64.9%
US
Prevalence (000s) 170,047 171,987 173,944 175,919 177,912 179,921 181,948
Prevalence rate (%) 57.5% 57.6% 57.8% 57.9% 58.0% 58.2% 58.3%
Japan 42,048 42,175 42,391 42,606 42,821 43,036 43,251

Prevalence (000s) 33.0% 33.1% 33.3% 33.4% 33.6% 33.8% 34.1%
Prevalence rate (%)
Total
Prevalence (000s) 406,219 408,781 411,511 414,259 417,026 419,810 422,612
Prevalence rate (%) 56.0% 56.1% 56.3% 56.4% 56.6% 56.7% 56.9%
HSV-2
France
Prevalence (000s) 9,402 9,475 9,548 9,622 9,695 9,769 9,843
Prevalence rate (%) 15.5% 15.6% 15.6% 15.7% 15.8% 15.8% 15.9%
53
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
HSV-2 (continued)
Germany
Prevalence (000s) 10,716 10,815 10,914 11,013 11,112 11,210 11,309
Prevalence rate (%) 13.0% 13.1% 13.2% 13.4% 13.5% 13.6% 13.8%
Italy
Prevalence (000s) 3,196 3,265 3,335 3,405 3,475 3,544 3,614
Prevalence rate (%) 5.5% 5.6% 5.7% 5.9% 6.0% 6.1% 6.2%
Spain
Prevalence (000s) 1,452 1,485 1,517 1,549 1,582 1,614 1,647
Prevalence rate (%) 3.6% 3.7% 3.8% 3.8% 3.9% 4.0% 4.1%
UK
Prevalence (000s) 2,539 2,611 2,684 2,757 2,831 2,904 2,978
Prevalence rate (%) 4.2% 4.3% 4.4% 4.5% 4.6% 4.7% 4.8%
EU5 27,304 27,651 27,998 28,346 28,694 29,042 29,391

Prevalence (000s) 9.0% 9.1% 9.2% 9.3% 9.5% 9.6% 9.7%
Prevalence rate (%)
US
Prevalence (000s) 75,412 76,606 77,811 79,026 80,252 81,488 82,736
Prevalence rate (%) 25.5% 25.7% 25.8% 26.0% 26.2% 26.4% 26.5%
Japan
Prevalence (000s) 3,823 3,975 4,128 4,281 4,434 4,587 4,739
Prevalence rate (%) 3.0% 3.1% 3.2% 3.4% 3.5% 3.6% 3.7%
Total
Prevalence (000s) 106,539 108,233 109,937 111,653 113,380 115,118 116,866
Prevalence rate (%) 14.7% 14.9% 15.0% 15.2% 15.4% 15.6% 15.7%
Source: Author’s analysis, JAMA Business Insights Ltd
Over the period 2005-11, it is estimated that the seroprevalence of HSV-1 will increase
from an estimated 406m in 2005 to 422m in 2011, representing an overall prevalence
of 56.9% across the seven major markets in 2011. It is forecast that in 2011 there will
be an estimated HSV-2 seroprevalent population of 117m, corresponding to a 15.7%
prevalence rate. A factor contributing to the increasing seroprevalence of both HSV-1
and HSV-2 across the seven major markets is attributable to the age-related increase of
both diseases, corresponding with an increasing elderly population within these
markets.
54
It is forecast that within the EU, Italy and Germany will remain the most highly
prevalent countries, with respective seroprevalence rates of 80.7% and 76.8%. France,
however, is forecast to have the highest HSV-2 seroprevalence across the EU,
estimated at 15.9%. Over the forecast period, it is estimated that the HSV-1
seroprevalent population of the US will increase more dramatically than that of the
HSV-2 population, at an estimated 12m and 7 respectively.
Vaccines
Tetanus, diphtheria, pertussis
Overview
Tetanus, diphtheria and pertussis are all potentially serious bacterial diseases, which
due to the widespread availability of vaccines pose a marginal health burden across the
seven major markets. Tetanus is characterized by a prolonged contraction of skeletal
muscle fibers, which is caused by the toxin of the bacterium Clostridium tetani that
typically enter the body through a cut or deep puncture wound. The clinical
manifestations of tetanus are caused when the bacterium toxin blocks inhibitory nerve
impulses, interfering with the release of neurotransmitters, which results in
uncontrolled muscle contraction and spasms. The incubation period of tetanus ranges
from 3 to 21 days, with a longer incubation period correlated to the distance of the
injury site from the central nervous system. Symptoms in more severe cases of tetanus
may include severe muscle spasms, generalized tonic seizure-like activity, and severe
autonomic nervous system disorders
Diphtheria, an acute bacterial disease, manifests itself either as respiratory diphtheria

(infecting an individual through the nose or mouth) or cutaneous diphtheria (infecting
an individual through a cut in the skin). Diphtheria is a highly contagious disease that
can be spread via direct physical contract or respiratory secretions and once exposed,
symptoms typically emerge in two to four days. The respiratory form of diphtheria is
the most common type of the two, and ssymptoms may include fatigue, fever, sore
55
throat, nausea, vomiting and problems swallowing. The cutaneous form of diphtheria
usually occurs as a result of an existing skin infection and is caused by
Corynebacterium diphtheriae. In more severe cases, which predominantly occur in
developing countries, the diphtheria toxin can cause serious, often life-threatening
complications including cardiomyopathy and peripheral neuropathy.
Pertussis, also known as whooping cough, mainly affects infants and young children
and is characterized by paroxysms, or intense fits, of coughing, which is followed by a
“whooping” sound. These intense coughing fits may also result in vomiting, which in
young children may also lead to malnutrition. In more severe cases, symptoms can
include pneumonia, encephalitis and pulmonary hypertension. Caused by the bacterium
Bordetella pertussis, approximately 90% of pertussis cases occur in developing
countries, and while there is a high vaccine coverage across the seven major markets,
outbreaks do still emerge.
As there are no laboratory tests available to determine the presence of tetanus,

diagnosis of tetanus is based on a physical examination, with the symptoms of muscle
spasm, stiffness and pain serving as indicators for diagnosis. In some cases, clinical
tests may be used to rule out meningitis, rabies, and other diseases with similar
symptoms. Antibiotics including penicillin, clindamycin, erythromycin, or
metronidazole are typically used in the treatment of tetanus.
The diagnosis of diphtheria is based on both laboratory and clinical criteria, which
include a culture to identify the presence of C. diphtheriae as well as a physical
examination to assess the presence of an upper respiratory infection, low-grade fever
and an adherent pseudomembrane of the tonsils, pharynx or throat. Similar to tetanus,
diphtheria is also treated with antibiotics, such as penicillin or erythromycin.
The diagnosis of pertussis during the diseases’ early stages can be complicated due to
the similarity in symptoms to common respiratory illnesses such as bronchitis and the
56
common cold. Diagnosis of pertussis may simply occur by listening to the cough, but
confirmation characteristically involves a nose or throat culture, serological tests to
determine the level of white blood cells, and/or a chest x-ray. Treatment with an
antibiotic, such as erythromycin, azithromycin and clarithromycin are used to shorten
the infectious period, but does not generally alter the outcome of the disease.
While treatment options are available for tetanus, diphtheria and pertussis, vaccination
is the cornerstone in preventing these diseases. The DTaP vaccination, a combination
vaccine, is one of the recommended childhood immunizations across the seven major
markets. The administration of the vaccine is a series of five shots, which is typically
given to children at the ages of 2 months, 4 months, 6 months, 15-18 months, and 4-6
years, and is characteristically a requirement for a child to enter school. Following this
initial series of immunizations, a booster shot known as the Td vaccine, is administered
to children at age 11-12 and every 10 years thereafter to maintain immunity to these
three diseases.
Epidemiology
Table 1.15 below details the estimated vaccine coverage and incidence of DPT across
the seven major markets in 2005.
Table 1.15: Estimated vaccine coverage and incidence of DPT across the
seven major markets, 2005
Country Coverage (%) Incidence (absolute) Share in 2005 (%)
France 97% 300 1.4%

Germany 90% 350 1.6%
Italy 98% 400 1.8%
Spain 96% 315 1.4%
UK 91% 370 1.7%
EU5 94% 1,735 7.8%
US 96% 19,025 86.0%

Japan 99% 1,350 6.1%
Total 96% 22,110 100.0%
Source: WHO Vaccine Monitoring System Business Insights Ltd
57
As with the majority of vaccines recommended by national guidelines or supported
through various vaccine programs such as the World Health Organization, the
vaccination coverage of DPT is extremely high across the seven major markets,
estimated at 96% in 2005. However, the incidence of DPT across the major markets is
primarily driven by the cases of pertussis, which approximately accounted for 95% of
cases of diphtheria, tetanus or pertussis in 2005. The majority of pertussis cases were
reported in the US, estimated at 19,025 in 2005, a significantly higher incidence than
the EU and Japan.
Mumps, measles and rubella
Overview
The mumps, caused by a paramyxovirus, are spread between individuals through saliva
droplets or direct contact with articles that have been contaminated with the infected
saliva. The incubation period is typically 18-21 days, with the duration of illness
lasting between 7-10 days in children, and longer in adults. The most common
symptoms of mumps include swelling of the parotid gland, fever, headache, and sore
throat. In more severs cases, specifically that in males past puberty, 15-20% of these
patients develop orchitis (painful inflammation of the testicles).
Measles, which is also caused by paramyxovirus, has an incubation period of 4-12

days. Measles typically begins with a mild-to-moderate fever, and is often
accompanied by a persistent cough, conjunctivitis and coryza (runny nose). After
approximately 2-3 days, the infected individual develops Koplik’s spots, described as a
maculopapular and erythematous rash that is slightly itchy in nature and originates on
the head/face of the infected individual and then spreading downward to the person’s
lower extremities. Spread through respiratory secretions, measles is a highly contagious
disease, with the infected individual remaining contagious 3-5 days after the
development of Koplik’s spots.
Rubella, while sharing similar symptoms to the measles, is caused by the Rubella virus.
Symptoms generally appear after 2-3 weeks and may include enlarged lymph nodes,
58
conjunctivitis, mild fever, headache, joint pain and a fine rash spreading from the head
to the arms and legs. Rubella is spread through respiratory secretions when an infected
person coughs or sneezes, or it can spread by direct contact with an infected person's
respiratory secretions. Rubella can also be vertically transmitted from pregnant mother
to child, with infection during the first 20 weeks of pregnancy resulting in the
development of congenital rubella syndrome in the baby, which may result
complications such as deafness, blindness, brain damage or heart problems.
Diagnosis of mumps, measles and rubella, in addition to a physical examination, is

often confirmed with a virus culture or a serological test in order to detect antibodies to
these three viruses. Due to the viral etiology of these diseases, antibiotics are
ineffective in treatment, and often acetaminophen is used to alleviate pain-related
symptoms.
The most common preventative measure against mumps, measles and rubella is a
combination immunization of live attenuated viruses, commonly referred to as the
MMR vaccine. Since the introduction of this vaccine in the 1970s, the incidence and
associated co-morbidities of these three diseases has declined significantly given the
widespread use of the vaccine as part of both recommended child and adult
immunization schedules. General recommendations (according the CDC) call for the
initial MMR dose at 12-15 months, followed by a second dose at 4-6 years of age. In
adults, MMR immunization is recommended for individuals 19-49 years of age who
lack evidence of immunity and those above 50 years of age if there are risk factors
present (medical, occupational, lifestyle or other indications) that increase their
likelihood of becoming infected with either of the three diseases.
Immunization with the MMR vaccine is associated with some adverse events, such as
fever and mild rash, which may be accompanied by swelling of salivary glands and/or
joint. However, these are typically mild in nature and last for a few days. In the late
1990’s, however, reports of a link between the MMR vaccine and inflammatory bowel
59
disease (IBD) and autism emerged, which have since been mitigated by a number of
key bodies including the World Health Organization. Yet, on-going adverse publicity
concerning these alleged effects of the MMR vaccine has resulted in diminished levels
of public confidence in the safety of the vaccine.
Epidemiology
Table 1.16 below details the estimated vaccine coverage and incidence of MMR across
Table 1.16: Estimated vaccine coverage and incidence of MMR across the
France 86% 13,691 5.0%

Germany 95% 2,133 0.8%
Italy 90% 2,030 0.7%
Spain 94% 2,969 1.1%
UK 85% 63,640 23.2%
EU5 90% 84,463 30.8%
US 92% 341 0.1%

Japan 99% 189,269 69.1%
Total 94% 274,073 100.0%
While MMR is recommended as part of childhood immunization schedules across the

seven major markets, with an estimated vaccination coverage rate of 94%,
approximately 274,073 cases of measles, mumps or rubella were reported across the
seven major markets in 2005. There are stark contrasts in incidence across these
markets, with the UK reporting 84,463 cases in 2005, significantly higher than levels
seen in the other EU markets. Similarly, while in the US there were only approximately
341 cases of these three diseases in 2005, approximately 189,269 cases were reported
in Japan, which contradicts the countries reported vaccination coverage rate.
60
Polio
Overview
Poliomyelitis, often called polio, is an acute viral infectious disease, with three
serotypes (PV1, PV2, PV3), which is spread from person-to-person via the fecal-oral
route. With an incubation period of 6 to 20 days, the polio virus enters the human body
by penetrating the intestinal lining, replicating in the pharynx and gastrointestinal tract.
After a period, the virus invades lymphoid tissue, enters the bloodstream and may then
infect cells of the central nervous system (CNS). Polio is highly infectious, with
seroconversion rates among contacts of children nearly 100%, and greater than 90%
among adults. Persons infected with polio are most infectious from 7-10 days prior and
post onset of symptoms, but the virus may be present in the stool for 3-6 weeks.
Up to 95% of all polio infections are asymptomatic, with an approximate 4–8% of

infections classified as abortive, non-paralytic or paralytic poliomyelitis.. The
symptoms of this form of abortive polio are difficult to distinguish from other viral
infections as it includes upper respiratory infections, gastrointestinal complications and
influenza-like illness. In non-non-paralytic poliomyelitis, which occurs in 1-2% of
polio infections, patients develop aseptic meningitis, which is usually followed by
complete recovery. Symptoms of this type of polio are similar to mild cases, but
include moderate fever, stiff neck and back, fatigue and muscle pain. Less than 1.0% of
infections lead to paralytic disease, in which patients develop flaccid paralysis, which
can be further classified as spinal, bulbar, or spino-bulbar disease dependent of the site
of paralysis. Symptoms of paralytic poliomyelitis can include a loss of superficial
reflexes, initially increased deep tendon reflexes, and severe muscle aches and spasms
in the limbs or back.
While polio reached its peak across much of the industrialized world during the first-
half of the twentieth century, polio remains a major health problem for countries such
as India, Afghanistan, Pakistan and Nigeria, all of which were reported to have
endemic polio.
61
Diagnosis of polio consists of a physical examination and is based on the identification

of symptoms such as neck and back stiffness, abnormal reflexes and difficulty
swallowing and breathing. To confirm the diagnosis, a sample of throat secretions,
stool or cerebrospinal fluid is cultured to determine the presence of the polio virus.
The initial inactivated polio vaccine (IPV) was introduced in 1955, which was given in
a series of three injections, and resulted in the dramatic decrease in incidence of the
polio virus. This vaccine however was not 100% effective, with 60-70% efficacy
against PV1, over 90% efficacy against PV2 and PV3, and 94% efficacy against the
development of bulbar polio. In addition, this vaccine did not provide lifelong
immunity to the polio virus.
With the introduction of an oral polio vaccine (OPV) in 1961, which conferred lifelong
immunity with a more convenient oral administration, and the implementation of mass
immunization programs, the incidence of polio continued to decline. OPV contains live
attenuated strains of all three serotypes of the polio virus, along with trace amounts of
neomycin and streptomycin and is supplied as a single 0.5ml oral dose. .While the OPV
continues to be the recommended polio vaccination in Japan and in many other
countries as part of a Global Eradication Polio Program supported by the WHO, it was
discontinued in the US in 2000. The US and the major markets of the EU immunization
schedules currently recommend the a series of three enhanced-potency IPV injections
containing all 3 serotypes at 2 months, 4 months, between 6 and 18 months, which has
demonstrated an efficacy of 99%, which is then followed by a booster shot between the
ages of 4 and 6. While the use of a polio vaccine has eradicated the presence of the
virus across the seven major markets, as well as the majority of the world, treatment for
polio-related symptoms may include anti-spasmodics to reduce muscular contraction,
analgesics for pain and antibiotics.
62
Epidemiology
Table 1.17 below details the estimated vaccine coverage and incidence of polio across
Table 1.17: Estimated vaccine coverage and incidence of polio across the
France 97% 0 0
Germany 94% 0 0
Italy 97% 0 0
Spain 96% 0 0
UK 91% 0 0
EU5 95% - 0
US 92% 0 0
Japan 97% 0 0
Total 95% 0 0
Polio vaccination coverage across the seven major markets is estimated at 95%, as
incidence has been virtually eradicated. However, while polio does not present a health
threat to these markets, countries such as India and Pakistan continue to represent
countries where the disease is still endemic.
Fungal infections
Overview
Fungal infections result when tissues are colonized by species of fungi. Many species
of fungi routinely occur in areas of the human body such as the skin, vagina and
gastrointestinal tract, but these species are not capable under normal circumstances of
causing infection unless changes, typically in the host immunological status, or the
fungus’ living environment occur. Environmental changes such as a persistent increase
in humidity or moisture content on a part of the body, a reduction in the numbers of
63
competing organisms such as bacteria, immuno-compromization via HIV infection, or
other forms of immunosuppression are the most common triggers that can promote the
colonization of human tissues by fungi, with over 90% of patients with systemic fungal
infections having an underlying serious medical condition.
Commonly, fungal infections are caused by species such as Epidemophyton,

Trichophyton, Microsporum and Candida spp., with Candida and Aspergillus spp.
representing the most common pathogens responsible for causing invasive fungal
infections, which can have deleterious effects on health.
Diagnosis of fungal infections is dependent on the site of the infection, with varying
symptoms observed when different tissues are colonized by fungal infection.
Superficial fungal infections, which are not covered in detail in this report are typically
gynecological or dermatological in nature.
Diagnosis of fungal infections can be made through visual examination, but this is only
relevant to sites of infection that can be assessed through gynecological or
dermatological exam. In the case of invasive fungal infections, diagnosis is often
difficult and occurs late in disease progression, with techniques such as ultrasound,
MRI, and more effectively serological examination including DNA sequencing and
antigen detection. If a culture can be obtained, determination of the pathogen is
relatively simple.
Treatment of systemic fungal infections is undertaken with the use of systemic anti-
fungal treatments, and if necessary, reduction of use in immunosuppressive treatments
to facilitate the stimulation of the immune system. Surgical procedures may be
employed, depending on the site of infection, should pharmacological therapy is not
effective. Common anti-fungal medications that are prescribed may include
amphotericin B, and azole treatments such as fluconazole and ketoconazole amongst
64
others. Early treatment of systemic fungal infections is important as prognosis may
deteriorate rapidly with disease progression.
Epidemiology
The incidence of systemic fungal infections is difficult to estimate due to a lack of

reliable epidemiological nature, in part due to the low level of successful confirmed
diagnoses, high levels of concomitant serious conditions amongst sufferers of the
disease, and a high level of mortality. As a result, the most reliable data is derived from
hospital populations, or in patients who have an underlying risk factor, such as HIV or
which have undergone a transplantation procedure and are under immunosuppression.
Table 1.18 summarizes the estimated incidence of nosocomial fungal infections in the
seven major pharmaceutical markets.
Table 1.18: Estimated incidence of systemic fungal infections in across seven

major markets, 2005
France 24 0.04% 7.9%

Germany 41 0.05% 13.7%
Italy 27 0.05% 9.0%
Spain 19 0.05% 6.3%
UK 30 0.05% 10.0%
EU5 143 0.05% 46.9%
US 117 0.04% 38.5%

Japan 44 0.04% 14.6%
Total 305 0.05% 100.0%
Source: WHO Business Insights Ltd
The incidence of fungal infections, including vaginal candidiasis, and fungal infections
affecting the nails, the scalp and the skin is so high that the collective incidence of such
conditions could be as high as 70%, but these conditions do not form the basis of the
analysis of this report. Instead, estimates of the incidence of systemic fungal infections
are low throughout the seven major pharmaceutical markets, a factor which should not
disguise the severity of such conditions and their impact on mortality.
65
Although there are estimated differences between the major pharmaceutical markets in
terms of incidence, these differences are partly a result of the lack of similar studies
present across the major markets that form the basis of analysis in this report.
The forecast incidence of systemic fungal infections is summarized in Table 1.19.
Table 1.19: Forecast epidemiology of systemic fungal infections across the

seven major markets, 2005-11
Country 2005 2006(f) 2007(f) 2008(f) 2009(f) 2010(f) 2011(f)
France
Incidence (000s) 24 25 26 26 27 28 29
Incidence rate (%) 0.04% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05%
Germany
Incidence (000s) 42 43 45 47 49 51 53
Incidence rate (%) 0.05% 0.05% 0.05% 0.06% 0.06% 0.06% 0.06%
Italy
Incidence (000s) 28 28 29 30 31 31 32
Incidence rate (%) 0.05% 0.05% 0.05% 0.05% 0.05% 0.05% 0.06%
Spain
Incidence (000s) 19 20 20 21 21 22 22
Incidence rate (%) 0.05% 0.05% 0.05% 0.05% 0.05% 0.05% 0.06%
UK
Incidence (000s) 31 32 33 35 36 38 39
Incidence rate (%) 0.05% 0.05% 0.05% 0.06% 0.06% 0.06% 0.06%
EU
Incidence (000s) 143 148 153 158 164 170 175
Incidence rate (%) 0.05% 0.05% 0.05% 0.05% 0.05% 0.06% 0.06%
US
Incidence (000s) 117 123 129 136 143 150 157
Incidence rate (%) 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05%
Japan
Incidence (000s) 45 46 47 47 48 49 50
Incidence rate (%) 0.04% 0.04% 0.04% 0.04% 0.04% 0.04% 0.04%
Total
Incidence (000s) 305 317 329 342 355 369 383
Incidence rate (%) 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.05%
Source: WHO Business Insights Ltd
66
Rates at which the incidence of systemic fungal infections are forecast to expand over
the period 2006-11 are based on estimated increases in the population of HIV/AIDS
sufferers, transplant patients and leukemia patients, and as such the forecast incidence
of fungal infections across the seven major markets are estimated to expand. Despite
robust estimated rates of expansion across the seven major markets, the incidence of
fungal infections is forecast to continue to be low in 2011 at 383 thousand patients.
67
68
CHAPTER 2
Global market analysis
69
Chapter 2 Global market analysis
Summary
The global anti-infectives market expanded at a CAGR of 8.0% for the period of
2001-05 representing total sales of $48,546m in 2005. Growth in this market
remains relatively low with the strong presence of generic competition and low
number of new product introductions.
Anti-bacterials occupied the leading position in 2005 with a share of 69.9%,

having captured $33,919m in sales for the same year.
The major growth drivers in this drug class were macrolides and beta-lactams
which together reported combined sales of $7,963m or some 23.5% of total anti-
bacterial sales.
Of the competing drug classes in this market, the strongest growth in 2005 was
seen by anti-virals, reported at 23.4% representing sales of $4,480m, an increase
of $3,629m from previous year sales.
Roche’s Tamiflu experienced dramatic growth attributable to the increased

awareness of the possibility of an Avian flu pandemic in 2005. Tamiflu garnered
sales of $638m in 2005, an increase of $425m from previous year sales of $213m.
Anti-fungals was the only drug class to record negative growth in 2004-5
reported at -4.4%, having witnessed a decline of $207m from $4,646m in 2004 to
$4,439m in 2005. This decrease in growth rates has been attributed to the low
levels of product proliferation and innovation in this drug class.
Vaccines recorded a strong growth of 9.4% in 2004-05, representing sales of

$5,708m in the same year. Pure vaccines dominated the vaccines market
accounting for some 32.9% of total sales in 2005.
The anti-infectives market is forecast to expand at a CAGR of 4.8% over the

forecast period, with sales estimated at $60,664m in 2011. Anti-virals are forecast
to outperform the market CAGR by 1.8% expanding at a rate of 6.9% over 2005-
11.
70
Introduction
This chapter analyzes the market dynamics of anti-infectives, excluding HIV/AIDS,

between major drug classes and within each drug class. Leading brands are profiled
and brand dynamics discussed, along with analysis of country level information and
generics trends. Finally, the market is forecast to 2011.
71
Market analysis by country
The global anti-infectives market in 2005 was valued at $48.5, 8.0% up on year
previous sales of $44.9bn. The geographic distribution of sales in the anti-infectives
market is largely along the lines of national pharmaceutical markets, with the US,
Japan, Germany, and France featuring prominently among the leading national
markets, as shown in Figure 2.1.
Figure 2.1: Global anti-infectives market share by geography, 2005
RoW
33%
36% US
$48.5bn
2%
2%
Spain
4% 12%
UK
5%
Italy 5%
Germany Japan
France
Source: Business Insights; IMS Business Insights Ltd
In terms of size, the US market dominates the global anti-infectives market, responsible
for some 36.3% market share or $17.6bn in 2005. Collectively the rest of the world
accounted for $16.1bn in sales or 33.1% of the global market. The UK has witnessed
diminishing shares within the global anti-infectives market, losing 3.5% over the 2004-
72
05 period. Collectively, the leading seven pharmaceutical markets represented 66.9%
of global anti-infectives sales in 2005, a decrease from 2001 levels of 69.0%.
Licensing trends
Figure 2.2 reveals trends in licensing over the period 2004-05.
Figure 2.2: Sales of types of anti-infectives brands, 2004-5
50
Patent n/a
45
Unbranded
40
35
Other brands
Sales ($bn)
30
25
Licensed brands
20
15
10
Original brands
5
-
2004 2005
Year
The anti-infectives market is dominated by sales of original brands and licensed brands,
with both categories collectively accruing sales of $27.3bn, representing 56.3 % of the
anti-infectives market in 2005. However, while licensed brands experienced positive
sales growth of 9.3% over 2004-05, original branded products saw sales decline by
73
2.0%, indicative of limited levels of new product introduction, particularly within the
anti-fungal and anti-bacterial drug classes. Generic competition is a major factor
shaping the anti-infectives market, with sales of generic products increasing by 15.7%
in 2005 to $21.2bn from $18.3bn in the previous year.
Market analysis by drug class
Table 2.20 summarizes the performance of the drug classes comprising the global anti-
infectives market over the period of analysis.
Table 2.20: Breakdown of the global Anti-infective market by drug class,

2001-05
Sales ($m) Growth Mkt. share

2001 2002 2003 2004 2005 04-05 (%) 2005 (%)
Anti-bacterials 26,608 27,116 30,476 31,455 33,919 7.8% 69.9%

Vaccines 3,954 4,134 5,040 5,216 5,708 9.4% 11.8%
Anti-virals 1,975 2,882 3,495 3,629 4,480 23.4% 9.2%
Anti-fungals 3,136 3,403 4,143 4,646 4,439 -4.4% 9.1%
Total 35,674 37,535 43,154 44,945 48,546 8.0% 100.0%
Source: IMS Business Insights Ltd
The global anti-infectives market was valued at $48,546m in 2005, having registered a
growth rate of 8.0% for 2004-05. Growth in this market has remained volatile during
the period of analysis, with the highest growth being registered during 2002-03, which
was reported at 15.0%.
While growth in the anti-infectives market remained moderately strong, the different
drug classes competing in this market exhibited very diverse dynamics. Although anti-
bacterials continue to command highest market share reported at 69.9% in 2005,
growth in this drug class remains poor, attributed to the low levels of product
proliferation and high levels of generic competition.
74
The major growth driver in the anti-infectives market in 2005 were anti-virals, which
registered the highest growth rate reported at 23.4% representing sales of $4,480m, an
increase of $851m from year previous sales of $3,629m. Growth in this market has
been largely underpinned by successful performances of branded products such as
Tamiflu (oseltamivir) and Hepsera (adefovir dipivoxil).
Vaccines outperformed the market growth rate by a mere 1.1% having registered a
growth rate of 9.4% representing sales of $5,708m in 2005. Growth in this market has
been driven by the successful performance of pure vaccines, as against combination
vaccines. Vaccines held a market share of 11.8% in the global anti-infectives market in
2005.
Antifungals were the only drug class in this market to witness negative growth reported
at 4.4% representing a decline of $207m from sales in 2004 reported at $4,646m to
$4,439m in 2005. Growth in this marker has remained largely stunted due to the high
market penetration of generic versions of branded products in addition to low levels of
product innovation combined with a reduced number of new product launches.
75
Figure 2.3 illustrates the competitive dynamics of the leading drug classes in the global
anti-infectives market in 2004-05.
Figure 2.3: Competitive dynamics of the drug classes in the global anti-
infectives market, 2004-5
24%
22% Anti-virals
20%
14%
Sales growth, 2004-5 (%)
12% Anti-bacterials
10% Vaccines
8%
6%
4%
2%
0%
2000 4,000 6,000 8,000 10,000 30,000 40,000
-2%
-4%
Sales, 2005 ($m)
Anti-fungals
-6%
Bubble size represents market share
76
Leading brands dynamics
Table 2.21 illustrates sales for the ten leading brands in the global anti-infectives
market in 2004-05, together with sales growth rates.
Table 2.21: Leading brands in the global Anti-infectives market, 2004–05
Sales ($m) Growth 2005 Mkt.

Brand Generic Class Company 2004 2005 04-05(%) Share (%)
Levaquin levofloxacin Antibacterial J&J 1,266 1,441 13.9% 3.0%

Valtrex valacyclovir Anti-viral GSK 1,089 1,323 21.5% 2.7%
Lamisil terbinafine Anti-fungal Novartis 1,174 1,157 -1.5% 2.4%
Zithromax azithromycin Antibacterial Pfizer 954 972 1.9% 2.0%
Z-PAK
Zithromax azithromycin Antibacterial Pfizer 805 892 10.9% 1.8%
Augmentin AMX+CLA Antibacterial GSK 791 819 3.6% 1.7%
Prevnar Vaccine Wyeth 649 802 23.7% 1.7%
Rocephin ceftriaxone Antibacterial Roche 972 759 -21.9% 1.6%
Tamiflu oseltamivir Anti-viral Roche 213 638 200.0% 1.3%
Omnicef cefdinir Anti-bacterial Abbott 388 622 60.2% 1.3%
Leading ten brands 8,300 9,426 13.6% 19.4%
Others 6,645 39,120 6.8% 80.6%
Total 44,945 48,546 8.0% 100.0%
J&J= Johnson & Johnson; GSK= Glaxo SmithKline; AMX = amoxicillin; CLA= clavulanic acid
Source: IMS Health; Business Insights Business Insights Ltd
Valued at $9,426 in 2005, the ten leading anti-infectives’ brands represented a minor
19.4% of the global anti-infectives market. The high level of generic penetration in this
market is apparent with sales from the ‘others’ category representing some 80.6% or
$48,546m of the market in 2005.
Sales from the ten leading brands registered a sales growth rate of 13.6% in 2005 thus
outperforming the market growth rate by 5.6% in the same year. Although the anti-
infective’s market is otherwise known for lack of innovation and strong generic
pressure, sales in 2005 witnessed a strong performance which is attributed to the
77
presence of growth drivers such as Roche’s Tamiflu (oseltamivir), Abbott’s Omnicef
(cefdinir) and Wyeth’s Prevnar.
The presence of anti-bacterials was dominant amongst leading brands, with sales from
this class of drugs representing a share of 58.4% or $5,506m in 2005. The anti-
infectives market was led by sales of J&J’s Levaquin (levofloxacin), an anti-bacterial
falling under the fluoroquinolones class of drugs. Levaquin accrued sales of $1,441m
in 2005, an increase of $175m from year previous sales reported at $1,266m.
Anti-virals accounted for a strong 20.8% of the market, with GSK’s Valtrex
(valacyclovir) and Roche’s Tamiflu (oseltamivir) posting collective sales of $1,960m in
2005. GSK’s anti-viral Valtrex (valacyclovir) was placed at second position among the
leading ten brands having registered a strong growth rate of 21.5% representing
$1,323m in 2005. Roche’s Tamiflu (oseltamivir), witnessed a dramatic increase in sales
due to the increased media attention around a possible pandemic of Avian flu in 2005.
Sales of Tamiflu increased by a 200.0%, from $213m in 2004 to $638m in 2005.
Although Novartis’ Lamisil (terbinafine) continues to remain patent protected in the

US, the product lost patent exclusivity in key European markets in 2005, which led to a
decline of 1.5% in sales growth representing sales of $1,157m in 2005. Following
Lamisil, in second position in this market is Pfizer’s tablet formulation of
azithromycin, Zithromax Z PAK, which registered a poor growth rate of 1.9% in 2005,
representing sales of $972m. The oral suspension formulation of the same garnered
$892m having registered a growth rate of 10.9% in 2005. Pfizer’s key anti-infective
lost patent protection in 2005 causing total sales of the Zithromax franchise to falter.
Vaccines featured a modest representation of one brand in this market in 2005,

representing some 8.5% or $802m the market respectively for the same year. The sole
representative of vaccines in this market was Wyeth’s Prevnar which registered a
strong growth rate of 23.7% in 2005 representing an increase of $153m in sales from
78
2004 sales recorded at $649m to $802m in 2005. Prevnar is used as an active
immunization of infants and children against invasive pneumococcal disease (IPD).
The global anti-infectives market remains highly fragmented with sales from branded
products representing a minor share of the total market. Sales growth of branded
products in this market remains largely restricted by the strong presence of generics
and is weakened by the lack of innovation in drug classes such as anti-bacterials and
anti-fungals. While drug classes such as anti-virals and vaccines continue to register
strong growth, these have not been significant enough to bolster branded sales within
the total global anti-infectives market.
79
Figure 2.4 illustrates the competitive dynamics of the ten leading anti-infective branded
products in the global anti-infectives market in 2004-05.
Figure 2.4: Competitive dynamics of the drug classes in the global anti-
200% Tamiflu
62%
60%
Omnicef
24% Prevnar
Valtrex
22%
20%
14%
12% Zithromax
10%
Levaquin
8%
6% Augmentin
4%
2% Zithromax ZPAK
0%
600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500
-1%
-2% Lamisil Sales, 2005 ($m)
-3%
-20%
-21%
-22% Rocephin
80
Key events in the anti-infectives market
Safety warning issued for Sanofi-Aventis’ Ketek (telithromycin)
In 2006, the US FDA issued a warning of the possible risk of severe liver failure
associated with the use of Ketek (telithromycin). The FDA further recommended that
the use of Ketek to be limited to the treatment of CAP, barring promotion for the
product’s use in the treatment of bronchitis and sinusitis. While the launch of this
product was to provide patients with an alternative to Pfizer’s Zithromax
(azithromycin), the performance of this product has seriously diminished and the
chances of reuptake remain bleak. Ketek is currently marketed with a black box
warning advising patients of the potential risks.
Serious adverse effects reported with the use of penicillins
The use of penicillins has been associated with a serious side effect of anaphylactic
reactions. While the release of this negative data caused sales performances of key
marketed brands falling under this drug class to falter, prescription rates remain steady.
However, physicians continue to prescribe penicillin based drugs with caution. Sales of
major blockbusters such as GSK’s Augmentin (amoxicillin/clavulanic acid) have
deteriorated since the release of this negative data.
Launch of new innovative class of drugs
The anti fungals class of drugs witnessed the launch of a new sub-class of drugs, the
echinocandins. Current product offerings that fall under this class of drugs include
Merck’s Cancidas (caspofungin) as well as the more recently launched Pfizer’s Eraxis
(anidulafungin). Echinocandins feature a mechanism of action significantly
differentiated to those of the products falling under older classes of drugs. Additionally,
their use in the treatment of serious and invasive fungal infections has been further
advocated through the release of positive clinical data. Furthermore, clinical trials have
shown a superior tolerability profile together with clinical efficacy in the treatment of
81
fungal infections such as invasive aspergillosis and oropharyngeal and oesphageal
candidiasis. Given that the anti-fungals drug class has not typically been associated
with innovation, the launch of these two new products has resulted in the alteration of
the competitive dynamics of this market. The increased competition is expected to
increase competition between the current products in this market thus resulting in the
possibility of further investment and innovation in this market.
Wyeth’s Prevnar gains from being the first vaccine to reach blockbuster
status in 2005
Wyeth’s Prevnar is a pneumococcal 7-valent conjugate vaccine indicated for active

immunization of infants and children against invasive pneumococcal disease (IPD)
caused by Streptococcus pneumonia. Prevnar is typically administered to all children
under the age of two, representing a large patient base for Wyeth. However, in 2001
Wyeth encountered a problem in supplying some 60% of the demand by the US
government which ultimately led the CDC to alter its recommended vaccination
schedule, keeping two of the four recommended doses as mandatory for infants. Since
then Wyeth has been able to meet the supply demand and achieved blockbuster status
in 2005 with sales of $1,019m.
Increased competition within the hepatitis B market
Gilead’s Hepsera (adefovir), launched in 2002 in the US, and has quickly become the
market leader for the treatment of hepatitis B across the seven major markets with
approvals in the EU in March 2003 and in Japan in December 2004. However, the
approval of BMS’ Baraclude (entecavir) in March 2005 poses a significant threat to
Hepsera’s continued market success as a head-to-head phase III clinical trial between
Hepsera and Baraclude has demonstrated Baraclude’s superior efficacy profile, with
significantly greater percentage of Baraclude patients achieving undetectable viral
HBV DNA levels and a superior mean change in viral load as compared to those
patients treated with Hepsera.
82
Arrival of generic competition to market leading products in the anti-
infectives’ market
GSK’ Augmentin is a combination penicillin drug comprising of amoxicillin and

clavulanic acid. It lost patent exclusivity in 2002. Although Augmentin at the time
faced severe attrition in sales due to the onslaught of generic versions of the drug in the
market, the product has managed to retain its leading position in the anti-bacterials
market with sales of $819m in 2005. It is believed that current revenues are drawn from
the product’s extended release version. However, Augmentin is likely to struggle to
maintain its position and sales potential by the end of the forecast period of this report.
Pfizer’s azithromycin portfolio, marketed under the name of Zithromax, lost patent
protection in 2005. In an attempt to extend the lifecycle of Zithromax and to counter
the loss in sales due to generic attrition, Pfizer launched Zmax, a one-dose-only
azithromycin treatment for mild-to-moderate acute bacterial sinusitis (ABS) and
community-acquired pneumonia (CAP) in adults. However, Zmax has recorded a poor
performance in this highly competitive market.
Generic competition to Novartis’ market leading anti-fungal Lamisil (terbinafine) is

forecast to hit sales after the product loses patent protection in June 2007. A further
deterrent to revenue generation has been the release of negative data linking the risk of
hepatotoxicity to the use of Lamisil. Additionally, there remains the risk of patients
developing serious adverse reactions such as Steven’s Johnson Syndrome which have
further damaged the reputation of this drug. Indicated for the treatment of
onchymycosis, a difficult to treat nail fungal infection, Novartis has resorted to
developing a new lacquer formulation for its drug. While switching this formulation to
OTC status can be seen as a strategy to safeguard severe attrition in sales, the potential
performance of this new formulation remains under speculation until its launch.
83
Anti-virals
Table 2.22 details the historical performance of the major classes of anti-viral
treatments over the period 2001-05.
Table 2.22: Breakdown of the global anti-viral market by drug class, 2001-05

2001 2002 2003 2004 2005 04-05 (%) 2005 (%)
Anti-virals 1,975 2,882 3,495 3,629 4,480 23.4% 100.0%
Total 1,975 2,882 3,495 3,629 4,480 23.4% 100.0%
The anti-viral market registered sales of $4,480m representing 9.2% of the global anti-
infectives market. As anti-viral therapies are becoming increasingly significant health
priorities across the major markets, this drug class has experienced a strong growth of
23.4% over the period 2004-05.
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Leading brands of anti-viral treatments
Table 2.23 summarizes the performance of the leading anti-virals over the 2004-05
period.
Table 2.23: Leading anti-virals in the global anti-infectives market,

2004–05
Brand Company Generic Class 2004 2005 04-05(%) Share (%)
Valtrex GSK valacyclovir AV 1,089 1,323 21.5% 29.5%

Tamiflu Roche oseltamivir AV 213 638 200.0% 14.2%
Rebetol SP ribavirin AV 378 348 -7.9% 7.8%
Copegus Roche ribavirin AV 316 325 2.7% 7.3%
Famvir Novartis famciclovir AV 285 278 -2.2% 6.2%
Valcyte Roche valganciclovir AV 194 233 20.1% 5.2%
Zelitrex GSK valacyclovir AV 102 109 6.5% 2.4%
Hepsera Gilead adefovir AV 113 204 81.1% 4.6%
dipivoxil
Zeffix GSK lamivudine AV 82 101 22.8% 2.3%
Zovirax GSK acyclovir AV 99 86 -12.9% 1.9%
Top 10 Brands 2,870 3,645 27.0% 81.4%
Others 759 835 10.1% 18.6%
Total 3,629 4,480 23.4% 100.0%
GSK = GlaxoSmithKline; SP = Schering-Plough; n/a = not available; lu = lab unknown; AV= Anti-viral
Sales of the leading ten anti-viral brands accounted for 81.4% or $3,645m of the global
anti-viral market in 2005. When compared to the ‘other’ anti-viral treatments falling
outside of the leading products, there is a marked difference between 2004-05 growth
rates, with the sales of the leading products increasing 27.0% and sales of the ‘other’
products witnessing a less significant growth rate of 10.1%, largely underpinned by
strong sales growth of Tamiflu (oseltamivir) and Hepsera (adefovir dipivoxil).
Both GSK and Roche have a strong presence within the global anti-viral market, with
GSK featuring 4 products among the leading 10 brands and Roche following close
behind with 3 products. GSK’s Valtrex (valacyclovir), the anti-viral market leader in
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2005, continued delivering blockbuster sales of $1,323m, an increase of 21.5% over
previous year sales of $1,089m. Roche’s anti-viral market leader, Tamiflu, was
positioned second and garnered sales of $638m in 2005. This constituted outstanding
growth of 200.0% over previous year sales of $213m.
The competitive dynamics of the leading of anti-virals are illustrated in Figure 2.5.
Figure 2.5: Competitive dynamics of the leading anti-viral treatments in the

global anti-infectives market, 2004-5
Tamiflu
200%
Hepsera
100%
80%
Zeffix
60%
40%
Valcyte
Valtrex
20%
Copegus
0%
0 200 400 600 800 1,000 1,200 1,400 1,600
-20%
Zovirax Famvir Rebetol
Sales, 2005 ($m)

Zelitrex
Bubble size represents 2005 market share
86
Key brands analysis
Valtrex/Zelitrex (valacyclovir)
Manufactured by GSK, Valtrex/Zelitrex (valacyclovir) was originally approved by the

FDA in June 1995 for the treatment of herpes zoster (shingles). It has since been
approved for the treatment or suppression of genital herpes in immunocompetent
individuals and for the suppression of recurrent genital herpes in HIV-infected
individuals, as well as the treatment of herpes labialis (cold sores). In 2005,
Valtrex/Zelitrex continued its blockbuster status with sales of $1,431m, an increase of
20.2% over previous year sales of $1,191m.
Valtrex was quick to establish its position as leader of the HSV market, largely
attributable to the product’s improved dosing regimen of once or twice daily as
compared to Valtrex’s market predecessor, Zovirax (acyclovir), whose dosing regimen
ranged from three to five times daily. Valtrex’s initial approval for the treatment of
herpes zoster was based on two randomized double-blind clinical trials among
immunocompetent adults with localized herpes zoster. Valitrex demonstrated a
superior median time to cessation of new lesion formation compared to those treated
with placebo, at 2 and 3 days respectively in patients less than 50 years of age.
However, no differentiation was shown in patients greater than 50 years of age in the
median time to cessation of new lesion formation. In patients greater than 50 years of
age, the median time to resolution of post herpetic neuralgia for the study population
was significantly shorter in patients treated with Valtrex compared with patients treated
with acyclovir, which was measured at 7 and 14 days. In patients greater than 50 years
of age, the incidence of chronic pain after complete crusting and/or healing of a lesion
rash were not significantly different among the Valtrex, acyclovir and placebo groups.
In May 2003, GSK filed a patent infringement suit in the US against Ranbaxy alleging
that its generic product would infringe GSK's basic "composition of matter" patent for
Valtrex, which expires in June 2009. In January 2007, the FDA approved first-time
generic formulations for valacyclovir to be manufactured by Ranbaxy, which the
company plans to market in the US. While no date has been set for the litigation, GSK
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is expected to apply for a preliminary injunction prohibiting the launch of generic
valacyclovir pending completion of the lawsuit. If GSK is successful in filing this
injunction within 45 days, Ranbaxy is not permitted to launch its generic product until
the court rules on either the injunction or delivers a decision in the court case.
Tamiflu (oseltamivir)
Co-developed by Roche and Gilead, Tamiflu (oseltamivir) is the first orally active
neuraminidase inhibitor commercially developed. It was first approved by the FDA in
October 1999 for the treatment of uncomplicated influenza (types A and B) infections.
A series of labeling extensions granted by the FDA (beginning in 2000 in which
Tamiflu was approved for chemoprophylaxis of influenza among individuals 13 years
of age and older, and later in 2005 for chemoprophylaxis of children under the age of
1) has resulted in an unprecedented 200.0% sales growth of Tamiflu over 2004-05,
with sales increasing from $213m in 2004 to $638m in 2005. Tamiflu, however, was
only granted approval for the treatment and prevention of influenza in the EU since
March 2002, which has nonetheless contributed to the formidable 48.9% CAGR over
the period of analysis.
The approval of Tamiflu for the treatment of influenza was based on several phase III
clinical studies among adult, geriatric and pediatric patients. Of 1,355 adult patients
enrolled in two phase III clinical trials, 75mg of Tamiflu administered within 40 hours
of onset of symptoms twice daily for 5 days was found to result in a 1.3 day reduction
in the median time to improvement compared to placebo. Similar results were found in
clinical trials of geriatric and pediatric patients experiencing a 1 day and 1.5 day
reduction in the median time to improvement, respectively.
The efficacy of Tamiflu in preventing naturally occurring influenza has been

demonstrated in a series of several seasonal prophylaxis studies in households
involving both adults and children. In a pooled analysis of two prophylaxis studies in
healthy unvaccinated adults, 75mg Tamiflu was administered once-daily for 42 days
during a community outbreak. This reduced the incidence of laboratory confirmed
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clinical influenza form 4.8% for the placebo group to 1.2% of those patients receiving
Tamiflu. Among children 1 to 12 years of age not shedding the virus at baseline,
Tamiflu administered orally (suspension) was taken once-daily for 10 days, reducing
influenza incidence from 17% in the placebo group to 3% in the Tamiflu group.
Also central to the commercial success of Tamiflu has been the emergence of the H5N1
avian influenza virus, which has predominantly impacted Southeast Asian countries
initially, but has now arisen as a global health concern as anxiety mounts over an
influenza pandemic. According to the WHO, as of the end of December 2006, 114
human cases of avian influenza have been reported, as well as 79-related deaths,
chiefly in countries such as Indonesia, Egypt, Turkey, Thailand and China.
However, the expectations surrounding the efficacy of Tamiflu in curbing the potential
for an avian influenza pandemic has not been ascertained due to concerns over
resistance. It is believed that resistance may be more likely to develop in avian
influenza than seasonal influenza due to the potentially longer duration of infection.
Several reports have documented cases of oseltamivir-resistant forms of H5N1 avian
influenza virus, with disease-resistant strains surfacing in patients in Egypt and Japan.
As such, it may be necessary to administer Tamiflu is higher dosages, over a longer
treatment course, or in combination with other anti-viral drugs to ensure the drug’s
effectiveness. Within the drug’s original indication for the treatment of influenza A and
B, there has also been a reported increase in general resistance to the drug in Japan.
However, the Neuraminidase Inhibitor Susceptibility Network (NISN) has collected
data related from patients worldwide who were treated with Tamiflu for seasonal
influenza and found that the incidence of resistance is rare, estimated at 0.32% in adults
and 4.1% in children. The possible development of anti-viral resistance is also of
concern for avian H5N1 influenza. However, only 3 cases of Tamiflu resistance have
been documented to date due to under-dosing and initiating treatment on the second
and sixth day of illness.
In terms of competition, Tamiflu’s chief rival is Biota/GSK’s Relenza (zanamivir), the

first neuraminidase inhibitor commercially developed for the treatment and prophylaxis
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and influenza A and B. Following a deleterious 72.5% loss in sales over 2003-04, sales
of Relenza rebounded by 235.7% over 2004-05, accruing $8.1m in 2005. The inability
of Relenza to capture a significant portion of the influenza market is mainly because of
its poor bioavailability, which limits it to parenteral routes, and in the case of Relenza,
via inhalation. Due to Tamiflu’s oral availability, the performance of Relenza has failed
to demonstrate a true threat to its market dominance. Another key factor limiting
Relenza’s market success has been the limited marketing and promotion support by
GSK. Originally developed by Biota and launched in 1999 following a licensing
agreement with GSK to complete development and market the product internationally,
GSK failed to properly launch Relenza across several international markets while
withdrawing its support for additional clinical studies post-launch.
While Tamiflu is patent protected through 2016, the capacity of Roche to meet the
production demand of its drug has also caused speculation, especially if an influenza
pandemic arises. In October 2005, the Indian drug company Cipla announced their plan
to begin manufacture of generic oseltamivir without license from Roche. Roche later
announced licensing agreements with Teva, Barr, Mylan and Ranbaxy for the
production of generic oseltamivir.
On November 13, 2006, the FDA approved a labeling supplement for Tamiflu to
include a precaution about neuropsychiatric events. The revision is based on post-
marketing reports (mostly from Japan) of self-injury and delirium with the use of
Tamiflu in patients with influenza. However, given the media attention that the
potential for an avian influenza outbreak has received, it is likely that this will have a
minimal impact on sales.
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Hepsera (adefovir dipivoxil)
In September 2002, the FDA approved Gilead’s Hepsera (adefovir dipivoxil) for the
treatment of chronic hepatitis B in adults with evidence of active viral replication and
either elevations in serum alanine aminotransferase (ALT) or aspartate
aminotransferase (AST), or histologically active disease. Hepsera was later approved in
the EU in March 2003 and in December 2004 in Japan for the treatment of chronic
hepatitis B, strongly factoring in to the astounding CAGR of 332.2% over 2002-05. In
2005, Hepsera registered sales of $204m, a robust increase of 81.1% over previous year
sales of $113m.
The FDA based its approval of Hepsera on the results of two randomized, double-blind,
placebo-controlled studies. In Study 437 among 515 HBeAg-positive patients, Hepsera
(versus placebo) was found to significantly decrease liver inflammation and damage, at
53% and 25% respectively, while improving liver function as measured by a reduction
to normal levels of ALT in 48% of patients as compared to 16% of placebo patients. In
addition, patients receiving Hepsera had a median reduction in HBV DNA from
baseline of 3.52 log10 copies/mL, compared to a reduction of 0.55 log10 copies/mL in
patients receiving placebo. Also, 21% of Hepsera patients had undetectable levels of
HBV DNA in their blood as compared to none of the placebo patients. Similar results
were found among 185 HBeAg-negative patients, with significantly more patients
treated with Hepsera showing reduced liver inflammation and damage (64% versus
33%) and normalized ALT levels (72% versus 29%) when compared to placebo-treated
patients.
The major adverse events associated with the use of Hepsera include severe, acute
exacerbation of hepatitis B after the discontinuation of Hepsera and nephrotoxicity.
Within clinical trial patients treated with Hepsera, approximately 25% experienced
severe, acute exacerbation of hepatitis, but this however is a relatively common adverse
event associated with other products for the treatment of chronic hepatitis B. In
addition, there is a concern that use of Hepsera may result in resistance to HIV drugs in
patients with chronic hepatitis B with unrecognized or untreated HIV infection. As an
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estimated 10% of the HIV patient pool is co-infected with hepatitis B, this clinical
characteristic may serve a factor to limit sales potential.
Hepsera has been shown to be effective in treating patients with clinical evidence of
HBV that is resistant to another approved antiviral therapy, (Epivir) lamivudine. It is
estimated that approximately 70- 80% of patients treated with Epivir develop drug-
resistant virus after four years, thus securing Hepsera a guaranteed patient pool in both
the first and second-line treatment of hepatitis B. While resistance to Hepsera,
estimated to occur in 15-20% of patients, is much lower than that of Eprivir,
highlighting the challenge viral resistance causes in effectively managing hepatitis B
and the need for long-term treatment options. However, in a study conducted in
patients receiving Hepsera with Epivir, it was found that the probability of developing
resistance to this combination treatment after fours years was 0%, providing another
window for increased market penetration of Hepsera.
Hepsera faces increased competition with the recent approval of BMS’ Baraclude
(entecavir) in March 2005 for the treatment of chronic hepatitis B. Similar to Hepsera,
Baraclude suppresses replication of wild-type HBV as well as lamivudine resistant
HBV. In clinical trials comparing Baraclude to Epivir in HBV treatment-naïve patients,
both with HBeAg-positive and HBeAg-negative hepatitis B, Baraclude were found
more effective in terms of improved liver damage and lower HBV-DNA levels. While
clinical trials appear to indicate a low rate of resistance among Baraclude treatment
hepatitis B patients, follow-up data is required after 4 to 5 years of treatment in order to
fully assess Baraclude’s resistance profile. With Baraclude garnering $9.5m in sales
during its first year on the market, it is expected that Baraclude will continue to emerge
as a growing threat to the commercial success of Hepsera.
Rebetol/Copegus (ribavirin)
Rebetol (Schering Plough) and Copegus (Roche) are two branded versions of ribavirin,
which is a nucleoside guanosine analogue that interferes with the ability of the hepatitis
92
C virus to reproduce. In 2005, Rebetol maintained a marginally larger market share
than Copegus, with sales of $348m and $325m respectively.
While both Rebetol and Copegus are comparable in terms of efficacy, both products
registered contrasting growth rates over 2004-05, at -7.9% and 2.7% respectively. As
Rebetol and Copegus are not indicated as a monotherapy treatment for hepatitis C, and
must be co-administered with a pegylated interferon, the performance of these two
drugs is largely contingent upon the market success of the company’s pegylated
interferon franchise.
Roche’s Copegus was approved in 2002 in combination with Pegasys (peginterferon

alfa-2a) for the treatment of adults with chronic hepatitis C who have compensated
liver disease and have not been previously treated with interferon alpha. Schering-
Plough’s Rebetol can be used in combination with either the company’s Intron-A
(interferon alfa-2b) or with Peg-Intron (peginterferon alfa-2b), carrying the same
indication for the treatment of Hepatitis C. In 1991, Intron-A gained the approval for
the treatment of hepatitis B. However, with increasing competition due to
genericization and the preference for second-generation pegylated interferons, sales
have been negatively impacted. This may account for a proportion of Rebetol’s sales
loss. Schering-Plough’s Peg-Intron competes strongly with Roche’s Pegasys, but Peg-
Intron is also associated with severe depression. Side-effects remain a strong platform
for differentiation between pegylated interferons, and while Roche’s Pegasys is
associated with similar psychiatric disorders, it is believed to be associated to a lesser
degree. Thus, it has outperformed Peg-Intron.
Further means for competitive differentiation is apparent in the dosing of each drug,
which involves differences in titration. Roche’s product is administered in pre-filled
syringes in a fixed-dose formulation, and Schering-Plough’s requiring titration in
relation to the body mass of the patient. Even though greater degree of flexibility is
thought to be important, the launch of Schering-Plough’s pre-filled syringe (RediPen)
may concentrate advantages in dosing in favor of Schering-Plough’s interferon product
portfolio.
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In addition, early findings from the REPEAT study demonstrated that Pegasys showed
clinical benefits in patients who had been unsuccessfully treated with Peg-Intron in
combination with Rebetol. Prior studies conducted with Peg-Intron found that the drug
was not able to generate sustained viral response in more than 50% of patients.
Findings from the REPEAT study have shown that patients receiving 180mcg and
360mcg dosage of Pegasys plus Copegus showed significant drops in viral load, 47%
or 64% respectively. The final results of the REPEAT study are expected in 2007, and
pending Pegasys’ ability to demonstrate superior clinical benefit over Peg-Intron, it is
forecast that Copegus’ sales driven by the performance of Pegasys will outperform that
of Schering-Plough’s Rebetol.
In February 2005, Roche’s Pegasys (in combination with Copegus) was approved for
the treatment of hepatitis C in patients co-infected with HIV. Hepatitis C is estimated
to affect 30% of the HIV patient population, and as the first-to-market regimen to treat
this patient pool, sales of Roche’s Copegus have likely benefited from this labeling
extension.
Sales of both Rebetol and Copegus are expected to be further eroded by the
introduction of generic ribavirin, with several versions currently available. After
concluding patent disputes over generic ribavirin availability in 2003, Three Rivers
Pharmaceuticals (in conjunction with Par Pharmaceuticals) was approved in 2005, to
market ribavirin as Ribosphere. Additional generic ribavirin became available in 2005
from Sandoz, Teva and Warrick Pharmaceuticals (the generic arm of Schering-Plough).
With more generic versions of ribavirin expected to enter the market over the forecast
period, these two branded products are expected to become displaced among the
leading anti-virals.
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Anti-Virals sales forecasts to 2011
Table 2.24 illustrates the sales forecasts for the major brands of anti-virals for 2005-11.
Table 2.24: Anti-virals sales forecast, 2005-11
Brand Molecule Sales ($m) CAGR Expected

2005 2008 2011 2005-11 (%) patent expiry
Anti-virals
Valtrex/Zelitrex valacyclovir 1,431 1,090 456 -17.4% 2007
Tamiflu oseltamivir 638 1,265 1,510 15.4% 2016
Rebetol ribavirin 348 243 175 -10.8% exp
Copegus ribavirin 325 260 156 -11.5% exp
Famvir famciclovir 278 204 77 -6.4% 2010
Hepsera adefovir dipivoxil 204 412 521 16.9% n/a
Others 1,255 1,975 2,980 15.5%
Total 4,480 5,449 5,875 4.6%
Pipeline products
Albuferon interferon alpha - - 302 - -
maribavir - - 110 - -
Total pipeline - - 412
Others - 75 286 -
Total Anti-virals 4,480 5,524 6,573 6.6%
Source: Business Insights; IMS; company websites Business Insights Ltd
The anti-virals market is forecast to expand at a robust CAGR of 6.6% over the
forecast period to 2011 despite a rapid decline in sales attributable to the market leader,
GSK’s Valtrex. Gains from other marketed products including Roche’s Tamiflu, but
also more minor products such as Valcyte and Hepsera are forecast to offset some of
the losses sustained from the anticipated collapse in Valtrex sales. Contributions from
pipeline products are forecast to be limited, but sufficient to deliver sustained levels of
growth to the end of the forecast period.
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Vaccines
Table 2.25 summarizes the performance of the leading vaccines over the 2004-05
period.
Table 2.25: Leading vaccines in the global anti-infectives market,

2004–05
Brand Company Indication Class 2004 2005 04-05(%) Share (%)
Prevnar Wyeth PD Pure 649 802 23.7% 14.1%

Varivax Merck varicella Pure 329 255 -22.6% 4.5%
Prevenar Wyeth PD Pure 168 217 29.0% 3.8%
Pediarix GSK DPT/HBV/ Comb 214 198 -7.7% 3.5%
Polio
M-M-R II Merck MMR Comb 219 193 -11.8% 3.4%
Twinrix GSK HAV/HBV Pure 167 192 14.5% 3.4%
Havrix GSK HAV Pure 146 163 11.7% 2.8%
Neuro- Nipponn n/a Other 129 134 3.7% 2.4%
tropin
Pneumovax Merck PD Pure 97 127 31.2% 2.2%
23
Fluzone SP Influenza Pure 70 120 70.8% 2.1%
Top 10 Brands 2,188 2,400 9.7% 42.0%
Others 3,028 3,308 9.3% 58.0%
Total 5,216 5,708 9.4% 100.0%
PD = Pneumococcal disease; DPT = Diptheria, pertussis, tetanus ; MMR = Mumps, measles, rubella ; SP =
Sanofi Pasteur; Comb = Combination vaccine
The global vaccine market was valued at $5,708m in 2005, an increase of 9.4% over
previous year sales of $5,216m. Pure vaccines dominated the leading brands,
occupying 7 out of the 10 top positions, collectively accruing $1,875m in 2005 or
32.9% of the overall vaccine market. Contrary to the majority of pure vaccines which
witnessed strong sales growth over the 2004-05 period, both combination vaccines,
GKS’ Pediarix and Merck’s M-M-R II featured among the leading 10 products
experienced a loss in sales, at 7.7% and 11.8% respectively.
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While Wyeth’s pneumococcal vaccine, Prevnar/Prevnar grossed comparatively higher
sales than Merck’s Pneumovax 23, Merck’s vaccine registered the strongest growth
amongst the three products at 31.2%. Sanofi-Pasteur’s influenza vaccine, Fluzone,
witnessed the robust growth of 70.8% over 2004-05, with sales increasing from $70m
in 2004 to $120m in 2005. This is heavily attributable to stockpiling in the US as well
as expansion of US immunization recommendations to include a larger patient
population.
The competitive dynamics of the leading of vaccines are illustrated in Figure 2.6.
Figure 2.6: Competitive dynamics of the leading vaccines in the global anti-
80% Fluzone
70%
60%
Pneumovax 23 Prevenar
50% Prevnar
40%
30%
Havrix
20% Twinrix
10%
Neurotropin
0%
0 100 200 300 400 500 600 700 800
-10%
-20% Varivax
-30% M-M-R II
Sales, 2005 ($m)
Pediarix
Bubble size represents 2005 market share
97
Key brands analysis
Prevnar/Prevenar
Prevnar, marketed by Wyeth, is a pneumococcal 7-valent conjugate vaccine. It is

indicated for active immunization of infants and children against invasive
pneumococcal disease (IPD) caused by Streptococcus pneumoniae due to capsular
serotypes included in the vaccine (4, 6B, 9V, 14, 18C, 19F, and 23F). In 2005, Prevnar
became the first vaccine to reach blockbuster status accruing $1,019m, an increase of
24.8% over previous year sales of $817m.
Prevnar was initially approved in the US in 2000, becoming the first multivalent
conjugate pneumococcal vaccine for children under the age of two. Marketed as
Prevenar in the EU, it was not until February 2001 that the vaccine received final
approval from the EMEA. Since its launch, the sales growth of Prevnar has been
bolstered by the decision of the EMEA (June 2004) to extend the range of vaccination
from 2 years up to 5 years of age. Prevnar is also indicated for active immunization of
infants and toddlers against acute otitis media (AOM) caused by serotypes included in
the vaccine.
The routine schedule for Prevnar consists of 4 doses at 2, 4, 6, and 12-15 months of
age. However, in September 2001 Wyeth encountered a problem in meeting
approximately 60% of the supply demand for Prevnar. This led the CDC to alter its
recommended vaccination schedule, prioritizing the vaccine supply to ensure infants
received at least two of the four recommended doses. It was not until July 2004 that the
CDC reinstated administration of the third dose, and among those children with chronic
illnesses or who are at increased risk for severe diseases were recommended to receive
the final fourth dose. Overall, compliance rates for the four-dose regimen of Prevnar in
the US are approximately 80% as of August 2005.
According to a study published in the New England Journal of Medicine in 2006, the
introduction of Prevnar in the US has resulted in a substantial decrease of IPD caused
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by penicillin-resistant strains targeted by the vaccine by 98% among children younger
than 2 years of age. Additionally, the rate of antibiotic-resistant IPD decreased in adults
over 65 years of age, an unvaccinated group, suggesting an indirect effect in the non-
vaccinated population. However, since its introduction the rate of penicillin non-
susceptible disease due to non-vaccine serotypes increased from 0.2 per 100,000 in
1999 to 0.5 per 100,000 in 2004. In an attempt to meet this growing demand from
patients susceptible to additional pneumococcal serotypes, Wyeth is currently
developing a 13-valent pneumococcal conjugate vaccine, which is currently in phase
I/II clinical trials.
Similarly, prior to the introduction of Prevnar, the predominate bacterial cause of AOM
was found to be S. pneumoniae. This accounted for approximately 40% of AOM
episodes. In one study, Prevnar has been shown to reduce the incidence of AOM
caused by S. pneumoniae by 34% and reduce the overall incidence of AOM by 6- 8%.
However, more recent studies have shown increases in the proportion of Haemophilus
influenzae and Moraxella catarrhalis in the middle-ear fluid of Prevnar immunized
children. Other studies have substantiated that the mean number of pathogenic bacteria
types isolated from children who received Prevnar is significantly higher than in
children who had not received the vaccine. Together, these studies have posed a severe
problem for Prevnar.
Despite its blockbuster status, Prevnar has been linked to several reports of adverse
events. According to the Vaccine Adverse Events Reporting System (VAERS), a
vaccine surveillance system maintained by the CDC and FDA, approximately 11,600
cases of adverse events have been reported since March 2000. This includes 362 deaths
and 1,347 hospitalizations following the administration of Prevnar alone or with other
vaccines. While the etiology of these adverse events is not specifically linked with
Prevnar, such statistics do raise concern over the safety of Prevnar.
Prevnar sales outside the US market are likely to plateau over the next several quarters
as the international markets will become fully penetrated over time. This is in keeping
with the trend that growth of most pediatric vaccine regimens is primarily based on the
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newly born population. However, the recent approval by the EMEA in March 2007 for
an extension of the indication for Prevenar to include active immunization against
pneumonia and AOM may help to maintain a level of sales growth with the European
market. However, this may be curtailed to a large extent due to the emergence of
studies around AOM and Prevnar. Continued growth is expected as Prevnar has been
launched in nearly 70 international markets and is expected to be included in additional
national vaccination programs in international markets over the coming years.
Future competition to Prevnar is likely to come from GSK’s rival pneumococcal

vaccine currently under development. Expected to launch as early as 2010, Streptorix is
said to be more effective than the Prevnar. This is based primarily on the vaccine’s
design to provide protection against the 10 pneumococcal serotypes worldwide,
including three serotypes (1, 5, 7F) not contained in Prevnar.
Varivax
Marketed by Merck, Varivax is indicated for vaccination against the varicella zoster
virus (VZV) in individuals 12 months of age and older and is a live-attenuated vaccine
consisting of the varicella zoster virus Oka strain vaccine. Varivax was first launched
in the US in 1995 and was later added to the list of recommended childhood
vaccinations in 1996, which has contributed to the product’s staying power within the
global vaccine market.
While Varivax experienced sales growth over 2001-04, with sales increasing from
$254m in 2001 to $329m in 2004, the introduction of Merck’s ProQuad, a combination
vaccine against measles, mumps, rubella and varicella, in September 2005 has quickly
eroded sales, with Varivax sales falling by 22.6% over 2004-05 to $255m. ProQuad, as
a combination of Merck’s well established Varivax and M-M-R II vaccines, sales of
M-M-R II have also seen a decline in growth, falling by 11.8% from $219m in 2004 to
$193m in 2005.
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Within the US, the Advisory Committee on Immunization Practices (ACIP) has
recommended one subcutaneous dose of Varivax for non-immune children 12 months
through 12 years of age and two doses for non-immune persons over 13 years of age.
This recommendation was based on clinical trials in which a single dose of Varivax
given to healthy children under the age of 12 resulted in seroconversion rates of 95%.
Seroconversion rates among adults were 79-82% after one dose and 95% after two
doses, hence the two-dose recommendation for individuals 13 years of age and older.
Germany is the only country in Europe with routine childhood immunization against
VZV, which was incorporated into the country’s routine immunization schedule in July
2004 as a single dose at the age of 11-14 months. The UK, Italy, Spain and Germany
currently have targeted vaccination of specific groups considered at risk such as
immunocompromised individuals, susceptible healthcare workers, childcare workers,
adolescents, and women of childbearing age, which vary across these markets. These
targeted strategies are predicted to have little impact on varicella incidence within these
countries, with several countries considering expanding targeted vaccination programs
or introducing mass childhood VZV vaccination. Given the disparity of use of Varivax
among the major markets, particularly the widespread use of the vaccine in the US due
to its incorporation into the routine childhood immunization schedule, it is not
surprising that the US markets accounts for an estimated 95% of Varivax sales in 2005.
In November 2006, Merck filed a supplementary protection certificate (SPC), which

covers the method of producing a vaccine using a live attenuated VZV, particularly the
Oka strain. This filing appears to cover a process for making Varivax, and if granted
this SPC, Varivax should be afforded further protection until July 2018.
Twinrix
Marketed by GSK, Twinrix (Hepatitis A inactivated and Hepatitis B recombinant

vaccine) is a sterile bivalent vaccine containing the antigenic components used the
company’s older vaccines, Havrix (Hepatitis A vaccine inactivated) and Engerix-B
(Hepatitis B vaccine recombinant), which gained FDA approval in May 2001.
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Twinrix’s market exclusivity as the only available combined hepatitis A and B vaccine
has contributed to the product’s strong performance, with sales increasing by 14.5%
over 2004-05 to $192m in 2005. Prior to 2001, the performance of Twinrix was
predominantly reflected by sales across the major markets of the EU, where the product
gained approval in 1996.
The monovalent vaccines, Havrix and Engerix-B, have well-established safety and
immunogenicity profiles in both adults and children, and appear to be unaffected by the
combination of the two vaccines as was demonstrated in the approval of Twinrix based
on results of 11 clinical trials. These clinical trials involved 1,551 individuals, in which
over 99.9% responded to the hepatitis A component and 98.5% responded to the
hepatitis B component of the vaccine.
Twinrix offers significant advantages including increased physician and patient

convenience, fewer injections and better compliance compared with separate hepatitis
A and B vaccination courses. Primary immunization with Twinrix consists of three
doses, given on a 0, 1, and 6 month schedule, which constitutes a superior
administration regimen when compared to the five doses needed to complete the series
of single-antigen formulations.
Across the major markets Twinrix is indicated for active immunization of persons 18
years of age or older, however in the EU a pediatric formulation, Twinrix Junior, has
been approved as well as an accelerated schedule given at 0, 1 and 3 weeks with a with
a booster recommended at 12 months (September 2001). The inability of GSK to gain
FDA approval for Twinrix Junior is likely attributable to the absence of long-term
clinical data evaluating Twinrix for its carcinogenic potential, mutagenic potential, or
potential for impairment of fertility, which may indicate a cumulative effect on the
development of a child's immune system. In the long term, however, this labeling
extension geared toward the children and adolescent population may catalyze a
recognized need for a universal vaccination of children and adolescents against
hepatitis as this population segment is becoming increasing susceptible to hepatitis A.
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A recent study presented at the International Society of Travel Medicine (ISTM)
detailed the length of immunity conferred by Twinrix over a six-year period. This
study, based on two groups of adults aged 17-60 years who received three doses of
Twinrix on a 0,1, 6 month schedule found that after six years, 100% of adults in both
groups showed an antibody response to the hepatitis A component of Twinrix, while
89% and 95% percent showed a response to the hepatitis B component.
The target populations for this vaccine include chronic liver disease patients, healthcare
personnel and individuals traveling to areas of high or intermediate hepatitis A and/or
B endemicity. With the growing number of international travelers, it is expected that
sales of Twinrix will continue to maintain strong growth.
Fluzone
Fluzone is marketed by the vaccine arm of Sanofi Aventis, Sanofi Pasteur, is indicated
for active immunization against influenza disease caused by influenza virus types A
and B contained in the vaccine in subjects from 6 months of age and older. Marketed
solely in the US, Fluzone’s monopolistic dominance of the market has resulted in the
strong sales growth of 70.8% over 2004-05, accruing sales of $120m in 2005.
This injectable vaccine is traditionally cultured on embryonic eggs, producing

sterilized monovalent concentrates, which are then combined into the trivalent form.
This time-consuming process requires that the supply be estimated a year in advance,
taking into account the antigenic drift which occurred within the virus over the past
year, and that high-scale production is possible. Given this production process and the
high standards for production, the injectable influenza market has dwindled from 4
manufacturers in the US in 1999 to 2 in 2005, Sanofi Pasteur and Chiron. Wyeth,
Parkdale (a subsidiary of King Pharmaceuticals) and Chiron all encountered citations
for current Good Manufacturing Practices (cGMP) and unable to incur the cost of
upgrading manufacturing facilities, all three companies halted production of their
influenza vaccine. Chiron, however, in August 2005 received approval from the FDA
to recommence manufacturing of the company’s Fluvirin.
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In July 2006, however, the FDA issued a warning letter for cGMP violations relevant
to Sanofi-Aventis regarding a series of problems related to the manufacturing of
Fluzone. Problems included failure to segregate equipment, processing areas and
materials adequately to prevent cross-contamination, insufficient equipment
maintenance, and inadequate adherence to written procedures and validation of the
methods used to ensure sterility. This notice was based on the failure of 11 lots of
Fluzone manufactured between February and April 2006 to meet sterility requirements,
and given past failures of other companies to pledge additional investment to counter
manufacturing violations, there still remains speculation around Sanofi-Pasteur’s
ability to meet future demand.
Key to the success of Fluzone within the US market has been the expansion of
vaccination guidelines. In April 2004 the CDC published new recommendations that all
children 6 to 23 months of age receive an annual influenza vaccination (2004/2005
influenza season). In addition, household contacts and out-of-home caregivers of all
children younger than 24 months of age are recommended to be immunized against
influenza each year.
Only three new influenza vaccines have entered the US market recently, which pose a
potential threat to Fluzone’s market monopoly. In 2003, the FDA approved
MedImmune’s FluMist. This is a needle-free influenza vaccine, a trivalent, cold-
adapted virus vaccine that combines the core of a live-attenuated influenza virus with
the envelope of the prevalent virulent strains in the preceding flu season. While the
intranasal mode of administration promised to a strong point for market uptake, several
factors negated the product’s success. Commanding a premium price-point of $19-$25
per dose compared to an average of $10-$12 for Fluzone, the cost of FluMist proved to
be a major obstacle for market success. In addition, FluMist is approved for use only
among individuals 5-49 years of age, leaving out the two key patient pools of young
children and the elderly. Initially, FluMist was available only in a frozen formulation,
requiring stringent storage and transport facilities. However, in January 2007 the FDA
approved a cold adapted formulation requiring only refrigeration. While this
formulation carries a marginally smaller price-point, it is unlikely that MedImmune
104
will be able to effectively compete with Sanofi-Pasteur due to an imbalance between
the two companies marketing and distribution networks.
The most recent market entrant, GSK’s FluLaval, gained approval by the FDA in
October 2006. However, sales of this vaccine are likely to be constrained by the
product’s indication for the immunization of individuals ages 18 years and older. GSK,
however, has an additional influenza vaccine on the market in the US, Fluarix, which
received approval in 2005. Pending the results of a phase III study sponsored by GSK
to evaluate the immunogenicity and safety of Fluarix compared with Fluzone in
children 6 months and older, Fluarix may be able to secure a sizeable market share if
data points to an improved efficacy profile.
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Vaccines sales forecasts to 2011
Table 2.26 illustrates the sales forecasts for the major brands of vaccines for 2005-11.
Table 2.26: Vaccines sales forecast, 2005-11

2005 2008 2011 2005-11 (%) patent expiry
Vaccines
Prevnar pneumoccocal 1,019 2,095 2,812 18.4% n/a

disease
Varivax varicella 255 114 73 -18.8% n/a
Pediarix DPT/HBV/Polio 193 149 128 -6.6% n/a
M-M-R-II MMR 193 149 128 -6.6% n/a
Twinrix HAV/HBV 192 243 262 4.1% n/a
Havrix HAV 163 195 207 4.1% n/a
Others 3,690 3,861 3,662 -0.1%
Total Vaccines 5,708 6,863 7,357 4.3%
HBV=Hepatitis B virus; MMR= Mumps, Measles, Rubella; HAV=Hepatitis A virus; DPT=

Diphtheria/ Pertussis
The vaccines market is forecast to post robust levels of sales growth over the period
2005-11, with sales increasing at a CAGR of 4.3%, a modest level, which forecast to be
built upon the continued dominance of Prevenar and contributions from a high number
of vaccines across a wide array of indications. The vaccines market is a major target for
a select number of pharmaceutical companies, and historically enjoys high barriers of
entry from generics companies. This enables a low level of sales attrition. However, the
increase in popularity of combination vaccines that can provide for coverage across a
range of indications, coupled with heavy pricing pressure from governments is set to
slowly erode sales of minority brands.
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Anti-bacterials
Table 2.27 details the historical performance of the major classes of anti-bacterials over
the period 2001-05.
Table 2.27: Breakdown of the global anti-bacterial market by drug class,

2001-05

2001 2002 2003 2004 2005 04-05 (%) 2005 (%)
Cephalosporins 7,670 7,604 8,345 8,692 9,288 6.9% 27.4%

Penicillins 5,412 5,481 5,871 6,001 6,488 8.1% 19.1%
Macrolides 4,622 4,769 5,607 5,725 6,451 12.7% 19.0%
Fluoroquinolones 5,078 5,206 6,026 5,781 5,861 1.4% 17.3%
Beta-lactams 959 1,051 1,183 1,341 1,512 12.8% 4.5%
Tetracyclines 690 699 813 875 877 0.3% 2.6%
Others 2,172 2,300 2,628 3,037 3,438 13.2% 10.1%
Total 26,603 27,111 30,472 31,451 33,915 7.8% 100.0%
Anti-bacterials expanded at a CAGR valued at 6.3% over the period 2001-05,

representing sales of $33,915m in 2005. Growth rates recorded by this drug class in
2004-05 were reported at 7.8%, thus outperforming the CAGR for the entire period of
analysis.
The anti-bacterials drug class is led by sales from the cephalosporins which garnered
$9,288m in sales in 2005, representing 27.4% of the market. Despite this strong sales
performance, growth in this class of drugs is stagnating with a CAGR of 4.9% reported
for the 2001-05 period. A similar performance has been witnessed with the penicillins
class of drugs which despite occupying a market share of 19.1% in 2005, expanded at a
poor CAGR of 4.6% for the period of analysis.
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In 2005, the highest growth rate in the global anti-bacterials drug class was reported by
the beta-lactams class of drugs which registered a growth rate of 12.8% representing
sales of $1,512m in 2005, an up of $171m from year previous sales reported at
$1,341m. On the other hand fluoroquinolones and tetracyclines featured a weaker
performance with sales growth rates of 1.4% and 0.3% reported for 2004-05. This poor
performance is attributable to the relative maturity of both drug classes, thus rendering
them vulnerable to strong generic competition and weak levels of innovation.
The competitive dynamics of the major drug classes of anti-bacterials are illustrated in
Figure 2.7.
Figure 2.7: Competitive dynamics of the global anti-bacterial market by drug

class, 2005
14%
Beta-lactams
-
Macrolides
12%
10%
8%
Penicillins
6%
Cephalosporins
4%
Tetracyclines
Fluroquinolones
2%
0
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000
Sales, 2005 ($m)
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Leading brands of anti-bacterial treatments
Table 2.28 summarizes the performance of the leading anti-bacterials over the period of
analysis.
Table 2.28: Leading Anti-bacterials in the global anti-infectives market,

2004–05
Levaquin J&J levofloxacin Fluoroquinolone 1,266 1,441 13.9% 4.2%

Zithromax Pfizer azithromycin Macrolide 954 972 1.9% 2.9%
Z-Pak
Zithromax Pfizer azithromycin Macrolide 805 892 10.9% 2.6%
Augmentin GSK AMX+CLA Penicillin 791 819 3.6% 2.4%
Rocephin Roche ceftriaxone Cephalosporin 972 759 -21.9% 2.2%
Amox Tr/ AMX+CLA Penicillin 589 734 24.6% 2.2%
Pot Clavul
Omnicef Abbott cefdinir Cephalosporin 388 622 60.2% 1.8%
Zyvox Pfizer linezolid Others 429 552 28.5% 1.6%
Zosyn Wyeth PIP+TAZ Penicillin 439 514 17.1% 1.5%
Cravit Daiichi levofloxacin Fluroquinolone 391 424 8.3% 1.3%
Top 10 brands 7 7,024 7,730 10.1% 22.8%
Others 24,428 26,186 7.2% 77.2%
Total 31,451 33,915 7.8% 100.0%
GSK = GlaxoSmithKline; J&J= Johnson & Johnson; AMX= amoxicillin: CLA = clavulanic acid; PIP =
piperacillin; TAZ= tazobactam
The leading brands in the anti-bacterial class of drugs accounted for 22.5% of total
global sales, valued at $7,621m in 2005. Sales of the ten leading products registered a
growth rate of 8.7% in 2005, outperforming the market growth rate by a mere 0.9%.
Additionally, there was no marked difference between the growths rates registered by
the ten leading products (8.7%) and by products falling outside of the major brands,
which was reported at 7.6% in 2005. The strong sales growth registered by the leading
products is largely underpinned by the successful performances of products such as
Abbott’s Omnicef (cefdir), Pfizer’s Zyvox (linezolid) and Wyeth’s Zosyn
(piperacillin+ tazobactam).
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Abbott’s Omnicef (cefdir) registered the strongest growth rate reported at 60.2%
representing sales of $622m in 2005. This strong performance has been attributed to
the successful marketing capabilities of Abbott. This has enabled Abbot to differentiate
Omnicef from other cephalosporins currently available in this market. Aside from
Omnicef, Pfizer’s Zyvox (linezolid) also featured a commendable performance in 2005
having garnered sales of $552m, an increase of $129m from year previous sales
reported at $429m.
The only product to experience negative growth was Roche’s Rocephin (ceftriaxone)
which was reported at 21.9%, representing sales of $759m down by $123m from year
previous sales of $972m. This sharp decline in sales has been attributed to the
increasingly strong presence of generics in the cephalosporins drug class which in turn
has negatively affected sales growth. Furthermore, Pfizer’s Zithromax Z Pak
(azithromycin) too witnessed a slowing down of sales due to loss of patent exclusivity
earlier in the year. Zithromax Z PAK the oral tablet formulation of Pfizer’s Zithromax
franchise generated sales of $972m, 1.9% up on year previous sales reported at $954m
in 2004.
110
The competitive dynamics of the leading ten brands of the anti-bacterial drug classes
are illustrated in Figure 2.8.
Figure 2.8: Competitive dynamics of the ten leading brands in the anti-
bacterial drug class, 2005
65%
Omnicef
60%
30%
Zyvox
25%
AMX+CLA
20%
Zosyn
15%
Zithromax Levaquin
10%
Cravit
5%
Augmentin
Zithromax ZPAK
0%
0 200 400 600 800 1000 1200 1400 1600
-22% Rocephin
Sales, 2005 ($m)
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Macrolides
Table 2.29 summarizes the performance of the leading macrolides over the 2004-05
period.
Table 2.29: Leading macrolides in the global anti-infectives market,

2004–05
Zithromax Pfizer azithromycin erythromycin 954 972 1.9% 15.1%

Z-Pak
Klacid Abbott clarithromycin erythromycin 388 408 5.0% 6.3%
Clarith Taisho clarithromycin erythromycin 226 240 6.1% 3.7%
Biaxin XL Abbott clarithromycin erythromycin 222 229 3.5% 3.6%
Klaricid Abbott clarithromycin erythromycin 223 218 -2.5% 3.4%
Ketek SA telithromycin ketolide 145 190 30.6% 2.9%
Azithro- lu azithromycin erythromycin 15 176 1,073.5% 2.7%
mycin
Ketek Pak SA telithromycin ketolide 52 145 178.5% 2.2%
Tri-Pak
Zithromac Pfizer azithromycin erythromycin 110 129 17.6% 2.0%
Top 10 Brands 3,269 3,742 14.5% 58.0%
Others 2,456 2,709 10.3% 42.0%
Total 5,725 6,451 12.7% 100.0%
SA = Sanofi-Aventis; lu = lab unknown
The global macrolide market accrued $6,451m in 2005, of which 42.8% or $3,742m in
sales was captured by the top 10 brands. Although a highly genericized market, strong
branding and marketing platforms of companies such as Pfizer and Abbott have
contributed to the leading 10 brands outperforming the overall macrolide market in
regards to sales growth, at 14.5% and 12.7% respectively.
The global macrolide is dominated by a few active ingredients, specifically

azithromycin and clarithromycin, with the various azithromycin brands and
112
formulations maintaining a significantly greater market share than that of
clarithromycin, at 61.8% and 29.3% respectively among the leading 10 brands.
Outside of these two key agents, Sanofi-Aventis’ Ketek (telithromycin), and Ketek Pak
managed to secure two positions within the leading macrolide brands, with sales
growth over 2004-05 largely driven by the approval of both products in the US in 2004.
Key brands analysis
Zithromax (azithromycin)
Originally developed by Pliva, Pfizer and Pliva signed a licensing agreement in 1986,
which gave Pfizer exclusive rights for the sale of Zithromax (azithromycin) in Western
Europe and the US. Since Zithromax’s launch in 1992 in the US, the product’s
commercial success has been driven by its broad efficacy, compliance advantages,
favorable side-effect profile and a range of formulations that cater to a vast spectrum of
the patient population. This range of formulations is detailed below in Table 2.30.
Table 2.30: Overview of Pfizer’s Zithromax franchise
Brand Formulation Dosage Indication(s)
Zithromax Tablet 500 mg qd day 1, CAP

Z-Pak followed by 250 mg qd for 4 days
Zithromax Oral suspension 10 mg/kg day 1, AOM

5 mg/kg days 2 to 5*
Zithromax Tablet 500 mg qd for 3 days AECB, ABS
Zithromax Intravenous 500 mg IV qd for at least CAP

IV 2 days, followed by 500 mg qd PO
to complete 7 to 10 days of therapy
ZMax Tablet
CAP = Community acquired pneumonia; AOM = Acute otitis media; AECB = Acute exacerbation
of chronic bronchitis; ABS = Acute bacterial sinusitis; qd = once daily; IV = Intravenous; * = 1 and
3 day dosing regimen also available
Source: Author’s research, Company reports Business Insights Ltd
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Collectively, Pfizer’s Zithromax franchise was estimated to accrue over $2bn in 2005,
with the majority of its sales being derived from the US market, which represented
approximately 73% of Zithromax sales in 2005. Zithromax Z-Pak, the macrolide
market leader in 2005, captured sales of $972m, a marginal increase of 1.9% over
previous year sales of $954m. Indicated for the treatment of community-acquired
pneumonia, the performance Zithromax Z-Pak as well as Zithromax Tri-Pak has been
driven by the products’ convenient dosage regimens and patient-friendly packaging.
Zithromax Z-Pak, for example, is a four-panel fold-out card containing six tablets in
blisters, which is accompanied by a panel containing instructions for administration.
The blockbuster status of the Zithromax franchise has faltered due to the product’s
patent expiration across all the major markets, having first lost patent protection in the
US in November 2005, followed by Japan and the majority of markets in the EU in
2006. Outside that of Italy where Zithromax remain patent protected until 2009, the
influx of generic competition is forecast to render sales of Zithromax to immense
vulnerability.
In an attempt to extend the lifecycle of Zithromax and to counter the loss in sales due to
generic attrition, Pfizer launched Zmax, a one-dose-only azithromycin treatment for
mild-to-moderate acute bacterial sinusitis (ABS) and community-acquired pneumonia
(CAP) in adults, which was granted approval in the US and EU in June and September
2005, respectively. Despite the transfer of a large proportion of its sales force and
marketing expenditure from Zithromax, Zmax was only able to garner sales of $35m by
the end of 2005. Also hampering the market penetration of Zmax has been the limited
window from the product’s launch to the patent expiry of Zithromax, which
consequently restricted uptake due to the availability of cheaper generic versions of
azithromycin. This prohibitive cost-constraint coupled with concerns over the
emergence increased adverse events with this once-daily dosing regimen has also
detracted commercial success, particularly the incidence of gastrointestinal
complications, which was found to occur in 17.2% of patients taking Zmax as
compared to 9.7% of those patients receiving competitor agents in clinical trials.
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Additionally, Pfizer has also sought to gain new indications for Zithromax, particularly
in combination with chloroquine for the treatment of malaria. Initiated in November
2006, a phase III clinical trial is currently underway to assess the efficacy of Zithromax
in combination with chloroquine versus mefloquine for the treatment of uncomplicated
Plasmodium falciparum in Africa. Regardless of the results of this clinical trial,
however, it is highly unlikely that Zithromax will be capable of rejuvenating sales of
prior blockbuster status.
Another strategy employed by Pfizer to maintain a share of the azithromycin market

came in the form of the launch of its own generic azithromycin through its subsidiary,
Greenstone. In November 2005, the FDA approved a generic version of azithromycin
to be manufactured by Teva, Sandoz and Pliva. Of these generic versions, Pfizer’s
generic azithromycin garnered the highest sales in 2005, reaching nearly $100m as
compared to Teva’s sales of $53m and $14m for Sandoz’s generic azithromycin. This
trend has continued through the first-half of 2006, with Pfizer’s generic azithromycin
accruing sales of approximately $285m, maintaining a superior market share when
compared to competing generic azithromycin versions. The ability of Pfizer’s generic
azithromycin to outperform its generic competitors was likely influenced by the
company’s petition to the FDA to recall Teva and Sandoz’s generic azithromycin to
correct misbranding of their products. While Pfizer has managed to delay the initial
impact of generic competition on Zithromax, it is expected that with the continued
market entry of additional generic competitors, price points are likely to continue to
slide, reducing overall revenues.
While Pfizer’s generic azithromycin may enable the company to retain a comparatively
minor share of the macrolide market, sales erosion of the macrolide class as a whole
due to increasing resistance may relinquish future market gains. As demonstrated in
studies such as the Alexander Project and PROTEKT (Prospective Resistance
Organism Tracking and Epidemiology for the Kelotide Telithromycin), which have
been designed to monitor the prevalence and distribution of anti-microbial resistance,
the incidence (as defined by the Alexander Project) were found to have increased from
16.5-21.9% in 1996 to 24.6% over 1998-2000.
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Klacid/Clarith/Biaxin XL/Klaricid (clarithromycin)
The global clarithromycin franchise is spearheaded by the performance of several

branded versions marketed by Abbott including Klacid (EU), Biaxin XL (US) and
Klaricid (Japan) as well as Taisho’s Clarith (Japan). Launched across the seven major
markets in 1991, clarithromycin is active against gram-positive and gram-negative
pathogens such as S. aureus and S. pneumoniae as well as against other micro-
organisms such as M. pneumoniae and mycobacteria. The main indications for
clarithromycin are uncomplicated skin and skin structure infections (SSSIs),
disseminated mycobacterial infections and respiratory tract infections (RTIs),
particularly pharyngitis/tonsillitis, acute maxillary sinusitis, acute bacterial
exacerbation of chronic bronchitis, CAP and AOM in children.
Abbott’s original clarithromycin product, Biaxin, lost patent protection in 2004 in

Japan and all European markets (except for Italy where it is protected through 2007)
and in May 2005 in the US. As such, Biaxin sales have plummeted by 45.5% over
2004-05, falling from $231m in 2004 to $126m in 2005. Conversely, marketed as
Klacid in EU, Abbott’s clarithromycin has been able to postpone the incursion of
generic attrition, to an extent, due to a reliance on the Italian market where it remains
patent protected, with Klacid registering a sales growth of 5.0% over 2004-05 and
garnering sales of $408m.
In an attempt to maintain market share through extending Biaxin’s lifecycle, Abbott

launched an extended release version, Biaxin XL, in the US in March 2000. Biaxin XL
is indicated for the treatment of adults suffering from acute maxillary sinusitis, acute
bacterial exacerbation of chronic bronchitis and CAP. Compared to its predecessor,
Biaxin, Biaxin XL maintains several key improvements, which have catalyzed sales
growth including a reduced dosing frequency of once daily compared to twice daily for
Biaxin. Additionally, clinical trials have demonstrated an improved tolerability profile
as compared to Biaxin and one of the product’s chief competitors, GSK’s Augmentin
(amoxicillin/clavulanate), which suggested Biaxin XL has less severe gastrointestinal
side-effects. In April 2005, Abbott was granted an additional US patent for Biaxin XL
116
through 2017, which protects the drug’s pharmacokinetic profile including its
extended-release formulation and improved taste profile.
Despite this patent extension for Biaxin XL, several companies are presently vying for
a portion of the market, however none have been successful. While Teva has been the
only generic manufacturer to have launched a version of Biaxin XL, it only enjoyed
three days on the market due to an emergency motion filed by Abbott, which prompted
Teva to pull its generic version off the market. Other applicants including Andrx,
Ranbaxy and Ratiopharm have all attempted to launch generics, but in February 2007
US federal courts ruled against these companies, preventing the manufacturing and
marketing of generic versions of Biaxin XL. As Abbott has been successful in
thwarting off generic competition to Biaxin XL, it is expected that the product will
continue to be key to maintaining a significant share of the clarithromycin market. It is
forecast that the branded clarithromycin products, particularly those marketed by
Abbott, will fail to maintain sales momentum over the forecast period due to increasing
levels of genericization across the seven major markets.
Ketek (telithromycin)
Marketed by Sanofi-Aventis, Ketek (telithromycin) was the first ketolide antibiotic to

enter the market. It was launched in the EU in July 2001 and subsequently received
approval in the US in April 2004. Ketek is indicated for the treatment of acute
exacerbation of chronic bronchitis, acute bacterial sinusitis, mild-to-moderate CAP due
to S. pneumoniae (including multi-drug resistant isolates), H. influenzae, M.
catarrhalis, C. pneumoniae, or M. pneumoniae, for patients 18 years old and above.
Collectively, both Ketek and Ketek Pak accrued $334m in 2005, a net increase of
69.7% over previous year sales of $197m. However, Ketek Pak demonstrated a
significantly stronger growth rate of 178.5% as compared to Ketek’s at 30.6%, which is
largely a result of the convenient packaging (10 tablet card) and dosing regimen (once
daily) of the Ketek Pak.
117
In 2006, Ketek’s reputation came under threat due to the emergence of several reports
of severe liver failure as a side-effect. In the US, the FDA’s Office of Epidemiology
and Surveillance identified 12 cases of acute liver failure, resulting in four deaths, and
an additional 23 cases of acute, serious liver injury in patients taking Ketek through
April 2006. Consequently, the FDA and EMEA directed Sanofi-Aventis to include a
black-box warning on the drug’s prescribing information. Following an FDA meeting
in December 2006, which further discussed the fate of Ketek, the advisory panel
recommended that the use of Ketek be limited to the treatment of CAP, thus barring
promotion for the product’s use in the treatment of bronchitis and sinusitis. In addition,
the FDA worked with Sanofi to update the product labeling with an additional warning,
stating that Ketek should not be used in patients with myasthenia gravis, a disease that
causes muscle weakness. While the advisory panel did not go as far as to withdraw
Ketek, it is expected that this ruling will have a significant impact on both the short-and
long-term sales of Ketek, resulting in a deleterious decline in sales over the forecast
period. While Sanofi ceased disclosing sales of Ketek in 2006 it is believed that the
drug witnessed shrinking revenues over the course of 2006, and as such it is unlikely
that Sanofi will be able to establish Ketek as a viable alternative to Pfizer’s Zithromax.
Prior to this, however, Ketek was able to establish is superior efficacy to standard first-
line anti-biotic therapy for the treatment to mild-to-moderate CAP. Results from the
Community-acquired pneumonia Outcome in high Bacterial Resistance Areas
(COBRA) study, showed that among 505 patients with CAP, those treated with Ketek
had a 7.2% higher clinical cure rate than those treated with either macrolides, beta-
lactams or fluoroquinolones.
And while the patent of Ketek is protected through 2017 in the US, 2015 in Germany,
2016 in France, Italy, Spain and the UK, and 2019 in Japan, the recent negative
developments in the safety profile of Ketek are likely to hinder intense market
penetration. Further contributing to the faltering performance of the Ketek franchise
was the recent announced made by Sanofi in March 2007 to discontinue the sale of the
Ketek Pak leaving little, if any, opportunity for future sales growth.
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Beta-lactams
Table 2.31 summarizes the performance of the leading ‘other’ beta-lactams over the
2004-05 period.
Table 2.31: Leading ‘other’ beta-lactams in the global anti-infectives market,

2004–05
Tienam Merck imipenem/ BETALAM 249 251 1.0% 16.6%

cilastatin
Primaxin Merck imipenem/ BETALAM 195 226 15.9% 15.0%
IV cilastatin
Merrem AZ meropenem BETALAM 151 184 21.7% 12.2%
Meropen Sumitomo meropenem BETALAM 113 131 15.3% 8.6%
Meronem AZ meropenem BETALAM 100 119 18.8% 7.9%
Zienam Merck imipenem/ BETALAM 102 115 12.6% 7.6%
cilastatin
Merrem IV AZ meropenem BETALAM 77 87 13.1% 5.8%
Azactam Elan aztreonam BETALAM 74 82 11.0% 5.4%
Invanz Merck ertapenem BETALAM 53 77 46.5% 5.1%
Carbenin Sankyo panipenem BETALAM 72 61 -15.6% 4.0%
Top 10 Brands 1,186 1,333 12.4% 88.1%
Others 155 179 15.7% 11.9%
Total 1,341 1,512 12.8% 100.0%
AZ = AstraZeneca; IV = Intravenous; BETALAM= Beta-Lactam
The ‘other’ beta-lactam market was valued at $1,333m in 2005, an increase of 12.4%
over previous year sales of $1,186m. Sales of the leading 10 brands accounted for
88.1% of the ‘other’ beta-lactam market in 2005, indicative of limited genericization
and strong branding platforms of pharmaceutical companies, particularly Merck. In
2005, Merck’s ‘other’ beta-lactam products accounted for 50.2% or $669m in sales of
the top 10 brands. AstraZeneca’s meropenem franchise has also been a key growth
driver of the ‘other’ beta-lactam class, with its 3 branded meropenem products
collectively accruing $690m in 2005, an increase of 18.8% over previous year sales of
$328m.
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Key brands analysis
Merrem/Meronem (meropenem)
AstraZeneca’s Merrem/Meronem (meropenem) is an ultra-broad spectrum injectable

anti-biotic used for the treatment of a wide variety of serious infections, including
meningitis and pneumonia. Merrem (US)/Meronem (EU) has been developed jointly by
AstraZeneca and Sumitomo Pharmaceuticals (marketed as Meropen). Marketed by
AstraZeneca in all major markets except Japan and some Pacific Rim countries, it has
become an established treatment for resistant gram-negative infections. Collectively,
AstraZeneca’s three leading meropenem products accrued $390m in 2005, a formidable
increase of 18.8% over previous year sales $328m. Both Merrem and Meronem
exhibited strong growth rates over the 2004-05, at 21.7% and 18.8% respectively,
which may be directly correlated with increasing incidences of multi-resistant gram-
negative infections across the major markets
Merrem gained FDA approval in 1996 and is indicated for use as a single agent therapy
for intra-abdominal infections and bacterial meningitis. This was later followed by the
approval of Merrem IV as a monotherapy for the treatment of complicated SSSIs in
adults and children in May 2005. This latest approval was based on the results of an
international, randomized, multicenter, phase III clinical trial among 1,037 patients,
which demonstrated that 500mg of meropenem was comparable in safety and efficacy
to 500mg of imipenem/cilastatin when administered intravenously every eight hours
for the treatment of complicated SSSI. In addition, this clinical trial also demonstrated
the superior safety and efficacy profile of Merrem IV in patients with diabetes mellitus.
86% of patients treated with Merrem showed a satisfactory clinical response at follow-
upcompared with 72% of patients treated with imipenem/cilastatin, which may serve
to expand the product’s treatment population.
In early 2002, AstraZeneca initiated two phase IV clinical trials to evaluate the
pancreatic tissue penetration of Merrem in the prophylaxis of septic complications in
severe pancreatitis and another to assess the pharmacoeconomic viability of first-line
Merrem versus standard antibiotic treatment in seriously infected secondary
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nosocomial sepsis syndrome patients. The results have yet to be released but seeing
that AstraZeneca acquired the investigational drug, CytoFab, in 2005 for the treatment
of sepsis, it may be possible that Astra Zeneca’s future R&D efforts within this
indication will focus on CytoFab.
Merrem’s US patent is projected to expire in 2010. This will be preceded by the loss of
patent protection in Japan and the EU (already expired in Spain) in 2008 and 2009
respectively. Over the forecast period, it is believed that AstraZeneca’s meropenem
franchise will continue to maintain a considerable sales growth, particularly through
2008, as the incidence of resistant gram-negative infections continues to escalate
globally. Given the commercial success of Merrem and the limited generic competition
currently existing within the carbapenems class it is believed that these two factors will
catalyze high levels of generic influx from a multitude of generic manufacturers.
Johnson & Johnson/Shionogi’s new carbapenem, doripenem, poses a competitive threat

to Merrem. Having launched in Japan under the brand name Finibax in 2005, it is
expected to launch in late 2007 in the US and EU markets. Doripenem has
demonstrated a wide-range of activity against a wide-range of gram-positive and gram-
negative bacteria and will be indicated for the treatment of intra-abdominal and
complicated urinary tract infections. Results from clinical trials seem to indicate that
doripenem does not offer any clinical advantages over Merrem. However, J&J may
gain a competitive edge by pairing it with another of its R&D anti-bacterial
compounds, notably ceftobiprole.
Tienam/Primaxin IV/Zienam (imipenem/cilastatin)
Merck’s imipenem/cilastatin franchise is led by the performance of three key products:

Tienam (marketed in France, Italy, Spain and the Pacific Rim), Primaxin IV (marketed
in the US), and Zienam (marketed in Germany). Collectively, these 3 growth drivers of
the ‘other’ beta-lactam class accounted for 39.2% or $592m in sales in 2005.
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Primaxin IV is a potent broad spectrum anti-bacterial agent for intravenous
administration and is indicated for the treatment of serious infections caused by
susceptible strains of the designated microorganisms in the following conditions: lower
respiratory tract infections (LRTIs), urinary tract infections (UTIs), intra-abdominal
infections (IAIs), gynecological infections, bacterial septicemia, bone and joint
infections, skin and skin structure infections (SSSIs), endocarditis, and polymicrobic
infections. Having been approved in 1985 in the US, the wide-spectrum of
antimicrobial activity of Primaxin has been key to the product’s success in maintaining
positive growth in global anti-infectives market. Central to the positive gains of
Merck’s imipenem/clastatin franchise has been the overall absence of generic
competition, with Primaxin’s US patent expiring in 2009. Post patent protection sales
are forecast to decline dramatically.
Invanz (ertapenem)
Invanz (ertapenem), marketed by Merck, was approved from the FDA in November
2001 for the treatment of adult patients with moderate-to-severe infections
(complicated intra-abdominal infection, complicated SSSIs, CAP, complicated urinary
tract infections, and acute pelvic infections) caused by susceptible strains of designated
microorganisms. Invanz was first authorized in the EU in April 2002 and has exhibited
strong growth prospects, with a CAGR of 81.9% over 2002-05. In 2005, Invanz,
registered sales of $77m, an increase of 46.5% over previous year sales of $53m.
This newer-generation carbapenem is characterized by a broad-spectrum of

antimicrobial activity and is associated with pharmacological properties that allow
Invana to be given once-daily. Further contributing to the appeal of this drug is the
more rapid bactericidal activity and diminished likelihood for the development of
resistance when compared to older carbapenems. However, one key barrier to increased
market penetration of Invanz is that while it has proven activity against highly resistant
organisms, such agents are typically reserved only for life-threatening situations or
when resistant pathogens are suspected.
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For the treatment of intra-abdominal, skin and soft-tissue, and pelvic infections, Invanz
has demonstrated equal efficacy to Pipracil (piperacillin). Pipracil, however, is at an
advantage over Invanz due to the drug’s proven effectiveness against Pseudomonas
aeruginosa and enterococci, and as such, Invanz is unlikely to replace Pipracil or its
cephalosporin competitor, Roche’s Rocephin (ceftriaxone) because of the broader
indications of these two drugs. Invanz, however, does maintain an advantage these two
treatments in terms of the drug’s more extensive anaerobic coverage than Rocephin and
more convenient dosing regimen than Pipracil, which may make Invanz a strong
candidate for home-care related treatment of some infections.
Since its approval in the US, there have been two significant changes to the labelling,
which are expected to further contribute to the product’s sales growth over the forecast
period. In February 2005 Invanz was granted pediatric exclusivity for use of the drug in
the pediatric population aged 3 months to 17 years. In October and December 2005,
Invanz received an additional indication for treatment of adult diabetic foot infection in
the US and EU respectively. Additionally, in December 2006, the FDA approved
Invanz for use as a preventative treatment of surgical site infections, specifically in
adults following elective colorectal surgery.
Given that Invanz is sold mainly to the non-retail setting and is administered either
intravenously or intramuscularly, the product accrues the vast majority of its sales from
the inpatient setting, with sales to non-federal hospitals in the US accounting for the
largest proportion of revenues. In consideration of the labeling extensions during 2005-
06, the use of Invanz in the pediatric population is expected to increase at a higher rate
as compared to adults, yet use among this demographic is estimated to account for only
1% of all Invanz use. According to the US Department of Health and Human Services,
the use of Invanz in inpatient hospitals for both pediatric and adult patients has
increased over the past 3 years, with Invanz-associated discharges increasing by 15%
over a 6 month period both pre- and post-pediatric exclusivity. Despite this, the
utilization of Invanz is marginal compared to that of Merck’s Tienam/Zienam
(imipenem/cilastatin) and AstraZeneca’s Merrem/Meronem (meropenem) and has been
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hindered by Invanz’s narrower spectrum of activity as compared to these two
treatments.
With US and Japanese patents expected to expire in 2013, followed by the loss of
patent protection in the EU in 2017, it is forecast that Invanz will strengthen its
competitive stance as the increasing need for effective carbapenems increases.
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Other anti-biotics
Table 2.32 summarizes the performance of the leading ‘other’ anti-biotics over the
2004-05 period.
Table 2.32: Leading ‘other’ anti-biotics in the global anti-infectives market,

2004–05

Zyvox Pfizer linezolid Other 429 552 28.5% 16.1%

Tobi Chiron tobramycin Amino- 220 245 11.3% 7.1%
glycoside
Vancocin ViroPharma vancomycin Other 98 160 63.5% 4.7%
n/a Shionogi vancomycin Other 145 143 -1.3% 4.2%
Seiyaku
n/a vancomycin Other 112 126 12.4% 3.7%
Cubicin Cubist daptomycin Other 56 114 102.9% 3.3%
Pyostacine SA pristinamycin Other 108 111 3.2% 3.2%
Zyvoxid Pfizer linezolid Other 64 95 48.1% 2.8%
Bactrim Roche trimethoprim/ Trimethoprim 86 89 3.0% 2.6%
sulfamethoxazole
Targosid SA teicoplanin Other 68 72 6.1% 2.1%
Top 10 Brands 1,387 1,708 23.1% 49.7%
Others 1,648 1,728 4.9% 50.3%
Total 3,035 3,436 13.2% 100.0%
n/a = not available; lu = lab unknown; SA = Sanofi-Aventis
Leading brands of the ‘others’ class of drugs accounted for some $1,708m or 49.7% of
total sales in this market in 2005. The strong growth of the ‘others’ class can be
attributed mainly to Pfizer’s Zyvox/Zyvoxid (linezolid), collectively generating 18.9%
of class sales in 2005 and growing at a CAGR of 58.2% from 2001-05. The use of
Zyvox in the treatment of serious infections has been further established through the
release of positive data from studies in an out patient setting.
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Another drug contributing to growth in this class is ViroPharma’s Vancocin
(vancomycin) which posted sales of $160m in 2005 having registered phenomenal
growth rate of 63.5% in 2005. Vancocin’s competitive advantage in this drug class is
that it remains the only drug to be approved for the treatment of two infections of the
lower digestive tract in a hospital setting, thus accounting for its strong competitive
position in this market despite heavy genericization of the active ingredient.
The highest growth in 2004-05 was recorded by Cubist’s Cubicin (daptomycin) which
registered a mammoth growth rate of 102.9% - representing sales of $114m for the
year. Given that Cubicin is an effective MRSA drug, this strong growth has been
attributed to the increasing need of drugs active against increasing strains of MRSA.
Since its launch Cubicin has gained additional indications and is forecast to continue to
post a strong sales performance in this market.
Key brand analysis
Zyvox (linezolid)
Pfizer’s Zyvox (linezolid) was initially approved in the US in April 2000 for the
treatment of complicated skin and skin structure infections and nosocomial pneumonia,
including those caused by MRSA. In December 2002, Zyvox was approved for use in
pediatric patients and subsequently received approval for diabetic foot infections in
July 2003. In 2005, Zyvox registered sales of $552m, a formidable increase of 28.5%
over previous year sales of $429m.
Zyvox is available in interchangeable IV and oral formulations, and currently is the

only oral medicine approved by the FDA for the treatment of designated infections due
to MRSA. This places the product at a significant advantage over its chief competitors.
Zyvox’s lead position has been solidified by several clinical trials establishing its
superior clinical profile when profiled against vancomycin. In a study published in
Antimicrobial Agents and Chemotherapy involving 1,181 patients with complicated
SSSIs, 361 of whom had confirmed MRSA infections, Zyvox was found to elicit a
superior clinical cure rate than vancomycin, at 92.2% and 88.5% respectively, with
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similar results seen among the MRSA subgroup, at 88.6% and 66.9% respectively. In
addition, because of the oral formulation of Zyvox, patients in the Zyvox arm had up to
five fewer days on IV therapy than those treated with vancomycin.
A recent study analyzing longitudinal claims data from more than 80 health plans for
patients treated with Zyvox (oral) or vancomycin on an outpatient basis found that
patients taking Zyvox had fewer physician and emergency room visits, hospitalizations,
lab tests and need of other health care services when compared to patients taking
vancomycin. These savings, estimated at an average of $4,630 per patient, place oral
Zyvox not only at a competitive advantage in terms of significant savings, but as an
oral agent eliminates the risks associated with administration via IV. Pfizer’s ability to
demonstrate the superior clinical profile and outline potential cost-savings over
vancomycin has firmly established Zyvox as the standard treatment for infections with
resistant gram-positive pathogens, including the rapidly expanding MRSA market.
Marketed in Japan since 2001 for the treatment of infections associated Vancomycin-
resistant Enterococcus (VRE), Zyvox received approval for an additional indication in
April 2006 for the treatment of infections associated with MRSA. This labelling
extension is expected to further contribute to the strong sales growth of Zyvox across
the major pharmaceutical markets, helping to propel the drug toward blockbuster
status.
Over the last decade, MRSA has emerged as a leading public health concern across the
vast majority of global markets. In the US, for example, the incidence of MRSA has
nearly tripled, particularly among intensive-care patients, accounting for an estimated
60% of all S. aureus infections in 2004-05. Equally impacted are the countries of the
EU, with the UK reporting a MRSA incidence of 45%, with 15% of these cases
proving fatal. With the increasing concomitant demand for drugs that effectively target
MRSA infections and a global R&D pipeline featuring several relevant agents, Zyvox’s
lead position is subject to considerable threat over the forecast period. One of the
leading competitive agents in development is J&J/Shionogi’s doripenem, indicated for
the treatment of complicated intra-abdominal and urinary tract infections. Doripenem
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was launched in the Japanese market in 2005 under the brand name Finibax and in that
year accrued approximately $6.8m (0.8bn Japanese Yen). It was expected to gross an
estimated $29m in 2006, which may prove a strong indicator of doripenem’s market
potential in the US and EU. However studies have not established a superior clinical
profile of doripenem over Zyvox. Given doripenem’s IV administration Zyvox will
likely continue to secure the lead position within the carbapenem class. This will be
largely a factor of the product’s interchangeable IV and oral formulations, which
facilitate expeditious and cost-effective health care management. Coupled with the rise
of MRSA, it is forecast that Zyvox will achieve blockbuster status over the forecast
period.
Tobi (tobramycin)
Tobi (tobramycin), marketed by Chiron, is an aminoglycoside which has been available

for intravenous administration since 1975. Originally developed by PathoGenesis,
Chiron acquired Tobi through the acquisition of the company in August 2000. Tobi has
been approved as an inhaled antibiotic for the treatment of cystic fibrosis (CF) and is
indicated to treat P. aeruginose infections, a common cause of lung infections in CF
patients. Tobi continues to be the gold standard inhaled antibiotic therapy among the
CF patient population, registering sales of $245m in 2005, an increase of 11.3% over
previous year sales of $220m.
Clinical trials demonstrated the increase in patients' lung function to be as much as

11% during six months of treatment. In a phase III clinical trial among 520 CF patients,
over a 24-week period, patients treated with Tobi were hospitalized three fewer days
than those receiving standard CF therapy, at 5.1 and 8.1 days respectively.
Additionally Tobi-treated patients required 4.4 fewer days of IV anti-pseudomonal
therapy as compared to those receiving standard CF therapy, at 9.7 and 14.1 days
respectively.
Coupled with the product’s established clinical profile, Tobi also maintains a
competitive advantage due to the drug’s inhalation route of administration, which
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targets drug delivery to the site of infection in the lung. Tobi is currently used in
combination with the Pari LC Plus reusable nebulizer and a DeVilbiss Pulmo-Aide air
compressor, which deliver high concentrations to the site of infection while minimizing
systemic toxicities. Whilst highly efficacious, the costs associated with this delivery
system are somewhat prohibitive when compared to competing products such as
Genentech's Pulmozyme (dornase alfa).
Chiron, in partnership with Nektar Therapeutics, is currently conducting phase III

clinical trials to assess a new formulation of Tobi, a tobramycin inhalation powder
(TIP) to be used with a capsule-based inhaler. The TIP phase III program, referred to as
ASPIRE, includes two clinical trials and will evaluate the efficacy and safety of TIP in
the treatment of lung infections caused by P. aeruginosa in CF patients. If approved
and launched before the patent expiry of Tobi, it is expected that TIP will secure a
large market share. TIP’s market success will be driven by the product’s profile, which
reduces the treatment burden for CF patients by offering full portability and a short
drug administration time.
Aside from its use among the CF patient population, tobramycin’s treatment utility may
expand to include non-cystic fibrosis bronchiectasis, ventilator-associated pneumonia
and prophylaxis against pulmonary fungal infections. In a small placebo-controlled,
double-blind, randomized study to evaluate the efficacy and safety of Tobi for the
treatment of patients with bronchiectasis caused by P. aeruginosa, Tobi was found to
eradicate P. aeruginosa in 35% of patients, while still being detected in all placebo
patients. In addition, 62% of Tobi-treated patients showed an improved medical
condition as compared with 38% of placebo patients. Larger studies are warranted to
fully assess the efficacy of Tobi within these indications, although early clinical trials
do show promise for extended the use of Tobi outside of the CF patient population.
With Tobi expected to lose patent protection in the US in 2014 and in the EU in 2015,
it is forecast that Tobi will remain the gold-standard treatment for lung infections in CF
patients over the 2005-11. Pending the outcome of the ASPIRE trials and the potential
labeling expansion outside of the CF indication, Tobi may be poised to capture not only
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a significant portion of the niche CF market, but increase its market opportunity to
include several other pulmonary-related infections.
Vancocin (vancomycin)
Vancocin (vancomycin), marketed by ViroPharma in the US, is a glycopeptide

indicated for oral administration for the treatment of enterocolitis caused by S. aureus
(including MRSA) and antibiotic-associated pseudomembranous colitis caused by
Clostridium difficile. Although heavily genericized with patent expiry having occurred
across all the major markets, Vancocin continued to perform strongly over 2004-5 with
sales increasing by 63.5% to $160m in 2005.
Originally developed by Lilly, ViroPharma acquired the rights to manufacture, market

and sell Vancocin in the US in October 2004, thus becoming ViroPharma’s first
commercialized product. As the only anti-biotic approved to treat two significant
bacterial infections of the lower digestive tract within a hospital setting, Vancocin has
been successful in maintaining a significant portion of the global vancomycin market.
Vancocin, however, has been reserved as a drug for the last line of defense,
traditionally utilized only after treatment with other anti-biotics has failed. This has
limited its market penetration. The drug’s relegation to last-line therapy is due to a
combination of factors including its IV administration, development of newer
generation anti-biotics - particularly β-lactamase-resistant semi-synthetic penicillins -
and the association with nephrotoxicity and ototoxicty in early clinical trials attributed
to the use of impure forms of the agent.
Historically, metronidazole has been typically used as first-line treatment for C.

difficile associated diseases (CDAD). Current guidelines reserve the use of Vancocin
for patients who have failed on metronidazole, have recurrent disease, or who are
suffering from severe CDAD. Within the US, the epidemiology of CDAD is not
nationally reported on thus complicating estimations of the actual incidence of the
disease. However, according to the CDC, it is estimated that approximately 400,000
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patients were affected by CDAD in the US in 2006, with clinicians reporting increasing
rates of treatment and higher rates of severe forms of CDAD. It is believed that this
changing epidemiology of CDAD has led to an increase in the use of Vancocin in the
US and will continue to contribute to augment prescription growth rates.
The emergence of vancomycin-resistant organisms has resulted in the displacement of

vancomycin from first-line treatment regimens, with increasing utilization of Zyvox
(linezolid) and several members of the carbapenem class, particularly Merck’s Invanz
(ertapenem). In the US among ICU patients, vancomycin-resistant Enterococi was
detected in about 31% of patients, similar to that in 2003 and indicative of a future
gradual decline in the incidence of VRE.
In March 2006 ViroPharma filed a Petition for Stay of Action with the FDA to block
the approval of generic vancomycin, or more specifically to stay approval of any
ANDAs that reference vancomycin capsules based solely on in vitro bioequivalence
testing. Later, in May 2006, ViroPharma filed a supplement claiming that the FDA’s
Office of Generic Drugs (OGD) decision to lower the bioequivalence standards for
generic vancomycin violated several federal statutes as well as the FDA’s own
regulations. As generic companies are expected to complete in vivo clinical studies to
prove bioequivalence, the final decision of the FDA to modify the bioequivalence
standards for generic copies of Vancocin (based solely on in vitro studies) is likely to
speed the market arrival of generic vancomycin. According to ViroPharma, sales of
Vancocin continued to climb during 2006, with sales estimated at $162-$170. This
continued sales growth, however, is highly contingent on the market entry of generic
competitors. It is believed that based on the decision of the FDA, generic vancomycin
will enter the market in early 2008, resulting in the cannibalization of Vancocin over
the remainder of the forecast period.
Cubicin (daptomycin)
Marketed by Cubist, Cubicin (daptomycin) was approved in September 2003 for the
treatment of complicated SSSIs caused by susceptible strains of Gram-positive
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microorganisms including both susceptible and resistant strains of S. aureus (MSSA
and MRSA respectively). Cubicin was the first agent in a new class of drugs, cyclic
lipopeptides, which work by binding bacterial cell membranes and causing
depolarization of membrane potential. As a result, protein, DNA, and RNA synthesis is
inhibited thus leading to cell death. In 2005, Cubicin garnered sales of $114m, a
formidable increase of 102.9% over previous year sales of $56m, fuelled by the
increasing need for effective MRSA drugs.
In May 2006, the FDA approved an expanded label for Cubicin for the treatment of S.
aureus bloodstream infections (bacteremia), including right-sided infective
endocarditis caused by MRSA and MSSA. It is currently the only IV anti-biotic
approved for this indication. Cubicin’s latest labeling expansion was based on a phase
III clinical trial comparing monotherapy Cubicin to either the dual therapy semi-
synthetic penicillin plus gentamicin for infections caused by MMSA or vancomycin
plus gentamicin for infections caused by MRSA. In the intend-to-treat analysis, success
rates at test-of-cure (TOC) were 44.2% of 120 Cubicin-treated patients compared to
41.7% of 115 comparator-treated patients. Success rates were similar in the patients
with complicated bacteremia, and in patients with right-sided endocarditis.
Additionally, Cubicin demonstrated a similar safety profile versus the two comparator
treatment groups. As such, Cubicin provides several competitive advantages over
existing antibiotic therapies in its approved indications, including the drug’s rapid
bactericidal properties, distinct mechanism of action, convenient once-daily dosing
regimen, similar safety profile to other IV anti-biotics, and its spectrum of activity
against both susceptible and resistant strains of gram-positive pathogens.
In January 2006 Cubicin received approval from the EMEA for the treatment of
complicated SSSIs where the presence of gram-positive bacteria is confirmed or
suspected. Prior to approval, Cubist entered a licensing agreement with Chiron for the
development and commercialization of Cubicin in the UK. Chiron subsequently
launched the product in the UK and the Netherlands in March 2006 and in Germany in
April 2006. Pending price negotiations in other European markets it is expected that
Cubicin will launch across the EU in mid-to-late 2007, helping to maintain strong sales
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growth. Further adding to the sales potential, intensified market penetration of Cubicin
came when Cubist licensed the rights for development and commercialization of
Cubicin in China to AstraZeneca in December 2006 and later in March 2007, with
Merck and its subsidiary Banyu Pharmaceuticals to market the drug in Japan.
While Cubicin commands a relatively high cost and must compete with a spectrum of
other effective agents, which may also be indicated for the treatment of pneumonia, the
drug’s innovative mechanism of action and convenient dosing regimen has not
completely precluded its increasing use in patients. In August 2005, in an effort to
further expand its patient population, Cubist began enrolling patients in a phase 1
pediatric study. This was designed to assess the pharmacokinetics and tolerability of
Cubicin in subjects between the ages of 2 and 17 who have proven or suspected gram-
positive infections for which they are receiving standard antibiotic therapy.
Cubicin maintains patent protection in the US through 2019. Given the recent market
expansion in Japan and that forecasted across the EU, it is likely that Cubicin will
maintain strong sales growth which may taper off due to the market entry of potential
competitors such as Theravance’s Arbelic (telavancin). Factoring into this growth is
the potential additional labeling extensions, which may include indications such as
cellulitis and prosthetic hip or knee infections caused by MRSA or coagulase-negative
staphylococci (CoNS).
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Penicillins
Market dynamics
Table 2.33 summarizes the performance of the leading penicillin brands in the anti-
infective market.
Table 2.33: Leading penicillins in the global anti-infectives market,

2004–05

Augmentin GSK AMX+CLA COMB 791 819 3.6% 12.6%

Amox Tr/ AMX+CLA COMB 589 734 24.6% 11.3%
Pot Clavul
Zosyn Wyeth PIP+TAZ COMB 439 514 17.1% 7.9%
Tazocin Wyeth PIP+TAZ COMB 216 257 18.8% 4.0%
amoxicillin AMX MOD 176 198 12.5% 3.1%
Augmentin XR GSK AMX+CLA COMB 212 181 -14.7% 2.8%
Unasyn Pfizer AMP+SULBAC COMB 163 177 8.8% 2.7%
Amoxil GSK AMX MOD. 134 137 2.1% 2.1%
Unasyn S Pfizer AMP+SULBAC COMB 93 107 15.4% 1.7%
Leading brands 2,813 3,125 11.1% 48.2%
Others 3,187 3,362 5.5% 51.8%
Total 6,001 6,488 8.1% 100.0%
AMX= amoxicillin: CLA = clavulanic acid; PIP = piperacillin; TAZ= tazobactam; AMP= ampicillin;
SULBAC= sulbactam; COMB= combination; MOD= moderate spectrum
The global penicillin’s market was valued at $6,488m in 2005, 8.1% up on previous
year sales reported at $6,001m. Although the penicillin drug class features many
variants in clinical use, the global market was heavily dominated by the presence of
amoxicillin and amoxicillin-beta lactamase inhibitor combination products which
represented some 31.9% or $2,070m of total global sales.
GSK’s Augmentin (amoxicillin+clavulanic acid) registered a poor growth rate of 3.6%

in 2005 representing sales of $819m in the same year. This poor growth has been
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attributed to the release of negative clinical data linking serious anaphylactic reactions
as an adverse effect associated with drug use. Despite the absence of patent protection
on this drug, GSK’s product has managed to retain market leader position in the global
penicillin market with a share of 12.6% in 2005. Despite Augmentin recording positive
growth in 2005, the extended release version of GSK’s product, Augementin XR,
recorded negative growth reported at -14.7% representing a decrease of $31m from
sales in 2004 (reported at $212m).
Despite Augmentin commanding highest share in this market, generic versions of

amoxicillin-clavulanic acid combinations are rapidly gaining market share, having
registered a growth rate of 24.6% representing sales of $734m in 2005. Generic
versions of amoxicillin- clavulanic acid combinations currently occupy second position
in the penicillin’s market in terms of sales and contributed towards 11.6% of the market
in 2005.
Wyeth’s product include a combination product of piperacillin and beta-lactamase

inhibitor tazobactam (marketed as Zosyn) in the US market and Tazocin, a drug with
internationally accrued combined sales of $771m in 2005 representing 11.9% of the
total penicillin market. Sales of Zosyn in the US market were reported at $514m in
2005, an increase of 17.1% from year previous sales of $439m. Cumulative growth for
both products was reported at 17.7% for 2004-05, representing an increase of $116m in
sales from year previous combined sales which were reported at $655m.
Generic versions of amoxicillin available in the global penicillins market accounted for
some 3.1% of $198m of the market in 2005 having registered a growth rate of 12.5%
for the same year. On the other hand, GSK’s branded version of amoxicillin (Amoxil)
represented a mere 2.1% of the market having accrued sales of $137m in 2005 (thus
trailing generic amoxicillin by some $44m in sales for the same year).
The only representative of ampicillin based products in this market is Pfizer’s Unasyn,
and its suspension formulation version Unasyn S which in 2005 accrued combined
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sales of $284m, up by $29m from year previous sales reported at $256m. However, the
growth for this brand hinges upon the performance of the suspension formulation
(Unasyn S) which registered a strong growth of 15.4% for 2004-05.
The global penicillin’s market is dominated by branded products from three main
major pharmaceutical companies (GSK, Wyeth and Pfizer). The lack of representation
of major companies in this class of drugs is indicative of the strong component of
generic competition in this market in addition to a lack of innovation.
Key brands analysis
Augmentin (amoxicillin+clavulanic acid)
GSK’s Augmentin (amoxicillin+clavulanic acid), launched in the early 1980s as a

moderate spectrum beta lactam antibiotic indicated for the treatment of a variety of
bacterial infections. Augmentin is indicated in the treatment of infections ranging from
lower respiratory tract infections to urinary tract infections and skin and skin structure
infections. Positioned as a superior treatment for specialized diseases such as sinusitis
and otitis media, Augmentin is targeted at pediatric patient populations suffering from
these infections. GSK’s product accrued sales of $819m in 2005, up by a mere 3.6%
from year previous sales of $791m.
Augmentin’s poor performance is attributable to the onslaught of generic competition

that GSK’s former blockbuster product has faced since its patent expiry in 2002, in
addition to the release of negative clinical evidence with respect to the product’s side
effect’s profile. In particular, the use of Augmentin is associated with serious
anaphylactic reactions which can be fatal. As a result, prescription rates for Augmentin
and other beta lactam antibiotics suffered a temporary setback, although, physicians
continue to prescribe the drug albeit with increased caution.
In addition, the product is beginning to face competition from other antibiotics such as
Omnicef (cefdinir) for the treatment of otitis media in children. A recent study showed
that children undergoing treatment with Omnicef (cefdinir oral suspension) were more
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likely to have a higher compliance rate (68%) than children taking Augmentin (53%).
The study which was based on 360 completed questionnaires by parents of children
undergoing treatment, and based on responses from the children, parents rated Omnicef
a significantly better tasting, easier-to-use medicine.
Omnicef apart, Pfizer released clinical data which demonstrated the superiority of its
own antibacterial product Zithromax (azithromycin) in the treatment of acute sinusitis
when compared to Augmentin over a three day period. Results from this trial showed
that Zithromax was better tolerated than Augmentin, with fewer side effects, leading to
higher compliance.
An additional study showed that the treatment response of children with middle ear
infections who received a single dose of Zithromax was clinically equivalent to the
response of those treated with a 10-day course of Augmentin (86% vs. 88%,
respectively). 75% of patients in both drug groups achieved treatment success upon
observation at 32 days. This study was conducted among children between the ages of
six months and 12 years. In the study, Zithromax was generally well tolerated, with
17% of patients in the Zithromax drug group experiencing treatment-related adverse
events as compared to 23% of those receiving Augmentin. More children discontinued
treatment due to adverse events when taking Augmentin compared with Zithromax (6
vs. 2 children, respectively).
Augmentin’s market performance has been very closely linked to the product life cycle
management strategies the company has implemented in order to extend the product’s
sales potential for as long as possible. Augmentin’s launch was timed to coincide the
loss of patent protection of GSK’s (then SmithKline Beecham) branded amoxicillin
treatment Clamoxyl and was positioned as a superior treatment for specialized ENT
problems such as sinusitis and respiratory infections (especially in pediatric patients
and patients who developed bacterial resistance to Clamoxyl). Furthermore, in a bid to
protect excessive loss in revenues to generic competition, GSK also developed various
formulations for its major brand ranging from oral, chewable tablets to oral suspensions
and injectables.
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GSK launched an extended release version of Augmentin, Augmentin XR in an attempt
to stave off attrition in revenues due to the launch of generic competition. However,
this formulation too has begun to face a decline in sales, recently registering a decrease
of $31m from 2004 sales of $212m to $181m in 2005.
Although life cycle extension strategies held the product’s sales performance steady
over a number of years, imminent generic competition and the entry of newer products
with better side effects profiles have left their mark on Augmentin’s sales since 2002.
With the increasing presence of generic versions of amoxicillin/clavulanic acid
combinations available in the market, the dominant presence of Augmentin is expected
to erode rapidly over the forecast period of this report.
Zosyn/Tazocin (piperacillin and tazobactam)
Wyeth’s Zosyn which is marketed internationally as Tazocin is a combination

antibacterial comprising of penicillin derivative piperacillin and beta-lactamase
inhibitor tazobactam. Formulated as an IV injection, Zosyn was launched in the US
market in 1994 with indications in the treatment of moderate to severe infections
caused by piperacillin-resistant, piperacillin/tazobactam-susceptible, beta-lactamase
producing strains of bacteria including E.coli, staphylococcus aureus and H. influenzae.
Zosyn and Tazocin accrued combined sales of $771m in 2005 thus representing some
11.9% of the total penicillin market.
Sales accrued by Zosyn in the US market were reported at $514m in 2005, an increase
of 17.1% from year previous sales of $439m. The strong sales growth of Zosyn is
attributable to the fact that it continues to remain patent protected in the US until 2023,
major European markets until 2007 and in Japan until 2008.
At the time of its launch, Zosyn was administered as a six times daily IV infusion for
the treatment of hospital acquired (nosocomial) pneumonia. In 2003, The US FDA
approved a new dosage regime for Zosyn which involved a four times daily
requirement for the IV infusion. Nosocomial pneumonia, a serious bacterial infection,
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typically represents approximately 15 percent of all hospital associated infections and
remains an important cause of morbidity and mortality among hospitalized patients.
This reduction of two doses resulted in lowering of costs for hospitals in addition to an
increase in convenience for patients who have to experience less discomfort with a
reduced number of administrations.
Multiple dosing is one of Zosyn’s drawbacks and the given that fluroquinolones such
as moxifloxacin have demonstrated equivalent efficacy in the treatment of complicated
intra abdominal infections (cIAI) with lower dosing regimens, Wyeth’s product is
forecast to face competition from anti infectives outside of the penicillins class with
products proving their clinical efficacy in the same indications.
A prospective, double-blind, randomized, phase III comparative trial was conducted

among 656 patients with cIAI who were randomized to either IV/oral moxifloxacin
(400 mg q24 hours) or a comparator (IV piperacillin-tazobactam (3.0/0.375g q6 hours)
followed by oral amoxicillin-clavulanate [800 mg/114 mg q12 hours]) each for 5 to 14
days. Results of this trial showed that of 656 patients, 379 (58%) were valid to assess
efficacy (183 moxifloxacin, 196 comparator). Clinical cure rates were reported at 80%
(146 of 183) for moxifloxacin versus 78% (153 of 196) for the comparator. The clinical
cure rate at test-of-cure for hospital-acquired cIAI was higher with moxifloxacin (82%,
22 of 27) versus comparator (55%, 17 of 31), while bacterial eradication rates were
78% (117 of 150) with moxifloxacin versus 77% (126 of 163) in the comparator group.
The study concluded that once daily IV/ oral moxifloxacin monotherapy was at least as
effective as standard IV piperacillin-tazobactam or oral amoxicillin-clavulanate dosed
multiple times daily for the treatment of cIAIs.
Although Zosyn was scheduled to lose patent exclusivity in 2007 in the US market
Wyeth developed a new formulation of its drug by adding a purifying agent, edetate
disodium dehydrate (EDTA), to the primary molecule and has since withdrawn its old
formulation from the market and introduced this new product to the anti-infectives
market in 2005. Although the product’s clinical efficacy has not been enhanced with
this new additive, the product can now be administered concurrently with other
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antibiotics such as gentamicin and amikacin at specific dosages, dilutions and sites of
administration thus increasing the convenience of administration through wire tubing
for hospitalized patients.
Furthermore, the launch of this reformulation involved the application of an ANDA

which has extended the period of patent exclusivity for Zosyn, until 2023. In response
to this, Wyeth has faced lawsuits from potential generic competitors claiming that the
company is being uncompetitive through its actions which have resulted in delaying the
potential launch of generic versions of the product in the market. Additionally, the
removal of the older formulation (scheduled to lose patent exclusivity in February
2007) from the anti-infectives market has further hindered the entrance of generics to
this market. These companies included Indian pharmaceutical company, Orchid,
Sandoz and Abraxia.
Wyeth is known to have expertise in the implementation of product life cycle strategies
for its key products, warding off generic competitors and salvaging potential losses in
revenues. The company has also been associated with the implementation of a similar
‘evergreening’ strategy for its hormone replacement therapy product Premarin,
marketed in the women’s health market. Despite insinuations of anti-competitive
behavior and lawsuits, Wyeth is set to continue to rake in revenues from
Zosyn/Tazocin for the forecast period of this report.
Unasyn (ampicillin+sulbactam)
Pfizer’s anti bacterial Unasyn (a combination of ampicillin and sulbactam) was

launched in the early 1980’s with an indication in the treatment of skin and skin
structure infections, intra abdominal infections and gynecological infections caused by
beta lactamase producing bacterial strains including staphylococcus aureus and E.coli.
Initially launched as an intravenous and intra muscular injection Unasyn is also
currently available as an oral suspension. Unasyn and its oral suspension Unasyn S
together accrued combined sales reported at $284m, a modest 11.2% up from year
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previous combined sales of $256m. Of the two products, Unasyn S is responsible for
some 37.7% or $102m of combined sales.
The use of Unsayn as a treatment for infections including soft tissue infections and
gynecological infections have been further advocated through positive evidence from
clinical studies comparing the use of Unasyn versus commonly used anti-infectives
such as clindamycin and gentamycin.
The clinical efficacy and safety of ampicillin/sulbactam versus metronidazole-

gentamicin for the treatment of gynecological infections were evaluated in a
comparative, randomized, prospective study conducted by Crombleholme et al (Am J
Ostet Gynecol). Of the 44 patients enrolled, 22 received the ampicillin/sulbactam
regimen and 22 received the metronidazole-gentamicin combination. There were 33
cases of severe acute pelvic inflammatory disease, two tubo-ovarian abscesses, five
cases of endomyometritis, and two cases of posthysterectomy pelvic cellulitis within
the patient population. Results of this study showed that clinical cure was noted in 19
of 20 patients treated with ampicillin/sulbactam and 18 of 21 patients treated with
metronidazole-gentamicin.
Results from a study by Sechser et al (Cas Lek Cesk), conducted among 60 patients
with soft tissue infections, showed that of the patients belonging to the sulbactam and
ampicillin group had a rate of cure of 93% as compared with 81% in the clindamycin
and tobramycin group. In addition the eradication of organisms was better in the
sulbactam and ampicillin group (67%versus 35%). For the purposes of this study
patients had been prospectively randomized to receive (N=30) 1g of sulbactam per 2g
of ampicillin every six hours while the rest received 600mg of clindamycin every six
hours and 1.5mg per kilogram of tobramycin every eight hours. The study concluded
that antibiotic activity of ampicillin was significantly augmented by the addition of
Sulbactam and that the addition of Sulbactam improved sensitivity to 70.0%. The
sulbactam and ampicillin combination is an effective combination for the treatment of
soft tissue infections.
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Pfizer’s Unsayn has lost patent exclusivity in all major markets, yet it continues to
feature among the leading penicillin brands in the global anti-infectives market. This is
attributed to the relatively weak presence of generic ampicillin/sulbactam products.
Although the sales growth of Pfizer’s product is forecast to stagnate over the forecast
period of this report, Unasyn is expected to continue to generate substantial revenues
for the company.
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Cephalosporins market analysis
Market dynamics
Table 2.34 summarizes the performance of the major cephalosporin brands over 2004-
05.
Table 2.34: Leading cephalosporin brands in the global anti-bacterials

market, 2004–05

Rocephin Roche ceftriaxone CEPH 972 759 -21.9% 8.2%

Omnicef Abbott cefdinir CEPH 388 622 60.2% 6.7%
Cefzil BMS cefprozil CEPH 350 341 -2.8% 3.7%
Zinnat GSK cefuroxime CEPH 294 306 3.9% 3.3%
Flomox Shionogi cefcapene CEPH 291 304 4.4% 3.3%
Maxipime Elan cefipime CEPH 241 265 10.0% 2.8%
Sulperazon Pfizer cefoperazone CEPH 166 174 5.2% 1.9%
/sulbactam
Flumarin Shionogi flomoxef CEPH 180 173 -4.1% 1.9%
Cefzon Astellas cefdinir CEPH 184 171 -7.1% 1.8%
Meiact Meiji Seika cefditoren CEPH 153 167 8.9% 1.8%
Leading 10 brands 3,220 3,282 1.9% 35.3%
Others 5,472 6,006 9.8% 64.7%
Total 8,692 9,288 6.9% 100.0%
BMS = Bristol-Myers Squibb; GSK = GlaxoSmithKline; CEPH = cephalosporin
Comprising 35.3% of the cephalosporin market (or $3,282m in sales), the ten leading
brands of this class hold a receding level of dominance as product proliferation and
introduction of generics have exerted a negative pressure on the growth potential of
established brands. Accordingly, the performance of the leading products has lagged
behind that of the class as a whole, with the leading brands collectively posting sales
growth of just 1.9% in 2005 versus 6.9% for the entire class.
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Few cephalosporin brands exhibit significant levels of sales growth, with Abbott’s
Omnicef (cefdinir) being the strongest performer in 2005, with sales growth of 60.2%.
This performance stands in stark contrast to that of Roche’s Rocephin (ceftriaxone),
which saw its sales fall by 20.1% in 2005. Rocephin is joined by three other prominent
cephalosporin brands which posted negative sales growth in 2005; Cefzil, Flumarin and
Cefzon.
Key brands analysis
Rocephin (ceftriaxone)
Roche’s Rocephin (ceftriaxone), is a cephalosporin treatment that was first launched in

1984. In 2005, Rocephin accrued sales of $759, 21.9% down on year previous sales of
$972m.
Rocephin’s first-in-class position is largely a factor of the product’s strong show in

treating a range of hard-to-treat, hospital-acquired, bacterial infections. However,
Rocephin, like other cephalosporins has lost ground to fluoroquinolone brands in key
indications and has since seen its strongest demand in complicated infections with high
rates of mortality such as intra-abdominal infections, bone and joint infections,
complicated skin and skin structure infections and septicemia.
Rocephin, administered via intra-muscular or intravenous injection or infusion, has had

a strong uptake in the treatment of acute conditions such as sepsis, among
institutionalized patients, or those that require prophylaxis prior to an operation.
However, the non-oral nature of administration with Rocephin has dented sales in the
out-patient market for broad-spectrum, high efficacy antibiotics, and as a result the
success of fluoroquinolones has had a detrimental impact on Rocephin sales.
Cephalosporins, and Rocephin in particular, have benefited from changes in CDC

guidelines to combat bacterial resistance in patients at risk of recurring diseases, such
as STDs. The changes (published in 2003) favored the use of a single dose of
cephalosporin therapy over an orally administered course of fluoroquinolones. The
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increased use of cephalosporins in indications such as the treatment of gonorrhea
comes on the back of a rise in the incidence of reported resistance to fluoroquinolones
in an indication in which positive identification of the disease-causing organism is
difficult to obtain.
The major factor that affects Rocephin’s performance in the cephalosporin’s market is
heavy genericization. While this market also features the presence of strong
competitors such as Abbott’s Omnicef (cefdinir) which share similar indications, the
use of Rocephin in institutionalized patients potentially safeguards Roche’s revenue
streams. Rocephin lost patent exclusivity in 2006, thus rendering sales vulnerable to
generic competition. Since there is no evidence of Roche investing further in this drug,
it is likely that Rocephin’s revenues will fall prey to genericization and thus decline
sharply over the forecast period of this report.
Omnicef (cefdinir)
Abbott’s Omnicef (cefdinir), is a cephalosporin treatment that was first launched in

1997. In 2005, the treatment accrued sales of $622m, 60.2% up on year previous sales
of $388m.
Omnicom’s performance in 2005 has been very strong because of accurate market
positioning from Abbott, which has moved to differentiate Omnicef from other
cephalosporin products and also target major community-acquired infections,
particularly in the pediatric market segment.
Omnicef is the only remaining major growth driver in the cephalosporin class of
products, and the treatment, which is available in oral formulation features significant
differentiation from the market leading cephalosporin – Roche’s Rocephin
(ceftriaxone). Like Rocephin, Omnicef is largely reserved for use in hard-to-treat
bacterial infections, but due to its oral formulation, it features a high level of use as an
out-patient treatment in certain indications or as a second-line treatment following
treatment failure with other antibiotics such as penicillins or fluoroquinolones.
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Abbott has attempted to strengthen the position of Omnicef in the pediatric market by
introducing a flavored liquid, oral formulation in 2004 for ear, skin, sinus and throat
infections. By targeting community-acquired infections, particularly in the pediatric
market segment, the product has been brought into close competition with
fluoroquinolone treatments such as Pfizer’s Zithromax (azithromycin) and GSK’s
Augmentin (amoxicillin clavulanate).
Omnicef has struggled to perform against strong brands such as Zithromax and
Augmentin which control high levels of market share in the pediatric market segment.
However, a series of clinical studies designed to evaluate Omnicef versus Augmentin
and Zithromax in common pediatric infections has provided strong clinical evidence
supporting the use of Abbott’s product.
In one such 2004 study comparing GSK’s Augmentin with Omnicef, Abbott’s product
was able to demonstrate roughly similar efficacy but importantly provide for a greater
level of popularity with children and their adult carers. The study, which examined
rates of compliance and cure, showed compliance with Omnicef was superior (68%
versus 52% for Augmentin), and that patients experienced a faster time to cure.
Versus Zithromax, Omnicef has been studied in the indication of otitis media, in which
both products were studied in shortened treatment courses. This 2005 study involving
357 patients revealed that Omnicef had a comparable level of efficacy to that of
Zithromax, with clinical cure rates of 87% versus 85% for the Zithromax study group.
The strong showing of Omnicef in the pediatric patient population has not been
matched by studies in the adult population, whereby the efficacy of oral tablet
formulations is the most important determinant of competitive advantage. As such,
Omnicef has struggled to develop blockbuster status in the face of competition from
GSK’s Augmentin and a range of fluoroquinolone products. Although the product has
been able to develop considerable differentiation from other cephalosporin treatments,
it is now approaching market saturation.
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Cefzil (cefprozil)
First launched in 1991 in the US, BMS’ Cefzil (cefprozil) accrued sales of $341m in
2005, down 2.8% from 2004 sales of $350m. There is widespread availability of
generics across all formulations and dosage strengths of BMS’ product, with recent
launches by Ranbaxy in June 2005, Novartis in November 2005 and Teva in December
2005.
As a second-generation cephalosporin, Cefzil is perceived as being inferior to more

recently launched cephalosporin brands such as third-generation products Rocephin
and Omnicef as well as recently launched fourth-generation products such as
Maxipime. Cefzil is handicapped by having a narrower spectrum of antimicrobial
activity and therefore faces competition across several indications whereby microbial
isolates cannot be extracted and identified easily.
Cephalosporins are perceived to have limited levels of differentiation between them in

comparison to other classes of antibiotics such as fluoroquinolones, aminoglycosides
and penicillins, and the majority of cephalosporins compete strongly for similar or
identical patient populations. The increasing popularity of beta-lactam antibiotics has
seen competition to cephalosporin products, particularly cheaper first and second
generation products, increase with detrimental effects on the performance of older
products such as Cefzil. Unlike third and fourth-generation cephalosporins, which have
benefited from revisions to CDC guidelines for use in bacterial STDs, Cefzil has not
profited from any change in use and as such prospects for further growth appear
limited.
Zinnat (cefuroxime)
GSK’s Zinnat (cefuroxime) continues to perform, with sales increasing by 3.9% from
$294m in 2004 to $306m in 2005. However, Ceftin (the other major cefuroxime brand
marketed by GSK) suffered a decline in sales in 2005 of 14.6% to $31m.
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Zinnat, which is primarily marketed in Europe, continues to deliver sales growth. In
the US, where generic competition is present among all formulations (including the
injectable version), opportunities are limited. Zinnat’s performance is largely based on
the remaining levels of patent protection that the product possesses in a number of
European markets, with SPCs having begun to expire from 2002 onwards. 2006 is
likely to be a key year for Zinnat, as GSK’s base of intellectual property protecting this
product continues to be eroded.
Zinnat’s principal competitors are second-generation cephalosporins such as BMS’

Cefzil. The majority of these feature limited patent protection, causing Zinnat to be
sold in a price-sensitive market. Zinnat, on account of its intramuscular formulation
also competes with Rocephin, which is viewed to be the gold standard injectable
cephalosporin treatment against which Zinnat suffers from an inferior dosing schedule.
Opportunities for Zinnat remain limited because of widespread generic competition in

2006 and a lack of opportunities for market development. Furthermore, GSK’s third
generation cephalosporin, Fortum/Fortaz (ceftazidime), has suffered from stuttering
growth. With combined sales of $206m in 2005, down by 1.8% on year previous sales,
it remains a stronger prospect for GSK to develop despite pressure from generic
versions of ceftriaxone and will likely reduce the visibility of Zinnat.
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Tetracyclines market analysis
Market dynamics
Table 2.35 summarizes the performance of the major cephalosporin brands over 2004-
05.
Table 2.35: Leading tetracycline brands in the global anti-bacterials market,

2004–05

Doryx Warner- doxycycline TET 81 109 35.1% 12.4%

Chilcott
n/a unknown minocycline TET 122 104 -14.4% 11.9%
Dynacin Medicis minocycline TET 86 73 -14.4% 8.4%
n/a unknown doxycycline TET 45 60 33.7% 6.9%
Adoxa Bioglan doxycycline TET 42 47 12.4% 5.4%
Minomycin Wyeth minocycline TET 41 38 -6.2% 4.4%
Minocin Wyeth minocycline TET 63 35 -43.5% 4.0%
n/a Goldshield demeclocycline TET 13 27 112.1% 3.1%
Vibramycine Pfizer doxycycline TET 28 26 -8.4% 2.9%
Tetralysal Galderma lymecycline TET 15 18 16.7% 2.0%
Leading 10 brands 534 538 0.7% 61.4%
Others 340 339 -0.4% 38.6%
Total 875 877 0.3% 100.0%
TET = tetracycline
The tetracycline class is dominated by sales of doxycycline and minocycline based

products, with 8 of 10 of the leading brands being based on these two active
ingredients. Growth in the class as a whole is low, largely as a result of high level of
market penetration attributable to generic versions of minocycline and doxycycline. As
a result growth among the leading brands is limited to major generic products,
reformulated versions of established products, and the introduction of new molecules
positioned for non-mass market disease states such as Lyme disease.
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As a result of the low level of innovation in the market, significant levels of generic
penetration, and the established positions that tetracyclines hold in mainstream
dermatology and women’s health indications, growth opportunities have been limited
to a handful of brands. Although the growth rate of the leading ten brands has
outperformed that of the class as a whole, with collective sales increasing by 0.7% in
2005 versus 0.3% for the class, this is due of the maturity of the market.
Key brands analysis
Doryx (doxycycline)
Warner-Chilcott’s Doryx (doxycycline), is a delayed release formulation of

doxycycline that is available in oral tablet form. The delayed release version of the
product (first approved in the US in 2005) accrued sales of $109m in 2005. This was a
34.6% increase on year previous sales of $81m.
With the widespread availability of generic versions of doxycycline in the market,

Doryx relies on its advantages in dosing to maintain competitive differentiation,
providing benefits in terms of treatment regimen and also in terms of side-effect
profiles. Tetracyclines are typically associated strongly with dose-dependent side-
effects profiles and as a result delayed release versions of doxycycline such as
Collagenex’s Oracea (doxycycline) and Doryx continue to feature a competitive
advantage over generic rivals.
Although there are multiple versions of doxycycline on the market, the most popular
are those that are indicated for the treatment of women’s health, dental or dermatologic
indications. Doryx is approved in more mainstream indications such as malaria,
syphilis, respiratory tract infections and urinary tract infections. The major competitor
to Doryx is Pfizer’s Vibramycine (doxycycline), which accrued sales of $26m in 2005,
down 8.4% on year previous sales of $28m. Vibramycine features substantial
competitive differentiation from Doryx due to the availability of the product in oral
suspension and syrup formulations. Vibramycine is more closely targeted at the
institutional and geriatric market segments as doxycycline is contraindicated in
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pediatric patients who have growing teeth due to the discoloring side-effects on tooth
enamel. As a result there is substantial space for both products in the tetracyclines
market.
The greatest threat to Doryx comes from the launch of Novartis’ own delayed release
version of doxycycline, which is available at identical dosage strengths to that of
Doryx. Approved in December 2005 in the US, it is anticipated that Novartis’ generic
delayed release product will take market share from Doryx, which faces an insecure
future.
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Fluroquinolones
Market dynamics
Table 2.36 summarizes the performance of the leading fluoroquinolone brands in the
anti-infective market.
Table 2.36: Leading fluoroquinolones brands in the global anti-infectives

market, 2004–5

Levaquin J&J levofloxacin 3rd gen 1,266 1,441 13.9% 24.6%

Cravit Daiichi levofloxacin 3r d gen 391 424 8.3% 7.2%
Avelox Bayer moxifloxacin 4th gen 319 400 25.4% 6.8%
Ciproxin Bayer ciprofloxacin 2nd gen 348 336 -3.3% 5.7%
Tavanic Sanofi Aventis levofloxacin 3rd gen 264 315 19.2% 5.4%
Levaquin IV J&J levofloxacin 3rd gen 209 229 9.5% 3.9%
Tequin BMS gatifloxacin 4th gen 202 151 -25.5% 2.6%
Ciprobay Bayer ciprofloxacin 2nd gen 107 93 -13.3% 1.6%
Zuo Ke Yangtze River levofloxacin 3rd gen 85 89 4.9% 1.5%
Ciflox Bayer ciprofloxacin 3rd gen 98 83 -15.4% 1.4%
Leading brands 3,289 3,561 8.3% 60.7%
Others 2,491 2,301 -7.6% 39.3%
Total 5,781 5,861 1.4% 100.0%
BMS= Bristol-Myers Squibb; IV= intravenous; gen= generation
The global fluoroquinolone market was valued at $5,861m in 2005 having registered a
minimal growth rate of 1.5% representing an increase of $90m from year previous sales
reported at $5,781m (2004). Given that this market is relatively mature and features
heavy genericization such poor growth is not surprising. Furthermore, this market
features the presence of four major brands competing with each other, which include
levofloxacin, moxifloxacin, ciprofloxacin and gatifloxacin. The presence of only four
major products is representative of the highly competitive dynamics of this drug class
and within the anti-infectives market as a whole.
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Despite the strong presence of generics, the fluoroquinolones market is led by J&J’s
Levaquin (levofloxacin) which represented 24.6% of the total market with sales of
$1,441m in 2005. The patent rights to levofloxacin are held by Japanese company
Daichii which markets the product under the name of Cravit in the Japanese markets,
while it is marketed under the name of Tavanic by Sanofi-Aventis in Europe. Total
sales accrued by levofloxacin in 2005 were valued at $2,408m representing some
41.1% of total market sales.
Other brands which are represented in this market include Bayer’s Avelox
(moxifloxacin) which is rapidly gaining share in the fluroquinolone drug class, having
registered a growth rate of 8.3% in 2005 representing sales of $424m. Bayer’s product
has benefited through results from a series of head to head clinical trials conducted
between Avelox and market leader Levaquin, which have demonstrated equable
efficacy in the treatment of certain disorders such as acute bacterial sinusitis, and
superior in efficacy for the treatment of complicated intra abdominal infections.
In 2005, the fluoroquinolone featured a strong presence of Bayer’s ciprofloxacin range

of product offerings which included Ciprobay, Ciproxin and Ciflox. These three
products reported combined sales of $512m in 2005. All three products experienced a
decline in sales for 2004-05 and reported a combined growth rate of -7.4%,
representing a decrease of $41m from year previous sales of $512m.
Key brands analysis
Levaquin (levofloxacin)
J&J’s Levaquin (levofloxacin) accrued sales of $1,441m in 2005, an increase of 13.9%

or $175m from year previous sales reported at $1,266m. Available as oral tablets and
solutions as well as an injectable formulation, Levaquin acquired market leader
position in the global fluoroquinolone market with a share of 24.6% in 2005. J&J
markets Levaquin in the US having in-licensed the US marketing rights to levofloxacin
from Daiichi-Sankyo. Levofloxacin is also marketed in Europe as Tavanic through a
similar marketing partnership between Daiichi and Sanofi-Aventis.
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Since its launch in 1996, Levaquin has gained approval and marketing exclusivity for
its indication in the treatment of acute bacterial sinusitis in 2005 till 2008 and until
2006 for the treatment of community acquired pneumonia. Levaquin is currently
indicated for infections including pneumonia (community acquired and nonsocomial),
complicated and uncomplicated skin and skin structure infections and complicated and
uncomplicated urinary tract infections. Levofloxacin is currently the only respiratory
fluoroquinolone approved by the US FDA for the treatment of nosocomial pneumonia.
Approval to Levaquin for the treatment of acute bacterial sinusitis was given on the
basis of results from a study that evaluated 780 adult out patients diagnosed with the
disease. Patients were randomly administered doses of 750mg once daily for five days
or 500mg over ten days. Clinical success rates were reported at 91.4% (n=139/152) for
the 750mg groups as compared to 88.6% (132/149) for the 500 mg group. The
inference drawn from this study was that the high dose, short duration regimen of the
drug delivered comparable efficacy.
This five day 750mg, once daily dosage of Levaquin has also been approved in the
treatment of community acquired pneumonia in adults due to penicillin resistant S.
pneumoniae (excluding multi-drug resistant strains) and H.influenzae. Additionally,
during this trial, the in vitro susceptibilities of strains of bacteria such as S. pneumoniae
and H.influenzae were reported at 100%, which were consistent with results from the
TRUST (Tracking Resistance in the United States Today) study which demonstrated
susceptibility to Levaquin among S. pneumoniae (99%) and H.influenzae (99.7%).
As with most bacterial infections, Levaquin faces the problem of treating bacterial
infections caused by strains which have developed resistance to the drug. This is
observed in particular with a strain of streptococcus pneumoniae, a pneumonia-causing
bacteria which easily develops resistance to most anti-bacterials during the course of
treatment. Clinical studies (Kumarsinghe et al, JAC, 2000, 46) have shown that while
levofloxacin has activity against most strains of S. pneumoniae, one of the viral strains
has high resistance to the drug. This resistance is attributable as a result of cross-
resistance to other quinolones. Studies have concluded that while levofloxacin has been
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proved useful in the initial treatment of community acquired, penicillin resistant
pneumonia; there is a possibility of levofloxacin resistance developing in communities
where the drug isn’t even clinically available.
While Levaquin has been proved successful in the treatment of various bacterial
infections caused by penicillin resistant strains of bacteria, it is beginning to face
competition from Bayer’s Avelox (moxifloxacin) launched in 1999, with indications in
the treatment of complicated intra-abdominal infections caused by strains of bacteria
such as E.coli, B. fragilis and in the treatment of complicated skin and skin structure
infections caused by methicillin susceptible staphylococcus aureus, E.coli in addition to
others.
Head to head clinical trials comparing the two products in the treatment of community
acquired pneumonia (CAP) among elderly patients have reported results of comparable
efficacy and safety profiles for moxifloxacin and levofloxacin. IV/oral moxofloxacin
although known to cause prolonged QTc intervals was found to have a comparable
cardiac safety profile to levofloxacin in a study conducted by Morganroth et al
(American College of Chest Physicians, 2005).
Additional studies such as Community Acquired Pneumonia Recovery in the Elderly

(CAPRIE), comparing the safety and efficacy profiles of moxifloxacin versus
levofloxacin therapy conducted among 281 patients (N= 195 for the moxifloxacin
group versus N=199 for the levofloxacin group) showed that moxifloxacin
demonstrated efficacy comparable to Levaquin. Groups receiving intravenous/oral
moxifloxacin therapy recorded successful cure rates of 92.6% for mild or moderate
CAP and 94.7% for patients with severe CAP compared to success rates for Levaquin
reported at 88.6% and 84.6% respectively.
Levaquin retains patent exclusivity in the US until June 2011 while it holds marketing
exclusivity rights to its indication in the 5 day treatment regimen for acute bacterial
sinusitis until 2008. However, despite this J&J has begun to face challenges from
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prospective generic companies attempting to prove Levaquin’s current patent status
invalid and thus launch their own versions.
In addition, the product continues to face competition in the treatment of intra

abdominal infections. Despite this J&J is not believed to be conducting further
investigational trials for additional indications for its block buster anti-infective. The
increasing presence of resistant strains together with imminent generic competition are
forecast to cause severe attrition in sales for Levaquin post its genericization in 2011.
Avelox (moxifloxacin)
Bayer’s Avelox (moxifloxacin), a fourth generation extended spectrum quinolone, was

launched in 1999 and is indicated for the treatment of bacterial infections such as acute
bacterial sinusitis, intra abdominal infections in addition to skin and skin structure
infections. Avelox registered a strong growth of 25.4% in 2004-05, representing an
increase of $81m from year previous sales of $319m, to $400m in 2005. Avelox
commands second position in the global quinolones market with a representation of
7.2% in 2005. Formulated as an IV in addition to oral tablets, Avelox features a once
daily dosing regimen and is indicated for the treatment of such disease in adults over
the age of 18 years.
Approval to Avelox for the treatment of patients with complicated intra-abdominal

infections (cIAI) was given based on results from a prospective, randomized, study,
which compared the efficacy and safety of moxifloxacin to that of combination therapy
in the treatment of cIAI. Of the 595 patients enrolled centers, 584 (289 moxifloxacin,
295 control group) were valid for the intent-to-treat analysis. During this trial, patients
received either intravenous (I.V.) followed by oral moxifloxacin (400mg, once daily)
or a sequential therapy with I.V. ceftriaxone (2g daily) and metronidazole (0.5g, three
times daily) followed by oral dosing of amoxicillin/clavulanate (625 mg, three times
daily) for 14 days. A switch to oral moxifloxacin (400 mg, once daily) or
amoxicillin/clavulanate (625 mg, three times daily) was allowed per protocol after the
third day of treatment for the two groups, respectively.
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In the study, moxifloxacin monotherapy was found to be as effective as the
combination regimen in treating patients with cIAI. Overall clinical cure rates were
80.9% in the group receiving moxifloxacin and 82.3% in the group receiving the
combination therapy regimen. Duration of therapy, length of post-operative hospital
stay and mortality rates were comparable for the two treatment groups. Both regimens
were well tolerated. In the study, 19% of the moxifloxacin patients and 12.5% of the
patients in the comparator arm experienced at least one drug-related adverse event.
The main competitor to Avelox’s performance in this market is market leader J&J’s
Levaquin which shares most of the clinical indications with Bayer’s product. While
Avelox is yet to gain an official indication in the treatment of nosocomial pneumonia,
there have been plenty of clinical studies demonstrating the product’s comparable
efficacy to that of Levaquin in the treatment of CAP. Additionally, Avelox holds an
advantage with its indication in the treatment of complicated intra abdominal
infections.
Bayer is believed to be in Phase III clinical trials investigating the use of its product in
the treatment of uncomplicated pelvic inflammatory disease compared to levofloxacin
and metronidazole. The study which is called MONALISA (Moxifloxacin,
Metronidazole, and Levofloxacin in Asia) is to be conducted among 392 patients who
are to be administered 400 mg of oral once daily for 14 days to that of levofloxacin 500
mg oral once daily plus metronidazole 500 mg twice daily for 14 days in subjects with
an uncomplicated pelvic inflammatory disease. Results are expected some time in Q3
2007, the study having commenced in January 2007.
Avelox, having gained positive results from a number of clinical trials, has
demonstrated efficacy comparable and in some cases superior to other available
treatments for its utility in the treatment of diseases such as CAP, skin and skin
structure infections and acute bacterial sinusitis among others. Additionally, in clinical
studies, Avelox has demonstrated comparable efficacy and safety profiles to existing
gold standard quinolone treatments such as Levaquin.
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While Avelox is expected to lose patent exclusivity in 2011, Bayer-Schering Pharma
continues to conduct investigational trials for key anti-infectives in indications such as
adjunct therapy in the treatment of TB, pelvic inflammatory disease, and post-operative
procedures such as laparoscopic cholecystectomies or gall bladder removals. The gain
of an additional indication is forecast to provide Avelox with additional patent
protection which is expected to salvage severe attrition in sales predicted once generic
competition sets in.
Ciproxin /Ciprobay/Ciflox (ciprofloxacin)
Bayer’s Ciproxin /Ciprobay/Ciflox reported combined sales of $512m in 2005, having

faced a decline in growth rates in 2005. This decline in sales is attributable to the
strong presence of generic competition in the anti-infectives market. In contrast to
other fluoroquinolones, ciprofloxacin has exhibited weak activity against S.
pneumoniae and C. pneumoniae as well as no activity against bacterial strains of
streptococcus pyogenes. Ciprofloxacin is primarily indicated for the treatment of
urinary and urinary tract infections in addition to acute uncomplicated pyelonephritis
(kidney infections) caused by E.coli.
Ciprofloxacin was the first systemically available fluroquinolone and there is a lot of
clinical data published with respect to this drug. Consistent positive results from trials
comparing the use of ciprofloxacin to other available therapies such as clarithromycin
and cefuroxime have established the use of ciprofloxacin in the treatment of diseases
such as acute bacterial exacerbations of chronic bronchitis. Given that ciprofloxacin is
useful in treating diseases caused by gram negative bacteria, the product has been
found potentially useful for treating sexually transmitted diseases and is active against
N. gonorrhoeae, including beta-lactamase-producing strains and strains that are
resistant to tetracycline, and Chlamydia spp. Additionally, ciprofloxacin is also used
for treating gastrointestinal infections and for selective decontamination of the
gastrointestinal tract.
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However as with all anti-bacterials, there is increasing resistance to ciprofloxacin
during treatment of infections caused by Ps. aeruginosa, S. aureus, and Serratia
marcescens. Given that the rate of resistance has been increasing over the years, this
remains a concerning factor with respect to treatment options available to patients.
Although there remain a few antibiotics to which many bacterial strains have not
developed resistance, there is a disproportionate rise in increasing resistance to the
number of drugs present in the market which are able to counter this effect.
Ciprofloxacin is a highly genericized product and the sharp attrition in sales is not
surprising. While Bayer continues to market its products, the availability of cheaper
generic versions in cost-sensitive markets such as Europe and Asia will cause a decline
in sales. Furthermore, the first generic version to the ciprofloxacin injectable was
approved in 2006, causing further losses in revenues. Despite this, there continue to be
valid patents on the oral suspension and tablets for some branded versions of
ciprofloxacin, which are expected to last until 2014 and 2011 respectively. However,
sales from these products are not expected to off-set the rates of attrition in revenues
caused by generic competitors.
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Anti-bacterials sales forecasts to 2011
Table 2.37, Table 2.38 and Table 2.39 illustrates the forecast sales of major brands
competing in the anti-bacterials market for 2005-11.
Table 2.37: Anti-bacterials’ sales forecast, 2005-11

2005 2008 2011 2005-11 (%) patent expiry
Macrolides
Zithromax azithromycin 972 111 45 -40.1% exp
Z PAK
Zithromax azithromycin 892 87 42 -39.9% exp
Klacid. clarithyromycin 408 134 75 -24.6% exp
Clarith clarithyromycin 240 83 44 -24.6% exp
Biaxin XL clarithyromycin 229 87 50 -22.4% exp
Klaricid clarithyromycin 218 154 132 -8.0% exp
Keltek telithromycin 190 258 300 7.9% 2017
Others 593 3,886 5,024 43.3%
Total 3,742 4,800 5,712 7.3%
Beta-Lactams
Merrem meropenem 184 265 254 5.5% 2010

Merrenem meropenem 119 130 83 -5.8% 2008
Tienam imipenem 251 257 54 -22.6% 2009
Primaxin imipenem 226 285 45 -23.6% 2009
Zienam imipenem 115 133 88 -4.4% 2009
Invanz ertapenem 77 148 187 15.9% 2013
Others 540 793 1,584 22.2%
Total 1,512 2,011 2,295 7.2%
Penicillins
Augmentin AMX+CLA 819 547 421 -28.3% exp
Zosyn PIP+TAZ 514 713 867 9.1% 2023
Unasyn AMP+SUL 177 213 231 4.5% exp
Amoxil AMX 137 127 99 -5.3% exp
Others 3,601 3,246 3,907 1.4%
Total 6,488 7,771 9,137 6.3%
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2005 2008 2011 2005-11 (%) patent expiry
Fluroquinolones
Levaquin levofloxacin 1441 1959 1777 3.6% 2011
Avelox moxifloxacin 400 617 591 6.7% 2011
Ciproxin ciprofloxacin 336 256 167 -11.0% exp
Ciflox ciprofloxacin 83 43 17 -23.2% exp
Others 3,601 3,246 3,907 1.4%
Total 5,861 6,121 6,459 1.6%
Cephalosporins
Rocephin ceftriaxone 759 487 344 -12.4% 2006

Omnicef cefdinir 622 993 1146 10.7% n/a
Cefzil cefprozil 341 277 102 -18.2% exp
Zinnat cefuroxime 306 187 100 -17.0%
exp
Others 7,260 8,587 9,793 5.1%
Total 9,288 10,531 11,485 3.6%
Teracyclines
Doryx doxycycline 109 153 175 8.2% exp

Dynacin minocycline 73 28 9 -29.5% exp
Others 695 680 659 -0.9%
Total 877 861 843 -0.7%
Others
Zyvox linezolid 552 989 1345 16.0% 2015
Tobi tobramycin 245 319 380 7.6% 2014
Vancocin vancomycin 160 224 87 -9.7% 2008
Cubicin daptomycin 114 301 425 24.5%
Others 2,365 2,817 3,363 6.0%
Total 3,436 4,650 5,600 8.5%
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Pipeline products
ceftobiprole - 44 129 -
Arbelic telavancin - 34 145 -
dalbavancin 12 35 -
Tygacil tigecycline - 311 815 -

doripenem 68 162 -
Total Pipeline - 470 1,286 -
Others 19,895 26,180 31,849 8.2%
Total Anti-bacterials 31,204 36,745 41,531 4.9%
Anti-bacterials are forecast to expand at a CAGR of 4.9% for the forecast period of
2005-11. With companies choosing to invest in drug class areas outside that of anti-
bacterials, new product launches are forecast to accrue $1,286m in 2011. Of these, the
major growth driver is forecast to be Tygacil (tigecycline), expected to capture an
$815m in sales in 2011.
Of the competing drug classes in this market, products falling under the ‘others’
category are expected to emerge as the main growth drivers, growing at an estimated
CAGR of 8.5% for 2005-11. While macrolides and beta-lactams are forecast to
continue featuring growth, drug classes such as fluroquinolones, tetracyclines and
cephalosporins are forecast to feature stagnating growth trends.
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Anti-fungals
Table 2.40 summarizes the performance of anti-fungals over the period 2001-5.
Table 2.40: The global anti-fungal market by drug class, 2001-05

2001 2002 2003 2004 2005 04-05 (%) 2005 (%)
Anti-fungals 3,136 3,403 4,143 4,646 4,439 -4.4% 100.0%
Anti-fungals experienced a decline of 4.4% (or $207m) in growth in 2005, from 2004
sales $4,646m. This is indicative of a prevailing trend in this drug class which features
limited innovation and few mass-market product launches, largely due to the relative
efficacy of existing treatments.
While the anti-fungal market remains heavily genericized and features a significant
degree of pricing pressure, growth in this market hinges upon the uptake of recent
launches of products indicated for the treatment of invasive fungal infections in patient
populations whose immune system has been weakened due to diseases such as cancer
and HIV. This sub-class is forecast to benefit from large patient populations of these
two diseases, a key factor in driving sales growth over the period of analysis.
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Leading brands of the anti-fungal market
Market dynamics
Table 2.41 summarizes the performance of the leading penicillin brands in the anti-
infective market.
Table 2.41: Leading anti-fungals brands in the global anti-infectives market,

2004–5

Lamisil Novartis terbinafine allylamine 1,174 1,157 -1.5% 26.1%

Cancidas Merck caspofungin echinocandin 399 520 30.4% 11.7%
Diflucan Pfizer fluconazole triazole 900 387 -57.0% 8.7%
Vfend Pfizer voriconazole triazole 237 328 38.3% 7.4%
Sporanox J&J itraconazole triazole 319 238 -25.4% 5.4%
Ambisome Astellas amphotericin B PAM 248 237 -4.6% 5.3%
Itrizole Kyowa itraconazole triazole 247 194 -21.6% 4.4%
Hakko
Funguard Astellas micafungin echinocandin 116 123 5.8% 2.8%
fluconazole triazole 85 118 38.8% 2.7%
Prodif Pfizer fosfluconazol triazole 80 89 11.7% 2.0%
Leading ten brands 3,806 3,391 -10.9% 76.4%
Others 840 1,048 24.8% 23.6%
Total 4,646 4,439 -4.4% 100.0%
J&J= Johnson & Johnson; PAM= Polyene antimycotic
Sales in the anti-fungals drug class were led by Novartis’ Lamisil (terbinafine) which
registered a decrease in sales growth rates reported at -1.5% for 2004-05 and
representing sales of $1,157m in 2005, down by $17m from year previous sales of
$1,174m. This decrease is attributable to the entrance of generic competitors in several
European markets. Sales of Lamisil represented 26.1% of the global anti-fungal market
in 2005.
Following Lamisil, placed second in the anti-fungal market with a share of 11.7% in
2005 is Merck’s Cancidas (caspofungin), one of the current growth drivers in this
164
market. Cancidas registered a sales growth rate of 30.4% in 2005 representing sales of
$520m, an increase of $121m from year previous sales of $399m. Cancidas belongs to
a relatively new drug class, echinocandins which are expected to gain a strong share in
the systemic anti-fungals market.
Despite experiencing severe attrition in sales following the loss of patent exclusivity in
2004, Pfizer’s Diflucan (fluconazole) is placed at number three in the global anti-
fungals market. Diflucan experienced a dramatic drop of 57.0% in sales in 2005
representing sales of $387m, a decline of $513m from year previous sales reported at
$900m in 2004.
The growth driver among original brands in this market is Pfizer’s Vfend
(voriconazole) which registered a strong growth rate of 38.3% in 2005, representing
sales of $328m, and thus representing 7.4% of the market. Vfend was launched in 2002
and is indicated in the treatment of serious, invasive fungal infections that are generally
associated with patients who are immuno-compromised.
Sales of Janssen’s Sporanox (itraconazole) suffered a decline of 25.4% or $81m in

2005 on year previous sales of $319m in 2004. Sporanox accrued sales of $238m in
2005, representing some 5.4% of the anti-fungals market. This decline in sales is owed
to the introduction of the product’s generic counterpart, itraconazole, by Sandoz in
2004. Sales of this product in the Japanese market where it is marketed under the name
of Itrizole also suffered with a decrease of 21.6% in sales growth rate, representing
sales of $194m in 2005. 2005 also saw the termination of a co-marketing agreement
between Janssen and Kyowa Hakko to promote the product in the Japanese market.
The anti-fungals market features relatively mature products with declining growth
rates. However, growth in this market is forecast to hinge upon products such as
Merck’s Cancidas and Pfizer’s Vfend which target serious, invasive fungal infections
in special target populations typically comprising of immuno-compromised patients.
Although the uptake of such products has been slow, with increasingly positive data
165
being released about these products sales are predicted to pick up and these products
are forecast to feature strong performances in the anti-fungals market.
The competitive dynamics of the leading ten brands of the anti-fungal drug classes are
illustrated in Figure 2.9.
Figure 2.9: Competitive dynamics of the ten leading brands in the anti-fungal
drug class, 2005
40% Vfend
35%
flucanozole
Cancidas
30%
25%
20%
15%
Prodif
10%
Funguard
5%
0%
0 150 300 450 600 1,050 1,200
-5%
Sales, 2005 ($m)
-10%
Ambisome
-15%
Lamisil
-20% Itrizole
-25%
-30% Sporanox
55%
Diflucan
60%
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Key brands analysis
Lamisil (terbinafine)
Novartis’ Lamisil (terbinafine) indicated for the treatment of onychomycosis accrued

sales of $1,157m in 2005, 1.5% down on year previous sales of $1,174m. This decline
in sales has been attributed to the introduction of generic competition in European
markets, albeit sales continue to increase from the US market. The product, first
launched in 1996, is available in topical solution and topical gel formulations in
addition to an oral once-daily formulation. Currently the product is available as a
topical formulation in the OTC markets of Europe and Japan.
Although Lamisil features a narrow therapeutic spectrum in comparison to many

prominent anti-fungals based on fluconazole and ketoconazole, the product has
achieved a high level of competitive differentiation, with Novartis focusing solely on
nail fungus in an attempt to distance the brand from competition within the highly
genericized anti-fungals market.
Onychomycosis is a difficult condition to treat successfully, particularly in advanced

stages of disease progression as fungal infections may occur under the nail and are hard
to treat with a topical medication. As a result, the efficacy of OTC medications is low,
and the majority of advanced infections require treatment with systemic anti-fungals,
the most prominent of which are oral versions of Lamisil and ketoconazole. These
allow for binding of the active molecule to the nail plate, providing for greater efficacy.
Lamisil oral tablets have a well established reputation in the treatment of

onychomycosis given the ability of the compound to inhibit the activity of the enzyme
responsible for ultimate nail cell death by the fungi. The dosing regime for the
treatment of this disease features a once daily dose of 250mg of Lamisil over a period
of 12weeks for toenail infection which can also be altered to 500mg orally once daily
over a duration of one week per month for a period of four months. However, despite
the increased efficacy of the oral tablets compared with the topical solutions of Lamisil,
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the oral formulation continues to report treatment failure rates as high as 20% to 30%.
Lamisil’s key competitor in the oral formulation is J&J’s Sporanox (itraconazole),
albeit Lamisil has proved superior in terms of clinical efficacy in comparative clinical
trials.
As such, Lamisil is well tolerated by patients undergoing therapy with this product;
however side effects such as urticaria, erythrema and hepatoxicity have been reported.
In 2001, the US FDA issued a warning to consumers of the associated risk of
hepatotoxicity, which could possibly result in liver failure. This warning resulted in
labeling changes for both Lamisil and its competitor Sporanox. The revised label now
advises consumers of the potential risks associated with the use of the drug, including
the risk of isolated yet reported serous skin reactions including Stevens-Johnson's
Syndrome. The release of this warning resulted in a temporary slow down in sales
growth rates for the product for 2002-03, although sales picked up during the following
years.
Topical Lamisil’s key competitive advantage is its high affinity for binding to nail
tissue and therefore achieving delivery of the anti-fungal component to a greater
amount of the infected area. However, cure rates from topical medications for
onychomycosis are low, and despite a strong DTC campaign, the product’s topical
formulation only offers useful therapeutic options in skin conditions such as tinea pedis
and tinea cruris. In both indications, Lamisil’s key competitive advantage, a high
affinity for nail tissue and a long half-life are negated in comparison to cheaper generic
products which are available in OTC and prescription format.
The strongest impact on the performance of Lamisil is forecast to be the introduction of

a new lacquer formulation which increases the length of time which the active
ingredient is exposed to the nail, potentially opening up the OTC onychomycosis
market. With the compound currently in phase I clinical trials, its impact over the
forecast period to 2011 is forecast to be minimal.
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Cancidas (caspofungin)
Launched in the US in 2001, Merck’s Cancidas (caspofungin) registered a strong

growth rate of 30.4% representing sales of $520m in 2005. Positioned second in the
global anti fungals market with a share of 11.7%, Cancidas is indicated in the treatment
of fungal infections in febrile, neutropenic patients. This condition typically affects
cancer patients as a known complication of chemotherapy and is marked by fever and a
reduction in neutrophils in the patient’s blood count. Cancidas is currently available
only as an intravenous injectable.
Cancidas belongs to a relatively new class of anti fungal drugs called the echinocandins
whose mechanism of action on the fungal cell wall renders it permeable thus causing
lysis or cell death. Drugs belonging to this class have exhibited additive and/or
synergic anti-fungal activity in vitro with older anti-fungal drugs such as amphotericin
B and triazoles. Additionally, clinical trials have shown a superior tolerability profile
together with clinical efficacy in the treatment of fungal infections such as invasive
aspergillosis and oropharyngeal and oesphageal candidiasis.
A comparative clinical trial conducted by Villaneuva, A et al (Am J Med.

2002;113:294-299) involved 175 patients with candidal esophagitis randomized to
receive either intravenous caspofungin (50mg daily) or fluconazole (200mg daily) over
a duration of an average of 9 days. The primary end point was favorable response
overall at 5-7 days post therapy. A favorable response was considered if there were
both significant endoscopic improvement and complete resolution of symptoms.
Results were comparable for the 2 groups and showed no statistical difference. There
was no statistically significant difference in relapse rates between the groups; however,
there was a trend toward fewer relapses in the fluconazole group at 28 days post
treatment.
An additional trial conducted by Villaneuva, A et al (Clin Infect Dis. 2001), comparing

caspofungin versus amphotericin B for the treatment of candida esophagitis,
randomized 122 patients to receive either intravenous caspofungin (50 or 70 mg daily)
169
or amphotericin B (0.5 mg/kg body weight daily). The primary endpoint was favorable
response overall at 5-7 days post therapy. Success rates for those treated with
amphotericin B, caspofungin 50mg, and caspofungin 70 mg groups were 63%, 74%,
and 88%, respectively. The differences did not achieve statistical significance for either
caspofungin group.
The use of Cancidas in the treatment of invasive apsergillosis has been evaluated in
several strategies, including empiric therapy and first line therapy in neutropenic
patients, first line therapy in newly diagnosed patients in addition to salvage therapy in
combination with other anti-fungals in patients resistant or intolerant to other
therapeutic agents. Results from clinical studies investigating the use of Cancidas in all
of the above cases published by M. Aoun et al (2006 ISHAM, Medical Mycology),
have further proved the product’s superior clinical efficacy and safety profile.
When considered as an empiric therapy compared with a lipid formulation of

amphotericin B (L-AMB) in a clinical trial comparing 901 patients, Cancidas was
found to be as effective as L-AMB in terms of response rates, albeit, it demonstrated
superiority in terms of successful treatment of baseline infections (51.9% versus
25.9%) and no premature discontinuation (89.7% versus 85.5%). Additionally,
caspofungin was better tolerated than amphotericin B with significantly lower rates of
nephrotoxicity and infusion related events. There remains a lack of data with respect to
Cancidas being used as primary therapy for the treatment of aspergillosis, however,
results from a study conducted by Candoni et al have shown a favorable response rate
comparable (58% vs 52.8%, N=32) to that of voriconazole as first line therapy for the
infection.
At the time of its launch, Cancidas experienced a slow uptake in physician

prescriptions mainly attributed to the limited published clinical data on the drug. Since,
positive results from comparative clinical trials with other established therapies such as
amphotericin B and fluconazole for indications such candidiasis and aspergillus have
further helped market penetration and increased prescription rates. Typical side effects
associated with the use of Cancidas have been reported include fever, headache,
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vomiting and rash. Although, during Phase II and III comparator clinical trials against
fluconazole and amphotericin B, there was a reported low risk (1.5%) of hepato-
toxicity associated with the use of this drug, users are warned of this contra indication.
Although, Merck’s product has been proven clinically superior while featuring an
excellent side effects profile, increased market penetration could be limited by the
availability of a single IV formulation. This limitation of Cancidas is attributed to the
low bio availability of caspofungin which has restricted the development of alternate
formulations. Currently, Merck’s product faces competition from Pfizer’s Vfend
(voriconazole), which shares similar indications in addition to gaining approval as first
line therapy for the treatment of aspergillosis. Additionally, Vfend is also available as
oral tablets and suspension formulations in addition to an intravenous injection.
The anti-fungals market has typically featured a limited number of products, low on
innovation and the introduction of Cancidas from a relatively new class of drugs has
resulted in the increase of competition in this market. Additionally, given the high rate
of genericization, Cancidas remains one of the few growth drivers within this market.
However, the recent launch of Astella’s Mycamine/Funguard (micafungin) in May
2005, the newest echinocandin product with an indication in the treatment of
esophageal candidiasis and prophylaxis of candida infections in hematopoietic stem
cell transplant patients may alter the growth dynamics of Merck’s brand.
Cancidas is also forecast to face strong competition from Pfizer’s Eraxis

(anidulafungin) which is forecast to launch in the US in early 2006. Eraxis is seeking
approval in the indications of candidemia and esophageal candidiasis thus sharing
indications with Cancidas upon its approval. Eraxis is a second generation product
falling under the echinocandins class of drugs, similar to that of Cancidas. While there
would be a time lapse between the drug’s approval and results from imminent
comparative trials, Merck is expected to further invest in marketing strategies for its
potential block buster.
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Merck’s product is forecast to feature a moderate performance in this market, given its
safety and efficacy profiles and lack of drug interactions which also render Cancidas as
an attractive replacement product to amphotericin B for candidal infections. Cancidas’
sales potential would benefit further through the gain of approval as first line therapy in
the treatment of aspergillosis which has been supported by newer clinical data.
Cancidas remains patent protected until 2015 while retaining exclusivity rights for its
indication as an empiric therapy in the treatment of presumed fungal infections in
neutropenic patients
Diflucan (fluconazole)
Pfizer’s Diflucan (fluconazole) indicated for the treatment of candidiasis, primarily of

the vaginal, oropharyngeal and esophageal variety. Diflucan lost patent exclusivity in
2004 and has since been subject to severe attrition in sales. Since its genericization,
Diflucan has rapidly lost share to its competitor’s Novartis’ Lamisil and Merck’s
Cancidas, losing its number one position in the global anti-fungals market in 2003to
number three in 2005. Pfizer’s former block buster anti-fungal registered a decline of
57.0% in sales growth rates in 2005 representing sales of $387m, a decrease of $513m
from 2004 sales reported at $900m.
Diflucan has been the long standing gold standard treatment for candidemia and other
invasive fungal infections, especially those associated as opportunistic infections in
patients suffering from HIV/AIDS. Systemic candidemia is a fungal infection occurring
in the patient’s blood stream and is therefore associated with the risk of the infection
spreading to other organs of the body of the immuno compromised patient thereby
increasing chances of death.
In addition to Diflucan’s high level of clinical efficacy and superior tolerability profile,
Pfizer’s product features a convenient once daily oral dosing regime, thus increasing its
attractiveness to patients who already suffer from the inconvenience of ‘pill burden’
given the stage of their disease. As compared with older drug amphotericin B, which
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also typically shares the same indications, Diflucan is associated with lower levels of
renal toxicity, further increasing its popularity as a treatment option.
However, given that the frequency of opportunistic infections is typically increased in

immuno-compromised patients, re-infections result in patients taking these medications
on a daily basis as a preventive measure. This daily prophylaxis has resulted in the
development of several strains of azole-resistant thrush. Despite the initial response to
fluconazole therapy being prompt and complete, there is a risk of developing resistance
to fluconazole, thus resulting in physicians preferring to start immuno-compromised
patients on prophylaxis therapy after the second re-occurrence of candida.
Alternatively, physicians may either increase the dose of Diflucan being administered
to the patient or switch the patient to another azole therapy.
Although sales of Diflucan have been severely impacted by loss of patent protection in
2004, Pfizer has actively positioned Vfend (voriconazole) as its successor in the global
anti-fungals market. In addition to sharing common indications, Vfend has also been
proved comparable in terms of efficacy and safety profiles in clinical trials conducted
with Diflucan. Vfend also possesses an additional advantage of gaining approval as
first line treatment for aspergillosis. Given that the anti-fungals market has historically
featured a low number of products, the launch of Vfend resulted in increased
competition with respect to the implementation of aggressive product positioning
strategies in addition to extended product life cycle management strategies. Vfend
registered a growth rate of 38.3% in 2005 representing sales of $328m.
Vfend (voricanazole)
Pfizer’s Vfend (voricanazole), the company’s second azole product offering to the
global anti-fungals market was launched in the US in early 2002. Vfend registered a
strong growth rate of 38.3% in 2005, representing sales of $328m in 2005, an increase
of $91m from year previous sales reported at $237m. Vfend has been approved in the
treatment of aspergillosis, candidemia in non-neutropenic patients, esophageal
candidiasis and other serious fungal infections. The active ingredient of the drug,
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voriconazole, a synthetic derivative of fluconazole, has demonstrated fungistatic
activity against most yeasts but is fungicidal against aspergillus species.
In a bid to salvage declining sales of Diflucan, the launch of Vfend in this market
coincided with the loss of patent protection on Pfizer’s blockbuster antifungal, product
offering to this market. Considering Diflucan lost patent exclusivity in 2004 and Vfend
was launched in 2002, physicians were given ample time to develop familiarity with
Pfizer’s new brand, thus encouraging switching over of patients to the new drug in
order to save declining prescription rates.
Vfend gained approval with an indication in the treatment of invasive aspergillosis

based on results from clinical trials which involved 116 immuno compromised patients
who were evaluable for testing the drug’s clinical efficacy and safety profiles. Patients
received intravenous voriconazole 6mg/kg twice daily for two days and then 3 mg/kg
twice daily for 6-27 days followed by 200mg orally for up to 24 weeks. Response rates
for the population were recorded at 48% as a good response which was defined as the
resolution of all clinical signs and symptoms attributable to invasive aspergillosis and
to at least a 50% improvement in radiologic findings. Additional study findings also
showed that 53 % of patients (N=144) who received Vfend had a successful response at
12 weeks of treatment, compared to 32% (N=133) of those who received amphotericin
B. The survival rate of the Vfend-treated patients was 71% versus 58% of those in the
amphotericin B arm of the study.
Although Vfend features a superior side effects profile with respect to nephrotoxicity
when compared with other therapies such as amphotericin B, the major negative effect
associated with the use of this drug is visual disturbances which have been reported in
30% of patients. Although, this side effect is reversible within 14 days of
discontinuation, this could be a limiting factor in prescriptions. Additionally, there also
remains the high potential for drug interactions linked to usage of Vfend attributable to
its metabolism by and inhibition of a key enzyme CYP 450 which is linked to the
metabolism of drugs in the human body. Given that most immuno-compromised
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patients tend to suffer from additional conditions ranging from depression through TB
to GIT conditions, physicians would need to prescribe this drug with caution.
Having gained an additional indication in the treatment of the treatment of candidemia

in non-neutropenic patients (those without low white blood cell counts) and candida
infections including disseminated (deep tissue) infections in skin and infections in
abdomen, kidney, bladder wall, and wounds in 2004, Vfend competes directly with
Merck’s Cancidas in these indications. However, Vfend features a competitive
advantage compared with Cancidas with its approval as first line therapy for the
treatment of aspergillosis in addition to being marketed in oral formulations thus
featuring superior administration techniques.
The use of Vfend has also been further advocated through results of post marketing
studies published in the 2005 November issue of Clinical Infectious Diseases, which
showed that patients who initially received Vfend were more likely to survive than
patients who initially received amphotericin B. The analysis also showed that patients
who started on Vfend were less likely to need salvage therapy than those on
amphotericin B. Salvage therapy is treatment given after the infection has not
responded to the initial treatment or if the patient cannot tolerate the initial medicine. It
has also been proved that using Vfend as initial therapy proves to be significantly
beneficial in terms of cost advantages when compared with patients who started
therapy with amphotericin B, a more expensive lipid formulation of amphotericin B.
Pfizer is expecting approval for approval on its new antifungal which falls under the
echinocandin class of drugs – Eraxis (anidulafungin) in 2006. While this drug shall
compete in indications similar to that of Vfend and Cancidas, cannibalization of sales
from Vfend is unexpected. Vfend remains patent protected until May 2016 until which
Pfizer’s product is expected to gain block buster status.
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Anti-fungals sales forecasts to 2011
Table 2.42 illustrates the forecast sales of major brands competing in the anti-bacterials
market for 2005-11.
Table 2.42: Anti-fungal sales forecast, 2005-11

2005 2008 2011 2005-11 (%) patent expiry
Antifungals
Lamisil terbinafine 1,157 515 140 -29.7% June 2007
Cancidas caspofungin 520 514 598 2.4% 2015
Diflucan fluconazole 387 273 203 -10.2% exp
Vfend voriconazole 328 696 1023 20.9% 2016
Others 2,047 2,710 3,239 9.0%
Total 4,439 4,708 5,203 1.9%
Pipeline products
Noxafil posaconazole 29 224 n/a -
Eraxis anidulafungin 312 739 n/a -
Total Pipeline - 341 963 n/a
Others 2,247 2,370 2,276 1.8%
Total Anti-fungals 4,639 4,708 5,203 2.7%
exp = Expired; n/a = Not available
Anti-fungals are forecast to expand at a CAGR of 2.7% for the forecast period 2005-
11, representing sales of $5,203m in 2011. With pipeline products expected to add an
estimated $963m in sales in 2011, the major growth driver among potential launches is
forecast to be Pfizer’s product offering in the echinocandin’s class of drugs Eraxis
(anidulafungin). Among major branded products, Vfend (voriconazole) Pfizer’s
replacement product for Diflucan is expected to grow at a CAGR of 20.9% for 2005-11
thus featuring major growth potential for this class.
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Total anti-infective market sales forecasts to 2011
Table 2.43 illustrates the anti-infectives’ sales forecasts by drug class for the period
2005-11.
Table 2.43: Therapeutic sales forecasts by drug class, 2005-11
Sales ($m) Forecast sales ($m) CAGR (%)

2005 2006 2007 2008 2009 2010 2011 2005-11
Anti-bacterials 31,204 33,259 35,084 36,745 38,373 39,948 41,531 4.9%

Antivirals 4,480 5,386 5,401 5,524 5,995 6,238 6,573 6.6%
Vaccines 5,708 6,000 6,429 6,863 7,052 7,207 7,357 4.3%
Antifungals 4,439 4,500 4,605 4,708 4,848 5,007 5,203 2.7%
Total 45,831 49,145 51,519 53,840 56,268 58,400 60,664 4.8%
Source: IMS Health; Author’s Research & Analysis Business Insights Ltd
The anti-infectives market is forecast to expand at a CAGR of 5.8% over the period
2005-11. Growth is forecast to be driven by gains in the anti-bacterials and anti-virals
classes, with anti-bacterials expanding at a low rate, due to the sheer size of the class
growth in the anti-bacterials class is forecast to carry far reaching impact.
Low levels of sales growth attributable to the anti-fungals and vaccines classes are a
result of pricing pressure and a lack of innovation, particularly in the anti-fungals area.
Whilst vaccines are forecast to benefit from increased development in niche
indications, the demise of the anti-fungals class is a result of generic competition to
block buster brands and a restricted number of indications which can be targeted by
pharmaceutical developers.
Anti-virals, with a forecast CAGR of 6.6% over the forecast period of 2005-11 are set
to overcome generic threats through Valtrex the market leader via further consolidation
of currently marketed brands and the introduction of a small number of targeted
therapies. Overall, anti-virals are forecast to contribute an additional $2.1bn over the
period 2005-11.
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CHAPTER 3
Pipeline analysis
179
Chapter 3 Pipeline analysis
Summary
As commercial opportunity in anti-fungals and anti-bacterials has become

progressively more limited due to heightened competition, increasing
genericization and comparatively short treatment regimens, the anti-virals market
currently represents a plethora of commercial opportunity driven by large
populations, long-term treatment regimens and significant unmet need.
Current R&D endeavors within the vaccine market primarily focus on

reformulated seasonal influenza and H5N1 avian influenza vaccines, as well as
innovative vaccines for “neglected” diseases such as Japanese encephalitis and
leishmaniasis.
Due to the anticipated launch of several promising compounds across the 3 major
anti-infectives classes, sales growth attributable to the performance of these
pipeline products is forecast to contribute strongly to the overall anti-infectives
market, with estimated CAGR of 96.8% over the 2006-11 period.
BMS’ Baraclude, indicated for the treatment of hepatitis B is forecast to emerge

as a serious competitive threat to Gilead’s Hepsera, offering patients a greater
reduction in viral load levels as well as a promising resistance profile. However,
the recent launch of Novartis/Idenix’s hepatitis B treatment, Tyzeka
(telbivudine), is likely to impede on Baraclude’s market penetration over the
forecast period.
Wyeth’s Tygacil (tigecycline) is the first market entrant in a new class of anti-
biotics, the glycylcyclines, and is indicated as a single-agent, IV therapy for the
treatment of complicated intra-abdominal infections and skin and skin structure
infections. Tygacil has also demonstrated potent activity against MRSA, MSSA
and VRE, and is forecast to accrue an estimated $815m in 2011.
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Introduction
This chapter analyzes the drug pipeline for the anti-infectives therapy area, primarily
the most promising or potential blockbuster drugs. Forecasts for drugs due to launch
before 2011 are also given at the end of this chapter.
Key trends in R&D
The major trends and approaches in R&D have been summarized in Figure 3.10.
Figure 3.10: Prevailing R&D approaches, 2006
2006 2008 2011
Resistance Prophylaxis Oral MRSA drugs

Anti-bacterials
Acute infection Niche populations Monoclonal antibodies
Resistance
Anti-fungals Wide spectrum IFI treatments
Acute infections Monoclonal antibodies
Indications with Combination therapy options

Anti-virals Resistance unmet need Prodrugs with improved dosing
Combination vaccines Focus on “neglected” diseases

Vaccines
“Potential pandemic” vaccines
Source: Author’s research and analysis Business Insights Ltd
Across the major classes of the anti-infectives market, a current key R&D approach
centers on the development of drugs which counter resistance in existing therapies,
particularly within the anti-bacterial, anti-fungal and anti-viral markets. While there
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exist several treatment options available for common infections, several new
opportunities exist in niche indications with high unmet needs within the anti-bacterial
market. The most significant are oral drugs to treat MRSA, the prevalence of which has
been dramatically increasing in both hospital and community settings since 2001.
Resistant gram-negative bacterial infections, such as pseudomonas and acinetobacter
also features as an area where there are currently few drugs in development and where
there is a forecast escalated need in the future. As the smaller hospital market continues
to expand rapidly, driven again by increasing resistance rates, it is forecast that R&D
within the anti-bacterial market will evolve to focus on the development of oral agents
to treat MRSA-related infections, as opposed to the currently available IV
formulations.
The vaccine R&D pipeline is also forecast to undergo a transition, shifting from current
efforts to develop vaccines which decrease the administration burden, particularly
among the pediatric population, to a pipeline addressing emerging issues such as
biodefense and potential pandemics such as avian influenza, and historically
“neglected” diseases such as leishmaniasis and trypanosomiasis.
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The therapeutic area pipeline
Figure 3.11 illustrates the number of compounds featured in the anti-infectives pipeline
across major indications in the anti-infectives therapeutic area and at different stages of
development.
Figure 3.11: The anti-infectives pipeline by indication and stage of

development, 2006
PC I II III PA A
Anti-fungal
Others
Indications
Anti-bacterial
Anti-viral
0 50 100 150 200 250 300 350 400 450 500

Number of candidates
Phases of Development:
PC= Pre-clinical; I= Phase I; II= Phase II; III =Phase III; PA= Pending approval; A= Approved
Source: Author’s research and analysis Business Insights Ltd
Of the major indications in the anti-infectives area, anti-virals represents the key
development opportunity for drug development companies, with 480 compounds
estimated to be in development. As commercial opportunity in anti-fungals and anti-
bacterials has become progressively more limited due to heightened competition,
increasing genericization and comparatively short treatment regimens, the anti-virals
market currently represents a plethora of commercial opportunity. This potential for
market success is largely attributable to large patient populations, which generally
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require long-term treatment, and significant unmet need, particularly within the
hepatitis market. Additionally, the numerous targets in the viral lifecycle of various
infections provide an immense window for potential novel products.
Anti-bacterials represent the second most popular area of development for

pharmaceutical companies. Whilst the overwhelming concentration of compounds are
currently believed to be in phase I and II clinical trials, with an estimated 65 and 62
agents respectively, the anti-bacterial is highly saturated, with nearly 4,000 marketed
products, with development of novel anti-bacterial agents focused on the emergence of
resistant strains. As such, R&D trends within the anti-bacterial class entail the
development of new drug classes that cover resistant organisms have a broad spectrum
of activity and have the ease of administration that can facilitate an IV to oral switch
from a hospital to outpatient setting.
While vaccines are not specifically highlighted in the anti-infectives pipeline, they
represent a key constituent among compounds in development, primarily reflected in
the anti-viral market. Current R&D endeavors within the vaccine market primarily
focus on reformulated seasonal influenza and H5N1 avian influenza vaccines, as well
as innovative vaccines for HIV/AIDS and “neglected” diseases such as Japanese
encephalitis and leishmaniasis.
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Leading drugs in development
There are a plethora of drugs under development in the anti-infectives therapeutic area.
High potential drugs which are being developed for major indications by leading
pharmaceutical companies are discussed in the remainder of this chapter, and
summarized in Figure 3.12.
Figure 3.12: Leading recently launched products and late-stage R&D in

the anti-infectives market, 2005
Albuferon
marivavir
ceftobiprole
Mycograb
Arbelic
Zeven
Tygacil
doripenem
Baraclude
Tyzeka/
Sebivo
Noxafil
Eraxis
Phase III Registration Marketed
Source: Author’s research and analysis, company reports Business Insights Ltd
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Profiles of key pipeline products
Phase III compounds
Albuferon (albinterferon alpha 2b)
Albuferon (albinterferon alpha 2b), co-developed by Human Genome Sciences (HGS)

and Novartis, is a novel, long-acting form of interferon alpha currently in phase III
clinical trials. As a cytokine, Albuferon works in controlling cellular processes such as
cell activation, migration and ageing. However, while the precise mechanism of action
is not known, established research of interferon alpha has demonstrated direct antiviral
activity in patients with hepatitis C as well as immune-modulating and direct anti-
tumor effects in certain cancers. Using HGS’ proprietary albumin technology,
Albuferon was created from the genetic fusion of human albumin and interferon alpha.
Existing research has shown that fusion of therapeutic proteins to human albumin
decreases clearance and prolongs the half-life of proteins, which may confer an
improved dosing regimen of Albuferon over existing therapies.
The Albuferon phase III clinical program includes two randomized, open-label, active-
controlled, multi-center, non-inferiority trials, to evaluate the efficacy, safety, and
impact on quality of life of Albuferon in combination with ribavirin versus Pegasys
(peginterferon alfa-2a) in combination with ribavirin. The first phase, ACHIEVE 1,
which will enroll approximately 1,300 patients with chronic hepatitis C genotype 1,
was initiated in December 2006. Patients will either receive subcutaneously
administered Albuferon once every 2 weeks (900 mcg or 1,200 mcg), or Pegasys once
every week (180 mcg), with all patients receiving oral ribavirin concomitantly over a
48-week period. Subsequently, in February 2007, HGS launched the second phase of
its phase III Albuferon development program, ACHIEVE 2/3, which will again
compare Albuferon versus Pegasys, both in combination with ribavirin in treatment-
naïve patients with chronic hepatitis C genotypes 2 and 3.
Phase IIb clinical results have indicated that Albuferon may offer comparable or
improved efficacy versus Pegasys, with an improved dosing regimen and the potential
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for less impairment of health-related quality of life. Patients receiving Albuferon
(900mcg every two weeks) achieved a higher rate of sustained virologic response at 12
weeks than Pegasys, at 73% and 63% respectively, and more favorable health-related
quality of life scores than those patients receiving Pegasys (180mcg once a week). In
addition, lower relapse rates were seen among the Albuferon-treated group as
compared to those patients receiving Pegasys, at 13.0% and 29.7% respectively.
However, the rate of discontinuation due to adverse events in patients receiving
Albuferon was significantly higher than that experienced by patients receiving Pegasys.
As there continues to be a significant need for more effective and better tolerated
treatments for hepatitis C, Albuferon is at a competitive advantage as it maintains a
superior dosing regimen, and clinical data to date has suggested the potential for less
impairment of health-related quality of life. Side effects, many of which are associated
with injections of interferon alpha, continue to be a significant treatment-limiting issue,
and again, because Albuferon requires half as many injections as compared to Pegasys,
this sole factor may drive sales growth of Albuferon if on-going phase III clinical trials
are able to establish a comparable efficacy and safety profile.
To effectively compete with Roche’s well-established and branded hepatitis C

franchise, HGS entered in an agreement with Novartis in June 2006 for the
development of Albuferon. Under the agreement, HGS and Novartis will co-
commercialize Albuferon in the US, sharing US development and commercialization
costs as well as profits, while Novartis will be responsible for commercialization in the
rest of the world. This partnership will likely provide the sales and marketing platform
needed for Albuferon to enter the hepatitis C market with the potential to siphon
market share away for Roche’s franchise. With the goal of filing for global market
applications in 2009, it is forecast that Albuferon will launch in 2010 across the major
pharmaceutical markets. It is forecast that Albuferon will experience strong sales
growth over 2010-11, accruing an estimated $302m in 2011.
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Maribavir
Currently in phase III clinical trials with ViroPharma, maribavir is a member of a new
class of drugs called benzimidazole ribosides, which is being investigated for the
treatment of cytomegalovirus (CMV). Maribavir is differentiated from existing CMV
therapies due to its novel mechanism of action, which inhibits viral DNA assembly and
inhibits egress of viral capsids from the nucleus of infected cells unlike existing
treatments which inhibit CMV DNA polymerase.
In 2003, ViroPharma acquired maribavir from GSK, prior to which GSK had
conducted several early clinical trials in which maribavir demonstrated potent in vitro
activity against strains of CMV that are resistant to current therapies with no evidence
of neutropenia or renal toxicity. Based on these pre-clinical findings, maribavir’s utility
may extend to include patients who have failed existing CMV therapy or in patients
with evidence of reduced CMV susceptibility to currently available agents.
Following the FDA’s granting maribavir orphan drug status in February 2006, two
pivotal phase III clinical trials were initiated in September 2006, which will evaluate
the prophylactic use of maribavir in stem cell transplant patients. These phase III trials
will build-upon a phase II study which demonstrated that prophylaxis with maribavir
displayed strong antiviral activity, as measured by a significant reduction in the rate of
reactivation of CMV in recipients of bone marrow transplants. More specifically, the
number of patients who required pre-emptive anti-CMV therapy post-transplant was
significantly reduced in each of the maribavir groups (100mg BID, 400mg QD and
400mg BID) as compared to placebo, at 15%, 30%, 15% and 57% respectively. As
compared to 3 patients in placebo group developing CMV disease, there were no cases
of CMV disease in any of the maribavir groups. Additionally, maribavir was well-
tolerated with the taste disturbance and nausea as the most notable adverse event.
There remains a significant unmet need for safe and effective therapies to treat CMV,
as the majority of existing therapies possess a less than ideal toxicity profile and dosing
regimen. The current CMV market leader, Roche’s Valcyte (valganciclovir), has been
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associated with hematologic toxicity, including anemia, depressed white blood cell
counts, and to a lesser extent, depressed platelet counts. Furthermore, as the oral pro-
drug of Cytovene (ganciclovir), which was found to be carcinogenic, teratogenic and
adversely affected sperm production in animal studies, the side-effect profile of
Valcyte has proven to be a barrier for increased market uptake of the drug. Given
maribavir’s clinical profile to date, it appears that the drug maintains a superior side-
effect profile to Valcyte, which may position maribavir as a serious threat for
cannibalizing sales of Valcyte.
CMV-related diseases such as CMV retinitis are common manifestations in HIV

patients, and it has been shown that in HIV patients taking didanosine concomitantly
with Valcyte there is increased potential for hematologic abnormalities. Prior to
ViroPharma’s acquisition of maribavir, GSK had conducted a phase I clinical study in
78 HIV-infected men with asymptomatic CMV shedding. Patients were administered
one of six different dosages of oral maribavir or placebo, and CMV activity was seen in
all maribavir-treated patients, with mean CMV reductions of 2.9 to 3.7log10.
Additionally, maribavir was well tolerated in this study, with taste disturbance as the
most frequently reported adverse event. While larger clinical trials are needed in order
to assess the efficacy and side-effect profile of maribavir in HIV-infected patients,
early clinical studies appear to indicate an improved side-effect profile, which may
result in the increased use of the drug in HIV patients with CMV manifestations.
In March 2006, maribavir was granted fast-track status by the FDA and assuming there
are no setbacks in the phase III clinical trials, ViroPharma is expected to submit a NDA
for maribavir in 2009. It is forecast that maribavir will launch in late 2009 and accrue
sales estimated at $110m in 2011, an increase of $75m over first-year sales of $35m.
Ceftobiprole
Ceftobiprole, co-developed by Johnson & Johnson and Basilea Pharmaceutica, is a

novel, injectable anti-MRSA, broad-spectrum cephalosporin, which was granted fast-
track status by the FDA in 2003 for the treatment of cSSSIs due to MRSA. This fast-
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track status was later extended to include treatment of hospital-acquired pneumonia
(HAP), including ventilator-associated pneumonia. Ceftobiprole works by binding to
the penicillin-resistant targets in gram-positive bacteria, resulting in potent bactericidal
activity. In vitro, ceftobiprole has shown a low potential to select for resistance and has
demonstrated a wide-spectrum of activity against bacteria, such as gram-positive
bacteria (including MRSA), gram-positive bacteria as well as strains of S. pneumoniae
resistant to penicillin.
Ceftobiprole has demonstrated positive phase III trial (STRAUSS II) results among 828
patients with cSSSIs in comparison with ceftazidime plus vancomycin. The clinical
cure rate for ceftobiprole was 91% in MRSA patients as compared to 86% in patients
treated with the competing combination regimen. The clinical response in patients with
diabetic foot infections was 86% for ceftobiprole and 82% for the comparator
combination therapy, with ceftobiprole exhibiting a comparable side-effect profile to
that of ceftazidime/vancomycin. One-third of patients had infections involving a gram-
negative pathogen, with similar microbiologic eradication rates at 84% in both
treatment groups. Such results are indicative of the non-inferiority of ceftobiprole as a
monotherapy as compared to standard combination therapy for cSSSIs. These positive
results, however, were somewhat expected as data from the first phase III study
(STRAUSS I) also demonstrated a high cure rate and a favorable tolerability profile.
In May 2006, Basilea announced the initiation of its phase III clinical trial (CHOPIN)
to assess the efficacy of ceftobiprole in the treatment of hospital-acquired pneumonia.
While results of CHOPIN have yet to be released, it is believed that ceftobiprole will
deliver positive clinical outcomes for the treatment of HAP based primarily on the
agent’s in vitro activity. However, ceftobiprole is expected to face competition from
J&J’s doripenem, which has been launched in Japan and is currently in registration in
the US, and is also being investigated for the treatment of HAP. Given doripenem’s
earlier market entry, ceftobiprole will have to demonstrate comparable, if not superior,
clinical results to gain market share within this indication.
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Ceftobiprole’s NDA filing in anticipated for Q3 or Q4 of 2007, with the drug expected
to hit the market in early 2008. The extent of its revenue generation is also dependent
on its ability to secure approval for the treatment of hospital-acquired pneumonia.
However, as a second-generation cephalosporin, which as a class has a well-established
efficacy record, in addition to its enhanced spectrum of activity, ceftobiprole is
expected to compete strongly not only with existing cSSSIs treatments, but those which
are set to enter the market over the forecast period, including Pfizer/Vicuron’s
dalbavancin. Per the licensing agreement, Johnson & Johnson subsidiary, Ortho-
McNeil, will market ceftobiprole in the US and its’ affiliate company, Janssen-Cilag,
will market the product in the EU, Japan and China. Given Ortho-McNeil/Janssen-
Cilag’s established presence in the major pharmaceutical markets, this strategy will
likely increase ceftobiprole’s global market penetration, with sales estimated at $129m
in 2011.
Drugs in registration
Arbelic (telavancin)
Arbelic (telavancin), developed by Theravance, is an injectable, bactericidal

lipoglycopeptide antibacterial, which has been investigated for the treatment of cSSSIs
caused by gram-positive organisms, including MRSA. Arbelic was granted fast-track
status by the FDA in March 2005 and is currently in registration after Theravance
submitted a New Drug Application (NDA) in December 2006.
Arbelic, a semi-synthetic derivative of vancomycin, has a unique multi-functional

mode of action, which is mediated through multiple mechanisms. Its bactericidal
activity results in the inhibition of cell wall (peptidoglycan) synthesis and disrupts
bacterial membrane function including the dissipation of membrane potential and
increased permeability. Arbelic’s novel mechanism of action may place the agent at a
competitive advantage by offering a lower frequency of resistance development, a
reduction in the duration of therapy, improved outcomes such as higher rates of
resolution of the infectious process, lower rates of relapse, and decrease the duration of
hospitalization and healthcare expenditure.
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Theravance’s NDA submission was based on data from two large, multi-national,
double-blind, randomized phase III clinical trials, ATLAS 1 and ATLAS 2. In both
studies, which enrolled 1,867 in total, 719 of which were infected with MRSA, patients
received either telavancin (10mg/kg IV once daily) or vancomycin (1g IV every 12
hours) for 7-14 days. Findings from these studies demonstrated a favorable clinical
profile of telavancin to vancomycin in both clinical cure rates, at 90.6% and 86.4%
respectively, and microbiologic eradication rates, at 89.9% and 85.4% respectively.
Theravance has also conducted two randomized, double-blind phase II clinical trials,
FAST 1 and FAST 2, in which telavancin was compared to vancomycin in patients
with cSSSIs caused by gram-positive bacteria. Results showed that while telavancin
was comparable to vancomycin, telavancin was associated with superior eradication
rates.
Pre-clinical and early stage data, however, suggested possible effects on cardiac
repolarization, which required further studies to evaluate the QT effects on healthy
individuals. In a study of 160 individuals randomized to receive placebo, telavancin
(7.5mg/kg or 15mg/kg) or moxifloxacin (400mg), placebo-correlated mean changes in
QTcF were respectively 4.1 msec and 4.5sec for telavancin and 9.2 msec for
moxifloxacin, which established that treatment with telavancin had no clinically
significant effect on QT prolongation. These findings were further confirmed in
ATLAS 1 and ATLAS 2 in which prolongation of the QTc interval, as compared to
pre-treatment values, of greater than 60 msec occurred in 1% of the telavancin group
versus 0.5% of the vancomycin group, with no reports of cardiac events attributable to
QTc prolongation.
In a pre-emptive move to ensure the market success of Arbelic, Theravance entered

into a development and commercialization licensing agreement with Astellas in
November 2005. In July 2006, Astellas and Theravance expanded the collaboration to
include Japan, which is expected to drive global sales. Under the terms of the
collaboration, Theravance will lead the development of Arbelic and will collaborate
with Astellas in marketing in the US for the first three years. Astellas will lead all other
development, regulatory, manufacturing, sales and marketing activities.
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FDA approval of Arbelic is expected by the end of 2007 and given the product’s multi-
functional mechanism of action, Arbelic is forecast to become a chief contender within
first-line treatment regimens for the treatment of cSSSIs. Post-approval, Arbelic is set
to compete strongly with Cubist’s Cubicin in treating cSSSIs, and it is forecast that
Cubicin’s formidable sales growth of 102.9% over 2004-05 may falter post-2007 with
the launch of Arbelic.
Additionally, Theravance is also exploring telavancin’s utility in the treatment of

hospital acquired pneumonia, which is currently in phase III clinical trials. This trial,
ATTAIN (Assessment of Telavancin for Treatment of MRSA Pneumonia), is a multi-
national, multi-center, double-blind study designed to assess the efficacy and safety of
telavancin compared to vancomycin in the treatment of HAP caused by gram-positive
organisms, with the aim to establish the drug’s superiority of clinical cure rate among
those patients with MRSA infections. Results from ATTAIN, which commenced in
September 2005, are expected in late 2007/early 2008 and given in vitro data that
suggests the drug’s superior activity to beta-lactams, older glycopeptides and Zyvox
(linezolid), Arbelic may be poised to secure a sizeable portion of the market share of
existing pneumonia-specific treatments, with sales estimated at $145m in 2011.
Zeven (dalbavancin)
Pfizer/Vicuron’s Zeven (dalbavancin) is a second-generation glycopeptide currently

under review by the FDA for the treatment of cSSSIs caused by gram-positive bacteria,
including MRSA. While Vicuron submitted a NDA in December 2004, considerable
delays have pushed back the drug’s approval, which has not been elaborated on by
Pfizer or Vicuron. It was reported in September 2005 that Pfizer had received an
approval letter from the FDA, but currently Pfizer is working with the FDA to resolve
an issue involving the chemistry, manufacturing and controls section of the NDA. Yet,
according to a recent statement by Pfizer, the launch of Zeven is expected by the first-
half of 2007.
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In pre-clinical and clinical studies to date, dalbavancin appears to be one of the most
potent anti-biotics in its class against MRSA and MRSE, and has not shown significant
dose-limiting side effects. Dalbavancin has also shown solid evidence of efficacy in
three phase III studies in patients with cSSSIs and in a phase II study in catheter-related
bloodstream infections (CR-BSI), where it proved superior to vancomycin. In a pivotal
phase III trial involving more than 850 patients with cSSSIs, once-weekly dalbavancin
was evaluated against linezolid, showing comparable efficacy. Within the evaluable
patients, dalbavancin demonstrated an 88.9% response versus 91.2% in the linezolid
group and in the intent-to-treat (ITT) group, dalbavancin patients showed a 76.5%
response compared to 82.7% for linezolid patients.
This study also involved a double-blind, randomized study of 565 patients with
uncomplicated SSSIs, comparing dalbavancin versus IV cefazolin followed by oral
cephalexin. In the clinically evaluable population, both arms demonstrated a clinical
success rate of 89.1%, and in the ITT group, 76.0% and 75.8% showed a clinical
response, respectively. The study also involved SSSIs caused by MRSA and was a
randomized, controlled, open-label study of 156 patients versus vancomycin. Evaluable
patients taking dalbavancin demonstrated an 89.9% response versus 86.7% for
vancomycin, and in the ITT group, 86.0% and 65.3% of patients responded to the
respective treatment groups.
In the randomized, open-label phase II clinical trial, 75 adult patients with CR-BSIs
compared treatment with IV dalbavancin, administered as a single 1,000mg dose
followed by a 500mg dose one week later, with IV vancomycin, administered twice-
daily for 14 days. Gram-positive bacteria isolated in this study included coagulase-
negative staphylococci (CoNS) and S. aureus, including MRSA. Infected patients who
received dalbavancin weekly had an overall success rate of 87.0%, which was
significantly higher than the 50.0% of vancomycin-treated patients.
Zeven, administered intravenously for hospital-acquired infections, would be given

once per week, compared with twice per day for mainstay vancomycin. This places
Zeven not only at a competitive advantage in terms of a more convenient dosing
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regimen, but it appears that dalbavancin offers greater tissue penetration, which may be
correlated to a superior efficacy profile versus vancomycin. Zeven also may help
reduce the length of hospital stays by decreasing the need for intravenous lines, which
may increase the risk of local and bloodstream infection.
While it appears that Zeven maintains some advantages over existing treatments for
cSSSI in regards to the once-weekly dosing, which may negate fewer local and
bloodstream infections, translating into diminished expenditure on administration and
healthcare costs, Zeven is not active against VRE or VRSA, which may limit its market
potential. Further hindering dalbavancin’s markets success is the delay in bringing the
product to market, which may negatively impact physician prescribing trends. If
approved, Zeven must compete with Wyeth’s recently launched Tygacil, which is
indicated for cSSSIs and has registered the astounding growth rate of 614.9% over
2004-05. It is forecast that Zeven will reach estimated sales of $35m in 2011.
Mycograb (efungumab)
Mycograb (efungumab), originally developed by NeuTec which was acquired by

Novartis in mid-2006, is a polyhistidine tagged human recombinant monoclonal
antibody against heat shock protein 90 (hsp90), which plays a crucial role in the
viability of yeast. This protein is involved in the formation and the repair of the cell
wall and is essential for the survival of the fungal cells. By attaching to hsp90,
Mycograb blocks the protein’s normal activities, which weakens the cell wall and
inhibits cell growth. As such, Mycograb represents the first human recombinant
antibody fragment with demonstrated clinical efficacy in the treatment of fungal
infections, which is currently in phase III clinical trials for the treatment of systemic
candidiasis.
In pre-clinical studies, Mycograb was found to be highly effective when used in

combination with amphotericin-B and demonstrated significant broad-spectrum anti-
fungal activity against all species of Candida examined namely C. albicans, C. krusei,
C. tropicalis, C. parapsilosis and C. glabrata. In July 2004, results from a multi-
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national, double-blind, placebo-controlled trials involving 139 patients demonstrated a
significantly superior clinical profile of Mycograb (administered twice-daily
intravenously) in combination with amphotericin B compared to amphotericin B
monotherapy, which is considered the standard of care. The trial showed a highly
statistically significant difference in the overall response rates (clinical and
mycological response) between the Mycograb and placebo groups, at 84% and 48%
respectively. Additionally in patients treated with Mycograb, candida-attributable
mortality was significantly reduced at 4% as compared to 18% in placebo-treated
patients. A superior expedited eradication of culture-confirmed clearance of infection
was also seen in the Mycograb group as compared to placebo group, at 3 and 23 days
respectively.
Based on this clinical data, a market application for Mycograb was submitted to the
CHMP for the treatment of invasive candidiasis in March 2005. In November 2006,
however, the CHMP delivered a negative opinion for the marketing authorization of
Mycograb due to insufficient data relating to the manufacturing and characterization of
the drug to determine its safety. As the issues raised do reflect the agent’s efficacy, it is
expected that Novartis will address these concerns and that Mycograb will receive EU
approval in 2008, attributable to the drug’s impressive performance in clinical trials. A
new drug application (NDA) for Mycograb is expected to be submitted to the FDA in
2009.
Apart from the setback Mycograb encountered in gaining approval in the EU, the
drug’s market potential may be limited by an assumed high price-point the drug will
command due to the complex nature of its composition and the associated increased
manufacturing costs. While amphotericin B is heavily genericized, offering a lower
price-point, this established treatment is associated with severe adverse events,
particularly kidney and liver toxicity. Given that Mycograb has established a clear
superior efficacy profile to amphotericin B, the additional data submitted by Novartis
in regards to the agent’s safety profile, if favorable, will likely offset price differentials.
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Through targeting the hsp90 antigen, which is also present in the fungus Aspergillus,
Mycograb may also be effective in the treatment of invasive aspergillosis. While
preliminary clinical data supports this, larger clinical trials are necessary to substantiate
the drug’s efficacy within this indication. Mycograb’s utility within this market may
be further expanded as a successful application to the FDA for an Investigational New
Drug (IND) has been achieved for a phase III study to assess the efficacy and safety of
the compound as adjunctive therapy for cryptococcal meningitis in patients with AIDS.
Outside the anti-infectives market, Mycograb has also shown promising potential in the
treatment of metastatic or recurrent breast cancer when used in combination with
Docetaxel. With the promising potential Mycograb offers within the anti-fungal
market, and expected launch in the EU in 2008, followed by its launch in the US in late
2009/early 2010, it is forecast that Mycograb will accrue
Recently marketed drugs
Tygacil (tigecycline)
Wyeth’s Tygacil (tigecycline), is the first market entrant in a new class of anti-biotics,
the glycylcyclines, and is indicated as a single-agent, IV therapy for the treatment of
complicated intra-abdominal infections (cIAI) and skin and skin structure infections
(cSSSI). Tygacil received FDA approval in the US in May 2005 and in May 2006 in
the EU, garnering sales of $10m in 2005. Sales during 2006 catapulted to $72m, an
increase of 614.9% over previous year sales.
As a glycylcycline, a new class of tetracyclines, Tygacil is a semi-synthetic derivative

of minocycline and has demonstrated potent activity against tetracycline-resistant
gram-positive and gram-negative pathogens. Due to its unique structure, which enables
it to bind 30S ribosomal unit and inhibit protein translation, Tygacil is unaffected by
ribosomal alteration and efflux, the two major mechanisms of tetracycline resistance.
As such Tygacil has a broader spectrum of activity than traditional tetracyclines.
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Tygacil’s approval was based on data from four pivotal phase III clinical trials
examining the efficacy and safety of Tygacil for the treatment of cIAI and cSSSI. In
1,575 patients with cIAI, a comparison of intravenously administered Tygacil was
compared to Primaxin (imipenem/cilastatin) and demonstrated equivalent efficacy
among the two groups. In terms of bacteriological eradication rates, Tygacil provided
superior results than Primaxin, at 91.3% and 89.9% respectively. In phase III clinical
trials among cSSSI patients, Tygacil monotherapy (100mg initially, followed by 50mg
every 12 hours) was compared to a combination of vancomycin (1g every 12 hours)
and aztreonam (2g every 12 hours), with Tygacil providing clinical cure rates
comparable to vancomycin/aztreonam.
In the phase III trials discussed above, which involved more than 1,500 patients,
Tygacil was relatively well-tolerated and displayed an adverse-reaction profile similar
to that of the tetracyclines. The most commonly reported adverse effects included
nausea and vomiting, which generally occurred within the first two days of therapy.
Discontinuation rates due to treatment-related adverse events occurred in 5% of
patients, compared to 5.3% for vancomycin/aztreonam and 4.4% for
imipenem/cilastatin.
Tygacil has also shown activity against MRSA, MSSA and VRE as well as anaerobic
pathogens. Given rising anti-biotic resistance, there is an escalating need for new anti-
biotics, especially those that are effective for the treatment of serious bacterial
infections including MRSA and VRE infections. Tygacil has also been shown to be
highly effective against multi-drug resistant strains of acinetobacter, which is emerging
as source of increasing cases of bacteremia and serious pneumonia, particularly within
the ICU patient population. In a lab analysis project funded by Wyeth, 90.2% of
isolates from strains of acinetobacter collected were susceptible at a minimal inhibitory
Tygacil concentration of 2mcg/mL. While the incidence of acinetobacter infections
may be on the rise, the likelihood of Wyeth pursuing an additional labeling extension
for this indication is doubtful. It is expected, therefore, that the performance of Tygacil
will be bolstered by increasing off-label use within these indications.
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There are also several clinical studies underway which have shown promising results,
indicating a potential expanded utility of Tygacil in complicated and/or nosocomial
infections. New data presented in September 2006 demonstrated comparable
microbiological cure rates to those of levofloxacin in hospitalized patients with CAP.
Among the 846 patients included in two multi-center, double-blind phase III studies,
patients received either Tygacil (100 mg IV initially, followed by 50 mg every 12
hours) or levofloxacin (500 mg IV once daily or every 12 hours). In the clinically
evaluable population, 89.7% of the Tygacil-treated patients were cured as compared to
86.3% of the patients receiving levofloxacin. Microbiological responses at the test-of-
cure assessment were also similar between the two treatment groups at both the patient
level and by the isolate at the baseline. In terms of safety profiles, statistically
significant differences were reported in patients reporting nausea in the Tygacil and
levofloxacin groups, at 20.8% and 6.6% respectively. Conversely, levofloxacin-treated
patients experienced higher levels of liver abnormalities than those treated with
Tygacil, a far more important differentiating factor. Other ongoing studies include
Study 307, which is comparing Tygacil against Zyvox (linezolid) and Vancocin
(vancomycin) in patients with MRSA or VRE, and pending results, Tygacil may be
well-positioned to siphon sales away from these two products.
In a further attempt to extend Tygacil’s utility, Wyeth is currently conducting a head-

to-head phase III clinical trials to assess the safety and effectiveness of a once-daily
dose of Tygacil compared to Invanz (ertapenem) for the treatment of diabetic foot
infections. The expected completion of this trial is set for April 2008, and given that
Invanz has been approved for this indication since 2005 and is available in an
intramuscular formulation, the market success of Tygacil is wholly dependent on the
drug’s ability to demonstrate a superior clinical profile.
With the expected patent expiry of another of Wyeth’s anti-biotic, Zosyn, it is forecast
that Tygacil sales should help offset the impact of sales attrition to Zosyn.
Additionally, given the broad spectrum of activity of Tygacil and its potential utility in
additional indications such as CAP and acinetobacter infections, it is forecast that
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Tygacil will continue to command significant sales growth over the 2006-11 period,
with sales expected to reach $815m in 2011.
Doripenem
J&J/Shionogi’s doripenem is a member of the carbapenem class of beta-lactam anti-

biotics, which was launched in the Japanese market in 2005 under the brand name
Finibax. In December 2006, J&J submitted a NDA to the FDA for doripenem for the
treatment of cIAI and complicated urinary tract infections.
Doripenem possesses the broad-spectrum activity of the beta-lactam class,

corresponding to established treatment of both gram-positive and gram-negative
bacteria, but is differentiated from earlier carbapenems in possessing the stability to
most clinically important bacterial beta-lactamases, which may promote its use in first-
line treatment regimens. In pre-clinical laboratory test, doripenem was also found to
have a lower propensity to induce resistance in P. aeruginosa than several of the
currently marketed anti-biotics used to treat serious infections. This is supported by in
vitro studies using over 16,000 bacterial isolates and found that doripenem to be:
highly active against oxacillin-susceptible S. aureus and coagulase-negative

staphylococci (CoNS), with a potency greater than existing carbanpenems
among the most potent agents tested against S. pneumoniae, viridans group
streptococci and beta-haemolytic streptococci
four to 32-fold more active than imipenem against wild-type isolates of

enterobacteriaceae
Since the launch of doripenem in the Japanese market in 2005, it has accrued
approximately $6.8m (0.8bn Japanese Yen) and is expected to gross an estimated $29m
in 2006, which may be a strong indicator of doripenem’s market potential in the US
and EU. However, studies have not established a superior clinical profile of doripenem
over Zyvox and given doripenem’s IV administration, Zyvox will likely continue to
secure the lead position within the carbapenem class, largely a factor of the product’s
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interchangeable IV and oral formulations, which facilitate expeditious and cost-
effective health care management. J&J is also investigating the effectiveness of
doripenem in the treatment of ventilator-associated pneumonia (VAP) as well as
hospital-acquired pneumonia (HAP). Coupled with the rise of MRSA, it is forecast that
doripenem will experience strong growth over 2006-11, with forecast sales of $162m in
2011.
Baraclude (entecavir)
BMS’ Baraclude (entecavir) was approved by the FDA in March 2005 for the treatment
of chronic hepatitis B in adults with evidence of active viral replication with either
evidence of persistent elevations in aminotransferases (ALT or AST) or histologically
active disease.
FDA approval of Baraclude was based on three phase III clinical trials, enrolling a
combined total of 1,633 patients 16 years of age or older with chronic HBV infection
accompanied by evidence of viral replication. Patients had persistently elevated ALT
levels, at 1.3 times the upper limit of normal (ULN) and chronic inflammation on liver
biopsy compatible with a diagnosis of chronic viral hepatitis. In study AI463022, a
multinational, double-blind study, which investigated the safety of efficacy of
Baraclude versus lamivudine, 709 treatment-naïve patients received either Baraclude
once-daily (0.5mg) or lamivudine (100mg) for 52 weeks, with Baraclude demonstrating
greater benefits in chronic HBV patients. Histologic improvements were observed in
72% of Baraclude patients as compared to 62% of lamivudine patients, with superior
reductions in fibrosis also seen in Baraclude patients, at 39% and 35% respectively.
Significant differences in the normalization of ALT levels was seen in the Baraclude
versus lamivudine patients, at 68% and 60% respectively, with similar results seen in
viral load reduction to undetectable levels (less than 300 copies/mL), at 67% and 36%
respectively. Additionally, Baraclude patients experienced a 6.9 log10 copies/mL mean
reduction in HBV DNA from baselines, which was significantly greater than
lamivudine patients who experienced a 5.4 log10 copies/mL reduction.
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In a head-to-head phase III clinical trial, treatment with Baraclude resulted in greater
viral load reductions compared to Hepsera (adefovir) in naïve chronic hepatitis B e-
antigen (HBeAg) positive patients. At week 24, 45% patients receiving Baraclude
once-daily achieved undetectable viral HBV DNA (<300 copies/mL) compared to 13%
of patients receiving adefovir. Additionally, Baraclude-treated patients demonstrated a
significantly superior mean change in viral load versus adefovir, at -6.97 log10
copies/mL and -4.48 log10 copies/mL. As such, Baraclude has emerged as a serious
threat to Hepsera’s continued market success.
Resistance to HBV treatments occurs quite frequently, which not only decreases the
efficacy of treatment and compromises future treatment options, but also factors
heavily into a product’s market success. It is estimated that some 70% to 80% of
patients treated with Epivir develop drug-resistant virus after four years, with the same
occurring to 15% to 20% of patients after four years of Hepsera treatment. While
follow-up data is required after 4 to 5 years of treatment in order to fully assess
Baraclude resistance profile, promising three-year data appears to indicate that
Baraclude maintains a superior resistance profile to its chief HBV competitors. The
incidence of Baraclude resistance in nucleoside-naïve chronic HBV patients was found
to occur in 15% of patients during the third year with 94% of patients achieving an
undetectable viral load as compared to 40% of patients receiving lamivudine.
When Baraclude was approved in 2005, the package insert indicated that it did not have
any activity against HIV, which permits Baraclude to be used as a monotherapy in co-
infected patients to treat HBV without the risk of HIV becoming resistant to the drug
and cross-resistant to other nucleoside reverse transcriptase inhibitors (NRTIs).
However, recent cases of co-infected patients taking Baraclude monotherapy reporting
significant drops in their HIV viral load have emerged, suggesting that Baraclude is
active against HIV and associated with HIV drug resistance. Ongoing research has also
found the exposure to Baraclude also demonstrated the emergence and proliferation of
the M184V mutation. Such data will likely negate the use of Baraclude monotherapy in
co-infected patients, and with an estimated 10% of the HIV population co-infected with
HBV, this will likely impede sales, albeit marginally.
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With Baraclude garnering $9.5m in sales during its first year on the market, it is
expected that Baraclude will continue to emerge as a leading HBV treatment as well as
a growing threat to the commercial success of Hepsera. Sales over the forecast period
will be bolstered by the drug’s recent EU approval in June 2006 and its launch in Japan
in August 2006, with forecast sales of $309m in 2011.
Tyzeka/Sebivo (telbivudine)
Novartis/Idenix’s Tyzeka (telbivudine) is a once-daily oral treatment hepatitis B, which

received approval by the FDA in October 2006. Telbivudine works by inhibiting HBV
DNA polymerase (reverse transcriptase) by competing with the natural substrate,
thymidine5'-triphosphate. Incorporation of Tyzeka into viral DNA causes DNA chain
termination, resulting in inhibition of HBV replication and in contrast to other
nucleoside antiviral agents, Tyzeka is an HBV-specific nucleoside analogue.
Tyzeka’s approval in the US was based primarily on one-year results from the GLOBE
study conducted among 1,367 patients comparing Tyzeka with lamivudine. In HBeAg-
positive patients, the therapeutic response was 75% versus 67% percent among patients
treated with Tyzeka compared to those treated with lamivudine, while the response
after one year was 75% versus 77% respectively for HBeAg-negative patients taking
either treatment. In addition, the majority of Tyzeka-treated patients achieved
undetectable levels of virus in the first 24 weeks of treatment, and in 95% of those
patients, the virus remained undetectable at one year. Follow-up data after two years
found that 82% of HBeAg-patients had undetectable levels of HBV RNA, compared
with 57% of patients treated with lamivudine. Additional results from phase III and
phase IIIb studies showed that HBV patients who switched to Tyzeka achieved greater
viral suppression than those who continued on lamivudine or adefovir. As such, it
appears that Tyzeka maintains a slightly superior clinical profile to one of its chief
competitors. This may help Tyzeka obtain a significant portion of the hepatitis B
market over the forecast period.
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Tyzeka’s rapid and profound viral suppression and favorable safety profile are
expected to have a positive effect on the drug’s market success. In terms of the drug’s
safety profile, it is the only hepatitis B drug in its class to have a pregnancy category B
safety rating, while all other HBV nucleoside analogs are in category C. Tyzeka’s
clinical profile is also supported by competitive pricing, which should help Tyzeka
garner greater market penetration relative to Baraclude. Tyzeka will be priced at
approximately $487 per month, translating into less than $6,000 a year, which is 15%
less than adefovir and entecavir and about 8% more expensive than lamivudine.
In February 2007, Idenix announced the adoption of a positive opinion by the EMEA
recommending granting of marketing authorization of telbivudine, which will be
marketed as Sebivo in EU. It is expected the EMEA will deliver its final decision by
June 2007, with the Sebivo forecast to launch shortly thereafter. Outside of the seven
major markets, Idenix and Novartis are looking to launch Sebivo in China, which
represents the market with the largest incidence of hepatitis B. With Sebivo’s March
2007 approval by China’s State Food and Drug Administration (SFDA), it is expected
that with more than 100 million people in China affected by hepatitis B, and the
upcoming launch across the EU, these two markets will drive Tyzeka’s sales growth
over the forecast period.
Over the forecast period, Tyzeka may gain additional market penetration if clinical
trials establish superior antiviral activity with another of Idenix’s hepatitis B drug
candidates, valtorcitabine. Currently, valtorcitabine is being developed as a fixed-dose
combination with Tyzeka for patients in which monotherapy has proven ineffective. In
pre-clinical studies, the combination of these two drugs has demonstrated superior
antiviral activity as compared to either drug as a monotherapy.
While little data has been released on viral resistance, follow-up data will is expected
to impact the future potential of Tyzeka and its ability to compete strongly with BMS’
Baraclude. Compared with lamivudine, Tyzeka was associated with significantly less
viral resistance and treatment failure. Fewer and less severe resistance-associated
elevations in serum ALT levels were also observed between Tyzeka and lamivudine, at
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4% and 8% respectively, which may be indicative of Tyzeka’s potential for long-term
treatment of hepatitis B, which will help boost sales over the forecast period, estimated
at $355m in 2011.
Noxafil (posaconazole)
Noxafil (posaconazole), an anti-fungal developed by Schering-Plough, has been

marketed in the EU since 2005 and was later approved in the US in September 2006
and is currently indicated for the prophylaxis of invasive fungal infections (IFIs)
caused by Aspergillus and Candida species in patients 13 years of age and older who
are immunocompromised, including hematopoietic stem cell transplant (HSCT)
recipients with graft-versus-host disease (GVHD) or those with hematologic
malignancies with prolonged neutropenia from chemotherapy. Noxafil is also indicated
for the treatment of oropharyngeal candidiasis (OPC), which is a fungal infection of the
mouth and throat caused by Candida.
Noxafil is a novel triazole anti-fungal agent, which blocks the synthesis of ergosterol, a
main component of the fungal cell membrane, through the inhibition of the enzyme
lanosterol 14a-demethylase and accumulation of methylated sterol precursors. This
mechanism of action has extended Noxafil’s utility in the treatment of patients who are
resistant to itraconazole and/or fluconazole, placing the drug at a competitive
advantage over existing anti-fungal therapies.
Noxafil’s approval for the prophylaxis of IFIs was based on results of two head-to-head
clinical trials among 600 high-risk patients who were receiving cytotoxic
chemotherapy for acute myelogenous leukemia (AML) or myelodysplastic syndromes
(MDS). This study compared Noxafil administered orally (200mg three times daily) to
fluconazole (400mg once daily) or itraconazole (200mg twice daily), with results
demonstrating a superior clinical profile against the two comparator groups. Patients in
the Noxafil grouped achieved a substantially significant reduction in treatment failure
(as defined by breakthrough IFIs, death and use of systemic anti-fungal therapy) as
compared to the pooled analysis of both the itraconazole and fluconazole groups, at
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27% and 42% respectively. In this study, Noxafil also demonstrated a superior
reduction in breakthrough Aspergillus infections as compared to patients treated with
fluconazole and itraconazole, at 1% and 7% respectively, while also a favorable
reduction in proven and/or probable IFIs when compared to the comparator groups, at
2% and 8% respectively.
The second phase III study comparing Noxafil to fluconazole as prophylaxis against
IFIs in allogenic hematopoeitic stem cell transplant (HSCT) recipients with graft-
versus-host disease (GVHD) further substantiated Noxafil’s superior prophylactic
effect over fluconazole, demonstrating similar results to the initial phase III study. As
the first and only currently marketed anti-fungal for the prophylaxis of IFIs caused by
Aspergillus, which is an increasingly common pathogen, Noxafil is well-placed to
secure a substantial portion of the anti-fungal market over the forecast period.
Sales of Noxafil are also expected to benefit with the drug’s approval for the treatment
of OPC in the US in October 2006 and in the EU in November 2006, which was
primarily based on the results of a randomized, evaluator-blinded, controlled clinical
study conducted in HIV-infected patients with OPC. In this study, Noxafil was shown
to be non-inferior to fluconazole for clinical success rates after 14 days of treatment, at
91.7% and 92.5% respectively, as well as 4 weeks after ceasing treatment, at 68.5%
and 61.8% respectively.
Within the US market, sales of Noxafil are likely to benefit from the recent category 1
recommendation (highest rating) by the National Comprehensive Cancer Network
(NCCN) for the use of Noxafil in preventing certain IFIs in high-risk cancer patients.
Noxafil also received a category 2 recommendation for preventing IFIs in neutropenic
cancer patients undergoing allogeneic hematopoeitic stem cell transplantation, which is
a high-risk population not examined in previous Noxafil registration trials.
Noxafil must not only compete with generic versions of fluconazole, but with
established products in the anti-fungal market, particularly Merck’s Cancidas
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(caspofungin), which was launched in 2001. However, growth of Noxafil will be driven
by the increased incidence and severity of IFIs, which has rapidly escalated over the
last 20 years, and are alone thought to affect 1.3 million hospital patients each year in
the US. Given the market exclusivity Noxafil enjoys as the only anti-fungal indicated
for the prophylaxis of IFIs caused by Aspergillus, it is forecast that Noxafil will
maintain robust sales growth over the forecast period, accruing an estimated $230m in
2011.
Eraxis (anidulafungin)
Pfizer’s Eraxis (anidulafungin) is an echinocandin semi-synthetic lipopetide, designed

to eradicate fungal infections through the disruption of enzyme synthesis pathways,
which are an essential component of fungal cell walls. Eraxis, administered
intravenously, was approved by the FDA in February 2006 for the treatment of several
types of fungal infections including Candidemia, intra-abdominal abscess and
peritonitis caused by Candida species, and esophageal candidiasis.
According to phase III clinical trials, Eraxis appears to be one of the few newer
generation anti-fungals to show comparable, if not improved, efficacy versus
fluconazole. In a phase III study, the success rate for patients with candidemia or other
Candida infections receiving a 200mg loading dose of Eraxis followed by a daily
100mg maintenance dose for at least 14 days was 75.6% versus 60.2% in those treated
with fluconazole for the same period of time. A study evaluating the drug's efficacy in
esophageal candidiasis, however, showed a slight advantage for fluconazole at a two-
week follow-up visit, 89.5% of the fluconazole-treated patients had sustained
endoscopic success, in contrast to 64.4% of patients in the Eraxis group. In terms of the
primary efficacy endpoint at the end of therapy, however, Eraxis demonstrated a non-
inferior clinical profile to fluconazole in terms of treatment success (cure and
improvement rates), at 97.2% and 98.8% of patients respectively.
Another key advantage Eraxis maintains over fluconazole is the drug’s activity against
azole-resistant strains of C. albicans, C. krusei and less susceptible species for which
207
high dosages of fluconazole are required. In vitro data from a large surveillance study
involving C. albicans indicated that Eraxis perhaps can offer an advantage over first-
generation echinocandins, particularly Merck’s Cancidas (caspofungin). However,
larger studies are needed before any distinct advantages over Cancidas can be clinically
verified.
Coupled with the drug’s potential utilization within this expanded patient population, is
Eraxis’ lack of drug interactions. Clinical trials with Eraxis have concluded that hepatic
metabolism does not occur and therefore, it is unlikely that the drug will have clinically
relevant effects on the metabolism of other drugs metabolized by CYP450 isoenzymes.
When administered concomitantly with voriconazole, tacrolimus, amphotericin B,
rifampin or cyclosporine, no drug-drug interactions were observed, and thus Eraxis
does not require any dose adjustment for renal or hepatic impairment.
While there are no additional clinical trials currently underway to expand Eraxis’ utility
within the anti-fungal market, as with other members of the echinocandin class, Eraxis’
spectrum of activity may be effective in the treatment of invasive aspergillosis
infections, as has been shown from in vitro studies. Pending future clinical trials to
demonstrate the drug’s efficacy within this indication, sales are forecast to accrue an
estimated $739m in 2011.
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Pipeline forecasts
Factors affecting forecasts
Factors influencing the forecast performances of the drugs listed Table 3.44 include the
presence of generics within the particular drug class, price based competition, new
launches, in addition to new indications gained by established products.
Anti-infectives pipeline forecasts
The forecast performances of the drugs that have been analyzed previously in this
chapter are illustrated below in Table 3.44.
Table 3.44: Anti-infectives pipeline forecasts, 2006-11
Brand Molecule Sales ($m) CAGR (%)

2006 2008 2011 2006-11
Anti-virals
Albuferon albinterferon n/l n/l 302 -
alpha 2b
- maribavir n/l n/l 110 -
Baraclude entecavir 10 101 309 135.7%
Tyzeka telbivudine 0.4 74 355 445.8%
Total 10 175 1,076 154.9%
Anti-bacterials
- ceftobiprole n/l 44 129 -
Arbelic telavancin n/l 34 145 -
Zeven dalbavancin n/l 12 35 -
Tygacil tigecycline 72 311 815 83.4%
- doripenem 7 68 162 119.2%
Total 79 470 1,286 74.7%
Anti-fungals
Noxafil posaconazole 0.6 29 224 588.1%
Eraxis anidulafungin 32 312 739 119.2%
Mycograb efungumab n/l 15 261 -
Total 33 356 1,224 106.5%
Total 122 1,001 3,586 96.8%
Source: IMS Health; Author’s Research & Analysis Business Insights Ltd
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Of the products listed in Table 3.44 the strongest performer in terms of sales captured
is forecast to be Wyeth’s Tygacil. Tygacil is the first market entrant in a new class of
anti-biotics, the glycylcyclines, and is indicated as a single-agent, IV therapy for the
treatment of complicated intra-abdominal infections (cIAI) and skin and skin structure
infections (cSSSI). Tygacil has also shown activity against MRSA, MSSA and VRE as
well as anaerobic pathogens. Given rising anti-biotic resistance, there is an escalating
need for new anti-biotics, placing the product a definitive advantage over other existing
compounds.
Schering-Plough’s Noxafil (posaconazole) is set to have a strong performance during

the forecast period of this report. Noxafil is a novel triazole anti-fungal agent, whose
mechanism of action has extended Noxafil’s utility in the treatment of patients who are
resistant to itraconazole and/or fluconazole, placing the drug at a competitive
advantage over existing anti-fungal therapies. Sales of Noxafil are also expected to
benefit with the drug’s approval for the treatment of OPC in the US in October 2006
and in the EU in November 2006.
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CHAPTER 4
Competitive landscape
211
Chapter 4 Competitive landscape
Summary
The ten leading companies in the anti-infectives market contributed 56.0% or

$27,177m towards the total market valued at $48,546m in 2005.
The top three leading companies apart, the competitive dynamics between the
leading companies in this market remain highly fragmented with differences in
market share reported at between 0.1% and 0.2%.
GSK, the top grossing company registered a poor growth rate of 4.7% in 2005
having garnered sales of $5,393m for the same year. GSK also recorded a very
poor CAGR among all ten companies reported at -0.2% for 2001-05.
The loss of patent protection on key anti-bacterial Zithromax’s franchise resulted

in infinitesimal growth reported at 1.5% for Pfizer’s anti-infective portfolio in
2005. Pfizer has since realigned its strategy choosing to invest in the development
of a strong anti-virals with products forecast to launch post 2011.
Of these leading companies, the highest CAGR for 2001-05 was recorded by
Novartis reported at 19.3%, with a sales growth rate of 10.6% registered for
2004-5 thus outperforming the market growth rate by some 2.6%.
Sanofi-Aventis witnessed a growth rate of 13.6% in 2005, some 1.4% higher than
that of its rate of expansion over the 2001-05 period reported at 12.2%. Having
captured sales of $2,390m in 2005, Sanofi-Aventis represented 4.9% of the
market, positioning it number 4
Although Wyeth occupied the number 8 position among the leading companies, it
registered the highest growth rate of 18.2% representing sales of $2,018m in
2005.
Schering-Plough recorded the worst performance amongst the leading companies

2005, with sales declining at a rapid 18.8% in 2004-5 in addition to a negative
CAGR of 13.1% recorded for the period of analysis. With sales of $964m in
2005, Schering Plough recorded a mere 2.0% of the market, placing it at number
ten amongst the leading companies.
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Introduction
This chapter of the report provides analysis of the competitive dynamics of the leading
companies in the anti-infectives market, providing company specific portfolio and
pipeline analysis.
Company market shares
Table 4.45 summarizes the performance of leading players in the global anti-infectives
market.
Table 4.45: Leading players in the global anti-infectives market, 2004-5
Sales ($m) Sales growth CAGR Market share

2004 2005 2004-5 2001-5 2005
GlaxoSmithkline 5,150 5,393 4.7% -0.2% 11.1%

Pfizer 4,954 5,028 1.5% 7.2% 10.4%
Novartis 2,512 2,780 10.6% 19.3% 5.7%
Sanofi-Aventis 2,104 2,390 13.6% 12.2% 4.9%
Merck & Co 2,249 2,325 3.4% 9.2% 4.8%
Johnson & Johnson 2,180 2,271 4.1% 5.4% 4.7%
Roche 2,036 2,202 8.2% 11.3% 4.5%
Wyeth 1,707 2,018 18.2% 7.1% 4.2%
Abbott 1,649 1,808 9.6% 6.4% 3.7%
Schering Plough 1,187 964 -18.8% -13.1% 2.0%
Top 10 25,727 27,177 5.6% 5.8% 56.0%
Others 19,218 21,369 11.2% 11.1% 44.0%
Total market 44,945 48,546 8.0% 8.0% 100.0%
Although the market share controlled by the leading ten players in the anti-infectives
market has decreased progressively over the period 2001-05, the major players
continue to command a dominant position in the global anti-infectives market,
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assuming 56% of market share in 2005. In a market in which penetration of generic
products is increasing, the performance of the leading players in the anti-infectives
market is deteriorating, with growth of 5.8% in 2005 versus 8.0% for the market as a
whole. The major companies are no longer the key drivers for growth in the anti-
infectives market, largely due to patent expiries to major brands, which has seen
growth opportunities limited.
GSK’s position as the anti-infectives market leader is secure at present, with the
company commanding 0.7% more market share than its nearest competitor Pfizer.
However sales growth attributable to GSK’s anti-infectives portfolio is low, at 4.7% in
2005, as a range of older blockbuster products continue to lose market share, and
growth being limited to a handful of products. GSK’s performance represents an
improvement over the company’s 5 year sales track however, as the company’s anti-
virals portfolio has performed brightly in recent years.
Pfizer’s performance in 2005 was weak, with the company posting gains of just 1.5%,
the second lowest of any of the major anti-infectives marketers. Pfizer’s weak
performance is largely due to the company’s less developed product portfolio which is
concentrated on anti-bacterials and anti-fungal brands which are vulnerable to generic
competition either directly or indirectly, via the generic versions of close competitors.
Sanofi-Aventis and Wyeth posted the strongest performances of any major players in
the anti-infectives market, with growth of 13.6% and 18.2% respectively in 2005. For
both companies, vaccines represent pivotal components of the performance of each
company’s anti-infectives portfolio, although additional products primarily those
indicated for the treatment of bacterial infections have assisted growth, albeit from a
more limited base of sales.
The performances of Roche and Abbott are heavily weighted by the performance of
major anti-bacterial products that are in the company’s portfolio, the key products in
each portfolio being cephalosporins that are increasing coming under pressure from
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generic competition in the class as a whole. Both Abbott and Roche have been able to
diversify their revenue streams, with Abbott and Roche both featuring growth drivers
in their anti-infectives portfolios, anti-virals in the case of Roche and anti-bacterials in
the case of Abbott.
Novartis’ position among the leading players in the anti-infectives market is almost
solely due to the presence of Lamisil, the last major anti-fungal blockbuster treatment
marketed by any of the major players in the anti-infectives market. Lamisil, features
strong differentiation from several other generic anti-fungals due to its applicability for
use in dermatologic conditions and amenability to be used alongside traditional anti-
fungal treatments in hard-to-treat conditions. Lamisil aside, Novartis markets an
extensive range of anti-infective treatments, the majority of which are sold as generics.
Merck markets an extensive range of anti-infectives, including vaccines, anti-fungals,

and anti-virals. The company has attempted to diversify its anti-infectives portfolio
away from anti-bacterials and vaccines, yet competition to these two franchises
continues to exert a negative influence on sales of the portfolio as a whole, with the
company’s overall growth rate in 2005 being low at just 3.4%, far behind the 5 year
CAGR of 9.2% that the company set over 2001-05.
Johnson & Johnson’s position as a major player in the anti-infectives area is fragile,
dependent on Levaquin, a blockbuster anti-bacterial treatment. Although Levaquin
continues to hold intact patent protection in the major markets, the brand faces
competition from generic versions of rival products in the same class, and as such faces
difficulties in maintaining high levels of sales growth. Johnson & Johnson’s anti-
infectives portfolio has traditionally relied on contributions from market-leading anti-
fungals Nizoral and Sporonox, but loss of patents pertaining to both products has
resulted in declining sales, with further investment in growth indications necessary if
Johnson & Johnson’s anti-infectives portfolio is to maintain its competitive position.
215
Schering-Plough’s performance in 2005 was the weakest of any of the leading players
in the anti-infectives market, with sales declining by 18.8% following the rapid
collapse of sales related to Procin, which ahs been hit hard by widespread generic
competition. With limited diversification in the company’s portfolio, which outside of
the anti-viral Rebetol, which is almost wholly used in combination with interferon
therapies, Schering-Plough remains dependent on the sales of anti-bacterial treatments,
particularly fluoroquinolones, which are vulnerable to the impact of generic
competition.
216
The competitive dynamics of the major players in the anti-infectives market are
detailed in Figure 4.13: Competitive dynamics of the leading players in the
global anti-infectives market, 2005.
Figure 4.13: Competitive dynamics of the leading players in the global anti-
infectives market, 2005
20%
Wyeth
18%
14% Sanofi Aventis
12%
Abbott Novartis
10%
8% Roche
GSK
6%
J&J
4%
Merck
2%
Pfizer
0%
1,000 1,500 2,000 2,500 3,000 5,000 5,500
Sales, 2005 ($m)
-18%
Schering Plough
-20% Bubble size represents market share
217
GlaxoSmithKline
Overview
GSK was ranked first in the anti-infectives market in 2005, controlling 11.1% of
market share, with sales of $5,393m. The company posted a low level of growth in
2005 at 4.7%, although this outperformed the five year average growth rate, which was
recorded at -0.2% over 2001-2005.
Sales focus by drug class
GSK markets a broad range of products across a range of therapy areas, and features
the most comprehensive coverage of any major pharmaceutical company, with strong
positions in anti-virals, anti-bacterials and vaccines. The absence of a significant anti-
fungals franchise is conspicuous, but due to the weak performance of this class of drugs
as a whole, this does not represent a competitive weakness. GSK’s sales by class are
summarized in Figure 4.14.
Figure 4.14: GSK’s anti-infectives sales, 2005
2,500
2,207
2,000 1,842
Sales, 2005 ($m)
1,500 1,342
1,000
500
1
-
Anti-bacterials Anti-fungals Anti-virals Vaccines
Drug classes
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Marketed product portfolio
Table 4.46 summarizes the recent performance of GSK’s major anti-infectives brands.
Table 4.46: GSK’s anti-infectives product portfolio, 2004-5
Brand Generic Expected US patent Sales ($m) Sales growth

expiry date 2004 2005
Valtrex valacyclovir expired 1,187 1,428 20.3%

Augmentin amoxicillin expired* 1,268 1,085 -14.4%
clavulanate
Zinnat cefuroxime expired 314 314 0.0%
Fortum ceftazidime expired 292 297 1.8%
Engerix B n/a n/a 248 226 -8.3%
Pediarix n/a n/a 214 199 -7.7%
Twinrix n/a n/a 167 193 14.5%
Zeffix lamivudine May 2010 159 188 18.0%
Zovirax acyclovir expired 201 180 -11.3%
Havrix n/a n/a 148 165 11.3%
Amoxil amoxicillin expired 148 148 -0.2%
Zinacef cefuroxime expired 129 125 -2.6%
Infanrix Hexa n/a n/a 77 108 39.6%
Others 600 743 23.9%
Total 5,150 5,393 4.7%
* = some formulations maintain patent protection
Source: Business Insights, IMS; FDA; Company websites Business Insights Ltd
GSK’s marketed product portfolio is extensive and features a range of products, the
majority of which are positioned for continued sales growth. The demise of the
blockbuster product Augmentin has continued, although in comparison to other major
anti-bacterial products which have undergone patent expiry and subsequent generic
competition, Augmentin has held out well by virtue of its strong brand, mode
complicated manufacturing requirements and staggered patent expiries across the major
markets.
GSK’s leading brand, Valtrex, indicated for the suppression and prophylaxis of herpes
simplex infections is the major growth driver behind the anti-infectives portfolio, with
the product, which is now in a mature phase of its lifecycle continuing to deliver
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growth, with sales increasing by 20.3% to $1,429m in 2005. Outside of Novartis’
Famvir there are few current challengers to this product, which continues to perform
brightly.
Across the remainder of GSK’s marketed product portfolio, there are a limited number
of products capable of driving sales growth, with the majority of products featuring a
lack of market potential or having been superseded by more recent products launches.
GSK’s expansive range of vaccines continue to provide a backbone of sales, but in the
context of a more limited market potential
220
R&D pipeline analysis
Table 4.47 summarizes GSK’s anti-infectives R&D pipeline in 2006.
Table 4.47: GSK’s anti-infectives R&D product pipeline, 2006
Brand Generic Stage Expected

Launch year
Daronix H5N1 vaccine n/a n/a

Cervarix HPV vaccine Phase III 2007
n/a chlorproguanil-dapsone-artesunate Phase III 2008
Etaquine tafenoquine Phase III 2008
Globorix combination vaccine Phase III 2007
n/a hepatitis E vaccine Phase III 2008
Priorix-Tetra MMR – Varicellavaccine Phase III 2007
Simplirix herpes simplex vaccine Phase III 2008
n/a sitamaquine Phase III 2008
Streptorix S. Pneumonia vaccine Phase III 2008
n/a Dengue fever vaccine Phase II -
n/a Epstein-Barr vaccine Phase II -
FluInsure Influenza vaccine Phase II -
n/a Hepatitis E vaccine Phase II -
Imvamune / MVA-BN smallpox vaccine Phase II -
LAPDAP artesunate Phase II -
n/a Meningitis B vaccine Phase II -
Menitorix meningococcal vaccine Phase II -
Mosquirix malaria vaccine Phase II -
Promacta eltrombopag Phase II -
n/a staphylococcal immunization Phase II -
742510 oral pleuromutilin Phase I -
Mtb72F/AS02A Tuberculosis vaccine Phase I -
PGCvax S. Pneumoniae vaccine Phase I -
n/a S. Pneumoniae vaccine Phase I -
Valtrex XR valaciclovir Phase I -
n/a Varicella zoster vaccine Phase I -
CRX-527 TLR-4 agonist Pre-clinical -
HepVax Hepatitis B vaccine Pre-clinical -
Source: Business Insights; Company website; IMS Lifecycle Business Insights Ltd
GSK’s R&D pipeline is extensive, but with few exceptions, is focused towards
vaccines development, with GSK attempting to successfully develop vaccines for a
wide range of common disorders including Epstein-Barr virus, HPV, influenza, malaria
and tuberculosis.
221
Outside of vaccines development, GSK is developing an extended release version of its
anti-viral, Valtrex, which occupies the most important position in GSK’s anti-infectives
portfolio and which is under threat from generic competition. Other major development
activities of note include the development of candidates for use in malaria and
Promacta, an adjunct therapy in development for raising platelet counts in hepatitis C
patients.
Strategic and growth analysis
Drivers of growth
Although GSK’s marketed product portfolio features a significant number of growth

drivers, the company no longer features any obvious brands that can act as
replacements for blockbuster products that are suffering declining sales. As a result,
GSK has relied upon developing revenue protection strategies to maintain franchise
sales, and has developed a wider product portfolio that can provide impetus to sales
growth.
GSK’s R&D pipeline is significantly differentiated from many of its rivals and features
a tight focus on developing the company’s vaccines franchise further. GSK appears to
have avoided markets such as anti-fungals and anti-bacterials, potentially due to the
high level of price-based competition and the high level of competitive differentiation
required to succeed in each indication. As a result GSK’s development activities appear
targeted towards areas that feature less competition, and which could provide high
levels of benefits in terms of revenue growth.
Resistors of growth
Generic competition to major brands in the company’s anti-viral and anti-bacterial

franchises remains a major impediment to growth of the company’s anti-infectives
portfolio as a whole, with generic versions of Augmentin, a major blockbuster product
exerting a drag on continued growth, and the forecast patent expiry related to Valtrex
potentially indicating a future risk.
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Valtrex (valacyclovir) is an anti-viral which has registered strong growth to supplant
established products as the leading product in GSK’s anti-infectives portfolio, but,
which lost patent protection in January 2007, with Ranbaxy launching a generic
version of the product in the US. Generic competition to Valtrex is forecast to have a
deleterious effect on future sales of the product, which have also come under
significant levels of competition from Roche’s Valcyte. Forecast erosion of sales on the
basis of severe competition is estimated to have a severe effect on the performance of
GSK’s flagship products, and the performance of the portfolio in general.
Although GSK’s vaccines franchise holds a strong position among the leading
companies in the anti-infectives area, increasing levels of competition from a wider
range of companies including Novartis and AstraZeneca could pose a threat to GSK’s
current portfolio of vaccines and also introduce increased competition for new products
developments, particularly in growth indications.
Pfizer
Overview
Although ranked second amongst the major players competing in the anti-infectives
market, Pfizer posted a poor sales growth of 1.5% in 2005 representing sales of
$5,028m for the same year. The main reason for this is the loss of patent exclusivity on
the Zithromax franchise, on which sales of this portfolio were heavily dependant.
223
Figure 4.15 illustrates Pfizer’s sales by drug class in 2005.
Figure 4.15: Pfizer’s anti-infectives sales, 2005
4,500 4,091
4,000
3,500
Sales, 2005 ($m)
3,000
2,500
2,000
1,500
930
1,000
500
7
-
Anti-bacterials Anti-fungals Anti-virals
Drug Classes
Pfizer’s anti-infectives sales are overwhelmingly dominated by the performance of the

company’s anti-bacterials and anti-fungals franchise. This domination is largely due to
the late redirection of Pfizer’s R&D and licensing activities towards other therapy
areas, notably anti-virals, the absence of a vaccines development program, and the
influence of the anti-bacterial blockbuster, Zithromax.
224
Table 4.48 summarizes the recent performance of Pfizer’s major anti-infectives brands.
Table 4.48: Pfizer’s anti-infectives product portfolio, 2004-5

Zithromax azithromycin expired 2,181 2,391 9.6%

Zyvox linezolid May 2015 494 647 31.1%
Diflucan fluconazole expired 974 464 -52.4%
Vfend voriconazole May 2016 276 370 34.1%
Unasyn ampicillin, expired 297 320 7.8%
sulbactam
Dalacin C clindamycin expired 220 228 3.7%
Sulperazon sulbactam/ expired 153 159 3.5%
cefoperazone
n/a azithromycin n/a n/l 94 n/a
Prodif fosfluconazole n/a 80 89 11.7%
Others 280 267 -4.6%
Total 4,954 5,028 1.5%
Pfizer’s marketed anti-infectives portfolio is overwhelmingly built on the success of

Zithromax, which was responsible for 47.6% of Pfizer’s anti-infectives sales in 2005.
The loss of patent protection related to Zithromax in 2005 in the US is forecast to exert
a strong effect on sales of Pfizer’s flagship brand, as generic competition is forecast to
be fierce. Pfizer has released a generic version of azithromycin across several markets,
and in 2005, this generic version, which was not yet in direct competition with
Zithromax in the major developed pharmaceutical markets accrued sales of $94m.
Pfizer has attempted to salvage its anti-fungals portfolio following strong generic
competition to Diflucan, which has accordingly experienced a significant decline in
sales. Vfend, Pfizer’s replacement anti-fungal has thus far experienced strong levels of
growth, with sales up by 34.1% in 2005 to $370m. Outside of these major brands
however, there are few candidates among the current marketed product portfolio which
225
have the potential to drive high levels of sales growth, and as such, opportunities
among the marketed product portfolio after the introduction of generic azithromycin
appear limited.
Table 4.49 summarizes Pfizer’s anti-infectives R&D pipeline in 2006.
Table 4.49: Pfizer’s anti-infectives R&D product pipeline, 2006

Launch year
Eraxis anidulafungin Marketed
n/a azithromycin/ Phase III 2008
chloroquine
Zeven dalbavancin Phase III 2008
IDN -6556 caspase inhibitor Phase II 2010
PF3709-270 Anti-bacterial Phase I -
PF-708093 Anti-bacterial Phase I -
PF-868554 n/a Phase I
UK-369003 n/a Phase I -
ETI-211 MRSA treatment pre-clinical -
VIC-5555 clindamycin pre-clinical -
n/a oxazolidinone pre-clinical -
Pfizer’s anti-infectives R&D pipeline features three focal points, anti-fungals, anti-
bacterials and anti-virals. Traditionally, Pfizer has marketed a series of strong products
in both anti-fungal and anti-bacterial indications, and unlike most other major
marketers in these areas, has chosen to continue develop of these indications through
new compounds and combination therapies. The development of IDN-6556, an anti-
apoptotic caspase inhibitor is indicative of Pfizer’s foray into the anti-viral’s
therapeutic area, an area where the company has previously lacked presence. IDN-6556
is believed to be a novel therapy for the treatment of Hepatitis C and has exhibited
positive results from the clinical trials conducted so far.
226
Drivers of growth
Pfizer’s efforts to replace forecast declining revenue streams derived from the
company’s anti-bacterials and anti-fungals franchises have seen an intensive
development of novel and reformulated anti-bacterials targeting minor indications, but
which can offer differentiation from mainstream broad-spectrum anti-fungal and anti-
bacterial products. The recently approved anti-fungal, Eraxis (anidulafungin) offers
potential to provide a new therapeutic option in treating a range of complicated fungal
infections, but will require accurate competitive positioning, and strong differentiation
if it is to avoid becoming a last-line therapy for fungal infections in minority subsets of
the patient population, following clinical studies that show equivalence to
ketoconazole.
Although currently at a nascent stage, the beginning of the company’s entrance into an
additional therapy area – anti-virals is also believed to be a growth driver for this
company’s franchise. The anti-virals therapy area continues to feature opportunities
for innovation and new target development in addition to featuring lower levels of
generic competition thus allowing for stronger growth potential.
Resistors of growth
Pfizer major driver of growth in its currently marketed portfolio is the anti-bacterial
Zyvox (linezolid), which posted sales growth of 31.1%, and on which the short-term
prospects for developing additional revenues beyond the patent expiry of Zithromax
rested. Zyvox has however recently been at the centre of safety concerns, which
showed that Pfizer’s product was associated with an increasing level of mortality over
a range of comparator treatments. Given that Zyvox is being positioned for an
indication with severe unmet need, that of bloodstream infections, in which mortality is
already high, the negative findings of this 2007 study are likely to exert a break on
sales growth in an area of immediate opportunity for Pfizer.
227
As with many of the other major players in the anti-infectives market, Pfizer’s
marketed product portfolio is under threat from patent expiries, notably those two of its
major products, Zithromax and Diflucan. With sales of Diflucan dropping by 52.4% in
2005, there are few opportunities remaining among Pfizer’s marketed product portfolio
to drive further sales growth. The loss of patent protection related to Zithromax is
forecast to lead to a rapid decline in sales, as this popular broad spectrum antibiotic
commands an extensive market in the US. In combination with forecast ineffective
revenue protection strategies, the decline in sales related to Zithromax is estimated to
leave a large gap in Pfizer’s anti-infectives portfolio.
Novartis
Overview
Novartis, positioned third among the leading companies in the anti-infectives area
posted sales of $2,780 in 2005, with the company posting a strong rate of sales growth,
at 10.6%. Despite this performance in 2005, sales growth related to Novartis’ portfolio
has been declining relative to the five year CAGR of 19.3% over 2001-05, the highest
among the major players in the anti-infectives area.
228
Figure 4.16 illustrates Novartis’ sales by drug class in 2005.
Figure 4.16: Novartis’ anti-infectives sales, 2005
1,400 1,298
1,200 1,130
1,000
Sales, 2005 ($m)
800
600
400 340
200
11
-
Drug Classes
Revenues derived from Novartis’ marketed product portfolio are heavily weighted
towards products falling under the anti-fungals and anti-bacterials drug classes, which
were responsible for close to 90% of sales in 2005. Within this category, contributions
from branded products are primarily from Novartis’ anti-fungals franchise, whilst
generic versions of several anti-bacterial products also provide contributions to net
sales, albeit far smaller ones. Since however, Novartis has made investments in the
development of a vaccines franchise through the acquisition of Chiron and this
franchise is forecast to be areas of strong potential development for Novartis. The
company’s anti-virals franchise is small and based almost entirely on one product,
Famvir, and as such is not a major contributor to net revenues.
229
Table 4.50 summarizes the recent performance of Novartis’ major anti-infectives

brands.
Table 4.50: Novartis’ anti-infectives product portfolio, 2004-5

Lamisil terbinafine Jun-07 1,170 1,156 -1.1%

n/a amoxicillin n/a 304 383 26.1%
clavulanate
Famvir famcyclovir Sep-10 286 280 -2.2%
n/a itraconazole n/a 0 61 17376.7%
Amoksiclav amoxicillin n/a 39 50 26.9%
clavulanate
n/a penicillin G n/a 54 48 -11.6%
n/a ribavirin n/a 28 43 52.3%
n/a ampicillin n/a 35 42 19.0%
n/a cefazolin n/a 33 40 21.4%
n/a fluconazole n/a 32 38 18.8%
Others 531 639 20.3%
Total 2,512 2,780 10.6%
Novartis’ anti-infectives portfolio is overwhelmingly dominated by a single product,

the broad-spectrum anti-fungal treatment Lamisil (terbinafine), which accrued sales of
$1,156m in 2005. Although another anti-fungal, a generic version of itraconazole
generated sales growth of over 17,000% in 2005, from negligible levels in 2004, the
product, due to its generic status, is forecast to have limited market development
potential. Lamisil’s performance, like that of Famvir was weak in 2005. However
unlike Famvir, Lamisil holds a strong market position, and is a prominent target for
generic manufacturers, with many generic versions of the product being marketed
outside the EU and the US.
Novartis markets a range of generic anti-bacterial products that feature strong demand,
including branded and generic versions of Augmentin (amoxicillin clavulanate) as well
230
as amoxicillin, ampicillin, cefazolin and penicillin. Although the majority of these
generic products experienced growth in 2005, this was from low levels, with a forecast
low ceiling for maximum sales.
Table 4.51 summarizes Novartis’ anti-infectives R&D pipeline in 2006.
Table 4.51: Novartis’ anti-infectives R&D product pipeline, 2006

Launch year
Arilvax yellow fever vaccine Registration 2007

TFP561 tifacogin Phase III 2008
OptaFlu influenza vaccine Phase III 2008
IC-51 Japanese encephalitis vaccine Phase III 2008
Aurograb Anti-staphylococcus aureus Phase III 2010
Albuferon pegylated interferon-alpha Phase III 2009
Mycograb Anti-candidiasis Phase II 2009
NMC283 valopicitabine Phase II >2011
NIM811 ciclosporin Phase II >2011
LDC300 valtorcitabine Phase II >2011
n/a hepatitis C vaccine Phase II >2011
Helivax H. Pylori vaccine Phase II >2011
ANA380 nucleotide analog Phase II >2011
PA-824 nitroimidazole Phase I >2011
GL59728 non-nuceloside Pre-clinical >2011
ANA975 isatoribine Pre-clinical >2011
Novartis’ R&D pipeline is developed, but highly dependent on the acquisition of

Chiron, which has provided a large number of vaccine compounds in development, in
the absence of which, would reveal a lack of depth in the pipeline as a whole.
Outside of the contribution from those compounds inherited through the acquisition of
Chiron, Novartis is developing a number of compounds of substantial interest.
Mycograb and Aurograb, potential treatments for fungal infections and Staphylococcus
aureus infection respectively, offer a new direction of R&D for the anti-infectives area
as a whole, with Novartis attempting to transpose biological development technologies
231
to the treatment of common infectious diseases. Both compounds involve the
development of monoclonal antibodies specific to key sites on the pathogen, allowing
for more rapid inactivation of the pathogenic organism, and potentially reducing the
possibility of immunity developing to the anti-fungal or antibiotic with which the
monoclonal antibody would be administered. Clinical studies for both compounds have
thus far shown utility, with final phase III clinical trial results eagerly awaited.
Although data on development activities pertaining to generic versions of currently

marketed treatments is not available, it can be assumed that Novartis will continue to
pursue an aggressive generics development strategy, targeting anti-fungal and anti-
bacterial indications.
Drivers of growth
Novartis’ acquisition of Chiron offers the company the ability to reinvigorate its anti-
infective portfolio through the development of a significant vaccines franchise. The
most advanced projects for Novartis are in indications such as yellow fever, Japanese
encephalitis and influenza, with the company electing to avoid congested indications
where major players such as GSK, Wyeth and Sanofi-Aventis hold strong competitive
positions.
Novartis’ generics business has long targeted anti-infectives as a continuing source of

revenues, due to the high number of blockbuster compounds that are off-patent, and it
is anticipated that Novartis will increase the breadth of its generic anti-viral and generic
HIV franchise over the duration of the forecast period to 2011. Contributions from
generic products to portfolio performance are however forecast as unlikely to exceed
$350m in additional sales in 2011, and as such the generics portfolio cannot be seen as
a major driver of growth in the future.
232
Resistors of growth
Currently Novartis’ product portfolio lacks significant depth, with Lamisil being the
only major product present in the portfolio as a whole. Although Novartis has taken
steps to further develop its anti-fungals portfolio and reinvigorate its small anti-
bacterials portfolio, the company has limited levels of expertise in many areas of anti-
infectives, and as such has been dependent on in-licensing and acquisitions to develop
an innovative, yet high risk portfolio. Novartis change of strategic direction, which sees
the company moving into the vaccines area is promising, but may require substantial
investment at a time when Chiron’s key areas of competency are becoming
increasingly targeted by the major players in the vaccines market, as mainstream
indications become saturated.
Sanofi-Aventis
Overview
Sanofi-Aventis was ranked 4th amongst the leading players in the anti-infectives
market in 2005, with sales of $2,390m, 12.2% up on year previous sales of $2,104m.
Sanofi-Aventis’ performance has been one of the strongest among the leading
companies in the anti-infectives market reported at 13.6%, with continued strong
growth of over the past 5 years continuing to be upheld.
233
Sanofi-Aventis’ anti-infectives portfolio is centered on anti-bacterials and vaccines,

with a lack of representation in the anti-virals and anti-fungals therapy areas. Despite
being limited to two major indications, the company has been able to deliver strong
sales from a diverse array of anti-bacterials.
Figure 4.17: Sanofi-Aventis’ anti-infectives sales, 2005
1,800 1,674
1,600
1,400
Sales, 2005 ($m)
1,200
1,000
800 713
600
400
200
3 3
-
Drug classes
234
Table 4.52 summarizes the recent performance of Sanofi-Aventis’ major anti-infectives

brands.
Table 4.52: Sanofi-Aventis’ anti-infectives product portfolio, 2004-5

Ketek telithromycin Apr-15 197 334 69.7%

Tavanic levofloxacin Jun-11 263 314 19.3%
Targocid teicoplanin n/a 292 294 0.8%
Vaxigrip n/a n/a 126 185 47.5%
Orelox cefpodoxime expired 126 139 11.1%
Pyostacine pristinamycin n/a 108 111 3.2%
Ditemer n/a n/a 1 93 6459.4%
Tarivid ofloxacin expired 85 74 -12.9%
Claforan cefotaxime expired 83 70 -15.7%
Rodogyl spiromycin/ n/a 62 58 -7.1%
metronidazole
Rulid roxithromycin n/a 54 52 -5.0%
Others 707 666 -5.8%
Total 2,104 2,390 13.6%
Sanofi-Aventis’ anti-infectives portfolio features a large number of brands with

moderate levels of sales, the majority of which are positioned for robust levels of sales
growth. Of the company’s brands that accrue sales of over $50m, 9 of 11 are anti-
bacterials, many of which feature substantial differentiation from mainstream anti-
bacterials.
Although patent protection remains intact for many of the company’s leading brands,
generic competition has begun to erode sales of minor brands such as Tarivid, Orelox
and Claforan. Sanofi-Aventis’ major anti-bacterial brands Ketek and Tavanic are
forecast to continue to expand sales, but contributions from recently launched vaccine
brands are forecast to contribute heavily to sales growth beyond 2006.
235
Table 4.53 summarizes Sanofi-Aventis’ anti-infectives R&D pipeline in 2006.
Table 4.53: Sanofi-Aventis anti-infectives R&D product pipeline, 2006

Launch year
AVE1330 beta-lactamase inhibitor PC >2011

AVE4221 topo-isomerase IV inhibitor PC >2011
Flu cell Vaccine n/a PC >2011
Malaria vaccine n/a PC >2011
Pneumo Vaccine n/a PC >2011
Rabies Vaccine n/a PC >2011
SAR 97276 n/a PC >2011
Epidemic Influenza n/a I >2011

Vaccine
Ferroquine / SR 97193 Haem Polymerase Inhibitor IIb >2011
Flu Pandemia Vaccine H7N1 cell culture I >2011
Influenza Vaccine n/a
XRP2868 streptogramin I >2011
ChimeriVax Dengue n/a IIa >2011
CMV n/a IIa >2011
DTP- HepB- Polio- Hib n/a IIb 2010
Vaccine
Flu Pandemia H5N1 IIb 2010
Pediacel DTP, Polio-Hep B III (EU) 2009
Flu Infants Vaccine n/a III 2010
Flu Micro n/a III 2010
Intranasal Pleconaril n/a II >2011
Menactra Toddler n/a III 2010
Menactra n/a Approved 2005
Meninge n/a Approved 2006
Pentacel n/a Approved 2006
Sanofi-Aventis features an extensive R&D pipelines which with a few exceptions is

focused on the development of vaccines indicated for the prophylaxis of diseases
ranging from influenza, Avian flu to malaria and rabies. The majority of these
molecules have been acquired through a series of acquisitions and are primarily being
developed by the vaccine arm of the company – Sanofi-Pasteur. Given the recent
awareness that has been built up around the influenza pandemic, Sanofi-Aventis is
currently conducting its activities around the development of vaccines for the same
236
through government contracts. The company is also developing formulations to
effectively immunize special patient populations including the elderly as well as
infants.
While continuing to develop vaccinations such as booster vaccines for both adults and
pediatric populations in indications such as diphtheria, polio, tetanus, pertussis, tetanus
and hepatitis strains, the company is also developing new targets. These new targets
include dengue, malaria and chlamydia trachomatis and targeted towards the large
travel populations required to take precautions.
Drivers of growth
Sanofi-Aventis features a strong product portfolio which has been able to maintain
growth in an anti-infectives market characterized by low growth potential. The
marketed franchise of the company has been expanding at a strong CAGR of 12.2% for
2001-5. While the current portfolio relies heavily on sales accrued by products falling
under the anti-bacterials/anti-fungals, the company’s increasing presence in the
vaccines market is expected to further bolster revenues for the company.
Sanofi-Aventis has managed to significantly differentiate its R&D pipeline, through

channelizing investigations to new therapeutic areas and exploiting new targets thus
avoiding further heavy investments in the anti-bacterials and anti-fungals classes of
drugs, which mostly compete on price based strategies. Furthermore, the company has
an established portfolio of products in these two drug classes featuring products that
continue to generate substantial revenues for this franchise.
Resistors of growth
Generic competition to major brands in the anti-infectives continues to remain a

potential threat to revenue generation. Furthermore, the lack of apparent protection
strategies to safeguard revenues from imminent competition is expected to cause a
more severe decline in sales. Additionally, although the company is investing heavily
237
in the development of a robust vaccines franchise, the administration of these vaccines
is typically reliant on governments and there is no assurance of a strong performance.
Merck
Overview
Merck was ranked 5th amongst the leading players in the anti-infectives market in
2005, with sales of $2,325m, a poor 3.4% up on year previous sales of $2,249m.
Merck’ performance has been one of the poorest among the leading companies in the
anti-infectives market with 2005 growth rates lagging behind its CAGR for 2001-5,
reported at 9.2% by 5.8%.
Figure 4.18 illustrates the sales performance of Merck’s anti-infective’s franchise in

2005.
Figure 4.18: Merck’s anti-infectives sales, 2005
1,200 1,079
1,000
Sales, 2005 ($m)
800 725
600 521
400
200
-
Anti-bacterials Anti-fungals Vaccines
Drug Classes
238
Revenues generated by Merck’s anti-infectives’ portfolio are weighted heavily on the
sales performances of products falling under the anti-bacterial and anti-fungal drug
classes. While sales from these products account for some 53% of total franchise
revenues, revenues from vaccines represent a significant 46.4% or $1,079m in 2005. Of
the marketed anti-fungals brands, newly launched Cancidas (caspofungin), representing
a new class of drugs is believed to be responsible for the strong growth registered by
this segment of the product portfolio.
Table 4.54 displays the sales generated by Merck’s anti-infectives portfolio in 2004-5
together with sales growth rates.
Table 4.54: Merck’s anti-infectives product portfolio, 2004-5

Zienam imipenem/ expired 562 607 8.1%

cilastatin
Cancidas caspofungin March 2017 399 520 30.3%
Varivax n/a n/a 327 244 -25.4%
M-M-R II n/a n/a 246 214 -13.2%
Pneumovax n/a n/a 118 154 30.5%
Recombivax HB n/a n/a 110 95 -13.7%
Invanz ertapenem n/a 53 77 46.5%
Avaxim n/a n/a 74 64 -13.8%
Pedvax HB n/a n/a 49 51 5.2%
Others 313 299 -4.2%
Total 2,249 2,325 3.4%
Zienam (imipenem/cilastatin), while the top performing brand in Merck’s anti-

infectives portfolio with sales of $607m in 2005, registered a modest growth rate of
8.1% for the year. Although growth rates of this drug have been slowing down due to
the presence of strong competition, the wide-spectrum of antimicrobial activity of
Zienam has been key to the product’s success in maintaining positive growth in global
239
anti-infectives market. An additional growth driver in this portfolio remains Cancidas,
a representative of a new class of drugs featuring significantly superior side effects
profiles in addition to an extensive list of indications. Invanz, a newer-generation
carbapenem characterized by a broad-spectrum of antimicrobial activity and is
associated with pharmacological properties that allow Invanz to be given once-daily,
also contributed to franchise sales with a robust sales growth of 46.5% over 2004-05.
In the company’s vaccine portfolio, the only product to feature significant positive
growth was Pneumovax which registered a growth rate of 30.5% representing sales of
$514m in 2005. While Varivax experienced sales growth over 2001-04, with sales
increasing from $254m in 2001 to $329m in 2004, the introduction of Merck’s
ProQuad, a combination vaccine against measles, mumps, rubella and varicella, in has
quickly cannibalized sales, with Varivax sales falling by 22.6% over 2004-05 to
$255m.
Table 4.55 illustrates Merck’s anti-infectives R&D pipeline for 2006.
Table 4.55: Merck’s anti-infectives R&D product pipeline, 2006

Launch year
MG2907 / Beta-lactamase inhibitor PC >2011

Sirna-AV34 / Sirna-034 n/a PC >2011
siRNAs n/a PC >2011
n/a TREM-1 PC >2011
MK-2764/PTK 0796 Bacterial Protein Synthesis Inhibitor I >2011
V512 (Flu Vaccine) n/a I >2011
V710 Staphylococcus aureus vaccine I >2011
c-1605 n/a II >2011
V502 (HPV Vaccine) n/a II >2011
Zostavax varicella-zoster virus A 2006
TREM=Triggering Receptor Expressed on Myeloid Cells-1
240
Merck’s anti-infectives R&D pipeline features two focal points, anti-virals including
vaccines and anti-bacterials. While the company’s pipeline is highly dependant on
molecules which have been acquired and being developed in conjunction with smaller
pharmaceutical companies, it remains evident that Merck is to maintain its focus on the
further development of its vaccine product offerings. With most potential products
currently in the early phases of development, outside of Zostavax which was launched
in 2006, no compounds are expected to launch within the forecast period of the report.
Drivers of growth
Current growth drivers in Merck’s franchise remain the presence of Cancidas,

representative of a relatively new class if anti-fungal drugs. In addition, the strong
vaccine portfolio is expected to continue to feature strong growth in this highly
competitive market. Although the launch of a new combination vaccine resulted in the
cannibalization of sales of an existing product, Merck’s vaccines continue to be a
strong contending factor in terms of contribution towards revenue streams.
Furthermore, the presence of a strong anti-bacterial product which continues to remain
patent protected and register strong sales growth further increases the potential of this
franchise.
Resistors of growth
Although Merck features an impressive vaccine portfolio which is to be substantiated

further with products from its equally rich pipeline, increasing competition remains a
restricting factor in terms of growth potential for this segment of the anti-infectives
franchise. Current market dynamics within this class of drugs remain highly influenced
by vaccination guidelines which are typically altered from time to time. Furthermore,
price points remain key to the success of these vaccines considering that governments
have a heavy hand in granting approvals to these products. Therefore, investing in a
pipeline which features a strong presence of vaccines could result in a high level of risk
with regards to future market penetration.
241
Johnson & Johnson
Overview
J&J was ranked 6th amongst the leading players in the anti-infectives market in 2005,
with sales of $2,271m, having registered a growth rate of 4.1%, lagging behind the
company’s CAGR by 1.3% for 2001-05. The sales performance of J&J’s marketed
franchise has been dwindling over the period of analysis, growing at a reported CAGR
of 5.4% for 2001-05.
Figure 4.19 illustrates J&J’s sales by drug class in 2005.
Figure 4.19: Johnson & Johnson anti-infectives sales, 2005
2,000
1,779
1,800
Sales, 2005 ($m )
1,600
1,400
1,200
1,000
800
600 492
400
200
-
Anti-bacterials Anti-fungals
Drug Classes
The performance of J&J’ s marketed franchise hinges upon on the anti-bacterials class
of drugs which features the presence of only one major product, Levaquin
(levofloxacin) which continues to retain patent protection. However, J&J is believed to
be expanding the focus of its anti-infectives portfolio having aligned itself with
242
companies in development agreements for potential anti-viral therapies in disease areas
such as hepatitis.
Table 4.56 illustrates the performance of J&J’s marketed anti-infective portfolio in

2005, together with sales and sales growth rates.
Table 4.56: Johnson & Johnson anti-infectives product portfolio, 2004-5

Levaquin levofloxacin Jun-11 1,515 1,747 15.3%

Sporonox itraconazole expired 610 453 -25.7%
Nizoral ketoconazole expired 25 25 -0.6%
Floxstat ofloxacin expired 25 24 -5.1%
n/a itraconazole n/a 0 13 47713.3%
Others 6 9 68.8%
Total 2,180 2,271 4.1%
J&J’s anti-infective franchise features an equal representation of both anti-bacterial and

anti-fungal products that are relatively mature with few products retaining patent
exclusivity. Revenue generation of J&J’s anti-infective franchise hinges heavily upon
the performance of its anti-bacterial product Levaquin (levofloxacin), which accounts
for some 77% of total franchise revenues.
While in the past, sales from Sporanox accounted for a significant proportion of
revenues, heavy attrition in sales has occurred since the onset of generic competition
and the release of negative data on adverse effects associated with use of this drug.
Although, J&J attempted to salvage revenue generation from its anti-fungal brand
Nizoral (ketoconazole) by switching it to OTC status, Nizoral has long since ceased to
be a growth driver for this portfolio. Barring the performance of generic itraconazole,
243
Levaquin is the only product in this portfolio to retain patent protection thus featuring
positive growth.
Table 4.57 summarizes Johnson & Johnson’s anti-infectives R&D pipeline in 2006.
Table 4.57: Johnson & Johnson’s anti-infectives R&D product pipeline, 2006

Launch year
Finibax / S-4661 Doripenem PA Q1 2008

Levaquin levofloxacin III 2008
BAL5788 ceftobiprole III 2008
VX-950 telaprevir II 2009
TMC207 / JNJ-16175328 Mycobacterium Tuberculosis II >2011
ATP Synthase Inhibitor
R147681 dapivirine II >2011
MIV 210 n/a II >2011
TPI-315 n/s PC >2011
n/a HCV NS3/4A protease PC >2011
NNRTI= Non nucleoside reverse transcriptase inhibitor, ATP= adenosine tri-phosphate
J&J features a relatively strong R&D pipeline marketing the company’s attempt to
develop potential products with indications in disease areas such as hepatitis. J&J has
invested heavily in development agreements with smaller companies for the
development of potential molecules in this indication, in addition to inheriting some of
these molecules following a spate of acquisitions. Pending positive results from clinical
trials, J&J is expected to enter the anti-virals market from 2009 onwards.
J&J continues to maintain its focus on anti-bacterial products being developed as

potential therapies in indications such as TB and other serious bacterial infections
ranging from cSSSI through UTI to pneumonia. Given that most products of the current
franchise have lost patent exclusivity, attempting to retain revenue generation, J&J
244
seems to be geared with a strong portfolio of substitute products forecast to be launch
2008 onwards.
Drivers of growth
Current growth in J&J’s anti-infectives’ franchise is driven by the performance of the

fluroquinolone Levaquin (levofloxacin), which continues to maintain patent
exclusivity. However, other than this product, J&J’s current portfolio does not feature
any other product registering positive growth. The performance of this franchise is
expected to be boosted with the future new anti-bacterial and anti-fungal product
launches from 2008 onwards. J&J’s attempt to enter the anti-viral market, if successful,
is another element expected to drive future growth in this market.
Resistors of growth
J&J’s current growth driver, Levaquin, is forecast to lose patent exclusivity in 2011.
However, despite this date the company has begun to face Paragraph IV challenges
from potential generic competitors. Bearing this in mind, it is plausible to assume that
while Levaquin theoretically remains protected until 2011, generic competition may
enter prior to the patent expiration date. Although J&J is currently investigating
additional indications for its blockbuster product, imminent genericization of this
product is forecast to cause a serious detrimental effect on sales.
Although J&J has begun to investigate potential therapies for the treatment of viral
diseases such as hepatitis, late market entry could result in diminished sales potentials
for these new compounds. Given that the majority of products are forecast to launch
beyond the forecast period of this report, J&J will have to implement a strong market
entry strategy in order to significantly differentiate its products from existing
competitors and generic competitors present at the time of product launch.
245
Roche
Overview
Ranked seventh in the global anti-infectives market, Roche registered a robust

performance in 2005, with sales increasing by 8.2% to $2,202m, a growth rate that lags
behind the company’s 5 year CAGR reported at a strong 11.3% for 2001-05. With the
exception of Roche’s leading product, Rocephin (ceftriaxone), a cephalosporin anti-
bacterial, Roche’s franchise is dominated by products indicated for the treatment of
viral infections.
Figure 4.20 illustrates Roche’s sales by drug class in 2005.
Figure 4.20: Roche’s anti-infectives sales, 2005
1,400
1,243
1,200
Sales, 2005 ($m)
960
1,000
800
600
400
200
-
Anti-bacterials Anti-virals
Drug Class
246
Anti-virals was the most significant franchises for Roche in 2005, with anti-virals
performing brightly due to the strong performance of Tamiflu and Valcyte.
Revenue generation from products falling under the anti-bacterials class was also
strong in 2005 with sales from these drug classes accounting for some 43.6% of total
franchise revenues. Although most of these products have witnessed declining sales
growth rates over the period of analysis, this is attributable to the high level of generic
competition in this market together with the lack of innovation featured in these
compounds.
Table 4.58 summarizes the recent performance of Roche’s major anti-infectives brands.
Table 4.58: Roche’s anti-infectives product portfolio, 2004-5

Rocephin ceftriaxone expired 1,151 854 -25.8%

Tamiflu oseltamivir June 2017 213 638 200.0%
Copegus ribavirin expired 319 327 2.7%
Valcyte valganciclovir July 2014 208 248 19.3%
Bactrim sulfamethoxazole expired 88 90 3.0%
/trimethoprim
Cymevene ganciclovir expired 38 29 -24.1%
Others 19 15 -19.4%
Total 2,036 2,202 8.2%
With sales growth of 200.0% in 2005, Tamiflu, an established product was the
strongest performing brand in Roche’s anti-infectives portfolio, with sales of $637.7m,
on the back of increased demands for the product as a treatment for avian influenza.
Although this drug remains patent protected until 2016, there remains serious
speculation of the use of Tamiflu in economically backward countries in the event of a
pandemic arising.
247
Roche’s blockbuster anti-infective Rocephin lost patent exclusivity in 2004, rendering
revenue generation vulnerable to generic competitors. With sales having declined by
some 25.8% in 2004-5, the future sales potentials of this drug remain bleak.
Table 4.59 illustrates Roche’s anti-infectives R&D pipeline for 2006.
Table 4.59: Roche’s anti-infectives R&D product pipeline, 2006

Launch year
R1626 HCV RNA Polymerase II >2011

R1558 / CS-023 Bacterial Cell Wall II >2011
Synthesis Inhibitor
R7128 HCV RNA Polymerase Inhibitor I >2011
R1656 I >2011
Maxy-Alpha Interferon-Alpha Receptor I >2011
2C (IFNAR2C) Agonist
ITMN-191 / ITMN B HCV NS3 Protease Inhibitor I >2011
Roche features an immature pipeline with all product launches expected to take place
towards the end of the forecast period of the report. While the company has mainly
concentrated on further developing its anti-virals franchise, with a focus on Hepatitis C.
The only anti-bacterial which Roche is investing in is R1558 / CS-023 is a novel is a

parenteral carbapenem with strong activity against gram-positive and gram-negative
bacteria, including resistant Staphylococcus aureus, a potentially pathogenic bacterium
found in nasal membranes, skin or hair follicles, and Pseudomonas aeruginosa, a major
agent of nosocomial infection. The development of this compound is believed to be in
lieu of key anti-bacterial losing patent protection.
Given the direction of Roche’s R&D pipeline, it is clear that the company plans to
enter therapeutic areas which are fast gaining importance in terms of patient potential
248
in addition to an increased need for innovative treatments, in market which do not
compete on price.
Drivers of growth
Roche’s strong presence in anti-virals is currently driving growth for Roche’s anti-
infective’s franchise accounting for almost 50% of total franchise revenues.
Additionally, the presence of majority of products which remain patent protected
further safeguards the franchise’s revenue streams. Roche’s development of a
promising Hepatitis franchise represents the strongest opportunity for the company to
continue to deliver continued sales growth, with four compounds currently in pre-
clinical development and one in Phase II trials, which is forecast to reach market over
the duration of the forecast period to 2011.
Resistors of growth
Given that the major growth driver in the current portfolio remains Tamiflu, the sales
potential of this anti-viral remain questionable when the question of marketing this
drug to economically challenged markets arises. Additionally, there seem to be no
significant investments made to safeguard revenue streams of most products featured in
the company’s portfolio. While the current product offerings continue to post high
sales, the advent of generic competition will definitely change the complexion of this
portfolio.
Wyeth
Overview
Wyeth, positioned eighth amongst the leading players in the anti-infectives market,
with 4.2% of market share or $2,018m in sales in 2005 posted a solid performance in
2005, with sales increasing by 18.2%. Wyeth’s anti-infective portfolio has been
249
growing at a modest CAGR of 7.1% over the last 5 years, a moderate performance
attributed to volatility in sales growth rates over the same period. This instability in the
franchise’s sales performance is attributable to the company’s inability to keep up with
the supply demand of the US government for vaccine Prevnar.
Figure 4.21 illustrates Wyeth’s sales by drug class in 2005.
Figure 4.21: Wyeth’s anti-infectives sales, 2005
1,060
1,045
1,040
Sales, 2005 ($m)
1,020
1,000
980 972
960
940
920
Anti-bacterials Vaccines
Drug Classes
Revenue generation of Wyeth’s anti-infectives’ franchise hinges upon the performance

of its key vaccine Prevnar. The company’s vaccines franchise features the strongest
level of representation of any franchise as a result of the success of Prevnar, indicated
for the prophylaxis of invasive pneumococcal disease (IPD) caused by Streptococcus
pneumoniae. Prevnar apart, Wyeth features a limited anti-infective portfolio with
limited representation across the majority of anti-infectives franchises.
250
Table 4.60 illustrates sales of Wyeth’s marketed anti-infectives portfolio together with
sales growth rates for 2004-05.
Table 4.60: Wyeth’s anti-infectives product portfolio, 2004-5

Prevnar n/a n/a 818 1,019 24.8%

Tazocin piperacillin/ 2023 732 865 18.2%
tazobactam
Minocin minocycline n/a 89 60 -32.4%
Meningitec n/a n/a 17 18 -4.0%
Others 51 56 8.9%
Total 1,707 2,018 18.2%
Wyeth’s marketed product portfolio is overwhelmingly influenced by the performance

of two products, Prevnar, a combination vaccine indicated for the prophylaxis of
invasive pneumococcal disease (IPD) caused by Streptococcus pneumoniae, and
Tazocin, a combination antibiotic featuring piperacillin, a methicillin, and tazobactam,
a beta-lactamase inhibitor. Both of Wyeth’s major products continue to drive sales,
accounting for $1,885m or some 93.4% of total franchise sales.
However, despite Prevnar’s blockbuster status, the future performance of the vaccine
remains under speculation with recent data of serious adverse events being linked with
the administration of the vaccine combined with the future launch of GSK’s rival
pneumococcal vaccine which is currently under development and expected to launch in
2010. Furthermore, despite gaining additional time on the patent protection of Tazocin,
Wyeth’s anti-bacterial faces competition from products such as moxifloxacin which
features a superior dosing profile. Given the increasing competition in this market, and
no immediate new launches, growth prospects for this franchise remain limited.
251
Table 4.61 illustrates Wyeth’s anti-infectives’ R&D pipeline.
Table 4.61: Wyeth’s anti-infectives R&D product pipeline, 2006

Launch year
Tygacil tigecycline Launched 2006
Prevnar 13 pneumoccocal vaccine III 2010
13vPnC 13-valent pneumococcal III n/a
conjugate vaccine
Nine-Valent Pneumococcal III n/a
Conjugate Vaccine
HCV-796 II
APL 400-003 / DNA Vaccine I >2011
MnB rLP2086 Meningococcal vaccine I >2011
Multiepitope CTL I >2011
peptide vaccine
HSV vaccine HSV PC >2011
Wyeth’s R&D pipeline focuses predominantly on the development of vaccines,

featuring treatments for meningococcal infections, herpes and Hepatitis C. The
increasing competition in the vaccines market is believed to have led Wyeth to the
development of Prevanar 13, a potential vaccine for the prophylaxis of pneumococcal
infections in both children and adults. With the product currently in Phase III clinical
trials, the company is expected to file a NDA in early 2009, with an expected launch in
2010, timed such to compete with GSK’s rival pneumoccocal vaccine. Other life cycle
extension strategies for other brands include studies for the gain of an additional
indication for Tygacil (tigecycline) in the treatment of pneumonia. The product is
expected to be launched in 2008, following the submission of a sNDA in 2007.
Drivers of growth
The current drivers of growth in Wyeth’s marketed franchise remain blockbuster

vaccine Prevnar and anti-bacterial Tazocin/Zosyn. With patent protection for Tazocin
252
in place until 2023, Wyeth has implemented an extremely strong and effective strategy
in safeguarding the product’s revenue streams through the application of an additional
NDA.
Resistors of growth
Although, the major bulk of revenues of this anti-infective franchise are generated by
vaccine, Prevnar, growth rates of this vaccine remain volatile. Furthermore, given that
the administration of pediatric vaccinations essentially rests upon government policies
which typically vary; further strong performances of this product remain questionable.
Wyeth’s current marketed portfolio comprises of four products, 50% of which remain
patent protected. Future launches of competitively superior products together with the
advent of generic competitors to this market, further diminish the scope of revenue
generation of this franchise.
Abbott
Overview
Abbott, positioned ninth among the leading companies in the anti-infectives area
posted sales of $1,808m in 2005, with the company posting a robust rate of sales
growth, at 9.6%. Abbott’s sales growth rate for 2005 growth rate outperformed the 5
year CAGR of 6.4% by a significant 3.2% attributable to the performance of a lone
product, Omnicef (cefdinir).
253
Figure 4.22 illustrates Abbott’s sales by drug class in 2005.
Figure 4.22: Abbott’s anti-infectives sales, 2005
2,000 1,806
1,800
1,600
Sales, 2005 ($m)
1,400
1,200
1,000
800
600
400
200 1
-
Anti-bacterials Anti-fungals
Drug Classes
Revenues derived from Abbott’s marketed product portfolio are derived from the
company’s anti-bacterials which contributed towards this significant sales growth in
2005. Abbott has traditionally been heavily involved in the development of anti-
bacterial treatments, particularly those that are used in the hospital setting. Outside of
this class however, Abbott features a lack of depth in its marketed portfolio with an
absence of vaccine manufacturing capability and a lack of historical involvement with
anti-fungals and anti-virals.
254
Table 4.62 summarizes the recent performance of Abbott’s major anti-infectives

brands.
Table 4.62: Abbott’s anti-infectives product portfolio, 2004-5

Klacid clarithromycin expired 1,144 1,074 -6.1%

Omnicef cefdinir expired 381 611 60.3%
Various erythromycin expired 80 78 -1.5%
n/a vancomycin n/a 18 18 -0.6%
n/a erythromycin n/a 7 7 9.8%
Zeclauren n/a n/a 6 5 -9.6%
Tosuxacin tosufloxacin n/a 5 5 -4.8%
Bareon lomefloxacin n/a 6 5 -17.1%
Others 5 5 3.0%
Total 1,649 1,808 9.6%
The strongest performing product in Abbott’s marketed product portfolio in 2005 was
Omnicef, an anti-bacterial cephalosporin product which despite operating in a class of
antibiotics which features high levels of generic competition, has been a resounding
success due to its high level of competitive differentiation with other rival, and often
generic cephalosporin products. Indeed, Omnicef’s performance is the only current
bright spot in a marketed product portfolio, with more than 50% of the leading products
registering declines in sales in 2005.
255
Table 4.63 summarizes Abbott’s anti-infectives R&D pipeline in 2006.
Table 4.63: Abbott’s anti-infectives R&D product pipeline, 2006

Launch year
n/a clarithromycin/amoxicillin/ Registration 2007

rabeprazole
Segard afelimomab Phase III
ABT-492 fluoroquinolone Phase II
Abbott’s R&D pipeline is believed to feature just three major compounds, all of which
are indicated for the treatment of bacterial infections. The closest compound to market
is believed to be a combination product featuring clarithromycin, amoxicillin and
rabeprozole, a proton-pump inhibitor. The combination product is indicated for the
treatment of H. pylori, bacterial species which are associated with peptic ulcer disease,
and could provide greater levels of convenience in treating this patient population.
Abbott’s combination anti-bacterial compound, which is currently in registration is
forecast to meet with strong demand due to the proven link between H. pylori
infections and gastrointestinal ulcers. Analysis of this compound is covered in more
detail in the gastrointestinal market outlook report.
Segard, indicated for the treatment of sepsis, does not feature a direct anti-bacterial
component, but rather acts through the inhibition of interleukin-6, an immune
modulator (cytokine), which plays a key role in the inflammatory response. Although
Segard showed significant levels of response versus placebo in clinical trials, the
compound was limited to patients with high serum concentrations of IL-6, and Abbott
will require substantial development of the compound if it is to be able to gain use in
what is typically a contracted therapeutic window.
256
Drivers of growth
Barring the fluoroquinolone compound being studied in phase II clinical studies,

Abbott’s R&D pipeline is not aligned to mainstream indications in the anti-infectives
market, and instead is targeted at niche indications. Given the high levels of market and
development failure that have so far been observed in the development of compounds
for the treatment of sepsis, Segard is associated with a high risk of market failure,
particularly given the likely price point of this biologic treatment.
Although Abbott features a number of growth compounds in its marketed portfolio, the
only substantial growth driver in 2005 was Omnicef, a cephalosporin which accrued
sales of $611m in 2005. Despite Omnicef’s strong performance, which saw sales
increase by over 60%, such growth is unlikely to be sustainable, as dominance of the
mainstream cephalosporin market is unlikely to occur without Abbott successfully
demonstrating superior efficacy at a higher range of doses to current mainstream
cephalosporin therapies such as Rocephin.
Resistors of growth
Abbott’s marketed portfolio features only one product which has witnessed significant
growth during 2004-05, the rest having witnessed negative sales growth rates for the
year. Currently the sales performance of the company’s marketed franchise hinges
heavily upon revenues generated by Omnicef. Growth rates within this portfolio are
forecast to lag as generic competition continues to cause severe attrition in sales. The
predominance of mature products in this portfolio combined with a lack of significant
growth drivers remain a major impediment to the sustainability of revenue generation.
Furthermore, Abbott has not exhibited major investments towards the development of a
robust R&D pipeline which proves a further deterrent to the growth potential of the
company’s marketed anti-infective franchise.
257
Schering-Plough
Overview
Schering-Plough, positioned tenth among the leading companies in the anti-infectives

area posted sales of $964m in 2005, with the company’s sales being hit by a significant
decline in portfolio sales, down 18.8% on 2004 sales, continuing a trend that has seen
an average 5 year decline in sales of 13.1%.
Figure 4.23 illustrates Schering-Plough’s sales by drug class in 2005.
Figure 4.23: Schering-Plough’s anti-infectives sales, 2005
700
601
600
Sales, 2005 ($m)
500
400 363
300
200
100
-
Anti-bacterials Anti-virals
Drug Classes
Schering-Plough’s anti-infectives portfolio is dominated by sales of anti-bacterial

products, which were responsible for 62.3% of total anti-infectives sales in 2005. The
importance of the contribution of Schering-Plough’s anti-bacterials franchise, which
258
was built on the successful in-licensing of fluoroquinolone products ciprofloxacin and
moxifloxacin, is lessening, following intense competition from generic ciprofloxacin
brands.
Schering-Plough’s anti-virals franchise faces fewer risks, but limited prospects for
growth, being built on the sales of Rebetol (ribavirin), which is seldom used as a
monotherapy, and is instead used in combination with interferon treatments. In
comparison with the majority of other major players in the anti-infectives market,
Schering-Plough features a limited franchise, with a lack of vaccine or anti-fungal
therapies.
Table 4.64 summarizes the recent performance of Schering-Plough’s major anti-

infectives brands.
Table 4.64: Schering-Plough’s anti-infectives product portfolio, 2004-5

Rebetol ribavirin March 2018 376 345 -8.2%

Avelox moxifloxacin October 2019 256 290 13.3%
Procin ciprofloxacin expired 333 100 -69.8%
Cipro ciprofloxacin expired 82 81 -1.4%
Cedax ceftibuten n/a 40 46 14.8%
Garamycin gentamycin expired 35 34 -2.0%
Others 65 67 3.1%
Total 1,187 964 -18.8%
The value of Schering-Plough’s anti-infectives portfolio declined by 18.8% in 2005,

reflecting several years of sustained declines in sales following the loss of patent
protection related to Bayer/Schering-Plough’s ciprofloxacin franchise. Schering-
Plough accrued $181.2m in sales from ciprofloxacin based products in 2005, a poor
259
result, which coupled with the disappointing sales of Avelox, the replacement product
for Cipro/Procin, may force Schering-Plough to effectively exit the anti-bacterials
market.
Minor products such as the anti-bacterials Cedax and Garamycin, which are used in
niche indications such as ophthalmology and limited respiratory indications continue to
provide limited levels of growth, albeit limited to a smaller market potential. Such
products are not forecast to significantly affect the prospects of Schering-Plough’s anti-
infectives portfolio.
Table 4.65 summarizes Schering-Plough’s anti-infectives R&D pipeline in 2006.
Table 4.65: Schering-Plough’s anti-infectives R&D product pipeline, 2006

Launch year
T-3811 garenoxacin Registration 2008

Viramidine taribavirin Phase III 2010
n/a pleconaril Phase II >2011
MX-3253 celgosivir Phase II >2011
n/a pradefovir/remofovir Phase II >2011
SCH 503034 protease inhibitor Phase II >2011
SCH7 protease inhibitor Phase I >2011
Schering-Plough has undertaken substantial investment in its anti-infectives R&D

pipeline with the company believed to feature some 7 major projects currently in
clinical trials or registration. Unlike many major companies active in the anti-infectives
area, Schering-Plough has continued to develop fluoroquinolone treatments, despite the
demise of Cipro and Procin, with T-3811, in-licensed from the Japanese company
Toyama. Although garenoxacin is believe to be up to 20 times more potent than
ciprofloxacin, the utility of such a potent antibiotic relative to already highly potent
antibiotics such as ciprofloxacin is unlikely to be outweighed by the cost of the
260
treatment. However, following the discontinuation of the development of Ziracin
(evernimicin), an intravenous antibiotic, Schering-Plough is becoming increasingly
reliant on garenoxacin to maintain its representation in the anti-bacterials market.
The only other compound in Schering-Plough’s R&D pipeline that is forecast to reach
market over the forecast period to 2011 is that of Viramidine (taribavirin), a pro-drug
of Rebetol (ribavirin), which is anticipated to replace ribavirin due to the compound’s
improved side-effects profile and equivalent efficacy. Viramidine is forecast to become
an important driver of Schering-Plough’s sales, although the majority of sales are
forecast to come from sales in combination with pegylated interferon treatment Intron.
Of the remainder of Schering-Plough’s R&D pipeline, the majority of products are

indicated for the treatment of hepatitis C, and include a wide range of compounds
aimed at consolidating Schering-Plough’s competitive position in the hepatitis C
market. None of these compounds are however forecast to launch over the forecast
period to 2011.
Drivers of growth
The 2006 launch of Noxafil (posaconazole) is forecast to play a pivotal role in

developing Schering-Plough’s presence in a therapeutic area in which it currently has
limited activity. Noxafil is likely to struggle to differentiate itself further from rival
existing, and often generic medicines, but as a novel agent in an area that has seen
limited levels of innovation, is forecast to have significant market potential.
The forecast launch of T-3811 (garenoxacin), which was in-licensed from Bristol
Myers-Squibb, would see the introduction of a novel fluoroquinolone agent for the
treatment of bacterial infections. With a superior time to elimination and a reduction in
the rate of mutation among common bacterial species, T-3811 appears to be a useful
therapeutic option, but one whose side-effects profile will be under renewed scrutiny.
The success of Cipro (ciprofloxacin), which is a direct comparator to T-3811 in many
261
studies is more likely to be an impediment to uptake of Schering-Plough new product,
given that ciprofloxacin is widely available in generic form. As a result, T-3811 will
require competitive pricing, unless the product can deliver evidence that it can provide
for shorter treatment courses in clinical studies.
Resistors of growth
Schering-Plough’s marketed product portfolio comprises a range of products that are

not directly useful as monotherapies as in the case of Rebetol, or which feature limited
levels of patent protection, in the case of Schering-Plough’s anti-bacterials franchise.
With sales of the marketed product portfolio falling by 18.8% in 2005, and an absence
of opportunities to follow, it is unlikely that sales will recover in the short to medium-
term, as pipeline products struggle to make up for declines in sales related to the
company’s marketed products.
262
CHAPTER 5
Appendix
263
Chapter 5 Appendix
IMS data
J1 Systemic antibiotics
Includes: J1A tetracyclines and combinations; J1B chloramphenicol and combinationS;

J1C broad spectrum penicillins; J1D Cephalosporins; J1E trimethoprim and similar
formulations; J1F macrolides; J1G fluoroquinolones; J1H medium and narrow
spectrum penicillins; J1K aminoglycosides; J1L carbenicillin and similar types; J1M
rifampicin/rifamycin; J1P other beta-lactam antibacterials, excluding penicillins,
cephalosporins; J1X other antibiotics
J2 systemic agents for fungal infections
J3 systemic sulphonamides
J5 Antivirals for systemic use
Includes: J5B antivirals, excluding anti-HIV products
J7 Vaccines
Includes: J7APure Vaccines; J7B Combinations Of Vaccines; J7C All Other Vaccines
Note: All sales figures across ATC codes, products and companies have been
rounded off at the last decimal place.
264
Index
Abbott, 77, 78, 109, 110, 112, 116, 117, 143, Cefzil, 143, 144, 147, 148, 161
144, 145, 146, 213, 214, 253, 254, 255, 256,
257 Combivir, 219
AIDS, 21, 67, 172 Copegus, 85, 92, 93, 94, 95, 247
Altabax, 16, 180 Cymevene, 247
Amoksiclav, 230 Dalacin C, 225
Amoxil, 134, 135, 160, 219 Diflucan, 164, 165, 172, 173, 174, 176, 225,
228
anti-fungal, 167, 168
diphtheria, 55, 56, 57, 58, 237
Arbelic, 133, 162, 191, 192, 193, 209
Ditemer, 235
aspergillosis, 82, 169, 170, 171, 172, 173, 174,
175, 197, 208 Engerix B, 219
Atripla, 210 Epivir, 92, 202
Augmentin, 77, 81, 83, 109, 116, 134, 135, Famvir, 85, 95, 220, 229, 230
136, 137, 138, 146, 160, 219, 222, 230
Floxstat, 243
Avaxim, 239
fluconazole, 167
bacterial infections, 21, 22, 23, 25, 27, 28, 30,
130, 136, 144, 145, 154, 155, 156, 182, 198, Fortum, 148, 219
214, 244, 256, 261
fungal infections, 21, 167
Bactrim, 125, 247
Fungal infections, 63
Baraclude, 16, 82, 92, 180, 201, 202, 203, 204,
209 GSK, 17, 77, 78, 81, 83, 85, 87, 89, 95, 96,
100, 101, 102, 105, 109, 116, 134, 135, 136,
Bareon, 255 137, 138, 143, 146, 147, 148, 188, 189, 212,
214, 218, 219, 220, 221, 222, 223, 232, 251,
Biguanides, 160 252
BMS, 16, 82, 92, 143, 147, 148, 152, 180, 201, Havrix, 96, 101, 102, 106, 219
204, 258, 260
hepatitis, 14, 16, 20, 36, 37, 38, 39, 40, 42, 48,
Cancidas, 81, 164, 165, 169, 170, 171, 172, 82, 91, 92, 93, 94, 102, 103, 180, 184, 186,
175, 176, 206, 208, 239, 240, 241 187, 201, 202, 203, 204, 205, 221, 222, 231,
237, 243, 244, 245, 261
CAP, 22, 31, 81, 83, 113, 114, 116, 117, 118,
122, 155, 157, 199 Hepatitis, 93
ceftobiprole, 121, 162, 189, 190, 191, 209, 244 herpes, 14, 20, 25, 47, 48, 49, 50, 87, 219, 221,
252
265
HIV, 47, 50, 64, 65, 67, 87, 91, 94, 163, 172, Novo Nordisk, 218, 221, 224, 226, 229, 230,
189, 202, 206, 218, 222, 224, 234, 264 231, 234, 235, 236, 238, 239, 240, 242, 243,
244, 246, 247, 248, 250, 251, 252, 254, 255,
Infanrix, 219 256, 258, 260
influenza, 16, 43, 44, 46, 61, 88, 89, 90, 97, Noxafil, 176, 205, 206, 209, 210, 261
103, 104, 105, 180, 182, 184, 221, 231, 232,
236, 247 Omnicef, 77, 78, 109, 110, 136, 137, 143, 144,
145, 146, 147, 161, 253, 255, 257
Invanz, 119, 122, 123, 124, 131, 160, 199, 239,
240 Oral antidiabetics (OADs), 161
Johnson & Johnson, 77, 109, 121, 164, 189, Orelox, 235
191, 213, 215, 242, 243, 244
Pediarix, 96, 106, 219
Ketek, 81, 112, 113, 117, 118, 235
Pedvax, 239
ketoconazole, 167
pertussis, 55, 56, 57, 58, 96, 237
Klacid, 112, 116, 160, 255
Pfizer, 17, 77, 78, 81, 83, 109, 110, 112, 113,
Lamisil, 77, 78, 83, 164, 167, 168, 172, 176, 114, 115, 118, 125, 126, 127, 134, 135, 136,
215, 230, 233 137, 140, 142, 143, 146, 149, 150, 164, 165,
171, 172, 173, 174, 175, 176, 191, 193, 207,
Levaquin, 77, 78, 109, 152, 153, 154, 155, 156, 212, 213, 214, 223, 224, 225, 226, 227, 228
157, 161, 215, 242, 243, 244, 245
pneumonia, 22, 27, 43, 48, 56, 82, 83, 100,
licensing, 73 113, 114, 118, 120, 126, 129, 133, 138, 154,
155, 157, 190, 191, 193, 198, 201, 244, 252
maribavir, 95, 188, 189, 209
Pneumovax, 96, 97, 239, 240
Maxipime, 143, 147
polio, 61, 62, 63, 237
measles, 58, 59, 60, 96, 100, 240
Prevalence, 21
Meningitec, 251
Prevnar, 77, 78, 82, 96, 97, 98, 99, 100, 106,
Merck, 81, 96, 97, 100, 101, 119, 121, 122, 250, 251, 252, 253
123, 131, 133, 164, 165, 169, 171, 172, 175,
206, 208, 213, 215, 238, 239, 240, 241 Prodif, 164, 225
Minocin, 149, 251 psoriasis, 183
mumps, 58, 59, 60, 100, 240 Pyostacine, 125, 235
Mycograb, 195, 196, 197, 209, 231 Recombivax, 239
Nizoral, 215, 243 respiratory tract infections, 14, 20, 22, 25, 27,
32, 116, 122, 136, 150
Novartis, 16, 17, 77, 78, 83, 85, 147, 151, 164,
167, 172, 180, 186, 187, 195, 196, 203, 204, Roche, 15, 70, 77, 78, 85, 88, 90, 93, 94, 95,
212, 213, 215, 220, 223, 228, 229, 230, 231, 109, 110, 123, 125, 143, 144, 145, 187, 188,
232, 233 213, 214, 223, 246, 247, 248, 249
rubella, 58, 59, 60, 96, 100, 240
266
Sanofi-Aventis, 17, 81, 104, 112, 113, 117, urinary tract infections, 23, 26, 28, 29, 33, 34,
118, 125, 153, 212, 213, 214, 232, 233, 234, 121, 122, 127, 136, 150, 154, 158, 200
235, 236, 237
US, 108, 111, 166, 181, 183, 185
Schering Plough, 18, 212, 213
Valcyte, 85, 95, 188, 189, 223, 247
skin and skin structure infections, 16, 27, 30,
35, 116, 122, 126, 136, 140, 144, 154, 155, Valtrex, 77, 78, 85, 87, 95, 177, 219, 221, 222,
156, 157, 180, 197, 210 223
Sulperazon, 143, 225 Vaxigrip, 235
Tamiflu, 15, 70, 75, 77, 78, 85, 86, 88, 89, 90, Vfend, 164, 165, 171, 173, 174, 175, 176, 225
95, 247, 249
Wyeth, 16, 17, 77, 78, 82, 96, 97, 98, 99, 103,
Targocid, 235 109, 134, 135, 136, 138, 139, 140, 149, 180,
195, 197, 198, 199, 210, 212, 213, 214, 232,
Tazocin, 134, 135, 138, 140, 251, 252 249, 250, 251, 252, 253
Tequin, 152 Zeclauren, 255
terbinafine, 167, 169 Zeffix, 85, 219
tetanus, 55, 56, 57, 58, 96, 237 Zeven, 193, 194, 195, 209, 226
Tosuxacin, 255 Zinacef, 219
Twinrix, 96, 101, 102, 103, 106, 219 Zinnat, 143, 147, 148, 161, 219
Tygacil, 16, 162, 180, 195, 197, 198, 199, 209, Zithromax, 17, 77, 78, 81, 83, 109, 110, 112,
210, 252 113, 114, 115, 118, 137, 146, 160, 212, 223,
224, 225, 227, 228
Tyzeka, 16, 180, 203, 204, 209
Zovirax, 85, 87, 219
Unasyn, 134, 135, 140, 141, 142, 160, 225
Zyvox, 109, 110, 125, 126, 127, 131, 161, 193,
199, 200, 225, 227
267

The Global AntiInfectives Market Outlook

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The Global AntiInfectives Market Outlook

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THE GLOBAL ANTI-INFECTIVES

MARKET OUTLOOK TO 2011

Copyright © 2006 Business Insights Ltd

While information, advice or comment is believed to be correct at the time of

Chapter 1 Epidemiology of Anti-infectives

Chapter 2 Global market analysis 70

Chapter 3 Pipeline analysis 180

Chapter 4 Competitive landscape 212

Chapter 5 Appendix 264

 Skin infections, with an incidence rate of 4.2% resulted in an incidence of 29m

 Respiratory tract infections are extremely common, affecting an estimated 1.6% of

 Urinary tract infections are common, with an estimated incidence of 68m,

 Viral infections are exceptionally widespread, with the seroprevalence of herpes

 Anti-bacterials occupied the leading position in the anti-infectives market in 2005

 Roche’s Tamiflu experienced dramatic growth attributable to the increased

 Vaccines recorded a strong growth rate of 9.4% in 2004-05 representing sales of

 The anti-infectives market is forecast to expand at a CAGR of 4.8% over the

 BMS’ Baraclude, indicated for the treatment of hepatitis B is forecast to emerge as

 The loss of patent protection on key anti-bacterial Zithromax’s franchise resulted in

 Schering-Plough recorded the worst performance amongst the leading companies

 Bacterial infections are extremely common, with an estimated incidence of 218m

 Skin infections, with an incidence rate of 4.2% resulted in an incidence of 29m

 Respiratory tract infections are extremely common, affecting an estimated 1.6%

 Urinary tract infections are common, with an estimated incidence of 68m,

 Viral infections are exceptionally widespread, with the seroprevalence of herpes

This chapter provides a background to the anti-infectives therapeutic area in terms of

Table 1.1: Estimated prevalence of infective diseases across seven major

Country Viral Bacterial Fungal

France >40,640 19,341 24

EU5 >194,124 96,909 143

US >170,047 84,344 118

Total >406,219 218,236 306

Source: Author’s research, various epidemiological studies Business Insights Ltd

Although there remain many weaknesses in epidemiological surveys investigating the

Respiratory tract infections

Skin and skin structure infections

Cellulitis and erysipelas

Folliculitis, the infection of hair follicles by S. aureus and P. aeuroginosa, is associated

Impetigo and Ecthyma

Impetigo is a skin infection caused by streptococci or staphylococci colonizing broken

Lymphadenitis and lymphangitis

Lymphadentis, the infection of lymph nodes by bacteria, typically streptococci,

Diagnosis, treatment and management

Respiratory tract infections

Diagnosis of lower respiratory tract infections is achieved by means of a sputum

Urinary tract infections

Skin and skin structure infections

Diagnosis may be undertaken by visual examination, but in rare bacteria spp., a

Treatment is with topical antibiotics if possible, although oral antibiotic therapy is

Respiratory tract infections

Table 1.2: Estimated incidence of community acquired pneumonia infections

Country Incidence (000s) Incidence (%) Share in 2005 (%)

France 567 0.94% 8.0%

US 3,253 1.10% 46.2%

Total 7,047 0.97% 100.0%

Table 1.3: Estimated incidence of uRTIs caused by streptococcus infection

Country Incidence (000s) Incidence (%) Share in 2005 (%)

France 9,455 15.6% 8.4%

US 47,215 16.0% 42.1%

Total 112,118 15.6% 100.0%

Urinary tract infections

Country Incidence (000s) Incidence (%) Share in 2005 (%)

France 6,771 11.2% 9.9%

US 21,455 7.3% 31.4%

Skin infections, with an incidence rate of 4.2% resulted in an incidence of 29m

Respiratory tract infections are extremely common, affecting an estimated 1.6% of

Urinary tract infections are common, with an estimated incidence of 68m,

Viral infections are exceptionally widespread, with the seroprevalence of herpes

Anti-bacterials occupied the leading position in the anti-infectives market in 2005

Roche’s Tamiflu experienced dramatic growth attributable to the increased

Vaccines recorded a strong growth rate of 9.4% in 2004-05 representing sales of

The anti-infectives market is forecast to expand at a CAGR of 4.8% over the

BMS’ Baraclude, indicated for the treatment of hepatitis B is forecast to emerge as

The loss of patent protection on key anti-bacterial Zithromax’s franchise resulted in

Schering-Plough recorded the worst performance amongst the leading companies

Bacterial infections are extremely common, with an estimated incidence of 218m

Skin infections, with an incidence rate of 4.2% resulted in an incidence of 29m

Respiratory tract infections are extremely common, affecting an estimated 1.6%

Urinary tract infections are common, with an estimated incidence of 68m,

Viral infections are exceptionally widespread, with the seroprevalence of herpes

Hepatitis B: Hepatitis B (HBV) is caused by a hepadnavirus, and can either be

Hepatitis G: This strain of hepatitis is believed to be transmitted by blood and