Ophthalmics Outsourcing Trends

By Leslie Brennan, Contract Pharma | November 9, 2012

Steady growth for contractors

Designer drugs and reformulations, changing patient demographics, innovative dosing/delivery technologies, and demand from newly opened markets are the drivers for ophthalmics pharmaceuticals now and for the next five years.

Estimates about current annual size of the global ophthalmics pharmaceutical market are in the range of $16 to $17 billion, with steady growth of approximately 6% CAGR predicted for the next two to three years. The U.S. market accounts for a little more than a third of that amount. In addition to prescriptions, ophthalmics include products used during and after eye surgery and pharmaceuticals dispensed in-office by eyecare professionals. Although not included in these projections, there’s a significant OTC market for ophthalmic products as well (think contact lens solutions).

CMOs and CDMOs are optimistic about their place in the market. “Overall, this is a fairly large and growing space,” reported Kevin McCarthy, associate director for Sales and Marketing, Dalton Pharma Services. “Historically, older generic products have accounted for a large portion of the market volume; many of these use more commonly available, lower-value APIs. Now there is increasing demand for combination drugs or reformulations, as well as new, innovative treatments, especially macular degeneration products needed for an aging population.”

Reformulations will aim to improve efficacy and reduce adverse events associated with older, proven products. At least one producer plans to target niche, orphan, and underserved disease states with reformulations.

Daniel E. Leone, senior director of Business Development for Contract Manufacturing at JHP Pharmaceuticals, echoed the sentiments of all the CMO/CDMO execs we consulted about ophthalmic outsourcing when he said, “Comparing this to a year and a half ago, I’m definitely seeing more inquiries. Customer interest certainly skews as strong and growing.” Reasons for growth are varied, including that big segment of the market that is driven by higher volume older generic products. However, there’s lots that’s new in ophthalmics.

New and Reformulated Drugs
Unless a garage can morph into a sterile manufacturing facility, more bright ideas than ever will be searching for contract partners in ophthalmic pharmaceuticals, according to the CMO and CDMO execs we talked to. “The specialty virtual pharmaceutical companies are outsourcing new chemical entities or brand-new NDA formulations or ANDA programs. They’re allowing us to develop their really new products,” said John W. Feik, Jr., senior director of Business Development for DPT Laboratories in San Antonio TX.

“We’re seeing some very small companies, very virtual,” confirmed Mr. Leone. “Even a couple of people that have a molecule they’re working on for ophthalmic use. They’re clearly working with their own consultants and identifying potential CMOs that can help develop the process as well.”

Generics are another way small companies are getting into ophthalmics. “There are some older, grandfathered generic products that newer, virtual companies are using to pursue a branded generic strategy,” explained Curtis L. Gingles, vice president of Marketing and Sales for Jubilant HollisterStier. “These smaller companies will rely on a CMO rather than going to a large generic house with competing products.”

Many of these small companies don’t have the capacity or expertise themselves to manufacture, even for clinical trials, much less take the next steps to eventually carry their products to market, which leads them to outsource. “We have begun to see an increase in business with outsourcing of early stage development.,” noted Eric Feltes, director of Business Development & Commercial Operations for Catalent Pharma Solutions. (Mr. Feltes is in Woodstock IL, Catalent’s site for blow-fill-seal sterile technology.)

One effect of the increase in inquiries from these small companies is that contractors may have to get creative to research their potential customers. “Just as they are having to do more work upfront to pick the right molecule, we’re having to do more work to be sure we’re choosing the right client,” said Mr. Gingles. “Instead of researching Dun & Bradstreet and Financial Review, we end up having to figure out whether this scientist has the background for this endeavor. Has s/he hired the right people to take it forth?”

Of course, small companies are not the only drivers in ophthalmics outsourcing. According to Mr. Gingles, some big pharmas are looking to outsource their legacy ophthalmic products that still have brand value. All the CMOs/CDMOs we talked to have the capability to work with large, medium, and small pharma in various capacities and may have multiple projects for one customer.

Newer Markets
Several of our experts pointed to market expansion into new geographic areas. Jubilant HollisterStier already has distribution networks in India, Mr. Gingles told us, adding, “We’re very well positioned to be able to distribute into the Asian market, especially India. That’s unique. There’s some skepticism about China, but everyone is looking at India as a growth area.”

Catalent is also looking into market expansion beyond North America and Europe. Mr. Feltes explained, “We’re seeing an approximate double digit increased growth potential in the emerging countries such as India, China, and Latin America.”

Aging Demographics
Many medical subspecialties and disease states are involved in opthalmics pharmaceuticals, leading to a highly segmented market. Diseases include diabetic retinopathy, dry eye, conjunctivitis, glaucoma, and age-related macular degeneration (AMD). The major subspecialties are in retina, glaucoma, cataract and refractive surgery, and anterior segment, in addition to specialist ophthalmologists, optometrists, and pediatricians.

Pediatrics have become a notable percentage of ophthalmic products, but the aging population is a much more significant force for new drug development and market growth. This translates principally to diseases and conditions of the aging eye. Mr. McCarthy at Dalton listed these as glaucoma, AMD, infection, dry eye, and post-surgical conditions and treatments.

At Catalent’s Woodstock facility, Mr. Feltes reported a heightened interest in dry-eye and unit dosing. He, too, cited the aging population, but also mentioned an increase in conditions related to staring at computer screens for hours on end. “You’re seeing patients that are losing their ability to produce tears naturally, so there’s an increase of demand for these types of treatments. Unit-dose applications, specifically for tear production, in particular is in high demand, where a particular patient would be put on a regimen of dosing on a daily basis to replenish tears that could no longer be naturally reproduced.”

In addition, reported Mr. Feltes, “We’re hearing more about treatment related to age when it comes to ophthalmics. There are more eye-related disorders such as glaucoma and wet AMD, as well as infections. There’s also a higher number of surgeries in that population, thus we’re seeing growth in areas of postoperative treatments (including dry eye). Many patients are looking for either anti-infectives or post-op treatments, as well as the new innovative treatments, the next-generation treatments for things like glaucoma and macular degeneration.”

Anti-glaucoma and anti-allergy prescriptions account for more than half of drop dose ophthalmic sales, according to Mr. Gingles of JHS. However, that number is not expected to grow over the next five years, mostly due to significant patent expirations. Just this year, for example, the patent expired for Xalatan, the leading prescription to reduce eye pressure in open-angle glaucoma. Anti-infectives and artificial tears account for another 20% of the drop dose market, and should also remain stable. 

Growth, as mentioned earlier, is expected in drugs indicated for wet AMD. The drivers are expected to be the anti-vascular endotheliel growth factor-A (VEGF-A) MAb injectables, specifically Lucentis and Eylea. Additionally, ThromboGenics has a new injectable, Jetrea, awating approval. It’s the first drug indicated for treatment of vitreomacular adhesion, a condition that may influence diabetic retinopathy and AMD. Global sales have been estimated to reach $500 million by 2018.

Technology Changes Everything
Many of the technology improvements that affect ophthalmics have to do with dosing and drug delivery. Most often mentioned are improvements to drop shape and size; upgrades in container closure and filtration; and attempts to develop delivery systems that will support preservative-free solutions. There’s some evidence that the use of preservatives may negatively affect eye health, and contractors are anticipating greater demand for preservative-free formulation technologies. These devices would have a sterile fill, then maintain sterility after the product was opened, eliminating the need for preservatives in the formulation.

At Catalent, Mr. Feltes reported interest in finding alternatives to the need for preservatives. “As far as specific container design and enclosure, many organizations come to us with a pre-existing container, typically a three-piece bottle that you’ll see on most shelves in most pharmacies. They’re looking for dosing alternatives, such as a unit-dose application that is preservative-free vs. a standard multi-dose presentation. We are also seeing an increase of interest in our unit dose design where we can offer anywhere from a .25mL fill, which is a single unit dose application where you would just apply the solution and then discard the container, vs. something in a multidose format. For multidose containers, there’s some early stage innovative work around what can be done in terms of different container closure systems to allow for a multiple-use, preservative-free applications by use of different types of filtration in the tipping cap closure system itself. We’re looking at alternatives in that area as well.”

Mr. McCarthy also has seen interest in improvements in container closure design, such as those that would allow preservative-free sterile solutions. “A couple of organizations have actually attempted some different systems that would allow for that type of expression of solution. I can’t speak to how successful they’ve been to this point in time, although I can say there’s been a lot of interest from different companies in having that type of technology made available.”

So is there really a way to make multidose solutions preservative-free and still sterile? Certainly the idea has been around for a long time. Right now, it’s attracting a lot of attention because it actually seems to be getting closer to commercial viability. Specialty drug container/delivery provider Aptar Pharma, for one, supposedly has a drop dose container in development with a 4.2µ filtration system; this means that after the drop is dispensed, the air pulled back into the bottle is sterile. Rumor has it that some big pharma companies are working on their own proprietary systems.

There’s also quite a bit of interest in combination drugs and reformulations such as those being explored by an alliance announced last summer between Molecular Partners and Allergan. In a press release, Zurich-based Molecular Partners announced that it had entered into a strategic partnership with Allergan to discover, develop, and commercialize ophthalmic pharmaceuticals. The drugs will be formulated on Molecular Partners’ proprietary DARPin technology, which the company describes as “targeted protein therapeutics beyond antibodies.” Claiming that DARPins combine the best of both antibody therapeutics and small molecules, Molecular Partners describes them as potent, robust, low cost in development, and capable of penetrating tissues easily.

Delivery devices are among the technology improvements under investigation and development. Mr. McCarthy described a current Dalton endeavor: “One project we are currently working on is with EyeGate Pharma. They are using iontophoresis to deliver EGP-437, a dexamethasone phosphate ophthalmic solution to the eye for acute anterior uveitis. Currently in Phase III, the iontophoresis device sits on the surface of the eye around the cornea and works by promoting the migration of ions (charged drug substance) across biological membranes (in this case, the ocular surface) by applying a low electrical current. The current produces ions, which, via electrorepulsion, drive a like-charged drug substance into the ocular tissues. This is one example of the ophthalmic applications we support our customers with.” The iontophoresis device is designed to be used in the doctor’s office.

Some ophthalmic manufacturers such as Catalent offer highly specialized blow-fill-seal capabilities, and Mr. Feltes said there’s definitely been an increase in customer demand for this technology over the last five years.

CMOs and CDMOs remain optimistic about the business future for ophthalmics and stand ready to meet whatever demands are presented. As summed up by Mr. McCarthy, “Clients may need different formulations, line types, packaging capabilities, or delivery systems. If the need for these types of products continue to grow, CMOs will fill that void if the business rationale is there.”

Leslie Brennan is a freelance writer. This is her first contribution to Contract Pharma. She can be reached at lebrenn1@yahoo.com.