Japan Clinical Research Operations

Japan Market
Overview

World’s 2nd single largest pharmaceutical market.
- In 2016, the Japan ethical drug market was > 94 billion USD
- Oncologics was the best-selling therapeutic class, with sales growing 14.5% to > 8.9 billion USD
Rapidly aging population; 26.7% in 2016 >65 years, forecasted to 38% in 2065.
Increasing participation in global clinical studies since 2007
- Total clinical trial notifications increased from 507 in 2007 to 657 in 2015
- Multinational clinical trials increased from 38 to 227 in the same period
Japanese government implementing various measures to speed up approval process including:
- PMDA staff increase : 400 to 897 staff (2008 to 2017)
- Short review time : In 2015 the approval time for NCEs was 284 days, shorter than its counterparts in the
  US (351 days),
  Canada (355 days),
  Australia (373 days),
  Europe (417 days), and
  Switzerland (464 days).
- Orphan Drug and Sakigake (Breakthrough) designation
- Conditional approval for regenerative products

Source: QuintilesIMS, PMDA, others. Exchange rate 1 USD = 110 JPY

Japan’s Inclusion in
Global Clinical
Trials (GCT)
Steadily Increased
since 2007

Japan’s Inclusion in Global Clinical Trials (GCT) Steadily Increased since 2007 Graph

Global Clinical Trials (GCT)
has
Significantly Reduced
Drug Lag

Global Clinical Trials (GCT) and Japan/US Development Lagfor Drugs Approved
in Japan
(2007-2012)

Global Clinical Trials (GCT) and Japan/US Development Lagfor Drugs Approved in Japan (2007-2012) Graph

Regulatory Review Time
<12
months &
No Review
Lag with US

Review Time (median) for New Drugs

Review Time (median) for New Drugs Graph

Rewarding Innovation
in Japan

Market & Patent Exclusivity
- 8 years re-examination period for NCEs after approval (Up to 10 years for orphan and pediatric drugs)
- Clinical development period in Japan (up to 5 years) can be added to standard patent period of 20 years
Pricing and Reimbursement
- Reimbursement for patients :
  - 70% below 70 years of age, 70-90% above 70 years
- Reference-based price (for drug with similar mode of action) and cost-based price calculation
Orphan Drug Designation Criteria
- Indicated patients must be less than 50,000
- Indication must be a serious disease or refractory disease
  - In addition, there must be high medical needs satisfying one of the following criteria:
    - There is no appropriate alternative drug or treatment in Japan
    - High efficacy or safety is expected compared with existing medical products in Japan
- There must be rational to use the drug for the disease and its development plan is considered as appropriate

Japan’s Clinical
Environment has
Changed
Drastically
in Past 10 Years

Historical View

Long time-to-market:most drugs launched overseas reach the japan market much later (drug lag)
Long start-up and recruitment timelines
High development costs due to need for japan only development program and studies needing large number of sites to meet needs of protocol

Changing Trend

Lower total development time by planning up front in order to for japan to join global pivotal studies. Concurrentn NDA filing in US,/EU/Japan actually done.
Japan is one of the countries that has the fastest start-up timelines (4-6 months Final Protocol-FPI) and very reliable in meeting recruitment and quality targets
Mitigate high development costs through use of high performing sites,more efficient monitoring & inclusion in global programs

Only 2% of Breast Cancers
Studies
include Japan
- Only 1 Foreign Biotech Active

Example: Breast Cancer Studies Started in 2014-2016
Phase I-III (n=984)

Example: Breast Cancer Studies Started in 2014-2016 Phase I-III (n=984) map

Of 984 Breast cancer Ph I-III studies, 50% (494) in US, 31% (308) in Europe,
19% (190) in China, Taiwan and South Korea, but only 2% (23) in Japan

Only 6% of Gastric Cancer
Studies
include Japan
- No Foreign Biotech Active

Example: Gastric Cancer Studies Started in 2014-2016
Phase I-III (n=276)

Example: Gastric Cancer Studies Started in 2014-2016 Phase I-III (n=276) map

Of 276 Gastric cancer Ph I-III studies, 26% (72) in US and 19% (52) in Europe,
58% (159) in China, Taiwan and South Korea, but only 6% (17) in Japan

76% of Oncology
Compounds
Already
Started Global
Pivotal
Study when Japan
Starts Phase I

Development Status in the US at the time of Starting Phase I Oncology Trials
in Japan

Status in US(all drugs eventually approved): Post approval; Submitted for approval; Starting pivotal study to submission; Starting Phase I study to starting pivotal study

n (33)(cumulative): 9; 13; 25; 33

% (100)(cumulative): 27.3; 39.4; 75.8; 100

40% of compounds have already been submitted for approval in US
76% of compounds have already started pivotal studies in US

*The notorious “drug lag” for oncology drugs in Japan,
Invest New Drugs (2011) 29:706–712

How to Catch Up Global Clinical
Development:
Strategy Example

How to Catch Up Global Clinical Development:Strategy Example flow

Strategy: After PoC completed in global, Japan development program starts.
The aim is to catch up and join global pivotal study to include Japanese patients
and to file JNDA at the same time with global NDA

Japan Maket

Japan Market Overview

Japan’s Inclusion in Global Clinical Trials (GCT) Steadily Increased since 2007

Global Clinical Trials (GCT) has Significantly Reduced Drug Lag

Regulatory Review Time <12 months & No Review Lag with US

Review Time (median) for New Drugs

Rewarding Innovation in Japan

Japan’s Clinical Environment has Changed Drastically in Past 10 Years