The airways diseases market is currently estimated to be in excess of $40bn worldwide and, with population growth and lifestyle changes, coupled with increasing longevity and wealth, this is expected to grow in value by 3.5% annually by 2025(1).

Respiratory is a large, attractive market with significant growth in asthma, COPD and specialist disease areas

After many years of status quo, the dynamics within this market are expected to change significantly over this time period with new treatment classes are emerging offering society and patients new ways to treat and control airways related diseases.

Asthma and COPD

Asthma and COPD are expected to remain the largest and most competitive segments. Given the size and scale of these markets, we are best placed to serve this market by partnering with pharmaceutical companies who have the expertise and infrastructure to sell and market these products globally.

Our existing portfolio and existing pipeline are well placed to benefit from changing market dynamics in the asthma and COPD segments

The COPD market as a whole is expected to grow from $15bn to in excess of $19bn(2), with the growth being driven from continued uptake of dual bronchodilators such as Breezhaler® (LAMA/LABA, partnered with Novartis) and Anoro® Ellipta® (LAMA/LABA, IP licence with GSK) and the emergence of closed triple therapies.

The asthma market as a whole is expected to grow from $17bn to nearly $18bn(3), with growth being driven by the emergence of closed triple therapies such as QVM149 (ICS/LAMA/LABA, partnered with Novartis) and biologic therapies expected to grow strongly from a small base offsetting generisation of the ICS/LABA class (VR942, co-developed with UCB, now available for license).

With diagnosis and treatment rates improving, particularly in emerging markets, we expect to see volume growth in the ICS/LABA class to treat asthma.

Market for inhaled generics

One of the most significant changes the airways diseases market is facing is the increase in the number of generic equivalents, both substitutable and therapeutic equivalents, of major blockbuster products. Of the major inhaled products facing imminent genericisation in the US, Advair®/Seretide®, Symbicort® and Spiriva® are the largest in terms of volumes and value, collectively generating US net sales in excess of $4.9bn in 2017(4).

Globally, the use of generic medicines is growing. In the US, the inhalants market was estimated to be worth some $23bn(5) in 2017, with less than 1% generic conversion in key inhaled classes(6) meaning that the inhaled generics market for major airways diseases products in the US remains largely untapped. This is in contrast to the oral solids market, where generic products account for 18.3% of the market value and 90.8% of all prescriptions(7).

Whilst pricing is a key challenge for the wider generics market, the relatively low level of competition within the inhaled generics space underpins our belief that this area continues to be a valuable opportunity that Vectura is well placed to exploit. As we refocus our investment and pipeline, we will seek to bring more partnered generic programmes into our strong existing generics pipeline.

Airways diseases market growth drivers

The world population is expected to rise from its current level of some 7bn to 8.5bn by 2030 according to the United Nations(8) and, alongside this population increase, life expectancy is also expected to increase significantly Globally, over the same time period, the number of people aged 60 years and over will increase from 901m to over 1.4bn(9). Alongside these changing demographics, the number of people who can access healthcare continues to increase.

In most established markets, ageing populations and certain lifestyle choices such as smoking, poor diet and lack of exercise are increasing the incidence of non-communicable diseases, such as airway-related diseases, which require long-term management.

Advances in science and technology innovation are critical if we are to address unmet medical need. Existing drugs will continue to be important in meeting the growing demand for healthcare, particularly with the increasing use of generic medication. The use of large molecules, or biologics, has also become an important source of innovation, with biologics amongst the most commercially successful new products.

It is expected that generics will take an increasingly larger share of global medicine spend increasing from 27% in 2012 to 36% by 2017(10).

Over the past few years, changing attitudes towards globalisation and free trade, coupled with concerns over inflation and wages and, for many, concerns about inequality, have caused significant volatility and uncertainty in western markets. In 2016, these uncertainties were exemplified by the UK vote to leave the European Union and the result of the US presidential election. These trends continued during 2017 as a result of “Brexit” negotiations and further national elections in the UK, France and Germany.

Expanding patient populations and growing unmet medical need are contributing to higher demand for healthcare services and leading to increased cost pressure within global healthcare systems. The world’s major regions are expected to see healthcare spending increases ranging between 2.4% and 7.5% between 2015 and 2020(11). This background of steadily rising healthcare costs has also led to increased scrutiny on drug pricing by governments, the media and consumers, particularly in the US.

Increasingly, government agencies and insurers are looking for ways to manage increasing costs and, in some cases, are restricting access to treatment, slowing the uptake of innovative new medicines. With continued focus on cost management, it is expected that generics will take an increasingly larger share of global medicine spend, increasing from 27% in 2012 to 36% by 2017(10).