Convergence by Paul Howells

The global magazine for the NUTRACEUTICAL and pharmaceutical industry

july 2013

SPECIAL SUPPLEMENT

A Recipe for Success

Take a pinch of pharma, add a dash of nutra and mix well

ALSO

Next-Generation Healthcare | Industries in Transition Botanical Drugs | Pharmabiotics in Europe | A Blurring of Boundaries

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CONTENTS

Pharma/NBT Supplement Contributors

Content/Marketing Manager Aimee Lacy Tel. +44 (0) 1372 700 203 aimeelacy@viacommsgroup.com

Editors

Financial Officer Melissa Jones Tel. +44 (0) 1372 700 200 melissajones@viacommsgroup.com

Zoe Pounder Tel. +44 (0) 1372 700 212 Sophia Ktori Tel. +44 (0) 1608 737 084 Art Director/Production Paul Howells Tel. +44 (0) 1372 700 202 paulhowells@viacommsgroup.com

Sales Tel. +44 (0) 1372 700 200 sales@viacommsgroup.com

Jörg Grünwald President Analyze & Realize ag John Kurstjens Marketing Manager Lipid Nutrition Chris Lee Event Director IIR Exhibitions Ulla Freitas Manager Scientific Affairs, Nutrition Lonza AG

Theodor Graser Head Pharma Industry DSM Nutritional Products Ltd

Dr Paul Berryman Chief Executive Leatherhead Food International

Denzil Phillips Founder Denzil Phillips International Pedro Vieira Marketing Manager Kemin Health Europe

Norbert Weitkemper Managing Director Vital Solutions GmbH

Robin Ward Managing Director Excelsa Pharmaceuticals Sagl

Leatherhead Food Research

in Europe? Not Just Yet! 06 Pharmabiotics Dr Magali Cordaillat-Simmons Pharmabiotic Research Institute

10 12

Editorial Advisory Board

Susanne Fässler Marketing Communication Manager Frutarom Switzerland Ltd

04 Next-Generation Healthcare

Dr Kevin Robinson with Professor Paul Berryman

Editorial Director

Kevin Robinson Tel. +44 (0) 1392 202 591 kevinrobinson@viacommsgroup.com

Contents

Dr Michelle H. Jones Manager, Regulatory and Scientific Affairs Archer Daniels Midland Company

John Wilkinson Consultant Phytochemist and Director Herbal Sciences Int. Ltd

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Professionals working within the industries we cover may purchase a year’s subscription by sending a cheque for £100.00 made payable to Via Communications Group Ltd, Lawster House, 140 South Street, Dorking, RH4 2EU, UK No part of this magazine may be reproduced, stored in a retrieval system or transmitted in any form without permission. Copyright © 2013, Via Communications Group Ltd. All Rights Reserved.

Over the Horizon, Over-the-Counter Dr Kevin Robinson and Zoë Pounder Via Communications Ltd

Prevention is Better Than Cure Anke Sentko

BENEO-Institute

16 A Blurring of Boundaries Ana Nicholls

The Economist Intelligence Unit

Botanical Drugs a New Model 18 forArePharma?

The editors of MedNous with Christian Hogg and Luis Cantarell China MediTech Ltd and Nestlé Health Science

to Select Promising Project Ideas in Converging Industries 22 How Stefanie Bröring and Christina Mintgen University of Applied Sciences Osnabrück

Healthcare Convergence in a Changing World Ian Newton

Ceres Consulting

Botanical Formula Fights Breast Cancer Metastasis Dr Isaac Eliaz

Amitabha Medical Clinic

Nutraceuticals: An Industry in Transition

Ewa Hudson, Head of Health and Wellness Research at Euromonitor International, George Paraskevakos, President

The publisher endeavours to collect and include complete, correct and current information in Convergence, but does not warrant that any or all such information is complete, correct or current. The publisher does not assume, and hereby disclaims, any liability to any person or entity for any loss or damage caused by errors or omissions of any kind, whether resulting from negligence, accident or any other cause. Convergence does not verify any claims or other information appearing in any of the advertisements contained in the publication, and cannot take any responsibility for any losses or other damages incurred by readers in reliance on such content.

of the International Probiotics Association, Bejit Ideas and Emiri Nishi of Ninapharm, Paul Berryman, Chief Executive of Leatherhead Food Research, Adam Ismail, Executive Director of the Global Organization for EPA and DHA Omega-3 (GOED), and George Pontiakos, President/CEO of BI Nutraceuticals.

PHARMA/NBT SUPPLEMENT | 2013

CONVERGENCE

Next-Generation Healthcare

Looking ahead to the upcoming WarGame on Pharma versus Functional Food (www.wargamesevent.com), Kevin Robinson of Via Communications Ltd, the event organizer, spoke with one of the players and key supporters of this new strategic exercise concept, Professor Paul Berryman, to find out why he’s taking part and what we hopes to gain from being involved. VC: Why is participation in WarGames important for you? PB: I think this is an innovative way to debate industry strategy and gain insights into the next big thing in the nutraceutical world. I also like the idea of comparing nutra and pharma; at the very least, it should lead to some new approaches, ideas and contacts. VC: Why is it important for the industry? PB: At Leatherhead, we are constantly working with all the big food and nutraceutical companies to come up with innovative products. Industry has been put off the development of new health

claims by the very stringent EFSA rules and I think this is a great pity. It stifles innovation. I am hoping that WarGames will produce a robust report that will reinvigorate interest in health claims and nutraceuticals in the food industry. Health and nutrition are still massive global issues, so we need novel foods and ingredients to tackle problems such as obesity, diabetes, heart disease, bone health and (in the longer-term) possible food shortages. VC: What are you hoping to achieve? PB: Often the best ideas on emerging technology come from totally different industry sectors. For example, Leatherhead has just set up a new industry club called INTENT that brings together food companies to learn about technologies from other sectors such as Big Pharma, electronics and construction. We heard from a building expert how we might use the optical fibre sensors used to measure concretesetting to study how chocolate sets! So, I hope to meet some new contacts in the pharmaceutical sector, take part in some stimulating debates, learn some new tricks … and have some fun! VC: Could you identify a specific challenge and briefly describe a winning strategy that could overcome it? PB: The food industry is still struggling to get EFSA Health Claims approval for probiotics. This is despite the EU spending €70 million of public money on probiotic research — most of which was supportive! There are also around 7500 peer-reviewed journal papers on probiotics — again mostly positive. Maybe the pharmaceutical sector (with its long experience of clinical trials) could help the food sector

PHARMA/NBT SUPPLEMENT | 2013

to get those claims! At Leatherhead, we specialize in running food-focused human studies; we just need to convince food companies to pay the money needed for a properly designed study to underpin their health claim submissions to EFSA. I would ask whether the pharmaceutical sector could offer any advice. VC: And what do you see as the industries’ biggest challenge(s)? PB: Both nutra and pharma face the same long-term issue — the massive growth in an ageing population. So will there be sufficient resources to feed and medicate the growing population to ensure health and wellness? In the short-term, the pharmaceutical sector faces the issue of dwindling blockbuster drug incomes. As massive sales volumes are needed to offset the cost of expensive clinical trials, the pharmaceutical sector may soon be facing the same problems as the food industry: will the trials be affordable? I also see a trend towards personalized medication (and personalized nutrition) that will match the individual’s genomic profile to the most effective drug (or food). This niche approach needs a totally different strategic mindset compared with the high volume blockbuster approach. Currently, the biggest issue facing the food industry is obesity and how we produce tasty, nutritious, healthy foods at a reasonable cost.

For more information Professor Paul Berryman Chief Executive Leatherhead Food Research Tel. +44 1372 821 553 pberryman@leatherheadfood.com www.leatherheadfood.com

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CONVERGENCE

Pharmabiotics in Europe? Not Just Yet!

Historically, almost every European country had two separate regulatory agencies: one of these agencies was tasked with ensuring the safety of foodstuffs and the other, the efficacy and safety of drugs. We see this dual regulatory reality at the European level today: EFSA (the European Food Safety Authority) and EMA (the European Medicines Agency) are the logical supranational iterations of their national predecessors. Science and its progress now show that foods traditionally considered for their nutritional qualities could also, in fact, benefit or even damage human health. “Frontier products” now exist, for which this dual regulatory paradigm proves to be a challenging situation. The case of probiotics is an ideal opportunity to address this regulatory sinkhole. Probiotics/probiotic strains that have shown preventive and curative qualities for human health fall between two regulatory frameworks in Europe: food is not meant to treat disease, and pharmaceutical regulations (with the exception of vaccines) are not suitable for living micro-organisms. Today in Europe, firms have at their disposal three principal regulatory options to try to bring probiotics to market. The first option is found within food regulations as functional foods or as food supplements. In both of these cases, a firm must comply with Regulation 1924/2006 (EC) on nutrition and health claims made on foods to make any health claims for their products. In the particular case of probiotics, nearly every single application submitted under this option has been rejected by EFSA: at first, dossiers were rejected mainly because of strains not being “sufficiently characterized.” Later on, dossiers were criticized and rejected under the premise that “the evidence provided did not establish that the proposed claimed

PHARMA/NBT SUPPLEMENT | 2013

effect is a beneficial physiological effect,” or that “the cause and effect relationship has not been established.” This is not to say that the quality of any study supporting these claims was not up to current scientific standards; indeed, many of these studies were published in reputable international scientific journals by way of peer-review. Nevertheless, it is therefore reasonable to expect that EFSA will continue to reject health claim dossiers for probiotics as long as applicants fail to provide the exact mechanism of action of the strain in question. Despite advances in our understanding of the human microbiota (the vast and complex communities of micro-organisms living in the human body, such as the GI microbiota, vaginal microbiota, etc.) and the intricate interactions between this complex community of organisms and their hosts, the current state of scientific knowledge does not provide potential applicants with sufficient information to understand those physiological pathways that may be implicated in the biological effect to which they claim. Something else of note: applicants are required to submit clinical data collected from healthy populations … and thus dossiers that refer to unhealthy populations risk being rejected by EFSA. It is also noteworthy that pharmabiotics have a much broader potential scope of indications, well beyond that of the

EFSA will continue to reject health claim dossiers for probiotics as long as applicants fail to provide the exact mechanism of action of the strain in question.

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GI tract. As such, probiotics firms have one less regulatory option if they should wish to make these micro-organisms’ health benefits available to the public.

The Dilemma

Some facts about the human microbiota: even if the precise mechanisms of actions are not yet fully understood, it is generally accepted that, owing to the intricate relationship between the human organism and the microbiota, any imbalance in the microbiota is often associated with various human pathologies (ulcerative colitis, vaginitis, etc.). The principal rationale for administering probiotics in general is the re-establishment of a balanced microbiota, and thus homeostasis. Therefore, it is clear that probiotics have a preventive or (perhaps) even therapeutic potential.

PHARMA/NBT SUPPLEMENT | 2013

So, back to the regulatory conversation. Medical device or medicinal product status are two other regulatory options for probiotics. Keeping in mind what is now generally accepted as probiotics’ role in restoring a balanced microbiota, these two options would seem to be the obvious paths. The salient points about medical devices are that, according to Council Directive 93/42/EEC, a ‘medical device’ means any instrument, apparatus, appliance, software, material or other article, whether used alone or in combination ... to be used specifically for diagnostic and/or therapeutic purposes ... intended to be used in human beings ... and which does not achieve its principal intended action in or on the human body by pharmacological, immunological or metabolic means. This might seem to be a solution; however, there are a number of national health authorities in Europe that have called into question the use of such a status for probiotic products, and the European Commission has proposed a new regulation on medical devices in which living micro-organisms are explicitly excluded (proposed Regulation 2012/0266 [COD]). The medical device status was never meant to be a long-term solution for probiotics — a regulatory sticking plaster if you will. This leaves us with the third and only viable option: medicinal product. And why not? We know that certain strains of probiotics have shown positive effects in preventing or alleviating symptoms in human diseases (vaginitis, ulcerative colitis, necrotizing enterocolitis, etc.) through their metabolic activity or their capacity to modulate the human immune system. We know that under Directive 2001/83/EC, a medicinal product is defined as “(a) Any substance or combination of substances presented as having properties for treating or preventing disease in human beings; or (b) Any substance or combination of substances that may be administered to human beings with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action.” And finally, we know, as written in the very next article of Directive 2001/83/EC, a substance is defined as “Any matter

irrespective of origin that may be ... animal, such as micro-organisms.” This would seem to settle the matter. So why aren’t there dozens of pharmabiotics on the market to treat human diseases? As opposed to EFSA, EMA is principally concerned with the safety and efficacy of drugs, even if the specific and complete mechanism of action is not immediately understood. Here, it is the regulatory framework that is the sticking point — the current framework was designed and developed with molecules (except for the specific regulations treating vaccines) in mind, and this exhibits glaring limitations when considering pharmabiotics. These limitations translate into a prohibitive regulatory uncertainty for firms. And herein lies the problem. The Pharmabiotic Research Institute (PRI) was created to analyse the problems surrounding the development of medicinal probiotics and offers the industry access to a network of specialized experts (scientific, industrial and regulatory) to help businesses overcome the specific regulatory challenges related to their products. Some questions to consider: • Will industrials have to continue fighting for each product on a caseby-case basis? • Can an industry survive in the face of such uncertainty? • Does such a situation call for pharmabiotic-specific regulatory guidance? • Will patients one day be able to benefit from these therapeutic methods (particularly in the case of those suffering from certain pathologies that are clearly associated with an imbalance in the microbiota and for which physicians have few therapeutic options, such as necrotizing enterocolitis, inflammatory bowel disease and/or recurrent vaginitis?

For more information Dr Magali Cordaillat-Simmons Executive Scientist Pharmabiotic Research Institute, France mcs@pharmabiotic.org www.pharmabiotic.org

CONVERGENCE

Over the Horizon, Over-the-Counter

With Russia, the CIS countries and China all looking at Rx-to-OTC switches, is now the time for Big Nutra to make a pre-emptive strike on the ageing, obese and increasingly wealthy consumers in the East?

If you read about a growing elderly population, rising obesity and a huge number of smokers, you might be forgiven for thinking that these are the often-quoted drivers for the nutraceutical industry … and you wouldn’t be far from the truth. They are, though, according to a recent report from healthcare industry analysts, GBI Research, the key contributors to a surging over-thecounter (OTC) drugs market in Russia. The firm’s publication predicts that the country’s OTC market will climb in value from last year’s total of $7.1 billion to $16 billion by 2018, at an impressive compound annual growth rate (CAGR) of 12.4%.1 According to GBI Research, the lifestyle OTC medications sector is a significant contributor to the industry, accounting for 19% of the total last year … and is expected to become the number one OTC market contributor in the future

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as more Russian’s seek to address their unhealthy habits. At the same time, according to PMR, a research and consulting company, in “OTC Market in CIS Countries 2012: Comparative Analysis and Development Forecasts for 2012–2014,” the OTC market in the CIS countries was worth €7.4 billion in 2011, after a year-on-year increase of more than 10%.2 Between 2012 and 2014, the market is expected to develop at a CAGR of 11% and could be worth €10 billion in 2014. Back in Russia, this Eastern European nation is home to the largest percentage of smokers in the world and has a growing problem with obesity, but a strong lifestyle OTC industry indicates a healthy cultural desire to combat these issues. The cough, cold and allergy category also holds a large market share at 18%. Since the fall of the Soviet

Union, tuberculosis has been on the rise, and although this is a serious condition that requires medical attention and prescription drugs, it is likely that OTC products will be used alongside professional treatments to help ease disease symptoms. Yet, apparently, it’s not all good news for Big Pharma investors, suggests Kline: “The vast and growing Russian market offers much promise, but requires cautious assessment.”3 Kline’s report states that the OTC drug segment in Russia accounts for a significantly larger share of sales compared with prescription medications, claiming nearly 66% of the total pharmaceutical market. Similarly, the OTC segment posted a healthy 14.2% growth in 2011, whereas the prescription market, tempered by a decrease in state budget allocations, saw growth of a little under 9.0%. Factors shaping current

market dynamics in Russia are manifold, including an increase in medication costs. Equally of note is the growing purchasing power of consumers. Among the positive factors driving sales growth is the implementation of new regulations under the Pharma 2020 Strategy, a Russian pharmaceutical revitalization programme. “Specifically, this is attracting numerous pharmaceutical companies following the government’s initiatives to modernize its national healthcare system and educate the public about illnesses and medicines,” says Laura Mahecha, Kline’s Healthcare Practice Industry Manager. Pharmaceutical innovations in Russia are largely driven by foreign companies, whereas local companies tend to focus on the manufacture of generic alternatives of innovative drugs. Local innovative brands claim only 20% of the market and one of Pharma 2020 Strategy’s goals is to increase the share to 50%. Nevertheless, the initiative is set to create and encourage opportunities for both foreign and local pharmaceutical companies. Despite the attractive prospects for the Rx-to-OTC switch, the costs of pursuing approval can be daunting. With a lack of clear procedures for an OTC switch in Russia, one of the main criteria for the Ministry of Health of the Russian Federation (Minzdrav) is to establish whether a medication has gained OTC status in other countries. The challenge remains for the pharmaceutical industry to create new ways of meeting consumer needs, overcoming regulatory hurdles and identifying which switch drugs will offer commercial success. Perhaps an opportunity for functional food and drink companies to jump on the OTC bandwagon and avoid the pitfalls set for Big Pharma.

East, Further East

Despite having a far greater population, China’s OTC market value is expected to be only marginally greater than Russia’s in 2018, at $16.6 billion. Of the seven emerging markets identified in GBI Research’s report, Brazil is predicted to have the third biggest OTC market value at $8.3 billion, whereas India is placed fourth at $5.2 billion. Kline takes a slightly more positive approach to China, suggesting that with vigorous growth

(15%) during the previous year and a confluence of factors encouraging even greater growth, the Chinese OTC market provides ample opportunities for OTC marketers. An ageing population and increasing incidence of several chronic diseases makes several therapeutic classes appealing for future Rx-to-OTC switches in China. Indications such as cholesterol, asthma, osteoporosis, migraine and peptic ulcer are currently excluded from the list of medications that can be approved for OTC status. Driven by the increasing incidence of these chronic diseases, the Chinese State Food and Drug Administration (SFDA) is considering including these additional indications before 2015, opening the door for manufacturers to pursue Rxto-OTC switches in these classes. Laura Mahecha, Kline’s Healthcare Industry practice manager, notes: “To really put these incidents into context, China’s phenomenal growth is six times stronger than the United States during the same timeframe, amounting to an astounding CNY 209.2 billion ($32.4 billion) for the 2011 retail OTC market. Moreover, China’s growing prosperity, ageing population and increasing adoption of Western lifestyles, abetted by imminent Rx-to-OTC switches for certain therapeutic classes, are expected to significantly increase market size and OTC demand.” The registration procedure of a new active ingredient for prescription status is the same for local and multinational manufacturers. Even for an active ingredient that is registered and widely used in other countries, the registration procedure is the same as a new active ingredient in China. The potential for switch is determined by several factors. A broad range of therapeutic products covered in the Kline report represent top-selling prescription medications that could be appropriate switch candidates. For Rx-to-OTC switches in China, there is no market exclusivity for a brand once it makes the switch. Consequently, any pharmaceutical company that has manufacturing capabilities can also manufacture and sell the same OTC drug once the switch sponsor has received approval from the SFDA. In some cases, the costs of conducting clinical research to support safe use of a medication as an

OTC are daunting for many companies in China and are likely to be undertaken by large local or multinational companies. Other smaller firms who are not interested in investing the considerable resources to support a switch application can manufacture OTC versions of these active ingredients once another company gains SFDA approval. The lack of market exclusivity can also be seen as a deterrent for some companies pursuing Rx-to-OTC switch in China. “The many challenges of this market certainly cannot be ignored,” continues Mahecha, “but the sheer size of the market and its manifold expansion, targeted by astute marketing and carefully controlled brand management, mean the potential returns are real. China is opening up and although it can be a daunting market to navigate, the demand for effective and trusted OTC medications is a valuable foothold for companies with vision.” I would also add that, in my opinion, this seemingly global epidemic of increasing consumer interest in OTC and preventive medications, combined with the regulatory hurdles that pharmaceutical-based products have to overcome, represents an opportunity for manufacturers and suppliers of functional food and nutraceutical products to capitalize on market demand, fly beneath the legislative radar for prescription goods and establish a foothold while Big Pharma assesses the risks and benefits.

References

1. OTC Pharmaceuticals and Self-medication in Seven Emerging Markets: Expanded Access, Aging Populations and Increasing Obesity Levels to Drive Future Growth: http://tiny.cc/njvgrw. 2. www.giiresearch.com/report/pmr255492otc-market-cis-countries-comparativeanalysis.html. 3. www.klinegroup.com/reports/y581b.asp.

For more information

Dr Kevin Robinson Editorial Director Via Communications Ltd Tel. +44 1392 202 591 kevinrobinson@viacommsgroup.com www.viacommsgroup.com

OTC TRENDS

Prevention is Better Than Cure Fighting the burden of non-communicable diseases with healthy eating. The human body is a “flexible” organism that copes with normal situations and challenges every day. Longer-term, the body might be compared with an elastic band that functions perfectly when it’s new … but loses elasticity when it gets older. Preventing the elastic band from tearing — totally or partially — and extending its elasticity for as long as possible is the aim when thinking about prevention and fighting the burden of non-communicable diseases (NCD). A healthy and active lifestyle is regarded as the key to healthy ageing, and balanced nutrition has a key role to play in this. Considering the ageing population, this aim is gaining importance. According to the UN’s World Population Ageing 2009 report, “The number of older people (60+) is expected to exceed the number of children (<15) in 2045 for the first time. In more developed regions, this already happened in 1998.” And a World Health Organization (WHO) report even cited: “As populations age, annual NCD deaths

12 P H A R M A / N B T S U P P L E M E N T | 2 0 1 3

are projected to rise substantially to 52 million in 2030.”1

Balanced Nutrition Plays a Part

Although further scientific study is needed to get a clearer and more detailed picture of what constitutes balanced and healthy nutrition, a lot can now be done with the wealth of knowledge that is presently available to prevent or delay the onset of NCD. It is agreed that the cumulative steps that an individual puts in place to achieve optimum health during the course of his or her life plays a role in the quality of physical ageing, which means a healthy and active lifestyle. Society as a whole is beginning to understand the importance of a balanced and healthy nutrition from early on.

Long-Term Impact of Imbalance

The long-term nature of wrong dietary choices is one of the key

factors that health and well-being professionals struggle against. The clinical manifestation resulting from an individual’s unsuitable diet only becomes noticeable after doing small things wrong for a long period of time. A case in point is the rise in body weight in the US population from 1980–1994. This was due to an intake of only 3.7 kcal above maintenance per day in men and 12.7 kcal above maintenance in women (calculation based on 35 year old adults).2 It doesn’t take much to cross over from weight maintenance to weight increase. It is estimated that a typical adult gains approximately 1 kg per year during their lifetime and that eating just a few calories less per day or burning a few more calories could make the difference between a healthy or unhealthy body weight in later life.

Nutrition-Related NCD

Overweight and obesity, diabetes mellitus, gut related disorders,

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osteoporosis, dental disorders and cardiovascular diseases are the key nutrition-related burdens that grow in importance as age increases. More and more research is showing that by incorporating key ingredients into a balanced diet, NCD can be delayed or prevented in most cases. An example of this is macronutrient ingredients such as prebiotic fibres, as well as low glycaemic and slowly but fully available carbohydrates. All of these have the potential to be part of the solution for healthy nutrition and counter the burdens of NCD.

Inulin-Type Prebiotics from Chicory The place where inulin-type prebiotics show their efficacy is the large intestine. The large intestine is an organ that was underestimated for a long time as it was thought to be no more than the place where faeces are made and that bowel movements/constipation were the key factors to consider. Today, however, we know that it also plays an important role in our hunger and satiety regulation and that it is a centre of inner protection activities. It is the home of the gut microbiota that strongly influences the human organism. In babies, inulin-type fructans from chicory selectively promote the growth of naturally occurring bifidobacteria so that the composition of the gut microflora of a bottle fed baby becomes similar to that of a breast fed baby. A recent scientific study incorporating BENEO’s Orafti Synergy1 (oligofructoseenriched inulin) in infant formula has demonstrated that the use of inulintype fructans is safe, well-tolerated and has a prebiotic effect in infants

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during the first 4 months after birth. The babies involved in the study showed a growth of naturally occurring bifidobacteria owing to the addition of inulin-type fructans from chicory.3 In the elderly, researchers have identified specific changes in the balance of digestive micro-organisms that are thought to be partly responsible for some of the increased intestinal problems that are all too common later in life.4 As people get older, the levels of beneficial bacteria in the intestine tend to decline, putting the elderly at greater risk of gastrointestinal disease and discomfort. The results of a recent scientific study indicated that the level of bifidobacteria increases significantly in volunteers who were supplemented with inulintype fructans from chicory root.5,6 Also, their bowel habits and general well-being were improved. A particular role of Orafti Synergy1 is related to an increase in calcium absorption and an increase in bone mineral density. The mode of action here is that, owing to the particular type of fructan with shortchain and long-chain components, the fermentation process of the gut microflora is occurring throughout the length of the large intestine and not only in the proximal part. This creates an additional absorption surface together with an acidic environment because of the fermentation by the microbiota that makes the calcium available for absorption. This increase in bioavailable calcium was demonstrated to reach the bones and increase bone mineral density — opening up still further the possibilities of osteoporosis prevention. It isn’t only the elderly, the young and very young who need an increased consumption of prebiotic fibre to promote longer-term health. The fact that people in only six out of 27 analysed countries worldwide manage to achieve the recommended daily intake level of 25 g clearly indicates the need for higher dietary fibre intake. Fibre-enriched products in combination with fruits, vegetables and wholegrain help to overcome this so called fibre gap and consequently support digestive health.

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Beneficial Effects of Low Glycaemic Carbohydrates

Human blood glucose regulation is a sensitive system that might become imbalanced with time if constantly challenged by high glucose loads that need to be regulated. The high prevalence of prediabetes and diabetes conditions worldwide and, in particular, in Western-type countries shows that this is becoming a common phenomenon. The key to low glycaemic blood glucose response is in the type of carbohydrate used. The glucose supply can be modified, for example, by replacing high glycaemic carbohydrates (such as glucose, sucrose, maltodextrins or processed starch as in white bread or boiled potatoes) with low glycaemic carbohydrates. Low glycaemic carbohydrates tend to be only partially digested, providing reduced energy, compared with fully digestible carbohydrates. However, there are those carbohydrates that are slowly but also fully digestible. Palatinose (isomaltulose) belongs to this group. It is a unique disaccharide. The mode of action of Palatinose digestion and absorption makes the difference. The enzymatic cleavage of this disaccharide takes much longer than that of sugar or starches and high glycaemic carbohydrates. This is reflected in its blood glucose response curve: a slow rise, a low peak and a steady flow in a plateau like way. There are no significant peaks and troughs, as would be found with the blood glucose response of sugar. Correspondingly, insulin (the ‘storage hormone’) levels are low and stay low, allowing the body to use fat as an energy source more easily. These physiological effects of isomaltulose were demonstrated in a number of human intervention studies and open new opportunities for healthy eating. Holub et al. have clearly presented the metabolic benefits of Palatinose and the results suggest that it may even have beneficial effects on long-term carbohydrate metabolism.7 Following their work, Palatinose has been shown to be a completely available carbohydrate and very well tolerated, irrespective of its consumption with food or beverages.

The slow yet complete intestinal release of the functional carbohydrate leads to a prolonged delivery of energy (blood glucose). The positive physiological properties are relevant for the general population, including overweight people and those with metabolic syndrome. The results of a recent study by König et al. also shows that the low glycaemic characteristics of Palatinose have a beneficial effect on fat utilization in overweight and obese people.8 With the wealth of knowledge and science available to food and drink producers, it is clear to see that there is a vital role that the industry can play in helping populations to maintain active and healthy lifestyles well into old age. A smart choice of ingredients from early on can make all the difference to the future delay or prevention of NCD.

References

1. WHO, Global Status Report on Noncommunicable Diseases (www.who. int/nmh/publications/ncd_report2010/en), 2010. 2. L.K. Khan and B.A. Bowman, “Obesity: A Major Global Public Health Problem,” Annu. Rev. Nutr. 19, 12–17 (1999). 3. R. Closa-Monasterolo, et al. Clinical Nutrition: doi: 10.1016/j.clnu.2013.02.009 (2013). 4. K. Tuohy, “Inulin-Type Fructans in Healthy Aging,” J. Nutr. 137, 2590S–2593S (2007). 5. E. Norin, “Intestinal Microflora Functions in Adults and Elderly; The EU Project Crownalife,” NUTRAfoods 6(1), 19 (2007). 6. S. Silvi, et al., “EU project: Crownalife: Functional Foods, Gut Microflora and Healthy Ageing,” J. Food Eng. 56(2), 195–200 (2003). 7. I. Holub, et al., “Novel Findings on the Metabolic Effects of the Low Glycaemic Carbohydrate Isomaltulose (Palatinose), Br. J. Nutr. 103(12), 1730–1737 (2010). 8. D. König et al., “Postprandial Substrate Utilisation in Overweight Subjects with the Metabolic Syndrome Following Isomaltulose (Palatinose) Ingestion,” Nutrition: doi:10.1016/j.nut.2011.09.019 (2012).

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Anke Sentko Vice President, Regulatory Affairs and Nutrition Communication BENEO-Institute www.BENEO.com

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CONVERGENCE

A Blurring of Boundaries “Food is a pharmaceutical,” declared Brian Perkins, one of Johnson & Johnson’s top marketing executives, a decade ago, when the US company was at the forefront of Big Pharma’s push into the functional food market. Since then, J&J’s efforts have suffered a few setbacks, thanks to quality problems at its McNeil Nutritionals subsidiary. Yet Mr Perkins’ pronouncement still makes some sense: there are plenty of synergies between food and pharma … and plenty of companies are still trying to explore them.

Most of the biggest are food companies, such as PepsiCo, Monsanto or Switzerland’s Nestlé. In late 2012, it bought Pfizer Nutrition as part of its efforts to become “the world’s leading nutrition, health and wellness company.” It also snapped up CM&D Pharma Ltd, which specializes in medical food. Others are pharmaceutical companies such as J&J, which set up McNeil Nutritionals in 2002, or GlaxoSmithKline with its consumer brands including Horlicks, or Abbott Laboratories, which has a nutrition business aimed at children and the elderly. The diverse approach reflects the diversity of the market. A wide range of

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terms — functional foods, health foods, nutritionals, nutraceuticals or even phood — covers a vast array of products. Some are products such as margarines, soy milk or probiotic yoghurts that claim to deliver health benefits on their own merits. Others are everyday items such as eggs or cereal that have nutritional content added to them. The benefits they offer also range from the faddish and vague to the precise and proven. Regulators are busily trying to move more of them into the second category — a shift that should make this business more compatible with Big Pharma. In developed markets, the focus has so far been on making product labelling more precise and stamping out unproven

health claims. But food safety bodies are taking an increasingly scientific approach. In the US, the Food and Drug Administration issued new guidelines on dietary ingredients in 2011. In Europe, the European Food Safety Authority scrutinizes health and nutritional claims under a 2006 pan-EU directive, and there are signs that it is getting more stringent — notably when it rejected numerous health claims for probiotics because there is little proof of their benefits. Australia, Japan, Canada and New Zealand have also tightened up their regulations for functional foods in recent years. Even in emerging markets, some of which used to be a

free-for-all as far as food claims were concerned, the red tape is increasing. The Food Safety and Standards Authority of India, which started operation in 2011, has been clamping down on false advertising claims. In China, Malaysia and Singapore, health claims are regulated by the Ministries of Health, and the number of pronouncements is increasing. As scrutiny increases, the research basis of pharmaceutical companies should play strongly to their advantage in terms of product development. They not only have numerous skilled scientists investigating chronic diseases, but are also at the forefront of new technologies — genomics, nanotechnologies and even GM food — that can add to food nutrition. They are also familiar with the whole process of validating such claims and developing relationships with regulators. The importance of research is obvious at Bayer, which has taken a different route into functional food. With its roots in chemical production, the German company’s CropScience division is devoted to the development of agricultural fertilizers and seeds. For decades, the main goal of its research in this area was to increase yields by warding off weeds and crop diseases, most controversially through the development of genetically modified crops. More recently, though, Bayer CropScience has stepped up its research into crop quality, including its nutritional value for humans. One recent innovation, for example, uses the fungicide Antracol to increase the zinc content of rice, thereby aiding child development. In 2012, the company set up a fund to allow researchers in its HealthCare and CropScience businesses to collaborate more. Moreover, pharmaceutical companies have a good overview of the factors driving the functional food market, including ageing populations and lifestyle shifts, because these are the same factors driving the pharma market. For the past few decades, pharma has been researching treatments to manage risk factors such as obesity, high blood pressure and high cholesterol. The huge barriers

to innovation in pharma have stymied many of these efforts — with high failure rates in clinical trials — yet the experience stands them in good stead for the less risky functional food market. Obesity is a good example. Safety issues have prevented several drugs from gaining approval (such as Sanofi’s Accomplia) and forced others to be withdrawn (Abbott Labs’ Meridia). Yet the market potential is undoubted, given that more than 1.4 billion people on the planet are reported to be obese. Little wonder that sales of diet drinks and food continue to boom. The spread of cardiovascular disease, cancer and diabetes all offer similar opportunities to both pharma companies and food companies, and those opportunities cover both developed and emerging markets.

Competition Intensifying

Yet for all the synergies, venturing into the nutraceuticals business has exposed pharmaceutical companies to some of the strategic disadvantages that food companies are familiar with. Unlike pharma, the food business is generally a slow and steady one, with high volumes and low margins. Though it lacks the all-or-nothing risks of pharma research and is fairly resilient to recessions, competition is intense. Marketing and advertising prowess, as well as product development, is essential for products to thrive. In the functional food business, innovation is still crucial. At the moment, however, the research advantage of pharma companies is blunted because the regulation is not stringent enough to block out less rigorous companies. A lack of patents also means that the investment into testing is not cost-effective compared with pharma. As the market gets more crowded, staying ahead of rivals becomes more difficult and the skills required to do so are not necessarily compatible with those required for success in the pharma business. Moreover, in most pharma companies, the nutrition business is a small one, and arguably a distraction. Although its Horlicks and Maxinutrition brands are thriving, GSK Nutrition brought in

total sales of just $1 billion last year, in a company with sales of $26.4 billion. J&J’s nutrition business reported sales of $4.4 billion, out of a total of $67 billion. Some pharma companies, therefore, are taking the opportunity to sell off broad-based food businesses, as part of the fashion for focus. Take Pfizer Nutrition, which came into the US pharma company through its 2009 purchase of Wyeth. It was sold to Nestlé as part of Pfizer’s efforts to refocus on its core pharma business. Although the emerging market prospects of the business were good enough to attract a hefty $11.85 billion price tag, exploiting that potential requires marketing and distribution skills rather than innovation and research. Similarly, GlaxoSmithKline is reviewing the future of its renowned Lucozade and Ribena brands, which may mean a sale. Once associated with healthiness, they are now seen largely as soft drinks — and the competition is fierce. Brand extensions and emerging market growth can sustain sales, but is GSK the right company to manage them? Abbott Labs considered the management needs of the consumer health and nutritionals business to be so different from those of the research-based pharma business that it split into two last year. Bristol Myers-Squibb, meanwhile, spun off its Mead Johnson nutritionals group in early 2009. Yet, get it right, and the growth prospects in nutritionals can be very tempting, particularly in niche areas of the business. Pfizer may have sold off Pfizer Nutrition last year, but it also bought Alacer Corp., a vitamin maker, signalling its continuing ambitions in this area. GSK’s Maxinutrition business, meanwhile, reported sales growth of 21% in 2012. At a time of huge uncertainty in the pharma business, that is a very welcome result.

For more information Ana Nicholls Healthcare Analyst The Economist Intelligence Unit Tel. +44 207 576 8181 emea@eiu.com www.eiu.com

PHARMA/NBT SUPPLEMENT | 2013

CONVERGENCE

Are Botanical Drugs a New Model for Pharma?

Every once in a while, one industry invades the space of another, particularly under pressure from advancing technology. In recent decades, the sleepy telephone industry has experienced a shake-up from computer developers. With medical discovery accelerating, could the food industry be about to invade the pharma industry? A new venture between a subsidiary of Nestlé SA, the global food company, and Hutchison China MediTech Ltd, a Hong Kong-based company that is controlled by Hutchison Whampoa Ltd, has all the elements of an industry transforming deal. In late November 2012, the two companies announced the setting up of a joint venture to research and develop a pipeline of medicines and

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nutritional products derived from botanical plant origins. For Hutchison China MediTech, the new venture is a way to explore western demand for Traditional Chinese Medicines, a huge source of potential new therapies. For Nestlé Health Science, the Nestlé subsidiary, it is a chance, it says, to shape “a new industry between traditional nutrition and pharmaceuticals.”

The new venture is called Nutrition Science Partners Ltd. It is based in Hong Kong and the two parent companies will have equal ownership. The immediate goal is to bring a botanical drug product that is being developed by the Hutchison China MediTech subsidiary, Hutchison MediPharma, into Phase III development for patients with inflammatory bowel disease (IBD). The

CONVERGENCE

longer-term objective is to research, develop and market novel medicines and nutritional products derived from botanical plant origins. The venture will initially focus on gastrointestinal indications but may in the future expand into metabolic disease and brain health. In an interview with MedNous, Christian Hogg, the Hutchison China MediTech chief executive, said the venture is an opportunity for both companies to conduct research into new products that “might end up being food for medical use or they might end up being botanical drugs.” Either way, there is expected to be a market for both types of products. The joint venture was announced on 28 November 2012. By the end of the first quarter of 2013, the two companies expect to start a Phase III programme for the botanical drug product, which

is called HMPL-004. A botanical drug is a medicinal product that is from a natural herb. The botanical substance itself contains a relatively small number of major chemical components. The two companies have already received regulatory approvals for the Phase III programme that will start in the US and then expand to the European Union, Mr Hogg said. The two companies are targeting the US and Europe as initial markets for the drug because the incidence of IBD in these regions is high. IBD includes both ulcerative colitis, an inflammation of the colon and Crohn’s disease, inflammation of the digestive tract. Although the herb upon which HMPL004 is based has been used for years in China to treat upper respiratory inflammation, it has never been used in IBD. In fact, IBD is underdiagnosed in China, the executive said. “What we were able to do is identify its IBD activity and patent its utility in the whole IBD area,” he commented. A big opportunity for the two companies is the existence of a regulatory pathway for botanical medicines that has been in place at the US Food and Drug Administration since 2004.1 Up until quite recently, only one company, Medigene AG of Germany, had received FDA approval for a botanical drug. This was the 2006 approval of Veregen (sinecatechins), an extract from green tea leaves that is an ointment used to treat genital warts. But on 31 December 2012, the US agency announced its second botanical approval: a drug called Fulyzaq (crofelemer), which is an extract from the red sap of the Croton lechleri plant found in the upper Amazon region of Peru, Colombia and Ecuador. The drug was approved to relieve the symptoms of diarrhoea in patients with HIV/AIDS who are taking antiretroviral therapy. Assuming the HMPL-004 Phase III programme is a success, the two companies will use this new pathway for registration. HMPL-004 is an extract of the plant, Andrographis paniculata, which is a popular herbal medicine in Asia, Sweden and Chile and is believed to have both anti-inflammatory and

antibiotic properties.2 It is understood to act on multiple cellular targets in the inflammatory signal transduction pathways, including inhibiting tumour necrosis factor-alpha (TNF-alpha) and interleukin-1beta (IL-1beta). According to Hutchison China MediTech, the drug has been successfully tested in more than 400 IBD patients, including those in Phase IIb trials in North America and Europe. The upcoming Phase III programme is expected to enrol more than 2700 patients with ulcerative colitis and Crohn’s disease. HMPL-004 is the first drug to come out of a botanical library built up during a decade by Hutchison MediPharma Ltd, the Shanghai-based drug research and development arm of Hutchison China MediTech. The library consists of medicinal herbs that have been used in one way or another for centuries in traditional Chinese medicine. In collecting the herbs, the company collaborated with the major botanical medicine centres in the country including the Shanghai Institute of Materia Medica, Chinese Academy of Sciences. “We put together this library of more than 1200 herbs, then spent 5 years with our team of in-house chemists breaking them down on a molecular level,” Mr Hogg commented. The result is a library of more than 50,000 fractions, all of which have been carefully characterized. The company has also built up chemistry, biology and pharmacology teams around the library so that it is capable of doing integrated drug research and development, and regulatory affairs. “We are ready to go, looking for other indications within gastrointestinal disease,” Mr Hogg commented. Although the initial objective of the joint venture with Nestle is to register and commercialize HMPL-004, Nestlé also has an option to develop botanical drugs for other indications. According to Luis Cantarell, chief executive of Nestlé Health Science, Nestlé will evaluate the possibility of expanding into metabolic health and brain health. Nestlé’s financial commitment to the venture hasn’t been disclosed. But Panmure Gordon analyst Savvas

PHARMA/NBT SUPPLEMENT | 2013

CONVERGENCE

Neophytou said the Swiss company most likely is paying for access to the botanical drug technology in tranches — similar to a traditional venture capital investment. Meanwhile — and importantly — the venture has assigned marketing rights in the US for HMPL-004 to Nestlé Health Science.

Nestlé Health Science

There is little doubt that Nestlé, known for generations for its chocolates and consumables, wants to build a business in healthcare. In January 2011, the parent company set up Nestlé Health Science SA in Vevey, Switzerland, to develop personalized treatments for diseases based on nutrition. Simultaneously, it set up an institute of health sciences on the campus of the Swiss Federal Institute of Technology in Lausanne. One of the remits of the institute is to establish genomic, proteomic and metabolic platforms to study the way cells function in both healthy and diseased tissues. In addition, the institute will look for ways to modify disease mechanisms through nutrition. Mr Cantarell has stated that the company is looking to develop “scientifically validated botanical-based solutions” for disease. These could be “medicines/drugs and nutrition products.” Driving the research is the company’s belief that the delivery of healthcare in the future will involve both disease prevention and new ways to mitigate the effect of chronic conditions. Within months of its founding, Nestlé Health Science announced the acquisition, in May 2011, of Prometheus Laboratories Inc., a US producer of gastrointestinal diagnostics. Nestlé Health Science is expected to use Prometheus to commercialize HMPL-004 in the US. Thus far, there aren’t any plans to develop a specific diagnostic for the botanical drug, but this can’t be ruled out in the future, according to Mr Hogg. The engine behind the botanical drug project, Hutchison MediPharma, is one of three business units held by Hutchison China MediTech. Hutchison Whampoa owns 71% of Hutchison China MediTech, whereas 29% is

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traded on the Alternative Investment Market (AIM) in London. In the first half year ended 30 June 2012, Hutchison China MediTech had group sales of $102.9 million and a net profit, before discontinued operations, of $2.5 million. MediPharma was loss making, but in the 2012 first half, its loss narrowed from the previous year. Like research-intensive biopharma companies elsewhere, MediPharma is mitigating its research and development costs with licensing deals. The agreement with Nestlé, which is essentially a licensing deal, is the first in the botanical drug arena. In late 2011, the company also secured a licensing deal with AstraZeneca plc for a small-molecule drug directed at cancer. This deal brought in an immediate $20 million in cash with the promise of up to $120 million later, upon the successful achievement of clinical development and first-sale milestones. Hutchison MediPharma was founded in 2002 with the aim of modernizing and globalizing Traditional Chinese Medicines. In 2005, management decided to broaden the scope of the company by introducing a smallmolecule discovery and development programme. Mr Hogg calls the smallmolecule programme the “second pillar” of MediPharma’s R&D business. “We have developed a portfolio of small-molecule oncology programmes and immunology programmes, many of which are in the clinic in China, because the opportunities in China in oncology are enormous,” he commented. Since 2005, MediPharma has entered into collaborations with Merck KGaA, Eli Lilly and Company and Johnson & Johnson Inc. The deal with AstraZeneca gives the UK company rights to a drug called Volitinib, which is an inhibitor of the c-Met receptor tyrosine kinase. The molecule was discovered and developed in China by MediPharma. Under the agreement, MediPharma will lead development in China while AstraZeneca will manage development elsewhere. AstraZeneca plans to develop the drug as a single agent treatment as well as

a combination therapy. The possible therapeutic indications include gastric cancer and non-small cell lung cancer as well as other cancers with aberrant c-Met signalling, according to the UK company.

Conclusion

It would not be an exaggeration to say that the pharmaceutical industry is changing rapidly. Not too long ago, it would have been very unusual for a pharmaceutical multinational to go to the developing world to both source and exploit a major cancer indication. This is now happening. It would also have been hard to imagine a traditional Chinese medicine gaining approval from the US Food and Drug Administration. This is now a possibility. Furthermore, it would have been inconceivable that a food company, famous for chocolates, could pioneer new treatments for chronic disease. This too is a possibility.

References

1. US Food and Drug Administration, Center for Drug Evaluation and Research, Guidance for Industry, Botanical Drug Products, June 2004. 2. R. Cohen and L. Harrell, Gastroenterology & Hepatology, 14 January 2011.

For more information

This article was written and researched by the editors of MedNous (www. mednous.com) and based on two interviews with Christian Hogg, CEO of Hutchison China MediTech Ltd and an email exchange with Luis Cantarell, CEO of Nestlé Health Science. It was originally published in the January 2013 issue of MedNous and is reproduced with kind permission.

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CONVERGENCE

How to Select Promising Project Ideas in Converging Industries Since the early 1990s, the nutraceutical and functional food (NFF) sector has been emerging as a separate entity at the boundaries of the pharmaceutical and food industries.1 This up-and-coming segment offers room for a variety of products derived from different industries that can be positioned between food and drugs (Figure 1). The chances of successful market introduction of New Product Developments (NPDs) are high, but also require a specific skill set of competencies from both industries. Companies aiming at the hybrid sector between food and drugs face competency gaps.2 The owners of particular competencies, thus different industries, need to share their abilities and knowledge to develop promising products. Already at the front end of innovation (FEI), these companies need to look for partners with complementary competencies. Owing to a lack of competencies in either market or the disciplines of technology development, the entire

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NPD process in these converging industries becomes risky and requires input from different players. Pharmaceutical producers tend to build their innovation strategy based on technology oriented innovations in the absence of any experience in retail and the distribution of Fast Moving Consumer Goods (FMCGs). By contrast, food companies have a huge competency in generating consumer insights and, as such, act in a much more market-oriented way. Currently, they face a knowledge gap regarding how to run gold standard clinical trials conducted with healthy patients, as required by EFSA (Table I).2,4 Given these challenges, which are specific to pharmaceutical/ NFF industry convergence, a careful evaluation of innovation projects becomes especially important and crucial for new product success. Manufacturers of health-promoting consumer goods need to examine the requirements for product positioning and market approval for such

The precondition for market success in hybrid innovations lies within the capability to combine critical knowledge areas, from consumer insights to gold standard clinical trials.

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CONVERGENCE

Table I: The different competencies of players in the NFF sector.5

Industry Food

Strategy

Feasibility

Pharmaceutical

R&D Intensity

Low (<1% of sales)

High (>14%)

R&D Cycles

Short (1â&#x20AC;&#x201C;3 years)

Long (10â&#x20AC;&#x201C;20 years)

IP Strategies

Trademarks, consumer brands

Patents (preferably on the product/compound)

New Technologies

Traditionally external sourcing, no own development skills

Foster internal development of technologies

Market Insights

Consumer market (B2C)

Industrial clients (B2B)

Access to Distribution Channels

Mass-market distribution via retail chains

B2B wholesalers, pharmacies, nutritional specialty stores

Communication

End-consumer-oriented

Science, industrial partneroriented

Regulatory Approval Processes

Little or no skills

Own regulatory approval and business functions

Familiarity with Safety and Efficacy Testing

No experience in clinical product evaluation

Long-term experience with clinical trials via CROs or own facilities

innovations positioned in the emerging NFF sector. When talking about functional food (FF) ingredients, these not only have to fit into the food matrix, but also into the overall brand and positioning needs of the product. This paper aims to identify the most important selection criteria, which could help to screen project ideas regarding their organizational and environmental feasibility and identify any lack of competencies. This will then enable companies to preselect project ideas regarding their requirements. Managing the Innovation Challenge Successful NPD in converging

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industries requires the companies involved to adapt industry specific innovation systems and evaluate criteria to identify and account for competency gaps. The precondition for the market success of these hybrid innovations lies within the capability to combine critical knowledge areas, from consumer insights to gold standard clinical trials in the case of an innovation project involving a health claim application under EC 1924/2006.6 There are different approaches to innovation among the different players, all of which have distinctive competence profiles.

Evaluating Project Ideas in the NFF Sector

In the following section, we summarize the most important criteria to evaluate the likelihood of market success of projects in the hybrid sector between food and drugs. These criteria are grouped together in five categories: strategy, market, technology, regulatory and finance (see Table II). The criteria give an overview of the necessary evaluation fields for both pharmaceutical and/or consumer goods companies as they help to identify competency gaps in the early stages of innovation. As a result of this analysis, the company

Table II: Selection criteria to evaluate innovation projects in converging industries.5

Strategy

Feasibility

Core Competencies

Does the project fit the businessâ&#x20AC;&#x2122; strategy and competencies?

Health Platforms

Does the project fit the targeted and predefined health platforms?

Availability

a) Is the required technology available? b) Is the required market available?

Market Need/ Consumer

a) Is the targeted health issue of relevance for the consumer? b) Is there an immediate need of action (because of pain and/or constrictions)? c) Is it possible to generate a need? d) Does the consumer accept the health ingredient? e) Does the consumer understand the health benefit?

Market Size

a) What is the size of the market for the targeted health issue? b) How many people are suffering from an issue that the Ingredient targets?

Growth Rate

How do you evaluate the growth rate of the segment that the ingredient targets?

Speed-to-Market

How much consumer education is necessary?

Market Access

a) How much experience with target markets, distribution channels and target groups do you have? b) How huge is the readiness of the retail to adopt and list the product?

Differentiator

How would you evaluate the unique selling proposition (USP)?

Rivalry

How powerful is the competition?

Pricing

How do you evaluate the pricing of the product in comparison with competitve products?

Sustainability

Do we have access to a sustainable raw material supply?

Quality

Can the supplier offer a constant raw material quality?

Number of Suppliers

How many suppliers can offer the raw material?

Market Attractiveness

Market

Competition

Sourcing

PHARMA/NBT SUPPLEMENT | 2013

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Table II: Selection criteria to evaluate innovation projects in converging industries.5

Alignment With Existing Resources

a) How do you evaluate the probability of success in relation to existing technical know-how and project complexity? b) How big is the need to integrate external technological knowledge? c) How good does the project fit with existing human resource skills? d) Is the intention to develop x) in-house or xi) in partnerships? if x) Do we have technology and know how? if xi) Do we have experience with the partners or do we need new ones?

Speed-To-Market

a) How complex is the transformation of the concept into a useful product? b) How long is the development time until proof of principles and scale-up?

Flexibility

1 Feasibility in Manufacturing

Technology

Technical Attractiveness

a) Versatility of the ingredient? b) Possibilities to enter other markets?

IP-Protection

a) Is the use, species, application or process novel? b) Is there an opportunity to achieve protection from any type? c) Do we have a competitive advantage because of the technique?

Speed-To-Market

How do you evaluate the time until the product gets regulatory approved?

Market Approval

Does the product pass all challenges for a necessary market approval?

Health Claims

Does a Claim already exist? If yes: does it offer a USP? If no: possibility of regulatory approval of health claims?

Clinical Trials

Availability of published clinical data? If yes, do the studies comply to gold standard? Do they show efficacy?

Competitors

Do competitors have claims for this indication in place?

Time-To-Market

Break-Even-Point

NPV

ROI

Development Costs

Market-ability

Regulatory

Claims

Finance

26 P H A R M A / N B T S U P P L E M E N T | 2 0 1 3

CONVERGENCE

Figure 1: The emerging NFF-sector between foods and drugs.3

can work on “closing the gaps.” Thus, the identified criteria may serve as a basis for the development of a company specific scorecard, which enables the company to rank possible innovation projects based on how well the project fits within the relevant categories.

Degrees of Innovation

As projects differ in their degree of innovation (radical versus incremental), the process of decision making cannot be standardized.3 Therefore, the selection process should be flexible to account for the individual type of project. Any technological and/or market uncertainty will certainly influence the decision making. Innovations are more risky in dynamic and uncertain markets or in projects that require new technologies. New technologies and uncertain markets, by contrast, offer the opportunity to achieve technology or market uniqueness.7 Both factors are of particular importance in emerging industries such as the NFF sector, as these segments most notably face competency gaps during innovation management. This leads to the fact

28 P H A R M A / N B T S U P P L E M E N T | 2 0 1 3

that a distinction between high- and low-risk projects should be made, combined with a similar mindset regarding long- and short-time projects: whereas the short-term projects solve existing needs, the long-term projects are based upon basic research. Projects that are linked to more time input and the build-up of new technology platforms can be characterized as projects with a high degree of innovation.8 By contrast, the anticipated time until these projects generate revenues is much longer.9 The higher the degree of product innovation in the emerging NFF sector, the higher the likelihood that neither the food nor the pharmaceutical company will bring sufficient competencies to face the challenge of the innovation project. In this case, consumer integration — through open innovation, for example — might help to specify end-user needs.10 Generally, an early competency gap analysis helps to focus the search for appropriate partners in either technology intense or marketoriented companies, depending on the industry background of the source organization.

References

1. N.M. Childs, P. Lachance and L. Meagher, “Advancing Nutraceuticals Opportunities: Priorities for Research,” Journal of Nutraceuticals, Functional & Medical Foods 2(3), 85–103 (2000). 2. H. Harmsen and B. Jensen, “Identifying the Determinants of Value Creation in the Market: A Competence-Based Approach,” Journal of Business Research 57, 533–547 (2004). 3. S. Bröring, The Front End of Innovation in Converging Industries. The Case of Nutraceuticals and Functional Foods (Deutscher Universitäts Verlag, Springer Fachmedien, Wiesbaden, Germany, 2005). 4. F. Fai and N. von Tunzelmann, “IndustrySpecific Competencies and Converging Technological Systems: Evidence from Patents,” Structural Change and Economic Dynamics 12(2), 141–170 (2001). 5. S. Bröring, “Innovation Strategies for Functional Foods and Supplements — Challenges of the Positioning Between Foods and Drugs,” Food Science and Technology Bulletin: Functional Foods 7(8), 111–123 (2010). 6. European Union (30.12.2006): Regulation (EC) No. 1924/2006 of the European Parliament and the Council. Available online at http://eur-lex.europa.eu/ LexUriServ/LexUriServ.do?uri=OJ:L:20 06:404:0009:0025:EN:PDF, checked on 15.04.2013. 7. C. Mark-Herbert, “Innovation of a New Product Category — Functional Foods,” Technovation 24(9), 713–719 (2004). 8. C. Herstatt and B. Verworn, “The “Fuzzy Front End” of Innovation,” Working Paper No. 4: www.tuhh.de/tim/downloads/ arbeitspapiere/Arbeitspapier_4.pdf (2001). 9. D. Herath, et al., “Firm, Market and Regulatory Factors Influencing Innovation and Commercialization in Canada’s Functional Food and Nutraceutical Sector,” Agribusiness 24(2), 207–230 (2008). 10. M. Martinez Garcia, Ed., Open Innovation in the Food and Beverage Industry (Woodhead Publishing Ltd, Cambridge, UK, 2013).

For more information

Stefanie Bröring and Christina Mintgen University of Applied Sciences Osnabrück Fakultät Agrarwissenschaften und Landschaftsarchitektur Oldenburger Landstr. 62 D-49090 Osnabrück, Germany Tel. +49 541 969 5271 s.broering@hs-osnabrueck.de www.chainnovation.de

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CONVERGENCE

Healthcare Convergence in a Changing World

The regulatory changes affecting today’s dietary supplement industry all seem to point in one direction — toward greater regulatory firmness — whether via oversight from the Australian TGA, the European EFSA or the US FDA. Ageing populations, particularly those in the developed Western world, are creating increased health cost pressures on all levels of society, be it governments, employers and individuals. This pressure of rising healthcare costs is particularly dramatic in “old” countries such as those found in Western Europe, namely the UK, France, Germany and Italy, compared with those in the new world, such as the Americas (including the US and Canada). The definition for “old” versus “new” is the percentage population over the age of 65 that is greater than 15%. In addition to these ageing populations, we also find increasing levels of chronic diseases in these countries, such as CVD, cancers, diabetes, stroke and dementias as the population lives longer. Further, the dramatic increase in obesity, owing to poor eating habits and less exercise and energy expenditure — as seen in all nations — has been termed the global “diabesity” epidemic. In addition to this, we are finding dramatically increased levels of diabetes in all countries, with India as a leading example. Obesity

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is thought to be a major factor and contributor for a variety of chronic diseases, causing billions of dollars in additional health costs in all nations. The healthcare cost in the US was estimated to be $95 billion dollars in 1995. Globally, there are some 1.5 billion overweight persons, of which 500 million are obese (>30 BMI).

Demographic Changes: The Engine of Rising Healthcare Costs

Age-related diseases are influencing one of the largest demographic groups in the USA. In 2010, there were estimated to be thirty five million cases of Alzheimer’s globally, which was expected to double every 20 years. The World Health Report in 1999 indicated that heart disorders contributed to 59% of global mortality (31.7 million deaths) and 43% of the global burden of disease. In the year 2000, malignant tumours were estimated at ten million new cases per year, and expected to rise to fifteen million new cases by 2020. Globally, about 25% of all deaths are from cancers.

Commensurate with an ageing population go increasing healthcare costs. Costs per capita for adults versus the elderly (>65 years) are often double. These costs are bringing the need for consumers to take healthcare responsibility into their own hands into focus. They wish to live healthier and longer, and they realize that action must be taken earlier in life. As many diseases have a large component of preventable factors, consumers worldwide are looking to any and all approaches for disease prevention, including supplements, exercise, dieting in an effort to extend life and, just as importantly, to cap or reduce family healthcare costs … or the cost of insurance. Corporations are also reviewing their medical benefits programmes as they attempt to reduce coverage, cut benefits or increase copays in an effort to maintain profits. The ten leading causes of death in the United States have changed dramatically during the last few decades, from disease-related causes such infections to CVD, cancers and other chronic diseases. The recent onset of economic

decline in 2008/9 has governments re-evaluating spending in all sectors of their economies, and this includes spending for healthcare. The evaluations not only include looking for alternate generic and cheaper forms of drugs, which are seen as being controlled by large global multinationals â&#x20AC;Ś and perhaps an easy target. Drug costs are often a minor segment of healthcare costs. Governments are also looking into hospital and physician costs, the major proportion of healthcare in the USA at least. Physician salary caps and cost-containment is being applied to all levels of healthcare, particularly in those nations that have socialized medicine (such as the UK, Scandinavian countries and even those with a combination of healthcare services provided by both private and government sources, such as Canada). In the United States, there is widespread discussion about

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CONVERGENCE

expanding the role of socialized medicine via Medicare, which is being fought vigorously by HMOs and insurance companies as they strive to grow their profits and continue to advocate treatment and testing regimes that can be extremely costly to payers and, ultimately, the consumer. Preventive medicine offers little scope for insurance companies and HMOs to grow their businesses. A recent article in the New York Times newspaper outlined the differences in two Texas towns, and compared “preventive healthcare” with “treatment healthcare” within similar demographic areas. Those citizens receiving and under the care of a preventive system were half the cost of an insurance-based profit treatment driven system. The preventive system provided virtually identical healthcare outcomes as the treatment case, costing approximately $7500 per capita versus more than $15,000 for those managed by for-profit healthcare delivery corporations. In the examples between these two cities, it was notable that treatment physicians prescribed excessive amounts of diagnostic tests and imaging at considerable expense, with significant profitability to their organizations, compared with the population receiving socialized, preventive

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and cost-conscious delivery. It was most noticeable that the health outcomes in terms of hospitalizations, time in hospital following operations, death statistics and other measurements of successful healthcare were virtually identical in both populations. A recent TIME magazine contained a detailed report on the crippling costs of healthcare in the United States and why this is occurring; it’s safe to say, the profit driven, private type health delivery system is much to blame, putting standard treatments well beyond the average citizen. Unless you have some type of medical insurance in the USA, you are at danger of being bankrupted by even a minor hospital stay or treatment.

Prevention Versus a Treatment Healthcare System

Consumers are under extreme financial stress as a result of the global financial situation, but also because an increasing amount of their living costs is being taken by healthcare. As healthcare expenses continue to grow, consumers are looking to take healthcare responsibility themselves. In general, in Western societies, smoking and alcohol consumption is gradually declining in the overall population. Some sectors,

such as teens, show increases, but some wide-ranging behavioural/lifestyle changes can be seen. In addition, dietary and nutritional considerations, such as reducing the intake of sodium, fatty foods and high calories foods can also be seen. Owing to the rising costs to nations for health expenditures, there continues to be a vigorous discussion on “fat” and high sugar food taxes. The removal of popular carbonated beverages from school cafeterias and hallways is such a step to reduce caloric intake in teens especially.

Health Claims and Consumer Promotion

Consumers looking to nutritional support are taking more supplements, particularly multivitamin and mineral tablets, and those products containing ingredients with credible science or that are supported by health claims. EFSA and other regulatory bodies are supporting such initiatives in that governments can gain large benefits in two ways: first, such products are paid for by consumers; and second, they may have the added benefit of reducing health costs in the long-term. Indeed, those foods with efficacious doses are now in virtually every nation, and have some type of claim as part of their product labelling. Corporations

see the benefit and it gives them a “license” to promote, supported by the government’s imprimatur or stamp of approval. However, evaluations by sanctioned government bodies are a worldwide phenomenon. Large global corporations recognizing consumer needs for “healthy foods” are developing nutraceuticalbased functional foods that are promoted to mitigate and help prevent a large number of chronic diseases, such as heart disease, diabetes, obesity, vision problems and cognitive decline. Innovative food companies are finally diverting more research funds into the rigorous scientific testing of such products, to first help regulate unscrupulous food manufacturers from making false claims, but also to ensure that consumers receive foods that have the possibility of extending and helping to maintain a healthy life.

Studies Show Prevention Can Reduce Healthcare Costs

Numerous studies looking at the potential of nutritional based products to reduce healthcare costs have been published. Examples include folic acid either as supplements or when added to staple foods to reduce neural tube birth defects, vitamins to prevent cataracts, probiotics for immune health and portfolio diets for CVD. In a wellplanned study, length of hospital days and improved outcomes in other health measures lead to significantly reduced costs through improved nutrition status prior to hospital entry. A study in the UK by the National Health Service looked at the potential cost benefit in the reduction of cholesterol through the use of sterol-based margarine spreads. They estimated that savings would be $150 million per year. Similar studies have looked at the potential for health savings in both Canada and the United States, and even if these only deliver 10% of the postulated savings, they are very significant. Importantly, most interventions utilize nutrition-based therapy with little or no safety concerns. Academic institutions are also recognizing the need for stringent science and are embarking on clinical trials to determine the benefits of the active ingredients contained both in supplements and foods. Some of the scientists are funded by food companies; however, as long as the data are collected and analysed and published in peer- reviewed journals, it is possible to say that this is providing benefits to society. In certain

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instances, the cumulative weight of such scientific evidence is very significant and, as an example, there are some 20,000 peer-reviewed papers published on the health benefits of long chain omega-3 three fatty acids (EPA and DHA) for a wide variety of diseases, such as cardiovascular disease, cognitive disorders and other conditions with an inflammatory basis. The amount of these studies far outweighs those for drug use to combat CVD. The effects of nutritional interventions, particularly with vitamin C, back to the 1930s and the basis of government recommended daily allowances (RDA) are well-known, and there is now a general movement to optimize these levels compared with the current RDA amounts based on the prevention of well-known diseases such as scurvy, pellagra and beriberi. New science is developing for the use of vitamin D in cancers, quite separate from its established effects in bone formation. Many plant-based sources of nutrients, such as insoluble fibres for the benefit of metabolic syndrome and diabetes, and for general immune support, are well documented. Manufacturers of specialty foods that have

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the benefit of reducing diabetes through mediating the amounts of insulin released are marketed globally, often with health claims or structureâ&#x20AC;&#x201C;function claims.

Collaborative Approach Needed with All Players at the Table Now would seem to be an appropriate time for collaborations between governments who advise on public policy, academia, health professionals and food companies to look to holistic approaches to disease management and treatment. Pharmaceutical companies are well engaged in the nutritional arena, not only with specialty nutrition foods (Novartis, Abbott, Pfizer, etc.) but also supplements through their associate companies or OTC operations. Pharmaceutical companies are also active in the diagnostic sector, not only for gene-based therapies, but also for the diagnosis of nutritional disorders. They then can apply a preventive approach and therapy. Food companies, who are now aggressively entering the nutrition and preventive sector with health promoting products are undertaking

significantly more applied research and funding, and clinical studies to show efficacy and benefits, with the data to seek health claims, enabling promotion. All parties can benefit and forums need to be brought into play to allow such developments, to help consumers worldwide extend their lives with healthy living. Governments can reduce healthcare spending and use approaches that are more preventive, applied earlier in life, which will help to ameliorate costs, particularly for chronic diseases. Forprofit corporations in the healthcare and the food industry can benefit under a regulated approach, so that foods and supplements can deliver well-researched ingredients and actives that will earn the trust of consumers.

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CONVERGENCE

Botanical Formula Fights Breast Cancer Metastasis The perception was that pharmaceuticals are intensely researched (which they are) and highly effective (but not as often as we’re sometimes promised). By contrast, claims made about nutritional supplements were thought to be based entirely on anecdotal evidence and longstanding cultural traditions. But in recent years, the substantial upsurge in research and clinical applications within the field of integrative medicine has broadened this perception. As a result, the divisive paradigm separating conventional medicine and alternative is gradually shifting to include natural therapies validated by peer-reviewed science. One emerging term that represents this integration of allopathic and complementary/alternative medicines, is the word “nutraceutical,” used to describe a medicine-grade supplement backed by substantial published research. As more scientific studies have been devoted to nutrition, and sophisticated technologies such as genomic sequencing are applied in such investigations, we have learned a great deal about how the foods we eat, and the supplements we take, affect us on a molecular level. I have been involved in such research for more than 20 years and, in addition, have seen many nutraceutical preparations make an important difference in my medical practice.

The Research

One such nutraceutical formula demonstrating important preclinical results in published trials is an integrative, nutraceutical supplement that I designed specifically to promote breast cellular health. Since the formula’s inception in 2010, it has been independently researched, with results published in peer reviewed journals demonstrating its ability to slow aggressive breast cancer.1–3 Perhaps the most significant attribute of this integrative formula is its proven ability to fight breast cancer metastasis. In the most recent study, presented at the

36 P H A R M A / N B T S U P P L E M E N T | 2 0 1 3

Not long ago, there was a stark dividing line between pharmaceutical drugs and nutritional supplements.

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American Academy of Cancer Research (AACR), scientists at Indiana University Health’s Cancer Research Laboratory found that the formula slows highly invasive human breast cancer growth and inhibits breast to lung metastasis in mice.1 The ability to control metastasis is critical. As many as 90% of all cancer deaths are attributed to this uncontrolled invasion (visit BreastHealthFormula.org for formula details). In this study, researchers implanted highly invasive, triple-negative human breast cancer cells (MDA-MB-231) in the breast tissue of mice, which were then given the botanical breast formula orally for 4 weeks. Results found that the breast cancer metastasized in 70% of controls but only 20% of the treated mice. In the treated mice that did develop metastases, the number of metastases per animal was significantly reduced by the formula. Digging deeper, the researchers found that the formula partially blocks two well-known cancer-promoting genes (PLAU and CXCR4). Both of these genes have been implicated in metastasis, so decreasing their expression is of critical importance in treating aggressive cancer. Without metastasis, cancer becomes a localized phenomenon that can often be removed surgically or treated with radiation, chemotherapy or an integrative approach that draws on diverse medical modalities. Equally significant, the formula produced no detectable side-effects. Given the rigors caused by many traditional cancer treatments, this is very good news indeed. This was the third peer-reviewed preclinical study to demonstrate the formula’s anticancer/ antimetastasis activity. Further studies on this formula are under way. However, there is still a great deal of work to be done. Ultimately, I envision botanical formulas like this being used side by side with new pharmaceuticals that will also target the genetic underpinnings of cancer. The result will be more effective treatments and fewer side-effects.

Formula Design

As an integrative physician with extensive training across a diverse range of medical modalities, I designed this formula based on the integration of Traditional

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Chinese Medicine botanicals, together with specific nutrients shown to fight breast cancer, protect breast cells, support hormone metabolism and enhance immunity. This integrative breast formula contains a highly absorbable form of turmeric extract, the antioxidant quercetin, a proprietary extract of Scutellaria barbata and Astragalus extract and medicinal mushrooms — Trametes versicolor (Coriolus), Ganoderma lucidum (Reishi) and Phellinus linteus — which are grown on an immune enhancing and anticancer botanical mixture, and the indole diindolylmethane (DIM). DIM is particularly significant. The compound is a common byproduct from digesting cruciferous vegetables, such as broccoli, cauliflower, kale and others. Research shows that DIM supports the immune system and helps to balance out our hormones, oestrogen in particular. Oestrogen breaks down into a variety of different metabolites, some of which are quite beneficial, providing antioxidant support. Other metabolites can derail cellular health. You might liken this to cholesterol: you want to raise the beneficial types and reduce the detrimental metabolites. DIM achieves this balance for oestrogen (again, see BreastHealthFormula.org). Each of the ingredients in this formula has been extensively researched. But what was very important to me as a holistic, integrative physician and healer is that the researchers studying this formula were able to demonstrate a synergistic effect between the ingredients. Such synergy allows results that would not be achieved by each ingredient alone, at the dosages in which they are present in the formula. This is of specific importance because the synergistic effect goes beyond just an interaction within a formula. Synergy is at the foundation of mindbody medicine; it’s about understanding the person as a whole and it’s what the holistic interactions between different organs, emotions and systems of the body are based on. Part of my commitment to research in this field is to demonstrate that these holistic principles can reflect themselves in formula design, showing significant synergistic effects and benefiting numerous critical areas of health simultaneously.

Walls Torn Down

Investigations such as the Indiana University studies affirm what many of us have suspected for decades: thousands of years of Traditional Chinese Medicine and herbal lore carry a great deal of truth. Although it was easy in the past to dismiss botanical formulas because of a “lack of evidence,” that line of reasoning is becoming much more difficult to sustain. This is only one example. There are numerous natural therapeutic resources available to us. Some are being uncovered even as this is being written. These solutions will provide the additional tools we need in the prevention and treatment of cancer, heart disease, diabetes, inflammation, autoimmune disorders and many other conditions.

References

1. J. Jiang, et al., “BreastDefend Suppresses Growth and Breast-to-Lung Cancer Metastasis in an Orthotopic Model of Human Breast Cancer,” poster session presented at the American Association for Cancer Research (31 March–4 April 2012, Chicago, Illinois, USA). 2. J. Jiang, I. Eliaz and D. Sliva, “Synergistic and Additive Effects of Modified Citrus Pectin with Two Novel Poly Botanical Compounds in the Suppression of Invasive Behavior of Human Breast and Prostate Cancer Cells,” Integr. Cancer Ther. doi:10.1177/1534735412442369 (April 2012). 3. J. Jiang, et al., “Suppression of Proliferation and Invasive Behavior of Human Metastatic Breast Cancer Cells by Dietary Supplement BreastDefend,” Integr. Cancer Ther. 10(2), 192–200 (2011).

For more information

Dr Isaac Eliaz is an integrative medical doctor, licensed acupuncturist, researcher, product formulator and frequent guest lecturer. He has been a pioneer in holistic medicine since the early 1980s and has published numerous peer-reviewed research papers on several of his key integrative health formulas. He is the founder and medical director of Amitabha Medical Clinic (California, USA), an integrative health centre specializing in cancer and chronic conditions (www.dreliaz.org).

CONVERGENCE

Nutraceuticals: An Industry in Transition

On one hand, we have many pharmaceutical companies facing expiring patents and slim pipelines. On the other hand, we have consumer movement towards prevention, which is stimulating growth in the sales of vitamin and dietary supplements, and rising sales of healthy food and beverages. So, the nutraceutical market could provide a welcome new alternative revenue stream for Big Pharma. Is our industry under threat from the drug world? Dr Ideas: I think we are living in the most exciting time for our industry. I think Big Pharma is interested in this market because they have knowledge about the consumer and know exactly what they want. New emerging markets reveal that consumers are looking for healthy nutritional alternatives to support overall health. For a pharma company that wishes to go into this lucrative business, they must consider the culture surrounding food and nutrition. The companies in the nutrition field have an advanced ability to communicate the importance of “health” and are able to adjust to the consumer and connect with them greater than a pharma company who aims to make a product for any target segment. The people who are going to profit from this growth are the people who are going to connect with the consumer. I see this change in the market as the greatest opportunity for the health and nutrition industries to reset what we have been doing and further understand the consumer. For instance, in terms of omega-3, a considerable amount of research indicates that omega-3 from a vegetable source has very low absorption compared to the marine source derivatives. It is clear that no one tells the truth to the consumer. People who have diabetes and metabolic syndrome should not take omega-3 from vegetable sources owing to its very low absorption levels. I do not see the pharma industry as a threat to the small supplement companies as it is these companies that will benefit most. At present, there is a more specific demand from the consumer. For instance, consumers want to know whether omega-3 is it going to prevent

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developing neurological disorders such as Alzheimer’s disease or whether it can affect photoageing. There is a lot of scope on the market to educate consumers. George Pontiakos: I think if there was ever a poster child for institutional arrogance, it was pharma’s missing of the market in nutraceutials. At present, food and beverages are driving health and efficacies — it is the nutraceutical industry that has control of the marketplace. Despite this, both industries face challenges regarding compliance. If people do not lose their 15 lb in three pills, they stop consuming them, and look out for the next appealing advert that offers a similar result. The food and beverage industries have found they can expand their marketplace by extending the beneficial properties of one ingredient and incorporating it into other products. As a result, they have a larger retail footprint. The only challenge they face is the ability to transfer the efficacy load that exists in a pill and migrate it into a food product. This confers additional taste masking and stability issues — another challenge in its entirety. An assault on the nutra organisations from pharma is not going to occur as the pharma industry does not have the existing advances to “catch up.” Campbell’s, Kraft, Danisco, Danone — these are some examples of the big nutraceutical companies that are driving this market. Adam Ismail: At present, there are two blockbuster omega-3 drugs based on fish oil concentrates. We have found that in the markets where they have truly achieved “blockbuster status,” they help grow the nutra category from

a consumer demand point of view, because consumers become more educated because of to drug advertising. In countries such as the US, there is a phenomenon occurring whereby consumers that take 1812 standard fish oil products (the standard fish oil products) are upgrading the concentrate content of their omega-3s because they acknowledge they need more omega-3 in their diet. This is largely because of the pharma industry, which as a result has benefited the nutra space. However, when dealing with a finite resource, other implications beyond consumer demand need to be considered. At present, there is approximately 300,000 tonnes of anchovy oil produced sustainably every year worldwide. If it continues its growth, the omega-3 industry will reach its 300,000 tonne cap in 2-3 years. The question arises, if you have a finite resource that is entirely maxed out, who is going to get preferential access to that supply? If the pharma industry decides it wants to use anchovy oil as its main source of omega-3 owing to its high natural DHA and EPA content, then they are going to get preferential access because they can pay more. Although there are two main blockbuster drugs available on the market using EPA and DHA as their main source of bioactives, in reality, there are at least a dozen more that are intended on being launched within the next 3 years. Those two blockbuster drugs today use approximately 10% of the world’s supply of anchovy oil, so what happens when there are 12 more products coming into the market with different indications that achieve blockbuster status? This will have a profound impact on the nutra

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CONVERGENCE

industry, which will simultaneously increase consumer demand for their products. There will be a big structural change because of the pharma industry. I do not think they are a threat to consumer demand but there are considerations to think about when dealing with a finite resource. George Pontiakos: Although this is educating consumers and driving the market, it is suggested that the majority of the regulations are influenced by pharma. Specifically, they are trying to set the bar to a point that the nutra companies cannot attain. We have to do “gold standard” trials that require up to 500 people within a population to come up with a claim — this costs a lot of money. My background is in pharma, and I know what it takes to put a trial together. It is clear they require different type of resources. You cannot blame them however, in the last 7 years we had 80 drugs fall off the patent cliff, a total of 65 billion dollars of lost sales. They have nothing in their pipelines and no biologics for another 6-8 years, so what exactly are we looking at? The industry is growing and lucrative — it is no wonder they want to get on the bandwagon. Kevin Robinson: Are you suggesting that the nutra industry could give the pharma industry back its blockbusters, as it certainly has not got any at the moment. Adam Ismail: I think so — all of those omega-3 drugs will be blockbusters. The majority are in Phase 3 clinical trials and the evidence is compelling. Omega-3’s are a very easy sell to doctors, as they have almost no side effects. If you tell a doctor; “Here is an approved pharmaceutical that has almost no side-effects, that is as efficacious as this product you are prescribing that could kill a patient,” it is an easy switch to make. It depends on the case but I think the omega‑3s could give the pharma industry blockbusters. What is interesting however, is the research done today is not by Pfizer or Glaxo or other big pharma companies but by independent

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Audience: There seems to be, rather than a convergence between the pharma and nutra industry, a clash, and it is not driven by the pharma industry. The nutra industry is increasingly intruding onto the pharma field with the solution to problems that are natural and effective, have no side-effects and cost less. At face value, in the nutra and pharma industry where there are no new drugs in the pipeline, profits are crunched. But when it comes to enemies, the nutra industry has only itself to blame. It is a threat to us all that we do not see the spiking, the dry labelling, the so-called messing up composition. The fact that people do not change the name on the door every 3 minutes is dramatic because in the meantime it allows a “revolving door of spikers,” allowing regulatory agencies to come down hard on nutra companies. For instance, soon antioxidants will be banned in Europe and America because little research is done to set standards. Opening a dialogue on the kind of proof they want us to give them and why is different from the proof necessary from the pharma industry. We should not be bound to do clinical studies like AstraZeneca does with a designer molecule — we do not use designer molecules, we use active principles that are present in nature so the standard should be totally different. The fault is not with the pharma industry, it is our fault. Audience: This is a very interesting topic at the moment because pharma companies have got the opportunity and capability to buy that kind of expertise. We have seen some interesting situations in recent years where smaller pharma companies have bought some heritage nutritional brands and tried to change the personality of them - unsuccessfully - thus discrediting the brand. By contrast, there are situations where nutritional brands have taken a formulation or ingredient, done the clinical trials and incorporated it into a registerable product, resulting in a valuable end product that is supported by GPs. It is an interesting from a food perspective of a pharma company, they have been in infant formulation for many years. Ultimately, the consumers should have the ability to buy safe, efficacious products that help benefit their health regardless of who is selling it.

pharma companies. These companies will eventually be bought by the bigger pharma companies. It is these independent pharma companies that are in control of the pipeline. Paul Berryman: Large pharma companies such as GSK have their own brands in the healthcare sector. Lucozade, for instance, have bought out Maximuscle and are branching into sports supplements. It would not be a massive stretch for them to start buying other smaller companies. They are cash rich so if they want to get into a market they have the ability to do so. They are also doing research investigating personalized pharma, as we will increasingly see drug prescriptions in tandem with genetic testing. In the first instance, they will target wealthy people who go for private healthcare. George Pontiakos: Convergence is occurring aggressively between food and the nutrascience industry. We as business people need to recognize this phenomenon. I do not view pharma as a threat at all. They should have been in here 15-20 years ago but refused because they did not believe the science. Now, the people that are

driving this industry are the food people and we need to recognize that because we are the experts. The pharma industry are subject matter experts on what they do, the food guys are subject matter experts in grains, they know nothing about botanicals, real extracts or how it is implemented on a food side. Our strength lies in being consultative resources to the food and beverage industry for driving that product, and expanding their lines.

Speakers Ewa Hudson, Head of Health and Wellness Research at Euromonitor International George Paraskevakos, President of the International Probiotics Association Paul Berryman, Chief Executive of Leatherhead Food Research Adam Ismail, Executive Director of the Global Organization for EPA and DHA Omega-3 (GOED) George Pontiakos, President/CEO of BI Nutraceuticals Bejit Ideas and Emiri Nishi, Ninapharm

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