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Decisions Now for Lundbeck's future


When Ulf Wiinberg arrived at Lundbeck in 2008 to take over as president and CEO, his immediate task was what to do about the looming patent expiry of the company's three leading products. Having reassured investors that the company's foundations have been shored up he explains to Scrip editor-in-chief Mike Ward how he plans to grow the business.


Ulf Wiinberg was under no illusion about the challenge he faced when he took the reins at Lundbeck in 2008. He had four years to deal with the patent expiry of three of the company's leading products – which were accounting for about 80% of total revenues - while also expanding its geographic footprint beyond the European market before he could even think about growing the business into a top 20 pharma company.

Indeed, between 2012 and 2014 the company will face the expiry of patents protecting Lexapro/Cipralex escitalopram for depression and Ebixa memantine for Alzheimer's disease. In 2010, these three drugs posted sales of DKK8.3 billion, and DKK1 billion, respectively, accounting for nearly three quarters of company revenues.

To confront the issue, Mr Wiinberg launched a project called Decisions Now which focused on tactics to improve operational efficiency of existing businesses while looking to broaden the company's offering through business development activities.

Full Article

Taking a biological approach to generic evolution - an interview with Actavis' Claudio Albrecht


Actavis, with sales of some $2.4 billion and growing at 10% a year, is the world's fourth largest generic pharmaceuticals manufacturer. While patent expiries of blockbuster drugs and high growth rates in emerging markets are the major drivers of the sector, healthcare reforms and austerity measures are also having positive and negative impacts on the generics industry.


"Generics only benefit from healthcare reforms if at the same time Governments put measures in place to help volume growth which enhance penetration in markets such as southern Europe. In markets like the US, Germany and the UK, where generics are fully accepted, we see penetration rates of up to 80%. In the Mediterranean countries, we see single to low double digit penetration rates," notes Mr Albrecht.

The challenge for Actavis is how to maintain its margins across all its markets, especially against the backdrop of a shift towards tendering systems. "The tendency towards tender systems influences our business planning and margin strategies. If you win a tender you're in but the prices will be lower so you need to improve your cost base. If you lose you will be out for a certain period of time," he added.

Moreover, tender systems that require dispensing of products by pharmacists forces a shift in how companies promote their drug. "Wherever we need to see physicians we employ field forces. However, when the pharmacist is allowed to substitute products, I need smaller sales teams. And once it becomes a tendering process we need just a few key accountants to work on the pricing," Mr Albrecht explained.

Full Article

A tale of two strategies


Dilip Shanghvi, chairman and managing director (CMD) of Sun Pharmaceutical Industries and Pankaj Patel, CMD of Zydus Cadila, are men of few words, their responses measured and devoid of floridness. But do not mistake their quiet demeanour for a lack of taste for derring-do.


Both billionaires have, in the past, ventured down paths few Indian firms had considered feasible, especially in the area of acquisitions, and indications are that there is more action in store. Yet, both firms, based in the western Indian state of Gujarat (Sun has since moved base to Mumbai), deny any pre-occupation with "big-bang" deals or rankings.

Both firms share common foci, including a thrust on the US market, an interest in the controlled substances space and links with big pharma for emerging markets. Sun and Zydus appear to be grooming the next generation – the sons of both Mr Shanghvi and Mr Patel are already involved in their respective firms - and it is perhaps a matter of time before the young scions take on larger responsibilities.

Size doesn't matter?

It is clear that the US will continue to be one of the core playgrounds for both companies. Mr Shanghvi, who was earlier this year reported as saying that the company needs a bigger acquisition in the US to garner critical mass, says that Sun has, in terms of overall performance and an improving focus on its bottom line, done well since its $454 million, rather acrimonious, takeover of Israel's Taro Pharmaceutical Industries, its largest investment so far.

Full Article

Pipeline dreams - an interview with Joe Jimenez


As we sit in Novartis’s Basel headquarters on a sunny October afternoon, discussing the pharmaceutical company’s growth strategy in the coming years, Joe Jimenez conducts himself as you would imagine the CEO of a major pharma company to appear: prepared, confident and direct.


With the Swiss healthcare company’s blockbuster anti-hypertensive drug Diovan losing patent protection over the next two years (in Europe in 2011, in the US in 2012 and in Japan in 2013), putting a hole of around $4 billion in annual sales, I wonder why Mr Jimenez appears so assured. He admits that losing this amount of sales from patent expiry is a huge blow, but notes that the company (like many of its peers) has at least benefited from a long period of time to form strategies to offset the sales decline from generic competition to key products.

Novartis's strategies have been well-publicised: diversification through the integration of its $50 billion Alcon buy; a staggered push into the emerging regions, especially Russia, Brazil and China; business diversification; and of course the future sales of two important newer drugs, Gilenya and Afinitor, to treat multiple sclerosis and multiple cancers, respectively.

Alongside this, “we have one of the best pipelines in the world,” he declares. Clearly, in Mr Jimenez's view, the company is now well positioned to confront its patent cliff, and despite diversification it will continue to focus on pharmaceutical innovation as a key growth driver.

Full Article

Focus on Almirall: partnering, new products and mature markets are key targets


Almirall, Spain's biggest domestic pharmaceuticals firm with sales of €882 million last year, has been going through challenging times - relying on Spain for around half of its revenues means the firm has been hit by austerity measures there - but newly appointed CEO Eduardo Sanchiz is focused on international growth and new product launches to help the firm through the difficult patch. And although the Spanish market's general stagnation and indeed recent recession, coupled with Almirall's international growth drive, means that the proportion of its sales coming from Spain will reduce, Mr Sanchiz maintains that Almirall's solidity there is a key priority. Scrip's EMEA editor Eleanor Malone spoke to him about the company and the world in which it does business. The interview is available as podcasts here


These days, emerging markets are widely accepted to present the best growth opportunities for the pharma industry as it faces patent expiries, austerity measures and healthcare reform and ever-increasing competition in major western markets. Almirall, however, has not jumped on that particular bandwagon.

"We still see a bigger opportunity for our products in the more established markets," Mr Sanchiz told Scrip. Why? Because "for certain innovative products you may get a faster uptake and reach peak sakes potential quicker in markets that are already developed...[whereas] in emerging markets the higher market growth is particularly in generics", explained the CEO.

With ample room for market penetration in major territories like the UK and Germany, then, Almirall is still picking the low-hanging fruit in its orchard, while its larger, arguably more aggressive rivals have stripped the lower branches and are now clambering higher up the metaphorical tree – having to work harder to maintain their growth trajectories.

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Sponsored by

A global force in the CRO industry

James T Ogle
Chief executive
INC Research
James T Ogle, chief executive of INC Research tells Scrip 100 how the recent acquisition of Kendle has enhanced its service offering and what opportunities 2012 promises to bring

Q. This year, INC Research acquired its direct competitor, Kendle International. What strengths does this newly enlarged company have compared to the previous individual companies?
Acquiring Kendle presented a unique opportunity for INC Research to create a new global force in the industry. Geographic size and scale — especially in Latin America and Asia, enhanced therapeutic breadth and depth, and new levels of operational efficiencies were all key motivations for the acquisition and significantly enhanced our ability to meet customer needs on a global scale.

We also now offer robust early-phase and expanded proven late stage expertise for more complete lifecycle management of outsourced drug development programmes. Both organisations shared a common culture around customer-centric, high-quality service delivery so from that standpoint as well, we were a winning combination.


Q. What services and areas of expertise have been enhanced as a result of the acquisition?
INC Research has long held a reputation for deep therapeutic expertise across a broad range of medical conditions, as well as with special populations such as women and paediatrics. Our global therapeutic experience includes cardiovascular, CNS, endocrine, immunology, infectious disease, oncology and respiratory. Kendle’s therapeutic expertise was largely synergistic, so merging capabilities primarily added depth. New capabilities from the acquisition include key expertise in immunology and inflammatory disease.

Combining our complementary heritage of therapeutic expertise provides a broad spectrum of global therapeutic experience – much of which strategically aligns with the largest areas of clinical R&D investment by our customers, including cardiovascular, CNS, endocrine, infectious disease, oncology and respiratory. These therapeutic areas accounted for approximately two-thirds of the total US drug development pipeline in 2010 according to a report from Frost & Sullivan.


Q. How is INC Research enhancing efficiency in drug development for its clients?
We are committed to increasing efficiency by bringing innovation to the drug development process, exploring new clinical research techniques, refining best practices and implementing the latest technologies to help our customers succeed and bring their products to the marketplace faster. Recently, INC Research announced a partnership with SAS, which will allow us to use advanced analytics to optimise clinical trial designs and proactively manage operations. With better analytics and real-time data, we can assist our customers in making more rapid and informed decisions about the future of their clinical development programmes.

Q. Which geographical regions are most important to INC Research over the next five years for growth?
Emerging markets are clearly driving the biopharmaceutical development market and are therefore very important to INC Research’s future. We are seeing a new wave of innovation, and competition in emerging regions. Asia, for example, has growing and ageing populations that are demanding access to the latest drugs and we will continue to expand our capabilities and services to meet these demands.

Q. What are the top trends and challenges you see in 2012?
We will be challenged to be more flexible and creative in developing strategic alliances to meet the needs of customers. We must evolve alliance partnership models with our customers to simultaneously take costs out of the process while spawning innovation in clinical development.

Another challenge to the market overall is the funding of R&D. A new wave of pharma investors is entering the market and is seeing opportunities in the compounds and therapies that asset holders lack the resources to develop internally – primarily because of financial pressures. These nontraditional funding sources will essentially form a new market segment, which could be considered a type of micropharma company because they will need to partner with CROs and other outsourcers to develop the compounds, as well as manage risk.

We are at the forefront of these arrangements which we term “networked drug development alliances”, in which we work with customers to bring together nontraditional funding sources and the operational/development expertise to successfully complete these programmes.

Competition and innovation also will continue to develop in emerging regions, particularly Asia. As local companies continue to enter the drug development industry creative solutions won’t be far behind, making it clear that innovation in clinical development is not strictly a Western world commodity. Companies that embrace this global model will have
a distinct advantage.