strategic generic portfolio selection may 12th 2010 (1)
TRANSCRIPT
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Asa Cox
Founder genericlicensing.com
Strategic Portfolio Planning
for Generic Drugs
May 12, 2010
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- 13 years in generics
Manufacturing, Development, Licensing, Consulting
- International projects
About me
- Online networker
- Web business 2.0 believer
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- Overview of typical generic portfolio’s
- Specifics of portfolio planning for generics
- Why strategic planning is important for generic companies
Topics
- Introduction to sourcing generic products from 3rd parties
Aim: To understand why strategy and
planning for generic portfolio’s is required!
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- Does typical exist?!
Country variables:
� Demographic
� Population
� Market development
Overview of typical generic portfolio’s
� Market development
� Local players
� Drug provision policy
� Generic incentives
� Economy
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Does typical exist?!
Typical category portfolio’s?
e.g United Kingdom
Overview of typical generic portfolio’s
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Does typical exist?!
Typical category portfolio’s?
e.g United Kingdom
Full : Teva, Actavis, Sandoz, Mylan
Overview of typical generic portfolio’s
Full : Teva, Actavis, Sandoz, Mylan
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Does typical exist?!
Typical category portfolio’s?
e.g United Kingdom
Full : Teva, Actavis, Sandoz, Mylan
Overview of typical generic portfolio’s
Full : Teva, Actavis, Sandoz, Mylan
Profit: Arrow, Ratiopharm, Winthrop, Stada
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Does typical exist?!
Typical category portfolio’s?
e.g United Kingdom
Full : Teva, Actavis, Sandoz, Mylan,
Overview of typical generic portfolio’s
Full : Teva, Actavis, Sandoz, Mylan,
Profit: Arrow, Ratiopharm, Winthrop, Stada
Focused: Rosemont, Hospira, Perrigo
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Does typical exist?!
Typical category portfolio’s?
e.g United Kingdom
Full : Teva, Actavis, Sandoz, Mylan,
Overview of typical generic portfolio’s
Full : Teva, Actavis, Sandoz, Mylan,
Profit: Arrow, Ratiopharm, Winthrop, Stada
Focused: Rosemont, Hospira, Perrigo
Manufacturing: Cipla, Ranbaxy, Wockhardt, Aurobindo...
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If you were creating a portfolio from scratch... where would you start?!
Specifics of portfolio planning for generics
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If you were creating a portfolio from scratch... where would you start?!
� Cash vs Profit� Business plan/strategy
� Cost of entry
� Available technology
Specifics of portfolio planning for generics
� Available technology
� Risk of competition
� Supply chain
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If you were creating a portfolio from scratch... where would you start?!
� Cash vs Profit
� IMS top down� Value or volume
� Level of competition
Specifics of portfolio planning for generics
� Level of competition
- Same data as everyone!
� Manufacturing capability
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If you were creating a portfolio from scratch... where would you start?!
� Cash vs Profit
� IMS top down
� Patent expiries� Originator tactics
Specifics of portfolio planning for generics
� Originator tactics
� Timing
- First in reaps rewards
� At risk vs late to the party
- Legal costs & expertise
� COGS vs ASP- Stock vs cash
- Loss vs market share
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If you were creating a portfolio from scratch... where would you start?!
� Cash vs Profit
� IMS top down
� Patent expiries
� Manufacturing capability
Specifics of portfolio planning for generics
�
� Dose forms
� Biologics
� Capacity
� Dedicated units
� Supply chain
� Cost
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If you were creating a portfolio from scratch... where would you start?!
� Cash vs Profit
� IMS top down
� Patent expiries
� Manufacturing capability
� Marketing & Distribution
Specifics of portfolio planning for generics
� Marketing & Distribution� Rx or OTC
- Branded or Private Label
- Standard or Generic+
� Hospital or retail
- Wholesale, Multiples, Independent, Online
� Positioning
- Service, Price, Depth, Speciality, Product Type
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If you were creating a portfolio from scratch... where would you start?!
� Cash vs Profit
� IMS top down
� Patent expiries
� Manufacturing capability
� Marketing & Distribution
Specifics of portfolio planning for generics
� Marketing & Distribution
� Copy Competition� Which one?!
� Response
� Attainability
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Specifics of portfolio planning for generics
Using IMS – Top Generics
Top 200
- All over $400m
- Very long tail
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Specifics of portfolio planning for generics
1. Fentanyl
Launched: January 2005, 2008 sales: $800 million
Branded equivalent: Duragesic, by Janssen 2008 sales of $250 million (from $1.1 billion)
2. Amlodipine besylate and benazepril hydrochloride*
Launched: July 2007, 2008 sales: $779 million
Branded equivalent: Norvasc, by Pfizer 2008 sales <$150m ($1.5 billion)
Using IMS – Top Generics
Branded equivalent: Norvasc, by Pfizer 2008 sales <$150m ($1.5 billion)
3. Metoprolol succinate
Launched: May 2008, 2008 sales: $675 million
Branded equivalent: Toprol, by AstraZeneca 2008 sales <$150m ($807 million)
4. Lamotrigine
Launched: February 2005, 2008 sales: $671 million
Branded equivalent: Lamictal, by GlaxoSmithKline 2008 sales $1.6 billion (peak)
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Specifics of portfolio planning for generics
5. Risperidone
Launched: September 2008, 2008 sales: $610 million,
Branded equivalent: Risperdal, by Janssen, 2008 sales $1.5b ($2.1 billion)
6. Omeprazole*
Launched: July 2008, 2008 sales: $609.8 million
Branded equivalent: Prilosec, by AstraZeneca, 2008 sales $185m ($1.1 billion)
Using IMS – Top Generics
Branded equivalent: Prilosec, by AstraZeneca, 2008 sales $185m ($1.1 billion)
7. Azithromycin
Launched: November 2005, 2008 sales: $599 million,
Branded equivalent: Zithromax, by Pfizer, 2008 sales <$150m ($1.7 billion)
8. Bupropion
Launched: December 2006, 2008 sales: $521 million
Branded equivalent: Wellbutrin, by Biovail, 2008 sales $579 million ($1.7 billion)
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Specifics of portfolio planning for generics
Using IMS – Top Generics
� Why difference in generic success? � Brand tactics
� Price match
� Alternative formulations
� Effective anti-generic messages� Effective anti-generic messages
� Doctor perspective� Long term use
� Activity limits
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EXAMPLE: OMEPRAZOLE – US vs UK
US - $300m value erosion (25%)
UK -
Specifics of portfolio planning for generics
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OMEPRAZOLE – UK (£25 to £1)
Specifics of portfolio planning for generics
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Specifics of portfolio planning for generics
Targeting patent expiry of a blockbuster?!
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Specifics of portfolio planning for generics
CLOPIDOGREL/PLAVIX
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Specifics of portfolio planning for generics
CLOPIDOGREL/PLAVIX
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Specifics of portfolio planning for generics
If you were creating a portfolio from scratch... where would you start?!
SUMMARY:
� Commercial strategy� Profit or volume
� Market strategy� Market strategy� Distribution channels
� Classification type
� Manufacturing capability� Product type
� Legal & Regulatory expertise� Patent expiry vs long tail
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Why strategic planning is important
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Why strategic planning is important
2009 global generic products generated $83bn (€59.8bn) in audited sales (IMS)
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Why strategic planning is important
2009 global generic products generated $83bn (€59.8bn) in audited sales (IMS)
BCC estimates the global market to reach $129.3bn by 2014, representing a
In the $59bn global generics market in developedcountries, Japan only accounts for 6%, while the US holds 42%, and five major European national markets account for 23%.
by 2014, representing a 9% annual growth rate.
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Why strategic planning is important
2009 global generic products generated $83bn (€59.8bn) in audited sales, according to IMS.
BCC estimates the global market to reach $129.3bn by 2014, representing a
29%
In the $59bn global generics market in developedcountries, Japan only accounts for 6%, while the US holds 42%, and five major European national markets account for 23%.
by 2014, representing a 9% annual growth rate.
$37.5bnUndeveloped markets
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Why strategic planning is important
Government debt as % of GDP (2009)
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Why strategic planning is important
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Why strategic planning is important
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Why strategic planning is important
IMS estimates that sales from the top 10 US generic players grew at an average of 13.2% in 2009
The big are getting bigger!
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Why strategic planning is important
The big can get bigger still!
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Why strategic planning is important
The big can get bigger still!
"Only those who are agile and strong will survive in this business," said Teva president and CEO Shlomo Yanai during the company's investor meeting last month in Jerusalem.
"About 15% of our business will come from acquisitions. We are taking the necessary steps and building our infrastructure by getting assets and know-how either internally, through acquisition or partnerships."
Teva estimates its 2009 global sales at $13.9bn, of which 70% are from generic products. Yanai is targeting $31bn in sales by 2015, of which 70% will still come from generics.
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Why strategic planning is important
The big can get bigger still!
Teva estimates its 2009 global sales at $13.9bn, of which 70% are from generic products. Yanai is targeting $31bn in sales by 2015, of which 70% will still come from generics.
"Only those who are agile and strong will survive in this business,"
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Why strategic planning is important
Biosimilars/follow on biologics
Approximately one-third of all newly approved drugs will be biologics. (2010) Double-digit growth of 20
percent, they generated percent, they generated $95 billion of sales amounting to approximately 15 percent of global pharma revenues.
Today, total sales of off-patent biologics amount to approximately $20 billion
The average costs of biologic drug treatment is about $72,000/year (compared to about $1,000 for conventional "small molecule" pharmaceuticals)
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Why strategic planning is important
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Why strategic planning is important
Biosimilars/follow on biologics
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Why strategic planning is important
The patent cliff: 2010-15
Of total pharmaceutical sales in 2008 of $643.6bn, a staggering 30% were derived from patented products which are “at risk” from generic competition within five years, almost double the competition within five years, almost double the percentage at risk in 2000 of 17%. Whilst the industry has already started its slide, the patent cliff becomes seriously precipitous in 2010 when 9%, or $57.5bn, of total market sales are expected to lose patent protection within the space of 12 months
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Why strategic planning is important
The patent cliff: 2010-15
The world's top drugmakers face the loss of $140 billion in annual sales by 2016 (of $700bn 2008)
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Why strategic planning is important
The patent cliff: 2010-15
Inhalation marketApproximately 50% of the current $32 billion global market segment for asthma and COPD medicines is expected to lose patent protection by the end of 2016, according to industry analysts IMS Health.
The asthma and COPD market segment is projected to grow significantly faster than the pharmaceutical market, driven by factors including a significant level of under-diagnosis, and Novartis/Sandoz will hope this acquisition will gain them a large market share in the future.
Sandoz has signed a definitive agreement to acquire Oriel Therapeutics, a privately held US pharmaceuticals company, gaining exclusive rights to a portfolio of generic drug candidates and related technologies targeting medicines in the inhalable respiratory drug market. Holzkirchen, Germany, April 19, 2010
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Why strategic planning is important
The patent cliff: 2010-15
"There is still room to grow in generics," says Yanai (TEVA). "Almost $150bn of branded drugs are going to be off patent in the next five years. This does not include the five years. This does not include the expiration of biologics, which is an additional $50bn potential.”
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Overview of typical generic portfolio’s
The patent cliff: 2010-15
Whats the big pharma plan?
- More investment in R&D?- Clever anti-generic tactics?- Switch out before expiry strategies?- Switch out before expiry strategies?- Increase legal spend on ever-greening patents?- Big budget advertising in BRIC markets?
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The patent cliff: 2010-15. Whats the big pharma plan?
Astra Zeneca announced today that it has agreed to market 18 of Torrent Pharmaceuticals Ltd.’s branded generic drugs in 9 emerging markets, marking the U.K. drugmaker’s first generic-drug partnership.Unlike some its competitors, Astra Zeneca is very vulnerable to generic competition as many of its best selling products such as Nexium for ulcers, the antipsychotic Seroquel and Crestor for cholesterol. are near patent expiry. Industry analysts expect
Why strategic planning is important
Seroquel and Crestor for cholesterol. are near patent expiry. Industry analysts expect the company to lose as much as 25% of its sales revenue to generic encroachment by 2014.
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The patent cliff: 2010-15. Whats the big pharma plan?
Sanofi-Aventis bought Zentiva NV of the Czech Republic, Helvepharm AG of Switzerland, Medley SA of Brazil and Laboratorios Kendrick SA of Mexico to bolster its branded generics portfolio.
Why strategic planning is important
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The patent cliff: 2010-15. Whats the big pharma plan?
“Generics are an important part of the health care system. ????? believes that when there is a direct generic equivalent to the prescribed brand
Why strategic planning is important
name drug, it should be used provided the doctor agrees it is best for the patient.”
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The patent cliff: 2010-15. Whats the big pharma plan?
“Generics are an important part of the health care system. Pfizer believes that when there is a direct generic equivalent to the prescribed brand
Why strategic planning is important
name drug, it should be used provided the doctor agrees it is best for the patient.”
http://www.pfizer.com/about/public_policy/generics.jsp
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The patent cliff: 2010-15. Whats the big pharma plan?
NEW YORK, March 18 (Reuters) - Pfizer Inc (PFE.N) may still be eager to buy genericdrugmakers, after being outbid for Germany's Ratiopharm in an effort to shore up revenue as it braces for evaporating sales of its blockbuster Lipitor cholesterol treatment.
Pfizer’s expanded agreements with Aurobindo Pharma Ltd. will grow its generic product portfolio within emerging markets to reflect the diverse and often unique market dynamics
Why strategic planning is important
portfolio within emerging markets to reflect the diverse and often unique market dynamics and commercial interests of more than 70 countries.
Pfizer entered into agreements with Claris Lifesciences Ltd. (“Claris”) to commercialize sterile injectable medicines after the products are no longer patent protected, and have lost market exclusivity in North America, Europe, Australia and New Zealand. The Claris agreements advance Pfizer’s Established Products strategy, which focuses on the commercialization of products where market exclusivity has been lost. Pfizer’s global annual sales of established products are approximately $10 billion.
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The patent cliff: 2010-15. Whats the big pharma plan?
Pfizer’s global annual sales of established products are approximately $10 billion (?!)
Why strategic planning is important
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The patent cliff: 2010-15. Whats the big pharma plan?
Last year, GlaxoSmithKline entered into joint ventures with the generic manufacturers Dr. Reddy’s Laboratories (India) and Aspen Pharmacare Ltd (South Africa).
Also, the company paid $246.5 million for Bristol-Myers Squibb’s Pakistan and Egypt drug units and acquired UCB’s drug portfolio in Africa, the Middle East, Asia Pacific and Latin America for $702 million; clearing signaling its intention to more aggressively
Why strategic planning is important
Latin America for $702 million; clearing signaling its intention to more aggressively pursue emerging global markets.
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Why strategic planning is important
SUMMARY: What is the future going to look like?!
� 5 year high growth window
� Major player strength & depth
� Biologics
� Big pharma entering generics
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Introduction to sourcing from 3rd parties
Creating the portfolio – why look outside
- Manufacturing constraints
- Development capability
- Time to revenue
- Financial status
- Product mix- Product mix
- Country/region specific products
- Tactical & strategic relationships
Strong and agile Teva in-licenses 30% of products!
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Introduction to sourcing from 3rd parties
Creating the portfolio – where to look
- Emerging markets
- EU ascension states
- High Tech Far East (Korea, Taiwan)
- Well developed Latin America
- Online
- New databases
- Forums and discussion groups
- Virtual partnering events
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Introduction to sourcing from 3rd parties
Creating the portfolio – considerations
- Partner Selection
- Commercial relationship model
- Quality and consistency of supply
- Long term cost position
- Partner’s ambitions- Partner’s ambitions
- Beware…
- Regulatory expertise
- Number of dossiers/licenses sold
- IP ownership and supply chain flexibility
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Summary
- What type of portfolio do you want?
- Selecting generic products isn’t easy
- Why strategic planning is important for generic companies
- The other option; in-license & partner- The other option; in-license & partner
That is why strategy and planning for
generic portfolio’s is required!