Strategic generic portfolio selection may 12th 2010

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Strategic generic portfolio selection may 12th 2010

  1. 1. Strategic Portfolio Planning for Generic Drugs Asa Cox Founder genericlicensing.com May 12, 2010
  2. 2. About me - 13 years in generics Manufacturing, Development, Licensing, Consulting - International projects - Online networker - Web business 2.0 believer
  3. 3. Topics- Overview of typical generic portfolio’s- Specifics of portfolio planning for generics- Why strategic planning is important for generic companies- Introduction to sourcing generic products from 3rd partiesAim: To understand why strategy andplanning for generic portfolio’s is required!
  4. 4. Overview of typical generic portfolio’s - Does typical exist?! Country variables: Demographic Population Market development Local players Drug provision policy Generic incentives Economy
  5. 5. Overview of typical generic portfolio’s Does typical exist?! Typical category portfolio’s? e.g United Kingdom
  6. 6. Overview of typical generic portfolio’s Does typical exist?! Typical category portfolio’s? e.g United Kingdom Full : Teva, Actavis, Sandoz, Mylan
  7. 7. Overview of typical generic portfolio’s Does typical exist?! Typical category portfolio’s? e.g United Kingdom Full : Teva, Actavis, Sandoz, Mylan Profit: Arrow, Ratiopharm, Winthrop, Stada
  8. 8. Overview of typical generic portfolio’s Does typical exist?! Typical category portfolio’s? e.g United Kingdom Full : Teva, Actavis, Sandoz, Mylan, Profit: Arrow, Ratiopharm, Winthrop, Stada Focused: Rosemont, Hospira, Perrigo
  9. 9. Overview of typical generic portfolio’s Does typical exist?! Typical category portfolio’s? e.g United Kingdom Full : Teva, Actavis, Sandoz, Mylan, Profit: Arrow, Ratiopharm, Winthrop, Stada Focused: Rosemont, Hospira, Perrigo Manufacturing: Cipla, Ranbaxy, Wockhardt, Aurobindo...
  10. 10. Specifics of portfolio planning for genericsIf you were creating a portfolio from scratch... where would you start?!
  11. 11. Specifics of portfolio planning for genericsIf you were creating a portfolio from scratch... where would you start?! Cash vs Profit Business plan/strategy Cost of entry Available technology Risk of competition Supply chain
  12. 12. Specifics of portfolio planning for genericsIf you were creating a portfolio from scratch... where would you start?! Cash vs Profit IMS top down Value or volume Level of competition - Same data as everyone! Manufacturing capability
  13. 13. Specifics of portfolio planning for genericsIf you were creating a portfolio from scratch... where would you start?! Cash vs Profit IMS top down Patent expiries 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
  14. 14. Specifics of portfolio planning for genericsIf you were creating a portfolio from scratch... where would you start?! Cash vs Profit IMS top down Patent expiries Manufacturing capability Dose forms Biologics Capacity Dedicated units Supply chain Cost
  15. 15. Specifics of portfolio planning for genericsIf you were creating a portfolio from scratch... where would you start?! Cash vs Profit IMS top down Patent expiries Manufacturing capability 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
  16. 16. Specifics of portfolio planning for genericsIf you were creating a portfolio from scratch... where would you start?! Cash vs Profit IMS top down Patent expiries Manufacturing capability Marketing & Distribution Copy Competition Which one?! Response Attainability
  17. 17. Specifics of portfolio planning for genericsUsing IMS – Top GenericsTop 200- All over $400m- Very long tail
  18. 18. Specifics of portfolio planning for genericsUsing IMS – Top Generics1. FentanylLaunched: January 2005, 2008 sales: $800 millionBranded 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 millionBranded equivalent: Norvasc, by Pfizer 2008 sales <$150m ($1.5 billion)3. Metoprolol succinateLaunched: May 2008, 2008 sales: $675 millionBranded equivalent: Toprol, by AstraZeneca 2008 sales <$150m ($807 million)4. LamotrigineLaunched: February 2005, 2008 sales: $671 millionBranded equivalent: Lamictal, by GlaxoSmithKline 2008 sales $1.6 billion (peak)
  19. 19. Specifics of portfolio planning for genericsUsing IMS – Top Generics5. RisperidoneLaunched: 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 millionBranded equivalent: Prilosec, by AstraZeneca, 2008 sales $185m ($1.1 billion)7. AzithromycinLaunched: November 2005, 2008 sales: $599 million,Branded equivalent: Zithromax, by Pfizer, 2008 sales <$150m ($1.7 billion)8. BupropionLaunched: December 2006, 2008 sales: $521 millionBranded equivalent: Wellbutrin, by Biovail, 2008 sales $579 million ($1.7 billion)
  20. 20. Specifics of portfolio planning for genericsUsing IMS – Top Generics Why difference in generic success? Brand tactics Price match Alternative formulations Effective anti-generic messages Doctor perspective Long term use Activity limits
  21. 21. Specifics of portfolio planning for genericsEXAMPLE: OMEPRAZOLE – US vs UK US - $300m value erosion (25%) UK -
  22. 22. Specifics of portfolio planning for genericsOMEPRAZOLE – UK (£25 to £1)
  23. 23. Specifics of portfolio planning for genericsTargeting patent expiry of a blockbuster?!
  24. 24. Specifics of portfolio planning for genericsCLOPIDOGREL/PLAVIX
  25. 25. Specifics of portfolio planning for genericsCLOPIDOGREL/PLAVIX
  26. 26. Specifics of portfolio planning for genericsIf you were creating a portfolio from scratch... where would you start?!SUMMARY: Commercial strategy Profit or volume Market strategy Distribution channels Classification type Manufacturing capability Product type Legal & Regulatory expertise Patent expiry vs long tail
  27. 27. Why strategic planning is important
  28. 28. Why strategic planning is important2009 global generic products generated$83bn (€59.8bn) in audited sales (IMS)
  29. 29. Why strategic planning is important2009 global generic products generated $83bn(€59.8bn) in audited sales (IMS)BCC estimates the globalmarket to reach $129.3bnby 2014, representing a In the $59bn global generics9% annual growth rate. market in developed countries, Japan only accounts for 6%, while the US holds 42%, and five major European national markets account for 23%.
  30. 30. Why strategic planning is important2009 global generic products generated $83bn(€59.8bn) in audited sales, according to IMS.BCC estimates the global 29%market to reach $129.3bnby 2014, representing a In the $59bn global generics9% annual growth rate. market in developed countries, Japan only accounts for 6%, while the US $37.5bn holds 42%, and five major Undeveloped markets European national markets account for 23%.
  31. 31. Why strategic planning is importantGovernment debt as % of GDP (2009)
  32. 32. Why strategic planning is important
  33. 33. Why strategic planning is important
  34. 34. Why strategic planning is importantIMS estimates that sales from the top 10 US generic players grewat an average of 13.2% in 2009The big are getting bigger!
  35. 35. Why strategic planning is importantThe big can get bigger still!
  36. 36. Why strategic planning is importantThe 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 companys 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.
  37. 37. Why strategic planning is importantThe 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,"
  38. 38. 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 Today, total sales of off-patent $95 billion of sales biologics amount to amounting to approximately $20 billion approximately 15 percent of global pharma revenues.The average costs of biologic drug treatment is about $72,000/year (compared to about$1,000 for conventional "small molecule" pharmaceuticals)
  39. 39. Why strategic planning is important
  40. 40. Why strategic planning is importantBiosimilars/follow on biologics
  41. 41. Why strategic planning is importantThe 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 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
  42. 42. Why strategic planning is importantThe patent cliff: 2010-15 The worlds top drugmakers face the loss of $140 billion in annual sales by 2016 (of $700bn 2008)
  43. 43. Why strategic planning is importantThe patent cliff: 2010-15Inhalation marketApproximately 50% of the current $32 billion global market segment for asthma andCOPD medicines is expected to lose patent protection by the end of 2016, according toindustry analysts IMS Health.The asthma and COPD market segment is projected to grow significantly faster thanthe pharmaceutical market, driven by factors including a significant level of under-diagnosis, and Novartis/Sandoz will hope this acquisition will gain them a large marketshare 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
  44. 44. Why strategic planning is importantThe 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 expiration of biologics, which is an additional $50bn potential.”
  45. 45. Overview of typical generic portfolio’sThe patent cliff: 2010-15Whats the big pharma plan?- More investment in R&D?- Clever anti-generic tactics?- Switch out before expiry strategies?- Increase legal spend on ever-greening patents?- Big budget advertising in BRIC markets?
  46. 46. Why strategic planning is importantThe patent cliff: 2010-15. Whats the big pharma plan?Astra Zeneca announced today that it has agreed to market 18 of TorrentPharmaceuticals Ltd.’s branded generic drugs in 9 emerging markets, marking theU.K. drugmaker’s first generic-drug partnership.Unlike some its competitors, Astra Zeneca is very vulnerable to generic competition asmany of its best selling products such as Nexium for ulcers, the antipsychoticSeroquel and Crestor for cholesterol. are near patent expiry. Industry analysts expectthe company to lose as much as 25% of its sales revenue to generic encroachment by2014.
  47. 47. Why strategic planning is importantThe patent cliff: 2010-15. Whats the big pharma plan?Sanofi-Aventis bought Zentiva NV of the Czech Republic, Helvepharm AG ofSwitzerland, Medley SA of Brazil and Laboratorios Kendrick SA of Mexico tobolster its branded generics portfolio.
  48. 48. Why strategic planning is importantThe patent cliff: 2010-15. Whats the big pharma plan?“Generics are an important part of the healthcare system. ????? believes that when there is adirect generic equivalent to the prescribed brandname drug, it should be used provided thedoctor agrees it is best for the patient.”
  49. 49. Why strategic planning is importantThe patent cliff: 2010-15. Whats the big pharma plan?“Generics are an important part of the healthcare system. Pfizer believes that when there is adirect generic equivalent to the prescribed brandname drug, it should be used provided thedoctor agrees it is best for the patient.”http://www.pfizer.com/about/public_policy/generics.jsp
  50. 50. Why strategic planning is importantThe 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 Germanys Ratiopharm in an effort to shore up revenue asit braces for evaporating sales of its blockbuster Lipitor cholesterol treatment.Pfizer’s expanded agreements with Aurobindo Pharma Ltd. will grow its generic productportfolio within emerging markets to reflect the diverse and often unique market dynamicsand commercial interests of more than 70 countries.Pfizer entered into agreements with Claris Lifesciences Ltd. (“Claris”) to commercializesterile injectable medicines after the products are no longer patent protected, and havelost market exclusivity in North America, Europe, Australia and New Zealand. The Clarisagreements advance Pfizer’s Established Products strategy, which focuses on thecommercialization of products where market exclusivity has been lost. Pfizer’s globalannual sales of established products are approximately $10 billion.
  51. 51. Why strategic planning is importantThe patent cliff: 2010-15. Whats the big pharma plan?Pfizer’s global annual sales of established products are approximately $10 billion (?!)
  52. 52. Why strategic planning is importantThe 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 Egyptdrug units and acquired UCB’s drug portfolio in Africa, the Middle East, Asia Pacific andLatin America for $702 million; clearing signaling its intention to more aggressivelypursue emerging global markets.
  53. 53. Why strategic planning is importantSUMMARY: What is the future going to look like?! 5 year high growth window Major player strength & depth Biologics Big pharma entering generics
  54. 54. Introduction to sourcing from 3rd partiesCreating the portfolio – why look outside- Manufacturing constraints- Development capability- Time to revenue- Financial status- Product mix- Country/region specific products- Tactical & strategic relationshipsStrong and agile Teva in-licenses 30% of products!
  55. 55. Introduction to sourcing from 3rd partiesCreating 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
  56. 56. Introduction to sourcing from 3rd partiesCreating the portfolio – considerations- Partner Selection - Commercial relationship model - Quality and consistency of supply - Long term cost position - Partner’s ambitions- Beware… - Regulatory expertise - Number of dossiers/licenses sold - IP ownership and supply chain flexibility
  57. 57. 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 & partnerThat is why strategy and planning forgeneric portfolio’s is required!
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