Partnering In Pharmaceutical Latin American Markets

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LatAm current & future potential
Venezuela: the LatAm fastest growth driver
LatAm In-licensing business needs
Generics / R&D licensing alliances opps.

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  • We believe our portfolio best meets the varied and often complex needs of patients and societies. Novartis is positioned to lead in innovation, partner with others and offer solutions to patients across a broad healthcare spectrum.
  • We believe our portfolio best meets the varied and often complex needs of patients and societies. Novartis is positioned to lead in innovation, partner with others and offer solutions to patients across a broad healthcare spectrum.
  • Partnering In Pharmaceutical Latin American Markets

    1. 1. Partnering in Latin American markets Finding the perfect licensing alliance between Generics / R&D Giovanny León, BD&L Director Vienna, 12 th June 2009
    2. 2. LatAm current & future potential Venezuela: the LatAm fastest growth driver LatAm In-licensing business needs Generics / R&D licensing alliances opps. Agenda
    3. 3. Latin American Markets (LatAm): US$ 32 bn in sales with expected double digit growth. <ul><li>Latin America forecast expected to increase $20 billion on the next 5 years </li></ul><ul><li>Brazil’s forecast to swell $6 billion in next 5 years </li></ul><ul><li>Venezuela sets to grow $5 billion </li></ul>
    4. 4. IMS forecasts Venezuela to achieve by 2013 the 11th position in worldwide ranking following Brazil Source: IMS Health Market Prognosis, Mar 2009. Market size ranking in Constant US$. *Russia 2013 Market Insights estimate 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Russia Belgium Netherlands Poland Greece Australia South Korea India Turkey Mexico Brazil Canada Spain United Kingdom Italy China Germany France Japan United States 2008 Rank United States United States 1 Turkey Australia 12 Venezuela Mexico 11 United Kingdom Brazil 10 Canada China 9 Brazil Canada 8 Italy Spain 7 Spain 6 France Italy 5 South Korea Netherlands 15 Mexico Poland 14 India India 13 Germany France 4 China Germany 3 Greece South Korea 17 Russia* Belgium 16 Japan Japan 2 Netherlands Greece 20 Australia Portugal 19 Poland Turkey 18 2013 Rank 2003 Rank Netherlands Greece South Korea Turkey Brazil Spain Italy Germany Japan Turkey United Kingdom Brazil Spain United Kingdom Mexico Germany France Russia* Japan Japan Netherlands Poland 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1
    5. 5. Venezuela have become the LatAm growth driver LATIN AMERICA PHARMACEUTICAL MARKET SALES AND GROWTH Mat Apr 2009 (US$ Const.) Share of Value Sales $37.9 Bn Share of Value Growth $1.5 Bn Source: IMS Health, PM, MAT Apr 2009, Retail Channel Retail only
    6. 6. Venezuela accelerates growth, while Brazil breaches the gap with Mexico Source: IMS, MAT April 2009, Retail Channel 12,48% 103 6,99% 1,8% 692 Perú 9,85% 108 12,08% 2,1% 807 Ecuador 7,64% 94 -2,68% 2,6% 993 Chile 10,15% 102 6,16% 3,4% 1.284 Centro América 7,54% 94 -1,90% 4,3% 1.623 Colombia 12,38% 112 16,64% 10,1% 3.822 Argentina 23,12% 127 31,91% 14,5% 5.491 Venezuela 3,25% 87 -9,87% 24,6% 9.324 México 17,17% 99 3,45% 36,6% 13.883 Brasil 11,70% 100 4,01% 100,0% 37.919 LatAm CAGR Mat Apr 05-09 Evol. Ix Growth MS% Sales Mat 09/Apr
    7. 7. Volume is the major driver of growth in most markets representing a healthy opportunity; Mexico shows high price growth Source: IMS Health, MIDAS, MAT December 2007 % contribution to growth constant US$ % GROWTH CONSTANT US$ Venezuela’s inflation >25% is a major factor in price growth LATIN AMERICA: ELEMENTS OF GROWTH % 2007 -5% 0% 5% 10% 15% 20% 25% 30% 35% LA MXC BRZ ARG VNZ COL CHL CA ECU PER Price Volume & Mix New elements Retail only 12.0% 7.5% 9.9% 19.1% 33.0% 2.4% 16.7% 7.5% 13.5% 18.4%
    8. 8. LatAm´s pharmaceutical spending is improving fast. Pharma Spend/C 2005 (USD) Pharma Spend/C 2010 (USD) Δ 171% 77% 33% 40% 18% 17% 99% 64%
    9. 9. Latin America: A look towards the future 5 year CAGR: 9-12% growth 2008-2012 <ul><li>Political Healthcare agenda’s will boost sales volume via broader access , but constrain sales through stronger price regulations and encouragement of locally produced generics </li></ul><ul><li>Growth in pharmacy chains and competition from ‘own label’ generics will exert strong influence on prices </li></ul><ul><li>Improved economic performance should allow greater uptake of more expensive new products </li></ul><ul><li>Gradual introduction of new patent-protected products with data exclusivity should drive price growth in some countries but this may be threatened by the recent usage of compulsory licensing in Brazil </li></ul><ul><li>Regional harmonization of registration requirements unlikely in next 5 years </li></ul><ul><li>Consolidation of small local companies , that will invest further on export business, generic production, OTC products and likely to acquire licensing rights of patented products. </li></ul>
    10. 10. Latin America is forecasted to continue with double digit growth, mainly powered by Venezuela and Argentina Source: IMS Health, IMS Market Prognosis International, Mar 2008 11,5% 9,9% Latin America 26,7% 27,6% Venezuela 8,8% 9,2% Peru 7,4% 7,2% Mexico 8,8% 4,3% Colombia 7,4% 4,6% Chile 9,7% 9,5% Brazil 13,7% 12,9% Argentina CAGR 2007-2012 CAGR 2003-2007 Country
    11. 11. LatAm current & future potential Venezuela: the LatAm fastest growth driver LatAm In-licensing business needs Generics / R&D licensing alliances opps. Agenda
    12. 12. Venezuela is positioned as 3rd largest Market in LATAM <ul><li>Fuente: IMS. Feb 2009 </li></ul>
    13. 13. Branded products foster up to 92% of Venezuelan market <ul><li>Source: IMS Venezuelan Market: Five Years Review July . 2008 </li></ul>
    14. 14. MS% (Vaues) Data MAT Growth (Values) MS% (Units) Data MAT Growth (Units) <ul><li>Data: MAT Marzo 09 </li></ul>Branded Generics represent the strongest growth drivers in Venezuela
    15. 15. LatAm current & future potential Venezuela: the LatAm fastest growth driver LatAm In-licensing business needs Generics / R&D licensing alliances opps. Agenda
    16. 16. LatAm Business Needs Portfolio Management CONTEXT <ul><ul><li>In/out licensing more strategic </li></ul></ul><ul><ul><li>Increase licensing opportunities </li></ul></ul><ul><ul><li>Low regional R&D investment </li></ul></ul><ul><ul><li>Increasing complexity </li></ul></ul><ul><ul><li>Globalization operations </li></ul></ul>CHALLENGES <ul><ul><li>Portfolio priority analysis </li></ul></ul><ul><ul><li>High volume of projects to manage </li></ul></ul><ul><ul><li>NPV/ROI assessment </li></ul></ul><ul><ul><li>Access to product information </li></ul></ul><ul><ul><li>Accurate project status </li></ul></ul>Identify Opportunities Initial evaluation Scientific review Due diligence Initiate Project
    17. 17. <ul><ul><li>Focus on most profitable projects </li></ul></ul><ul><ul><ul><li>Understanding and planning for different future scenarios </li></ul></ul></ul><ul><ul><ul><li>Balancing and prioritizing investments over entire franchise </li></ul></ul></ul><ul><ul><ul><li>Aligning lifecycle strategy with investment budgets </li></ul></ul></ul><ul><ul><ul><li>Commercially focused and timely lifecycle planning </li></ul></ul></ul><ul><ul><li>Effective and efficient execution of chosen projects </li></ul></ul><ul><ul><ul><li>Accelerating time to peak sales </li></ul></ul></ul><ul><ul><ul><li>Building more commercial focus into product development </li></ul></ul></ul><ul><ul><ul><li>Maximizing launch effectiveness </li></ul></ul></ul><ul><ul><ul><li>Optimizing mature product profitability </li></ul></ul></ul><ul><ul><ul><li>Managing late-lifecycle strategies (e.g. OTC switching) </li></ul></ul></ul>LatAm Business Needs Portfolio Management STRATEGIC OPERATIONAL
    18. 18. LatAm portfolios in particular need to be redefined to address future changes <ul><li>Price would be the key to determine market attractiveness and would be driven by the liberalisation of re-imbursement structure </li></ul><ul><li>‘ Market Access’ would be determined only by right pricing & reimbursement </li></ul>Right Pricing Right ‘Portfolio’ <ul><li>Most company portfolios are not in-line with the market requirement </li></ul><ul><li>While lifestyle therapies are getting momentum in urban markets, there is scope for penetration to extra-urban and rural markets </li></ul><ul><li>In-Licensing & striking right alliances is becoming more critical </li></ul>
    19. 19. LatAm current & future potential Venezuela: the LatAm fastest growth driver LatAm In-licensing business needs Generics / R&D licensing alliances opps. Agenda
    20. 20. Opportunities for generics / originator alliance in LatAm. A Novartis case. Innovative Medicines Reducing economic burden Self-care Next generation products First in market New combinations New formulations & dosages Novartis Venezuela's Projects Innovative Medicines Reducing economic burden Self-care <ul><li>Russian developer </li></ul><ul><li>Indian Gx </li></ul><ul><li>Indian GX </li></ul><ul><li>Spain Gx </li></ul><ul><li>Argentina Gx </li></ul><ul><li>Sandoz ( NVR Gx) </li></ul>Potential collaboration areas
    21. 21. Where are the limitations to license with Latin American partners and how to overcome them? Innovative Medicines Self-care Product Commoditization Lack of clinical data <ul><li>Stability zone IV </li></ul><ul><li>Bioequivalence </li></ul>Price Proactive approach Innovative Medicines Reducing economic burden Self-care <ul><li>Highlight potential added value formulations </li></ul><ul><li>Review of publications </li></ul><ul><li>Include in the dossier </li></ul><ul><li>Accelerate data first. </li></ul><ul><li>Start BIO vs. originators / reference products. </li></ul><ul><li>Look for regional deals to reach critical mass </li></ul><ul><li>Focus on TOP countries. </li></ul>Potential Limitations
    22. 22. Questions

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