Strategic generic portfolio selection may 12th 2010

Asa CoxFounder genericlicensing.com

Strategic Portfolio Planning for Generic Drugs

May 12, 2010

- 13 years in generics

Manufacturing, Development, Licensing, Consulting

- International projects

- Online networker

- Web business 2.0 believer

About me

- 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 parties

Aim: To understand why strategy and planning for generic portfolio’s is required!

Topics

- Does typical exist?!

Country variables:

Demographic Population Market development Local players Drug provision policy Generic incentives Economy

Overview of typical generic portfolio’s

Does typical exist?!

Typical category portfolio’s?

e.g United Kingdom




e.g United Kingdom

Full : Teva, Actavis, Sandoz, Mylan




e.g United Kingdom

Full : Teva, Actavis, Sandoz, Mylan

Profit: Arrow, Ratiopharm, Winthrop, Stada




e.g United Kingdom

Full : Teva, Actavis, Sandoz, Mylan,


Focused: Rosemont, Hospira, Perrigo




e.g United Kingdom

Full : Teva, Actavis, Sandoz, Mylan,


Focused: Rosemont, Hospira, Perrigo

Manufacturing: Cipla, Ranbaxy, Wockhardt, Aurobindo...


If you were creating a portfolio from scratch... where would you start?!

Specifics of portfolio planning for generics


Cash vs Profit Business plan/strategy Cost of entry Available technology Risk of competition Supply chain



Cash vs ProfitIMS top down

Value or volume Level of competition

- Same data as everyone! Manufacturing capability



Cash vs ProfitIMS top downPatent 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



Cash vs ProfitIMS top downPatent expiriesManufacturing capability

Dose forms Biologics Capacity Dedicated units Supply chain Cost



Cash vs ProfitIMS top downPatent expiriesManufacturing capabilityMarketing & 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



Cash vs ProfitIMS top downPatent expiriesManufacturing capabilityMarketing & DistributionCopy Competition

Which one?! Response Attainability



Using IMS – Top Generics

Top 200- All over $400m- Very long tail


1. 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)



5. 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)




Why difference in generic success? Brand tactics

Price match Alternative formulations Effective anti-generic messages

Doctor perspective Long term use Activity limits

EXAMPLE: OMEPRAZOLE – US vs UK

US - $300m value erosion (25%)UK -


OMEPRAZOLE – UK (£25 to £1)



Targeting patent expiry of a blockbuster?!


CLOPIDOGREL/PLAVIX


If 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

Why strategic planning is important


2009 global generic products generated $83bn (€59.8bn) in audited sales (IMS)


2009 global generic products generated $83bn (€59.8bn) in audited sales (IMS)

In the $59bn global generics market in developed countries, Japan only accounts for 6%, while the US holds 42%, and five major European national markets account for 23%.

BCC estimates the global market to reach $129.3bn by 2014, representing a 9% annual growth rate.


2009 global generic products generated $83bn (€59.8bn) in audited sales, according to IMS.

In the $59bn global generics market in developed countries, Japan only accounts for 6%, while the US holds 42%, and five major European national markets account for 23%.

BCC estimates the global market to reach $129.3bn by 2014, representing a 9% annual growth rate.

29%

$37.5bnUndeveloped markets


Government debt as % of GDP (2009)


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!


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.



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,"


Biosimilars/follow on biologics

Approximately one-third of all newly approved drugs will be biologics. (2010) Double-digit growth of 20

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)


Biosimilars/follow on biologics


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 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



The world's top drugmakers face the loss of $140 billion in annual sales by 2016 (of $700bn 2008)



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



"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.”



Whats 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?

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 the company to lose as much as 25% of its sales revenue to generic encroachment by 2014.



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.



“Generics are an important part of the health care system. ????? believes that when there is a direct generic equivalent to the prescribed brand name drug, it should be used provided the doctor agrees it is best for the patient.”



“Generics are an important part of the health care system. Pfizer believes that when there is a direct generic equivalent to the prescribed brand 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


http://www.pfizer.com/about/public_policy/generics.jsp


NEW YORK, March 18 (Reuters) - Pfizer Inc (PFE.N) may still be eager to buy generic drugmakers, 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 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.


http://www.reuters.com/finance/stocks/overview?symbol=PFE.N


Pfizer’s global annual sales of established products are approximately $10 billion (?!)



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 pursue emerging global markets.


Why strategic planning is importantSUMMARY: What is the future going to look like?!

5 year high growth windowMajor player strength & depthBiologicsBig pharma entering generics

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 relationships

Strong and agile Teva in-licenses 30% of products!

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

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

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

That is why strategy and planning for generic portfolio’s is required!

Strategic generic portfolio selection may 12th 2010

Business

Transcript of Strategic generic portfolio selection may 12th 2010