Global Pharma: is the "Emerging Market" a Dated Concept? (Part 4 of 5)

by Ben Comer, for Pharnaceutical Executive

Putting Risk in a Basket

One of the crucial aspects of selling in the pharmerging space is the assets in a company's portfolio, and how it changes from market to market. "The opportunity in each of the individual pharmerging markets is very different depending on portfolio," says Campbell, adding that GlaxoSmithKline, and several other companies, have a "very localized portfolio in India versus their global portfolio," a strategy primarily due to the prevalence of out-of-pocket payment from patients. "The opportunity depends on whether you're trying to sell high-priced innovative products ... or branded or unbranded generics."

Aside from portfolio customizing for specific markets, industry must also prepare itself for some volatility in how countries see this squaring with their own priorities. "Companies are essentially realigning their definitions to match this [emerging markets] basket approach, which mitigates some of the risk," says Kleinrock. "We've seen growth performance swings in China of 10 percent or 12 percent in a single year. Companies are increasingly talking about putting these countries together, to curb variable growth trends. That's helpful in terms of investment return." Nevertheless, marquee growth rates among local players in emerging markets can drum up artificially high performance expectations at headquarters, and some of the multinationals fail to achieve similar growth rates, adds Kleinrock. A long-term perspective and tolerance of the occasional launch failure is the best way that HQ can overcome this trend. It is also important to agree on just where HQ should set benchmarks for progress—measuring performance against local firms is not always the right indicator to chart success.

Leveraging the portfolio successfully should also recognize rates of disease morbidity and mortality unique to a given market, since disease prevalence can vary dramatically between countries. In Russia, for instance, cardiovascular disease and metabolic disorders represent the most pressing health concerns; in India, infectious diseases are top of mind; and in Brazil, China, and Mexico, neuropsychiatric disorders represent the largest healthcare costs.

Leading a Best Practices Culture

So, how is the C-suite responding to growth opportunities in emerging markets? "Most companies start out with a legacy footprint—countries where the parent organization has been strong in the past—but now the local affiliates are saying, 'Okay, we are beating the competition in Brazil so can we launch in other Portuguese-speaking markets?' Or, 'We're in Asia; are there other markets in Asia that have similar demographics and disease profiles that we can move into?'" says Campbell. "Everyone is chasing China," but beyond that, it depends on the company and its management.

In terms of organization, many companies have elected to combine the emerging markets into a single entity that reports up to the CEO, taking leadership out of the regions, says Benoff. "But a lot of the tier 3 pharmerging countries still stay in the regions, and to me, that's a signal of where efforts are the most focused." In this scenario, "you're seeing the four BRIC countries, plus maybe Turkey or Mexico, getting most of the attention" from top brass, he says. Chris Nickum, vice president, IMS Consulting Group, says companies are still configuring internal reporting structures for the smaller emerging markets. "I think all companies have good intentions of trying to take commercial best practices from around the globe and putting them into use in those markets," says Nickum. "They're still working out accountability for some of the Tier 3 markets: Who makes what decision, in what order, and under what workup for allocating resources?"

In terms of expertise on the ground, "the local general manager is going to know the most about the market," according to Nickum. "But they may not see everything else the company is doing commercially, around the rest of the world. What we see a lot of times is that the GM is doing one thing, headquarters is doing another, and they don't meet in between." If global multinationals are serious about maintaining a long-term presence in emerging markets, they will need to start incorporating local talent in to the executive ranks. Much like politics, all business is local.

In summary, for a successful launch in an emerging market, Nickum says organizational alignment is No. 1, followed by a clear value proposition, which may include pharmacoeconomic data and CER, patient assistance programs, and a commitment to diagnostic testing. It is equally important to use the asset provided by a distinct offering through the portfolio to build currency with local stakeholders.

Big Pharma leadership has demonstrated a desire to learn about new markets, and to do their homework, says Campbell, but they haven't yet shown a "desire to innovate in terms of the commercial model." Nickum says true innovation often requires "new systems and capabilities;" some of these are beginning to get rolled out. "You're starting to see some of the big multinationals roll out global centers of excellence for things such as e-detailing or tele-detailing," he says.

Global Pharma: is the "Emerging Market" a Dated Concept? (Part 3 of 5)

by Ben Comer, for Pharnaceutical Executive

Reimbursement Innovation

"If you don't have a vision of how a drug is going to be reimbursed, you don't really have a drug," said Alberto Grignolo, corporate vice president, Parexel Consulting, at the DIA conference. There are ways to improve a drug's chances of gaining reimbursement, the first of which begins in the developmental stages. According to Raj Long, head of international regulatory, AMAC, GEM, Latin America, at Novartis, the onset of historically Western diseases, such as type 2 diabetes, hypertension, and cancer, demands mass-market access, which in turn generates a demand for affordable and reimbursable healthcare. A key mistake, says Long, is made when comparative effectiveness research (CER) is conducted during the final stages of product approval, in Phase III or later. Long says that the result of late-stage CER reflects a developed market gold standard, which becomes non-comparable in the local context.

"You can demonstrate superiority, and that's fine, you might get approval, but you won't get reimbursed, because the products you compared aren't available" in a given emerging market, Long tells Pharm Exec. Additionally, the dose titration target for mature markets may not jibe with emerging market standards, says Long. By commencing CER on dosage, safety, and efficacy during Phase II, sponsors can better identify payer-oriented endpoints, seek and combine payer/regulator/sponsor input, and identify local practices and medical standards, Long says. This helps to create a "local system" value, rather than just claiming marginal improvements in efficacy in terms of global value.

It's also important to remember that innovative drugs do get reimbursed in some emerging markets, particularly the most innovative therapies. Bayer was able to gain reimbursement on Nexavar, an innovative cancer drug, in Korea, a notoriously difficult reimbursement environment, earlier this year. Compelling evidence relevant to the disease profile for kidney cancer in Korea as well as an aggressive clinician outreach strategy helped do the trick.

Another way to gain reimbursement favor in emerging markets is to invest in local manufacturing, as the political preferences for homegrown products pile up. Perhaps the most famous call for local production over the last year came from Russian Prime Minister Vladimir Putin, who, according to a report in the Moscow Times, said he wanted "90 percent of Russia's vital medicines, and 50 percent of its medical equipment to be domestically produced by 2020."Pharm Exec's IMS panel agreed that local investment can sometimes help to open reimbursement doors. "There are discussions around setting up bio parks to stimulate new industry [in Russia], says Campbell, but that presents new challenges, since Russia doesn't have established Good Manufacturing Practices (GMP). 

"A lot of organizations don't want to manufacture in Russia, because you can't export out" without GMP compliance. "Other organizations are making decisions about whether to build manufacturing plants, hedging on the fact that government may mandate local manufacturing to be included on its central drug list for any new national drug insurance scheme that goes forward," says Campbell. But that's a risky bet, since it could turn out that local manufacturing isn't mandated, but instead receives preferential pricing, which could in turn be offset by importation taxes.

For IMS's tier 1 and 2 markets—China plus Brazil, Russia and India—"making some direct investment, I think, has a real impact," said Benoff. But for the 13 tier 3 markets—which include Argentina, Egypt, Indonesia, Mexico, Pakistan, Poland, Romania, South Africa, Thailand, Turkey, Ukraine, Venezuela, and Vietnam—"the ability to drive local investment is much less significant," since "the tradeoffs aren't as strong."

Global Pharma: is the "Emerging Market" a Dated Concept? (Part 2 of 5)

by Ben Comer, for Pharnaceutical Executive

Generics: Challenge or Opportunity?

Despite healthy growth forecasts for many of the 17 emerging markets surveyed by IMS, a closer look at the numbers may staunch initial enthusiasm: It's worth noting that market growth and pharma company growth is not the same thing. Spending on innovative brand drugs is expected to decrease across the board, with any gains offset by patent losses. Even though the global pharmaceutical market is predicted to cross the $1 trillion mark in 2015, approximately $400 billion to $430 billion, or 39 percent, will come from the sale of generic drugs. In 2010, generics accounted for just 27 percent of the global drug market.

To capitalize on the skyrocketing generics spend, top pharmas have dusted off brands with expired patents and rejiggered them for emerging markets, often with the help of local generics players. In India alone, partnerships have been forged between Merck and Sun Pharmaceuticals, AstraZeneca and Torrent Pharmaceuticals, Bayer and Cadila Healthcare, GSK and Dr. Reddy's Laboratories, and Abbott paid $3.7 billion for key parts of Piramal Healthcare last year. But the branded generics game is not without risk; while some patients in emerging markets are willing to pay extra for the prestige (or presumed safety) that comes along with a drug manufactured by a Pfizer or a Merck, the margins necessary to make a deal worthwhile are beginning to face a crunch, as local governments intervene in negotiations or try to scale back reimbursement coverage.

Drug Spending by Geography

Latin America, which represented 6 percent of the $856 billion global pharmaceutical industry in 2010, provides an example of the growing pains for pharma. Drug spending in the region is expected to rise by between 11 percent and 14 percent in the next five years, to as much as $82 billion by 2015. Brazil leads Latin America in terms of spending on drugs, and while that spending will increase, brand drugs will take a hit, despite a relatively large original brand market, says Michael Kleinrock, research director, IMS Institute for Healthcare Informatics. "Government policies will have longer-term impact on brand growth over the next five years ... a lot of the growth is essentially going to be volume-driven," he says.

Indeed, brand drug prices in Latin America have been driven down by the adoption of international price referencing, where the lowest price wins. "Brazil's international price referencing significantly impacts the rest of Latin America," said John Brennick, director, worldwide market access, Janssen Global Services, at a panel at the Drug Information Association's (DIA) annual meeting in June. "Brazil takes the lowest price reference available," based on nine reference countries including Australia, Canada, France, Greece, Italy, New Zealand, Portugal, Spain, and the US or the drug's country of origin, said Brennick. That price can then represent "your product's maximum price for its entire patent life on the market in Latin American countries." Brand growth is also hampered by the fact that 79 percent of drug costs in Brazil are paid for out of pocket; Mexico's out-of-pocket percentage is even higher.

Some traditionally innovative drug-oriented companies have opted to buy in to Brazil's generics market. Last October, Pfizer bought 40 percent of Teuto, a Brazillian drug company, for $238 million. Sanofi bought Medley, and its portfolio of 189 generic products, for €500 million in 2009, although the deal was held up for a year by antitrust concerns.

Global Drug Spending by Segment

Many of the growing pains present in Latin America hold true for other emerging market countries. Generic drug buy-ins are likely to continue, particularly with the shift in the profile of disease caused by things such as urbanization, diet, smoking, and rising life expectancy. "By 2030, the burden of disease in the emerging markets will look very similar to the burden in terms of chronic conditions in mature markets, "says David Campbell, senior principal, IMS Consulting Group. As the bulk of drug spending moves from acute disease to chronic disease, R&D-driven organizations are increasingly considering a play in branded generics, or pure generics sales. As an illustration of the pricing pressures in Brazil, and the appeal of generic buy-in, consider the following case presented at DIA by Alexandre Schiola, head of regional market access for Latin America at Bayer. Elan and Biogen Idec's Tysabri received regulatory approval in August 2008, and was eligible to be classified as a category 1 drug by the Brazilian Health Ministry. The wholesaler price in August 2008, as well as the accepted international price, was $2,400 per dose. The expected price in Brazil, with taxes and margins, was $3,900. But the price that received approval was $2,219.

Examples like the one above can be impossibly frustrating. But challenges in pricing and market access have a way of weeding out companies without a stomach for change and innovation. Where some companies see a prohibitive set of circumstances, others see opportunity. In some cases, product process can be the source of innovation.

Global Pharma: is the "Emerging Market" a Dated Concept? (Part 1 of 5)

by Ben Comer, for Pharnaceutical Executive

As Big Pharma struggles through an endless cycle of market churn, a strategic question is whether the concept of an "emerging market" is a dated one. Many of these markets are no longer justemerging, but instead are firmly established, with the C-suite placing big bets on them as growth centers against diminished earnings over the next few years from the old mainstay markets of the US, Europe, and Japan. Drawing on insights from a May 31 roundtable with experts from IMS Health, our third-annual survey of the "pharmerging 17" adds some grouch to the gloss, concluding that profitability—the metric that counts—depends on how well companies deploy their portfolio strengths to separate themselves from the pack, drop that HQ comfort-zone mentality, and anticipate a growing list of built-in risks.

Fastest-Growing Emerging Markets

Like any passion play, the potential for big returns depends on the level of engagement, the cost of which is rising. Creating infrastructure, cultivating relationships, preserving a reputation for quality, and building a ground presence by mobilizing a large and conspicuous sales force is not cheap. At the same time, such investments don't mean that local payers—assuming you can identify them—will automatically pony up to pay for expensive brand drugs. The consensus is that "expensive"—in terms of commercial investment, portfolio positioning, and drug pricing—is an increasingly relative concept, dependent on a host of factors unique to each particular country. Making a decision about which emerging markets to enter requires as much of a studied self-examination of company assets and culture as it does an understanding of the market forces at work within a specific country. Going forward, it will take more than just showing up to make money.

Adaptability Pays 

The traditional selling model for US- and European-based companies has been to launch innovative products at a premium price, which can be more or less maintained through the lifecycle of the drug. Following on that model, biologics and specialty drugs targeting orphan diseases—priced at an even higher premium, to make up for smaller patient populations—have been a winning strategy for many companies in mature markets, where healthcare spending is backed by a critical mass of affluence.

This is not necessarily so in the emerging markets. While India is said to have the world's largest middle class, annual household income for this segment is still only between $5,000 and $22,000, a modest amount in relation to what middle-class patients are able to pay for a typical innovative medicine in the West. In addition, that Indian middle class usually has to pay the full cost of a drug out of pocket, due to the absence of any government safety net. While other governments might pay for innovative treatments, most of the highest growth geographies start at a low base, and favor generics over brand drugs. Big Pharma has had some success in emerging markets by sticking to the brand and muscling out generic competitors, but that window is closing as governments start intervening to curb drug prices and promote the interests of local generics companies. 

"China is planning to benchmark brand drug prices to the local generic, even if the brands are on the essential drug list," said Marc Benoff, vice president, IMS Consulting Group. Russia and South Africa are two other examples of countries where government has said it will extend healthcare and drug reimbursement to greater swaths of the population, says Benoff, but it's unclear how these initiatives will be financed without significant European-style austerity measures.

LatAm Pharma M&A: tres grandes Farmacéuticas Globales se disputan un Laboratorio Brasilero

Al menos tres de las mayores farmacéuticas del mundo realizaron ofertas por Aché Laboratorios Farmacéuticos de Brasil, en una subasta que podría valorar al grupo en más de 5,000 millones de dólares, dijeron personas con conocimiento del tema. Se trata de las norteamericanas Pfizer y Abbott, y la suiza Novartis, quienes están considerando una segunda ronda de ofertas para adquirir a la compañía, que goza de una sólida posición en el mercado farmacéutico brasileño, de rápido crecimiento, dijeron las fuentes.

Las ofertas deben presentarse en la segunda mitad de abril, dijeron dos de las fuentes, que pidieron no ser identificadas debido a que la subasta no es pública.

La compañía privada Aché es atractiva para las farmacéuticas que buscan aumentar su presencia en el creciente mercado latinoamericano. Pero una de las familias dueñas de la empresa ha dicho que le gustaría conservar su participación, y la incertidumbre ha disuadido a potenciales oferentes. Además, Glaxo mostró un interés inicial, pero se ha retirado de la competencia, dijeron las fuentes.

Funcionarios de las compañías multinacionales rehusaron realizar comentarios. Gente cercana al proceso dijo en febrero que las familias con gran cantidad de acciones en Ache pidieron al banco de inversión Lazard que explorara una venta, aunque no estaba claro si se procedería con un acuerdo dadas las divisiones entre los controladores de la compañía.

Las familias Baptista y Siaulys, que contrataron a Lazard, están listas para vender, pero la familia Depieri quiere conservar su participación, dijeron las fuentes.

"La gente está un poco preocupada sobre la situación en torno a las familias que venden y se preguntan si alguna vez quedarán satisfechas con el precio. Algunas personas que estaban interesas se han retirado por esa razón", dijo una fuente.

Aché se ubica en el cuarto lugar de las ventas generales de medicamentos en Brasil, pero es líder en medicinas con recetas y también participa en el negocio en expansión de remedios de venta libre. "Todas las grandes compañías farmacéuticas quieren entrar en los mercados emergentes y Ache es la joya de la corona en Brasil", dijo un banquero, quien pidió permanecer anónimo debido a que no tiene permitido hablar con los medios de comunicación.

Las ganancias de Aché antes de intereses, impuestos, depreciación y amortización (EBITDA) para el año en curso se estiman en torno a los 300 millones de dólares y los dueños de la empresa buscan un múltiplo de "decenas" del EBITDA en cualquier venta, han dicho personas con conocimiento del tema. Un múltiplo de 15 a 20 veces sugeriría un precio de 4,500 millones a 6,000 millones de dólares.

Fuente: Mirada Profesional

Pharma Trends: Big Pharma deals lie ahead in 2013
by Meg Tirrell, Jeffrey McCracken & Drew Armstrong

Pharmaceutical companies including Pfizer Inc. (PFE) and Bristol- Myers Squibb Co. (BMY)have spent the last several years digesting earlier acquisitions, refocusing their product development and setting aside cash in anticipation of expiring patents. Now, the expectation is they’re ready to start buying again. Led by Pfizer, in New York, and Whitehouse Station, New Jersey-based Merck & Co. (MRK), five of the largest U.S. drugmakers had more than $70 billion in cash, near cash and short-term investments at the end of the third quarter.

“We’re through many cost-cutting programs, restructurings and portfolio arrangements,” said Henry Gosebruch, managing director of health-care mergers and acquisitions at JPMorgan Chase & Co. (JPM) “When you put that together with record levels of cash available and improving, but still moderate R&D productivity, we think there will be more big pharma M&A activity in 2013.”

Johnson & Johnson (JNJ), Abbott Laboratories (ABT), Sanofi (SAN), Pfizer and Merck have already shown interest in one purchase that may top $10 billion: Bausch & Lomb Inc., the eye-care company, is for sale by Warburg Pincus LLC. The private equity firm is seeking at least $10 billion for the business and those companies may be bidders, according to people with knowledge of the matter.

This week will set the year’s dealmaking agenda at JPMorgan’s annual health-care conference in San Francisco. Almost 8,000 attendees and more than 400 companies will gather to make public presentations, have one-on-one meetings and get a sense of available and competing assets.

‘Circus Bazaar’

“It’s like a circus bazaar for business development,” said Geoff Meacham, JPMorgan’s biotechnology analyst, in a telephone interview. “It’s at the beginning of the year, the time when everyone sets the stage; there are crowded hallways, lots of buzz. And there’s probably a million 10-minute cups of coffee between companies.”

Big drugmakers will probably be on the hunt for assets to fill revenue holes left by expired patents.

Pfizer’s Lipitor, which drew more than $12 billion in annual revenue at its peak, lost marketing exclusivity in November 2011. Eli Lilly & Co. (LLY) lost patent protection on its top-seller, the antipsychotic Zyprexa, in October 2011. The drug had drawn more than $5 billion in peak sales. New York-based Bristol-Myers faced generic competition last year to Plavix, its best-seller with more than $7 billion in revenue.

Cash Reserves

At the same time, they’ve got deep pockets. Pfizer ended the third quarter with $23 billion incash, near cash and short- term investments. Lilly had $6.9 billion, while Merck had $18.1 billion, and J&J, $19.8 billion.

“Many large cap pharma companies still face a patent cliff and have the financial capability and strategic willingness to partner and acquire their way to continued innovation,” Leerink Swann analysts including Seamus Fernandez wrote in a Jan. 3 report. They cited Bristol-Myers, Lilly and London-based AstraZeneca Plc (AZN) as potentially the most active acquirers.

Still, they’re likely to be careful buyers, avoiding purchases where valuations have risen too high, Gosebruch said.

Some biotechnology companies dependent on a single product have seen their stocks triple or quadruple in the last couple of years, to market values from $2 billion to $5 billion, as those products have seen success. While those companies are attractive, big pharmaceutical firms may look elsewhere for acquisitions, such as to larger firms trading at more digestible multiples and with more established products, he said.

Biotechnology Growth

Biotechnology companies with market valuations of more than $10 billion include Amgen Inc. (AMGN), Gilead Sciences Inc. (GILD), Biogen Idec Inc. (BIIB), Celgene Corp. (CELG), Alexion Pharmaceuticals Inc. (ALXN) and Regeneron Pharmaceuticals Inc. (REGN) Celgene, the maker of $3 billion- a-year cancer drug Revlimid and other oncology drugs based in Summit, New Jersey, fits the focused profile that may draw bigger drugmakers’ interest. Regeneron, based in Tarrytown, New York, with efforts in ophthalmology, cancer and high cholesterol, is more diversified.

To be sure, big pharmaceutical companies may face pressure on their buying power, with valuations below 2006 levels giving stock transactions less leverage and patent expirations squeezing cash flows, according to Ernst & Young.

“Each of these potential currencies is now under increased pressure,” Ernst & Young said in a report released today. “Big pharma’s firepower has fallen.”

Seeking Acquisitions

Still, the accounting firm emphasized big drugmakers’ need for deals to boost revenue. “With sales declining for the first time in 2012, it is only a matter of time before shareholder returns follow suit -- unless pharma can find new sources of growth,” Ernst & Young said. “With few options for organic growth, pharma needs transactions.”

Big drugmakers may see competition from large biotechnology firms and specialty-drug makers as buyers.

“The pool of potential suitors that could pay up to $20 billion has swelled,” Ernst & Young said.

Excitement over acquisitions of biotechnology companies at the end of 2011 and beginning of 2012 contributed to skyrocketing valuations, said Ziad Bakri, a biotechnology analyst with T. Rowe Price Group Inc.

Gilead, the second-largest biotechnology company, announced in November 2011 that it was buying Pharmasset Inc., a company with no marketed products, for $11 billion to gain its hepatitis C assets. Bristol-Myers followed in January, the weekend before the JPMorgan conference began, with a $2.5 billion purchase of Inhibitex Inc., another drugmaker in hepatitis C.

Single Focus

“Last year, what dominated the conference was hepatitis C,” Bakri said in a telephone interview. “It was hepatitis C and M&A in general. Both of those ended up contributing to the outperformance of the biotech sector in the beginning of 2012.”

Companies such as Pharmacyclics Inc. (PCYC), the developer of an experimental blood-cancer drug, and Medivation Inc. (MDVN), maker of a medicine for prostate cancer, have seen their market valuations multiply many times over in the last two years on optimism for their products. Pharmacyclics, based in Sunnyvale, California, has a market value of about $4.4 billion, while Medivation, in San Francisco, is about $4 billion.

Acquisitions of similar sizes followed those of the hepatitis C companies last year. Bristol-Myers bought Amylin Pharmaceuticals Inc. for $5.3 billion, while GlaxoSmithKline Plc (GSK) bought partner Human Genome Sciences Inc. for $3 billion.

Deal Pace

There have been 676 takeovers of biotechnology and pharmaceutical companies in the last three years, according to data compiled by Bloomberg. The average disclosed deal size was $328.7 million, and the average premium, 38 percent. The largest acquisition was Sanofi’s takeover of Genzyme Corp. in 2011 for $20.1 billion. Only two deals topped $10 billion; the other was Foster City, California-based Gilead’s purchase of Pharmasset.

AbbVie Inc., the drug unit that split from parent Abbott on Jan. 1, is seeking treatments for unmet medical needs, such as Parkinson’s and endometriosis, to increase sales in 2015, Chief Financial Officer William Chase said last week.

Bristol-Myers is looking to buy a new type of Alzheimer’s disease drug to restock its pipeline after the failure of its experimental compound avagacestat, said Mark Day, who heads the company’s neuroscience business development.

Merck will consider “targeted deals” while seeking to avoid a big merger, Chief Executive OfficerKenneth Frazier said last week at a Goldman Sachs Group Inc. (GS) conference. Frazier said further industry consolidation is likely, considering pricing pressures, the costs and risks of clinical studies, and a “certain redundancy of infrastructure” in the industry.

“With cost restructuring and portfolio realignments largely behind us, pharma is now more ready to make bigger moves again,” Gosebruch said. “They are going to be back in a more aggressive way.”

Fuente: Bloomberg

BRIC Countries Boom in Global Neonatal Care Products Market

A new study from InMedica, (now part of IHS Inc. (NYSE: IHS)), The World Market for Neonatal Incubators, Warmers and Phototherapy Devices – 2012, highlights the emergence of BRIC countries (Brazil, Russia, India and China) in the global neonatal care products market. Traditionally, the neonatal care market has been perceived as a relatively slow moving with low growth and technologies that have changed little for several years. That perception is set to change considerably over the coming years, as emerging countries account for a more substantial share of the global market.

Fueled by increased healthcare spending arising from substantial economic growth in recent years, these countries are seeking to close the significant gap that exists with most developed countries in terms of healthcare provision. “BRIC countries are driving global growth in the neonatal care market and this is set to continue over the next five years. Growth rates in China and India for example, are projected at more than 10 percent per annum” commented Michael Haverty, senior analyst at InMedica.

Whilst some of the emerging countries remain at a relatively early stage in development in terms of the quality of neonatal care equipment used, there is evidence that the more advanced emerging markets are beginning to upgrade equipment and are expressing a preference for higher-quality products. This is prompting suppliers in these countries to focus on improving product offerings to meet higher demands and to establish a stronger presence internationally.

It is also noteworthy that other emerging markets across EMEA, Asia-Pacific and the Americas are showing signs of promise.  Stable African countries with strong economic growth are likely to present promising long-term opportunities for suppliers that can successfully manage the risks involved, and meet customers’ expectations in terms of pricing and quality. 

In the more established Western countries, conditions are more challenging due to high-saturation, a poor economic environment and growth rates reflective of a replacement market. That said, growth is still forecast in most of these countries over the next five years. Furthermore, new competitors are also expected to enter these markets, maintaining pressure on suppliers to offer innovative solutions to meet clients’ evolving needs.

Over the next five years, InMedica forecasts a five-year average compound annual growth rate (CAGR) of 4.7 percent for the global neonatal care products market, driven primarily by new installations in the Asia-Pacific region. In Western countries, replacements will continue to dominate the market. However, there will also be a need for increased connectivity between devices to facilitate more efficient and effective hospital information systems, as efforts continue to reduce costs in the context of restricted healthcare budgets.

Fuente: IHS Inc.

Biggest Biotech Trends for 2013

The world didn’t come to an end in 2012, but the biopharma world ended the year holding its breath, as President Obama and Congress struggled to craft a budget deal and avoid the “fiscal cliff” of across-the-board spending cuts. Below is a list of some key biopharma developments of the past 12 months:

AstraZeneca: New CEO and More Deals

AstraZeneca (AZ) hoped a new CEO would address longstanding problems with late-stage clinical trial setbacks for drug candidates expected to replace revenues lost to patent-cliff expirations. In Pascal Soriot, AZ found a pharma executive with experience integrating a biotech company and making deals; he was previously Roche’s pharmaceutical division CEO. AZ started 2012 announcing plans to lay off 7,300 people, 2,200 of them in R&D. Three months later, Soriot’s predecessor David Brennan resigned, amid reports he was pushed out. The company scored with some new deals, notably a collaboration with Bristol-Myers Squibb (BMS) to commercialize Amylin Pharmaceuticals' portfolio, in return for AZ paying BMS about $3.4 billion. AZ ended 2012 with mixed news: Its Crestor patent was upheld by the U.S. Court of Appeals for the Federal Circuit (CAFC), protecting the company from generic competition until 2016. But fostamatinib, the oral rheumatoid arthritis drug AZ is co-developing with Rigel, failed to show superiority to Abbott’s injectable Humira.

Biosimilars: FDA Finally Speaks

FDA issued its long-awaited draft guidance February 9 on the development and approval of biosimilar drugs, required under President Barack Obama’s Patient Protection and Affordable Care Act. FDA recommended a gradual or "stepwise" approach, which the agency said could include "a comparison of the proposed product and the reference product with respect to structure, function, animal toxicity, human pharmacokinetics (PK) and pharmacodynamics (PD), clinical immunogenicity, and clinical safety and effectiveness." At a May 11 hearing, executives from a dozen biopharma companies urged greater flexibility in the definition of proteins, tighter standards in naming and labeling follow-on biologics, as well as more details on moving drugs through agency approvals.

Budget & User Fees: At Cliff’s Edge, and a Rare Agreement

The federal budget stood at the brink of the “fiscal cliff” as 2012 was ending. Budgets for NIH, FDA, NSF, and CDC face across-the-board 8.2% cuts unless President Obama and Congress agree to at least $1.2 trillion in cuts over 10 years as agreed in 2011. “No question there would be delays in research. Things would have to be slowed immensely. There would be practically no new proposals coming forward, and not a whole heck of a lot. There wouldn’t be money for that,” Jon Retzlaf, managing director of science policy and government affairs at the American Association for Cancer Research, told GEN.

Early in 2012, Obama proposed freezing NIH’s budget at $30.702 billion, and cutting NSF program outlays 9%, despite a 4.8% rise in discretional budget authority. FDA was given a 17% hike in program spending, to $4.486 billion, almost entirely due to higher industry user fees. By June, the Senate Appropriations Committee approved an extra $100 million for NIH, though the following month, a House of Representatives subcommittee sided with Obama in backing a flat NIH budget. Also in July, President Obama enacted a fifth authorization of the Prescription Drug User Fee Act (PDUFA V), which over FY 2013–17 will collect a total $6.4 billion in biopharma user fees—including, for the first time, generic and biologic drugs—following rare bipartisan approval in Congress.

Drug Development: More Approvals, and Alternatives

Merck appeared poised to disrupt the $2 billion-a-year sleep disorder market, releasing in June promising results from two pivotal, three-month-long Phase III efficacy trials and additional results from daily dosing for at least a year for Suvorexant (MK-4305). The drug differs from current medicines by inhibiting wakefulness rather than enhancing sleepiness. This year also saw not one but two new obesity drugs approved by FDA, the first in more than a decade—Vivus’ Qsymia (phentermine and topiramate extended-release) and Belviq (lorcaserin hydrochloride), to be made by Arena Pharmaceuticals and distributed by Japan’s Eisai. The two obesity treatments were among 32 new drugs approved by FDA in 2012 as of December 10—one more than approved in 2011.

Genomic Privacy: Presidential Panel Offers Advice

The Presidential Commission for the Study of Bioethical Issues took a small step—not a giant leap—for genomic privacy with its release October 11 of Privacy and Progress in Whole Genome Sequencing. The report, which followed months of hearings, called for defining how whole genome sequence data can be accessed and used, and ensuring data security. It said the promise held by whole genome sequencing in aiding drug development cannot be realized absent widespread public participation and individual willingness to share genomic data and relevant medical information. But the report stopped short of hammering out protections for whole genome sequence data regardless of how they were obtained, saying only that the federal and state governments develop a process based on individual consent.

M&A Deals: The Year Without a Blockbuster

The year saw no blockbuster like last year’s Sanofi $20.1 billion purchase of Genzyme. M&A activity fell 35% over 2011, according to the law firm Freshfields Bruckhaus Deringer ($146 billion vs. $225 billion). Yet 2012 still saw several significant if smaller deals as companies pursued more targeted deals. BMS expanded its reach in diabetes when it acquired Amylin for $7 billion in August. Weeks earlier, Amylin was in the crosshairs of its third-largest shareholder, Carl Icahn. He touched off a proxy war with Amylin’s board in March, after it rejected and failed to disclose an earlier BMS takeover offer.

Watson Pharmaceuticals snapped up Actavis in a roughly $5.9 billion marriage of generics powerhouses. Also looking to grow in generics was Sanofi, which bought Colombian-owned Genfar for an undisclosed price. In molecular diagnostics, the largest deal saw Hologic shell out about $3.7 billion for Gen-Probe. Not all deals worked out: Roche tried but failed twice to buy Illumina, whose board rejected offers for the sequencing giant of $5.7 billion, then $6.7 billion. Finally, GlaxoSmithKline’s $3 billion acquisition of Human Genome Sciences followed an often-bitter courtship that ended soon after their once-weekly type 2 diabetes drug, injectable glucagon-like peptide 1 albiglutide, compared favorably to Merck’s Januvia (sitagliptin) in a Phase III trial.

Patent Cases: Prometheus Loses; Myriad on the Docket

Nestle’s Prometheus Laboratories subsidiary suffered a stinging legal defeat when a unanimous U.S. Supreme Court held as ineligible for patenting the company’s methods of dosage calibration for thiopurine drugs for gastrointestinal and nongastrointestinal autoimmune diseases. “A patent must do more than simply state the law of nature while adding the words ‘apply it.’ It must limit its reach to a particular, inventive application of the law,” the Court ruled in a decision written by Justice Stephen G. Breyer. It was a victory for Mayo Collaborative Services, which Prometheus sued in 2004, alleging that a never-marketed Mayo diagnostic test infringed two Prometheus patents by measuring the same metabolites as Prometheus’ test. Last month, CAFC applied the Mayo decision in PerkinElmer, Inc. v. Intema, Ltd by invalidating all claims of Intema’s patent for a diagnostic method to gauge the likelihood of Down’s syndrome in babies before they are born.

“Right now, how to protect diagnostic methods is something that patent attorneys across the United States are struggling with. Whenever they think they have good language, a court somewhere rules in a different fashion,” Michael J. Belliveau, Ph.D., a partner in the Boston law firm Clark+Elbing, told GEN.

Still unresolved is whether breast cancer susceptibility genes BRCA 1 and 2—perhaps all genes—are legally patentable. CAFC in August reaffirmed the mixed ruling it rendered a year earlier on seven BRCA-related patents held by Myriad Genetics. That court found Myriad’s gene composition-of-matter claims and methods of screening for cancer compounds patent-eligible—but not Myriad’s claims for its method of analyzing the genes for breast-cancer mutations. On December 1, the high court agreed to hear arguments in the nearly four-year case, in which 20 medical associations and individual doctors led by the Association for Molecular Pathology, and assisted by the American Civil Liberties Union and Public Patent Foundation, have sued the U.S. Patent & Trademark Office.

Research: Hair, Addiction, Gender and Homosexuality

Researchers continued to stretch the bounds of knowledge in 2012. A super-active form of Vitamin D enhanced the ability of stem cells to induce hair growth, a team of Japanese researchers found, perhaps striking a blow against male baldness. German investigators said they discovered a gene mutation linked to Internet addiction. Researchers from two City University of New York schools found that women can differentiate between colors better, while men show more sensitivity to detail and rapidly moving objects, which may explain why men and women see things differently—literally.

Speaking of men and women, a Yale University study revealed embarrassingly that professors favored a male job candidate over a female with identical qualifications for a fictitious science lab manager position. Women profs were just as likely as men to favor the male. And homosexuality may result from epigenetic influences on sexual development, a U.S.-Swedish team found. Sex-specific epi-marks, which normally do not pass between generations, can lead to homosexuality when they escape erasure and are transmitted from father to daughter or mother to son.

Venture Capital: Investors Remain Skittish

The quarterly MoneyTree Report by PwC and the National Venture Capital Association showed an 18.5% drop in VC funds during Q1–Q3 2012 vs. a year earlier (about $2.9 billion vs. $3.5 billion), and a 6.9% drop in the number of VC-funded biotech deals (325 vs. 349 deals). First round funding cratered, with a 55% plunge in capital ($283.5 million vs. $624.7 million) and a nearly 40% drop in the number of deals (49 vs. 81). Investors blamed biopharma startups’ greater risk than other techs, and FDA’s post-Vioxx shift toward more risk-benefit analysis.

“We’re seeing policies and regulations started—primarily in the form of taxes—that are going to disincentivize investment. You couple that with the timelines in biotech, and there’s a real potential for significant decline there,” Thomas C. Meyers, a Boston-based partner in the IP practice of law firm Brown Rudnick.

Fuente: GEN