Strategy Diversification Divested: Productivity measurements, Divestment of non-core assets resulting in healthy Cash position- Will accelerate Next wave of targeted acquisition.
In the recent years several new therapies have been approved in the area of diabetes (SGLT-2, GLP-1 agonists), Multiple Sclerosis, HCV, melanoma and breast cancer from major pharmaceutical companies. Many of them are expected to reach multibillion dollars peak sales in the near-term which is likely to compensate the patent expiry loss in top-line revenue. Novel mechanisms like anti-PD1, anti-PCSK9 and CDK inhibitors have also got exclusive attention by large cap Pharma companies. Most companies are in race to acquire assets in these hot therapy areas. Companies who already have these assets are investing heavily in clinical development programs. The interest in pursuing opportunities in Oncology therapy is unhindered for all major Pharma companies. Research investments in oncology likely to continue for several more years due to the significant unmet need exist in this area.
But for a few companies, patent expiry impact continues to haunt the top-line and they are finding it difficult to replace declining sales with Proprietary pipeline products. Beyond 2013, the impact of patent loss will further aggravate the revenue decline. They have chosen strategies of prioritization pipeline assets, cost efficiency measures, divestment of non-core assets which yield poor margins and increase focus on therapy areas where they have already proven its mettle. Increase in dividend payout and share repurchase are some near term measures where they are actively participating. Gain in financial strength through divestment of non-core assets (OTC, Animal Health, Consumer health, Diagnostics) will be utilized in pursuing opportunities in high margin therapy areas. At the same time it has becoming more difficult to find such lucrative assets because they are scarce and if available are trading at very high premium in speculation of getting acquired (ex. Roche-Alexion). Going forward, Economies of Scale will also play a major role in swapping the non-core business among major pharma including Vaccines, OTC and animal health to improve margins.
Global Pharma continues to remain attractive due to management efforts on the restructuring of entire business model, cost efficiency measures, de-consolidation, acquisition of high value targeted assets, share repurchase program and dividend policy.
AstraZeneca, Merck, Merck KGaA, Novartis, Novo Nordisk, GlaxoSmithKline
Table of Contents
AstraZeneca: Late Stage Pipeline maturing; Focused development on Respiratory, Psoriasis and anti-PD1 will support long term growth Late stage development is positive but near term pressure immense R&D Strategy Long-term CV study and R&D Updates Brilinta preferred over Plavix in NSTE-ACS patients in the US Strengthening Business in Diabetes: Acquisition from BMY Late Stage Development Program Selumetinib (PhIII, NSCLC, MEK inhibitor, Array Pharma) Lesinurad (PhIII, URAT1 inhibitor/Hyperuricemia in Gout): did not reduce gout flares but biomarker uric acid level met the end point for approval Immunotherapy such as anti CTLA and anti-PD1 will strengthen the franchise long-term Olaparib (PARP Inh, Ovarian cancer)FDA approval AZD9291 (once daily, oral Tyrosine kinase inhibitor, second-line NSCLC) Inflammation pipeline: Benralizumab (IL-5R antibody, severe asthma and COPD) Competitive landscape of cytokine targeted therapies (Tralokinumab, Dupilumab, Lebrikizumab, Mepolizumab Brodalumab (IL-17RA antibody, Psoriasis, Psoriatic arthritis, Ph III) Outlook of respiratory franchise going forward: Symbicort, Pearl and Almirall Anti-infective franchise update (AZD0914) Nexium OTC approved and generic entry in 2015 The impact of competition on Faslodex Key milestones Table 1: Competitive Landscape of Biologics in Severe Asthma GlaxoSmithKline: Reliance On Low Margin Consumer Health And Vaccines; Unable TRevive Respiratory Franchise Respiratory business competitive and large outcome trials became futile Cost savings tkeep up the operating margins and Potential ViiV IPtfund NVS JV buy-out Our views on the recently approved drugs from GSK Eperzan/Tanezeum (Albiglutide): Superior efficacy, better tolerability, ease of administration and compliance benefit should position Albiglutide better than competition in earlier lines of treatment Mepolizumab (IL-5 inhibitor, UR, once monthly, severe eosinophilic asthma) Competitive Landscape in severe asthma Advair Generics Key milestones Tables: Table 1: Bydureon, albiglutide & Victoza Clinical data comparison Merck: Anti-PD1 and HCV will remain growth drivers going forward!! IMPROVE-IT Outcome data positive, boosted confidence on other aggressive LDL reducing antibodies therapy TECOS should help DPP-IV expand their share in a fast growing but highly genericized diabetes market Acquisition of Cubist for $9.1b will fortify MRK's anti-infective acute hospital care franchise Collaboration with Bayer for novel cardiovascular assets ($1b+) Ebola Vaccine acquisition and development Keytruda Potential HCV Therapy (grazoprevir/elbasvir, PhIII): targeted for patients whdnot tolerate market leading Sovaldi Regulatory Developments Gardasil, Belsomra, Grass and Ragweed sublingual allergy tablets, Sugammadex, Odanacatib Isentress and anti-retroviral development Diabetes Franchise Ertugliflozin, Januvia/Janumet, Omarigliptin Keytruda in Second-line NSCLC: Potential additional indications -breast cancer Remicade Biosimilar impact in Europe: patent expiry in major EU countries in Feb 2015 Key milestones Tables: Table 1: Keytruda: List of on-going combination studies Table 2: On-going Phase III clinical trials for HCV combo Table 3: On-going clinical trials of Keytruda Table 4: Competitive Landscape of Anti-PD1
Merck KGaA: Emerging market and anti-PD1 tlift the outlook; Acquisition of Sigma-Aldrich tstabilize business growth Acquisition of Sigma-Aldrich for $17b would add over $2.1b in topline Strategic alliances with PFE tdevelop Immuno-oncology pipelineanti-PD1 Erbitux in first line CRC Erbitux Biosimilar threat is limited due tdifferent manufacturing process in EU/US Gonal-FBiosimilar competition Performance materials Merck Millipore in life sciences tool market (?2.6b) Consumer Health (?472m ~4% of total sales) Emerging market continues tsupport the company growth going forward (?1.8b) Key Milestones Tables & Charts Table 1: Merck SeronPhII and PhIII pipeline assets Chart 1: Merck KGaA Revenue Contribution By Strategic Divisions In 2013 Chart 2: Geographic contribution based on 2013 sales
Novartis: Strengthening Position In Oncology: Heart Failure And Psoriasis Therapy Will Find New Blockbusters LCZ696 (valsartan with neprilysin inhibitor; twice daily; 8442 patients study) in chronic heart failure patients: Superiority can command higher prices and reimbursement Rationale for fixed dose combination and Paradigm HF Patent expiry pressure immense Targeted and cellular therapy approach in Oncology CART Technology Gilenya in Multiple Sclerosis continues tbe key growth driver but market ramp up of Tecfidera (BiogenIdec) is extraordinary despite PML issue Lemtrada was effective but disease progressed after discontinuation SERELAXIN (RLX-030) in Acute Heart Failure Unmet need but FDA rejected the approval for more efficacy data Signifor LAR Approved in Cushing's disease and in acromegaly: Sandostatin LAR Replacement ready in active acromegaly Signifor/ Pasireotide will penetrate in patients inadequately controlled on Sandostatin. Signifor LAR will take up market share from Sandostatin LAR before the patent expiry in 2017 Secukinumab (Cosentyx) in Plaque Psoriasis Trying TBe Different in a Crowded Space Current treatments of psoriasis and psoriatic arthritis Long term safety data is the key for gaining acceptance by Dermatologist Panobinostat (UR, multiple myeloma, oral HDAC inhibitor) negative recommendation from FDA and safety concerns coupled with nimprovement in overall survival Patent expiry impact and potential drivers Sandoz growth tbe driven by biosimilars and respiratory generics Key milestones Tables: Table 1: Efficacy data of LCZ696 in PARADIGM-HF Table 2: Competition in Acromegaly Table 3: PASSPORT-Efficacy and Safety Comparison: SIGNIFOR LAR VS. SANDOSTATIN LAR Table 4: Select Late& Mid-stage pipeline: Plaque Psoriasis Table 5: PHIII Clinical Data on Plaque Psoriasis of marketed products Table 6: Patent Expiry Impact Through 2019 Table 7: Sandoz Biosimilar Pipeline Status
NovNordisk: Business growth is limited by pricing and competitive pressures in Diabetes Xultophy made the entry in Europe-US filing delayed Competitive pressures on Victoza: Semaglutide needs tshow at least comparable efficacy tTrulicity Dulaglutide Phase III data non-inferior tVictoza suggests slightly better efficacy with once weekly advantage Dulaglutide Efficacy and safety data comparison based on ADA conference vs. Victoza (AWARD-6) Insulin Franchise: Bio-similar insulin's and Novel Insulin's impact cannot be neglected Liraglutide 3mg obesity (Saxenda): FDA advisory committee voted in favor (14-1) Clinical safety and Efficacy from SCALE study vs. Contrave Pricing and Safety likely thamper the market reimbursement and uptake, but delayed progression tpre-diabetes may help Regulatory concerns of pancreatitis, thyroid cancer & CV risk for high dose regimen in obesity Haemostasis franchise Turoctocog (NovoEight), NovoThirteen (Cartridecacog), N8-GP Haemophilia A market size and competition Novoeight competing long-acting pipeline product from Biogen Idec / Sobi, but may score with a first mover advantage in Hemophilia A Key milestones Tables: Table 1: Clinical data comparison of weekly GLP-1 Vs Victoza Table 2: Obesity Efficacy data comparison vs. marketed drugs
List of Tables
AstraZeneca : Table 1: Competitive Landscape of Biologics in Severe Asthma GlaxoSmithKline : Table 1: Bydureon, albiglutide & Victoza Clinical data comparison Merck : Table 1: Keytruda: List of on-going combination studies Table 2: On-going Phase III clinical trials for HCV combo Table 3: On-going clinical trials of Keytruda Table 4: Competitive Landscape of Anti-PD1 Merck KGaA : Table 1: Merck SeronPhII and PhIII pipeline assets Novartis : Table 1: Efficacy data of LCZ696 in PARADIGM-HF Table 2: Competition in Acromegaly Table 3: PASSPORT-Efficacy and Safety Comparison: SIGNIFOR LAR VS. SANDOSTATIN LAR Table 4: Select Late& Mid-stage pipeline: Plaque Psoriasis Table 5: PHIII Clinical Data on Plaque Psoriasis of marketed products Table 6: Patent Expiry Impact Through 2019 Table 7: Sandoz Biosimilar Pipeline Status NovNordisk : Table 1: Clinical data comparison of weekly GLP-1 Vs Victoza Table 2: Obesity Efficacy data comparison vs. marketed drugs
List of Charts
Merck KGaA : Chart 1: Merck KGaA Revenue Contribution By Strategic Divisions In 2013 Chart 2: Geographic contribution based on 2013 sales
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Major pharma companies are continue to improve the productivity by taking different approaches like focusing on selected therapy area and markets, merger and acquisition, divestment of non-core brands/segments and consolidation in animal health, v...
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