An analysis of clinical trials registered between October 2005 and September 2007 has been published by Nature[1]. The conclusion is clear: Most registered trials were in oncology, followed by central nervous system (CNS) disorders and cardiology. This could indicate the future for marketed products within the three therapeutic fields.
Oncology is the largest therapeutics area with more early phase trials than any other area. The market for anticancer drugs[2] is the second largest therapy market, with US$34.6 billion in global sales in 2006 – only exceeded by lipid regulators[3].
The position as a follower is occupied by CNS – most depression and schizophrenia trials are being conducted. However both indications have experienced a negative growth, with moderately few early phase trials. This could indicate a shift in CNS-focus by the Pharma and Biotech companies, maybe due to the lack of success in psychiatric diseases compared to other areas – sleep disorders, multiple sclerosis and Alzheimer’s etc.
Cardiology is the third biggest therapeutic area with targets like hypertension, cardiovascular diseases etc. Both indications showed a decrease in trials and why the industry has paid less attention to cardiology development is not clear. One explanation could be the intensive competition from strong market leaders, many of which soon will become generics.
To sum it up: the future competitive environment within oncology is increasing based on the number of clinical trials registered. A too crowded market with strong market leaders could make it financially risky to develop a new oncology drug. Nevertheless, many indications are still untreated or with a limited number of competitors and before this has changed I cannot picture a decrease in registered oncology trials.
[1] www.nature.com/reviews/drugsdisc
[2] Drugs like Gleevec, Taxotere, Leustatin, Gemzar etc.
[3] Drugs like Lipitor, Zocor etc.
Tuesday, August 26, 2008
Thursday, August 21, 2008
Strategies when your product is losing patent protection
Expiring patents is one of the Pharma industry’s weak points. When a product goes out of patent the generic manufacturers are often quick to grab the opportunity and erode the market with cheap copies. The price is often reduced by 70-90% and has a significant effect on the revenue made by the original producer.
As I see it the originator has four strategic alternatives:
The last alternative is often applied because of the possibility of protecting the revenue by moving all patients from the patent losing product to the new and improved version. For this strategy to succeed the company has to demonstrate a better efficiency or safety compared to the old version. The Danish pharmacies cannot substitute between the generic and the new improved version – if the benefit is approved and acknowledge by the Danish health department, and hereby is the generic risk bypassed.
Imigran (sumatriptan): a case study of applied patent strategies
Imigran from GSK lost DK patent protection in May 2006 and 10 companies has eroded the Danish market with different tablet variations of sumatriptan (GSK has a nasal and an injectable variation of sumatriptan with no generic competition on the Danish market). GSK tried to protect their revenue stream by using the second and last strategic alternative:
The first strategic move was to introduce Imigran Sprint and deregister the four pack of Imigran[1]. GSK could hereby get around the generic challenge, but the Danish health department did not find the rapid formulation of Imigran Sprint evident and made the new and the old version substitutable.
The second strategic move was to launch a generic copy and try to cannibalize the market. Sumatriptan “GSK” was launched when the patent expired in May 2006 and the idea behind this move must have been to compete on price with the other generic alternative from Sandoz – many generic manufactures followed.
If you examine the sales figures of Imigran it gets evident that the revenue was reduced by half from 2006 to 2007. The three biggest Migraine products on the Danish market are Imigran (GSK), Maxalt (Merck) and Relpax (Pfizer). GSK has protected their position as a market leader, but I think it is only a matter of time before the market share of Maxalt or Relpax exceeds the one of Imigran.
To sum up: GSK tried to apply two of the described strategies and has to some extend protected their market share – Imigran is still the market leader in selective 5HT-receptor agonists. But the revenue was cut by half when the patent protection expired.
[1] http://www.laegemiddelstyrelsen.dk/db/filarkiv/5938/20060406.pdf
As I see it the originator has four strategic alternatives:
- Follow the price level of the generic competitors
- Waive the product and let it generate as much profit as possible with a minimum of resources utilized
- Launch a generic copy and try to cannibalize the market
- Launch an improved version and pull the patent losing version out of the market before the patent expires (the company can of course keep both on market)
The last alternative is often applied because of the possibility of protecting the revenue by moving all patients from the patent losing product to the new and improved version. For this strategy to succeed the company has to demonstrate a better efficiency or safety compared to the old version. The Danish pharmacies cannot substitute between the generic and the new improved version – if the benefit is approved and acknowledge by the Danish health department, and hereby is the generic risk bypassed.
Imigran (sumatriptan): a case study of applied patent strategies
Imigran from GSK lost DK patent protection in May 2006 and 10 companies has eroded the Danish market with different tablet variations of sumatriptan (GSK has a nasal and an injectable variation of sumatriptan with no generic competition on the Danish market). GSK tried to protect their revenue stream by using the second and last strategic alternative:
The first strategic move was to introduce Imigran Sprint and deregister the four pack of Imigran[1]. GSK could hereby get around the generic challenge, but the Danish health department did not find the rapid formulation of Imigran Sprint evident and made the new and the old version substitutable.
The second strategic move was to launch a generic copy and try to cannibalize the market. Sumatriptan “GSK” was launched when the patent expired in May 2006 and the idea behind this move must have been to compete on price with the other generic alternative from Sandoz – many generic manufactures followed.
If you examine the sales figures of Imigran it gets evident that the revenue was reduced by half from 2006 to 2007. The three biggest Migraine products on the Danish market are Imigran (GSK), Maxalt (Merck) and Relpax (Pfizer). GSK has protected their position as a market leader, but I think it is only a matter of time before the market share of Maxalt or Relpax exceeds the one of Imigran.
To sum up: GSK tried to apply two of the described strategies and has to some extend protected their market share – Imigran is still the market leader in selective 5HT-receptor agonists. But the revenue was cut by half when the patent protection expired.
[1] http://www.laegemiddelstyrelsen.dk/db/filarkiv/5938/20060406.pdf
Wednesday, August 13, 2008
Lundbeck: a company facing tough challenges
The Danish CNS company Lundbeck has released an interim report for the second quarter of 2008 that illustrated positive elements. But it was impaired by the failure of Flurizan.
The Q2 revenue continued to grow and reached DKK 2,938 million. But the increase had no impact on the bottom-line due to the DKK 481 million depreciation of Flurizan – Flurizan was in-licensed from Myriad in May 2008. Lundbeck and Myriad has decided to discontinue the clinical trials and the DKK 481 million investment made by Lundbeck is hereby gone down the drain. The investment was considered as part of the defense against the pending patent expiry of Lexapro/Cipralex. The product will lose patent protection in March 2012 in US and if Lundbeck doesn’t in-license or develop a successor it will be impossible to secure a positive development in revenue. The Q2 revenue of Lexapro/Cipralex was DKK 1.926 million and a big part of that can, and probably will, vanish when the patent expires.
Pfizer’s major anti depressant Zoloft (sertraline) lost patent protection in 2005, causing severe attrition in sales resulting in the product’s displacement from market leader to number two in the global anti depressant market in 2006. A number of generic versions are present on the Danish market and has made the sales of Zoloft drop significantly.
The solution
Lundbeck’s pipeline product Lu AA21004 has potential, but I find it almost impossible to prepare the product for market introduction – to get it through phase III trials and get marketing approval, on less than four years. The product will enter a market with fierce competition, both from marketed products like Lilly’s Cymbalta/Yentreve, Wyeth’s Effexor and the generic versions of Lexapro/Cipralex. The market potential of Lu AA21004 is hereby uncertain and the clinical trials needs to document an improvement in efficacy and/or side-effects etc. compared to the competitors.
Lundbeck could in-license a product but the company hasn’t had success yet and the clock is ticking. The company must in-license a late stage product if it should take over from the patent-losing Lexapro/Cipralex and it is a tough challenge. The competition from other Pharma companies interested in licensing future blockbuster candidates is harsh and a late stage candidate is expensive – as showed in the case of Flurizan.
To sum it up: Lundbeck has to act fast and has limited attempts at coming out of this heads first.
The Q2 revenue continued to grow and reached DKK 2,938 million. But the increase had no impact on the bottom-line due to the DKK 481 million depreciation of Flurizan – Flurizan was in-licensed from Myriad in May 2008. Lundbeck and Myriad has decided to discontinue the clinical trials and the DKK 481 million investment made by Lundbeck is hereby gone down the drain. The investment was considered as part of the defense against the pending patent expiry of Lexapro/Cipralex. The product will lose patent protection in March 2012 in US and if Lundbeck doesn’t in-license or develop a successor it will be impossible to secure a positive development in revenue. The Q2 revenue of Lexapro/Cipralex was DKK 1.926 million and a big part of that can, and probably will, vanish when the patent expires.
Pfizer’s major anti depressant Zoloft (sertraline) lost patent protection in 2005, causing severe attrition in sales resulting in the product’s displacement from market leader to number two in the global anti depressant market in 2006. A number of generic versions are present on the Danish market and has made the sales of Zoloft drop significantly.
The solution
Lundbeck’s pipeline product Lu AA21004 has potential, but I find it almost impossible to prepare the product for market introduction – to get it through phase III trials and get marketing approval, on less than four years. The product will enter a market with fierce competition, both from marketed products like Lilly’s Cymbalta/Yentreve, Wyeth’s Effexor and the generic versions of Lexapro/Cipralex. The market potential of Lu AA21004 is hereby uncertain and the clinical trials needs to document an improvement in efficacy and/or side-effects etc. compared to the competitors.
Lundbeck could in-license a product but the company hasn’t had success yet and the clock is ticking. The company must in-license a late stage product if it should take over from the patent-losing Lexapro/Cipralex and it is a tough challenge. The competition from other Pharma companies interested in licensing future blockbuster candidates is harsh and a late stage candidate is expensive – as showed in the case of Flurizan.
To sum it up: Lundbeck has to act fast and has limited attempts at coming out of this heads first.
Sunday, August 10, 2008
This Blog
This Blog will mainly focus on the Pharma and Biotech industry - implemented/future strategies, business insight etc. I will give my view on the industry, that has been the focal point of my attention for many years.
Further I will try to update you on recent articles, business reports etc. - that can update or enlighten you and give you insight in the exciting world of Pharma and Biotech.
Further I will try to update you on recent articles, business reports etc. - that can update or enlighten you and give you insight in the exciting world of Pharma and Biotech.
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