Replies to post #80564 on Biotech Values

[DewDiligence]

PFE is Going Generic in Japan

[Japan has the lowest penetration of generic drugs among the major pharma markets. The reason is more cultural than legal, which leaves an opportunity for companies like PFE to make money there by selling branded generics. See #msg-39315651 for a related story in a different part of the world.]

http://www.reuters.com/article/marketsNews/idCNT19941420091118

›Wed Nov 18, 2009 6:56pm EST

TOKYO, Nov 19 (Reuters) - Pfizer Inc, the world's largest drugmaker, plans to begin selling generic drugs in Japan as early as 2011, the Nikkei business daily reported on Thursday.

The U.S. company aims to have a line-up of more than 100 generic drugs in Japan, including 70 of its own patent-expired drugs, the Nikkei said. Pfizer is considering manufacturing the products in India and elsewhere, according to the paper.

The Japanese market for generic drugs is estimated to be worth around 400 billion yen ($4.5 billion) this year, the business daily said.

Generics account for just one fifth of overall drug sales in volume terms in Japan, compared with more than 50 percent in the U.S. and European markets, the Nikkei said. [In the US (thanks to the Hatch-Waxman act for small-molecule drugs), generic penetration by volume is almost 80%; Europe, generic penetration varies widely from country to country.]‹

[DewDiligence]

Did anyone wonder who is going to supply the “branded generic” drugs
Big Pharma is increasingly interested in selling to emerging markets?
The answer is: companies like Cipla.

http://www.reuters.com/article/idCNTOE6030A420100104

›India’s Cipla in Drug Supply Talks with GSK, Teva

Jan 4 2010
By Farah Master

HONG KONG, Jan 4 (Reuters) - Indian drug maker Cipla Ltd <CIPL.BO> is in talks with drug companies including GlaxoSmithKline <GSK.L> and Israel's Teva <TEVA.TA> to supply generic drugs, its chairman said on Monday.

Cipla, India's second-largest pharmaceutical company by market value, has been in negotiations with GlaxoSmithKline for six months, Yusuf Hamied, also managing director, told Reuters in an interview.

"It may be specifically for one or two products -- it is not a down-the-line drug deal," said Hamied. He also said there was "not a chance" that Cipla was in talks to sell a stake to a partner company.

In December Cipla had said it was in talks with a number of global drugmakers including Pfizer Inc <PFE.N> to supply generic products.

Hamied also confirmed recent reports that Cipla was in supply talks with German drugmaker Boehringer Ingelheim.

Global drug makers such as GlaxoSmithKline and Pfizer are increasingly looking to low-cost destinations like India to tie up supplies as they battle falling prices and increasing generic competition.

Cipla, with a market value of $5.5 billion, is one of the world's biggest producers of low-cost antiretroviral drugs to fight HIV and AIDS. The company provides AIDS drugs to African companies for just $350 per year patient compared with $10,000 charged by multinationals.

Hamied, who holds a doctorate in chemistry from Cambridge University, said Cipla would launch between 50 to 100 different products this year, including veterinary drugs and agrochemicals. The company exports to 183 countries including Hong Kong, where one of its biggest customers is the Hong Kong Jockey club, which buys drugs for race horses.

Shares in Cipla, which have gained 76 percent over the past year, closed 0.42 percent higher at 337 rupees on Monday.

Hamied said Cipla's expected revenue to ending March 2010 was $1.1 billion.

INTELLECTUAL PROPERTY WOES

Demand for generic drugs from Indian producers such as Cipla, Dr Reddy's Laboratories <REDY.BO> and Ranbaxy Laboratories <RANB.BO> is booming as nations battle rising healthcare costs.

But Hamied said that WTO regulations, which since 2005 have prevented Indian generic drug firms from copying patented drugs, mean Indian generic companies have to change their business model or risk being swallowed up by multinational firms.

Cipla said it was in negotiations for in-licensing agreements -- where foreign companies can sell their products through Cipla -- with at least two Japanese companies. "This is going to increase a lot in India," as generic drug companies look for other business models, said Hamied.

Hamied said negotiations between multinationals and the World Health Organisation (WHO) for a voluntary patent mechanism -- where selected patents for HIV and other disease treatments are put in a pool for generic companies to imitate -- are making no headway.

"The multinationals don't want China, India or Brazil in the pool. So who is going to manufacture the raw materials?" said the Mumbai-born Hamied. "They have not involved any generic producers in the talks. All they are doing is delay, delay, delay."‹

[DewDiligence]

Pfizer Keeps on Trucking in Branded Generics

[These kinds of deals have become so commonplace it’s hard to keep track of all of them. For instance, #msg-45161432 is a similar deal that was inked yesterday. The PFE-Strides deal impinges most directly on the business of HSP, who can’t be pleased about such encroachment.]

http://finance.yahoo.com/news/Pfizer-and-Strides-Arcolab-to-bw-1229835906.html?x=0&.v=1

›Pfizer and Strides Arcolab to Collaborate on Generic Products

Wednesday January 6, 2010, 10:00 am EST

NEW YORK--(BUSINESS WIRE)--Pfizer (NYSE: PFE) and Strides Arcolab (BSE: 532531, NSE: STAR) today announced a new collaboration, wherein Pfizer will commercialize off-patent sterile injectable and oral products in the United States through its Established Products Business Unit. These finished dosage form products will be licensed and supplied by Strides and Onco Laboratories Limited and Onco Therapies Limited, two joint ventures between Strides and Aspen, South Africa, in which each has a 50% ownership interest. The financial terms of the supply agreement were not disclosed.

The companies believe this is a highly complementary collaboration, which is expected to deliver 40 off-patent products, many of which are oncology therapeutics, to healthcare providers and patients in the U.S., by joining Pfizer’s solid commercial infrastructure with Strides’s high-quality manufacturing capabilities. The first of the products commercialized under this collaboration is expected to be launched in 2010.

“This Strides collaboration is new and exciting, and we are encouraged about the potential of this relationship," said David Simmons, president and general manager of Pfizer’s Established Products Business Unit. “In addition, this agreement brings the total number of products in-licensed by our Established Products Business Unit to more than 200 -- resulting in a total business unit portfolio of approximately 600 high-quality, reliable, and cost effective products for patients.”

“Partnering with Pfizer enhances our ability to reach a larger base of customers and patients in need of quality treatment options,” said Arun Kumar, Strides Founder and Managing Director. “We have established a reputation for efficient formulation development and technologies, manufacturing, and operational flexibility and are looking forward to bringing these strengths to bear in our collaboration with Pfizer.”

Pfizer’s Established Products Business Unit launched its U.S. Injectables team less than 10 months ago and is already marketing products in the U.S. Through this new collaboration with Strides, Pfizer continues to demonstrate its commitment to become one of the top players in the injectables market.

Strides Arcolab Limited: Leadership Through Partnering

Strides Arcolab is a global pharmaceutical company headquartered in Bangalore, India that develops and manufactures a wide range of IP-led niche pharmaceutical products with an emphasis on sterile injectables.

The company has 14 manufacturing facilities across 6 countries, including its joint venture with Aspen in India and has a marketing presence in more than 60 countries in developed and emerging markets. Manufacturing is ably supported by a 350-scientist strong global R&D Centre located in Bangalore.‹

[DewDiligence]

[OT] Chávez Orders National Guard to Stop Price Rises

[This is a real newswire, not a spoof. Has there ever been a case where *dual* government-mandated exchange rates have worked? See #msg-45259378 for a related story.]

http://www.reuters.com/article/idAFN1012995920100110

›Chavez warns businesses after currency devaluation

4:37pm EST
By Frank Jack Daniel

CARACAS, Jan 10 (Reuters) - Venezuela's Hugo Chavez ordered soldiers to seek out businesses that raise prices after a sharp devaluation of the bolivar currency last week, saying he will expropriate firms that engage in price gouging.

Chavez also created a $1 billion fund to jump-start the recession-hit, oil-reliant economy before elections in September when the opposition hopes to strip him of a parliamentary majority.

"Right now, there is absolutely no reason for anybody to be raising prices of absolutely anything," Chavez said on his weekly TV show, two days after announcing a dual exchange system for the weakened currency, which had been on a fixed exchange rate.

"I want the National Guard on the streets with the people to fight against speculation," Chavez said. "Publicly denounce the speculator and we will intervene in any business of any size."

The socialist Chavez has given the state a hefty role in managing the economy. During his 11 years in office he has nationalized most heavy industries and expropriated large farms. Business and finance are tightly regulated.

He says the devaluation will help make Venezuelan companies more competitive but warned that the government will take over shops and give them to workers if price rises are uncovered.

Chavez gave out phone numbers during the broadcast to report price gouging and asked his defense minister to prepare an "offensive" against the practice.

After browbeating firms that might raise prices, he announced $1 billion of credits and subsidies to try to diversify the economy and get industry back on its feet. He also invited businessmen to talks with the government.

Venezuela's economy is largely dependent on oil revenue and slipped into recession last year as crude prices fell and manufacturing and industry output crashed.

PROTECT THE POOR

South America's leading oil exporter, Venezuela imports most consumer products. Under the new system, food and medicines will be imported at an exchange rate of 2.6 bolivars to the U.S. dollar while nonessential goods will be bought at a rate of 4.3 per dollar [see the rhetorical question in the prologue of this post].

Since 2005 the bolivar had been fixed at 2.15 to the dollar.

Venezuelans packed electrical goods stores on Sunday, fearing prices will double as the cost of imports rise.

Venezuelans are already struggling with electrical power and water shortages caused by drought, a high murder rate, inflation and recession [but the country is otherwise in great shape, LOL]. But many still support the government because of its focus on easing the economic plight of the poor.

Some analysts say the price impact of the devaluation will not be severe, pointing out that much of Venezuela's imports are already paid for with dollars bought on a semi-legal black market, where the bolivar is worth about a third of its official rate.

The currency closed at 6.15 to the dollar on Friday.

Others have predicted that Venezuela's inflation, already the highest in the Americas at 25 percent last year, will be pushed up by the devaluation [duh].

However, the measures would give Chavez more cash to spend this year before the September elections.

He said subsidies introduced by his government, along with the stronger exchange rate for food and medicine, would protect the poor from a jump in inflation.

"This government protects and will continue to protect the weakest with investment and with special attention," he said.

The devaluation is a relief for the state oil company, PDVSA, which has struggled to pay service providers and meet social spending requirements since crude prices dropped last year.

Foreign debt-holders will also be pleased, since the devaluation improves Venezuela's finances [i.e. the debt held by foreigners is not denominated in bolivars].

Last month, BMO Capital Markets cut ratings on Colgate-Palmolive Co, Avon Products Inc and Kimberly-Clark Corp to "market perform" saying a possible currency devaluation in Venezuela could hurt the U.S. consumer goods makers' profits. [Most multinational companies—including Big Pharma—will be affected to some degree.]‹

[DewDiligence]

Pfizer Expands e-Payment Drug Discounts in Emerging Markets

http://www.ft.com/cms/s/0/503e764c-1414-11df-8847-00144feab49a.html

›By Andrew Jack in London
February 8 2010 01:43

Pfizer, the world’s largest pharmaceutical group, is launching a system of electronic payment for medicines that links it directly with patients in many of the world’s fastest-growing economies.

The company this month launches its eCard programme in Russia with the aim of reaching 500,000 patients over the next year, and is gearing up for similar rapid expansion in Mexico, Brazil and Venezuela.

The move could help boost use of high-priced drugs by providing discounts to the majority of patients in emerging countries who have to pay for their own medicines, while raising concerns about direct access to personal medical information by a pharmaceutical company.

Jean-Michel Halfon, head of emerging markets for Pfizer, said: “The eCard is an innovative way to partner with society, patients and governments, to help manage chronic diseases at an affordable price.”

Each patient presents their eCard to the pharmacist to receive an automatic discount on the normal retail price, giving Pfizer information on the drug purchases to reimburse the difference to the pharmacist and track patient use directly.

By allowing it to offer discounts of up to 50 per cent to patients on the pharmacy price, the move may help boost access to expensive drugs by making them more affordable, while increasing Pfizer’s sales.

It will also allow the company to monitor when patients are not returning for regular repeat prescriptions for their medicines for long-term chronic conditions, allowing it to contact patients to remind them to take their drugs – and further boosting sales.

But the pricing discounts may also trigger concerns that they influence doctors’ prescriptions, switching away from the most medically appropriate drug to a decision based on affordability. It also breaks the traditional arms’ length relationship with pharmaceutical companies, designed to limit access to confidential personal data and prevent direct marketing without the intermediary role of a medical professional.

Pfizer first launched its eCard in the Philippines six years ago, where 2.2M patients are now in the system. It has since recruited another 110,000 in Indonesia and 18,000 in Malaysia. Apart from Russia, Mexico, Brazil and Venezuela, it plans to expand in Ukraine, the Caucasus and other Latin American markets in the coming months.

Patients receive reminders to take their medicines, educational information about their disease, and are eligible for discounts of 15-50 per cent.

Drugs the company offers through the programme are typically those for long-term chronic conditions including Lipitor, its cholesterol-reducing medicine. It said its experience with Norvasc, its blood pressure control drug, showed patient adherence to the medicine rose 162 per cent as a result of the programme.‹