Replies to post #126197 on Biotech Values

[zipjet]

North America, Europe, and Japan have 1 billion people; the rest of the world has 6 billion people. If 1/3 of the people in the rest of the world become pharmaceutical customers

Per capita income relative to the US, population in B:

China 9%, 1.3
India 2.6%, 1.15

I do not know whether those two countries comprising 2.45B people fairly represent the relative income of that other 6B people. Nor do I have stratification data on the per capita income of the top 1/3 of those populations.

But it does raise some question about just what the top 1/3 of the other 6B people will be able to pay for drugs.

ij

[DewDiligence]

From SNY’s Investor Day PR earlier this week:

http://en.sanofi.com/binaries/20110906_Outlook_EN_tcm28-33355.pdf

Sanofi expects to extend its leadership in Emerging Markets, which are expected to account for 38% to 40% of its sales in 2015 compared to 29% in 2010. This objective implies double-digit sales growth in Emerging Markets over 2012-2015.

SNY defines emerging markets as everywhere other than the U.S., Canada, Western Europe, Japan, Australia, and New Zealand.

[DewDiligence]

Breast Cancer Increases Sharply in Emerging Markets

http://www.bostonglobe.com/news/world/2011/09/14/breast-cancer-cases-hit/mFy1UZYbykhe5hnaZhOPbJ/story.xml

›By Maria Cheng
September 15, 2011

LONDON - For years, it was assumed that young women in poor countries had a higher risk of dying in childbirth than from cancer. But a new study shows that is changing; specialists say that breast and cervical cancers are killing more women than labor in more than 60 developing countries.

In the first global review of breast and cervical cancer, researchers estimated the number of new breast cancer cases rose from about 641,000 cases in 1980 to 1.6 million cases last year.

Researchers at the Institute for Health Metrics and Evaluation at the University of Washington analyzed cancer registries and other data from 187 countries but also used modeling techniques to calculate their cancer rates. In contrast, the World Health Organization says there were about 900,000 breast cancer cases in 2008.

Specialists in the new study found that cervical cancer rose from 378,000 new cases in 1980 to about 454,000 cases in 2010, with most of those cases in the developing world. Still, the death rate has been dropping as more countries introduce regular screening.

Officials estimate that every year about 343,000 women die in childbirth, most in the developing world. In comparison, breast cancer kills 425,000 women a year, while cervical cancer kills about 200,000.

The increase in breast cancer is partly explained by aging populations, since older women are more vulnerable. But the globalization of bad habits - people eating more fatty foods and exercising less - is also driving the growth, particularly in Asia and Latin America.

“People may wonder what the urgency is in addressing these cancers, but the numbers are staggering,’’ said Jan Coebergh, a cancer specialist at Erasmus University Medical Centre in Rotterdam, who wrote an accompanying commentary to the study. “It’s like six jumbo jets crashing every day.’’

The study was paid for by the breast cancer group Susan G. Komen for the Cure and the Bill & Melinda Gates Foundation.‹

[DewDiligence]

Covidien Announces Shanghai R&D Center

http://finance.yahoo.com/news/Covidien-Announces-RD-Center-bw-4072358876.html?x=0

›Thursday September 15, 2011, 7:00 am

SHANGHAI--(BUSINESS WIRE)-- Covidien (NYSE:COV), a leading global provider of healthcare products, today announced the creation of its flagship research and development (R&D) center for China, which will be based in Shanghai.

The center, which will be fully functional by July 2012, will house two of Covidien’s emerging market R&D organizations:

• Tailored Products – will identify and develop products that are customized to meet the needs of China and other countries in the emerging markets

• Breakthrough Platforms – will utilize the unique skill sets and expertise of employees in Asia to create and develop new medical device technologies.

“The establishment of this R&D facility is a first for Covidien in China,” said Dr. Dong Wu, Vice President, China R&D, Covidien. “We will be undertaking a range of cutting-edge activities that will create innovative products to help physicians improve the health of the people of China and of other markets worldwide.”

The 25-member R&D staff that Covidien currently employs in Shanghai will increase to more than 300 once the new 100,000-square-foot facility is completed.

“At the core of our R&D facility will be our Laboratory and Operating Theatre Simulation Suites that will enable healthcare professionals to visit the center and be involved in the actual design and development process of future medical devices,” Dr. Wu added. “This collaborative approach will help us create products that are best suited to the needs of doctors in China and in other countries in Asia and, therefore, will be more likely to produce better patient outcomes.”

“We are very pleased Covidien has chosen Shanghai and CHJ to be the base of the Company’s inaugural R&D Center in China,” said Mr. Enliang Gui, Vice President of Caohejing Hi-Tech Park and Chairman of Pujiang company. “We are very proud of our long-standing partnership with Covidien, which has also chosen our park as the location for both its regional training center for healthcare professionals and its commercial operations.”

Mr. Alex Gu, Vice President and General Manager, Covidien China, said, “This R&D Center is the latest in a series of China-focused initiatives that clearly demonstrates our commitment to this very important market for Covidien. We look forward to a very successful future here.”‹

[DewDiligence]

Pharma industry is undervalued, says SNY CEO, Chris Viehbacher:

http://finance.yahoo.com/news/Sanofi-CEO-says-drug-industry-rb-137609661.html?x=0&.v=1

“I'd like to have the same P/E as people who make sodas and potato chips.”

[DewDiligence]

Re: PFE and The Global Demographic Tailwind (from 3Q11 CC):

http://seekingalpha.com/article/304116-pfizer-s-ceo-discusses-q3-2011-results-earnings-call-transcript

In terms of highlights for the quarter, our Emerging Markets business had a strong quarter, delivering operational growth of 12% with solid performance in key countries such as China, Russia, Turkey and India.

I am pleased with the continued progress of our Established Products business to penetrate the growing generics market both in developed markets as well as within emerging markets. Close to $1 billion of the $3.2 billion in total revenues for Established Products…came from Emerging Markets.

…For China, for the quarter, our reported growth was 31% operational growth, 26% on a year-to-date basis… Also adding in on China and we maintained the #1 rank in the market in China of all multinationals and local Chinese companies. And our growth rate is outpacing the underlying growth. So China is a big anchor point for us in emerging markets and we're doing very well there.

[DewDiligence]

Chris Viehbacher better be careful or he might owe a royalty to BMY:

http://www.bloomberg.com/news/2012-01-11/sanofi-is-open-deals-of-up-to-2-6-billion-this-year-ceo-viehbacher-says.html

:- )

[DewDiligence]

From LLY's 1Q12 PR:

http://finance.yahoo.com/news/lilly-reports-solid-start-first-103000996.html

China remained Lilly's fastest-growing market, with revenue growth of 41 percent.

[DewDiligence]

PFE shuffles division-level management with an eye toward eventual spinoffs:

http://www.sec.gov/Archives/edgar/data/78003/000007800313000031/x991217a.htm

On January 1, the company will begin operating with three commercial businesses -- the Global Innovative Pharmaceutical business, led by Geno Germano; the Global Established Pharmaceutical business, led by John Young; and the Vaccines, Oncology and Consumer Healthcare business led by Albert Bourla. [Bourla rather than Amy Schulman for this business unit is the major change in today’s announcement.] The company remains on track to provide a 2014 baseline management view of profit and loss for each of these businesses, starting with the Q1 2014 quarterly results.

All these machinations are to enable PFE to split into three publicly-traded companies at some point in the next few years, but probably not before 2017.

If the split happens, the “Global Established Pharmaceutical” company, which will sell branded generic drugs throughout the world with an emphasis on emerging markets, will be a strong beneficiary of The Global Demographic Tailwind.