Strategic Pharma Issues
Dr. Brian W Tempest
www.briantempest.com
brian.tempest@clara.co.uk
Mumbai, India
May 2013
Hale & Tempest
Dr Brian Tempest advises Companies, Banks, High Net Worth Individuals and Investment Funds on
their Strategy in the Emerging World based on his wide experience in China, Japan, South East Asia
and India where he has lived for the last decade.
Brian has worked for Ranbaxy Laboratories since 1995 holding the position of Managing Director
and Chief Executive Officer until 2005. He was then Chief Mentor and Non Executive Director until
2008 when he retired. He is one of the few westerners to have led a Sensex Nifty 50 Indian blue Chip
MNC and as a result has a valuable insight into India. Brian has also worked for Glaxo as Regional
Director Far East and Regional Director Middle East & Africa from 1985 to 1992.
Brian has worked in the Pharmaceutical Industry for the last 41 years and has managed Healthcare
businesses in North America, South America, Europe, Africa, Middle East, Australasia, China, Japan
and India. He has also led many sessions at Investor Meetings held around the world.
He is now Independent Chairman of Religare Capital Markets, a Non Executive Director of Fortis
Healthcare, a Non Executive Director of SRL Diagnostics and a Non Executive Director of Glenmark
Pharmaceuticals. He is also an adviser to MAPE in India and UNCTAD in Geneva. He is a member of
the SCRIP Global awards panel and is on the Editorial Board of the Journal of Generic Medicines.
Brian speaks at global conferences and more information on these presentations can be found on his
website www.briantempest.com.
Brian has a PhD in Polymer Chemistry from Lancaster University in 1971 and in 2009 he became
Chairman of the Advisory Board for the Lancaster University Management School, UK. He is a
Fellow of the Royal Society of Medicine and a Fellow of the Royal Society of Chemistry and is a
Chartered Chemist. He is now Chairman and Senior Partner of Hale & Tempest Co Ltd
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There are few certain things in our World
Source: T Stevenson, Fidelity Worldwide Investment Director, S Telegraph April 21 2013
•Populations growth
•Ageing
•Expansion of the World’s Middle Classes
•Increasing demand for healthcare is as
close to given as investors can hope for
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Global Healthcare
Source: Sunday Telegraph April 21 2013
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Asian Growth
source: Bangkok Post 26 July 2012
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A Slide from a UK Headhunter
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The Biggest Healthcare Fraud in History
Source: Daily Mail 3 July 2012
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A Pfizer Decade of Bribery
source: FT August 7 2012
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Big Pharma Business Model Broken
source: Pharmatimes World News April 2012
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Pharma in Crisis
Source: Pharmatimes February 2013
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Global Brands Vs. Generics 2011-16
Source: IMS
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USA Life Expectancy & Pharma Costs
Source: US Health in International Perspective Jan 2013
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The Strategic Changes by Big Pharma
Source: FT December 5 2012, Franz Humer, Roche Chairman
•Possible to cut 30-50% off development costs via CT efficiencies
•Shift from product focus to patient focus using diagnostic tools
• In Europe there isn’t one Government or politician interested in the
health of the Industry
•USA & Latin American countries open to rewarding innovation
•Industry has to change fundamentally how it manages costs
•Leaner headquarters & smaller central functions
•Division of the industry into 2 parts
• A Innovative businesses able to charge a premium price
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• B Large scale manufacturers who can compete on cost
Will Big Pharma Change?
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Patent Expiries to 2018
source: EvaluatePharma 2012
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Products Going Off Patent in 2015 $33b
Source: Evaluate Pharma 14 February 2013
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The Teva Future – Standing Still
Source: RBC Capital 12 December 2012
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Teva Losing Control of Costs in the EU
source: Teva June 2012
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Actavis Sales Momentum
Source: RBC 12 March 2013
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Mylan Sales Momentum
Source: RBC 12 March 2013
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Reference Pricing Globally Endemic
Source : Istanbul September 2012
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Pharma purchases reduced from 1.7% of GDP
to 1.0% of GDP in Turkey
Russia, South Korea & Saudi Arabia health
ministries now requesting Turkish prices
Everybody is referencing everybody else on
Pharma prices in Europe
Bulgaria is currently referencing prices in 17
other countries
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30 generic packs, >2 years treatment £69
200 king size cigarettes £68
Source: Generics Bulletin 15 Feb 2013
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Indian Generic Cos continue to grow
Source: Pharmatimes World News Feb 5 2013
•Many Indian Companies in 2013 showing a sales growth
of >20%, often with a buoyant USA profile
•Indian Pharma Exports 2008-2012 have shown a %CGR
of +19% in sales
• New Product Pipeline in USA ANDAs shows approvals
from India in 2012 was 37% with 178 out of a total of 476
and in 2011 33% with 144 out of 431
•New ANDA filings of ANDAs in the USA from India
indicate 51% in 2011 and 49% in 2010
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Compulsory Licence - 97% price cut
with a 6% royalty
Source: Economic Times 5 March 2013
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India Patent dismissed for Evergreening
Source: Financial Express 2 April 2013
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Aggressive EU-India Bilateral FTA
Source: ET 27 March 2013
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India to extend Compulsory Licences
Source: Economic Times 5 March 2013
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More CLs on the way in India
Source: 29 March 2013
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BiosimiIar Challenges
Do I enter or keep out?
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Rituximab >100 patient CT for Roche, >600
patient CT for Generic companies
Interchangeability (AB rating) unlikely
Cabilly patents may delay US mAbs
EU mAb in 2013 from Hospira/Celltrion
EPO biosimilar side effects in Thailand
Many biosimilar manufacturers in China but
few will reach EU/USA
Scientifically challenging - Amgen
Biobetters need a full dossier with health
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economic data
Biosimilar Deals – to share the risk
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Cipla & Biomab, China $165m 12 products
Richter & Stada – mABs
Celltrion, Korea -Hospira, Egis, Hikma, BB, etc
Biocon & Mylan, USA, mABs:
Xbiotech
Teva & Lonza, EU – limited range
Biocon Idec & Samsung, Japan – now Merck
Watson & Amgen, USA
Fuji Film & Kyowa Hakko Kirin
DRL & Merck-Serono, Germany - mABs
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New Generic Company- Samsung No1
maker of smart phones
source: Fortune India Feb 2013
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New Biosimilar Company (with Merck)
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Sandoz Biosimilars – an 18 years ROI
source: Pharmacloud June 2012
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NIBS (tyrosine kinase inhibitors)
Will these small molecules replace mAbs?
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Axitinib, Pfizer, cancer
Cediranib, AZ, cancer
Pazopanib, GSK, cancer
Regorafenib, Bayer, cancer
Semaxanib, Sugen, cancer
Sorafenib, Bayer(Nexavar),cancer
Sunitinib, Pfizer, cancer
Toceranib, Pfizer, cancer
Vandetanib, AZ, cancer
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Tofactinib, Pfizer, RA
Hisun-Pfizer 51%/49%
Manufacturing at Zhejiang, R&D at Hangzhou, HQ at Shanghai
Hisun already has 40 FDA approved APIs
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Walgreens, Boots, Amerisource, China
Source: FT March 19 2013
•A global wholesaler axis
•Walgreens has 45% of Alliance Boots with the option to
buy the rest in 2 years
•Walgreens and Boots jointly buy 23% in Amerisource
Bergen
• Boots Alliance owns 12% of Nanjing which is the 5th
largest wholesaler in China & 50% of Guangzhou
Pharmaceuticals which is ranked 6th wholesaler
•21% of Cardinal sales were to Walgreens which will now
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switch to Amerisource Bergen
However forecasting can be difficult
2012 Nobel Laureate in Medicine - Biology School Report
source: Daily Telegraph October 9 2012
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Thank You
brian.tempest@clara.co.uk
www.briantempest.com
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