Pharma 2.0 -- De-Risking the Business Model
Adapt. Evolve. Survive.
Darwinian Theory as a business model for the pharmaceutical industry?
Never has it been more apt—or timely. As it enters one of its most challenging periods ever, the pharmaceutical industry is faced with problems on multiple fronts. The issues are not new, but they are of epic proportion: By 2014, $182 billion in global sales could be lost as household drugs go off-patent and are reproduced by generics. Blockbuster pipelines are dwindling and not being replaced. News of rollbacks on R&D spending occur almost daily as companies evaluating drug investigations spin off high-risk developments in favor of more secure markets. Meantime, as the industry comes under increasing fire from the public, pressure is mounting for companies to become more and more transparent in their actions.
Enter Pharma 2.0, the result of a massive recalibration by small and large companies to do business leaner, nimbler and more focussed on emerging realities. For some firms, that has meant divesting some areas of investigation, diversifying into other business like animal vaccines and over-the-counter lines or taking existing products to emerging markets and matching them to local requirements. For others, collaborations, partnerships and mergers have reshaped their profile.
“In the next decade, no pharmaceutical company will be able to profit alone,” warns Joe Pisani, a partner in PriceWaterhouseCoopers’ UK pharmaceutical practice. “Extensive collaboration will take pharmaceutical companies out of their comfort zone, but it’s the only way they will profit by 2020.”
But how well prepared will the industry be for that reality?
INSIGHTS INTO DE-RISKING STRATEGIES
In its timely new report, FirstWord defines the scope of the problems facing Big Pharma in an era of fewer blockbuster drugs, growing investment in biotech, increased demands for transparency and the threat of massive profit loss as more and more drugs go off patent. The 43-page report, which spans everything from drug portfolio expansion and collaborations to diversification and personalized medicine, offers a snapshot view of how the industry is adapting—right now—and where it’s headed.
The report investigates de-risking strategies to reveal:
THE REPORT
KEY QUOTES FROM THE REPORT
“I think we are seeing deals that are really driven more by weakness than what I would describe as strong strategic combinations. They are predicated on synergies and rather massive cost cutting. That will improve short term problems but fail to answer the long term question of research productivity.” John Lechleiter, CEO of Eli Lilly.
“One could argue Big Pharma’s core capability is the ability to commercialize innovation through late stage development and market it effectively through sophisticated knowledge and relationships, with remaining skills and assets secured through long term strategic alliances.” Joe Pisani, PricewaterhouseCoopers’ London in PharmaTimes
"The inexorable move toward partnering is being driven by economic forces within Big Pharma, the growing strength of innovation from external sources, and the worldwide commoditization of R&D expertise. These trends will fuel a surge in partnerships between the pharmaceutical industry, biotech and academia that will fundamentally and irreversibly change the model by which new drugs are discovered and developed." Ted Torphy, CSO, Johnson&Johnson Pharmaceuticals
Darwinian Theory as a business model for the pharmaceutical industry?
Never has it been more apt—or timely. As it enters one of its most challenging periods ever, the pharmaceutical industry is faced with problems on multiple fronts. The issues are not new, but they are of epic proportion: By 2014, $182 billion in global sales could be lost as household drugs go off-patent and are reproduced by generics. Blockbuster pipelines are dwindling and not being replaced. News of rollbacks on R&D spending occur almost daily as companies evaluating drug investigations spin off high-risk developments in favor of more secure markets. Meantime, as the industry comes under increasing fire from the public, pressure is mounting for companies to become more and more transparent in their actions.
Enter Pharma 2.0, the result of a massive recalibration by small and large companies to do business leaner, nimbler and more focussed on emerging realities. For some firms, that has meant divesting some areas of investigation, diversifying into other business like animal vaccines and over-the-counter lines or taking existing products to emerging markets and matching them to local requirements. For others, collaborations, partnerships and mergers have reshaped their profile.
“In the next decade, no pharmaceutical company will be able to profit alone,” warns Joe Pisani, a partner in PriceWaterhouseCoopers’ UK pharmaceutical practice. “Extensive collaboration will take pharmaceutical companies out of their comfort zone, but it’s the only way they will profit by 2020.”
But how well prepared will the industry be for that reality?
INSIGHTS INTO DE-RISKING STRATEGIES
In its timely new report, FirstWord defines the scope of the problems facing Big Pharma in an era of fewer blockbuster drugs, growing investment in biotech, increased demands for transparency and the threat of massive profit loss as more and more drugs go off patent. The 43-page report, which spans everything from drug portfolio expansion and collaborations to diversification and personalized medicine, offers a snapshot view of how the industry is adapting—right now—and where it’s headed.
The report investigates de-risking strategies to reveal:
- The immediate impact of diverse pressures on the industry and what key players have initiated to manage the emerging Pharma 2.0 business model
- Which strategies are working; the flaws and failures of those that are not
THE REPORT
- Provides an introduction to de-risking strategies in the current financial climate, paying particular attention to the events of 2009
- Offers an immediate and timely portrait of the M&A, In-licensing and Research partnership ventures of 2009
- Identifies high-growth emerging market strategies with specific case studies of top players, including sanoi-aventis, Pfizer and GSK
- Focuses on the big pharma deals that are set to penetrate the generics and vaccine business
- Reviews the deals made with regulatory bodies to reduce risk
- Includes charts, graphs and diagrams illustrating key points
KEY QUOTES FROM THE REPORT
“I think we are seeing deals that are really driven more by weakness than what I would describe as strong strategic combinations. They are predicated on synergies and rather massive cost cutting. That will improve short term problems but fail to answer the long term question of research productivity.” John Lechleiter, CEO of Eli Lilly.
“One could argue Big Pharma’s core capability is the ability to commercialize innovation through late stage development and market it effectively through sophisticated knowledge and relationships, with remaining skills and assets secured through long term strategic alliances.” Joe Pisani, PricewaterhouseCoopers’ London in PharmaTimes
"The inexorable move toward partnering is being driven by economic forces within Big Pharma, the growing strength of innovation from external sources, and the worldwide commoditization of R&D expertise. These trends will fuel a surge in partnerships between the pharmaceutical industry, biotech and academia that will fundamentally and irreversibly change the model by which new drugs are discovered and developed." Ted Torphy, CSO, Johnson&Johnson Pharmaceuticals
EXECUTIVE SUMMARY
INTRODUCTION
DRUG PORTFOLIO EXPANSION
Innovation reigns supreme
Mergers & acquisitions
Seismic shift in pharma R&D
Successful collaboration
Option deals
Tie ups with universities
Working with rivals
Patent pools
REGIONAL AND PORTFOLIO DIVERSIFICATION
Entering the generics business
Big pharma goes generic
The emerging markets
sanofi-aventis
Pfizer
GSK
Novartis
Vaccines
Big pharma vaccine acquisitions
Rare diseases and personalised medicine
DIVESTMENT STRATEGIES
Spin offs
COLLABORATION WITH REGULATORY BODIES
CONCLUSION
INDEX
INTRODUCTION
DRUG PORTFOLIO EXPANSION
Innovation reigns supreme
Mergers & acquisitions
Seismic shift in pharma R&D
Successful collaboration
Option deals
Tie ups with universities
Working with rivals
Patent pools
REGIONAL AND PORTFOLIO DIVERSIFICATION
Entering the generics business
Big pharma goes generic
The emerging markets
sanofi-aventis
Pfizer
GSK
Novartis
Vaccines
Big pharma vaccine acquisitions
Rare diseases and personalised medicine
DIVESTMENT STRATEGIES
Spin offs
COLLABORATION WITH REGULATORY BODIES
CONCLUSION
INDEX
