Pharmaceutical Executive Digest Europe - January 28, 2009 - (Page 6) 2009 Forecast and are likely to proliferate in 2009 if no cash infusion comes. According to BIO, more than a third of the 370 publicly traded US biotechs lack the liquidity to survive until July. Biotech’s loss may be Big Pharma’s gain. A year ago a biotech with even a single product commanded a sky-high valuation. This is no longer the case. “The economic downturn has brought the price of acquisitions and other deals back down to earth,” says Daiichi Sankyo’s Joe Pieroni, allowing that he would not be surprised if 2009 saw the same flood of M&A action by big Japanese pharmas that made 2008 so notable. For now, pharma’s only problem is figuring when to bite. Yet in the long run, the industry’s fate is inextricably linked to biotech’s. With half of R&D at some of the big companies done in partnership with biotechs, a decline in these entrepreneurial firms could poke more holes in pipelines. “A lot of biotechs and important early-stage research are going to die in the current financial crisis,” says Peter Young, head of Young & Partners. Young advocates a collaborative model in which drugmakers pool risk-sharing funds. “Money needs to flow more regularly to biotechs, so they don’t have to spend their time raising venture capital.” How would you determine which company owns a particular product? “Maybe by sharing patents,” says Young. The European market is pegged to grow 4.5 to 5.5% ($162 to $172 billion), while Japan will hit $84 to $88 billion, a 4 to 5% bump. For good news, look to what IMS calls the “pharmerging” markets—China, Brazil, India, South Korea, Mexico, Turkey, and Russia—which should break the $100 billion barrier in combined sales, growing at a rate of 14 to 15%. The European market is pegged to grow 4.5 to 5.5% ($162 to $172 billion), while Japan will hit $84 to $88 billion, a 4 to 5% bump. Snapshot of the market Sales. IMS Health’s annual forecast puts 2009 global sales at $820 billion, growing at the same 4.5 to 5.5% rate as last year. Major markets are expected to be stagnant, with the US growing by 1 to 2%, to a little less than $300 billion. Dynamics. The contraction of the primary care market will accelerate, with growth dropping to 2 to 3%, according to IMS. Primary care’s piece of the drug-spending pie dropped below half for the first time in 2008, and it will fall to one-third in 2009. With a fourfold higher growth rate, specialty drugs are where the action is. Oncology will remain the number one growth area in 2009, with sales increasing 15 to 16%. But though medical need is increasing in oncology, profits may lag. With cancer compounds comprising almost half of the industry pipeline, Bain & Company predicts that competition will trigger price declines of 35% or more starting in 2011. The economic downturn, however, may hasten that moment. Struggling private payers will increasingly make like NICE and refuse to cover $30,000 drugs that extend life for only a few months. Generics. The global generics market is expected to expand 5 to 7% to $68 million in 2009. That is consistent with 2008’s 5 to 7% growth, but markedly lower than the double-digit rates of previous years. Generics will be OK’d for sale in Japan for the first time in 2009, while Spain and Italy will also see first time rapid uptake. Bain predicts a sustained generics jump through 2011, as pharma loses as much as $105 billion to the patent cliff. But once the industry reaches the other side—that would make the cliff a canyon—the annual incursion of new copycats will sink by half. “Generics will have the wind in their sails for the next few years,” says Bain’s Tim van Biesen. “But they will run out of new products after that—and they have no clear path to new revenue.” Competition in top therapy areas is already driving prices down, says IMS. Fear of ObamaCare Most of the consultants, academics and other experts Pharm Exec talked to 8 STRATEGY Industry life cycle: surviving the competitive stage 11 JACKY LAW Awaiting Pfizer’s next move? 13 CALENDAR Upcoming pharma industry events 2 NEWS Teva and Lonza join forces
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Digest Europe - January 28, 2009 Pharmaceutical Executive Digest Europe - January 28, 2009 Contents News From the Editor 2009 Forecast Strategy Jacky Law Calendar Pharmaceutical Executive Digest Europe - January 28, 2009 Pharmaceutical Executive Digest Europe - January 28, 2009 - Contents (Page 1) Pharmaceutical Executive Digest Europe - January 28, 2009 - News (Page 2) Pharmaceutical Executive Digest Europe - January 28, 2009 - From the Editor (Page 3) Pharmaceutical Executive Digest Europe - January 28, 2009 - From the Editor (Page 4) Pharmaceutical Executive Digest Europe - January 28, 2009 - 2009 Forecast (Page 5) Pharmaceutical Executive Digest Europe - January 28, 2009 - 2009 Forecast (Page 6) Pharmaceutical Executive Digest Europe - January 28, 2009 - 2009 Forecast (Page 7) Pharmaceutical Executive Digest Europe - January 28, 2009 - Strategy (Page 8) Pharmaceutical Executive Digest Europe - January 28, 2009 - Strategy (Page 9) Pharmaceutical Executive Digest Europe - January 28, 2009 - Strategy (Page 10) Pharmaceutical Executive Digest Europe - January 28, 2009 - Jacky Law (Page 11) Pharmaceutical Executive Digest Europe - January 28, 2009 - Jacky Law (Page 12) Pharmaceutical Executive Digest Europe - January 28, 2009 - Calendar (Page 13)
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.