Pharmaceutical Executive Europe - January 2008 - (Page 35)

Pharmaceutical Executive Europe January 2008 Last Word 35 Mid-size Matters As costs increase and competition intensifies, Luciano Conde, chief operating officer of Almirall, Spain, explains why mid-size pharma companies are better poised for success in the market. T he pharmaceutical industry is one of the world’s most innovative and dynamic industries. To grow or even survive in this market requires not only flexibility and the ability to respond quickly, but also the resources to deliver. And this is where we find that mid-size pharmaceutical companies may have some advantages over their Big Pharma and smaller biotech peers. In all industries, innovation is driven by people’s needs, whether they are customers, regulators or shareholders. In pharma, the need for innovation is magnified by the constant demand for new and better medicines to help people live longer, better and fitter. People are living on average 30 years longer than they did 100 years ago and, therefore, healthcare needs are increasing and we are seeing a growing demand for the treatment of chronic diseases that impair patients’ quality of life. Despite the increasing investments in R&D, there has been a constant reduction in the number of new chemical entities (NCEs) coming through over the past twenty years. The reduction in NCEs has impacted most significantly on the big pharmaceutical companies. By contrast, during this period, scientists at Almirall, a mid-size Spanish pharma company, have synthesised more than 40000 molecules and have developed a ‘chemical library’ of more than 55000 molecules, some of which have achieved a marked medical and commercial success in several countries around the world. While biotechs are at the cutting edge of innovation, they often do not have the financial might to take potential blockbusters to market. According to the National Venture Capital Association, the average venture capital investment in a biotech firm is approximately $3 million, compared with $1 billion needed to develop a new drug. These costs can be prohibitive for anyone outside Big Pharma. However today, even for Big Pharma, the blockbuster model is coming under threat. In fact, seven out of the top 15 pharmaceutical companies have shown negative or less than 1% growth in market cap in the past three years. For a mid-sized pharmaceutical company, generating growth and profitability can be achieved through the adoption of a tightly focused innovation risk strategy, in preference to the high-risk strategy of big pharmaceuticals or the single therapy approach of biotech. At Almirall, for example, we have achieved such a strategy by developing expertise and an understanding of the need for new therapies in the areas of dermatology and respiratory, notably through the combination of novel compounds and treatment delivery mechanisms in the area of chronic obstructive pulmonary disease (COPD). In addition to a tightly focused innovation risk strategy, mid-size companies are ideally positioned to share the associated risks/benefits through partnerships, where R&D exposure is minimized in exchange for shared commercial revenues. At Almirall one of the latest agreements, on an international level, was signed in 2006 with the US company Forest Laboratories for the development and subsequent marketing of aclidinium bromide in the US. Aclidinium is a new Almirall R&D compound for the treatment of COPD, currently in Phase III; the results are expected by Q3 2008. One of our objectives is to promote the discovery of new products, hence maximising competitiveness. This is driven by the rigorous evaluation of projects from the early discovery stages and prioritising those with the greatest level of clinical validation. Senior management is involved throughout this process and is ‘hands on’ in a way that is difficult in large organizations. Last year, we committed 13.3% of our business turnover to R&D. Furthermore, we are increasingly participating in co-operative projects with various Spanish and foreign universities, as well as with other public research centres, in order to aid the transfer of new technologies and innovative criteria. The acquisition of companies and treatment portfolios, as is the case with the German dermatology specialist and our recent purchase of eight products, including two pan-European dermatology products, from Shire, have enabled us to extend the global reach of the business and expand our footprint into new but related therapy areas. What makes mid-sized pharmaceutical companies well positioned to respond to today’s challenges is, precisely, their size. They are small enough to ensure close management involvement in key pipeline decisions — subsequently enabling the company to respond quickly to the regulatory, social and political environment — whilst being large enough to possess the technical expertise and resources required to develop and market new drugs. http://www.nvca.org/

Table of Contents for the Digital Edition of Pharmaceutical Executive Europe - January 2008

Pharmaceutical Executive Europe - January 2008
Contents
From the Editor
News and Analysis
Calendar
Corporate Strategy: Walking the Line
Executive Profile: The Pharmacist’s Friend
Q&A: An End to Drug Counterfeiting
Healthcare Cost Assessment: Ready to Make NICE?
Pricing and Reimbursement: Through the Reimbursement Barriers
Generics: India Inc.
The Mix: New Models of Excellence
Last Word: Mid-size Matters

Pharmaceutical Executive Europe - January 2008