Patent Expiries, Empty Pipelines And Safety Concerns Spell Woe For Pharma Industry
Patent expiries, a dearth of new products, and financial pressures are plaguing the industry. Imminent Q2 results will provide valuable clues as to how companies are dealing with these major issues, saysInforma Pharma analyst.
Informa Pharma analyst Dr Peter Charlish highlights the tough issues facing the pharma industry and explains why the next few weeks will be critical in gauging
how the world’s major drug companies will fare during the next couple of years.
“With pharmaceutical companies poised to report their financial results for the second quarter of 2008, it seems that the industry’s problems just won’t go
away,” says Dr Charlish.
“One of the biggest of these headaches is the fact that the patents on many top-selling products will expire in the next few years, leaving the market vulnerable to generic competition. The general dearth of significant new products to replace these big earners is a real problem,” he explains. “The market also faces a slowing economy and low share prices - which make it difficult for companies to raise cash, and render them targets for takeovers.”
Pfizer and AstraZeneca have both faced rivals in the courts during the first half of the year and both are deemed by many to be at risk from generic competition. The legal battles have worked out reasonably well for them, although other issues – such as the safety of some drugs and personnel matters – may yet prove detrimental at results time later this month.
Analysts will also be keeping a close watch on Roche when it declares its results on July 24th. For the first quarter of this year, the company reported a 68% decrease in sales of its anti-influenza product Tamiflu (oseltamivir phosphate) because stockpiling by governments and corporations in anticipation of an influenza epidemic had been completed the previous year.
On the other hand, financial analysts will be looking for increases in the sales of Roche’s biotech products, particularly the angiogenesis inhibitor Avastin (bevacizumab). In February, the FDA granted Avastin accelerated approval for the additional indication of locally recurrent or metastatic breast cancer, but the decision came too late to have any impact on first-quarter sales. The expectation is that the impact of this wider indication on sales will now start to show.
Elsewhere analysts will be looking for repercussions of the ENHANCE study, which found that the hypolipaemic combination product Vytorin (ezetimibe plus simvastatin) was no better at reducing the progression of atherosclerosis than simvastatin alone. Vytorin is marketed in the US by Merck/Schering-Plough Pharmaceuticals. Despite the limitations of the study – it involved only 720 patients, for example – the share price of both Merck & Co and Schering-Plough fell when the ENHANCE results were published in January.
Not surprisingly, Vytorin sales have also tumbled since the publication of the ENHANCE results, although the most recent sales figures – for May – suggest that the decline has slowed. There have also been reports that sales outside the US have remained strong. Therefore, the six-month sales figures for both Merck and Schering-Plough, due on July 21st, will be eagerly awaited.
From a broader perspective, observers will be watching for any signs of a solution to the recurring problem of empty pipelines.
“A number of early-stage deals have been made recently, but they still leave the problem of how to repopulate empty pipelines in the medium term, and what new products Big Pharma will be launching four or five years from now,” explains Dr Charlish. “Clearly, innovative solutions to this problem are needed and observers will be looking for answers as companies announce their second-half round of results.”
“In addition, with credit harder to come by and share prices low, strategic acquisitions will become harder to finance. So again, observers will be looking for signs of how Big Pharma is responding,” adds Dr Charlish. “The next few weeks should be illuminating.”
For further information see www.scripnews.com or contact:
