Perspectives

Throughout history the unpredictability of the Flu Virus has offered challenges and new opportunities to providers of therapeutic and prophylactic antiviral treatment options. While opportunities during the Spanish Flu of 1918 pandemic were not quantifiable, the impact from the more recent Bird Flu and SARS occurrences can be extrapolated to assess the investment opportunity surrounding the Swine (H1N1) flu pandemic. Tamiflu sales in 2005-2007 amounted to ~$1.7b and we expect 2009-2010 sales to match or exceed this. One notable difference between Bird…

Enthusiasm for the host of clinical data released at the ongoing American Diabetes Association (ADA, June 5-9) meeting has simmered down as the FDA’s long-term safety concerns will weigh heavily on whether these drugs will actually make it to market. New data on weekly versions of GLP-1’s, Phase II data from Roche’s aleglitazar, and data for a novel class of drugs that aim to treat diabetes by blocking IL-1β were all important developments in the fight against diabetes, but they are unlikely…

The American Society of Clinical Oncology (ASCO) meeting is one of the biggest annual events in the healthcare industry.  This weekend over 30,000 oncologists, educators, industry leaders and investors will gather in balmy Orlando, Florida to review the latest developments in cancer treatment. Our team of analysts conducted a review of the data abstracts to determine their impact on a range of Biotech and Pharma stocks.  Over the next four days we will see full data from a number of…

Hepatitis C is a blood-borne infection caused by the Hepatitis C virus (HCV), which targets the liver cells. The most important sequel of chronic HCV infection is progressive liver fibrosis that leads to cirrhosis, end stage liver disease (ESLD), and hepatic cellular carcinoma. An estimated 270m - 300m people worldwide are infected with HCV and close to four million of them are in the US. Unlike chronic Hepatitis B and HIV, HCV can be cured although its heterogeneous mutation capability…

A new year fosters hope and optimism. In 2009, all Pharma companies, Investors and Regulatory authorities will need wisdom and prudence to bring in cheer. With this backdrop, we have taken a fresh approach in the presentation of our annual Global Pharmaceutical and Biotechnology Outlook (TM) 2009. After defining the key determinants of growth within each sector, we recommend an Overweight position in Rising Stars (RS, unprofitable companies). RISING STARS Our rationale for recommending that investors be Overweight in the RS sector (as per Recommended Portfolio…

The Global Pharma universe today has low valuation multiples, definitive five-year free cash flows and a strong dividend yield which hedges the downside, while dwindling R&D productivity and an uncertain pricing environment rules out any major upside for this universe. Although fundamental growth drivers like higher prevalence of chronic illnesses and an aging population remain intact, in this challenging environment, where is Global Pharma headed? Pricing Rationalization is Just a Matter of Time The US, which to date has been…

Hereditary AngioEdema (HAE) is a rare, severely debilitating, and potentially life-threatening genetic disease characterized by spontaneous and recurring attacks of edema (swelling) in various parts of the body. While abdominal HAE attacks, caused by the swelling of the intestinal wall, can lead to severe pain, attacks affecting the hands, face, throat, and feet can be fatal. Patients suffer an average of 12 attacks per year, each enduring about two to five days if left untreated. Although approximately 10,000 patients in the…

A new ‘layer’ of long-awaited Japanese healthcare reforms were enacted as of April 2008. They are aimed at increasing the use of generic drugs to 12% by 2010 (from 2007 level of 5.2% by value). Japan currently lags far behind other regulated markets in terms of generic use: 16.8% in Japan versus 54% in USA, 52% in UK, and 55% in Germany, by volume. Key factors that contribute to poor generic uptake in Japan are: 1) low margins received by…

Structural reforms lead to weeding out unhealthy competition During 2006 and 2007, the India Rx market bucked the trend of the previous five years by growing at 18% and 13% respectively vs an average growth of 8-9% during 2001 to 2005. This upward trend is the result of several reforms that have helped reduce fragmentation by weeding out unhealthy competition from unorganized and small players. By 2007, approximately 2000 units (40% of the unorganized sector, in terms of business units)…

Why all the fuss? The market for innovative biologics exceeded $43b in 2006 and is growing at ~12% annually. With costs for treatment exceeding $50,000/yr for cancer drugs like Erbitux or Avastin, and no clear path for generic alternatives, biologics have occupied a comfortable position in an industry facing mounting generic competition. However, the tide may be turning - Europe already has a biosimilar regulatory pathway in place and the US appears poised to follow. The cost of prescription drugs is…