Big Pharma starts believing in outside innovation

Interesting trends are emerging for the big pharmaceutical companies as they try to brandish new drug launches, dash into untapped — previously rated insignificant — markets, release their scientific data gathered over the years for wider use and application and assertively trim their overweight staff strengths in all departments starting at the labs and ending at the doctor’s clinic.

Effient, the clot buster developed by Daiichi Sankyo and Eli Lilly, does not seem to have done much to erode sales of its bigger rival Plavix, which is co-marketed by Sanofi-Aventis and Bristol Myers-Squibb.

In its calls with analysts, Daiichi Sankyo executives admitted that sales were moderate but indicated that the product will be more appreciated in the coming years as knowledge gets spread out on the exact way it demonstrated therapeutic advantages over clopidogrel.

Daiichi Sankyo may be right but considering that the blood thinner is also associated with serious bleeding issues as pointed out by the US Food and Drug Administration may not make it an easier choice for the doctors.

Also, it is generally seen that if a product does not get appreciated in the first few months of its launch, it may not succeed in generating large sales or qualify as being called a blockbuster.

That may be a premature assumption as Daiichi Sankyo has not undertaken a global rollout plan especially through its Ranbaxy arm in key markets.

Another product that is on the watch list is Onglyza - a DPP IV - that is looking at a direct combat with Merck’s star brand Januvia. Onglyza is a co-developed product from Bristol Myers Squibb and Astra Zeneca.

Onglyza has a major task of making some space in the widely created market by its rival.

There may be a disadvantage of being the second in class product for Onglyza but the big point going in its favor is that the product got approved in the US, while Novartis’ Galvus - also in the same class - faced tough questions from the US regulators. It is a different question though that Novartis has had a good launch of Galvus in Europe, its home turf.

For both Bristol Myers Squibb and Astra Zeneca, Onglyza could be a big savior from the long drought of striking a big earner.
With increased expectations to strike big drugs on one side and observers weighing whether billion dollar sales from single drugs are anymore possible, the industry research is at the crossroads.

One business development executive felt that the approvals from the FDA are coming at a faster speed now and so there could be big drugs in the offing but another remained skeptical saying that newer approaches to research like patent pools and collaborative work may fetch better dividends.

Crowding more drugs in the same therapeutic category may still not work as the first entrant in the market like in the case of Januvia does such thorough build up that acceptance levels by prescribers becomes virtually unshakeable for follow-on products.

Remember Januvia continues to grow stronger notching up sales of close to $1.5 billion despite concerns over the way it reacts with the pancreas.

The solution may then be to widen the therapeutic base like the way AstraZeneca did with Crestor.

Though rosuvastatin comes much later in the market against its peers, the brand is doing very well in the international markets while Lipitor has seen a declining trend, partly because Zocor has gone off-patent for approximately last two years.

While the more-drugs-in-the same category theory may be acceptable for some companies, niche therapeutic segments are the latest attractions for a few big pharmaceutical companies.

GSK, Sanofi-Aventis and J&J have gone for several deals that open them up to new segments - may not be large population pockets but once that are approached by few and has chances of better success rates. It is difficult to believe that they may all get the strengths of Genzyme but definitely they are adventuring in areas that were previously untouched by them. Notable in this light was the exit of GSK from anti-depression drugs research.

Among the many big programs, anti-TNF’s are turning out to be a keen area of research for more and more companies and MABs are giving very exciting leads.

Likewise, many companies have found fascinating results in new delivery routes. Novo Nordisk for one is looking closely at stem cells for diabetes treatment.

In a way, the perpetual bad times in getting leads over the last ten years have forced big pharmaceutical companies to shed their arrogance, come out of their legacy issues and renew their energies in looking at smaller niche areas.

Most importantly, they now believe that innovation can happen outside their own labs, may be more vigorously, and of course more cost-consciously.

(Pillman is an executive closely linked to the global pharma industry)