Tuesday, April 28, 2009

11 views on the question: “Which Biotech and Pharma companies would you say are growing the best during the economic down turn?”

Recently, Jonah Manning of BeAspired Inc. in Tallahassee, Florida asked “Which Biotech and Pharma companies would you say are growing the best during the economic down turn?”

Here are some the answers you might find interesting, plus a view from STINSON Brand Innovation.

Miguel Vilaplana, MD, MBA -- Biogen Idec, Amgen, Novo Nordisk, Pharmamar (Spanish), Life Technologies (for sure, Stem cells and anything related to cell culture etc. as Advancell; Spanish too...), Lonza (Stem cell department). However, how many of the medium-sized biotechs will survive after 2009? I do not know. Pfizer/Wyeth movement and Roche/Genentech hostile approach are telling us that M&A are just starting. Who is not able to stay without movement? Novartis, BMS (buy or be bought?), GSK, Merck ... We are going to see several movements there and some of the medium-sized pharma will have to buy or might be bought, and you can bet according to this parameters: total revenues, pipeline, sales force and manufacturing (being the first two, the most important I guess).

Chris Pounds
-- Myriad Genetics just announced our Q4 2008 numbers and saw ~50% annual revenue growth over 2007.

Belkis Castro & Mary Jo Miller -- I would have to add Novartis to the list of growing companies. I just read their press release today and they are showing growth and actually hiring. They have over 80+ openings just in the US. For a large Pharma company they seem to be adding value without having to cut personnel.

Lin Chen -- I'd say more globalized company will more likely to survive this wave of economic downturn. Those who focus their business in the U.S. will suffer more for sure.

Guido Tomás Rozenblum -- For sure those companies that doesn't need fundings from investment institutions. Interests are going high, therefore, companies with cash such as Novartis, Invitrogen, Pfizer or Roche they may go for a trip buying small start-ups at ridiculous prices to fill up their pipelines.

Thomas Beattie -- Genentech will continue to lead in innovation over next 10+ years if Roche tender is unsuccessful. Watch the data released over next 30+ days (DNA).

Karen Strauss -- I believe that the Contract Research Organizations (CRO) that work for the Biotech and Pharma Industry are doing well. With mergers there is a chance that a particular contract could be cancelled but they usually have a wide range of clients and are able to keep revenues up.

Mike L -- The companies that benefit most from the down turn are the medium to large Pharma companies with a lot of cash. Biotech and Pharma companies are going for fire sale prices. Secondly, since Pharma and Biotech are shedding RD staff left and right, CROs are gaining huge market share.

Amy Clausen -- MD Biosciences is also experiencing good growth. We are a contract research organization and drug development company. We are continually adding staff, new services as well as searching for drug development partners.

Mohankumar Sowlay -- In the current global macroenvironment, small but innovative biotechnology companies which do not have to go to the market in the immediate future for financing needs have a good chance to survive the economic downturn. The present cost structure of big pharmaceutical companies dictated by the conventional drug development model is unsustainably high leading to a wave of cost optimization strategies. On the other hand, shareholders and employees may benefit from those companies that invest in targeted biotherapeutics, molecular diagnostics and regenerative medicine as successful product candidates from these companies become attractive acquisition targets by Big pharma. The attraction of these products to big pharma is due to the prospect of high reimbursement rates from the payers and the urgency to buffet their dwindling product pipeline. In my opinion, look for signs of prudent management of research dollars through the enlistment of global partnership in clinical development and for eventual market cultivation in emerging markets. I regularly analyze these and other company and industry strategies both from a business development and M&A perspective.

At STINSON Brand Innovation, we’re admiring two companies: CSL Behring and BioMarin.

CSL Behring
Commenting on CSL’s outlook, Dr Brian McNamee, CEO, said in February, “To-date there has been little to no impact on our sales arising from the global financial crisis. This is consistent with a product portfolio of life saving therapies and essential vaccines. However, we remain vigilant as the situation develops. Potential risks to our outlook include pressures on healthcare spend, debtors risk, foreign exchange volatility and ongoing access to long term debt. However, in this difficult economic environment, we anticipate broadly stable market conditions for CSL’s group of businesses. Research and Development spend of $153 million in the first half is expected to be similar in the second half with total spend for the year between $300 million to $310 million on a reported currency basis. Vivaglobin® (subcutaneous Immunoglobulin), a product which provides the convenience of immunoglobulin self administration, attracted significant patient growth. We have met key milestones in the approval process for increasing Privigen® manufacturing capacity. Specialty products, particularly Beriplex® P/N and Berinert® P, made a strong contribution.”


"All three of our commercial products are independently profitable, which helps fund the advancement of several promising programs including PEG-PAL for PKU and GALNS for MPS IVA. We are strategically developing earlier stage programs and looking for attractive later stage in-licensing or acquisition opportunities to ensure continued growth," said Jean-Jacques Bienaime, Chief Executive Officer of BioMarin. "We feel confident in meeting our overall top and bottom line financial objectives for 2009.”

One BioMarin growth brand, for example, is KUVAN® (sapropterin dihydrochloride) Tablets, a product for the treatment of phenylketonuria (PKU). Net product revenue was $15.5 million for the first quarter of 2009, compared to $5.8 million for the first quarter of 2008. The quantity of commercial tablets dispensed to patients, the best metric to track true patient demand, increased 9.5 percent in the first quarter of 2009 compared to the fourth quarter of 2008.

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