More Indian news from GlaxoSmithKline. CEO Andrew Witty is traveling this week in India, meeting with reporters along the way, and that’s put GSK in the headlines almost daily. Witty’s been talking deals (he’s in favor of them) and drug prices (they have to be flexible) and strategy (grow via deals and organically in poor and middle-income countries).

Now, Witty tells the local Economic Times that he has a long, long time line for his India strategy. After all, he’s seen the country evolve over the last 10 years–he ran India operations around 2000. “This conversation is not about the next quarter but it is about the next 10 or 20 years,” he explains.

Second, he’s not interested in selling generics in the U.S. or Europe. If GSK were to buy a company that has an American generics division, “We will sell it.” He’s more interested in the complete opposite: Branded drugs in emerging markets.

Third, one of the ways he’s planning to make price cuts a reality in India is by cutting the production cost of those products. The company will drive down production costs in part via alliances with local firms, he said, and by driving internal efficiencies. Doing that won’t just enable flexible pricing in India, but allow GSK to export those low-production-cost drugs. Maybe even back home to the U.S. and Europe.

Source: FiercePharma

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GlaxoSmithKline has cut prices to boost sales in the poorest countries on the globe. Now it’s homing in on middle-income countries as another way to grow its revenues. And the company’s strategy in these nations mirrors its approach in the poorer ones: Make medicines more affordable, improve access to them, and higher sales will come.

“Our strategy is to grow our business in middle-income countries by increasing the volume of products we sell,” CEO Andrew Witty tells Bloomberg.

GSK is part of the Big Pharma parade into Asia and other emerging markets. Faced with the prospect of more generic competition and tougher pricing policies, drugmakers have been looking past the slow-growth U.S. and Europe. GSK’s revenue from emerging markets grew by 20 percent in 2009 to about $4.5 billion, and the company is looking for more growth this year.

So, GSK is using flexible pricing models to make drugs more affordable; because middle-income countries have a wide range of socioeconomic groups, the pricing models will allow for different prices in different settings. “[E]conomic status, demography and healthcare infrastructure … can vary significantly,” Witty says. “Taking a single pricing approach would be difficult, inappropriate and inequitable.”

Source: FiercePharma

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Growth in Asia, growth via acquistion, growth via acquisition in Asia: Drugmakers promised investors all these strategies over the weekend. Here’s who plans to use which approach:

• Eli Lilly said it expects its Japanese revenues to grow in the “mid teens” percentage-wise in 2010, the chief of its Japanese unit said today. That’s on top of 19 percent growth in 2009, Bloomberg reports, which put Lilly’s Japanese sales at 109 billion yen for the year, or $1.2 billion.

• Traveling in India, GlaxoSmithKline CEO Andrew Witty pledged to continue expansion in that country via acquistions and organic growth. Speaking on the sidelines of a company event in Nashik, Witty told reporters that India is a crucial market for the company. “[Acquisition] opportunities will be evaluated based on a variety of factors, including the strategic nature of the fit,” he said (as quoted by the Wall Street Journal).

• Fresh off his deal to buy the biotech-equipment company Millipore, Merck KGaA CEO Karl-Ludwig Kley tells a German newspaper that more acquisitions are on the way. “We have indeed a few ideas,” he says. “Acquisitions are part of our strategy … And so it should continue.”

Obviously, these companies aren’t unique; almost everybody in pharma is either looking to buy or be bought these days, and the list of companies targeting Japan for growth gets longer by the day.

Source: FiercePharma

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Fueled by windfall profits from swine flu vaccine sales, GlaxoSmithKline reported a big spike in revenue for the fourth quarter. But the extra money hasn’t stopped the pharma giant from sharpening its budget-cutting axe once again. Glaxo executives this morning outlined an additional 500 million pounds ($791.6 million) of budget cuts as it scales back on R&D.

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Specifically, Glaxo says it will stop R&D efforts in certain neurological areas, with work grinding to a halt in depression and pain, according to Bloomberg. The company will focus on Alzheimer’s, Parkinson’s and multiple sclerosis and create an R&D unit that will concentrate on new therapies for rare diseases. Glaxo makes it quite clear that this new unit would be an active collaborator.

“We are allocating capital to areas where we can get the best return on investment,” the company says in the statement. CEO Andrew Witty told reporters that the budget cuts included a further reduction in the company’s workforce that would amount to the “hundreds rather than thousands” in the U.K.

“In addition to our existing discovery effort, alternative opportunities need to be explored to make treatments available for rare diseases,” says Marc Dunoyer, GSK’s president of Asia Pacific and chairman of Japan, who will head the new rare diseases unit. “This complementary approach will combine our existing global expertise with specialist partners. Over time, this new unit has the potential to deliver multiple therapies responding to high medical needs of underserved populations of patients.”

Source: FierceBiotech

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GlaxoSmithKline CEO Andrew Witty swung by Health Blog HQ this week. Given all the M&A action in the industry in the past year (Pfizer-Wyeth & Merck-Schering Plough, to name a few biggies), we asked him about GSK’s acquisition strategy.

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“We’re not in the market for traditional, large-scale, premium acquisitions,” he said.

He didn’t focus on the pipeline drugs or growing franchises that acquirers often cite. Instead, he waded into the ramifications of making a big acquisition at a moment when many segments of the industry are contracting.

“People are buying companies and taking costs down,” he said. “You’re paying a 30% or 35% premium to have the opportunity to fire people.”

Instead, he’s looking for “bolt-on acquisitions” — under $5 billion — that add to growing businesses such as vaccines or consumer products, or to key emerging markets. And even those have to be at a the right price; the company walked away from a few deals in the second quarter of last year, because they were too expensive.

Source: The Wall Street Journal

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Pharmaceutical company GlaxoSmithKline (GSK) is to reveal previously confidential data on thousands of potential anti-malaria compounds.

In addition to this, the company is to pump millions into an ‘Open Lab’ for independent research teams.

The company has 13,500 molecules which have been tested against the parasite which causes malaria.

One expert said more sharing of data could trigger advances like those that came from the human genome project.

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The way in which pharmaceutical firms guard the secrets of their drugs and research has long been cited as an obstacle to disease research.

The latest announcement by GSK chief executive Andrew Witty, follows an earlier decision to set up a “patent pool” where information about patented drugs could be shared.

In a speech in New York, he said that it was important to “earn the trust” of society.

“The measures we have announced today are characterised by a determination to be more flexible, open and willing to learn.

“GSK has the capability to make a difference and a genuine appetite to change the landscape of healthcare for the world’s poorest people.”

Millions scanned

The data in question is the result of a year’s effort by GSK scientists to study a disease which still claims almost a million lives a year, mainly in sub-Saharan Africa.

The company holds a “library” of millions of different molecules, and each of these was tested against the Plasmodium falciparum parasite which causes malaria.

The result was 13,500 which appeared to have an effect on it, although extensive further research would be needed to narrow down this list into those most likely to succeed as new drugs.

Dr Timothy Wells, Chief Scientific Officer of the Medicines for Malaria Venture, which has worked with GSK on the project, said it had the potential to “dramatically alter” the way the world approached malaria research.

“By sharing the data, the research community can start to build up a public repository of knowledge that should be as powerful as the human genome databases and could set a new trend to revolutionise the urgent search for new medicines to tackle malaria.”

Dr Mallika Kaviratne, from the Malaria Consortium, a not-for-profit organisation, said it could boost access to medicines for developing countries, as resistance to existing drugs was an important issue.

She added: “The release of 13,500 molecules made to the public is very important – we have nothing else in the pipeline – and new drugs need to be developed, but they’re expensive.”

Professor Peter Winstanley, from the Liverpool School of Hygiene and Tropical Medicine, said that the decision was a “step in the right direction”.

He said: “It looks like the chief executive has said: ‘What’s the sense of sitting on 13,500 molecules which perhaps have antimalarial properties when other people might be more interested in them than we are?’.

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“How, while there’s a slight possibility that we may have new drugs from this in the next five years, it is more likely to happen over the next 10 to 20 years, and that will take a lot of work, some luck, and a lot of money.”

Source: BBC NEWS

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Since January 1, the pharmaceuticals world watched three of its biggest names go gently into the good night. Yes, those names are still around, but they’re each preceded by another company name with an apostrophe and an S. As in Roche’s Genentech, Merck’s Schering and Pfizer’s Wyeth.

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So, we can say 2009 was a megamerger year, a year of buyout press conferences, antitrust asset sell-offs, and golden handshakes for departing executives. Even the companies that eschewed the megamerger in favor of smaller, strategic deals were in a way defined by it: They were the companies that didn’t. Think GlaxoSmithKline’s CEO Andrew Witty just saying No; Sanofi-Aventis chief Chris Viehbacher questioning megamergers’ efficiency; Bristol-Myers Squibb helmsman Jim Cornelius not only avoiding the big deal, but selling off units to tighten his focus.

When 2010’s ranking of pharma companies is rendered, we’ll thus see some big shifts. Pfizer will stay No. 1, albeit with more room to spare ($64.2 billion in sales, using 2008 figures for Pfizer and Wyeth). Merck will vault up to No. 4 with $37.8 billion in sales, just past Sanofi-Aventis and just ahead of Novartis. And with $31.5 billion in sales, Roche will step up a slot to No. 7, taking Merck’s former place.

That ranking is just an educated guess, however, because of all the smaller deals that the likes of Glaxo, Sanofi, and Novartis engaged in during 2009. Some notable ones: Sanofi’s $4 billion buyout of animal health J.V. Merial and its recent $1.9 billion agreement to take over consumer healthcare firm Chattem; GlaxoSmithKline’s ‘targeted buy’ of dermatology specialist Stiefel Labs for $3.6 billion; and Novartis and its $10.4 billion purchase of a 25 percent stake in eye health company Alcon (which included a second-stage option likely to come to fruition in 2010).

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So we’ll have to wait and see how the 2009 sales come out to know for sure how the new rankings stack up. And then wait again for confirmation from 2010 numbers. One thing’s for sure: there’s plenty of flux still ahead.

Source: FiercePharma

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The U.K. has unveiled a tax incentive plan that would from 2013 offer companies a 10 percent tax break on revenues resulting from patents filed there. U.K.-based GlaxoSmithKline likes the sound of that. “The patent box is exactly the sort of active, long-term and creative support that we need from the Government to ensure that the U.K. remains an attractive place for highly skilled sectors such as pharmaceuticals,” CEO Andrew Witty says in a statement.

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But there’s more to this story. GSK is planning to invest £500 million ($810 million) to develop and manufacture its newest drugs. Of that, £200 million ($324 million) will be invested in Ware, Hertfordshire, where GSK has a long-standing history. But there’s still a £300 million ($486 million) manufacturing factory planned whose location hasn’t yet been decided. Witty is threatening to invest outside of the U.K. if the government doesn’t apply the tax incentives to drugs already in development. “For GSK, assuming the new regime will apply to patents currently under development it will have the immediate impact of making the U.K. a priority area for future investments, particularly in manufacturing,” the CEO adds.

According to the Financial Times, the U.K. is competing with Belgium, Ireland, Singapore and other countries that have offered significant tax breaks to lure pharma businesses. GSK’s veiled threat didn’t fall on deaf ears. “We have taken that very seriously. It is something we are definitely working on,” commented Lord Drayson, the U.K.’s science and innovation minister.

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For a clue to where GlaxoSmithKline is cutting back on sales reps, and where the company is staffing up, take a look at the company’s third-quarter earnings announcement, out this morning: Sales were up 25% in emerging markets and 19% in Japan — and down 8% in the U.S.

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Now that you know what the answer’s going to be, you can watch GSK CEO Andrew Witty give you the news via Web video. The part we’re talking about is just before the end, when he says:

Just over the last year or so we’ve reduced by around 2,200 the number of sales personnel in our established Western markets, and we’ve increased by around 2,200 the number of sales personnel we have in our emerging and Asia Pacific markets. … We are reallocating resources to go for growth.

This is sort of thing is happening industrywide, as business remains sluggish in Europe and the U.S. and companies look to emerging markets for growth. Just last week, we noted that Eli Lilly is adding jobs in the developing world even as it makes cuts in the U.S. and other developed markets.

Glaxo Deals Bonus: Witty said Glaxo walked away from two or three potential deals in the third quarter, Dow Jones Newswires reports. Here’s more on hookups that Glaxo didn’t do from the WSJ’s The Source blog.

Source: The Wall Street Journal

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GlaxoSmithKline has been all over the news lately, as the drugmaker racks up order after order for its pandemic flu vaccine. But it’s not just the vaccine that’s boosting Glaxo’s pandemic sales. The most recent estimates have GSK reaping some $4.8 billion from the pandemic, between its Pandemrix vaccine, its Relenza antiviral drug, and other products such as antiviral face masks and flu diagnostics.

And as the Wall Street Journal reports today, none of this happened by accident. As virologists and other experts predicted the eventual evolution of a novel flu virus, the company spent more than $3.2 billion to build up its pandemic-related offerings. It was the kind of all-in bet that can pay off big–or fail big.

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With the H1N1 pandemic in full swing, no one’s arguing the latter. Indeed, some analysts are looking beyond the immediate “windfall” to long-term government stockpiling of antivirals and vaccines. “That is more likely to provide the drugs companies with recurring revenues, and it is that that has got the investors more excited,” one told The Independent.

In fact, it’s been so successful that some are accusing Glaxo of profiteering on the epidemic. As the WSJ notes, Glaxo caught criticism of its $10-per-dose charge for the vaccine, paid by the U.K. government. U.K. press claimed the shot only cost $1.60 to make. But CEO Andrew Witty brushes off such charges.

Rich countries are indeed paying about that price, Witty says, but the margin isn’t anywhere near that large, especially factoring in the cost of R&D. And Glaxo has pledged 50 million H1N1 shots for use in poor countries. ”Swine flu is going to be positive for performance, but only because we have put ourselves in a position to do it,” Witty recently said. “And we have done that by taking very significant risks over a long time, diverting a huge amount of resource to it and doing the research that nobody else has done.”

Source: FiercePharma

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