Economic Recovery: US Contract Biomanufacturing Companies Are Experiencing an Upswing

For the past decade or more, small to mid-sized biotechnology companies had been outsourcing production of their preclinical and clinical protein-based products to Asian contract manufacturing organizations (CMOs). This was because manufacturing and labor costs were lower and product quality was consistent with Western standards and requirements. However, the recent economic down turn coupled with rising prices at Asian CMOs (mainly driven by increasing labor and project management costs) has forced many small to mid-sized companies to rely again on American CMOs to manufacture their products. Unlike cash-rich, larger companies, US small to midsize companies generally lack the financial resources and personnel to effectively manage operations in Asia. Many industry analysts contend that the lower initial costs of Asia-based companies are usually offset by the money and resources need to oversee a project.

While business returning from Asia improved the financial outlook for some American CMOs, 2009 was a bad year for most firms that service small to mid-sized pharma and biotech companies. However, industry analysts expect 2010 to be better than 2009. More importantly, the return of biomanufacturing to the US may signal the beginning of a new trend in the biomanufacturing outsourcing industry.

Until next time....

Good Luck and Good Job Hunting!!!!!!!!!!

 

Spurring Innovation

American competitiveness in engineering, technology and science. Unfortunately, while American competitiveness and innovation in these areas continues to wane, little has been done (except talking) about it! Yesterday, Intel and 24 venture capital funds announced that they plan to invest $3.5 billion in American startups and early stage ventures over the next two years. Further, in addition, several of America’s leading technology companies including Google, Cisco Systems, Intel Microsoft and 13 others pledged to add as many as 10,500 jobs into 2010—mainly by hiring Americans graduating from colleges with degrees in computer science and engineering.

The initiative, named the Invest in America Alliance was formed in response to “steadily declining long-term investments in education, technology and human capital” that has been taking place in the US for past 20 years or more. Put simply, the American education system is not training enough qualified individuals to allow the US to compete with other emerging technology and engineering powerhouses that include China, India Finland, Korea and the Netherlands. 

According to Robert Compton, a venture capitalist, entrepreneur and education enthusiast “Fewer than 10 percent of college graduates in the US have engineering degrees, compared with more than one-third in India and China and more foreign-born graduates of US universities are returning to their home countries.” For those of you with degrees in math and science (and you base your calculations on population size), the magnitude of the problem (for Americans anyway) is glaringly obvious. Compton went on to say what many others have been thinking for a while, “Early indicators are that we are not the center of innovation anymore. It is shifting to the East.” And he may be right! Based on surveys conducted by the World Intellectual Property Organization in the last year, patent filings increased 30 percent in China while declining 11 percent in the US.

While the Invest in America Alliance appears to be a great public relations opportunity for the companies and venture firms that are participating in it, its critics doubt whether investing more money in technology startups is going to fix the ongoing problem. Education analysts contend that a better and cheaper solution may be changing US immigration laws so that foreign students who train in the US are allowed to remain in the country after they complete their training. Other naysayers contend that most of the venture money committed by the alliance would have likely gone to American startups anyway (US based venture firms already invest 70 percent of their money in American start ups) and that 10,500 new jobs isn’t enough to make a dent in the US unemployment rolls.

Like the technology industry, a decade of wrong-head immigration policies coupled with a waning American interest in science has begun to jeopardize the US dominance in the life sciences. Further these trends are largely responsible for the massive layoffs and unrelenting outsourcing of pharmaceutical R&D jobs to foreign countries.

Toothless or not, the Invest in America Alliance shows that engineering and technology industry leaders are willing to cooperate with one another and get behind an initiative that raises public awareness about America’s waning competitiveness in these fields. Perhaps,   pharmaceutical, biotechnology and medical devices and diagnostic companies ought to take a page out of the Alliance’s play book to similarly insure the future innovation and competitiveness of the American life sciences industry.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!

 

GlaxoSmithKline to Increase the Size of its Sales and Marketing Team in India

According to an article that appeared in the Indian publication The Hindu Business Line, GlaxoSmithKline (GSK) is set to increase the size of its Indian marketing and sales force to better support the sale of vaccines and other specialty products. A company executive said that GSK will add another 200 people to its 2,250 member sales and marketing team.

GSK is repositioning itself to be more competitive in developing and emerging markets like India, China, Brazil and elsewhere. The announcement to increase the size of its workforce in India comes only a couple of weeks after the company announced massive global layoffs that would affect at least 4,000 GSK employees.

Hat tip to Ed at Pharmalot!

Until next time...

Good Luck and Good Job Hunting!!!!!!

 

The Carnage Continues: GlaxoSmithKline to Slash an Additional 4,000 Jobs

GlaxoSmithKline (GSK) Britain’s largest pharmaceutical company today announced it plans on slashing 4,000 jobs over the coming months. The bulk of the cuts will be in America and Europe, and are part of the company’s efforts to shift resources away from low-growth territories into parts of the world with greater scope to expand sales, most notably Asia. GSK’s currently employs 99,000 workers worldwide. The reduction in headcount will be combined with a drive to make the company’s research and development more cost-efficient. 

While the job losses will not be as severe as those announced last week by its rival Astra Zeneca, they will provide further depressing news for a sector that is fighting to contain costs as it reduces its reliance on big-selling blockbuster drugs, many of whose patents will expire in the next two to three years.

The pipeline of new drugs at GSK is much deeper than at many of its rivals, say industry analysts. The company’s roster of planned launches includes Menhibrix, a vaccine to combat meningitis, and Benlysta (belimumab), a novel, monoclonal antibody treatment for systemic lupus erythematosus that it is co-developing with Maryland-based, Human Genome Sciences. In total, the group has more than 30 products in the advanced stages of development and testing.

While GSK continues to develop new drugs, it has increasingly been turning to emerging markets to find and sustain corporate growth. This has meant that thousands of jobs have already been sacrificed in the West, although the company is adding staff elsewhere. For example, it recently cut 2,000 sales jobs in America but added 1,500 staff in China. Also, GSK’s vaccine division has suffered a few regulatory setbacks with its pneumococcal vaccine Synflorix and its cervical cancer vaccine Cervarix. The loss of market share in these areas has put additional financial pressure on the company.

Like many of its competitors, GSK is looking to other divisions of the company to cover projected losses in the pharmaceutical sector. Recently, GSK has shifted a lot of its attention to its consumer products division, which owns brands such as Lucozade and Ribena soft drinks, Aquafresh and Sensodyne toothpaste, and over-the-counter medicines such as Panadol painkillers and Alli, a weight-loss pill. Analysts predict the division will have raised its annual sales 18% to £4.7 billion. A deal signed last year to increase sales of Lucozade in China has provided the blueprint for how the company would like to develop the consumer healthcare side of its business.

Similarly, last week, Sanofi-Aventis, a French rival, announced a joint venture with Minsheng Pharmaceutical Group, a Chinese company, to sell vitamin pills and nutritional supplements. Also, Pfizer recently announced it would bid for the possibility of purchasing the financially-troubled German generics manufacturer Ratiopharm; signaling the possibility that the world's largest branded pharmaceutical manager may be toying with the idea of getting into the generics business.

Late last year I predicted that more pharmaceutical company employees would loss their jobs. Sadly, this prediction has come true. That said, I am surprised at the scope and size of the layoffs that have already taken place in 2010. I suspect that more layoffs are likely in the near future if the economy doesn’t turn around anytime soon.

Hat tip to Ed at the Pharmalot blog!

Until next time...

Good Luck and Good Job Hunting (try medical devices or biotech)!!!!!!!!

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US Pharma Layoffs Continue as Companies Increase the Size of Asian Operations

Pfizer today announced that it’s looking to increase its sales force in China to 3,200 by the end of next year, up from about 2,300. The company expects to have sales representatives in about 250 Chinese cities by the end of 2011. It presently has a sales presence in about 185 cities. Previously, Pfizer it will cut nearly 20,000 jobs as part of the Wyeth merger. Over the pass several years more than 50,000 US pharma sales reps have lost their jobs.

Eli Lilly said last fall that it would continue to hire in China, even as it cuts jobs in the U.S. and other developed markets. Novartis is also making a big push into China, hiring hundreds of workers and spending $1 billion to expand a research center in Shanghai.

With business tough in developed markets, drug makers are counting on the developing world for growth and are expanding into biotechnology and generic drug manufacturing.

Like it or not, the emerging markets in China, India, Brazil and elsewhere represent a substantial upside whereas markets in the developing world are becoming less profitable. Drug companies, like most other large multinational companies, always will follow the profit stream not matter where it takes them or at what cost to the folks at home.

Until next time...

 Good Luck and Good Job Hunting (Try China, I hear they are looking for sales reps)

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Big Pharma Continues Jockeying for Position in India

Yesterday, Sanofi-aventis (S-A) agreed to acquire a controlling stake in Indian vaccine maker, Shantha Biotechnics, for an undisclosed amount. And, recently, Abbott announced a definitive agreement to acquire the nutrition businesses of Wockhardt Limited, Carol Info Services Limited, and certain Wockhardt subsidiaries and group companies for consideration totaling approximately US$130 million in cash.

While these two recent acquisitions don’t appear to be particularly noteworthy, they speak volumes about growing Indian influence in biologics and, perhaps more importantly, in biosimilars. India, long known for its expertise in generic drug development and its ability to work with US-based companies, has expanded beyond generic pharmaceuticals into generic biologics aka biosimilars. Biosimilars have been on the Indian market for over a decade and by all accounts several Indian companies, most notably BioCon, might be able to steal biosimilar market share in Asia from the likes of Sandoz, Merck and Teva—companies expected to be major players in the emerging biosimilar market.

Both Shantha and Wockhardt possess substantial experience in biosimilar development and commercialization. To that end, Sanofi-aventis has publicly announced its desire to get into biotechnology and Abbot must expand its biotechnology pipeline beyond Humira to remain competitive. These acquisitions likely represent Sanofi’s and Abbott’s attempt to gain a foothold in the emerging Asian markets. Also, it gives both companies access to lower cost biologics R&D and manufacturing capabilities.

It will be interesting to see how things unfold over the next year or so!

Until next time...

Good Luck and Good Job Hunting!!!!!!!

 

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Looking to the East: GlaxoSmithKline Inks a Deal with India's Dr. Reddy's Laboratories

GlaxoSmithKline (GSK) inked a deal yesterday with the Indian generics manufacturer Dr. Reddy’s Laboratories giving it access to over 100 future generic drugs and a gateway to Asia’s emerging pharmaceutical markets. The therapeutic areas covered under the agreement include diabetes, cardiovascular, pain management, gastroenterology and oncology. Dr Reddy’s Laboratories is one of India’s largest generic drug manufacturers. Like many of its competitors, Dr. Reddy’s Laboratories also have active development programs for new biotechnology drugs and biosimilar products.

UK-based, GSK joins a growing number of pharmaceutical companies including Pfizer, Merck and others that have entered into deals with major generic drug manufacturers—or purchased smaller generics companies—to gain access to generics pipelines and an ability to compete in emerging  non-branded pharmaceutical markets. Impending US healthcare reform and downward pricing pressures (resulting from increased global competition) have forced drug makers to reevaluate the role that generic drugs will likely play in future pharmaceutical revenue streams.

While generic drug makers have outstanding manufacturing capabilities, they generally lack the marketing, sales and distribution channels necessary to penetrate foreign markets and quickly ramp up drug sales. I suspect that the number of deals between pharmaceutical companies and generic manufacturers will continue to increase as many of the patents for multibillion, blockbuster drugs continue to expire in the next few years.

Until next time....

Good Luck and Good Job Hunting!!!!!!!!!

 

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The Thing about Gardasil

The Pharmalot blog reported today that Merck received approval from the US Food and Drug Administration to use Gardasil to prevent vaginal and vulval cancer in addition to cervical cancer.

Of late, Gardasil has been a lightening rod for controversy—mostly because of Merck’s unrelenting marketing campaigns (and the behind-the-scenes lobbying for the vaccine to be placed on the US mandatory vaccination list)  coupled with the Christian right’s moral machinations about premarital sex and sexually transmitted diseases in general. Also, let’s not forget the brouhaha surrounding FDA’s decision to delay approval of GlaxoSmithKline’s competing cervical cancer vaccine called Cervarix. Finally, about a month ago, there was study published in the New England Journal of Medicine questioning the cost effectiveness of Gardasil vaccination of women after the age of 18.

Regardless of your moral, ethical or business concerns about Gardasil, the bottom line is this: girls/women vaccinated with Gardasil are much less likely to develop cervical cancer as compared with those who are not vaccinated.

As I have mentioned before, all approved and marketed drugs have side effects and possible safety/tolerability issues. More importantly, the decision to approve a particular drug is always based on a careful risks/benefits assessment by government healthcare regulators. Whether or not a person uses a drug or vaccine is ultimately a personal choice. With the exception of mandatory childhood vaccines (children can be exempted for moral or religious reasons), every American has the right to decide whether or not to use a medication or undergo a treatment recommend by a healthcare professional. Based on everything that I have read about Gardasil, it appears to be a safe and effective vaccine to prevent cervical cancer. When FDA finally approves Cervarix (probably sometime in late 2009), it will offer women who may have concerns about Gardasil with an alternate vaccine to protect them against developing cervical cancer.

The funny thing about the Gardasil firestorm is that cervical cancer isn’t a major healthcare problem in the US. This is because a majority of American women undergo annual routine gynecological examinations (that include pap smears, the current gold standard for cervical cancer detection). In contrast, cervical cancer is a major healthcare problem and economic concern in Asia, most notably in China and India. This begs the question—why are Merck and GSK so intent on selling their cervical cancer vaccines in the US? Put simply, there is still much more money to be made in the US than in Asia. Look for approval of Gardasil and Cervarix in China and India when the middle class of both countries reach a critical mass.

Until next time…

Good Luck and Good Job Hunting!!!!!!