This week examines significant developments from biotech companies AstraZeneca (AZN), Relypsa (RLYP), and Mast Therapeutics (MSTX). AZN deserves investor attention because on May 26th, 2016 the FDA rejected its potential blockbuster hyperkalemia drug, ZS-9, citing concerns over its pre-manufacturing process. More specifically, the FDA issued a complete response letter (CRL) and 483 form to AZN, which states a drug will not be approved in its current state, but does not require new clinical data for potential future approval. This came as a surprise to many who expected a smooth road to approval for ZS-9 after AZN purchased ZS Pharma for $2.7 billion last December. AZN shares were only down 1% as a result of the news, but competitor RLYP saw its shares jump ≈29%. Previously, a general market consensus had arisen that AZN would swoop in with a superior drug and claim most of the market for hyperkalemia, but with the FDA’s denial of ZS-9 that future looks murkier. This surprising catalyst provides an excellent opportunity to interview an expert about the long term effect this will have on the hyperkalemia landscape and what the future looks like for both AZN and RLYP. MSTX warrants investor interest after their CEO announced they would be delaying the release of Phase 3 top-line data for EPIC (using vepoloxamer to treat sickle cell disease) by more than a month due to delays locking their patient dataset. Despite this announcement, MSTX’s stock price has risen more than
In our experience with Pharmasim we learned that Marketing decision making must be very sensitive and responsive to everything going on in the industry which is very complex. Consumer responses to marketing tactics can be volatile and unpredictable and no idea is guaranteed to work well. Marketing is a matter of meticulous research, assumptions, planning, and volatility at times. Overall we took away two major points: 1) that it is important to consider the product lifecycle in evaluating how to promote businesses and, 2) that the “Sweet Spot” as a competitive advantage should be the greatest point of consideration when evaluating how to best gain leverage to beat the competition in the minds of
Improvements in health care and life sciences are an important source of gains in health and longevity globally. The development of innovative pharmaceutical products plays a critical role in ensuring these continued gains. To encourage the continued development of new drugs, economic incentives are essential. These incentives are principally provided through direct and indirect government funding, intellectual property laws, and other policies that favor innovation. Without such incentives, private corporations, which bring to market the vast majority of new drugs, would be less able to assume the risks and costs necessary to continue their research and development (R&D). In the United States, government action has focused on creating the environment that would best encourage further innovation and yield a constant flow of new and innovative medicines to the market. The goal has been to ensure that consumers would benefit both from technological breakthroughs and the competition that further innovation generates. The United States also relies on a strong generic pharmaceutical industry to create added competitive pressure to lower drug prices. Recent action by the Administration and Congress has accelerated the flow of generic medicines to the market for precisely that reason. By contrast, in the Organization for Economic Cooperation and
The company that I will be issuing a buy recommendation for is Regeneron Pharmaceuticals, Inc (REGN). It is a biopharmaceutical company based out of Tarrytown, New York that develops, manufactures, and sells medicines for various medical conditions. Regeneron’s commericialized drugs include EYYLEA (aflibercept), ZALTRAP (ziv-aflibercept), and ARCALYST (rilonacept.) Furthermore, there are many drugs in their pipeline. I will disclose that I have a certain bias toward this stock as I have been investing in it since early 2012. REGN has been on a meteoric rise since 2011 and while some analysts may say that the price is too high, I will show that it is not the case and there is still room to make a profit from REGN.
The company is so large that no one drug can lift it from its current sales doldrums. In addition, the company was once highly attractive to investors, but its recent stock price fell to 1997 lows. This may put pressure on the company to attempt acquisitions at a time when the company is ill-equipped to integrate a new company into its organization, and it is engaged in a cost-cutting program at a time when it may need to invest even more in research and development (McTigue Pierce, 2005).
The company’s target is to develop products that act as activators or blockers to specific purine receptors without producing undesirable outcomes. It is on the verge of securing a partnership with a major pharmaceutical company in the next 4-12 months that could seal the fate for it to develop the
The most important issue that can impact Pharm Universe is if any of their formula is stolen by hacking into their information systems. Such an incident will have a negative effect on the company and it won’t be able to meet its goals like increasing market share to 10 percent
Mallinckrodt’s is the maker of a drug that price has recently increased in the past within three years. The H.P. Acthar Gel is used for lupus, and conditions such as multiple sclerosis. The drug price has increased from $1,235 a bottle to $29,086 a bottle in 2008. That’s approximately $28,000 difference. The drug is currently $35,000. After a recent tweet made by Citron, the shares of Mallinckrodt’s drug crashed. Andrew Left is the owner of a stock-commentary site called Citron; Left believes that Mallinckrodt will fall eventually. In an interview Left revealed “that drug missed its primary goal in a trail of patients with type of lupus that can harm the skin and joints.” In the past Left
* No foreseeable new product in pipeline. Currently takes up to 11,000 compounds to be screened to find one (1) compound to send through final testing (human trials). And even then it’s not guaranteed to make it past the FDA.
Recently, there has been a debate about the high prescription drug prices in the United States. Accounting for 9.7% of the national health expenditure, $329.2 billion was spent on prescription medications ($931 per person) in 2011 (Linton, 2014). So what exactly is the average American getting with their $931? Well, because there is an extraordinary amount of time, effort, and energy that goes into creating, manufacturing, and distributing a new drug, it’s no wonder the prices are so high. But what other costs are folded into the prices of your prescribed medications? This review looks beyond just the research and development costs needed to take a new drug from idea to shelf by examining several journals and other credible, secondary sources, to shed some light on how much pharmaceutical companies are spending to develop, advertise, and sell their drugs.
Another issue is too much power is given to scientists in decision-making of candidate drugs. Also there were inadequacies and lack of communication between marketing and research. Merck’s marketing and research needed to realize that the making of the drug is not only the most important part in increasing sales, but it also included a strong advertising campaign that will satisfy the needs of the customers.
Nucleon is a small biotechnology start-up company focused on developing biotechnological pharmaceutical products based on a class of proteins known as cell regulating factors. The company has been in the market for five years, and currently, they are in the process of human trials for their first potential product, “cell regulating protein-1” (CRP-1). Overcoming these phases, Nucleon has to decide among several alternatives on producing CRP-1. Knowing that the process involved a tremendous amount of time and money, Nucleon has to choose the right decision for their long-term survival in the intensively competitive and high-stakes drug industry.
The strategic implications for Vertex attempting to fund and develop four drugs are as following:
Successful IPO offerings by Quintiles and PPD and their subsequent growth to top 5 CROs in the industry (refer appendix 1), Kendle can follow the same strategy and obtain required capital through IPO. Threats: Kendle is losing contracts to larger CRO’s with international presence, industry consolidation, presence of numerous fragmented CRO’s worldwide, growth of many start-ups through financial roll-up strategy, many CRO’s are on an acquisition spree and Kendle is losing bids to companies such as Collaborative due to shortage of capital, ClinTrials negative performance is affecting other CRO stocks. Competitors: The fragmented CRO industry has hundreds of players ranging from small, limited-service providers to full-service CRO’s, and global drug development corporations which possess significantly greater capital, and other resources than Kendle. CROs compete on the basis of experience, medical and scientific expertise in particular therapeutic areas, quality of work, the capability to handle extensive trials worldwide, medical database management capabilities, and relevant technology to advance research. International presence with strategically located facilities, proximity to clients, and financial capability and cost efficiency are also necessary. In order to build these capabilities for competing effectively, the CRO industry is consolidating as
Introduction AstraZeneca PLC (AstraZeneca, AZN:NYSE, AZN:LSE) is one of the largest pharmaceutical companies in the world. It was formed in 1999 from the merger of Sweden’s Astra AB and UK’s Zeneca Group plc. Core Activities AstraZeneca is engaged in the discovery, development, manufacturing and marketing of prescription pharmaceuticals and biological products for important areas of healthcare: Cardiovascular, Gastrointestinal, Infection, Neuroscience, Oncology, and Respiratory and Inflammation. One of the key benefits of the merger between Astra and Zeneca is seen as their portfolio of new products in development: AstraZeneca call this their 'product pipeline'.
The research and development of the pharmaceutical industry is very important as the industry relies on it to develop new products to maintain and sustain the growth of the industry (ALRC 2014). According to the Australian Government Law Reform Commission, every year, the total spending in research and development in pharmaceutical industry, which includes drug discovery, pre-clinical testing and clinical trials on drugs is around $300 million (ALRC 2014). Mergers and acquisitions are intensifying in the global pharmaceutical industry, especially over the last 10 years. With factors like exorbitant research and development costs, the relatively shorter product life cycles, and the rarity of discovering a new life-changing drug acting as catalysts, leading pharmaceutical companies now have more cause to step out and look for external collaboration. This results in an increasing number of smaller biotechnology companies merging with bigger pharmaceutical companies (The