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TMFHelical (98.85)

More on Biosimilars

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May 08, 2008 – Comments (5)

 

 I blogged a couple of days back on Biosimilars, and how I'm not sure that the pathway for the approval will be clear cut or the impact all it expected to be.

Well, the Biobusiness section of the latest issue of Genetic and Engineering and Biotechnology News (a great, free industry trade mag) had an major (linkable) article on the subject.

Biosimilars are Poised to Influence the Industry

A very good place to start for those interested in the potential of this business.  The article describes the current landscape, European vs. US policy divergence, current time line, and companies that are poised to benefit.  The companies include Barr (BRL), Dr. Reddy's (RDY), Ranbaxy, Sandoz (Novartis, NVS), Teva (Teva), and others.  And yup, I have them all bullish in my CAPS port, but expect patience will be required with them.

The article also offers opinions as to how big a deal biosimilars will be.  One such opinion, supported by industry organization BIO, is that of Dr. Grabowski, who believes the impact will be modest in terms of consumer savings, and that the revenue drain from primary branded manufacturers will not be so dramatic.  In contrast, small molecule pharmaceutical revenue losses to the primary branded manufacturer are often quite large (80% revenue loss - to throw out an undocumented number off the top of my head).

Here is Dr. Grabowski's (long) industry analysis.  Having only scanned it so far, I find it consistent with my modest expectations (for what that's worth - and it ain't much).

Zz (Ralph)

5 Comments – Post Your Own

#1) On May 08, 2008 at 2:05 PM, madcowmonkey (< 20) wrote:

Heli- These two statements make the most sense to me.

"The scenario painted by Dr. Grabowski may not fully factor in the high degree of physician frustration with current biologic prices nor the impact of the global economy. Leading oncologists have spoken publicly against the pricing of biologics and the fact that many patients, even with insurance coverage, have difficulty affording the required $10,000–20,000 copay. "

"Global competition and economy of scale could allow physicians, patients, and hospital administrators to get FDA-okayed-equivalent therapies and save themselves half the cost or more. If that happens, follow-on biologics could receive top-tier placement on formularies or even fail-first treatment, as has happened with many small molecule generics. On cost alone, without marketing, follow-on biologics could achieve dominant market share.  "

You are doing some good work here. Much appreciated. 

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#2) On May 08, 2008 at 3:22 PM, TMFHelical (98.85) wrote:

Thanks madcowmonkey,

I saw your reply on the earlier commentary and hoped you'd see this one and read the GenEngNews article.  It did offer a nice overview and balanced commentary.

Ralph

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#3) On May 08, 2008 at 3:42 PM, madcowmonkey (< 20) wrote:

Definitely. I will be curious about the RDY purchase in Louisiana. Dang, it has been a long time since I spelled that state out, I almost had to go and check.

An India company producing their product on American soil. What gives? I thought most of the pharmaceutical companies outsourced to the other countries, not to the US. Must be some kind of incentive? 

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#4) On May 08, 2008 at 8:57 PM, TMFHelical (98.85) wrote:

madcowmonkey,

Not everyone is outsourcing heavily, but it is certainly a trend.  Mostly production and mostly production of generic drugs, but plenty of R&D as well.  I was out in Hyderabad a couple of years ago overseeing a process development project (poorly thought out, but executed OK).  Dr. Reddy's is centered there as well and was clearly expanding, as was the entire city.

Zz - long India, like Mathew's India fund, but don't own it right now.  I do hold IGC which is an infrastructure play (former SPAC).

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#5) On May 09, 2008 at 11:03 AM, madcowmonkey (< 20) wrote:

I wold be long on arcadis, but I am finding other ways to make my money grow. I feel the company is strong and they put up good numbers, but unfortunately they are going nowhere even though they are everywhere. Infrastructure, water, environment.,,,,,

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