In a new blog post entitled Pharma in 2011: A Year for Big Decisions, Scientia Advisors Managing Partner Harry Glorikian (who is my client) writes that most pharma firms’ current approaches for playing in new fields are likely to fail—and makes a number of  industry predictions for the coming year.
With several major products going off –patent, and with regulatory and policy changes in the works, Glorikian writes, many large pharma companies must rethink  their current business models in order to succeed on new playing fields. 

In the coming year, pharma can expect:

  • Little growth for big caps and fewer big cap company mergers
· Need for cash generation leading to divestment of  developmental assets
  • Increased focus on therapeutics for niche and orphan diseases
  • Accelerated  need for prescription/diagnostics combinations, leading to partnerships or acquisitions.


“In our view, most pharma firms’ current approaches for playing in new fields will not succeed—and companies have many difficult decisions to make,” Glorikian writes. “A big question is whether, in making those decisions, they will try to satisfy shareholders’ immediate needs or ensure long-term company health.”

Here’s a link to the complete blog:  Pharma in 2011: A Year for Big Decisions

–Anita M. Harris

Scientia Advisors, based in Boston and San Francisco,  is a management consulting firm specializing in growth strategies for major and emerging companies in health care, life science, biotechnology and nutrition. Scientia recently launched a practice  Pricing and Reimbursement/Market Access .

Anita Harris is president of the  Harris Communications Group— an award-winning marketing and public relations  firm in Cambridge, MA. HarrisCom also publishes New Cambridge Observer, a blog covering arts, sciences, business, politics and life in and around Cambridge, MA.

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Pharma execs with blockbuster drugs on the market should be up staying at night strategizing in case someone comes up with a “companion diagnostic” that the FDA requires before the blockbuster  can be prescribed.

So write Scientia Advisors authors Amit Agarwal and Jonathan Pan in “Theranostics and Already Approved Drugs: What You Don’t Know Can Hurt You,” published in the 2010-2011 Parexel Yearbook.

Disclosure: Scientia is my client.

In the article, Agarwal, partner, and Pan, senior associate, describe the situation that led the US Food and Drug Administration (FDA) to require warning labels and recommend diagnostic testing for the blockbuster drug Plavix more than 10 years after the anti-thrombotic hit the market.  Plavix is marketed by Bristol-Myers Squibb and Sanofi-Aventis to prevent myocardiofaction (MI) or strokes.

As early as 2001, when Plavix had been on the market for four years, studies began to show that Plavix helped certain patients more than others, the authors write. By 2008, genetic testing by a competing pharmaceutical company showed that nearly one-third of Plavix users did not fully benefit from the drug.  Based on these and other trial results, in 2010 the FDA required that the manufacturers include a “black box” warning label and a diagnostic testing recommendation for the product.

In 2009, Plavix had worldwide sales of $9.5B including $5.6 B in the US. As a result of the FDA diagnostic testing recommendation, the authors project that by 2012, BMS and Sanofi Aventis will lose $450M to $575M in sales in the US alone– and more if regulators in other nations add requirements. “Given the need to maximize revenue in the face of generic competition across their portfolios, it is a significant amount to offset.” Other drugs, prescribed in conjunction with Plavix, will also most likely be impacted.

Agarwal and Pan recommend a number of actions that pharmaceutical executives can take to mitigate such potential post-launch losses.

  • Expand competitive landscape and threat assessment coverage to monitor the diagnostic environment for new research and clinical trials which could potentially impact the sales of marketed drugs
  • Upgrade skills, capabilities, reporting relationships and the organizational clout of the theranostic function
  • Develop organizational structures that allow knowledge of new biomarkers and clinical trials to reach commercial decision makers

Scientia Advisors’ article is available in the PAREXEL’s Bio/Pharma R&D Statistical Sourcebook 2010/2011 at Barnett Educational Services.

—Anita M. Harris, President, Harris Communications Group

Scientia Advisors, located in Boston and San Francisco, is a management consulting firm specializing in growth strategies for major and emerging companies in health care, life sciences, biotechnology and nutrition.

HarrisComBlog is a publication of the Harris Communications Group, an award-winning public relations and marketing communications firm in Cambridge, MA.


Ever wait anxiously for days to get the results of medical tests?  Such periods may eventually become passe as new methods for analyzing blood and other tests increasingly allow quick turnaround times in doctors offices, “rapid clinics,” and even in patients’ homes.

According to a new review of the global “point of care” testing industry released today by Scientia Advisors, a Cambridge, San Francisco strategy consulting firm (yes, my client!)–the market for point-of -care medical tests (those analyzed in close proximity to patients)–is growing at 8 per cent–and even faster for certain types of tests and in the developing world.

Harry Glorikian, Scientia’s managing partner, points out that this growth is fueled in part by a trend toward decentralization of health care—in which testing and treatment are migrating from hospital labs to settings such as emergency rooms, outpatient, doctor’s offices, rapid and urgent care clinics, and homes.

But, he points out,  “companies bringing point-of-care (POC) tests to market must consider not only accuracy, reliability and ease of use, but also the challenges of gaining clinical acceptance and meeting sometimes-onerous regulatory and reimbursement requirements.”

Based on primary and secondary research and proprietary analysis, Scientia projects that the POC testing market, which includes professional and over-the-counter segments, will experience compound annual growth of 8%, from $11.6B in 2008 to $18.4B through 2013 —with additional potential for growth in emerging economies.

While diabetes is the largest segment of the POC testing market, infectious disease testing, a smaller segment, has high growth potential due to (1) increasing awareness of public health problems such as flu, chlamydia and hospital-acquired infections (2) potential availability of disruptive, point-of-care molecular diagnostics and (3) increased adoption of POC testing in emerging markets.

Scientia also found that:

  • While the US is a major influencer in the global POC testing market, the developing world will experience the fastest growth—especially in China and India, where the governments plan to open thousands of rural clinics.
  • In the current economic slowdown, US retail giants such as CVS and Wal-Mart have closed many rapid clinics. As a result, rapid clinics may need new strategies, such as partnering with hospitals, to remain viable.
  • Next-generation, portable, easy-to-use technologies, which promise greater accuracy, convenience and clinical impact, will fuel the growth of many POC segments.
  • Stringent regulatory and reimbursement requirements and a need for pharmaco-economic studies remain barriers to widespread POC adoption in the US and abroad.

Scientia’s review, “The Point-of-Care Diagnostics Market: Growth Drivers and Challenges to Widespread Adoption”, is available for download at no cost at www.scientiaadv.com.

—Anita M. Harris

Harriscom blog is a publication of the  Harris Communications Group is a marketing communications and public relations firm located in Boston, MA.


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I’ve been working with Instrumentation Laboratory, a Bedford, MA company, to spread the word about its new diagnostic test that helps prevent brain injury in newborns.  Newly cleared by the FDA, it’s first-ever, rapid point-of-care, lab-quality blood test for measuring  total bilirubin (tBili) in neonates.

Bilirubin, a toxin, can, in high amounts, lead to irreversible brain injury in neonates.  The new tBili assay is performed on IL’s GEM Premier 4000 critical care analyzer.    It allows clinicians to receive lab-quality test results in 90 seconds fromwhole blood in the Neonatal Intensive Care Unit (NICU), rather than wait up to an hour for results from the lab, using traditional chemistry methods.    

 During the first few days of life, the body breaks down fetal red blood cells, producing bilirubin.  More bilirubin is produced than the liver can remove, and it remains circulating in the blood. 

This results in jaundice, the most common condition requiring medical attention in newborns, present in approximately 70%.  However, in 8-10% of newborns, jaundice progresses to severe hyperbilirubinemia.  Left untreated, hyperbilirubinemia can quickly evolve into kernicterus, a devastating, irreversible neonatal brain injury. 

IL announced that it had received the FDA clearance for the test on Tuesday, at the annual meeting of the American Association for Clinical Chemistry. For more information,  check out the Instrumentation Laboratory (US) Web site-http://www.instrumentationlaboratory.com/ilus.aspx .

—Anita Harris

HarrisCom Blog is a publication of the Harris Communications Group of Cambridge, MA. We also publish New Cambridge Observer and Ithaca Diaries Blogs.


My client, Scientia Advisors,  has found that the market for certain advanced medical testing methods is poised for accelerated growth.

Scientia, a management consulting firm, recommends that many diagnostics companies reexamine their portfolios and  business models to position themselves for growth.
Immunoassays are laboratory tests used to identify and quantify blood components associated with particular diseases. Immunoassays are a key growth area within in vitro diagnostics (tests conducted in laboratories, as opposed to those carried out in living organisms).

Based on  a review released on June 28, 2010, Scientia Advisors Founding Partner Arshad Ahmed said: “Most current immunoassay technologies focus on detecting one or several proteins in a patient’s blood/serum or other samples.

 “However, novel markers and new technologies that can detect and measure multiple markers simultaneously will become increasingly available in the next several years.”

 Such advanced technologies—already used in diagnosing and treating infectious diseases, cancer, and kidney injury—are faster, more accurate and more cost-effective than many “traditional” tests. As a result, they may command higher prices and are driving growth in the overall immunoassay market.

What is more, for diagnostics players, marketing and business models are changing, according to Ahmed. Pharmaceutical companies are beginning to incorporate diagnostic tests into their sales processes. And certain diagnostics companies are adopting a “sole service provider” model—in which tests are marketed directly to physicians and performed in company-run laboratories.

 In light of these changes, “it is crucial that companies in the diagnostics space re-examine their business strategies in order to compete successfully in the coming years,” Ahmed said.

Review highlights:

  • The $7.7B immunoassay market, which comprises one fifth of the $37B in vitro diagnostics (IVD) market, grew approximately 6% a year between 2005 and 2007. The immunoassay market has since shown 9% compound annual growth — a rate that is expected to continue through 2012, largely due to technology advancements.
  • Growth in the immunoassay market will be driven by the emergence of (1) ultra-sensitive platforms, which enable detection of analytes at minute concentrations; (2) multiplex technologies, which allow simultaneous analysis of multiple compounds and (3) novel biomarkers that increase the accuracy and efficiency of diagnosis or treatment.
  • Emerging economies, such as China’s, are experiencing robust immunoassay market growth.
  • Personalized medicine and new business models such as the bundling of immunoassays with marketed drugs and the sole service provider areare changing industry paradigms.

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Scientia’s study, Strategic Review of Immunoassays: Seeing Beyond the Market Inflection Point”. is available for download at no cost at www.scientiaadv.com.

—Anita M. Harris

Harriscom Blog is a publication of the Harris Communications Group of Cambridge, MA.

Scientia Advisors, based in Boston and San Francisco,  is a management consulting firm specializing in growth strategies for major and emerging companies in health care, life sciences, biotechnology, and nutrition.
 

 

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A new review by my client, Scientia Advisors, finds that, with the market for biologic  drugs growing much faster than that of drugs based on chemical compounds, many biopharma companies are repositioning and forming new alliances in order to succeed in a rapidly changing pharmaceutical landscape.

In the review, released today, Scientia reports that revenue growth for the small molecule (chemically-based) drug segment has slowed and will begin to decline within three years as numerous blockbuster drugs go off patent and are replaced by less expensive generic substitutes.

In contrast, the market for biologics (based on living matter) which comprises approximately one-third of the overall pharmaceutical market, increased at a 21% compound annual growth rate (CAGR) between 2003 and 2008, to $110B.

While the CAGR for biologics has since slowed to 8%, Scientia projects 2013 revenues of $165B, due largely to rapid growth in monoclonal antibodies. Scientia also projects growth opportunities in the vaccine and cell therapy segments.

Many biologics command relatively high prices and require complex and expensive manufacturing processes. To keep costs down, biopharmaceutical companies are increasingly seeking to outsource their manufacturing to contract manufacturing organizations (CMOs).

 In addition, “numerous biologic therapies with total revenues of $37B will have lost patent protection by 2017, promising considerable opportunity in biosimilars (government-approved new versions of branded biopharmaceutical products following patent expiration),” Glorikian said. “As a result, pharmaceutical, generic drug, and contract manufacturing companies are joining forces to enter the biosimilars space. To be successful, they must take into account the considerable technical, competitive, and regulatory hurdles that will be involved.”

Scientia Advisors’ review, entitled “Assessing the Biopharmaceutical Market: Promises and Challenges,” is available for download at no charge from www.scientiaadv.com.

–Anita M. Harris

HarriscomBlog is a publication of the Harris Communications Group–a public relations, content and thought leadership firm in Cambridge, MA.  We also publish New Cambridge Observer.


A new global review from my client, Scientia Advisors , predicts rapid growth in molecular diagnostics and that,  with traditional pharma companies slow to innovate, a myriad of new entrants vying for market share will change the healthcare landscape.

(Molecular diagnostics are genetic tests used to judge the effectiveness of  particular treatments for individual patients–key to the burgeoning new field of personalized medicine).

Released earlier this month  (and available for download at no charge at www  scientiaadv.com)  the review projects that MDx will grow at  an annually compounded rate 15% to approximately $7.5B in 2013.

Currently, molecular tests used for oncology and critical care infectious diseases are experiencing the fastest growth among MDx segments.

“Ultimately, MDx will enhance care, cut health care costs and make personalized medicine a worldwide reality,” said Scientia Advisors Managing Partner Harry Glorikian.

Among other major findings:

  • The industry is transitioning away from low-cost, low-margin tests. New, “high-value” MDx tests are changing the health care paradigm by providing critical information to physicians more quickly and accurately than was previously possible.
  • While most MDx revenue is currently generated in the US and Europe, future growth will be most pronounced in the developing world.
  •  New, easy-to-use, random access and fast-turnaround-time MDx platforms are enabling widespread adoption of MDx in small and mid-sized hospitals, worldwide.
  • Companies seeking to enter the MDx field must be cognizant that, with the growing impact of MDx, government oversight and regulation will likely increase and reimbursement policies will evolve to reflect added value.

Scientia Advisors is a global management consulting firm specializing in growth strategies for companies in health care, life sciences, biotechnology and nutrition, world wide. The firm is based in Boston and San Francisco.

—Anita M. Harris

HarrisCom Blog is a publication of the Harris Communications Group of Cambridge, MA.

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