The Top 15 Generic Drugmakers of 2016 by Eric Sagonowsky, Eric Palmer, Angus Liu
Total Page：16
File Type：pdf, Size：1020Kb
The top 15 generic drugmakers of 2016 by Eric Sagonowsky, Eric Palmer, Angus Liu Branded drugmakers weren’t the only ones working through a tumultuous 2016. Generics companies faced pricing pressure, too. And while branded companies suffer pricing pain on costly cutting-edge therapies, generics outfits feel the pinch with already-thin margins, making pressure all the more agonizing. How is the industry responding? By consolidating and hoping to save money, for one. Take a look at FiercePharma’s 2014 ranking, and it’s clear that some companies have made leaps too big to depend on organic growth alone. Take Teva, which topped the 2016 list as it did in 2014. It wrapped up the biggest M&A move in recent history for the generics industry, swallowing Allergan’s unbranded offerings for $40.5 billion in August. The massive move will continue to reverberate in the generics industry for years to come. Top drugmakers by 2016 generics revenue in USD billions Teva Pharmaceutical Industries 9.85 Mylan 9.43 Novartis 9 Pfizer 4.57 Allergan 4.5 Sun Pharmaceutical Industries 3.61 Fresenius 2.8 Endo International 2.57 Lupin 2.49 Sanofi 2.05 Aspen Pharmacare 2 Aurobindo Pharma 1.86 Dr. Reddy's Laboratories 1.78 Cipla 1.61 Apotex 1.6 Source: Evaluate, May 2017 Get the data Sales data for Sun Pharma, Fresenius, Lupin, Aspen Pharmacare, Aurobindo, Cipla, and Apotex are Evaluate estimates. Dr. Reddy’s data provided from company filing. Behind Teva came Mylan, which also completed a big deal last year, a $7.2 billion buyout of Sweden’s Meda. The buy helped it bulk up in over-the-counter drug offerings and win a presence in some emerging markets new to the U.S.-based company. That acquisition followed a series of others in recent years, and Mylan is now working to cut loose up to 3,500 employees as it aims to reap savings from that deal spree. 1 FierceMarkets, a division of Questex, LLC www.fiercemarkets.com | www.questex.com 2017 Questex LLC. All rights reserved. Trailing those two companies was Novartis, whose Sandoz unit tallied $9 billion in off-brand sales for the year, according to life science commercial intelligence firm Evaluate. From there, the industry saw a bit of a dropoff: Pfizer came in fourth with $4.6 billion, while Allergan, which officially offloaded its generics assets in August, rounded out the top 5 with $4.5 billion. Other names in the top 15 are familiar to industry watchers: Sun Pharmaceutical Industries, Fresenius, Endo International, Lupin, Sanofi, Aspen Pharmacare, Aurobindo, Cipla, Apotex and Dr. Reddy’s Laboratories. If pricing pressure alone was not enough of a challenge for the generics industry, multiple top players are also embroiled in a pricing collusion probe at the Department of Justice, an issue that could weigh on the sector going forward. Several have been slapped by the FDA for manufacturing violations that continue to weigh on their ability to supply key meds. But amid the industry’s turmoil lies a silver lining. Generic drugmakers are well-positioned to take advantage of the pricing pressure in the U.S. The industry’s lobbying group has already rebranded itself as the Association for Affordable Medicines to drill in on the message, and legislation is pending in Congress that would speed certain generics applications through FDA review. Generic drugs make up 89% of prescriptions but only 27% of drug costs, according to the industry, something the sector will continue to hammer as lawmakers look to reduce drug costs in the U.S. Despite the lingering challenges, life science commercial intelligence firm Evaluate recently predicted that generics will continue on a steady growth path to $115 billion in 2022, up from $80 billion in 2016. The sales data used to arrive at these rankings were compiled on a fiscal- year basis, in some cases from reported data and in some from Evaluate’s internal estimates. We have identified the numbers that are based on estimates, and whether the companies have fiscal years that vary from the calendar year. Questions, comments? As always, please get in touch. And if you’re interested in making comparisons to our 2014 report, here’s where to find it. Editor’s note: This report was updated to reflect a correction in the data from Evaluate. Worldwide generics sales 2008-2022 2008 $53b 2009 $53b 2010 $59b 2011 $65b 2012 $66b 2013 $69b 2014 $74b 2015 $73b Generics 2016 $80b 2017 $86b 2018 $92b 2019 $97b 2020 $103b 2021 $109b 2022 $115b Worldwide generics sales are projected to rise at a compound annual growth rate of +6.3% over the next five years, according to EvaluatePharma. 2 FierceMarkets, a division of Questex, LLC www.fiercemarkets.com | www.questex.com 2017 Questex LLC. All rights reserved. 1. Teva Headquarters: Petah Tikva, Israel 2016 generic drug sales: $9.8 billion Being the world’s largest generic drug player certainly comes with its challenges. With 57,000 full-time employees around the globe, Israel’s Teva Pharmaceutical Industries ranked No. 1 among the world’s top generic drugmakers, raking in $9.8 billion with its copycats last year. That’s in line with the drugmaker’s finish in FiercePharma’s 2014 ranking, and Teva has bulked up even further in 2016, purchasing Allergan’s generics for $40.5 billion. But industry bragging rights weren’t enough for Teva’s restive shareholders. Before the drugmaker even closed the deal in August, it faced investor angst over concerns it paid too much. “They grossly overpaid, there’s no doubt about it,” one investment banker told the Financial Times last year. Those concerns would prove to be just the start of Teva’s recent troubles as problem after problem cropped up. The drugmaker said goodbye to its CEO, settled a massive bribery case with U.S. officials and lowered its 2017 guidance, all within a few months. Facing those challenges, an Israeli newspaper in March reported that Teva is considering thousands of layoffs. Meanwhile, in an attempt to combat the trends so badly hurting the industry, Teva last fall committed to a high number of launches—1,500 per year—to propel its business to 5% growth in the years to come. “Our global pipeline of generic products positions us for an increasing number of first-to- file opportunities and other key generic launches, as well as further expanding our product portfolio,” Teva wrote in its annual 20-F filing with the Securities and Exchange Commission. Overall, the drugmaker has 330 product applications awaiting FDA approval, according to that filing, and 71 tentative nods from the agency. Teva said it’s the first-to-file company for 95 of those products, which comes with a 6-month monopoly and its attendant revenue boom. And it disclosed a staggering 1,655 generic drug approvals in Europe last year. The company is just kicking off its launch of AirDuo RespiClick and an authorized generic of that product, which is an alternative to GlaxoSmithKline’s respiratory giant Advair that Evercore ISI analyst Umer Raffat called a “very important launch” for Teva. Like Mylan and several other generics firms, Teva is under investigation for possible generic pricing collusion. 3 FierceMarkets, a division of Questex, LLC www.fiercemarkets.com | www.questex.com 2017 Questex LLC. All rights reserved. While Teva pressures branded drugmakers with its cheap copycats, the company faces its own generic threat with its branded Copaxone, a blockbuster MS med. Already fighting off copycats to its original Copaxone formula, Teva is expected to soon face generic erosion on its follow-up 40 mg version. After losing numerous court battles to defend that med, the drugmaker caught a lucky break when Momenta and partner Sandoz received a complete response letter from the FDA related to manufacturing. 2. Mylan Headquarters: Bunschoten, The Netherlands 2016 generic sales: $9.43 billion For some time, Mylan’s corporate image will be linked with its damaging EpiPen pricing controversy. But aside from all that negative attention, it has a booming generics engine that generated $9.43 billion in sales last year, according to Evaluate analysts. The drugmaker had a rough time in 2016 after its EpiPen price increases, made over several years, went public. To appease critics, the company launched an authorized generic and amped up its patient assistance programs. Still, Mylan worked through a deluge of bad PR and is now working to finalize a settlement with the U.S. Department of Justice over alleged Medicaid overcharges on its med. Despite the controversy, Mylan turned in 18% growth last year to $11.1 billion in total sales, expanding at a clip the company’s larger pharma peers would love to duplicate. But it wasn’t all sunny, as pricing presented a challenge and will continue to pressure results in 2017, President Rajiv Malik said in an accompanying statement. “We continued to see erosion both globally and in U.S. generics in the mid-single digits which was in line with our expectations, and we continue to expect a comparable environment in 2017 given the breadth and make-up of our global portfolio,” he said. For 2017, Mylan is expecting 17% growth at the midpoint of its revenue projections. At the end of 2016, Mylan had more than 35,000 employees around the globe and 247 generic drug applications pending at the FDA, representing nearly $100 billion in sales for the branded versions. Needless to say, it’s a complicated outfit constantly seeking to challenge Big Pharma’s patents, master manufacturing and supply chain efficiencies, and steal market share from expensive branded meds.