Pharmaceutical companies

The top 10 players wield enormous power in the global pharmaceutical industry. They drive the market in terms of revenue, growth and profitability. Without doubt they dictate the direction and pace of the industry. In the recent past, the top 10 players have been focusing on a single issue: discovering new drugs.

In fact, the top 10 pharma companies lead the rest of the pack in research and development expenses. The top 10 pour huge sums of money into research, resulting in new drugs. In industry parlance, these new drugs are called IPR Assets, short for Intellectual Property Rights Assets. IPR Assets are the key drivers of the pharma industry. But, the IPR pipeline of major pharma companies has been on a declining trend for the past few years; an explanation for the recent spate of mergers and acquisitions.

Novartis AG

Novartis AG is a major healthcare company, which produces a range of health and personal care products for humans and animals, developing and marketing products to combat disease and improve quality of life. It is headquartered in Basel, Switzerland. Operating through 360 independent affiliates in 140 countries, Novartis is one of the fastest growing global pharmaceutical companies, gaining market segment share and now at fifth place in global rankings. In 2003, the company’s sales increased 19 per cent to US$24.9 billion. Market shares of all the business units of the company have been increased. Financial analysts rated the rich pipeline, with a total of 79 projects in clinical development or registration, as one of the industry’s strongest. It offers its products and services through two main divisions: pharmaceuticals and consumer health. The pharmaceuticals division engages in the discovery, development, manufacture and marketing of prescription medicine. The division consists of five business units, which include: primary care, oncology, transplantation, ophthalmics, and mature products.

The primary care business unit includes a wide range of products for several disease areas such as cardiovascular, central nervous system, gastroenterology, dermatology, respiratory, and rheumatology/bone/hormone replacement therapy.

Novartis’ oncology business unit includes ‘Glivec’ to treat Philadelphia chromosome positive chronic myeloid leukaemia, and a specific type of life-threatening gastrointestinal cancer. ‘Femara’, a first-line hormonal treatment for post-menopausal women with advanced or metastatic breast cancer; ‘Zometa’ for multiple myeloma and for patients with documented bone metastases from solid tumors; and ‘Sandostatin LAR’ for patients with acromegaly and to control symptoms in patients with functional GEP tumors.

Its transplantation business unit includes medications such as ‘Neoral’ and ‘Simulect’, which are used to protect transplanted organs from rejection. The business unit specializes in developing a new range of therapeutic products for the prophylaxis of organ rejection in order to provide an extensive choice of drugs to the transplant market.

The Novartis ophthalmics business unit engages in the research, development and manufacturing of ophthalmic pharmaceuticals, which assist in the treatment of glaucoma, age-related macular degeneration, eye inflammation, ocular allergies, dry eye and other eye related disorders.

The mature products business unit is responsible for supporting a broad range of branded, mostly older, products that are still used in a variety of therapeutic areas. The business unit actively seeks opportunities to extend the life of these products through line extensions with new improved formulations.

The consumer health division creates, develops, manufactures and markets a wide range of competitively differentiated products. The division includes Sandoz generics, over-the-counter products, animal health, medical nutrition, infant & baby, and CIBA vision business units.

Sanchoz engages in the development, manufacture and marketing of generic pharmaceuticals as well as pharmaceutical and biotechnological active ingredients. It acts as a partner in the franchised pharmaceuticals, biopharmaceuticals, and industrial products. Sanchoz is headquartered in Vienna, Austria.

The over-the-counter business develops, produces and markets self-medication products for the home treatment and prevention of medical conditions and ailments. Its main product categories include: cough, cold and allergy treatments, gastrointestinal treatments, dermatological treatments, topical analgesics, mineral supplements, and smoking cessation treatments.

The Novartis animal health business unit deals with the well being of companion animals as well as the health and productivity of farm animals. The business unit develops treatments for the most common pet ailments such as internal parasites, fleas, renal, heart and allergic diseases. For livestock and farmed fish diseases, it offers prevention through vaccination as well as therapeutic products to treat parasitic and bacterial infections.

The medical nutrition business unit markets and offers a complete range of nutrition medical food products and services tailored to the various needs of patients, health professionals and carers. The business unit focuses on disease specific therapeutic areas, with products administered under professional guidance or over-the-counter direct to the patient. It also includes health food and slimming and sports nutrition products.

The Novartis infant and baby business unit, the Gerber Products Company, is one of the major baby food-brand in the USA with more than 200 food products. Its line includes care and wellness products featuring baby washes, shampoos, lotions, dental care products, bottles and products for breastfeeding mothers. Gerber labels its products in 16 different languages, and distributes them to around 80 countries. In addition, Gerber offers whole life insurance, through the Gerber Life Insurance Company.

Bristol-Myers Squibb

Bristol-Myers Squibb, one of the top 30 companies in the FT Global 500, is a diversified health and personal care company that provides pharmaceuticals, consumer medicines and nutritional products. The company operates in around 60 countries. It is headquartered in New York City. For the fiscal year ended December 2003 the Bristol-Myers Squibb Company achieved revenues that totaled US$20.89 billion, an increase of 15.4% against the 2002 revenues of US$18.1 billion, see Table 48 overleaf.

Bristol-Myers Squibb (BMS) is one of the leading diversified health and personal care companies in the world; as such it has a wide product range, marketed internationally in many countries. The company’s primary focus is the pharmaceutical market, which accounts for over 70 per cent of its annual sales.

BMS operates through four business divisions: pharmaceuticals, oncology therapeutics network (OTN), nutritional, and healthcare/medical devices.

The company’s pharmaceuticals division produces and markets a range of brand pharmaceuticals and consumer medicines. Its portfolio includes more than 50 drugs that have annual sales in excess of US$50 million. These include products such as cholesterol-lowering agent ‘Pravachol’, and platelet aggregation inhibitor ‘Plavix’. In 2003, worldwide pharmaceuticals sales of BMS increased 16 per cent to US$14.92 billion, reflecting a 2 per cent price increase, a 9 per cent volume increase and a 5 per cent increase in foreign exchange.

The OTN business unit was previously part of the pharmaceuticals division, but has now split. BMS is a major provider of anti-cancer therapies, as well as being involved in the discovery and development of innovative treatments to fight heart disease, high blood pressure, stroke, type 2 diabetes, HIV/AIDS and other infectious diseases, depression, anxiety and pain.

The company’s worldwide consumer medicines sector includes an over-the-counter medicines division in the USA called UPSA, a pain medication company in France, and a self-medication joint venture between Bristol-Myers Squibb and Lion Corporation in Japan. The company has acquired DuPont Pharmaceuticals and has expanded its medicines business with products including ‘Sustiva’, ‘Coumadin’ and ‘Cardiolite’.

The nutritional products division, meanwhile, markets a range of infant formulas, dietary supplements and meal replacements. Through subsidiary, Mead Johnson, the company has a substantial market share in the worldwide and USA infant formula markets.

The healthcare/medical devices division consists of its subsidiary, ConvaTec. ConvaTec is one of the largest producers of ostomy care and modern wound care products. The ostomy division produces and markets a range of devices aimed to ease the pain of using ostomy pouches. The company has launched a complete range of innovative wound care products aimed to provide moisture retentive environments for wound healing. The division also produces a line of patient skin care products to permit care workers to maintain the integrity of their patients’ skin and to protect against skin irritation and breakdown.

Wyeth

Wyeth is a global pharmaceutical company, ranked amongst the top 20 largest health care companies on the Forbes 500. The company has three primary product lines - pharmaceuticals, consumer healthcare products and animal health - and is segmented into business units on this basis. It also operates in biotechnology markets. The company is headquartered in Collegeville, Pennsylvania. For the fiscal year ended December 2003, Wyeth achieved revenues totaling US$15.85 billion, a 10 per cent increase on 2002 revenues of US$14.58 billion, see Table 54 overleaf.
Wyeth is one of the largest research-based pharmaceutical companies in the world. Employing 38,000 staff it specializes in therapy areas of critical need, including women’s health, cardiovascular diseases, gastrointestinal diseases, infectious diseases, transplantation and immunology, haemophilia, oncology, vaccines, and neuroscience.

In 2002, Wyeth spent approximately US$2.1 billion on research and development, with an emphasis placed upon pharmaceutical, vaccine and biotechnology treatments. Pharmaceutical research and development operations at Wyeth are divided into two basic units - ‘discovery’ and ‘development’. ‘Discovery’ is directed toward both new chemical entities and new biological entities, whilst ‘development’ activities include chemical, biological and pharmaceutical development; drug safety and metabolism and clinical research and development. Wyeth Research undertakes research into vaccines that can prevent significant life-threatening diseases. Vaccine research and development activities are directed to diseases of both bacterial and viral origin in areas of respiratory illness, sexually transmitted diseases and gastrointestinal disease.

Wyeth created the Women’s Health Research Institute in 1993 to centralize as well as expand the company’s efforts in women’s health care discovery and clinical research. It includes state-of-the-art laboratories dedicated to the identification of new products for the future, such as new steroids, non-steroidal molecules, and non-hormonal targets. The institute also cooperates with major professional and public organizations to encourage a continuing emphasis in the world community on the health care issues that uniquely affect women.

Wyeth consumer healthcare is a leader in the research, development, manufacturing, and marketing of a broad range of consumer health care products, operating in over 65 countries. With 2002 sales of US$2.2 billion, Wyeth consumer healthcare is the third-largest over-the-counter health care products company in the world. The Wyeth research and development unit has expertise in the development of innovative products spanning many therapeutic categories. It also has expertise in the development of innovative dosage forms including tablets, softgels, topicals, syrups and metered dose inhalers.
Founded in 1912 and a division of Wyeth since 1945, animal health is a leading manufacturer and distributor of prescription and over-the-counter animal health care products for the livestock and companion animal industries. Animal health serves the US and international markets, distributing products in more than 100 countries. It is the number one veterinary biological (vaccine) manufacturer in the world and ranks second in veterinary vaccine sales in North America.

Animal health is one of the industry’s more successful companies in achieving USA Department of Agriculture registration for new and innovative biological products. The division has numerous registrations for canine, feline, equine, and bovine biologicals, along with several unique products in the development pipeline.

Today, the animal health division has approximately 4,000 employees worldwide. The division established its worldwide headquarters in Overland Park, Kansas, in 1995. The move to the Kansas City suburb followed the acquisition of the American Cyanamid Company and Syntex Animal Health, and allowed the company to centralize its rapidly-growing operations.

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