Profitable Biotech (Mature Biotech) and non-Profitable Biotech companies (Rising stars) have developed innovative drugs for treatment of chronic and non chronic diseases. In the next five years the distinction between mature biotech companies and large global pharma is likely to disappear as investment in R&D and acquisition start delivering and Market Cap match the large global pharma. Dividend and consolidation could be the future drivers and continue to attract long term investors. Optimism prevails around the future of this sector as a whole which was reflected in the unprecedented rally in shares in 2012. We expect this trend to continue in the next five year driven by launch of Innovative drugs catering to unmet needs in Alzheimer’s, HCV, osteoporosis, RA, Psoriasis, MS, Dyslipidemia, Cystic fibrosis, Cancer and orphan diseases. Drug approvals and label expansion of existing portfolio of launched drugs and data from late stage pipeline drugs should maintain the growth momentum and investors interest.
2012 was recovering from the big acquisitions made in the last five years by this sector but we expect exercising of some restrain for similar large acquisitions as investors would like to see the returns reflected in the top-line and EPS. However in- licensing of early or mid stage compounds or small acquisitions will continue since the Rising Stars will keep throwing the bait by taking risks and innovate using novel technology platforms or validating novel targets for treating diseases.
Patent expiry impact is modest for the next five years for the sector as majority have “not so easy to copy” biologics and other drugs in their portfolio. They however are not complacent and are not leaving any stones unturned to meet the challenges as well as exploring emerging market opportunities with local partners. Favorable regulatory environment should finally see biosimilar mAbs entry in regulated markets in the next five years. The optimism of biosimilar players is reflected in the maturing pipeline. Para IV Filing from other generic players continues to pour leaving room for surprises and volatility.
Global Biopharmaceutical Outlook 2013 of the Mature Biotech sector released by MP Advisors provides valuations and an in depth analyses of biotech companies, their launched drug portfolio and promising drug candidates in the pipeline. The report discusses the competitive landscape of the targeted therapy areas and the innovative strategy each company is deploying to create or retain its leadership in the therapy areas. Forecast for major marketed drugs and drugs in the pipeline are included after factoring, competition, and risks from changing regulatory environment which could change the future market dynamics. Risk reward analyses of important upcoming milestones of the companies are included which should help fund managers as well as pharma company management to make critical decisions.
The detailed 110 pages report contains:
1.Performance of the Mature Biotech companies recommended by MP Advisors in 2012 -report card is very impressive and we expect the positive sentiments to prevail in 2013 and beyond
2.Valuation Multiples and Fundamentals- Drivers of Growth.
3.MP Advisors’ Proprietary Sum-of-The-Parts Valuation and Top Picks for 2013
4.Drug Approvals 2012-15
5.Key Milestones During 2013/14
6.Impact on revenue 2012-2017 from Patent Expiry and Strategies deployed to meet the challenges.
7.Pipeline of Biosimilar mAbs
8.Joint Ventures between innovators and biosimilar players
9.Merger & Acquisitions Forecast- 2013-2020
In-depth Company Analysis and Reports on
1.Acorda - AMPYRA addresses co-morbidities associated with multiple sclerosis (MS) and with no competition, future growth in US and EU to sustain the current valuation. Pipeline remains a free call option.
2.Alexion - Innovative drugs, diversification and focus on orphan diseases will continue to lend stability. Availability of Soliris (eculizumab, C5a inhibitor) indicated for Paroxysmal nocturnal hemoglobinuria (PNH) and Hemolytic-uremic syndrome (HUS) in other geographies along with label expansion should drive growth in the next five years. Pipeline (Asforase alfa, ALXN1102/1103, ALXN1007) beyond soliris is also maturing.
3.Amgen - Sales of denosumab (Prolia: Postmenopausal Osteoporosis, male osteoporosis and XGEVA: skeletal-related events in patients with bone metastases from solid tumors) and novel compounds in the pipeline targeting bone health, cancer and Hypercholesterolemia should sustain Amgen’s reputation as an innovator. Through acquisitions and collaboration, Amgen is poised to tap the emerging market opportunities.
4.Biogen Idec - Poised to sustain its leadership in MS with the well awaited launch of the best in class oral therapy BG-12 (dimethly fumerate, R). Diversification in other therapy area - hemophilia is the future driver.
5.Celgene – Leadership in hematological cancers will be sustained with the launch of pomalidomide. Diversification in autoimmune and inflammatory diseases and label expansion of marketed drugs will drive growth. Risk of Para IV challenges remain.
6.Gilead - Leading in HIV and poised for a similar feat in HCV. Product pipeline beyond the Anti-viral is maturing and promising.
7.Grifols – Stable growth in the plasma protein business, while IVIG opportunity in Alzheimer’s disease remains a wild card.
8.Onyx - Oncology drugs portfolio (Nexavar, Kyprolis, Stivarga) is attractive and places it high on the acquisition target list. Kyprolis is not restricted to R/R MM (3rd-line) and label expansion in 1st –line MM could be a blockbuster opportunity.
9.Regeneron – Growth trajectory driven by Eylea in wet Age-related macular degeneration (AMD), Central Retinal Vein Occlusion (CRVO) and Diabetic macular edema (DME,). Pipeline targeting Hypercholesterolemia, Cancer and RA promises long term growth.
10.Vertex - Bleak prospects for INICVEK as better drugs for HCV are poised to hit the market. Kalydeco (CF potentiator) in combination with VX-809/VX-661 (CF corrector) for larger Cystic Fibrosis opportunity remains a binary event.
2.Expected Drug Clinical Milestones
3.MB sector Selected M&A Activities
4.Marketed Products’ Potential
5.Pipeline Potential Thru 2017
6.Patent Expiry – Impact On The Sector