Well, its seems like the heavy-weight title match and in this corner we have the defending champ: Pfizer with apparently its back to the ropes as it continues to be pummeled in all directions; by generics manufacturers and patent challenges and expirations; by emerging market politicians; by troublesome research fraud (Pfizer innocent bystandard); and by the courts for drug marketing fraud (not so innocent…ouch).
But I question management’s strategic reaction to the onslaught. It appears to me the the defensive response has been to slash R&D on new innovative products; industry consolidation and cost cutting in a attempt to more resemble a consumer goods company, and what appears to be a strategic attempt to simply become a run of the mill distributor of other companies’ products.
Pfizer and Strides Arcolab to Collaborate on Generic Products
NEW YORK–(BUSINESS WIRE)–Pfizer (NYSE: PFE) and Strides Arcolab (BSE: 532531, NSE: STAR) today announced a new collaboration, wherein Pfizer will commercialize off-patent sterile injectable and oral products in the United States through its Established Products Business Unit. These finished dosage form products will be licensed and supplied by Strides and Onco Laboratories Limited and Onco Therapies Limited, two joint ventures between Strides and Aspen, South Africa, in which each has a 50% ownership interest. The financial terms of the supply agreement were not disclosed.
The companies believe this is a highly complementary collaboration, which is expected to deliver 40 off-patent products, many of which are oncology therapeutics, to healthcare providers and patients in the U.S., by joining Pfizer’s solid commercial infrastructure with Strides’s high-quality manufacturing capabilities. The first of the products commercialized under this collaboration is expected to be launched in 2010.
“This Strides collaboration is new and exciting, and we are encouraged about the potential of this relationship,” said David Simmons, president and general manager of Pfizer’s Established Products Business Unit. “In addition, this agreement brings the total number of products in-licensed by our Established Products Business Unit to more than 200 — resulting in a total business unit portfolio of approximately 600 high-quality, reliable, and cost effective products for patients.”
“Partnering with Pfizer enhances our ability to reach a larger base of customers and patients in need of quality treatment options,” said Arun Kumar, Strides Founder and Managing Director. “We have established a reputation for efficient formulation development and technologies, manufacturing, and operational flexibility and are looking forward to bringing these strengths to bear in our collaboration with Pfizer.”
Pfizer’s Established Products Business Unit launched its U.S. Injectables team less than 10 months ago and is already marketing products in the U.S. Through this new collaboration with Strides, Pfizer continues to demonstrate its commitment to become one of the top players in the injectables market.
Strides Arcolab Limited: Leadership Through Partnering
Strides Arcolab is a global pharmaceutical company headquartered in Bangalore, India that develops and manufactures a wide range of IP-led niche pharmaceutical products with an emphasis on sterile injectables.
The company has 14 manufacturing facilities across 6 countries, including its joint venture with Aspen in India and has a marketing presence in more than 60 countries in developed and emerging markets. Manufacturing is ably supported by a 350-scientist strong global R&D Centre located in Bangalore.
I wrote a previous article on Big Pharma’s strategy of purchasing generic manufacturers , ‘If you can’t beat them, join them’ and I stand by the conclusion I wrote in that post:
“The better approach to improving your business model is to invest in the future innovative technologies such as biotech, medtech devices, device/pharma combinations, genomics, and proteonomics which will allow you to maintain your competitive advantage and to continue to produce higher margin products.”
This is costlier, riskier, and definitely subject to short term battering of stock prices as investors react to day to day events, but ultimately was the methodology on which the firm was built in the first place and management must have longer term value creating/product differentiation and specialization considerations in mind. Everything I see management execute so far suggests the promotion of commoditization, obscuring differentiators, and general “against the ropes” defensive and reactive posturing.
Tej Deol, M.D.
