FiercePharmaAsia combs earnings calls by major drug companies for notable and quotable nuggets on emerging markets and Asia to track the latest sales trends and insight into business outlooks in markets as diverse as China, India and Japan to Southeast Asia.
For the first quarter of the year, see remarks by top executives from AstraZeneca ($AZN) and Abbott Laboratories ($ABT), with more to come.
AstraZenecaAstraZeneca CEO Pascal Soriot
AstraZeneca CEO Pascal Soriot and his team had a wide ranging discussion on emerging markets and Asia in the April 24 earnings call.
China's healthcare reform push was a key part, though he did let Luke Miels, executive vice president for Global Portfolio & Product Strategy and Corporate Affairs, do the talking in response to an analyst query on how the reforms will impact business.
"So, in terms of China, I think the broad trends remain. You've got high unmet need. As you go into the lower-tier cities and the other provinces, there's still going to be a gap between what most patients can afford and innovative medicine, so that broad pattern is unlikely to change."
But the idea of price controls for tenders or other sales channels elicited a wait-and-see tone.
"I think capping and elements like that, I think we have to see how that's actually implemented at the province level. What we are seeing is more competition at the tendering level in hospitals and a lot more experimentation at the provincial level in terms of ways of accessing medicine."
"So, again, if we look into the future, tiered pricing and combinations of access programs for the oncology portfolio are going to be critical for us to drive growth."
However, Miels noted that going by the figures, AstraZeneca was still among the top multinationals in China.
"We continue to outgrow the market in China, as measured by IMS. There was some volatility in the industry in China, because of the timing of China New Year. But again, we expect the underlying demand to land at around 18%."
Soriot was not silent, noting that emerging markets gained 18% in the first quarter on strong diabetes and respiratory sales.
But like other companies, Japan continues to see poor trading conditions that are linked in part to passage of sales tax increase in April last year, though Soriot said they were set to wane.
"Japan experienced a slight decline in the quarter still due to price effects, but also a very strong quarter for some products like [Silastia] in particular, Symbicort. But moving forward, we expect that Q1 was the last quarter with a negative growth," Soriot said.
He also noted that externalization and collaboration are a focus in Japan.
"We announced earlier in the quarter a collaboration with Daiichi Sankyo to commercialize Movantik in the United States. It's a very important collaboration. Daiichi Sankyo will start promoting Movantik in the United States next month, early next month, and we have great hope for Movantik in the U.S. marketplace."
Abbott LaboratoriesAbbott CEO Miles White
There is never any shortage of comment about emerging markets and Asia from Abbott Laboratories in the earnings calls. On April 22, a host of executives led by Chairman and CEO Miles White waxed on at length from Chile to Russia and then on to China as it views a vast geographic spread built by acquisition and new investment that now includes an R&D pilot plant in Singapore.
"Operational sales increased 10% in the quarter with particularly strong performance in our branded generics, international nutrition, and global diagnostics businesses, as well as double-digit growth in emerging markets," White said.
"And that did include the additions of CFR (Chile) and Veropharm (Russia)."
Then he headed onto China.
"The international adult nutrition business has consistently delivered high-single digits, double-digit sales growth. Our adult nutritional Ensure is roughly a $2 billion brand globally today, and we launched it into the retail segment in China early this year."
And then he took a trip down to the Equator.
"In March, we also opened a nutrition pilot plant in Singapore. This facility, in addition to the others there, allows us to customize more of our products to meet consumer preferences across Asia."
Executives at Abbott are obviously piling up the frequent flyer Miles, pun intended, as the CEO noted sharp growth from Latin America to Asia.
"Excluding the benefit from our recent acquisitions of CFR Pharmaceuticals and Veropharm, sales in our key emerging markets increased in the low double digits, with above-market growth in India, Brazil, China, Russia, and Colombia."
For the numbers, Brian Yoor, vice president of Investor Relations, filled in some details.
"We continued to capture market share with new infant formula products we launched into the fast-growing market segments and geographies over the past year. This includes Similac QINTI and Eleva, which we launched into the premium infant formula market segment in China in 2014," Yoor said.
"International adult nutrition sales increased nearly 11% in the quarter, driven by strong double-digit growth in Latin America. This is the sixth consecutive quarter of double-digit sales growth in our international adult nutrition business."
But White said all of this growth across dozens of countries was hard number-crunching work--especially because they all use different currencies.
"Because so much of the growth for many of us is Asia, Latin America, other emerging markets, we have all had to pay a lot more attention to a lot more currencies," White said.
"I think that's made it harder to forecast and predict, particularly the mix and the shifts and so forth. Although when it all goes in one direction like it did the last couple of quarters, that's pretty easy. But for us, at least in terms of the currency piece, I think all of us were caught off guard somewhat by the magnitude of the currency shift in the fourth quarter last year--although maybe we shouldn't have been, but we were."
Finally, White wound up with some color on CFR and the Veropharm deals that shows how the company rolls with the punches in emerging markets.
"Now you'll note we also acquired a wonderful company, CFR Pharmaceuticals, in Latin America, which gave us a very strong position in Latin America and enhanced the one we already had," White said.
"And we made a fairly significant move in Russia that got done during the core of the whole Ukraine issue, which was a--again, Murphy's Law: if you believe that if it can go wrong, it will. Boy, everything aligned badly and we still got that deal done."
"Fortunately we did it in rubles, so it didn't hurt us when the ruble collapsed. So, that was really good strategically."