From the pharma C-suite: Notable, quotable remarks on Asia, emerging markets for Q1

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 Johnson & Johnson ($JNJ), Roche ($RHHBY), Novartis ($NVS) and Amgen ($AMGN) to start, with more to come.

Johnson & Johnson

J&J VP of investor relations Louise Mehrotra

For Johnson & Johnson, with CEO Alex Gorsky not on the April 14 call, the currency headwinds of a stronger dollar were well reported with Louise Mehrotra, vice president of investor relations, noting that outside the U.S., "operational growth was 0.8%, while the effective currency exchange rate negatively impacted our reported results by 13.2%."

But Dominic Caruso, vice president for finance and chief financial officer, also provided some detail in response to an analyst question on a bigger threat to cash flow from a possible Remicade biosimilar launch by South Korea's Celltrion that would certainly give pause about the prospects of a near-term competitor.

"Yes, it's true that the U.S. patent office has issued what is referred to as a final rejection," Caruso said. "But under the process in the U.S. patent office, the word final is not exactly what a layman or I would consider as final, so there are a number of steps that can still occur after that final rejection. And in fact, one of those steps includes our response to that final rejection, which we filed just yesterday."

"Then that filing then is reviewed by the patent office, and we would expect to hear back from them in the next 30 to 60 days, and depending on that response, we then have another avenue of appeal, which if the current position of the patent offices remains the same, we have another appeal process which could take another 12 months or so to prosecute with the patent office. And then after that, even if there's an adverse ruling after that, there's another decision to the Court of Appeals in the federal circuit court that we could appeal for, which would take another 12 to 18 months. So first of all, as I said earlier, we're very confident in the strength of our patents, and we intend to pursue all of the available avenues for appeal, and we're doing so, including our response just yesterday to what was previously described by you as the final, but it's not final, as I've just described."


Image removed.Roche CEO Severin Schwan

For Roche on April 22, CEO Severin Schwan noted a pickup in what is labelled international, but broken down in slides, noting that Japan was a standout on the downside, stemming from a move in April last year to raise the national sales tax.

"You see Japan down by 3%. This is really driven by this change in the consumption tax in Japan last year. If you correct for this base effect, actually Pharma would have grown by 10% on an underlying basis."

The company does not provide earnings by the quarter, just sales figures and trading remarks.

However, for Daniel O'Day, chief operating officer, the news was more granular by product, the highlight being hep B drug Pegasys.

"Of this franchise, we have about ($)500 million in hep B and that is still growing in the developing world particularly in Asia and has potential to have some growth although at a small scale in Africa. So I think at some point in time, although I would be cautious on this, I mean we'll continue to have a decline in Pegasys because the hep C business continues to [degrade] over the course of this year."

But the big news for Roche in pharmaceuticals was once again China, where sales rose 27% in the first quarter, O'Day said.

"We expect in China by the way a new indication approval in the second half of this year for non-small cell lung cancer," O'Day added.

Roland Diggelmann, chief operating officer for diagnostics, also noted the glaring exception to upbeat sales was Japan, but has good news from the rest of the world.

"And then for the rest of the geographies, very good growth in particular in emerging markets. Asia-Pacific was 16% and notably China was 23%; but also good growth in Latin America, EMEA...," Diggelmann said.


Amgen CEO Robert Bradway

Amgen bet big on manufacturing operations in Singapore last year, and has made strong moves in Japan and other markets to expand in Asia.

But the company rarely has a lot to say on operations outside the U.S. with Chairman and CEO Robert Bradway on April 22 staying brief in remarks by noting "internationally, we were up 10% at constant currency."

But Bradway did discuss briefly plans with Astellas in Japan and the launch of Repatha.

"We are well along ... And we own the rights to this product globally, and we look forward to commercializing it globally. Of course, we are sharing--we have a partnership in Japan with Astellas, but otherwise the rights are ours."

However, Tony Hooper, head of Global Commercial Operations, filled in more details noting that Prolia sales jumped 44% in international.


Swiss-based Novartis and CEO Joe Jimenez on April 23 cited "very strong emerging markets growth, 13% in the pharma business, and that allowed us to absorb the generic impact of Diovan and Exforge."

He also noted that in the generics category, Sandoz did its part.

"In Sandoz, we delivered strong financial results this quarter. You can see sales are up 9% and core operating income up 17%. This is driven by growth in emerging markets. For example, Latin America was up 16% and biosimilars also contributed to this growth, up 19%."

Harry Kirsch, chief financial officer, said sales growth of 13% in emerging markets in the first quarter means sales in those geographies now represent 27% of Pharma divisional sales.

"We have one of the largest, now, emerging growth businesses in the pharmaceutical industry," Kirsch said.

Novartis pharma chief David Epstein

That setup David Epstein, head of Pharma, to go into detail on emerging markets and even show some surprise things went so well.

"In terms of emerging markets, as last year wrapped up, we assumed that some of the geopolitical issues, the declining price of oil, would play through in terms of the slowdown in the emerging markets. So far, that hasn't happened. I still think at some point it will, but so far, it hasn't. We had a good Q1. Thanks."

- here are the J&J release, Roche release, Amgen release and Novartis release