From the pharma C-suite: Notable, quotable remarks on Asia, emerging markets (Part 2)

SINGAPORE--Here is part two of comments from C-suite execs on emerging markets and Asia in the latest quarterly conference calls. See below for notable quotes from GlaxoSmithKline ($GSK), AbbVie ($ABBV), Amgen ($AMGN), Roche ($RHHBY), Sanofi ($SNY), Novo Nordisk ($NVO) and AstraZeneca ($AZN). You can read part one here.

For the first quarter in more than a year, GlaxoSmithKline CEO Andrew Witty didn't mention the word China on the earning call--and the country appears nowhere in the transcript.

That marks a sharp turn of the corner for the U.K. company about to embark on a major realignment of products that put emerging markets and Asia squarely in focus.

GSK CEO Andrew Witty

Andrew Witty, GlaxoSmithKline CEO

"Revenues grew positively in emerging markets up 5%, Japan (sometimes referred to as a re-emerging market) up 1%," Witty said on the Feb. 4 call.

"So we've gone from an overdependence on the U.S. to really a very good balance between U.S., Japan, Europe, and emerging markets. What that means is that we've got durable businesses in consumer because of brand protection, durable businesses in vaccines, and we've got durable businesses in our pharmaceutical portfolio, not least because of the device technologies in respiratory. We have durable business in emerging markets because of the nature of those marketplaces compared to the IP-heavy Western markets."

And Witty pointed to an antibiotic standby in the company's portfolio to show that the company doesn't only need blockbusters to make money in emerging markets.

"Just to put that last point into crystal clear clarity, the year that Augmentin went off patent, we made 477 tons of Augmentin. In 2014, with almost no sales in America, we made 894 tons; almost double."

He went on to note that outside of established products and respiratory, GSK's vaccine manufacturing units are beginning at the margin to co-mingle as the pharma business moves more into biologics.

"But what's critical to understand is 100% of the distribution is merged together, so on the ground in 100 countries it is a single pharmaceutical vaccine business and there are very substantial synergies around how you operate with governments, how you engage with the marketplace."

Sanofi's former CEO Chris Viehbacher loved to talk about emerging markets. It also seems that Serge Weinberg has found something to like as well on the Feb. 5 earnings call.

Sanofi Chairman Serge Weinberg

Serge Weinberg, Sanofi Chairman

"You can see that we delivered good growth across all our diversified businesses. Going through those businesses individually, you will know the strong performance in emerging markets, a region that represents a third of Sanofi's worldwide sales."

In fact, it sounded like there was a bit of a Viehbacher echo on the call at times as Weinberg used language that was nearly as enthusiastic to describe Sanofi's reach across the globe.

"Sanofi is clearly a leader in emerging markets, and the economies in the fast-developing countries will remain a key growth engine for Sanofi. New initiatives are underway to further expand our leadership position in emerging markets."

But there was a slight dig on the diabetes side, which speculation says was part of the rift between the chairman and the CEO that was made wider by the success of keen rival Novo Nordisk.

"Importantly, our diabetes business has performed well, and we have finished the year with double-digit growth."

But one program Viehbacher championed and invested substantially in manufacturing to bring to market won a thumbs up.

"Last but not least, a rolling submission process for our dengue vaccine was initiated in several endemic countries in Asia. There are around 2.5 billion people who live in dengue-endemic countries, and this is the first vaccine ever that has proven to be safe and effective both in Latin America and Asia. This breakthrough innovation will help reduce the burden of dengue and ultimately make dengue the next vaccine-preventable disease."

Novo Nordisk for its part had a subdued tone on the Feb. 3 earnings call with

Novo Nordisk COO Kare Schultz

Kare Schultz, Novo Nordisk President and COO

"So sales in underlying local currencies growing 8% and the majority of sales growth coming from North America, with more than 60%, actually 61%, and one quarter of the growth coming from international operations (IO), China also growing double digit with 13% and then very, very low growth in Europe and Japan," Schultz said.

"And basically it's the same story as you heard before; Europe and Japan very low demographics, very low GDP growth; China  and IO very high GDP growth, very high demographics, very big organic demand growth; US, good demographics, good pricing, good value share development."

But he did note that Japan was a standout in the past quarter despite a drop because of the success of Tresiba.

"Tresiba, as we've been communicating, is doing very well in the markets where it has been launched and where it has reimbursement. You can see the first markets where we launched, such as in Japan and in Switzerland, we are above 24%. That's less than two years after launch, so that's very, very successful."

In the clear since Hospira ($HSP) came into the picture for Pfizer ($PFE), AstraZeneca CEO Pascal Soriot seemed a bit more relaxed than usual on the Feb. 5 earnings call, where he used the term growth platforms for emerging markets. He and the team talked extensively about China where the company is No. 2 among multinationals.

AstraZeneca CEO Pascal Soriot

Pascal Soriot, AstraZeneca CEO

"So 2014 was really a year ... we focused on implementing our strategy. And we believe we did make quite some progress in returning to a growth. In particular, our growth platforms delivered collectively a 15% growth rate and they now represent about 53% of our total sales. So quite, quite remarkable. And, as you can see here, they all grew except Japan. And we'll cover Japan a little bit later."

But China saved the day once again.

"We are the number two in China, as you know. We have the fastest, or one of the fastest, growth rates there and China is now second largest national market on a global basis, so very exciting development there. But also very good results in other markets in the emerging market region."

Some of the detail was filled in by Luke Miels, executive vice president and head of Product Strategy.

"We feel very confident about our business in China. We often get asked are you too reliant on China. You can see here this is the growth rate of emerging markets outside of China ex-factory and there's a nice trend there as we start to see the growth platforms have an increasing share of the business in emerging markets."

But Miels also explained Japan and the effect of lower prices from reimbursement and a weaker yen.

"In terms of Japan ex-factory, there was a negative number. If we look in market, we grew well ahead of the market. The market overall itself did contract but we grew ahead of the market, both in the full year and also in the quarter."

And he said growth is ahead in Nippon and promised a surprise.

"In terms of quarter one, that's the last quarter that we'll see the effect of the price drops earlier in this year and we believe we're well positioned for growth in Japan in 2015."

"And in conclusion, we've also got some exciting news coming. We'll update you more fully on this in quarter one."

In response a question from Mark Clark, Deutsche Bank analyst, Miels went into a bit more detail on China.

"In terms of the outlook for the market, it's clearly slowing, but it's still at a growth rate of around 12% which is certainly not slow," Miels said.

"In terms of structural changes, I think that's the open debate we've had for a couple of years now. I think there's a number of people that are of the belief that if the economy further slows, the government will direct funding into healthcare in the interests of stability. They recognize that they have a structural challenge in the country, whether it is diabetes, cardiovascular disease, or also COPD. So I think we remain quite optimistic."

Amgen was short and to the point on international markets on the Jan. 27 earnings call.

Tony Hooper

Tony Hooper, Amgen head of Global Commercial Operations

"Globally, product sales grew 8% year over year and 6% for the full year. Our international business grew 11% in the fourth quarter, excluding the negative impact of foreign exchange. Our new and emerging markets delivered just over $1 billion in sales in 2014."

For AbbVie, there was a bit of color on Japan and hepatitis C and not much else on the rest of the world on the Jan. 30 earnings call.

AbbVie CEO Richard Gonzalez

Rick Gonzalez, AbbVie Chairman and CEO

"With respect to our HCV programs, we expect continued progress in 2015. We're on track to submit our regulatory application for HCV combination in Japan in the first quarter and anticipate approval in the second half. As a reminder, we expect to commercialize a 12-week 2-pill once-a-day combination for this market. We also expect to see SVR data from our next-generation HCV program and transition to Phase III development later this year."

Swiss-based Roche, also once an emerging market booster was slightly more subdued in the past quarter--maybe because the Swiss National Bank threw them a googly and they had to explain in some detail how that flowed through to the bottom line on the Jan. 28 earnings call.

Roche CEO Severin Schwan

Severin Schwan, Roche CEO

"Because the vast majority of our costs--more than 80% of our operational costs are outside of Switzerland  ... we have a full value chain in countries like the United States. In Europe, of course. In China, in Japan. And, on top of it our debt and our related financing costs are actually also not in the Swiss franc but primarily in the dollar."

The details on the pharma side were fleshed out further by Daniel O'Day, Roche COO, Pharmaceuticals.

"We had Latin America growing at around 9%. We have China actually returning to growth particularly in the last quarter. The strategic products continue to do well in China. And then, we had some disruptions in what I'd call the Eastern Europe-Middle East region. Both in Russia for economic reasons, and then also for some of the other countries in Middle East that we had some effects in."