2014 Generics Sales: $8.5 billion +4%
Worldwide Market Share: 11.5%
Novartis ($NVS) is the second largest drugmaker in terms of revenue, but sometimes one forgets that its Sandoz generics unit accounts for a very sizable piece of that, 16% of the Swiss drugmaker's $58 billion in revenue in 2014. According to EvaluatePharma, which calculates it slightly differently than the drugmaker does, that added up to $8.5 billion in sales in 2014.
While most drugmakers can't grasp the hybrid model, Peter Goldschmidt, the U.S. president of Novartis' Sandoz unit, told FiercePharma why it can make so much sense. When you already have experience in a treatment area, bringing multiple generics into that arena provides synergies that help make them more profitable. And in emerging markets, Goldschmidt believes companies that can offer drugs all along the "value chain" make more credible healthcare players, he said. The same really is true in the U.S., he said, where the drugmaker often sells copies of its own branded meds when they lose IP protection. "What's better than to have the original as the generic?" he asks.
Being able to do all of that well has secured Novartis' spot as not only the second largest drugmaker by revenue last year but the second-largest generics producer by revenue with an 11.5% global market share that trails Teva's 12.2% market share by a fraction of a percent.
The U.S. as the largest market is where most generics producers laser in their focus. But Europe accounts for the biggest piece of Sandoz's sales at 48% and the U.S. is next at 34%. There is a combined 12% from Asia, Africa and Australia and another 6% from Canada and Latin America.
Still, the U.S. saw 28 launches of new generics from Sandoz last year, and it was the launch of a copy of one of its own meds that was perhaps the most important. That was generic Diovan, a copy of its blockbuster heart drug, which actually lost patent protection two years before. It has been spared competition by FDA entanglements for Ranbaxy Laboratories, which had the 180-day exclusive, and agency uncertainly about how to proceed. That allowed Novartis to reap billions of dollars in sales that otherwise would have been lost. When Ranbaxy, through a workaround, finally got a generic to market in 2014, Sandoz was ready with its own copy, managing to hold on to 50% of the market share for the year.
Other U.S. releases ran the gamut from a generic of its own ADHD drug Focalin XR and a generic of Otsuka's Dacogen, a treatment for the bone marrow disease myelodysplastic syndrome. In Europe, launches included more country-by-country rollouts of the first generic version of Nasonex, the Merck & Co. ($MRK) allergy drug, and others.
Much of 2014 was also spent setting the stage for this year by fighting Teva ($TEVA) over its patent for the MS blockbuster Copaxone. Novartis also submitted an application to the FDA for Zarxio, a copy of Amgen's ($AMGN) Neupogen, which is a blood treatment used in conjunction with chemotherapy. With its approval this year, Novartis won the distinction of having the drug that marked the arrival of biosimilars in the U.S.
-- Eric Palmer (email | Twitter)
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