2014 Generics Sales: $2.6 billion +12%
Worldwide Market Share: 3.6%
Hospira, now part of Pfizer ($PFE), is a bit of an outlier among generics companies because its focus is almost entirely on sterile injectable drugs. That has been its selling point, but also its bane, given that when it was spun off from Abbott ($ABT) in 2004, it had an aging infrastructure that led to repeated recalls and finally warning letters by the FDA plus years of investments and remediation to resolve them. But after years of responding to FDA concerns and hundreds of millions in investments, the specialist in making sterile injectable drugs has turned a corner and started building sales, becoming a player in the biosimilars market along the way. Its 12% growth in generics revenue is an outcome of those improvements.
It was a long haul to get there. Manufacturing problems for Hospira date back to 2010, when plants in North Carolina, including its massive Rocky Mount operations, were tagged with warning letters. It had repeated problems before getting an FDA OK for a new plant Vizag, India, that it built to bring down its costs of production. It has had warning letters for an older plant in India, as well as for one in Italy. Along the way, it has had dozens of recalls, more than any other drugmaker in the U.S., according to FDA data.
With persistence, former CEO F. Michael Ball was able to get the company back on track. The turnaround was enough to entice Pfizer this year to pay a 40% premium on the stock price, $15 billion, to get the company. Pfizer CEO Ian Read wanted it to build Pfizer's established products division and to get Hospira's expertise in biosimilars.
The copies of biologics are expected to be the next really big thing in generics. Hospira's Inflectra, a biosimilar of Johnson & Johnson's ($JNJ) arthritis blockbuster Remicade, which Merck ($MRK) sells in Europe, is picking up market share there. It has been submitted for approval in the U.S., where the first biosimilar is just being launched. Ball was handsomely rewarded for all of that hard work at turning around the generics maker. With closure of the Pfizer deal, he was able to cash out for $91.1 million.
-- Eric Palmer (email | Twitter)
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