2012 Generics Revenue: $2.2 billion
As Hospira ($HSP) notes in its most recent annual report, its industry is highly competitive. And according to the company, the most effective players in that industry are those focused on product quality, manufacturing efficiency and regulatory compliance, among other things.
But that's easier said than done for Lake Forest, IL-based Hospira, which has watched manufacturing woe after manufacturing woe unfold at facilities both at home and abroad. The company has issued a host of recalls this year for vials containing glass particles, steel particles and, on one occasion, a human hair. But Hospira's production problems date back farther than that. Its Rocky Mount, NC, plant came under fire in 2010, and a post-remediation reinspection of the plant this year yielded 20 new observations from the FDA. Hospira also received a May warning letter for problems at its Irungattukottai, India, plant, citing sanitary issues.
Luckily for Hospira, its earnings are recovering from production slowdowns, and that goes for its generics revenues, too. Hospira's generics--about 200 injectable products with 77 more in the pipeline--fall under its "Specialty Injectables" unit, along with its biosimilars and some proprietary specialty injectables. In 2012, that unit accounted for 63% of the company's net sales. Revenues for that segment rose a modest 0.9% last year over 2011. For the most recent quarter, however, specialty injectables sales climbed by 7%, powered by a 9.7% sales increase in the Americas. That region generates the vast majority of revenue for the unit: $1.99 billion in 2012, compared with $318.4 million for Europe, the Middle East and Africa and $260.6 million for Asia Pacific.
It accomplished this without sales of biosimilars in Hospira's home market, where the regulatory pathway for biosimilar approval is still being formulated. Not so in other nations: Hospira launched its first biosimilar, Retacrit (biosimilar erythropoietin) in 2008, and it now sells the drug in 22 EMEA countries. It followed up in 2010 with Nivestim (biosimilar filgrastim), with that med now available in 29 countries, including Australia. Hospira is currently testing its biosimilars, to have them ready when the FDA is. It has also teamed with South Korea's Celltrion to co-commercialize up to 11 compounds. The two companies last month received EU approval for Inflectra, a biosimilar of Johnson & Johnson's ($JNJ) Remicade and the first biosimilar of a monocolonal antibody (mAb) therapy in the European market.
Hospira is also expanding in India, where it has a specialty injectable manufacturing facility in the works. Construction on the Visakhapatnam plant began in 2011, and the company expects the first commercial production by the end of 2014. Also in 2011, the company formed a JV with Indian generics maker Zydus Cadila, forming Zydus Hospira Oncology. That company, located in Ahmedabad, sells certain oncology drugs to Hospira in a deal that continues through 2015. Hospira further extended its Indian presence last year by buying an API plant in Aurangabad and an R&D operation in Chennai, both from Orchid Chemicals & Pharmaceuticals. The plant was nailed with an FDA warning letter in May.
And Hospira has plans to keep its generics business fruitful. In 2012, more than half the generics in its pipeline fell under oncology or anti-infective drugs--areas it expects to grow. In June of 2012, it kicked off a modernization program for its drug-finishing operations, including installing more automated visual inspection equipment. And in 2011, it started targeting specialty injectables in new countries. The following year, it broadened its lineup with 108 new-to-country injectable drug launches from 19 compounds.
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