PowerPoint Presentation - No Slide Title - Wm Sword & Co.

mutebabiesBiotechnology

Dec 6, 2012 (4 years and 6 months ago)

175 views

Pharmaceutical Contract
Services Market

2

A. Contract research organizations



Offer pharmaceutical companies a range of services covering all
phases of drug development


Increasing emphasis on informatics services to complement other
activities


Enable big pharma firms to staff for valleys rather than peaks of
research cycle


Facilitate worldwide testing of new products


Dependence on pharmaceutical companies’ budgets creates high
volatility in results


CROs’ involvement in genetic research will have a long
-
term
payback

3

Company Profiles


Quintiles Transnational Corp.



largest CRO, with revenues of
$2.15 bil. Provides integrated product and commercial
development services to the pharma, biotech and medical
industries


Covance



Offers broad range of outsourced development
services; growth through acquisitions; diversifying into
biotechnology


Parexel International Corp.



Clinical research, consulting,
medical marketing and informatics, growth through acquisitions









continued next page …

4

Company Profiles
(cont’d)


Pharmaceutical Product Development, Inc.



includes PPD
Discovery (genomics technology), PPD Development (analytical
lab and Phase I
-
IV clinical development services, and PPD Virtual
(consulting)


Inveresk Research Group



pre
-
clinical and pharmacology
evaluation services; acquired Clin Trials Research


Kendle International



clinical research and drug development
services; acquisitive


ICON plc



clinical research for pharma and biotech industries

5

Contract Research Organizations (CRO’s) Summary

($ in millions)

¹ Represents sum of market value of common stock and equivalents

²
Prices as of 5/01/05

6

B. Manufacturing services organizations



U.S. market for outsourced pharmaceutical manufacturing is
growing


Integration of pharmaceutical research, manufacturing and
packaging services


Chemical Industry still has less outsourcing than other industries

7

Under
-
utilized
Assets

Old Paradigm


Avoid Capital Investment
Reinvest cash in R&D and in
Marketing


Results:

Outsource

Add Capacity

Existing Products

Recycle Capacity

Add Capacity

New Products:

Discount Cash Flow (DCF)

COGS

Costs:

Entire Supply Chain

Factories

Focus:

Source: Patheon Co. website


Benefits of outsourcing can be measured by comparing new
paradigm with former pharmaceutical business model

New Paradigm


8

Company Profiles


Lonza Group AG



supplier of active chemical ingredients,
intermediates and biotechnology solutions to the pharma and
agrochemical industries


$1.3 billion in revenues


CCL Industries



Canadian co. providing outsourcing in personal
care, OTC pharma and oral care products


Cambrex Corp.



Life sciences company providing
pharmaceutical ingredients, intermediates and services to drug
companies


Patheon Co.



Vertically integrated approach to pharmaceutical
development with manufacturing expertise in both prescription
and OTC products






continued next page..


9

Company Profiles
(cont’d)


Catalytica



acquired by DSM in Dec. 2000. Pharmaceutical and
fine chemical contract manufacturer


ChiRex



aqcquired by Rhodia in Sept. 2000. Contract research
and contract manufacturing of active pharmaceutical ingredients


Draxis Pharma



unit of Draxis Health inc. Contract
manufacturer with ability to produce a variety of dosage forms


also packaging capability


DPT Laboratories



acquired West Pharmaceutical Services’
contract manufacturing unit in November 2001.



10

Manufacturing Services Companies Summary

($ in millions)

¹ Represents sum of market value of common stock and equivalents

²
Prices as of 5/01/05

11

C. Information Technology Companies

Sector Fundamentals


Provide the following services:

< Health portals (health information sites)

< Connectivity and communications services

< E
-
commerce, including on
-
line health insurance and drug
prescriptions


Rising costs compel industry participants to examine
use of technology


Consumers are becoming more active in their health
care management, as managed care is redefining the
doctor
-
patient relationship


12


Health care had under
-
invested in information
technology relative to other industries


As the health care delivery model changes,
participants need additional information to measure
outcomes

C. Information Technology Companies
(cont’d)

13

Company Profiles


IMS Health Inc.



Split off from Cognizant in Jan. 1998. Provides
market information and decision support services to the
healthcare
sector


Web MD Corp.



Leverages Internet to provide services that
connect participants in health care sector and automate workflow


Cerner Corp.



Information management systems, primarily sold
to hospitals


IDX Systems Corp.



Information systems and medical
transcription services









continued next page ..


14

Company Profiles
(cont’d)


NDC Health Corp.



Point
-
of
-
service systems, high volume,
network
-
based information solutions and information
management systems


Eclipsys Corp.



Healthcare information systems


The TriZetto Group



Internet hosting and software consulting
services


Allscripts Inc.



Point
-
of
-
care medication management,
distribution and software


15

Information Technology Companies Summary

($ in millions)

¹ Represents sum of market value of common stock and equivalents

²
Prices as of 5/01/05

16

D. Developing Trends


Pharmaceutical and consumer product manufacturers expected
to increase their contract activities to reduce costs and improve
speed to market


Complexity of FDA approval process enhances values of already
approved proprietary methodologies and heightens attractiveness
of contract services


European manufacturers of pharmaceutical and fine chemicals
such as DSM and Lonza may be contract service providers to
establish a presence in the US market


Competitive environment in outsourcing has intensified, due to
existing production overcapacities at the pharma companies
coupled with the declining number of approvals for new products


Future consolidation likely through mergers and acquisitions