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Stada : all the best :)
Anne Bodin
Jimmy Leroy
Marine Monfourny
Mathilde Verva
STADA : Set the Scene
• Pharmaceutical Industry
• Parent company : Bad Vilbel (Germany)
• Sales : 1,715 396 € billion
Sales
Evolution of Sales in € Million (9 months of 2008 to 9 months of 2012)
1350
1300
€ Million
1250
1200
1150
1100
1050
1000
9 months of 2008
9 months of 2009
9 months of 2010
Years
9 months of 2011
9 months of 2012
Foundation
1895 :
Founded in Dresden as a
pharmacists’ cooperative
1948
New beginning at the locations in
Essen and Tübingen with products
for self-medication
Essen
1956
Move to the present location in Bad
Vilbel
1970
STADA becomes a stock
corporation with registered shares
exclusively for pharmacists
1975
Entry into the emerging generics
market
Dresden
Bad Vilbel
Tübingen
Management
Hartmut
Retzlaff
Chairman of the
Executive
Board/CEO
Helmut Kraft
Chief Financial
Officer
Dr. Axel
Müller
Chief Production
& Development
Officer
The strategy
Procurement, Production and Quality Management
Employees
The strategy
• The health care market
• Internationally
• No own research of new active pharmaceutical
ingredients
• Focuses on the development and marketing of
products with active ingredients (particularly
patents)
• 2 core segments :
▫ Generics : 5th rank (1st : Teva, 2nd Sandoz, 3rd :
Watson/actavis, 4th Mylan)
▫ Branded Products
The strategy
Comprehensive
product portfolio
Efficient cost
management
Success
factors
Flexibility
(fast decisioning)
Accelerated
acquisition
policy
Strong product
development
International
sales structure
The strategy : Success factors
A comprehensive product portfolio
• Strong product development.
• Constantly expand the Group portfolio
(Generics essentially).
• Goal : launching new products
• The earliest in the respective national
markets
• The best possible cost of sales.
The strategy : Success factors
• No conduct any own research for new active
pharmaceutical ingredients
• Development activities : expansion of the existing
product portfolio (dosage forms…)
▫ Acquisition of new markets
• Focused on long-term objectives : new product
launches (Generics)
• Development of generic products : beyond 2020
• “time and cheap to market”
• Internal and external development partners
• Environmental politic for development and
production
The strategy : Success factors
An international sales structure with a local focus
• 33 countries market the products from the Group portfolio
• Risks in individual markets
• Use the respective growth opportunities.
The accelerated acquisitions policy
• The regional expansion of business activities (emerging
markets essentially)
• The expansion and internationalization of the Generics and
Branded Products core segments (better margins and less
regulatory intervention)
The strategy : Success factors
The high degree of flexibility
Short decision-making processes
• Decentralized sales organization with close
market proximity
• Centralized functional reporting structures
• Exploiting opportunities and reducing risks.
• Better market position or a higher market
share.
The strategy : Success factors
Efficient cost management
Efficient costs of the active pharmaceutical ingredients and
auxiliary materials
Efficient costs which can be allocated to pharmaceutical
production.
• Suppliers in the market risk (price escalation clauses or
renegotiations)
• Suppliers in low-cost countries.
Procurement, Production and Quality
Management
• Global procurement of active ingredients
and auxiliary materials
• For reasons of flexibility and cost :
▫ worldwide network of raw materials
suppliers(active pharmaceutical ingredients+++) :
▫ Low-priced suppliers from low-cost countries,
mainly from Asia..
• Stock levels in the Group : office in Shanghai
Procurement, Production and Quality
Management
• High flexibility and continuous cost optimization in
supply chain and pharmaceutical production
▫ 900 active pharmaceutical ingredients
▫ 13,000 product packagings marketed by the Group.
• In-house production : in low-cost countries :
▫ South East Europe,
▫ Russia
▫ Vietnam.
  costs :
 manufacturing and production facilities
  transfer
 large amount of production volumes : other plants (contract) own plants
  unit prices of individual products
Procurement, Production and Quality
Management
• The pharmaceutical production facilities in the
following locations belong to the Group:
EUROPE
Bad Vilbel (Germany)
Pfaffenhofen (Germany)
Banja Luka (BosniaHerzegovina)
Dubovac (Serbia)
Sabac (Serbia)
Vrsac (Serbia)
Podgorica (Montenegro)
CIS
ASIA
Nizhny Novgorod (Russia) Beijing (China)
Obninsk (Russia)
Ho Chi Minh City (two
production sites in the
greater metropolitan
area)(Vietnam)
Procurement, Production and Quality
Management
• Expansion and renewal of production sites and
facilities: EUR 5,7 million in the first nine
months of 2012
Procurement, Production and Quality
Management
• Highest safety and quality standards
• Group Quality Management : quality standards (required
by law) :
▫ In the Group’s own production sites
▫ In the facilities of suppliers
▫ Contract manufacturers.
• Outside of the European Union,
▫ EU quality standards for drugs,
▫ Non-EU-based production sites : approved for this by the
responsible EU supervisory authorities.
• International certifications : quality management systems :
▫ follows not only the Good Manufacturing Practice (GMP)
▫ ISO standards.
STADA : Restructuring
• “STADA – build the future” : strengthening the
mid and long-term earnings potential (planned
until the end of 2013)
• Increased investments and burdens on the
income statement.
Employees
Extensive expertise
Experience
(continuous formation)
Strong commitment
Employees
• In 2011 : 7,826 (previous year: 8,080).
• The reduction in the number of employees due :
▫ Implementation of the “STADA – build the future” project
(improve earnings at STADA’s Serbian subgroup)
▫ The associated planned staff reductions..
Employees repartition
• Women: 49%
Marketing sales
Production procurement
Product developement
Administration
7%
17%
49%
27%
S
W
TRENGTHS
O
•Continuous expansion and
internationalization of the groupwide sales network
•Focus on generics market
contributing towards STADA's
top-line growth
•Acquisition of branded products
expanding the group’s reach in
the high margin segment
PPORTUNITIES
•Focus on Australian generics
market Implementing cost
efficiency program likely to
strengthen mid- and long-term
earnings
•Collaborating with Richter
could help STADA develop
biosimilar products
Positive
EAKNESSES
Reliance on matured European
markets increasing
dependancy risks
T
Internal
factors
HREATS
•Reduced reimbursement
level and intensifying
competition would put
downward pressure on
STADA's margins
•Adverse macro-economic
conditions in Serbia
Negative
External
factors
STADA in Germany
Active worldwide
In Europe
STADA CIS
In Asia
USA, Brazil, Australia
Active Worlwide presence on Internet
Strength
STADA in Germany
STADApharm GmbH
STADA GmbH
ALIUD PHARMA GmbH (sales company)
Bad Homburg
cell pharm Gesellschaft für pharmazeutische
und diagnostische Präparate mbH
Bad Vilbel
Hemopharm GmbH Pharmazeutisches
Unternehmen
Laichingen
STADA CEE GmbH
STADA in Germany
• STADA’s German business activities
▫ 
▫ ¼ Group sales
• Local framework conditions for generics (competition) :
agreement public health insurance organizations.
• Cell pharm : areas oncology and nephrology
• ALIUD PHARMA : Travel, Dementia, Allergies,
Depression, Hypertension
• Hemopharm : Multi-Nutriments, Non-prescription
drugs , Disinfection Products, Blood Glucose Meters
Active worldwide
• Functionally organized Group with local and
close to market sales companies
• Group guideline : manage local product portfolio
differently (local requirements).
Active worldwide
• The STADA subsidiaries in the area of national sales
and marketing : various target groups :
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patients and/or consumers,
doctors,
doctors’ cooperatives,
pharmacies,
pharmacy cooperatives,
hospitals,
wholesalers
other service providers in the health care market
(public health insurance organizations or private
insurances).
In Europe
Austria
1986
Parent
company
In Europe
Belgium
1991
Parent
company
In Europe
The Netherlands
1991
Parent
company
In Europe
To expand the branded
products business in the
France
French market signature
of contracts for the
1996
purchase of
Laboratoires d´études
et de recherches en
oligo éléments
thérapie (LERO),
(nutritional supplements
and dermatology
products)
Parent
company
In Europe
Denmark
1998
Parent
company
In Europe
Ireland
1999
Parent
company
In Europe
Italy
1999
2002
Parent
company
In Europe
Spain
1999
Parent
company
In Europe
Czech Republic
2002
Parent
company
In Europe
Slovakia
2003
Parent
company
In Europe
United Kingdom
2003
Parent
company
In Europe
Russia
2004
Parent
company
In Europe
Portugal
2005
Parent
company
In Europe
Ukraine
2005
Parent
company
In Europe
BosniaHerzegovina
2006
Parent
company
In Europe
Finland
2006
Parent
company
In Europe
Lithuania
2006
Parent
company
In Europe
Romania
2006
Parent
company
In Europe
Serbia
2006
Parent
company
In Europe
Switzerland
2012
Parent
company
In Europe
Bulgaria
Croatia
Macedonia
Montenegro
Poland
Slovenia
Parent
company
Internationalization
Parent
company
: The Begining
• October 2008 : the first
pharmaceutical holding
company in Russia to be
consolidated in a large
international group
• Begining of a rapid growth for
the unifying company
• The accomplition of the long
integration process of Stada
CIS and Hemofarm
companies, work as a united
team : a force in the Russian
pharmaceutical market
NIZPHARM
MAKIZPHARMA
• 2 two fully equip laboratories and plant
▫ Nizhpharm (Nizhny novgorod)
▫ Makiz-pharma(Moscow)
• 4 manufactured sites :
▫ Moscow
▫ Obninsk
▫ Skopin
▫ Nizhny novgorod
•Conform with GMP
•Response to the flexibility needs
of the pharmaceuticals market
•Optimize price
•Accelerate the introduction of new
technological equipment in the
production sites
: Marketing
•
Marketing team works through the Russia
▫ 450 medical representative
▫ 340 cities across Russia
• The medical representative of STADA CIS rank among the top 3 among russian
pharmaceutical companies intends of the professionnal knowledge and
competence
• The wide representative network
includes CIS countries, Ukraine and
Kazakhstan with more than 200 people
working in medical representatives, in 220
cities in CIS
• 2011 STADA CIS was the 2nd largest
local pharmaceutical company in
Russia, in terms of volume output more
than 5% of all medicine produced in
Russia
• 2011 the company became the leader
among the local pharmaceutical
companies operating in the out of pocket
pharma market showing the highest
sales growth rate about 16%
• Today the group is supplies
medicine in 17 countries
worldwide
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Estonia
Latvia
Lithuania
Belarus
Moldava
Ukraine
Georgia
Armenia
Azerbaijan
Turkmenistan
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Uzbekistan
Afghanistan
Kazakhstan
Kirghizistan
Tajikistan
Mongolia
Serbia : a Double-edged Market
Unstable countries…
2011 : announcement exceptional charge
(€ 97 million) due to its outstanding subsidiary
Hemofarm by several dealers Serbs.
Threats
Hemofarm is an important East-European generics supplier.
The sales focus of Hemofarm is in Eastern Europe.
• Serbia (home)
• CIS countries
…but profitable
• stable demand for HF products
• market share of sales 2010/11 stable (21%, #1)
• HF inventories at wholesalers at low level
Strengths
In Asia
•1992: Hong Kong : Health Vision
Enterprise Ltd
•1994: Became 100% subsidiary of
STADA
•1999 : Thailand
•2001 : Croma Medic Inc.,
Philippines
•2001 : Health Vision, China
•2003 : STADA Vietnam Joint
Venture
•2005 : Kazakhstan (Nizhpharm)
•2008 : 2nd factory of the Vietnam
Joint Venture
Internationalization
2001 : American conquest
• Planned expansion of its marketing and sales
company in the U.S., the largest market for
generics in the world.
▫ STADA acquires US generics business
 The generic supplier MOVA Laboratories (New
Jersey, USA ) + MOVA Pharmaceutical Co., Puerto
Rico.
▫ STADA is on track to expand U.S. business
 81 generics
 Targets further expansion of its U.S. business by
means of additional product acquisitions.
2006 : American failure
• STADA: Contract for the sale of US subsidiary
STADA Inc.
▫ To DAVA Pharmaceuticals Inc
▫ Complete withdrawal from the country is due in
part to :
 High price and margin pressures in the US generics
market,
 Stada had always been relatively small in the US and
should have had to invest a lot of money.
Internationalization
2002 : Brazil’s market conquest
• STADA establishes joint venture in Brazil
• Joint venture (51%) : the distribution of generics
in Brazil.
▫ AVA STADA PHARMA LATIN AMERICA LTDA,
• Added a production facility in Manaus, the
capital of the federal state of Amazonas
▫ tax-exempt
Internationalization
Opportunities
2012 : STADA : subsidiary in Australia
• Commenced its business activities end of 2012
• The sales of the Australian generics market
currently amounts to approx. AUD 1 billion
(€ 800 million)
▫ Anual growth of approx. 5%.
• High growth expected in the Australian generics
market.
• Low generics penetration
• Market a number of in-licensed off-patent products
▫ And aftermarket of STADA's own pipeline.
• Expand its presence in the growth region
Asia/Pacific. (India, Korea?)
www.stada.de
• 2000 : STADA website ranked first in an
independent study of all German-language
pharmaceuticals internet sites
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Topic of the Month (health)
STADA's Health Advisor
Patient brochures
STADA Weather Service (pollen)
STADA products
pharmacy locator
Area for professionals (Pharmacist and Physicians)
Stada in social Media
• Health information on the World Wide Web
• Exchanging experiences/opinions with others in social networks.
• Contribute to this exchange and build up a direct line of
communication with various stakeholders.
Flickr : Overview of Stada press photo
XING : The german company profile of
Stada
Linkedin : The English company profile of
Stada
2012 : presence on Youtube
http://www.youtube.com/user/stadaarzneimittelag
Stada charity activities
• Sponsoring, charitable donations and foundations
• Selected commercial and charitable activities
▫ The “Kinderzukunft” (Children’s Future)
▫ The RTL-telethon
▫ RED NOSE DAY
Wheelchair basketball
club Lahn-Dill
STADA is Partner of
Eintracht Frankfurt
Strengths
Generics is a growth segment
• Guarantee a cost-effective medicative therapy without any loss in
quality
• The market potential expand : continuous expiration
▫ Ex of patent expiration for 2013 :
 Cymbalta
 Avonex
 Humalog
 OxyContin
 Rebif
• Increasing cost pressure in the individual national health care
systems
Strengths
Generics is a growth segment (IMS)
Annual growth rate
for the global generics
market of up to 9,6%
until 2016
Generics is a growth segment
• Generics : 65,5% of sales in the first 9 months of
2012 (same date in 2011: 68,5%).
Evolution of Sales in € Million (9 months of 2008 to 9 months of 2012)
880
870
860
€ Million
850
840
830
820
810
800
790
780
9 months of 2008 9 months of 2009
9 months of 2010
Years
9 months of 2011
9 months of 2012
Best generic sales
• Omeprazol: stomach medicine
• Phospholipide : hepatic medicine
• Enalapril : ACE inhibitor
• Simvastatin: cholesterol lowering medication
• Diclofenac: antirheumatic drug
Acquisition of generic portfolio
LAUCHES :
Ex
Omeprazole
(best-selling )
1999 : After a fight with Astra
2000 : new dosage forms and
new active strengths
Mirtazapine
2004 :
german market
Agreement
signed N.V.
Organon
Acquisition of generic portfolio
MERGERS AND ACQUISITION
Hemofarm
(Serbian)
Ciclum Farma
(Portuguese )
…
Nizhpharm
(Russian)
Spirig Pharma
(Switzerland )
2012
annual sales :
CHF 45 million
€ 37 million
56 prescription
15 OTC and OTX
Sales of generics on a new market
Marketing of the local
generic portfolio
Marketing of STADA
generic portfolio
Growth opportunities for generics…
… including specific challenges
• Pharmaceuticals market is characterized by a
large number of regulations
• Can have significant economic & strategic effect
• Pricing pressure as a result of state
reimbursement systems can reduce profitability
Threats
Net pharmaceutical budget impact from
the healthcare public payer perspective
Net pharmaceutical budget impact from
the healthcare public payer perspective
Prices for Generic Drugs
Drug importation in EU
Importation in € Million
250
200
150
100
50
0
1990
2000
2010
2011
Gaining Market share in the generic drug industry throug acquisitions and
partenerships – Thomson Reuters
India generic companies market
Gaining Market share in the generic drug industry throug acquisitions
and partenerships – Thomson Reuters
Strengths
A strong brand with strong brands
Branded products:
In the health care market: drugs, medical, or health care
products sold under a product-specific brand name.
A strong brand with strong brands
The core segment of Branded Products
recorded sales growth of 25% to 437.9
million € in the first nine months of 2012
(1-9/2011: EUR 350.1 million)
Branded Products contributed 32.9% to
Group sales in the first three quarters of
2012
(1-9/2011: 28.0%)
Adjusted sales of branded products in the
Group recorded a plus of 8%.
Branded products in € million by year
500
450
400
€ million
350
300
250
200
150
100
50
0
9 months of
2008
9 months of
2009
9 months of
2010
years
9 months of
2011
9 months of
2012
Why branded products?
• less regulatory intervention
• better margins than the
Generics segment
• expand and increasingly
internationalize the
branded products business
Little chronology…
1999 Investment in Spain in Ciclum Farma, Madrid
2002 STADA increases stake in Spanish brand supplier
Ciclum Farma to 100%
Pain
Allergies
alimentairies
complements
2003
• Acquisition of a package of branded products from
redinomedica
• German OTC market
• Six branded
• The best-selling product of these is Curazink®
• self-medication sector
• exclusively available from pharmacies => cost
reductions in the German public healthcare system
• Acquisition of 6 branded products :
▫ Strengthen STADA’s of branded product segment
• OTC=>marketed by an external sales force.
2004
• Acquisition of a portfolio of Branded Products in
Italy
• Crinos aquired 68 branded products
• Viapress (calcium antagonism for the regulation
of blood pression)
• Megestil (hormone for palliative breast cancer
• Noravid (antithrombotic)
2005
• Acquisition of a package of eleven European
branded products (amongst others Mobilat®)
Top 5 branded products
• With the top five branded products in term of sales,
STADA achieved sales of 115.0 million € in financial year
2011
• (previous year: EUR 104.0 million).
• These products => 24.4% of the sales of the Branded
Products segment (previous year: 24.5%).
• Grippostad®: 33,8 million € in 2011
• Previous year: 28,7 million €
• Symptomatic treatment of common old-related
headache, pain in limbs, nasal congestion and dry cough
2011 Cetraben®
In addition, the branded product Cetraben® could successfully be acquired for
the British market in 2011;
The product was already marketed via in-licensing by the local STADA sales
Stada And Grünenthal Acquire
Branded Drug Portfolio
STADA has expanded the strong margin Branded
Products segment.
On september 2011: Purchase of a portfolio of
primarily prescription branded products
152 millions € 14 branded
Tramal (tramadol)
Zaldiar (tramadol+paracetamol)
Transtec (buprenorphine)
Palexia (tapentadol)
=> area of pain
with associated sales structures markets in
Central, Western and Eastern Europe
Brands is a growth segment
Janvier
2012
• To sales there branded
products internationnally
they decided to separate
branded and other sales
in a new distribution
channel
S
W
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T
Weaknesses
Reliance on matured
European markets increasing
dependancy risks
• Presence on a mature European Market (Germany and
Russia)
• Lake of presence on the world's most lucrative healthcare
market :
• The US
• The Japan
• Rivals: Teva, Sandoz and Mylan
• Favorable to generic manufacturers : to reduce their
increasing healthcare burden
• Pathway for biosimilars in the US or in Japan
• Concentration on these markets to reduce Reliance on
European Markets
• Presentation
• Regulatory requirements
• Biologics & Biosimilar market
• Biosimilar stada strategy
Opportunities
Number of Biologic Product Based Dealds Biologics vs Biosimilars 2000-2011
Number of Biologic Product Based Dealds Biologics vs Biosimilars 2006-2016
Major Generic Companies Active in
Biosimilar Development
Biologicals are large,
complex molecules
Biologicals are much
larger with more
complicated structures
than classical drugs
Erythropoietin alpha
Molecular weight 32,000
Aspirine
Molecular weight 180
The biological and clinical properties of biologics
cannot be predicted from physical chemical
analyses
The analytical tools for
biologics are 10-100
times less senstive than
for for classical drugs
Biologics are produced by living cells
• Biologicals are produced
under controlled
conditions
• Newly generated proteins
undergo complex posttranslational
modifications
 Very sensitive to
production conditions
 Minor changes can have
major impacts on
biological activity
E. Coli bacterium producing
interferon gamma
Biopharmaceuticals differ from conventional drugs
Generic
Biosimilar
• Chemical and therapeutic
equivalent of original low
molecular weight drug whose
patent has expired
• Biological product referring,
but not identical, to an existing
product, submitted for
separate marketing approval
following patent expiration
EU Regulatory Requirements
Status of Biosimilar: evolution
Barriers To Entry Will Limit Competion
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Biomanufacturing facility, additional capabilities
Significant clinical and non-clinical testing
Substantial, NDA-type dossiers
Post-market safety surveillance
Substantial manufacturing investments
Sales promotion and marketing
Intellectual property considerations
Stada First Wave Biosimilar Deals
• Stada via DSM Biologics (2001) and Bioceuticals
(2001) EPO α / Silapo®
• Stada & Hospira in pact to develop new
biosimilar (2006), EPO ζ /Retacrit®
Indication
Treatment of symptomatic anemia
with chronic renal failure
Treatment of anemia in adult patient
receiving chemotherapy
Lauch on February 1, 2008
Stada First Wave Biosimilar Conclusion
• Successful Epo development created deep
experience in EMA biosimilar procedures
• Tap into the opportunity with the right
risk/benefit approach for the company
• Opt for an in-licensing stratedy amongst based
on the company’s experience with marketing of
Epo in Europe
• Avoid R&D expense on the P&L – backloaded,
success oriented milestone paytments
• Select experienced parter
Stada biosimilar activity
• Preparatory work for Trastuzumab was stopped at the
end of 2010, STADA made the strategic decision to
pursue the lower-cost approach of an in-licensing
• High sales potential without cost-intensive own
development
• Cooperative development for biosimilar products
Research
2nd Wave Biosimilar Technology Acquisition
• Stada via Gedeon Richter (2011)
License and collaboration
agreements for the
development and
marketing of two
biosimilar products signed
with Gedeon Richter Plc.
Collaboration
Gedeon Richter Plc - Stada
• Purchase of non-exclusive rights for Europe and the
CIS area for Rituximab as well as the option for a
distribution license for Trastuzumab on similar
conditions
• Rituximab = monoclonal antibody for the treatment
of various forms of cancer, European market volume
approx. € 1,15 billion p.a (expected at the end of
2017)
• Trastuzumab = monoclonal antibody for treatment
of certain forms of breast cancer and stomach
cancer, European market volum approx € 1,39
billion p.a.
Best biosimilar market potential
Best biosimilar market potential
Global Biosimilar Market
Opertaing profit
Evolution of operating profit (9 months of 2008 to 9 months of 2012)
1400
1200
€ Million
1000
800
operating profit
sales
600
charges
400
200
0
9 months of
2008
9 months of
2009
9 months of
2010
9 months of
2011
9 months of
2012
Liquidity analysis
Growth of STADA
1200
1000
In € million
800
600
3,5
3,0
2,7
3,1
400
2,7
200
0
2007
•
•
•
•
2008
2009
Years
2010
2011
This ratio is characteristic of the capacity of STADA to repay his debt.
This ratio is better when it is around 3.
This ratio is stable since last year, and turn around 3 since 2007.
In 2010, they decreased this ratio because they optimized the long-term
refinancing to increase liquidity security as planned in the reporting
year
EBITDA in € million
Net Debt € million
Thank you for your attention