Emerging Markets Earnings Roundup: Amgen, Bristol Myers Squibb (Part 1)

After tackling Brazil and Turkey, Amgen looks to ramp up in Japan and China, while BMS talks up its first-to-market opportunity for an all-oral hepatitis C regimen in Japan.

In a recurring feature, PharmAsia News combs through quarterly earnings reports to bring you highlights on emerging markets.

Early Innings In Emerging Markets

Amgen Inc. says it’s still “early innings” in its drive to expand overseas, but CEO Robert Bradway told analysts on a Q4 conference call Jan. 23 that the company has made progress in Brazil, Russia and Turkey, while finding direct sales channels in Japan and China remains a focus.

“Obviously, Japan is the world's second-largest pharmaceutical market, and while we have three very successful partnerships there and the products that are associated with Amgen generate some $2 billion in sales, we know we have molecules in our pipeline that are well-suited to that market,” Bradway said in response to an analyst question. “We'd like to have an operating platform there from which we can reach patients directly.”

In Japan, Amgen has worked with Kirin Holdings Co. Ltd. and its pharmaceutical affiliate Kyowa Hakko Kirin Co. Ltd. since 1984 and more recently formed partnerships with Takeda Pharmaceutical Co. Ltd. and Daiichi Sankyo Co. Ltd.

In the case of Takeda, Amgen out-licensed 13 compounds in 2008 for a $200 million upfront payment, another $702 million linked to multi-year global R&D funding and milestones, and double-digit royalties on Japanese sales, giving Takeda exclusive rights to develop and commercialize selected molecules in Japan. In addition, Takeda acquired Amgen’s Japanese subsidiary Amgen KK, a decision that Amgen perhaps now regrets given its renewed interest in a direct channel to the market (Also see "Takeda Makes $1 Billion Move For Amgen Development Rights" - Scrip, 5 Feb, 2008.)

In China, Bradway said interest is strong for biologics in the pipeline like rilotumumab (AMG 102) for gastric cancer, molecules like AMG 145 in cardiovascular disease, and the company’s sclerostin antibody.

“We're looking at ways, again, of gaining direct access in that market to be able to reach patients and care givers directly,” Bradway said, describing the company’s China strategy. “We're optimistic that we have a plan that will get us there over the next few years in time to benefit from the launch of these products as the data become available over the next several years.”

Last year, Amgen hired a top-shelf China player, James Li, to lead its efforts as VP and China general manager. Li formerly was a partner with Kleiner Perkins Caufield & Byers focusing on the VC’s U.S. pandemic fund and China fund. Prior to that he served for over 15 years with Merck & Co. Inc. in various leadership positions including franchise management and new product development.

Outside of China and Japan, Bradway said Russia, Brazil and Turkey remain a priority for Amgen (Also see "After Brazil Onto China? Amgen Unveils Emerging Market Strategy" - Scrip, 26 Apr, 2011.).

“I think we've positioned ourselves very well in each of those now, by, in the case of Brazil and Turkey, acquiring businesses from which we're able to launch our own proprietary molecules quite effectively,” (Also see "Amgen Shrugs Off Turkish Price Cuts, Snatches Up Mustafa Nevzat For Broader Reach Into Emerging Markets" - Scrip, 26 Apr, 2012.).

“There are a couple of other small emerging markets that we continue to look in,” Bradway said. “Overall, early innings … We remain encouraged.”

Bradway made no mention of the company’s move to set up a state-of-the art manufacturing plant in Singapore announced in January, though products are likely to be aimed at Asian markets (Also see "Singapore Wins Amgen State-of-the-art Manufacturing mAB Plant" - Scrip, 16 Jan, 2013.).

Looking ahead, Amgen holds its 2013 business review for investors Feb. 7 in New York, where it plans to discuss its Japan and international strategy in more detail, the company told PharmAsia News.

BMS Focuses On Japan

Meanwhile, for Bristol-Myers Squibb Co. the focus in Asia is Japan, including the launch of new products like the potential blockbuster anti-coagulant Eliquis (apixaban) (Also see "BMS Bets On Growth In A Key Emerging Market – Japan" - Scrip, 4 Apr, 2012.).

“Eliquis was the big story of the quarter, by gaining back-to-back approvals in Europe, Canada, Japan, the U.S., and South Korea, this differentiated asset has set us up for a strong start to the New Year,” CEO Lamberto Andreotti said during a Q4 earnings call Jan. 24.

Another opportunity highlighted by Andreotti is an all-oral hepatitis C regimen that is a first-to-launch opportunity in Japan (Also see "The HCV Race: Gilead Plowing Ahead With ‘7977; Bristol Eyes First-To-Market Opportunity With All-Oral Combo In Asia" - Scrip, 17 Feb, 2012.). Although BMS is behind competitors like Gilead Sciences Inc. and AbbVie Inc. in the race for an all-oral regimen in the U.S., the company has focused on genotype 1b patients in Japan with an oral regimen comprised of its NS5A inhibitor daclatasvir (BMS-790052) and protease inhibitor asunaprevir (BMS-650032).

“Japan, in particular, provides a significant opportunity with its 1.5 million patients,” Andreotti said. “We expect to file an all-oral regimen in Japan by the end of this year and expect to be in the market next year in 2014.”

The company is also focusing on diabetes as a growth opportunity in ex-U.S. markets, particularly after the joint acquisition last year with AstraZeneca PLC of Amylin Pharmaceuticals Inc. The deal put the first-in-class glucagon-like peptide-1 agonist (GLP-1) Byetta (exenatide) and its long-acting follow-on Bydureon, into the hands of two experienced, deep-pocketed partners that have worked jointly in diabetes since 2007 (Also see "Bristol And AstraZeneca Make A Splash In Diabetes With Joint Purchase Of Amylin" - In Vivo, 30 Jul, 2012.).

“I feel good about also our diabetes franchise. We have now this strong, diversified, comprehensive franchise. With, I think, we are the only company with three novel classes of diabetic agents,” Andreotti said.

“And, with this portfolio, and not only focusing on glycemic control within diabetes, but we're also looking at [CV] protection. I'm sure that we're all following the fact that we have CV outcomes programs in place for all three classes of products. The Amylin acquisition made a lot of sense to us to make this program more complete” (Also see "Bristol Signals Dapaglifozin’s Back On Track, Plans FDA Resubmission" - Pink Sheet, 24 Oct, 2012.).

Bristol and AstraZeneca are still in the process of integrating Amylin, particularly in Europe and Asia where Eli Lilly & Co. had been Amylin’s commercial partner. “Our cross-strength sales force is already hard at work in the U.S. market,” Andreotti said. “By the beginning of the second quarter, we should largely assume full commercialization of the two Amylin assets outside the U.S.”

Beatrice Cazala, executive vice president for commercial operations, said a sales ramp-up “may take some time in terms of the transfer of the marketing integration and also non-commercial responsibilities. That is likely to go on for a few quarters. However, with our partner AstraZeneca, we are expecting to have full control of the commercial operation at the end of the quarter, and we should book sales starting in Q2 of 2013.”

BMS expects to carry that commercial operation into the international market, though no specific countries were mentioned.

Also, there was no elaboration on a recent agreement with India’s Biocon Ltd. for oral insulin compound IN-105. Under the agreement, BMS will assume full development and commercialization responsibility following completion of Phase II trials by Biocon (Also see "BMS, Biocon Team Up To Rekindle Oral Insulin Hopes" - Scrip, 16 Nov, 2012.).

Overall, the New Jersey-based pharma reported fourth quarter and full-year earnings that outpaced analysts’ low expectations for the company in the wake of U.S. patent expiry for blockbuster Plavix (clopidogrel). Bristol earned $925 million, or 56 cents per share, in the fourth quarter, up from $852 million, or 50 cents per share, in the year-prior period. Excluding special items, particularly a $411 million tax benefit from the write-off of a failed hepatitis C drug, the company earned 47 cents per share – above analyst estimates of 43 cents per share (Also see "2013 May Still Be A Trough Year For Bristol As New Drugs Continue To Take Hold" - Pink Sheet, 24 Jan, 2013.).