A boon for life sciences in North Carolina

For those who missed it last week, the CEO of Novartis paid a statesman’s visit to little ol’ Holly Springs, NC. The occasion was the grand opening of the Novartis cell-based manufacturing facility for vaccines, the first of its kind. When fully operational, the plant will have the capacity to produce enough vaccine each year to protect half the US population from the threats like the H1N1 virus.

I’m sure Mike Huckman from CNBC and even Mr. Vasella himself had to, at one point, look up Holly Springs on a map to find its place jsut outside the Raleigh Durham ‘triangle’.   The region has a loyal following in the life sciences industry, originally founded on R&D and manufacturing centers for some of the industry’s largest companies.  But following GSK’s move of its US headwuarters to Research Triangle Park earlier this year, the Novartis commitment is another feather in the cap of the North Carolina life sciences industry.

A continued focus on China

For years, leading life sciences companies have looked to Asia as the next frontier. While a popular & almost necessary strategy for any global organization in the life sciences, to date most significant investments in China or India have been measured only by unrealized potential.

Still, the move makes sense for a number of reasons. First, employee cost is low. While the talent market in China remains challenging and competitive, it is improving. Secondly, the markets are simply too big to ignore. While underdeveloped and fraught with risk, the population volume dictates the future potential of the region as healthcare matures and the patient base grows exponentially in the coming decades.

Until very recently, China was not always the obvious bet. A westernized culture, a friendly government and an advanced infrastructure made Singapore the pick for most Asia Pacific headquarters. But again, the growth in northern China and the improvements in the supporting business environment in places like Shanghai have turned the tide. While many companies maintain their Asia Pacific HQ in Singapore, almost all understand the necessity to be in (not just near) northern China.

Announcements last week by two of the life sciences industry’s largest employers again validated the life sciences industry’s ongoing curiosity and commitment to operations in China.

Novartis plans to pump a billion dollars into its R&D operations in China over the next five years, expanding its scientific ranks in the Asian economic powerhouse from 160 to 1,000 as the pharma giant constructs a new research complex designed to rival centers in Europe and the U.S.

The strategy includes expanding its Institute for BioMedical Research in Shanghai and a global ‘technical center’ for research and manufacturing in Changshu. These moves easily make Novartis the largest biopharma R&D operation in China.

In the same news cycle, Pfizer announced its own plans to expand R&D operations in central and western China, specifically, a new R&D centre in Wuhan and expansion of its existing R&D facility in Shanghai.  According to Allan Gabor, Pfizer’s Regional President in China, Pfizer’s R&D operations in Wuhan will support global clinical drug development programs while Shanghai will remain the operations hub of Pfizer’s R&D in China.

For most of us working in the US or Europe, these announcements come across as ‘a world away’ and literally they are.  Still, the globally diverse workforce of the future that is sure to evolve in the coming years for true multinational life sciences companies includes a signficant presence in China.  As Novartis CEO Dan Vasella said it best on a recent trip to Shanghai: “You have to ask yourself where do you need to be down the road, and clearly it is here.”

Timely career advice…once the triptofan wears off

 

It’s no secret that the holidays are a time for reflection.  As the calendar year start to come to a close, we all start to consider the path forward in our lives, for our families….and for our careers.   For true passive candidates, this is the time most consider the next step in a career.  Can I move forward within my company?  Or should I start taking those calls & explore external opportunities just over the horizon?

There are thousands & thousands of videos on the web related to career advice.  At Beaker, we try to weed through the volume & separate the best.  In the video above, the CEO of Nestle (formerly controlling Alcon Labs) offers some sage advice for those whose minds are wandering during the holidays.

Not your father’s Big Pharma CEO

Chris Viehbacher was given the helm at Sanofi Aventis as an outsider after losing out in the race to become CEO of GlaxoSmithKline. Since, he’s taken the French pharmaceutical giant by storm initiating a dramatic series of decision and a new operating style.

Viehbacher reminds us of Andrew Witty, the man who beat him out to replace JP Garnier at GSK. He is clear, articulate and to the point. He communicates often and through non-traditional channels. Compare either to Dick Clark at Merck or Jeff Kindler at Pfizer and you’ll see a stark difference. Even those leading the new generation at Amgen, Genentech and Genzyme have not grasped the concept of leveraging new media to stay connected to their employees, the market and the press.

Viehbacher even criticizes those that came before him at the traditionally stuff Sanofi Aventis. Oh, and he wants to change the name of the company, a move that’s sure to ruffle the feathers of French traditionalists.  Some of his Viehbacher’s greatest hits:

• “We had really a scientific organisation that really lived within its own walls; not a lot of external partnerships, virtually no contact with our commercial organisations.”
• “The best scientists are often lousy managers. You had a research and development god who hoped a blockbuster emerged. When it didn’t, you merged. The model was flawed.”
• “I think the mistake we made in our industry was, we made R&D organisations that were very big, very complex, very difficult to manage, and we killed the innovative spirit.”
• “(Sanofi Aventis) missed the boat on biologics.”
• “We have to be much more adapted to our markets and customers and fight globalization.”

Fight globalization? This is not your father’s Big Pharma CEO.

Fill your shopping cart, then fill your prescriptions

The day after Thanksgiving – AKA Black Friday – is commonly understood as the busiest shopping day of the year.  What few people know is that, in the life sciences industry, the real calamity hits Monday.

According to IMS Health & Medco, the busiest shopping day of the calendar year for pharmeceuticals is the Monday after Thanksgiving.

“Although the post-Thanksgiving shopping binge is largely driven by holiday bargain hunters, the post-Thanksgiving pharmaceutical phenomenon remains an interesting, predictable — but largely mysterious — occurrence. But there is one connection — consumers are increasingly turning to the Internet in both cases to take advantage of the added convenience and lower cost,” said Tom Feitel, Medco’s chief web officer. “No line at the counter, no drive to the stores, no battle with the crowds — a click or two away (from the pharmaceuticals) you need.

So, while we’re all lining up at 4AM outside Walmart or braving the masses at the mall, who knew that the real early season cheer takes place at your local pharmacy.

The Final Tally?

Recent aggressive moves by Eli Lilly and J&J to pare back their global headcount came as a surprise to some who thought the layoffs across the industry were coming to an end.

For certain, the past 12 months have been a shock to the life sciences industry from an employment perspective.  Forced to make difficult choices, hundreds of smaller companies froze or reduced headcount to increase their chances of surviving the downturn.  In addition, many larger company CEO’s took advantage of the environment to make their organizations more lean, moving to sustain profitability by reducing employee costs in the face of lower revenue.

More recently, the mergers of Pfizer/Wyeth and Merck/Schering Plough have taken an additional toll  as these companies remove redundancy in their combined workforce to help pay for the mergers.  One out of every six Merck employees, almost 16,000 researchers, sales representatives & manufacturers–will lose their job.   Pfizer has announced 20,000 layoffs and the closure of six facilities as a result of its integration with Wyeth.  In fact, the layoffs of Merck & Pfizer account for more jobs lost than Bristol Myers Squibb has in its global workforce.

Beyond these massive changes, there are hundreds of other companies that have made similar moves: Medtronic (2600), Allergan (460), Cardinal (800), J&J (9000), Thermo Fisher Scientific (480), Eli Lilly (5500), BMS, (3800).  According to Forbes, the life sciences industry has registered over 60,000 job losses from those companies included as part of the Fortune 500.  Add in all the pre-revenue, entrepreneurial startups forced to cut back or shutter their operations as a result of an impossible financing environment, that number most likely represents only a fraction of the change we’ve seen in the past year.

A fight brewing between Congress & the life sciences industry?

 

There is a conflict brewing between Congressional legislators and the pharmaceutical industry that could come to a head in the coming weeks.  A NY Times article has some in Congress asking for government reviews of the pricing practices under suspicion the price increases may be the industry’s way of hedging against restrictions created by pending health care legislation.  The article, published Monday, reports that wholesale prices of brand-name drugs rose about 9 percent in the past year, the highest increase in years.

The reaction is a letter penned by Congressional leaders inferring of foul play by the industry.  The letter was signed by four House representatives (Rangel-NY, Waxman-CA, Lewis-GA, Stark-CA) & Senator Bill Nelson of Florida, a Democrat who has led efforts in the Senate to seek more concessions from drug makers.  The letter, sent to the Inspector General and the HHS, calls for immediate inquiry and oversight of the industry’s pricing policies.

“I want to know if there’s a back-door move under way by the drug makers to recover some of the concessions they’ve promised for health care reform,”  said Senator Nelson.

These are sleepless nights for Billy Tauzin & his team at PhRMA, the lobbying group responsible for representing the industry in Washington.  Let’s hope Mr. Tauzin doesn’t believe his own statement in the video above & that he can, in fact, yield the influence necessary to stave off an antagonistic battle between Big Pharma & those inside the beltline that could spill over to the whole of the life sciences industry.

The first big challenge for a ‘new’ Merck

The American Heart Association conference was held this week in Orlando.  If you’ve never been, AHA is a monumental event for any life sciences company that focuses on anything related to cardiology:  drugs, devices, equipment, etc.  It’s also used as a pulpit to release any substantial news about your cardiology products to the media.

So, Sunday night Abbott Labs released the findings of a small clinical study of its cholesterol drug compared to Zetia, from Merck.  In short, the study showed little or no clinical benefit for one of the largest cholesterol drugs on the market and, in turn, created a nightmare for Merck.  This is the second such study in the past year that has called Zetia’s efficacy into question.

The news had everyone scrambling.  First, the media was supposed to hold their reporting until Monday morning before the markets opened.  Well, that was quickly compromised as news leaked out from Orlando, starting a huge cat fight amongst reporters trying to scoop the story.  The Today Show, GMA, Squawk Box all led with the story Monday morning adn the newspaper had it across their front page.  Secondly, the FDA is now answering questions about why a drug with little to no benefit is generating $4B a year in revenue. And, finally, Merck is scrambling to contain a double whammy that affects not only Zetia, but also Vytorin, the combination therapy which it now wholly controls due to its recent $41B acquisition of Schering Plough (which was largely driven by the drug).

To its credit, Merck is doing a large scale study to determine Zetia’s true benefit.  One problem:  results will not be available until 2012.  If you’re looking for a Big Pharma controversy, they don’t get much bigger than this.  Merck has some damage control to do.  The FDA has questions to answer.  And, millions of patients are taking pills this morning that may offer nothing more than a placebo effect in treating their cholesterol.

FDA, I’d like to introduce you to the social media universe

Last week’s FDA meeting on Social Media was all the buzz on Twitter and other mainstream social media platforms.  It wasn’t a conference or convention.  It wasn’t even a place for FDA to make decisions regarding social media.  Instead, it turned into a big fact-finding mission for Commissioner Hamburg and her team to hear out all points of view and better understand the issue.

Google presented their own take as to how best format online ads (and drive Google revenues).  Pfizer talked about social media specifically as relates to their interaction with doctors.  PhRMA stood up to offer its proposal on behalf of its industry members.  Others spoke about the undeniable benefit technology has provided to open up the health care lines of communication.  As you can imagine, the room was filled with a bevy of passionate bloggers, Twitterers and social media gurus.  The Eye on FDA blog did a fantastic job of covering the event with a few informal interviews on site.

Fact is, most companies remain in the Stone Age relative to integrating social media into their corporate strategy, either lacking the resources or the fortitude to quickly adopt to a changing communication medium.   Small companies are doing nothing more than watching the industry behemoths gently tip toe down this path, happy to observe rather than participate.  But the world is changing.  What has only been adopted by the biggest or most forward looking in our industry today will soon become commonplace for all, relative to social media.  Those with the time & resources will experiment on the cutting edge of new social media platforms, and the masses will follow & adopt what really works.

For certain, this is new territory for the agency & Dr. Hamburg.  They are right to take their time, hear the various perspectives, and evaluate all options before rendering any kind of formal policy.

 

Merck’s snappy new website

With a certain bit of resolve & determination, the life sciences industry is flexing is technology prowess alongside its passion for scientific discovery. The FDA held its first ever summit on social media last week. No fewer than 20 leading companies across the industry actively manage Twitter accounts. As you can tell from Beaker’s video library, more and more are telling their company’s story through streaming, online video. And, without question, corporate websites are getting better and better.

Truth be told, most website renovations are not approved without reason. Mergers are the best excuse to drop a chunk of money on a new corporate branding initiative. Life Technologies recently reworked their message when Applied Biosystems and Invitrogen became one company. And although Merck is still Merck, it seems that the acquisition of Schering Plough was reason enough to rethink www.merck.com.