Why AstraZeneca takes a local approach to Business Development in the emerging markets




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Video title: Why AstraZeneca takes a local approach to Business Development in the emerging markets
Released on: April 11, 2012. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, filmed in Amsterdam at BioEurope Spring 2012, Fintan Walton talks to Hakan Wickholm, Director, Regional Business Development, Central & Eastern Europe, Middle East & Africa, AstraZeneca
AstraZeneca's perspective: Similarities and opportunities in diversed territories
Fintan Walton:
Hello and welcome to PharmaTelevision News Review, on this show I have Hakan Wickholm who is a Director of Regional Business Development at AstraZeneca, your responsibilities cover a range of territories including Eastern Europe, Central Europe, Russia, middle east, Africa. Welcome to the show.
Hakan Wickholm:
Thank you.
Fintan Walton:
Quite a diverse range of territories which you are responsible for, they are quite different in many ways but there are similarities what's your perspective from somebody who has responsibility to bring in products for those areas?
Hakan Wickholm:
I agree with you there are a lot of diversity in these regions from development level but there are also lot of similarities for example if you look at the diseases especially from our AstraZeneca perspective if you look at our key therapeutic areas cardiovascular, diabetes , respiratory for example these are growing very much growing markets, there is a high prevalence of these diseases in these markets for example more than 20 % the diabetes has a prevalence of more than twenty percent in the middle east, in the Saudi and the gulf for example and the prevalence is growing in Russia and South Africa as well. But of course they also have their own unmet medical needs for example the need of anti-infectives, Malaria, Tuberculosis medication is much higher in South Africa, sub Sahara for example.
Fintan Walton:
Right, so obviously then as you say there are different unmet clinical needs within those territories and then obviously the other aspects of these they have different markets in the sense that there are different tendering systems in the private market, so again from your perspective how do differentiate and how much can you from an AstraZeneca point of view satisfy all of those particular regions?
Hakan Wickholm:
If we start with middle east like Saudi and Gulf which are the key markets there I mean there we are playing and competing in all sectors both in tenders and in the private retail markets. In South Africa for example we are today playing more or less only in the private sector which is about eight million people out of forty. Up there the government there they are going to introduce a National health insurance and they are putting investments into building a better healthcare structure so we believe in that market but it will take time obviously. In Russia which is a huge opportunity especially now when for the first time since Russia has laid out a clear national health care strategy which is also introducing a healthcare insurance, today it is about 10-15 million people who ask coverage and that will out of 140 so they say that by 2015-2016 I think about 100 million people will be covered by that so that market is forecasted to have a strong growth going forward and there we are playing in all sectors basically.
Strategy towards branded generics
Fintan Walton:
I suppose the other aspect to it is I mean obviously AstraZeneca is always looked for innovation it's an important aspect to it, branded generics become important and to get access to branded generics to build your presence in each of these territories I mean what is your strategy do you go for licenses,do acquisitions, how do you do it?
Hakan Wickholm:
Yes, you are right we have branded generics has a valid part in our emerging market strategy I mean foremost we are definitely innovate being a pharmaceutical company but we definitely see that there is a significant opportunity in some of these markets where we would like to extend our patient access to patient population and there we need to compliment our portfolio with branded generics. We have made a couple of deals sourcing branded generics from India but there are also challenges bringing branded generics from one country to another one, there you also have some requirements of local manufacturing etc that you have to recognize so we are looking into some additional sources of some products but I have to say that we have a select a very focused approach to branded generics. They need to fit our disease areas and of course represent there significant business opportunity in the local market.
Hakan Wickholm' perspective: Importance of local knowledge in emerging markets
Fintan Walton:
Sure, but I suppose also as you mentioned your own pipeline the core pipeline that comes from AstraZeneca itself obviously all of those products that make their way will be considered in those particular territories but I suppose again because of the nature of the markets themselves, how they are changing and so forth, how much is local knowledge important from your perspective because obviously it's not just looking at these regions in a general sense it is understanding and having the right people on the ground in those particular territories so how does that work for you?
Hakan Wickholm:
That is in fact very important and we recognize that I would say that we really we recognized that many years ago but we really started to invest in the emerging markets in let's say in 2004-2005 and was important for us to really make sure that we have the right people local people in order to make sure that we have the local insight and knowledge, how the systems work in regulatory wise for example you know that area is also developing all the time so you have to keep up so that is really important.
Fintan Walton:
But also it's the creating a trusted organization and I understand that AstraZeneca has invested in some of these territories as well into research and development in this particular territories.
Hakan Wickholm:
Yes absolutely, I mean we also see now that there are if you look at emerging markets I mean 85% of the earth's population is in the emerging markets. If you look at the growth potential of pharmaceutical business 70% of the growth going forward up to 2015 is generated in the emerging markets, half of that is in the BRIC countries and the other half in small and mid-size growing ones. So you need to be there and they have different medical needs of course and you need to be there to understand that what kind of needs to they have what kind of innovation do you see in this local places as well, I mean for example in China that is a very dynamic place right now and there is a lot interesting activity going on there so we invested in a R&D centre there innovation in China center in 2007 and we are going to we have just opened also a clinical hub in China for Asia which will be ramped up and fully operational by next year, so that is definitely in order to find both innovation but also to tailor and use the local insight into building the regulatory files the reimbursement files etc. One of the recent successes we have had in is in fact in China where we have entered into a co-development commercialization agreement with a local Chinese biotech company Hutchison MediPharma [PharmaDeals ID = 44597] and that is about a new cancer therapy the molecule is Volitinib where we are going to AstraZeneca is going to take care of the development and the commercialization in the rest of the world while Hutchison MediPharma is continuing do it in China and they have they also keeping some of the rights for commercialization which will be discussed later on.
Fintan Walton:
So they select some specific indication that are particularly prevalent in China?
Hakan Wickholm:
Yes and the first indication here are gastric cancer and liver cancer which has a higher prevalence in the Asian markets than in Europe, so these are the first indication that we will look at. So this is in fact an interesting deal from that perspective that is a it's a compound originating from emerging markets.
Future growth plans
Fintan Walton:
I suppose you have to compete, you are competing against all the other pharmaceutical companies they have the same ambition as you, how do you compete?
Hakan Wickholm:
No, I mean we focus on our ambition is to bring forward the best in class products on the innovative side and as I said on the branded generics side we have a very focused approach, the products need to fit our portfolio and there should be a good opportunity and of course when it is about a branded generics you want to be among the first to launch after a when a regional patent is expiring so you need to be among the first ones otherwise it's no use to do that.
Fintan Walton:
What would you like to achieve over the next five years, what would you like to look back at in five years time and see what you have achieved, what you like to see?
Hakan Wickholm:
For the emerging markets I mean that's definitely continue the growth that we have I mean we are the fastest growing multinational company in emerging markets, we would like to continue on the show that we are a strong commercialization organization we are in fact ranked number one if you look at the aggregated sales since 2001 of new products, so we have really strong capabilities, we would like to bring in more products more opportunities and support other companies to establish themselves in the emerging markets.
Fintan Walton:
Hakan, thank you very much indeed for coming on the show.
Hakan Wickholm:
Thank you very much.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Hakan Wickholm
Director
At the time of recording this PTV interview Hakan Wickholm serves as Director of Regional Business Development at AstraZeneca and is responsible for development and execution of Regional Business Development activities in Central and Eastern Europe & Middle East and Africa (CEEMEA) Based in Brussels. In the past from 2003-2009 Hakan Wickholm has served as Vice President Mature Brands at AstraZeneca Sweden.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
AstraZeneca
AstraZeneca is a global, innovation-driven biopharmaceutical business with a primary focus on the discovery, development and commercialization of prescription medicines for gastrointestinal, cardiovascular, neuroscience, respiratory and inflammation, oncology and infectious disease. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide.