Amgen Team 2: Joshua Zamarron, James Stariha Elizabeth Allen, Michael Johnson

Transcription

Amgen Team 2: Joshua Zamarron, James Stariha Elizabeth Allen, Michael Johnson
Amgen
Team 2:
Joshua Zamarron, James Stariha
Elizabeth Allen, Michael Johnson
Michael Mullin
Industry Analysis
 Strong growth rate
 Barriers to Enter
 Competition
 Threat of Substitutes
 Power of Buyers
 Growth/Profit Potential
Growth Rate
 Estimated market value in 2016 is $453 Billion
 Government Initiatives
 Increased Research and Development funding
 Countries becoming major markets
 China, India, Europe
 Mergers and Acquisition
 Amgen and Immunex
Barriers to Enter
 Likelihood is weak
 Majority startups are spin offs
 Based on innovative products of processes resulting from
discoveries in academic research
 Long start up periods with little profit
 High fixed costs
 Not enough funding (research and development)
 Government Regulations
Competition
 More than 1,000 Biotech companies in North America
 Top 1% of these companies making majority of revenue
 Competition for patents
 Good for Industry
Buyer Power
 Ranges from Healthcare providers to farmers and
growers
 Amgen
 Healthcare providers
 Hospitals
 Specialized products don’t allow for much buyer power
Growth/Profit Potential
Market Value $453 Billion
Environmental Threat and Opportunity
Profile (ETOP)
 An environmental threat and opportunity profile is a description of
the structure of external factors.
 Multiple Reasons for an ETOP
1.
It helps the organization to identify opportunities and threats
2.
Consolidates and strengthens an organization’s position
3.
Provides strategists information on which sectors have a
favorable impact on the organization
4.
The organization gains knowledge of its standing with respect to
its environment
5.
Helps formulate strategies.
Steps in an ETOP
1. Identify major Environmental factors such as:
economic, political, social, technological, competitive,
geographical, etc.
2. Environmental factors are then sub-divided into
subsectors of each factor.
3. These factors are then analyzed to determine major
weaknesses and strengths in each of the subsectors.
4. The impact of each factor is then accessed as being
either favorable, unfavorable, or neutral.
Economic Factors
 Economic factors affect the purchasing power of potential
customers and the firm’s cost of capital.
 These factors include: business cycle, inflationary trends,
consumption, employment, investment, monetary, and fiscal
policies.
 Exp: The most recent fiscal policy event that has happened,
is that buried within the Fiscal Cliff Section 632, is a clause
that delays Medicare price restraints on a class of drugs
including Sensipar. This provision leads to Amgen having
two more years to sell Sensipar without governmental
controls. The delay of Medicare price restraints has a
positive effect on Amgen.
Political Factors
 Political factors are how and to what degree government
intervenes in the economy.
 Political factors include: political power, ideologies, interest
groups, social stability, legislation, and regulation.
 Exp: One of the most recent and controversial legislations
passed was the United States health care reform. Amgen
expects a drastic increase of competition in future years due
to this legislation. The legislation allows the approval of
biosimilars, generic biotech drugs, to take significantly
shorter time
Social Factors
 Social factors impact an organization due to the social,
cultural, demographic, and environmental profiles in the
industry.
 Social factors include: age distribution, geographic
distribution, income distribution, mobility, education,
family values, and business attitudes.
 Amgen strives to encourage a high-performing
environment where team members embrace the talents
and backgrounds of each other as well as nourish
innovative thinking, and achieve their full ability and
potential that leads to Amgen’s success.
Technological Factors
 Technological factors impact how an organization or
company operates in relation to equipment used in the
company’s environment.
 Technological Factors include: rate of technological
change, future raw material availability, raw material
cost, technological developments, and product life
cycle.
 CEO Robert Bradway announced during a lecture at
MIT that he believes the company is “on the cusp of a
major change in how we manufacture proteins.”
Geographical Factors
 Geographical Factors are important to the overall
analysis of a company.
 Geographical factors include: plant/warehouse location,
relocation of facilities, headquarters, and foreign
markets.
 Although the United States markets contribute to more
than 75% of Amgen’s Annual revenues, Amgen has
been working to increase its reach in international and
foreign markets. The company has extended its
products to high-growth regions such as Japan, China,
Russia, and Africa.
Amgen SWOT Analysis
Strengths
Weaknesses
•Expertise in R&D of protein
therapeutics helped Amgen build strong
product portfolio
•Neulasta, Neupogen and Enbrel driving
Amgen’s top-line growth
•Strong IPR position enabling Amgen to
offset biosimilar
•Restructuring initiatives driving
significant profit growth during a period
of declining sales
•Declining sales of Aranesp and
Epogen
•Discontinuation of late stage
clinical trials
•Relatively low levels of technology
diversification increasing
dependency on therapeutic proteins
Opportunity
Threats
Expanding Prolia franchise could drive
top-line growth, and reduce Amgen’s
dependency on protein therapeutics
Acquisitions could strengthen Amgen’s
pipeline
Focus on the emerging economies
providing growth opportunities
Collaboration with Watson could help
Amgen enter oncology biosimilars
market
•Affymax’s Omontys likely to affect
Aranesp and Epogen sales
•Cost containment measures may
affect Amgen’s sales growth
Strengths
 Expertise in R&D
 Top of industry
 Breakthroughs in PEGylation and Glycosylation techniques
increased drug effectiveness
 Directly responsible for development of next strength
 Neulasta, Neupogen, and Enbrel driving top-line growth
 Developed from PEGylation and Glycosylation techniques (from
3-4 hrs to 15-80 hrs)
 Amgen’s top three products contributing to over 55% of
revenues
 Neulasta/Neupogen- $5.2 billion in sales 2011
Strengths
 Strong IPR position enabling Amgen to offset biosimilar
competition
 Highly innovative industry and protecting proprietary
property is essential
 Strong R&D means nothing if it is not protected
 Successfully defended property numerous times including
10 claims of infringement on 4 of Amgen’s EPO patents
that led to a permanent injunction against Swiss big
Pharma Roche from ever selling its products in the US
Weaknesses
 Declining sales of Aranesp and Epogen
 Concerns raised about safety of the drugs
 FDA issued black boxed warnings of increased chance of
death and other cardiovascular disease
 In 2006 sales reached 10 billion
 Discontinuation of late stage clinical trials
 Two trials in phase III failed due to statistics that they had
no real effects
 Extremely expensive
 Did not look good having back to back failures
Weaknesses
 Relatively low levels of product diversification
 3 most successful products are all protein therapeutics55% of revenues
 Other companies pulling ahead in promising medicine of
protein anti-bodies, small molecule, and limited MAB’s
drugs
 Therapeutic anti-body market is estimated to be the
fastest growing market through 2015
 IPR could limit future growth in markets (same that
protected their PEGylation and Glycosylation from others)
Opportunity
 Expanding Prolia Franchise could drive top-line growth
 In 2012 FDA released new indicator for Prolia as a treatment to increase




bone mass in men
Showed significant increases in safety and efficacy (%5.7 vs %.9)
Been in the US markets for sometime with sales hovering at $88 million,
first quarter after new indicator sales went up to $120 million
Huge new market for Amgen (12 million conflicted)
Relieve pressure off of Therapeutic protein revenues
 Acquisitions could strengthen Amgen’s pipelines
 Recently acquired two firms Micromet and KAI pharmaceuticals
 Acquired not only pipelines but the proprietary technology of the
companies
 Including multi promising drugs in phase I and phase II of research, one is
BiTE anti-body technologies
 If they pan out would significantly increase their product diversity
Opportunity
 Focus on emerging economies providing growth
opportunity
 Over past 4 years have expanded from 35 countries to 50
 Including Brazil and Turkey
 Brazil top ten Pharmaceuticals market in the world and by
2015 it is estimated to be fifth
 With more plans to increase to 75 countries by 2015
(helps with diversity)
Threats
 Affymax’s Omontys likely to affect Aranesp and Epogen sales
 FDA approved their Peginesatide injection
 Likely to outperform Amgen’s and only need injections once a
month vs. 3 times a week
 Combined with the safety concerns already raised future does not
look good
 Cost containment measures may affect Amgen’s sales growth
 Amgen relies heavily on reimbursements from government aid
programs and private third party payers
 Health care reform huge threat to those revenues
 Already seen a %2 percent reduction in government payouts for all
Medicare services, and several more already put forth
Matching S&W with O&T
•Relatively low levels of product
diversification
•Acquired multiple firms with
proprietary technologies and
promising new products
•Expertise in R&D
•Entering emerging economies
•Strong IPR
•Expanding Prolia franchise
•Declining Aranesp and Epogen sales
•Failure of late stage clinical trials
•Cost containment measures
Competitive Factors
 Competitive forces at work in the industry and their
strength
 Companies in the strongest/weakest competitive
position
 Keys to competitive success
Amgen’s Top Competitors
 Johnson & Johnson
 Novartis AG
 Teva Pharmaceutical Industries Limited
Amgen’s Financial Analysis
 Net income, sales, and operating expenses
 Current ratio is 3.8
 Asset turnover ratio is 0.32
 Debt-to-equity ratio for 2012 is 1.85
 Net profit margin is 0.25
 Return on equity is 0.22
 Return on assets is 0.08
Market Share
Managerial Factors
 The Scientific Method
 Teams
 Diversity
Technical Factors
 Manufacturing
 Facilities
 Collaboration
Senior Management
 Robert A. Bradway: Chairman and Chief Executive
Officer
 Madhavan Balachandran: Executive Vice President,
Operations
 Victoria H. Blatter: Senior Vice President, U.S.
Government Affairs
 Suzanne Blaug: Senior Vice President, Global
Marketing and Commercial Development
Senior Management Cont.
 Paul R. Eisenberg: Senior Vice President, Global
Regulatory Affairs and Safety
 Sean E. Harper: Executive Vice President, Research
and Development
 Rolf K. Hoffmann: Senior Vice President, U.S.
Commercial Operations
 Anthony C. Hooper: Executive Vice President, Global
Commercial Operations
Senior Management Cont.
 Raymond C. Jordan: Senior Vice President, Corporate
Affairs
 Diana L. McKenzie: Senior Vice President and Chief
Information Officer
 Brian M. McNamee: Senior Vice President, Human
Resources
 Joshua J. Ofman: Senior Vice President, Global Value and
Access
 Cynthia M. Patton: Senior Vice President and Chief
Compliance Officer
Senior Management Cont.
 Jonathan M. Peacock: Executive Vice President and
Chief Financial Officer
 David J. Scott: Senior Vice President, General Counsel
and Secretary
 Michael Severino: Senior Vice President, Global
Development and Corporate Chief Medical Officer
Board of Directors
 David Baltimore: President Emeritus and Robert
Andrews Millikan Professor of Biology, California
Institute of Technology
 Frank J. Biondi, Jr.: Senior Managing Director,
WaterView Advisors LLC
 Robert A. Bradway: Chairman and Chief Executive
Officer, Amgen Inc.
 François de Carbonnel: Former Chairman of the Board
and Director, Thomson S.A. and Director of
Corporations
Board of Directors
 Vance D. Coffman (Lead Independent Director):
Retired Chairman of the Board and CEO, Lockheed
Martin Corporation
 Robert A. Eckert: Former CEO and Chairman of the
Board, Mattel, Inc
 Rebecca M. Henderson, Ph.D: John and Natty
McArthur University Professor, Harvard University
 Frank C. Herringer: Chairman and Retired CEO,
Transamerica Corporation
Board of Directors
 Tyler Jacks: David H. Koch Professor of Biology,
Massachusetts Institute of Technology and director of
the David H. Koch Institute for Integrative Cancer
Research
 Gilbert S. Omenn: Professor of Internal Medicine,
Human Genetics & Public Health and Director of the
Center for Computational Medicine and Bioinformatics,
University of Michigan, and former CEO, University of
Michigan Health System
 Judith C. Pelham: President Emeritus, Trinity Health
Board of Directors
 Adm. J. Paul Reason, USN (Retired): Former Vice
Chairman and President, Metro Machine Corporation
 Leonard D. Schaeffer: Senior Advisor, TPG Capital
 Ronald D. Sugar: Chairman Emeritus, Northrop
Grumman Corporation
Assessment
 Importance of Culture
 Compatibility with Strategic Change