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January 30, 2008
Booming Medical Technology Sector Seeks Stronger Commercialization
Different projections show the global diagnostic market climbing toward record milestones -- $50 billion in a few years, $100 billion within a decade or so. This isn't a surprise; the medtech sector has been growing steadily, and revenues are surging. For diagnostics, increased use of at-home and point-of-care products has opened new markets, and growth in biotechnology and genomics has given rise to entirely new diagnostic paradigms.
Diagnostic manufacturers, however, still struggle to get their products to market, as the fight for resources creates a vicious cycle. Market-focused product development is key, since customers ultimately pass judgment on the worth of whiz-bang innovation and technological advancements. Regulators, payer organizations, healthcare providers, lab techs and patients must all agree on the value of a product before it can achieve commercial success. Designing and marketing a diagnostic with a clear picture of the market is difficult, however, thanks to slim margins and tight budgets -- market knowledge and actionable intelligence is hard to come by, especially early in development.
Our recent research on in vitro diagnostics shows that, throughout development and one or two postmarket years, many companies invest less than $5 million in each product's cumulative R&D and marketing costs. The data show a relationship between a product's peak annual returns and its marketing investment during this time. Logically, brands with relatively low peak projected sales draw on little early marketing funding. Bigger brands with annual returns in the hundreds of millions of dollars can support larger initial marketing investments.
The problem is that among teams with little budget for long-term market evaluations and sales projections, the challenge multiplies. Brands that can't show their worth don't receive early marketing funding; theirs is a constant struggle for dollars, market knowledge and customers. At launch, lack of funding forces highly focused marketing campaigns that target very specific customer groups. Ideally, increased financial support would allow these teams to reach more potential customers.
Posted by Eric Bolesh at 09:23 AM | Comments (0)
January 16, 2008
The Days of Our Pharma Lives
Good news for all those languishing in the doldrums of the early-year news drought. Taking a cue from CSI, General Hospital is doing a spin-off, General Hospital: Diabetes, destined for more drama and more witty repartee than even CSI: Miami.
The rumor mill speculates that the first season will revolve around all the recent developments in treatment delivery, focusing on Type 2. People are already laying bets that Exubera will be the first character to return from the dead. But, to me, that seems like a pretty risky bet after the way Pfizer informed Nektar of the decision - or rather didn't inform them, depending on who you ask. This might be the first time two characters in a soap opera have broken up over the industry equivalent of Facebook.
Nektar is looking for another partner but after the slap-in-the-face, the pay-off and their statements that it was all Pfizer's fault that their relationship failed, I doubt Pfizer and Nektar will be dating anytime soon. Not to mention the fact that as far as painful memories go, the bong-like apparatus that is soon to appear in tobacco paraphernalia shops across the country must seem to Pfizer as burning then inhaling Benjamins by the truck load.
But one must wonder what Pfizer is doing to recoup and reenter the world of diabetes treatment. Something similar to Exubera may come back, from either Pfizer or Nektar, which says it has a better designed device, but it won't come back under the same name. But, then again, isn't that how it always happens in soap operas?
Don't turn the webpage; that all happened before the first commercial break. Quite a few characters have recently experienced damaged hearts due to relationships with two especially pernicious lead roles. Actos and Avandia are officially the bad boys of the show, vying to escape a harmful label (or labels) as "heart-breaker" with watchers everywhere clutching old but still-full pill bottles and booing the naughty boys' presence on screen.
How producers GSK and Takeda will work the characters back into the good graces of the audience, or if they will just kill them off, is sure to keep viewers on the edge of their seat all year.
The show did receive questionable reviews from pre-viewers for the character Injectable Insulin. Apparently the audience found her a rather bland, unsympathetic character, who did not match viewers' ideal of a diabetes treatment. She actually received a lower rating than Actos for not being convenient enough for the viewers to like.
The most interesting, if unproven, characters to date seem to be Januvia and the old entrepreneur turned crazy-scientist, Thomas E. Mann. Mann has an interesting character history. A successful investor over the years - once before in diabetic treatment: insulin pumps - who Forbes lists as having a personal fortune of $2.2 billion ($600 million less than what Pfizer spent on Exubera) admits to committing half of his estate so far to his company, MannKind Corporation, to develop an inhaled insulin product called Technosphere insulin. He believes his product far superior to Exubera and remains undeterred by the troubles in the therapeutic area.
While having a much more convenient device (about the size of a cell phone) and delivering faster-acting insulin, Mann's seeming eccentricity stems more from his personal investment against more intractable issues. First, because of the technology's novelty, no long-term study has been conducted to discover the degree of lung reduction caused by inhaling a complex protein. Second, Mann's meager resources from a corporate and pharmaceutical standpoint, does not put him in a good position to compete for ratings against giants such as Eli Lilly and Novo Nordisk (breaking update: NN appears to be pulling out of the race) who are also working on inhaled insulin products.
Possibly the brightest character on the cast, and the most serious challenge to Mann and his inhaled insulin team, is Januvia. A character making strong gains in audience popularity, this DPP-4 inhibitor seems to be avoiding the tabloids that have nabbed all other diabetic treatments that are not intravenous. Though there have been concerns raised over her effects on the kidneys and she can cause upper respiratory infection, Januvia has gotten off to a better than expected start and Jami Rubin of Morgan Stanly recently nominated her for a daytime Emmy, calling her a potential multi-billion dollar figure in an interview with Medical Marketing and Media.
The convenience of an oral treatment over needles will bring a lot of patients aboard, although an upper respiratory infection does make it difficult to conduct the other major part of the treatment's regimen: daily exercise. To head producer Merck's advantage and peace of mind, they did develop her in-house, so they are not taking a high-priced gamble bringing in an unfamiliar outsider.
This new soap opera can't help but make a big splash and I am sure all of us will be right here watching. Enjoy tonight's pharma viewing.
Posted by Jordan Stone at 11:21 AM | Comments (0)