I attribute the strong performance of Astellas Pharma Europe in these tough economic times to our broad, well-rounded portfolio. Our overall growth from 2009/10 was 9 per cent in Europe, while corporate growth was 10 per cent. We are not reliant on a single molecule: we have three major products in urology, two within transplantation. Looking forward, in the next three to five years, we have about 10 new products to launch.
I think we have managed our portfolio well, both in in-house products and licensing. We have a lot of partnerships with other companies, for example in anti-infectives, we recently launched the anti-fungal Mycamine, plus we have Vibativ, licensed from Theravance and Fidaxomicin, for Clostridium difficile infections, from Optimer, both under review with the EMA [European Medicines Agency]. We have also signed a deal with Basilea for Isavuconazole.
In oncology, we’ve entered an agreement with AVEO Pharmaceuticals to commercialise and develop tivozanib, which has significant potential in a broad range of cancers. We currently market a prostate cancer treatment, Eligard, and we have formed a strategic partnership with Medivation for the development and commercialisation of MDV3100, a treatment for advanced prostate cancer. Our acquisition of OSI will also play a key role in helping us achieve our goal of addressing unmet needs in oncology.
Urology is a key strategic area for Astellas and we have a strong pipeline in this therapy area; we are currently getting prepared with Mirabegron, a drug to treat overactive bladder, which is a first in a new class of orally active Beta-andrenoceptor agonists that is in the final stages of development undergoing phase III clinical trials.
In transplantation, three years ago we launched Advagraf, a prolonged-release tacrolimus formulation, which offers the consistency of exposure so vital for transplant recipients. Our focus is to upgrade patients from Prograf to this new standard of care.
We launched a new franchise in pain management last year with Qutenza, which has a synthetic form of a substance found in chilli peppers.
While we have a comprehensive range of treatments in dermatology, this is an area where we are still looking either for licensing in or other complementary opportunities.
During the past five years we have had to manage two patent expiries and despite that we have been able to maintain our growth. We have a programme that we started following the merger in 2005, called Impact, and this is about optimising organisational effectiveness. We are finding in some areas we have growth opportunities so we have expanded, while in areas where growth has been lower we have been looking at natural attrition or other ways to be efficient. Every year we have been refocusing and making sure that we don’t get too fat and stay lean. It’s been very difficult; we have had price cuts across the board in certain countries. Fortunately for us, with the therapy areas that we are in, we are meeting high unmet needs. The payers and clinicians believe that our products are adding value where others aren’t, so we are continuing to gain key market share.
Our biggest challenge is launching these seven to ten products and allocating resources appropriately, structuring the organisation appropriately. I have a lot of vacancies I have to recruit for. I am in a growth mode, while my competitors are going the other way and downsizing.
I think the challenges that we have as an organisation are the same as the whole industry: being able to generate and articulate the evidence that supports the value in our product in a manner that is meaningful to customers. There is the challenge of market access, which is around making sure our products are adding incremental value. I think health prescribers and payers do not want marginal increases, they want incremental increases and I think that is an important challenge we are facing in our new product development and our R&D organisation. We need to focus on high unmet need and making sure that our drugs can generate the data necessary to show the differentiation; it’s critical.
Our biggest industry threat is a lack of innovation. If we don’t innovate we are dead. A lot of companies have failed to innovate. If you look at our competitors’ pipelines, they are not filling the gaps left by the patent cliff we are facing. It is about being clever and making decisions quicker. We have STAR [Strategy Team for Therapeutic Area Reinforcement], a multi-disciplined group focused on identifying and prioritising promising compounds, ensuring greater alignment between discovery and marketing, which supports us to market products that genuinely satisfy unmet needs.
It is about identifying earlier what projects we should be cutting that aren’t meeting the standards of unmet need and differentiation and whether we can reallocate resources to other projects which then have a higher chance of probable success. It’s a problem that is going to take a long time to solve. I don’t think we are ever going to find one solution because technology and innovation changes are based on radical breakthrough technologies. The cost of innovation is going to go up. I think the burden of proof is going to be much more on industry and I think it is going to cause some delays in approvals.
I try to focus on making sure that we are meeting our customer needs. If we focus on competition then we are not doing our job, which is answering the questions that payers and prescribers are asking. We have to make sure that we have the right patient, with the right product, at the right time. That is what we should be focusing on; everything else is a distraction.
We are also doing a lot right now in the European emerging markets and we are looking at Russia, CIS, Turkey, Hungary, Romania, Bulgaria and Poland. They are very volatile markets. For example, in Russia, a lot of health initiatives are dictated by the oil price. As long as oil stays a certain price, things are great; if not, there are cutbacks. In the established markets there are also austerity measures where they are making dramatic price cuts of 10-15 per cent. In these countries you need to make sure that you are compensating by either launching new products, which we are, fortunately, or by looking at your overall cost structure, which we are doing on an annual basis. Those markets pose a very different challenge.
Then you have the smaller, established markets that are less volatile and have their own initiatives to make sure cost structures are maintained. We have to remember that the actual medicine cost of the total healthcare cost is less than 10 per cent, so the issue is the cost and ability to deliver healthcare, which is really a public service sector issue.
Every country provides opportunities because each is driven by patients’ needs. I think what makes one more interesting than another depends on whether or not it has a large proportion of healthcare providers who prescribe or whether it is specialist driven. Also, health policies influence markets.
Having lived in Japan, I never thought I would work for a Japanese company, and I have to say it has been a pleasant surprise. It’s a global company, the two parent companies having a history of working outside of Japan. Therefore, from that perspective they have an international mindset, but there are some specific things that are very Japanese. They have the Ringi system, a system of approval, which instills huge transparency in decision making and authorisation. It is actually quite empowering because it’s power politics. You are told: ‘here’s your role and responsibility’. Your approval level is so clearly defined that there is no ambiguity in the decision. Empowerment in the organisation is much higher than I have experienced working at a Western company.
They are also really quality conscious; the culture is to do it right first time. The Kaizen constant improvement mentality is ingrained so, as an organisation, Astellas is very encouraging of product improvements and ideas that can help improve efficiency and effectiveness. You don’t have to struggle to get resources to improve processes. In some other companies, they look at it and ask whether it is worth it, while here it is culturally in-bred; it is a part of their DNA.
We need to stick to basics and make sure we are successful in all the launches that we are preparing, that we are focused on our targets, given the expectations that we have, making sure that we have highly engaged employees. We recently carried out an employee survey and we beat industry standard. In half of the areas, we were equal to the highest performing organisations and we want to maintain that. The teams that we have here are highly motivated, dedicated, qualified and I think the fact that we are a young, dynamic, agile organisation means it is a great place to work and we are a great partner. Just look at the deals we are making. We need to make sure we are doing the right things, at the right time, with the right effort.
I believe that the pharmaceutical industry is about social responsibility. Our job is to try and improve public health welfare, so as an organisation we try to help local communities. We’ve held a lot of activities and helped fund emergency relief in Haiti, Myanmar, Italy and in Japan. We allocate a day of the year for each employee to participate in a charity event that we organise called the Changing Tomorrow day. As part of this, I got involved in a day focused on educating children to make better nutritional choices, so I spent the day at a local school making healthy snacks and smoothies. It’s important to give back and help people realise that we are part of a broader community, not just a company.
The company has been heavily involved in helping in the aftermath of the recent Japanese earthquake, giving $1.4m to the Japanese Red Cross. We do not have any employees that were affected by the earthquake as our manufacturing plants are 200km away. We’ve been fortunate in such a terrible, terrible situation.
The Interviewer
Liz Wells is deputy editor of PME
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