- I don't follow big pharma names like Novartis $NVS as closely as I do the smaller companies in the BiotechDueDiligence coverage list, but I enjoy the free flowing format at the Goldman Sachs conference and they are a crucial partner for Momenta Pharma (Click here for MNTA research page) on generic Lovenox and Copaxone products, so I thought I would post a few notes.
- See the Past Events page for the webcast link- they are still available as of 7/2/11, but I don't know how much longer that will be the case
- I was hoping to learn about Novartis' perspectives on follow-on biologics (FOBs) aka biosimilars/biogenerics - was covered briefly, and the comments actually slightly increased my perspective on NVS as a potential FOB partner for MNTA
- See my notes below (these are not a complete transcription by any means, just some highlights):
- Jonathan Symonds, CFO
- inorganic growth- acquisions will not be in pharma. vaccines business is "subscale" but is a very restricted industry (which is appealing though). Sandoz is overconcentrated in North America and western Europe-want asian expansion. Likewise consumer health- need more asia, china, latin america...common theme is georgraphic needs
- Emerging markets: BRIC plus korea and turkey- each is unique
- Company believes that a AA debt rating is appropriate - wouldn't sacrifice this for an acquisition or business opportunity, but don't aspire to a higher rating (ie, AAA) or maintaining as conservative net cash position as it was recently..Now see and believe that can use balance sheet as asset to be manged and optimized...a debate for the next one or two years
- Biosimilars- opportunity is not one that naturally sits within generic company (though some elements do, such as manufacturing optimization and cost reductions). But other aspects like protein engineering, generation of equivalent monoclonal antibodies (mAbs) and associated regulatory packages are what pharma does. Also these FOB products will be marketed (at least for some time) by fully qualified sales rep force. NVS has both Sandoz and Pharma segments to handle these features of the opportunity
- have more areas of potential investment than available dollars. The opposite scenario is a very dangerous proposition (how true!)