Focus: As steep patent cliff looms, Shionogi moves to develop its own U.S. sales staff

PeptiDream

17/07/2019 24:00

* Shionogi plans own U.S. sales of specialist antibiotic 
    * Tested waters with 1 drug in U.S. market last year
    * Four HIV drugs lose patent protection in nine years time  

    By Takashi Umekawa
    TOKYO, July 17 (Reuters) - For much of its 141-year history,
Japan's Shionogi & Co Ltd  4507.T  has played safe when selling
its drugs in the United States and other overseas markets -
relying on bigger partners to promote its products and avoiding
the cost of maintaining a large sales force.
    It followed that pattern for blockbuster cholesterol
treatment Crestor, its biggest success story, which was
developed in-house until mid-stage trials when it teamed up with
AstraZeneca Plc  AZN.L . AstraZeneca gained the rights to sell
the drug in all markets but Japan.
    But Shionogi, Japan's most profitable drugmaker by operating
margin, has become open to more risk - prodded into seizing more
sales for itself by a looming patent cliff that will see a key
HIV drug and three combination medicines exposed to generic
competition in nine years time.
    "We'll have to increase by a bit the portion of what we sell
by ourselves and not just rely on others," CEO Isao Teshirogi
told Reuters in an interview.
    Shionogi tested the waters in the world's biggest drug
market last year with Mulpleta, a drug designed to prevent
excessive bleeding in patients who need surgery and have a lower
blood platelet count due to chronic liver disease. 
    It also plans to develop its own U.S. sales team for
cefiderocol, an antibiotic it hopes will gain approval this year
and which will be used as a last-resort treatment for patients
with infectious disease not cured by other antibiotics.
    "Cefiderocol is a drug that will only be used by specialists
at big hospitals and across the U.S., we're only going to need
50 to 70 medical representatives. That makes it a good next
entry point for us - something we can do under own steam," he
said.
    Shionogi declined to disclose its sales team numbers for
Mulpleta, a drug it expects will earn $12.3 million this year.
It has also not disclosed sales estimates for cefiderocol.
    Japan's No. 9 drugmaker by revenue is, however, also keen
not to bite off more than it can chew. 
    Teshirogi said while it might be possible to take on U.S.
sales of a drug like an HIV medicine with a team of 100-plus,
primary care market drugs that require teams of 400 to 500
people were another matter.
    An attempt at U.S. sales in 2013 for Osphena, used by women
who experience pain during sexual intercourse, became too
costly, as it was a primary care market drug and as it was the
only drug Shionogi had in women's healthcare at the time. It
licensed out Osphena to Canada's Duchesnay in 2017.
    Shionogi, which gains roughly half its revenue from
royalties, has notched up four straight years of record
operating profit and boasts an operating profit margin of 38%.
It also has promising drugs like newly launched flu-drug Xofluza
but the patent cliff for its HIV treatments will create an
earnings gap that will be hard to completely offset.
    HIV drug Tivicay and three combination treatments, which are
marketed by GlaxoSmithKline's  GSK.L  ViiV Healthcare Ltd,
accounted for a third of Shionogi's 364 billion yen ($3.4
billion) in revenue in the last financial year.  
    "The next few years are going to be key for Shionogi," said
Citigroup analyst Hidemaru Yamaguchi.
    The drugmaker currently has 23 drugs in clinical trials with
five of those trials having progressed to late-stage.
    In other moves to diversify its revenue stream, Shionogi has
partnered with U.S. startup Akili Interactive Labs Inc to
develop and sell two medical apps, one for ADHD and one for
patients on the autism spectrum.
    Japan has yet to approve apps designed to treat diseases or
disorders. By comparison, the U.S. Food and Drug Administration
gave its first nod for such medical apps in 2010.
    Teshirogi said Shionogi was keen to develop drugs made from
so-called mid-sized molecules such as peptides - an area that
few other drugmakers were looking at. Shionogi is working with
universities and had partnered with Japanese biopharmaceutical
firm PeptiDream Inc  4587.T  to conduct joint research.
    "I truly believe we're going to see two or three products
come out of these efforts that will help us counter our HIV
patent cliff," he said.

($1 = 107.9600 yen)

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 (Reporting by Takashi Umekawa; Editing by David Dolan and
Edwina Gibbs)
 ((Takashi.Umekawa@thomsonreuters.com;))