Magazine
#10. Wyeth
Five Giralda Farms
Madison, NJ 07940
Tel: (973) 660-5000
Fax: (973) 660-7026
www.wyeth.com
| Headcount | 49,732 | |
| Year Established | 1926 | |
| Pharma Revenues | $14,280 | +10% |
| Total Revenues | $18,756 | +8% |
| Net Income | $3,656 | +196% |
| R&D Budget | $2,759 | +12% |
| Drugs Approved/Launched | |
| Drug | Indication |
| effexor XR | panic disorder |
| tygacil | antibiotic /complicated infections, including drug-resistant bacteria methicillin-resistant s. aureus |
| enbrel | improve physical function in patients with psoriatic arthritis |
| Drugs Pending Approval | |
| Drug | Indication |
| desvenlafaxine succinate | major depressive disorder, vasomotor symptoms of menopause, fibromyalgia, neuropathic pain |
| lybrel | continuous contraception |
| bazedoxifene | postmenopausal osteoporosis |
| Drugs in Phase IIB and Beyond | |
| Drug | Indication |
| lybrel | premenstrual dysphoric disorder |
| pinaberel | endometriosis |
| bifeprunox | schizophrenia, Bipolar disorder |
| bapineuzumab | Alzheimer’s disease |
| lecozotan | Alzheimer’s disease |
| gap-486 | ventricular arrhythmias |
| myo-029 | muscular dystrophy |
| tygacil | community-acquired pneumonia, hospital-acquired pneumonia, resistant pathogens |
| 13-valent pneumococcal conjugate vaccine | pneumococcal disease |
| enbrel | asthma |
| pinaberel | rheumatoid arthritis |
| methylnaltrexone | subcutaneous for opioid-induced constipation in advanced medical illness, I.V. postoperative ileus |
| tru-015 | rheumatoid arthritis |
| rapamune | calcineurin inhibitor-free regimen, conversion in liver transplants and renal transplants |
| refacto | hemophilia A |
| temsirolimus | mantle cell lymphoma, renal cell carcinoma |
| hki-272 | breast cancer, non-small cell lung cancer |
| Top Selling Drugs | |||
| Drug | Indication | Sales | (+/- %) |
| effexor | depression | $3,459 | 3% |
| protonix | GERD | $1,685 | 6% |
| prevnar | pediatric vaccine | $1,508 | 43% |
| enbrel (outside N.A.) | rheumatoid arthritis | $1,084 | 59% |
| premarin | contraceptive | $892 | -2% |
| zosyn/tazocin | antibiotic | $760 | 19% |
| alliance revenues* | $1,147 | 45% | |
* Alliance revenues include North American revenues from Amgen’s sales or Enbrel, King Pharma’s sales of Altace, and J&J’s sales of the Cypher drug-eluting stent, for which Wyeth makes the API of the eluted drug.
Account for 74% of total pharma sales, up from 69% in 2004.
PROFILE
| THE LOWE DOWN Wyeth has an interesting distinction: it has the largest disconnect, among major companies, between its ranking in sales and its ranking in R&D spending. Whether you think that’s a bug or a feature sort of depends on whether you have your lab coat on or your nice suit. Actually, that’s been the rap on the company for many years, at least among research people like me—that the suit-to-lab-coat ratio is a bit on the high side. Of course, in some ways it’s not fair to pick on the company, because they’re only now emerging from the exciting world of Fen-Phen litigation. Now that they can be looked at under (semi-) normal conditions again, it’s clear that they’ve made some strong moves into vaccines and biologicals. They get a good share of Enbrel revenue, without having to make as big a deal out of it as Amgen does, and the Prevnar vaccine is doing well. But there’s always something. Their biggest seller, Effexor, is coming out of patent protection later this year, and the same thing is going to happen to Protonix soon. Suit or lab coat, Wyeth’s people are probably wondering by now what it would be like to work under less “exciting” conditions. — Derek Lowe |
The company enjoyed blockbuster results from its Enbrel markets (outside the U.S. and Canada), as that drug passed the $1.0 billion mark in 2005. Wyeth receives Enbrel royalty revenue for the U.S. and Canada markets from Amgen. Neither company will break out the exact amount of the royalty, but Wyeth’s total “alliance revenue”—which includes royalties from Enbrel, Altace (from King Pharmaceuticals) and Sirolimus (the drug used to coat J&J’s Cypher stent)—was up 45% to $1.1 billion in 2005.
Having adequate supplies has been the story of Enbrel, so Wyeth has worked to ensure that there’s plenty of the stuff in the years ahead. In September 2005, Wyeth opened its Grange Castle biopharma facility in South County Dublin, Ireland. The $2.0 billion site includes a drug development unit, a drug substance site and a drug product facility, and will be used to produce Enbrel, as well as Prevnar and the Tygacil, a broad-spectrum antibiotic that was approved by the FDA in June 2005 and the EMEA in May 2006.
Wyeth’s pipeline continued to produce last year, as the company moved a dozen new compounds into development for the fifth straight year. During 2005, Wyeth also began trials on eight new molecular entities and moved two projects into Phase III. We’ll see if the hard-charging style of executive vice president of R&D Robert Ruffolo, Jr. will pay off with new drug approvals. In December 2005, Wyeth filed an NDA for DVS-233 for the indication of major depressive disorder. This product is seen as part of the plan for “life after Effexor,” since that drug is already slowing down because of competition from both branded and generic antidepressants.
The pipeline was bolstered in December with a pair of new alliances. Wyeth bolstered its gastroenterology expertise by signing a development and commercialization pact with Progenics Pharmaceuticals. The companies will work on methylnaltrexone, a compound to treat opioid-induced side effects, including constipation and post-operative bowel dysfunction. The drug is in Phase III, and received favorable results earlier this year. The companies are working on three different dosage forms of the drug.
Wyeth also entered a discovery, development and commercialization alliance with Trubion Pharmaceuticals. The companies will work on biopharma products to treat inflammatory disease and cancer, including a Phase II rheumatoid arthritis drug. In July 2006, Trubion announced that it would go public, and that Wyeth intended to buy 20% of the stock at the initial public offering price.
The company has also extended existing agreements. In November 2005, Wyeth extended its neurological research pact with Curis and is expected to select a development candidate and file an IND within the next two years. In January 2006, Wyeth extended its AlphaVax agreement researching vaccines for infectious diseases.
Spring Forward?
Wyeth has a productive pipeline and (just barely) double-digit revenue growth, but the company is also engaged in a restructuring effort that has led to plant closures and 1,500 layoffs. Under the aegis of Project Springboard, Wyeth is emphasizing “innovation, cost savings, process excellence and accountability, with an emphasis on improving productivity,” according to a company statement, which added, “We are reviewing our production network to achieve optimal efficiencies and to reduce production costs for our global core products.”
As part of its restructuring program, Wyeth is closing down its Premarin facility in Rouses Point, NY. Diminished sales of the menopause treatment, following the controversy of a study on the health risks of hormone replacement therapy, was a key factor in closing the site. Wyeth also ended manufacturing at its Shiki, Japan site. In September, the company sold an inactive facility in Marietta, PA to GlaxoSmith-Kline for $40.2 million, which GSK plans to use for vaccine manufacturing.
Another component of the Springboard restructuring was the firing of 750 sales reps, who were replaced with 375 part-timers. Wyeth seems to have hidden any mention of it in its public archives, so I’m not sure how happy they are about the public report of that number. Still, the reports were in the press in June 2005, even if the company has used deliberately vague language in its descriptions of how many people were fired.
Project Springboard’s charges added up to $190.6 million in 2005, largely in severance costs, and will reach between $750 million and $1.0 billion in the next few years. Interestingly, I can’t find any indication of how much the company projects it will save in the long term. That’s typically a selling point for this sort of project. However, since a text search of Wyeth’s entire website for “springboard” yields zero results, I’m not sure how comfortable the company is with this initiative.
