Bold Bets - Pharmaceutical Executive

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Bold Bets
Serono is muscling its way into the US market with head-to-head trials and big marketing partners.


Pharmaceutical Executive


Reproductive Health. This franchise is Serono's founding cornerstone and the basis for its expertise in recombinant biological products. Serono developed its first hormone to help infertile women in the early 1960s and has been a global market leader ever since. Although the infertility market may ultimately be limited, Gonal-F (follitropin alpha) experienced 17 percent growth in 2003, with sales totaling more than half a billion. The unit's other products—Cetrotide (cetrorelix), Crinone (progesterone gel), Ovridrel (choriogonadotropin), and Luveris (lutropin alpha)—together generated another $67.5 million in 2003 sales.

Says Tewarie: "By providing patient-friendly products, such as the Gonal-F RFF Pen—the first and only prefilled and ready-to-use multidose FSH (follicle stimulating hormone) in the US—as well as patient services such as Fertility LifeLines, Serono continues to demonstrate our commitment to improving the patient experience."


On the Market
Serono's commitment to its reproductive patients can also be seen in its development of Luveris, which is used to treat infertile women with severe deficiencies of both luteinizing and follicle stimulating hormones—and took 12 years to gain FDA approval. The number of women who will benefit from this drug is only 2,800-5,600, but Firouz says return on investment was never a factor in the decision to bring it to market. Tewarie adds, "We recognized the additional endocrine needs of this special population of patients and developed recombinant human LH specifically for them as part of our continued commitment to advancing infertility treatment."

Metabolic Endocrinology. Although based on a single off-patent growth hormone, this franchise still represents about 12 percent of Serono's revenue. Saizen (somatropin) for pediatric growth hormone deficiency (GHD) was approved in Europe in 1988 and in the United States in 1996, generating $151.4 million in sales in 2003. The franchise got a big boost in 1996 when the drug was approved for AIDS-associated wasting under the name Serostim. In 2003 Serostim had global sales of $88.8 million. The growth hormone also earned two new FDA approvals in 2003: for adult GHD and for short bowel syndrome under the name Zorbtive.

"Serono is the only growth hormone manufacturer that serves three distinct therapeutic areas—pediatric and adult endocrinology, HIV/AIDS, and gastroenterology," says Sapirstein. "In gastroenterology, we have orphan protection for Zorbtive's use in short bowel syndrome. This orphan drug has truly changed some patients' lives this year, allowing them, in some cases, to go off intravenous parenteral nutrition completely."


Head to Head
In spite of a handful of competitors that already market a form of somatropin, the biggest threat to Serono's leadership position in this franchise could be a generic growth hormone from Sandoz/Novartis. Although the European Commission (EC) rejected Omnitrop, the generic somatropin had been recommended by the European Agency for the Evaluation of Medicinal Products, and Sandoz is appealing the EC decision.

Dermatology. Serono's newest product, Raptiva (efalizumab), is its first foray into psoriasis, an emerging therapeutic area for the company. The drug was developed by Genentech and Xoma, and Serono signed an agreement with Genentech in 2002 to market the product internationally outside the United States and Japan. "We think peak sales of Raptiva for Serono could be anywhere between $250 and $400 million three to four years from now," says Grant.

Neurology. This franchise—with the greatest sales—is Serono's newest area of expertise and is based on one main product: Rebif. The drug has been approved for the treatment of relapsing-remitting multiple sclerosis in more than 80 countries and had $819.3 million in sales in 2003.


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