One drug firm's no-research strategy

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Pharmaceutical Representative

Medeva's tale is a small-company success story.

If it's true that there will be less than 10 major players in the drug industry someday, executives at Medeva Pharmaceuticals aren't too concerned. In fact, their company is relishing the recent spurt of consolidation.

Medeva Pharmaceuticals, Rochester, NY, is the U.S. drug branch of Medeva p.l.c., an international company based in Britain that searches out late-stage development projects and existing products that are not being fully exploited by other companies. Medeva then launches the products through its own infrastructure.

The time is right for a company like Medeva. Current developments in the pharmaceutical industry, particularly consolidation, are offering Medeva many attractive business opportunities, particularly in the acquisition and licensing area.

"Consolidation at the top works in our favor," said Bruce Simpson, president of Medeva Pharmaceuticals. "More companies are reviewing their pipelines because the markets are so dynamic. We want to take some of these late-phase development projects and bring them to market.

"In addition, there are a number of products with sales of less than $50 million that don't get over the embarrassment threshold for a large company. These products are insignificant to major drug companies that choose to focus on larger brands."


Many of these big companies are also pumping most of their resources into major therapeutic areas. "Larger companies may neglect these smaller disease markets because they are not economically feasible," Simpson said.

Medeva's small size is one of its biggest assets, Simpson said. "Big companies have more bureaucratic infrastructure that may slow them down. But we're able to react more quickly to the changing marketplace."

Sales strategy

Being small also provides a sales and marketing advantage, according to Tom Parker, vice president of sales and marketing.

"As a small organization, we have an opportunity to get closer to the customer and make it mean more than just lip service," Parker said, adding that both he and Simpson often spend time in the field or on the phone talking with customers.

The company has 155 salespeople in its general U.S. field force who are assigned to one of 13 geographically defined business centers. Medeva also has a 22-member institutional field force and is currently building it own flex-time sales force of 75 people. Medeva's three sales forces currently promote 12 products.

Medeva salespeople are currently involved in a copromotion with Ciba Vision Ophthalmic for Livostin,™ although the Medeva executives were not able to confirm at press time that the agreement would be in place for 1997. However, Medeva is talking with other companies about copromotion opportunities.

Future outlook

This year, Medeva wants to enhance its presence in four markets: congestive heart failure, cough and cold, allergy and anti-obesity. The company's aim is to "be a big player in small, niche markets," Simpson said.

Following its strategy, the company recently bought Tillotts Pharma AG, a Swiss drug company that develops drugs and delivery systems for lower gastrointestinal products. "It was a perfect acquisition because the gastrointestinal market is dominated by only 6,000 physicians," Simpson said. "By the end of the decade, we hope to be a major player in this market."

While Medeva's strategy may seem small time to the Big 10 players, the company executives are confident their strategy is solid.

"In the future, there will be less than 10 major pharmaceutical companies and we won't be one of them, nor do we have the desire to be in their ranks," Simpson said.

"It takes an incredibly large amount of money to play in the research end of the business. If a company is not spending $500 million to $1 billion a year on research, it might as well stay out of the game because Pfizer, Merck and the others will blow it away. But that's not our strategy. We're more concerned with search and development than research and development." PR