Shire's CEO, Angus Russell, says that he is comfortable that the company's niche in orphan drugs is a safe place. Shire has grown the share of revenues that orphan drugs occupy in its own portfolio from less than 5% to more than 30% in the past three years.
Russell is confident in the orphan business model as an alternative to the blockbuster model (which seems to be coming to an end as an option) will sustain Shire. This is true even if larger competitors like GSK or Pfizer enter the orphan space - or Sanofi is successful in buying Genzyme. That's because orphan drug status confers market exclusivity - 10 years in the EU and Japan and 12 years in the USA.
Shire has been able to establish a position in Fabry's disease with its drug, Replagal, and in Gaucher's disease with Vpriv - successfully competing against Genzyme's Fabrazyme and Cerezyme respectively. Of course, this is largely due to Genzyme stubbing its toe in a major way with the manufacture of both their products - which opened the door for Shire's entrance to these patients.
Russell also thinks the Big Pharma competitors will need to learn how to compete in the orphan markets which is not like competing in the larger global markets with their large patient populations. Russell notes that 'we work with a very tiny, discreet patient population." Selling orphan drugs is a very patient intimate selling and servicing process. See WSJ.
In that process, there is safety with the Shire.
Posted by Bruce Lehr November 22nd 2010.
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