Biotechnology giant Amgen Inc expects up to a quarter of its growth to come from Asia over the next decade, Chief Executive Officer Robert Bradway told Reuters.
The forecast marks a shift for 40-year-old Amgen, which still relies on the U.S. market for more than 75% of its sales, 30 years after it won U.S. marketing approval for its first drug, red-blood-cell-booster Epogen.”China and Japan are the second and third largest markets in our industry,” Bradway said in an interview on Monday on the sidelines of the JP Morgan healthcare conference in San Francisco. “In the case of China, it is a rapidly growing market. … Japan has an aging population and we expect that will be a growth market for us.”
Amgen, based in Thousand Oaks, California, late last year acquired a 20.5% stake in Beijing-based BeiGene Ltd in a deal to expand its presence in China.
In Japan, Amgen expects by the second quarter of this year to dissolve its current joint venture with Astellas Pharma Inc and begin for the first time to operate an independent marketing unit in that country.
Bradway said the Astellas venture is a model for what Amgen aims to do with BeiGene – “work on a basket of drugs together, then after a period of time, the rights would return to us.” Under the deal, BeiGene can retain rights to one of Amgen’s cancer products.
Bradway said Amgen drugs such as osteoporosis treatments Prolia and Evenity as well as potent cholesterol fighter Repatha are tailor-made for aging populations.
“Where there are therapies available to prevent disease, it makes sense for society to identify people who are at risk,” Bradway said. “The alternative is to fix that which is broken.”
Amgen, which is facing more U.S. competition for older biotechnology drugs for which “biosimilar” versions are becoming available, needs new sources of growth.
Bradway said Amgen will announce its 2020 financial outlook on Jan. 30, when it presents fourth-quarter 2019 results. He said the company is unlikely to return to its previous pattern of issuing five-year financial plans, due in part to “a much more uncertain environment.”
In addition to biosimilar competition, pharmaceutical companies are grappling with backlash from politicians and consumers to the industry’s practice of routinely hiking list prices, and then giving some of that money back to health insurers in return for preferential reimbursement terms.
For 2019, Amgen forecast that its global net sales prices would drop by a rate in the mid-single digits.
Bradway said Amgen continues to see growth in Europe, where product sales volumes are increasing by rates in the high-single-digits or low-double-digits.
As in most European countries, the governments of both Japan and China negotiate prices for pharmaceuticals paid for by state-operated health plans.
Bradway said Amgen does not currently have any of its drugs authorized for coverage on China’s National Reimbursement Drug List, but the company does plan to apply to have drugs like Repatha and leukemia treatment Blincyto approved for inclusion.
This article was first published on Reuters