The fact is, trends matter. On this, Mckinsey Director Peter
Bisson is emphatic.
Global forces: An introduction
, Bisson argues the importance to successful companies of
identifying and acting on trends:
Systematically spotting and acting on emerging trends helps
companies to capture market opportunities, test risk and spur
Today, when the biggest business challenge is responding to
a world in which the frame and basis of competition are always
changing, any effort to set corporate strategy must consider
more than traditional performance measures, such as a company's
core capabilities and the structure of the industry in which it
Managers must also gain an understanding of deep external
forces, and the narrower trends they can unleash. In our
experience, if senior executives wait for the full impact of
global forces to manifest themselves at an industry and company
level, they will have waited too long.
Or as Dick Clark, host of American Bandstand and successful
entrepreneur would have it,
I don't set trends
. I just find out what they are and exploit them.
Of course, there are trends, and there are fashions. Fashions
are short term vogues with no real lasting impact, here today gone
Business trends are long term in scope and influence,
fundamentally changing the way business is conducted, and
presenting significant opportunities to those companies that can
harness them to their own advantage.
This article will discuss the major trends that are redefining
the global healthcare industry, and why Unilife Corporation (
) is better positioned than any other therapeutic drug delivery
company to exploit and capitalise on them for the long term benefit
The First Trend: Personalized Medicine and Patient
To paraphrase the old saying, all roads in the new healthcare
paradigm lead to the Third Place. The first of these roads is the
trend to personalised medicine and patient self-injection.
Traditionally, injectable drug therapies have always been
delivered at hospitals, doctor's surgeries or other private
healthcare clinics. That is all changing with the rapid growth of
complex biologics and user-friendly, patient-centric injectable
The trend is so pervasive it is predicted that within a decade
over half of all healthcare will be delivered outside traditional
healthcare facilities. Drug delivery platforms such as Unilife's
wearable injectors and auto injectors, combined with emerging
therapies for many chronic disease conditions - especially where
patients may be challenged with strength or dexterity issues -
including rheumatoid arthritis, multiple sclerosis and cancer, will
empower patients to self-inject their personalized medicine at
their own convenience, wherever they happen to be.
According to a report released last year by
Pharma firms are now looking to collaborate with the right
delivery device partners as a number of rapidly changing factors
across the pharmaceutical landscape converge and create the
demand for alternate drug delivery technologies.
Says EY Global Pharmaceutical Leader,
Whether we are talking about home health, aging in place, self
management, smart phone health apps, strip mall clinics, the
consumerization of medical devices or the medicalization of
consumer devices - health care consumers are taking more control
and responsibility for the quality, timeliness and insights
necessary to stay healthy or manage the implications of their
Indeed, even the traditional view of the patient is changing,
with the focus shifting from disempowered patients who need
treatment, to sophisticated healthcare consumers who are
increasingly informed - and empowered - by rapid advances in drug
delivery technology and drug discovery to take control of, and
responsibility for, their individual healthcare situation.
In terms of patient self-injection, the delivery device is now
the critical element of the drug-device combination. Far from being
yesterday's necessary, but often feared adjunct to the treatment
process, today's drug delivery device - with its attractive
personalised industrial design, functionality and ease of use -
becomes the user interface between the pharmaceutical company and
So far as the self-injecting patient is concerned there is no
best in class drug without a safe, convenient, easy to use - and
disposable - best-in-class device.
This is the key point for investors to understand when
benchmarking Unilife's platform technologies against others in the
As the patient user interface, the superior functionality and
ergonomic design of Unilife's delivery systems - and the benefits
they provide to the self-injecting patient in terms of safety,
convenience and ease of use - are key differentiators that will
drive both patient acceptance and physician preference in writing
prescriptions, which in turn will drive market share and revenues
for both Unilife and the pharmaceutical companies who choose to use
Unilife delivery systems.
With its comprehensive range of patient-centric, intuitive to
use technology platforms for self-injection including prefilled
syringes, disposable and reusable auto-injectors, and wearable
injectors, Unilife is at the vanguard of the global trend to
personalized medicine and patient self-injection.
The Second Trend: The Shift to Complex Biologics
A biologic drug is comprised of living cells - molecules - that
are created by biological processes, whereas traditional drugs are
manufactured by chemical synthesis through the combination of
specific chemicals in an ordered process. Biologics are extremely
complex and often highly viscous meaning they need to be delivered
in higher volumes due to the need to dilute them sufficiently to
enable patient injection.
By way of example, water has just two molecules, yet a single
biologic drug can have anywhere between 50,000 - 100,000
In a recent report,
Re-inventing the Hypodermic Syringe, A Market Ripe for
state that in the past five years the drug market has been
characterized by a strong shift away from small molecules and
toward large molecules and biologics for development.
The reasoning is simple. Biological drugs offer greater target
specificity, improved safety profiles, and open up new
possibilities in disease treatment and prevention not addressable
with conventional therapeutics. As such, they are an attractive
addition to the pharma portfolio, commanding a premium price with
reduced competitive pressure, especially from the generic threat
that looms for small molecule drugs.
In 2000, just two of the Top 20 pharmaceutical products sold
in the US were biologics.
By 2016, 10 of the 20 leading US drugs by sales, and seven
of the top eight, are expected to be biologics, whose annual
sales are forecast to top about $50 billion.
Industry sources indicate that there are over 1,000 biologic
drugs currently coming through the R&D pipelines of US pharma
companies alone - with over 3,000 in the global pipeline. Within
five years, half of all marketed drugs are expected to be
Ernst and Young Life Sciences Division
Emerging technological developments, evolving patient needs
and global demand for reduced healthcare costs are significant
high-level trends that would see the continued emergence of
biologics as a powerhouse in the pharmaceutical industry.
Dr Kenneth Kaitin, Director of the
for the Study of Drug Development, agrees. The pharmaceutical
industry, especially Big Pharma, has dramatically shifted its
R&D focus from its historical concentration on small molecule
drugs to include a rapidly increasing number of biotechnology
The transformation of big pharma has been driven as much by
new technologies that have enabled development of new products
that improve disease outcomes and command high prices, as by the
expiring patents on many top-selling small molecule drugs.
One of the new technologies driving this change is wearable
injectors which provide the mechanism for pharmaceutical companies
to deliver increasingly complex high-volume biologics in a safe,
convenient, patient-friendly manner that helps ensure patient
compliance with accurate drug dosage administration.
Because biologics are highly viscous and delivered in higher
volumes than traditional drugs, in most cases they require a
sub-cutaneous injection. In turn, sub-cutaneous injections can only
be safely and effectively delivered over a period of time - as
opposed to a single quick jab - otherwise the drug will literally
leak out from under the skin. This gives rise to the wearable
injector, where the patient can safely self-administer the required
drug dose over a period of time at their own convenience.
Under an agreement signed last year with MedImmune, the drug
development arm of global giant Astra-Zeneca (
), Unilife became the first injectable drug delivery company in the
world to sign a commercial Supply Agreement for wearable injectors
with a Top 10 pharmaceutical company.
In recent shareholder presentations, Unilife CEO Alan Shortall
confirmed that the agreement with MedImmune/Astra-Zeneca was the
first of several that will be signed in coming months from
Unilife's platform technology for wearable injectors.
The Third Trend: Product Differentiation and Life-Cycle
At its most basic level product differentiation is a strategy
for strengthening product pipelines and life-cycle management, and
Traditionally, pharmaceutical companies could rely on
established brand names and long term patent protection to achieve
required product differentiation and profit outcomes. The most
common strategies of product differentiation were new dosage forms,
fixed drug combinations and new indications.
Today that is no longer the case.
Product differentiation is now an essential element of all
pharmaceutical companies drug development, regulatory approval,
sales and marketing and life-cycle management programs.
As the delivery system becomes the focal point of product
differentiation, commodity-type delivery systems become dinosaurs -
a dying breed.
Let's be clear about this - Unilife is no dinosaur, (as much as
those holding a short position might wish it to be!), nor it is in
competition with the commodity-type delivery devices.
Instead, Unilife is a new breed of drug delivery company carving
out an increasingly influential and powerful position as market
leader in the new world of injectable drug therapies.
Unilife's platform of wearable injectors is a classic example of
innovative, disruptive technology enabling pharmaceutical companies
with their product differentiation strategies.
With over 100 hundred issued patents - 200 pending - embracing
multiple platform technologies covering all aspects of injectable
therapies for existing and pipeline drugs, particularly complex
biologics, Unilife is uniquely positioned to assist pharmaceutical
companies with their Product Differentiation strategies.
This is a high-value proposition for Unilife investors.
Because when a pharmaceutical company wants to modify an
existing device from Unilife's platform technologies for their own
specific requirements, a new patent issues.
This is a critical competitive advantage for pharmaceutical
companies wanting - and needing - to differentiate their products
for the long term, and why Unilife is in the enviable position of
being able to sign 10, 15, and even 20 twenty year commercial
As product differentiation becomes an increasingly important
pillar in the long term success of pharmaceutical companies'
injectable drug therapies in the global market, so too the inherent
differentiation of Unilife's unique technology becomes an essential
element in Unilife's long term success.
Product Life-Cycle Management
Abbott Laboratories strongly believe in life-cycle management,
with one of the most important things being the ability to listen
to the data and change gears when the opportunity arises. In a
recent report, "
Can a Drug Live Forever
?", Dr John Leonard, CSO and SVP Pharmaceuticals Research and
Development at Abbott Laboratories, had this to say about
) has a development plan and when we proceed down that road map,
we are always thinking what our options are at every stage of the
game. The program itself has the life-cycle notion fully
integrated into it. There is not a step that says 'Now we do
lifecycle management.' We look at what all the options are along
the way to make the drug available for more patients, to make it
better tolerated, and to make it better delivered. All that falls
into lifecycle management.
Once upon a time product life cycle management was virtually
unheard of as drug companies could rely on deep pipelines for the
launch of the next blockbuster, continued revenue growth and
All that changed with the rise of generics and bio-similars, and
the emergence of a more regulated and increasingly specialized
market where increasingly sophisticated drug therapies are being
developed to treat a wider range of specific disease
Combined with a dramatic increase in the cost of discovering and
developing new compounds, and successfully bringing them through
the regulatory process to market, this gave rise to the concept of
Product Life-Cycle Management as a critical element of
pharmaceutical companies sales and marketing strategies.
Best Practices LLC
is a research company that conducts work based on the principle
that organizations can chart a course to superior economic
performance by studying the best business practices, operating
tactics, and winning strategies.
Says CEO, Chris Bogan:
I believe that the pipeline deficits of some of the larger
companies have gotten so big that it has forced them to begin to
think more about how to handle life-cycle management well. Our
emerging body of work is suggesting that life-cycle management is
something that, ironically, should be done throughout the entire
life cycle, not just at the end when they are three, four years
out from patent expiration and they are panicked about a large
successful product falling off.
It is no longer sufficient to bring a drug to market then sit
back and watch the rivers of gold flow into the corporate coffers.
Maintaining market profile, widespread user acceptance and user
preference is equally, if not more, important.
Successful product life-cycle management strategies involve all
aspects of a drug's 'life' - from discovery, clinical development,
regulatory approval, through to eventual sales and marketing - that
increase the value and extend the life of the drug.
For years drug delivery technology has been overlooked,says
John Fraher, president, North America, Eurand. But pharmaceutical
companies are getting better at using drug delivery companies.
We're beginning to see a significant increase in the
incorporation of drug delivery into research and development.
One of the main reasons for the growth in alternate drug
delivery systems is that drug delivery is a versatile life-cycle
management tool. The application of drug-delivery technologies can
provide companies with technological barriers to generics, extended
patent protection, market exclusivity of at least three-plus years,
new indications and labelling advantages, pricing options, and
Additionally, and more importantly, drug delivery technology
offers significant patient benefits, such as reduction in dosing
frequency and side effects and the development of optimal dosage
forms for certain disease states and patient populations, such as
the elderly and children.
What better examples of this than the recent Supply and
Development Agreements Unilife signed with Sanofi-Aventis (
), MedImmune and Hikma Pharmaceuticals (
), the Clinical Supply Agreement with Novartis (NVS) for targeted
organ delivery, or the agreement signed with an as-yet unnamed
global pharma for Unilife's Ocu-Ject technology for delivery of a
targeted injectable therapy into the eye?
As Unilife's unique platform technology becomes increasingly
embedded into the drug development, regulatory approval process and
product differentiation/life-cycle management strategies of
pharmaceutical companies, so too pharmaceutical companies better
understand and become more comfortable with the benefits of signing
long term commercial Supply Agreements with Unilife.
What we are seeing now is the emergence of multiple symbiotic
relationships between Unilife and its partners that are tailor-made
for the biggest emerging trend of all in the global healthcare
market - The Third Place in Healthcare.
The Fourth Trend: The Emergence of The Third Place in
As Ernst &Young's Global Pharmaceutical Sector Leader,
Carolyn Buck Luce is responsible for overseeing strategy, thought
leadership, resourcing, learning and solutions for the firm's life
science clients. With over two decades experience in the Life
Sciences Industry, she has this to say about the importance of the
emergence of the Third Place In Healthcare:
Life Sciences companies are at a critical juncture where they
must move beyond simply experimenting with patient engagement
around the margins and ratchet up their investment in innovative
business models that build enduring relationships with their
customers. Successful companies will marry their deep
understanding of their medical science with their total
commitment to health outcomes and individual consumer preferences
to deliver on the promise of personalized medicine.
The healthcare system - how healthcare is produced, delivered,
consumed and paid for - is moving from just the two pillars of
the doctor's office and the hospital to the third place -
anywhere the patient is, any time, any where.
Instead of organizing the business model around the pill, the
future of healthcare for life sciences companies is to extend
their business models to the ultimate customer, the patient, and
be focused on increasing their health outcomes at an economic
benefit to health systems.
In their annual report,
: The Third Place, HealthCare Everywhere
", analysts with EY Life Sciences Health unit explained why:
Healthcare costs are becoming unsustainable, in large part due
to a chronic disease epidemic fuelled by unhealthy lifestyles,
aging populations and increasing standards of living. To bring
costs under control and improve health outcomes, patients and
other stakeholders of the health care system will need to change
To enable these behavioral changes, the epicenter of the
health care system is shifting from the two places in which
health care has traditionally been produced, delivered,
consumed and paid for - the hospital and the doctor's office -
to a third place: the patient.
Patients have grown increasingly comfortable with empowering
technologies and are taking a more active role in managing
their health. They are demanding a different health care
delivery model that will reach them wherever they happen to
Above all, the Third Place promises to change the game in
health care by making costs more sustainable and providing new
opportunities for growth and value creation."
Even more revealing, especially for Unilife, in the same report
EY analysts state:
Although the trends are clear, it is very difficult for
large, mature incumbents to disrupt their own business
For companies to be successful they must:
Move quickly to out-innovate the competition.
Think different to find untapped surpluses in other
Follow the value not the money, and start by changing
the. value proposition rather than focusing solely on the
Remember that moon shots matter, and that a clear call to
action can set strategic direction, engage talent and align
resources and activities
Moreover, companies need to significantly extend their business
models to be experience-focused with personalization, mass
customization - and an increased focus on industrial design.
This is exactly what Unilife is doing and what their competition
- the large, mature incumbents - are not doing. It is also why CEO
Alan Shortall is adamant that Unilife is eating the competition's
lunch and will continue to do so for the foreseeable future.
Make no mistake - the Third Place in Healthcare is no passing
fad. It is a mega-trend fundamentally changing the way the entire
global healthcare industry operates, from the biggest
pharmaceutical companies down to the individual patient having a
coffee with friends at Starbucks while self-injecting their
personalised drug therapy with a Unilife wearable injector.
Unilife has embraced this mega-trend like no other drug delivery
company and is aggressively pursuing the significant financial
rewards on offer.
Nowhere is this more evident than in Unilife's unique B2B
The Fifth Trend: Unilife's Business-to-Business Marketing
In a word, Dr Ramin Mojdeh, Unilife's Chief Operating Officer,
Before joining Unilife he spent nearly two decades in the global
healthcare industry with multi-nationals Becton Dickenson (BDX), GE
Healthcare and Boston Scientific (BSX). In a succession of
increasingly senior executive roles - including Vice President and
GM at Becton Dickenson - Dr Mojdeh's responsibilities covered the
entire spectrum of medical devices including design, development,
manufacturing, business development, and sales and marketing of
multiple therapeutic and diagnostic medical devices.
As BD's VP Research and Development, he led technology,
innovation, product development, and commercialization across all 4
businesses in the BD Medical segment - Medical Surgical Systems,
Diabetes Care, Pharmaceutical Systems, and Ophthalmic Systems -
with combined annual revenue of over US$4 billion.
In terms of executive talent, Ramin Mojdeh is as blue chip as
Yet he is not alone at Unilife. An adherent to the discipline of
empowering employees to achieve their full potential, CEO Alan
Shortall has brought together a team comprising many of the best
and brightest in the medical devices world to spur innovation and
drive the company forward.
If a company is defined by the calibre of its people, Unilife is
top of the class, rapidly garnering a deserved reputation among its
peers - competitors and clients alike - as a company
setting new standards in research innovation and product delivery
in the world of injectable therapeutic drugs.
Arguably, Ramin Mojdeh's most significant achievement while at
Becton Dickenson was to create a blueprint for a new, disruptive
business model - one which focused on developing unique injectable
drug delivery devices in response to the specific requirements of
pharmaceutical companies, then selling them B2B on multi-year
Becton Dickenson - a large, mature incumbent perhaps struggling
to disrupt their own business model - didn't understand the
benefits of Dr Mojdeh's foresight, and weren't interested.
To say that joining Unilife was a coup for Unilife and a
significant loss for Becton Dickenson is an understatement.
Happily for Unilife shareholders, Becton's loss is Unilife's
gain. Not only is Unilife disrupting the drug delivery/medical
devices industry with their creative thinking and ground-breaking
design, but with their proven ability to sign long term 10, 15 and
20 year commercial agreements, they are also disrupting the
traditional way pharmaceutical and injectable drug delivery
companies do business.
For investors and potential investors it is worth noting that
the recent long term agreements signed by Unilife are not once-off
random events. They are significant commercial partnerships entered
into with the future very much in mind, partnerships that were -
until recently - unheard of in the traditional medical
The commercial reality is that Unilife is creating a new way of
doing business - the new normal.
Why is this possible?
Firstly, because Unilife is so embedded in the internal and
external processes of their clients - from initial consultation
through to inking of long term commercial contracts - it is in the
interests of all stakeholders for Unilife to be a strong and
Secondly, Unilife has proven across the entire organisation that
they have all the necessary expertise - research, design,
development and production - to satisfy the most stringent
requirements from some of the biggest and most powerful
organisations in the world - the pharmaceutical companies.
Thirdly, Unilife are unfailingly responsive to meeting and
satisfying the unmet needs of their clients, and committed to
delivering exactly what they want today, and in the years to
That is why global giants like Sanofi-Aventis, MedImmune/Astra
Zeneca, Hikma and Novartis are increasingly comfortable choosing
Unilife as their preferred partner for their injectable drug
The most exciting - and intrinsically valuable - aspect of
Unilife's B2B model is that it cuts out all the traditional
stakeholders - hospitals, medical practitioners and private
Accordingly, virtually none of the traditional go-to-market
costs one normally associates with medical device and
pharmaceutical companies, reside on Unilife's balance sheet.
Because Unilife deals directly with their clients - B2B -
virtually ALL go-to-market costs - fill-finish, regulatory
approval, packaging, advertising, sales and marketing, and
distribution - are carried by the pharmaceutical client.
And if that's not enough to make investors - and potential
investors - sit up and pay attention, so eager are pharmaceutical
companies to work with Unilife and access their technology, they
are willing to pay upfront license fees and a significant portion
of the annual development costs to ensure their devices are brought
to market in a timely and efficient manner.
This is why CEO Alan Shortall can talk about blended margins of
40% across Unilife's entire product range of platform technologies,
and why Unilife is such an attractive investment proposition going
Unlike Dick Clark, Unilife is not merely identifying a trend and
exploiting it. They are creating the trend and owning it to their
considerable competitive and financial advantage, and the benefit
of all shareholders.
All these trends - patient self-injection, the development of
complex biologics, reduction of healthcare costs, product
differentiation, life-cycle management and the emergence of the
Third Place in Healthcare - are fundamental and permanent changes
in how the global healthcare industry is operating now, and will
continue to operate in the future.
In this new paradigm - as a
, innovative organisation - Unilife has first-mover advantage. With
its B2B business model it is redefining how the market operates.
The long term supply and development agreements with global leaders
Sanofi-Aventis, Medimmune/Astra-Zeneca, Hikma and Novartis are just
the start - persuasive evidence that the B2B model works - and that
a new commercial reality is in place.
For Unilife shareholders the force of these fundamental changes
are converging at exactly the right time. Not only is Unilife at
the epicenter of this convergence, they are actively partnering
with the global pharmaceutical industry and driving it forward to
create a new commercial reality.
In so doing, Unilife Corporation becomes a compelling long term
value proposition for the astute investor.
Last - but not least - if anyone doubts what Unilife is doing,
they should visit their HQ in Pennsylvania.
There they will not find an empty Chinese factory bereft of
people and products.
Instead they will find a state of the art facility populated by
what is arguably the finest, most concentrated pool of talent in
the world of injectable drug delivery systems - industry leaders
across all disciplines many of whom have come from Becton
Dickenson, Medtronic, Boston Scientific, Johnson & Johnson,
West Pharmaceutical, Sanofi, Stryker and St. Jude Medical - who are
creating a world class company that is building an unassailable
position in the injectable drug delivery market.
I am long UNIS. I wrote this article myself, and it expresses my
own opinions. I am not receiving compensation for it. I have no
business relationship with any company whose stock is mentioned in
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