Tag Archives: GlaxoSmithKline

Flax Oil as the New Omega-3 Source

The recent ruling by Health Canada, the Canadian equivalent of the US FDA charged with overseeing food and nutrition, that approves the claim that flax diet reduces cholesterol, is expected to drive the market for flax seed and flax seed oil. The ruling, coming after two years of study following a claim for allowance regarding therapeutic benefits, followed after a meta-study examination of eight clinical studies using an average 40 gram daily diet of ground flax seeds in hypercholesterolemic patients. The metastudy concluded that both total cholesterol and LDL cholesterol were lowered in pooling data from the eight studies.

The implications for market expansion for flax are significant since in its ruling Health Canada also noted that 39% of all Canadians between the ages of 6 to 79 have unhealthy cholesterol levels. Canada has a population of approximately 39 million people; assuming 90% of them fall within this age range and assuming a diet of 40 g per day as recommended, this would result in a potential 220,000 tons of annual demand within Canada for health and wellness reasons.

Flax as a source of essential oils has over the past 10 years been flagged as an alternative to fish oils, based on their availability, cost to produce, and potential for higher purity extracts. However, it has lagged behind fish-derived omega-3 oils in terms of claims and marketing. This new ruling will undoubtedly strengthen flax’s competitive positioning in the market place.

The fish oil nutraceutical market is now over $1B in annual sales. Companies such as BASF have increasingly raised the stakes and benchmarks for this market with its acquisition in 2012 of fish oil omega-3 producer Pronova for $844M, and its subsequent acquisition of Equatec, another concentrated fish oil omega-3 producer for an undisclosed sum in order to gain access to its novel chromatographic technology to produce ultrapure oils. These come after BASF’s initial foray into fish oils via its acquisition of Cognis in 2010 for €3B.

It is of interest to note that BASF stands at the threshold of the pharmaceutical industry, as Pronova is the primary producer of GlaxoSmithKlines’ blockbuster drug Lovaza for the treatment of hypertriglyceridemia. Thus the line between food and pharmaceuticals continues to blur as we’ve noted before. A leitmotif we expect to see increasingly in the future is food as pharmaceutical; evolving along the path of; food to extract to increasingly purified and therapeutically active extract to final purified active ingredient. The recent ruling on flaxseed oil will certainly give BASF and others in the chemical and pharmaceutical industries a run for their money.

Divestment wave continues as pharma banks on delivery systems

The wave of divestures sweeping the pharmaceutical industry continues following the most recent announcements by SurModics and Pfizer*.

Beleaguered drug delivery company SurModics recently announced the sale of its pharmaceutical assets (such as injectable delivery platforms and biodegradable polymer implants) to Evonik Industries AG for $30 million. The move comes as no surprise following SurModics’ Q3 Earnings Call announcement, as well as the series* of layoffs* the company undertook over the past year. SurModics claims the move will allow it to recover from Johnson & Johnson subsidiary Cordis’ discontinuation* of “one-time blockbuster drug” Cypher, by focusing on growing its Medical Devices and In-Vitro Diagnostics (IVD) business units. SurModics faces an uphill task on the road to recovery with declining revenue from its profitable Medical Devices unit, and as the IVD unit faces stiff competition in the marketplace.

Generic and specialty drug company, Mylan, recently acquired the rights to Pfizer’s dry powder respiratory drug delivery system used to treat chronic obstructive pulmonary disorder (COPD) and other respiratory illnesses. While the $17.5 million sum Mylan will pay Pfizer may not seem substantial, Pfizer will earn “far more” in royalties from products Mylan is expected to develop and commercialize using Pfizer’s platform, especially when over 50% of the $34 million global respiratory and COPD markets comes off patent by the end 2016. While Mylan will initially use the Pfizer platform to produce generic versions of GSK’s asthma and COPD treatments, it will eventually develop its own brand product and additional generic products. This divestment comes on the heels of Pfizer’s sale* of its Capsugel platform, and the shuttering of its largest R&D plant in the U.K. as it struggles to slash $1 billion from its R&D budget. Expect Pfizer’s woes to continue when Lipitor comes off patent at the end of the year – although the profit sharing clause with Mylan will provide much-needed cash infusion. As Pfizer illustrates, drug delivery systems offer pharma companies a lifeline as traditional revenue streams dry up.

In the wake of declining revenues and patent expiries*, pharma companies like Pfizer will need to expand beyond their core business and seek additional revenue streams by turning to delivery systems. Considering this trend – as well as the increasing number of startups thirsting* for funding – clients have an opportunity to seek out promising technologies, whether through co-development partnerships or licensing new drug delivery platforms.

* Client registration required.

 

Kraft, GSK, and BASF announcements illustrate convergence of food, cosmetics, chemicals, and medicine

The distance between food, cosmetics, chemicals, and medicine keeps shrinking, as evidenced by several recent commercial announcements. In May, food giant Kraft and its partner Medisyn, which specializes in discovery of novel active ingredients, announced an expansion of their collaboration. Specifically, in addition to developing health and wellness actives, they’ll be developing additional compounds aimed at improving food quality, food safety, and product performance. Delivering functional actives in food products is meant to keep the company growing in the face of a general stagnation in conventional food and beverages.

Meanwhile, BASF recently said it would spend $3.8 billion to acquire Cognis, which supplies raw materials for pharmaceuticals, food and beverages, dietary supplements, and cosmetics – new markets that the chemicals firm wants to enter. Now comes word that GlaxoSmithKline’s (GSK’s) consumer products division is close to launching sports nutrition drink Lucozade in the U.S. The company’s consumer business offers a more predictable revenue stream than the larger but more volatile pharmaceutical unit.

What’s behind the convergence of these ostensibly separate industries? It’s the growing understanding that chronic, lifestyle-associated diseases like obesity and diabetes (and their opposites of lifelong health and wellness) require lifestyle products – not simply medicines, procedures, or healthy habits, but a combination of them all.

DSM’s CEO recently bemoaned the pharma-grade scrutiny that European regulators are applying to foods. But foods are increasingly part of a larger strategy (among individuals as well as corporations) for addressing aging, increasing affluence, and chronic conditions (see the November 18, 2008 LRBJ*). Specifically, that strategy combines food with over-the-counter medicines, nutritional supplements, oral care, and skin care. Moreover, established players in these fields are looking to escape competition from generic drugmakers like Teva and lower-cost petrochemicals from rising Middle East rivals (see the January 5, 2010 LRBJ*). As such, these aren’t opportunistic moves by GSK, BASF, and Kraft – they’re a harbinger of the companies’ and the industries’ futures. Rivals like Pfizer, Bayer, DSM, and Unilever should take note.

*Client registration required.