Specialist
Former EVP at Theramex HQ UK Ltd
Agenda
- Pandemic impacts on the women’s health market and Theramex’s relative exposure based on portfolio composition and geographic exposure
- Theramex’s contraceptive, fertility, menopause and osteoporosis franchise analysis – key price and volume dynamics review and salient competitive threats
- Recent launches and in-licensing deals, including Livogiva (biosimilar teriparatide), Bijuva and Enzene Biosciences’ deal to develop and commercialise a biosimilar to Roche’s (VTX: ROG) Actemra (tocilizumab) in RA (rheumatoid arthritis)
Questions
1.
What impact did the pandemic have on the broader women’s health market and how exposed was Theramex to those pressures based on its geographic and portfolio composition?
2.
You mentioned France is a key geography for the company. Roughly speaking, how significant is Theramex’s reliance on France as a percentage of top line or EBTIDA?
3.
You mentioned that the pandemic impacted ability of sales forces go out and engage with customers, for example fertility clinics. How reliant is Theramex on its sales force to drive volumes? How promotion-sensitive is the company’s portfolio and what percentage of sales are driven via sales reps vs other distribution channels?
4.
Broad strokes, can we assume something in the order of 80% of Theramex’s sales are driven by promotion-sensitive products, or is the revenue base more diversified? Essentially, I’m looking to understand the magnitude of revenue rebound as the women’s health market opens up and sales forces can go back out to the customers.
5.
You highlighted France and Italy are markets where Theramex has a broad portfolio on market. How broad are the portfolios in geographies such as Germany or other key growth markets?
6.
Does Theramex have the necessary regulatory dossiers in place to launch and expand its UK portfolio beyond the HRT [hormone replacement therapy] patch it acquired from Janssen?
7.
How significant, in terms of revenue, is the base business with no international expansion opportunities? Might it be 20-30% of the top line? Is it more or less material than that?
8.
Has the pandemic simply delayed the process of launching new drugs in the UK and Germany, with the potential NPV broadly unchanged, or have there been consequences to this inability to launch over the past few years?
9.
A lot of fertility clinics were closed, in France at least, over the past few quarters. Do you expect procedures to have simply been delayed, so there will be a bolus of catch-up work, which will be a positive for Theramex? Or have the volumes simply been lost?
10.
There’s a lot of consolidation among fertility clinics with PE sponsors pursuing a buy-and-build strategy in certain regions. How do you think this is impacting Theramex’s fertility business? Is there a shift in customer pricing power or increased pricing pressure because of this customer consolidation? Are we seeing increasingly competitive tenders for example?
11.
By way of summary, according to public sources, Theramex has had a difficult 2020, with an estimated EBITDA decrease of 10% YoY. In light of everything we’ve discussed, how do you think the business has performed in 2021? Then, as a part two to the question, how sustainable is that performance going forward?
12.
You mentioned that some legacy, off-patent brands within Theramex’s portfolio could be facing new generic competition. What brands are you referring to here?
13.
Is it just Monazol [sertaconazole nitrate] or are there other legacy Theramex brands facing generic competition, whether already launched or in the future?
14.
You commented a couple of Theramex’s key products were out of stock during the course of the pandemic, according to French pharmacists. What do you think could have been the consequences of this given how critical reliability of supply is? Was this unique to Theramex, and did customers churn to competitors as a consequence? Did pharmacists or CERPs [coopératifs d’exploitation et de répartition pharmaceutique; cooperative for the exploitation and distribution of pharmaceuticals] search for alternative sources of supply?
15.
How strong is the Theramex commercial organisation across key regions such as France or Italy in terms of rep productivity, number of pharmacies covered and reputation, etc?
16.
Is it reasonable to assume the sales per FTE [full-time equivalent] would be higher than market average in France and Italy, given your comments that upwards of half of the sales force are from the original Theramex Monaco entity?
17.
Forgive me if I am being slow, but would the downsizing in France you referenced have hurt commercialisation for any brands within the portfolio in this geography?
18.
Based on the portfolio Theramex has in France and Italy, is there scope for further sales force rationalisation?
19.
Have there been any hangover effects from Theramex’s carve-out from the wider Teva business in 2017 and 2018? It seems it was a fairly complex operation based on previous Forum Interviews [see Theramex & Women’s Health – Strategic Positioning & Portfolio Analysis – 21 July 2020].
20.
How significant an issue does the supply situation remain today? We have heard about manufacturing issues and sourcing APIs [active pharmaceutical ingredients], especially for key brands such as Zoely. Has this been resolved now?
21.
Beyond the supply chain and the regulatory dossiers, which we discussed earlier, are there any other potential pain points or issues that have not been addressed since Theramex’s carve-out from Teva?
22.
Theramex has a new CEO, CFO and COO since the carve-out from Teva. Why do you think we’ve seen a changing of the guard in the C-suite? Secondly, what’s your view on the current management team?
23.
I’d like to move on to discussing the Theramex portfolio. How should we be thinking about base business erosion YoY and the extent to which Theramex needs to offset this with new product launches and BD&L [business development and licensing]?
24.
Could you expand on Theramex’s BD&L competencies and ability to acquire assets such as J&J’s HRT patch in the UK to drive growth? We’ve discussed the importance of BD&L in offsetting some of that base business erosion.
25.
How should we be thinking about Theramex’s ability to win licensing deals with biosimilar players given how competitive the market is? Teva, Sandoz, Stada and other large incumbents are all actively pursuing biosimilar BD&L. Many pure-play small molecule generic players are also considering moving into biosimilars to offset the price and volume pressures in their core markets, so one could argue the competition is only increasing. How successful do you see Theramex being in winning licensing deals vs any of the other players similarly wanting to diversify into, or grow their existing presence in, biosimilars?
26.
Beyond biosimilars, it seems Theramex is also shifting into the OTC [over-the-counter] and consumer health end markets via the acquisition of Femarelle. How successfully could Theramex shift into OTC to offset some of the price and volume pressures we’ve discussed?
27.
How large a growth-driver could Femarelle be for Theramex? Is this more of a nice-to-have product, or do you think this will be a significant driver for the menopause business?
28.
Sticking to the menopause franchise, what was Bijuva’s [estradiol and progesterone] level of uptake following approval in September 2021? Theramex licensed the ex-US rights from TherapeuticsMD, but it seems to be another HRT in a market that is reluctant to use such a therapy. What was the rationale here given your comments?
29.
How significant of a threat is Mithra’s E4 [Estelle] CoC [combined oral contraceptive], which has been approved, to Theramex’s contraceptive business?
30.
You mentioned Theramex wasn’t able to get drospirenone four milligrams. Who did? Who will be marketing that?
31.
How significant could the revenue erosion be after the Zoely patent expiry? How much prescription share could Theramex hold on due to its brand equity?
32.
How cost-sensitive are oral contraceptive consumers in the French and Italian markets? If a generic is launched at a 20-30% discount, for example, is that enough to drive a woman switch her contraceptive pill, or is there significant brand loyalty here?
33.
Earlier, you noted Theramex’s teriparatide biosimilar could be a growth-driver in osteoporosis. Can you expand on that? What are your expectations for Theramex’s Livogiva [teriparatide], given Gedeon Richter has a biosimilar in Europe, Terrosa [teriparatide], which has been approved since 2017? Additionally, UCB and Amgen’s Evenity [romosozumab] was approved in 2019, representing a new innovative treatment which teriparatide patients can be switched to, and Amgen’s Prolia [denosumab] is coming up to patent expiry too, so there may be additional biosimilar competition in osteoporosis.
34.
Looking at the fertility franchise, Theramex has Ovaleap [follitropin alfa] which compets vs Gedeon Richter’s Bemfola [follitropin alfa] and Merck’s Gonal-f [follitropin alfa]. What is your outlook for the biosimilar’s respective market shares?
35.
Theramex recently acquired ganirelix acetate from GP Pharm, its new biosimilar in fertility. There is some competition here, including Organon with Orgalutran [ganirelix], and Sun Pharma with Fyremadel [ganirelix]. On what basis is Theramex looking to compete vs these other ganirelix biosmimilars, and is this a growth-driver for the business?
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