Challenges and Opportunities Facing the Life Sciences Industry

1
Challenges and Opportunities Facing the Life
Sciences Industry
MEDIC Conference PresentationNovember 13, 2006
2
Overview

• The medical device and biopharmaceutical sectors
  face similar challenges
• Coping strategies for both sectors are similar
• While opportunities differ in each sector, both
  have the potential for significant growth over
  the next decade

3
Top Challenges

• Pressures from payers to lower costs
• Exposure to lawsuits and product recalls
• Long development times and costs (gt1B in
  development costs)
• Low success rates (lt1 of investigated drugs go
  from preclinical to NDA approval)
• Higher costs for direct to consumer marketing
• Increased competition from foreign competitors
• Loss of patent protection for older
  products/patent disputes for existing products
• Dependence on blockbuster product sales (gt1B
  annual revenue)

4
Drivers of Growth
Below are some of the primary drivers of growth
in one or both sectors of the industry

• Graying population, with high expectations for
  treatment
• New technologies creating new product areas and
  expansion of existing ones
• Expanded support infrastructure (RD,
  Manufacturing)
• Increased funding from government and private
  initiatives
• Developing nations poised to become consumers

5
Coping Strategies
So how will the industry cope with the
opportunities and challenges?

• Relocation of RD to less expensive venues
• Use new technologies to lower costs and develop
  higher profit margin products
• Acquire companies that can feed the product
  pipeline
• Merge with peer companies to achieve critical
  mass
• Look to development/manufacturing partners to
  lower costs of development and manufacturing

6
Consequences for HR
What does this mean for you?

• International experience becoming more highly
  valued
• Greater emphasis on training and development
• Increased threat (or opportunity) of merger or
  acquisition