PDI Wants To Help Small Pharma Develop Products In-House
This article was originally published in The Pink Sheet Daily
Executive Summary
Contract sales provider wants to diversify into small pharma services as big pharma cuts back outsourced sales reps.
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PDI will broaden its sales services to target the commercialization needs of emerging pharmaceutical companies, the company told "The Pink Sheet" DAILY Nov. 8. The Saddle River, N.J. sales and marketing services provider plans to transform itself into "a healthcare commercialization partner that can provide the innovative contract sales offerings big pharma is seeking and the full commercialization expertise emerging pharma needs," CEO Michael Marquard said during a same-day third quarter earnings call. The decision to diversify into emerging pharma services has been driven by market dynamics, the company explained. PDI revenues have taken a major hit as three big pharmaceutical clients - AstraZeneca, GlaxoSmithKline and Sanofi-Aventis - declined to renew sales contracts during 2006 (1 (Also see "Sanofi-Aventis Ends PDI Sales Contract" - Pink Sheet, 25 Oct, 2006.)). In an interview, PDI Exec VP-Corporate Development Stephen Cotugno said that PDI would like to "convince [small and emerging pharmas] that [with] everything we can do for them, why don't they keep the drug and not out-license it, because generally when you license a product away to big pharma you're really giving away the store, and you've really lost most of the future economic value." PDI plans to provide emerging pharmas services such as "marketing research, sales force analytics, key opinion leader services, maybe publication planning," Cotugno said. "If we can provide them services early on, before the drug is approved, when it comes closer to the time it's approved, we also will talk to them about the sales force services that we have and give them the option instead of out-licensing the product to launch it on their own," Cotugno explained. During the earnings call, Marquard noted PDI "expects [that] acquisitions will be a key component of providing these expanded sales and marketing services." He also said PDI's new emerging pharma business would call on Pharmakon, an audio conferencing and marketing company it acquired in 2004, for best practices (2 (Also see "PDI Expands Into Physician Audioconference Marketing With Pharmakon Acquisition" - Pink Sheet, 27 Aug, 2004.)). PDI announced Nov. 6 that David Stievater would join the company as its new Senior VP-Emerging Pharma. Stievater was previously a member of the executive team at ImpactRx, a provider of proprietary physician data for measuring pharmaceutical promotional effectiveness. When asked about the decision of big pharma clients not to renew contracts with PDI, Marquard assured analysts "there's no smoking gun, if you will, in the quality area." Those "clients that we worked with are among our greatest advocates right now and are very willing to speak about the quality of the team and their relationship." For the quarter, PDI's net revenues fell 21% to $183.4 mil., compared to $226.9 mil. over the same period in 2005. -Shirley Haley ([email protected]) |