Therapeutic focus - Novartis set to dominate eye care market

Analysis

If Novartis’ move to consolidate its hold on Alcon is successful, the addition of the world’s largest maker of eye preparations will give the Swiss pharma giant a considerable hold on the global eye care market. According to EvaluatePharma’s Peer Group Analyzer, the merger will give the Swiss pharma giant a substantial 34% share of this sector by 2014, leaving the other players in its wake (see tables).

As the analysis below reveals the growth predicted for this area of the market, largely driven by an ageing population, is not as pronounced as areas such as oncology or diabetes. However, with 4% a year sales growth forecast until 2014, the field is certainly proving tempting to a handful of companies who look set to maintain their dominance of this field, and others such as Sanofi-Aventis, which with its recent acquisition of Fovea clearly sees opportunities in this sector.

Biggest players in eye preparations market 
Total Rx and OTC sales ($m) Market Share Market Rank
2009 2014 CAGR 2008 2014 2009 2014
Novartis-Alcon 3,421 4,590 6% 30.5% 34.1% - -
Alcon 2,200 2,865 5% 20.9% 21.3% 1 1
Allergan 1,960 2,603 6% 17.5% 19.4% 2 2
Novartis 1,222 1,725 7% 9.6% 12.8% 4 3
Roche 1,063 1,421 6% 8.2% 10.6% 6 4
Santen Pharmaceutical 1,066 1,247 3% 8.4% 9.3% 5 5
Bausch & Lomb 853 1,182 7% 7.4% 8.8% 7 6
Pfizer 1,719 692 (17%) 16.4% 5.1% 3 7
Merck & Co 606 650 1% 8.4% 4.8% 8 8
Bayer - 362 - - 2.7% - 9
Regeneron Pharmaceuticals - 325 - - 2.4% - 10
Total Market 10,981 13,450 4% - -

Source: EvaluatePharma

Novartis and Alcon’s dominance of this market will be secured by several key products. These include Novartis’ Lucentis, for macular degeneration, Alcon’s glaucoma treatment Travatan, and Patanol, for eye inflammation. Still, Alcon’s strength, and probable attraction to Novartis, is due to its breadth of products rather than one or two big blockbusters, and the fact that more than half of its revenues are derived from surgical equipment and devices, rather than pure pharmaceutical products. The revenue projections in this analysis only reflect sales of pharmaceutical eye preparations.

Lucentis, however, is on track to be blockbuster product, for both Roche and Novartis; the former sells the product in the US only. It is this product alone that is responsible for Roche’s position in eye drug league table.

The other notable player in this sector is Allergan, thanks to its tear secretion enhancer Restasis, glaucoma drug Lumigan and dry eye treatment, Refresh, among others. Its strong share in such a distinct market could well make the company attractive to large pharma bidders, just like Alcon, and the company was regularly linked to GlaxoSmithKline last year.

In terms of future growth in the market, Regeneron’s VEGF Trap-eye for macular degeneration is seen as one of the most promising products in development. Licensed to Bayer outside the US, data is not due until later this year, or early in 2011, so it will be some time before the market becomes entirely comfortable with sales forecasts for this product, which currently sit at $687m worldwide, in 2014.

As the table below shows, sensory organs as a broad therapy area is one of the smallest in terms of drug sales; almost all of the revenues below derive from eye products. Including the non-drug side of the area, such as contact lenses or surgical devices, would give substantially larger figures, but no doubt the names above would remain dominant. With a number of the world's pharma giants looking to diversify and reduce exposure to the unpredictability of drug development, the eye care field has yielded a viable route, as well as a neat cross over from drugs to devices, for Novartis.

Whether others will follow remains to be seen, however Sanofi's move on Fovea last year, which could cost the French drug marker up to €370m, suggests further deals are on their way.

Total Market By Therapy Area   WW Rx & OTC Sales ($m) CAGR
 2009  2014
 Oncology & Immunomodulators  69,802  100,646  8%
 Systemic Anti-Infectives  73,581  92,194  5%
 Central Nervous System  90,223  84,100  (1%)
 Cardiovascular  79,207  66,623  (3%)
 Musculoskeletal  41,727  58,327  7%
 Endocrine  35,558  49,929  7%
 Blood  41,323  47,150  3%
 Respiratory  43,074  42,128  (0%)
 Gastro-Intestinal  27,368  24,982  (2%)
 Genito-Urinary  24,880  24,468  (0%)
 Various  11,544  15,216  6%
Sensory Organs 11,769 14,536 4%
 Dermatology  10,031  11,728  3%
 Other Rx & OTC Pharma 94,284 137,184  8%
 Total WW Rx & OTC Sales  654,369  769,211  3%
Source: EvaluatePharma

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