Copaxone reached its global peak sales of $4.3 billion in 2013
In 2013 Teva, with total revenue over $20 billion, had a generic drug business close to $10 billion and specialty drug sales of $8.4 billion (Copaxone accounted for more than half of the specialty drug business)
Profitability 1/2
…while made 50.8% of Teva’s total profitability in 2013
Copaxone contributed a segment profitability (gross margin – S&M – R&D) of $3.3 billion, with a very healthy margin of 76%
Other specialty drugs and generic business had a margin of 32% and 17% respectively
Teva’s total profitability (gross margin – S&M – R&D) was $6.4 billion in 2013
Two “bad” (for Teva) developments in 2013
Biogen’s Tecfidera approved by FDA, which would become the leading MS drug in 2017
The United States Food and Drug Administration (FDA) announced on March 27, 2013 that it has approved Tecfidera™(dimethyl fumarate or DMF, formerly known as BG-12) as a first-line therapy for the long-term treatment of relapsing forms of multiple sclerosis (MS).
Tecfidera is administered in pill form orally (by mouth) and is the third oral DMT approved for MS. The approved dosage is 240 mg to be taken two-times daily.
The appellate court struck down some of Teva’s composition patents that were protected until that date, with the effect of allowing a launch as early as May 24, 2014
Copaxone is one of the leading drugs for multiple sclerosis (MS).
What is MS?
Multiple sclerosis (MS) is a chronic inflammatory demyelinating disease of the central nervous system affecting more than 2 million individuals globally and approximately 400 000 in the United States. [paper]
MS 通常分为四类，其中复发缓解型多发性硬化症 relapsing-remitting MS (RRMS) 占比约 85%。[药事纵横]
Relapsing forms of MS include clinically isolated syndrome (CIS; a first demyelinating episode), relapsing-remitting MS (RRMS), secondary-progressive MS, and progressive-relapsing MS. The symptoms of MS can be highly variable, both in severity and duration, but may include visual disturbances, bladder/bowel dysfunction, weakness, impaired balance, vertigo, numbness, tingling, pain, and cognitive dysfunction. [paper]
Source: Multiple Sclerosis Association of America
Among the available drugs for MS, Copaxone has been the best-selling drug for years until 2017. In 2017 H1, Copaxone sales = $2.296 billion while Tecfidera by Biogen had a total revenue of $2.069 billion. [药事纵横]
The past decade has seen a dramatic change in the US MS-treatment landscape. While no cure for MS is currently available, treatment options exist to reduce the frequency of relapses, manage symptoms, and slow disease progression. Many US Food and Drug Administration (FDA)–approved disease-modifying therapies (DMTs) are currently available in the US market for patients with relapsing forms of MS, including interferon beta-1b (Betaseron®4, Extavia®), interferon beta-1a (Avonex®6 and Rebif®), glatiramer acetate (Copaxone8), natalizumab (Tysabri®), fingolimod (Gilenya®), teriflunomide (Aubagio®), dimethyl fumarate (Tecfidera®), alemtuzumab (Lemtrada®), peginterferon beta-1a (Plegridy®), and daclizumab (Zinbryta™). In general, the currently available medications primarily target the mechanisms that underlie inflammation. Early and ongoing treatment helps to minimize early inflammation, reduce damage in nerve fibers (axons), and reduce loss of brain tissue. The anti-inflammatory effects of these agents are largely believed to result from the inhibition of T-lymphocyte proliferation, from a shift of the cytokine response from an inflammatory response to an anti-inflammatory profile, and/or from a reduction in the migration of inflammatory cells across the blood–brain barrier. More recently, ocrelizumab (Ocrevus™) became the first and only DMT approved for the treatment of primary progressive and relapsing forms of MS. Although the precise mechanism by which ocrelizumab exerts its therapeutic effects in MS is unknown, it is presumed to involve the depletion of pre-B and mature B lymphocytes. [paper]
Source: 药渡
Copaxone History
Glatiramer acetate, also known as copolymer-1, is a heterogeneous mixture of peptides comprising 4 amino acids and is similar to myelin basic protein. Copolymer-1 was first discovered in the late 1960s during research to produce an antigen capable of inducing experimental autoimmune encephalomyelitis (EAE), an animal model of MS. [paper]
Following its discovery and the accumulation of preclinical data supporting its use as a therapeutic agent in MS, the clinical evaluation of GA was initiated in the late 1970s. Intensive clinical research has since been conducted on GA to establish its efficacy and safety as a DMT for MS, resulting in its initial approval for RRMS in 1996 and for clinically isolated syndrome (CIS) in 2009, followed by a subsequent label change to the current indication of relapsing forms of MS along with approval of a higher dose and less frequently administered version of GA in 2014. [paper]
Source: Two decades of glatiramer acetate: From initial discovery to the current development of generics
On May 8, 2018, the United States withdrew from the Joint Comprehensive Plan of Action.
Why
“We cannot prevent an Iranian bomb under the decaying and rotten structure of the current agreement…” “Therefore, I am announcing today that the United States will withdraw from the Iran nuclear deal.”
[Vox] The problem, though, is that the deal wasn’t “rotten”: The best evidence we have suggests Iran was actually complying with the deal. Iran has dismantled a huge portion of its nuclear program and given international inspectors wide latitude to make sure it isn’t cheating; the country is significantly further from a nuclear weapon than it was when the deal came into force.
The rationale:
The first one is that the deal isn’t entirely permanent; the restrictions on Iran’s nuclear program start to relax about 10 years after the deal was signed (though the agreement not to build a nuclear weapon is permanent).
The second is that the deal didn’t cover other problematic things Iran was doing, including ballistic missile development and its support for violent militias around the Middle East (like Hezbollah in Lebanon).
One year after
On 5/8 2019, one year after US President Donald Trump announced his country’s pullout from the Iran nuclear deal, Tehran says it is no longer committed to parts of the agreement. [aljazeera.com]
On 6/17, Tehran has sped up the countdown to its breach of the nuclear deal with the announcement that it will exceed its uranium stockpile limit in the next 10 days. The country’s atomic agency also said Tehran might also start the process of enriching uranium up to 20% from 7 July. Kamalvandi, the spokesperson for Iran’s Atomic Energy Organization (AEOI), said Iran needed 5% enrichment for its nuclear power plant in the southern Iranian port of Bushehr and 20% enrichment for a Tehran research reactor.
Iran also announced water supplies at the Arak water reactor would exceed a 130-tonne limit within the next two and a half months if the country did not find a client to buy heavy water byproducts.
Iran’s Islamic Revolution Guards Corps (IRGC) said the aircraft had violated Iranian airspace, and that the incident sent a “clear message to America”.
But the US military insisted the drone had been over international waters at the time, and condemned what it called an “unprovoked attack” by the IRGC.
After President Donald Trump’s last-minute pullback from military retaliation, the American focus has shifted to diplomacy and an effort to build international support for Trump’s approach.
A deal, Joint Comprehensive Plan of Action (JCPOA), was reached in 2015 between Iran and P5+1 (US, UK, France, China, Russia and Germany).
The deal came after years of tension over Iran’s alleged efforts to develop a nuclear weapon. Iran insisted that its nuclear programme was entirely peaceful, but the international community did not believe that. [BBC]
Uranium is required to produce nuclear power and create nuclear weapons. However, the naturally-occurring form of the element does not have a sufficient level of a common fissile isotope U-235 to set off a nuclear reaction.
The amount of U-235 in uranium must be increased through a process of enrichment.
Uranium enriched to between 3 and 4 percent can be used for nuclear power plant fuel, but it must be enriched to around 90 percent for use in weapons.
Iran previously reached a near 20% level enrichment before the deal.
When uranium is mined it typically has about 140 atoms of U-238 for every atom of U-235. Refining it to a purity of 3.67% means using centrifuges to remove 114 unwanted atoms of U-238 for every atom of U-235. Boosting its purity to 20% means removing 22 more unwanted atoms of U-238 per atom of U-235, while going from there to weapons-grade material means removing just four more per atom of U-235. [TheGuardian]
Cap: Stockpile of Low-enriched Uranium
JCPOA set a limit of 3.67 percent enrichment and a stockpile limit of 300kg (660lbs) for 15 years (until 2031).
The United States said in 2015 the deal reduced Iran’s stockpile of enriched uranium by 98 percent, to less than the amount needed for one weapon from enough for about 10. [france24]
Limit: Enrichment capability
Iran had two facilities – Natanz and Fordo – where uranium hexafluoride gas was fed into centrifuges to separate out the most fissile isotope, U-235.
Much of Natanz is deep underground and Fordow is buried inside a mountain, which is widely believed to protect them from aerial bombardment.
The deal allows Iran to continue enrichment at Natanz but with constraints. It turns Fordow into a “nuclear, physics and technology centre” where centrifuges are used for purposes other than enrichment, like producing stable isotopes.
First-generation centrifuges installed in Iran is capped at 6,104, reduced from 19,138.
Plutonium Track
Spent fuel from a heavy-water reactor contains plutonium suitable for a nuclear bomb.
Iran had been building a heavy-water nuclear facility near the town of Arak.
Under the JCPOA, the core of that reactor has been removed and filled with concrete to make it unusable
The reactor is being redesigned so as to “minimise the production of plutonium and not to produce weapon-grade plutonium in normal operation”
Iran will not be permitted to build additional heavy-water reactors or accumulate any excess heavy water until 2031.
Here to compare the % of population ages 65 and older and healthcare expenditure as a % of GDP.
United States
1960: 9.1%
2017: 15.4%
The number of Americans ages 65 and older is projected to more than double from 46 million today to over 98 million by 2060, and the 65-and-older age group’s share of the total population will rise to nearly 24 percent from 15 percent.
Healthcare expenditure mainly ranges from 4% to 5% from 2000 to 2016, rising constantly in recent years. Considering the rapid growth in its GDP, the healthcare expenditure in China is growing fast.
The percentage of GDP is expected to rise to more than 26% for elders’ caring related costs. [2015-2050年，我国用于老年人养老、医疗、照料等方面的费用占GDP的比例将从7.33％升至26.24％]
Just by comparing China to US, China’s healthcare expenditure percentage is a little lagging behind (~10% 65+ population for 7% healthcare GDP). But the opportunity is large as Chinese demographic is changing rapidly. With the historical “one child policy”, China’s working population will experience a “squeeze”.
The number of shared bikes reached its largest in September 2017 (2.35 million; then new deployments were suspended). Other cities also set the cap (Shanghai 1.5 million, Guangzhou 0.9 million, Nanjing 0.45 million).
By and large, the financing activities paused (as described in part 2) in the bike-sharing space. And the $3 billion valuation for both mobike and ofo was not attractive. Capital markets were developing way ahead of the business.
What is more, the economic model was still in the “testing stage” (to put it nicely).
M&A?
The most obvious way to end the war and to make the industry profitable was a merger between ofo and mobike.
Similar talks must have been held for several times, especially in the summer of 2017. But before a merger, there would probably be a winner.
Investors from both sides probably have been talked about this privately for long. In June 2017, a discussion between Xiaohu Zhu (GSR Ventures), ofo’s backer from Series A, and Pony Ma (Tencent), mobike’s lead investors for Series D&E, was leaked and posted on the internet.
They were trying to claim ofo and mobike as the No.1 bike-sharing company respectively.
Discussion between GSR and Tencent leaders | Source: tech.sina.com.cn
At the end of 2017, ofo CEO had the last conversation with Xiaohu Zhu (GSR Ventures) about the merger. One month after the last attempt, Xiaohu Zhu sold his position to Ali, together with his veto power.
Alibaba got the power it wanted in ofo (to counter Didi/Tencent)
To some extent, mobike and ofo are offering an alternative to Didi’s ride-hailing services, especially short-distance rides; they also wanted to march into the broader ride-sharing space
OYO is grown from India with series B ($100mn), C ($90mn), D ($250mn), E ($1bn) led by SoftBank. Huazhu has participated between D and E; Grab, Didi, Airbnb has participated in Series E separately.
From my understanding, OYO is pursing a model that provides minimum standardization with the least cost while getting data and digitalizing management.
The most valuable thing OYO provides is the traffic (if any), which is where OTA’s profits come from and where hotel chains are good at.
The brand itself tho, doesn’t have much power. China’s overall hospitality standard is higher than India’s I think (with players like Jinjiang, Huazhu, etc.)
OYO’s rapid expansion in China might make it worse.
But it is really big – said to have 10k+ hotels and 450k+ rooms on its website.
It now has a three-tier branding: 轻享，智享，尊享
Branding-up and providing more values is really important. Hotel owners may end up with less profit in the long-run.
It’s like imperialism in the hotel sector.
The traditional hotel sector in China has reacted with their own exploration in “light franchise” (but might be late for this game).
