Astellas Plans Sales Push in China

| About: Astellas Pharma, (ALPMF)

Astellas Pharma (OTCPK:ALPMF) of Japan plans to hire 300 sales employees in China in a bid to double its China sales in five years. Although Astellas did not break out separate figures for China, its Asia revenues (including China) are expected to be $395 million this year. By the end of the March quarter in 2015, the company wants to increase that number to $670 million.

In making the announcement, Astellas is repeating a multinational pharma mantra: drug market growth in the near future will come largely from emerging markets, especially China. By doubling China/Asia revenues over the next five years, Astellas forecasts that its global revenues will rise 17%. In other words, there isn’t much growth in established markets.

The revenue targets named by Astellas were higher than analysts’ forecasts, showing better-than-expected optimism.

Astellas’ particular problem is that its lead drug, Prograf, a treatment to prevent organ rejection, went off patent and now faces generic competition. Unlike most similar situations, Prograf is performing better than expectations. Astellas is seeking to have the drug approved for new indications, primarily autoimmune diseases such as rheumatoid arthritis.

Astellas also reached a deal recently to buy OSI Pharmaceuticals (OSIP) for $4 billion. The purchase gives Astellas its first cancer drug and a US marketing force. OSI developed the blockbuster cancer drug Tarceva with Genentech (Private:DNA). It co-markets the drug in the US with Genentech, while international sales are handled by Genentech’s parent, Roche Pharma (OTCQX:RHHBY).

Disclosure: none.

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Tagged: , Drug Related Products, Japan
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