REVENUE STRATEGY - GENENTECH

1. Genentech espouses a radical set of management principles: Stay focused on the science. Tune out Wall Street's insistence on short-term profits. And leap at new drug opportunities "that other people think stink."
2. It had once increased research spending to 50% of the company's sales—more than twice what most drug companies spend on R&D resulting in a stream of hit drugs pushing sales up from $1 billion to $9 billion since 1999
3. It is taking on one of the most treacherous areas of medicine - diseases like multiple sclerosis, rheumatoid arthritis, lupus, and more than 80 other ailments that arise when the immune system becomes deranged, attacking the very tissues and organs it's supposed to protect.
4. It took insights of British physician Jonathan Edwards on its cancer drug Rituxan, that the drug's method of annihilating cancer-causing cells might also ease the agony of rheumatoid arthritis.
5. Its scientists rethought everything they knew about how the body's defense mechanisms go astray.
6. It launched a program to study the drug as a possible treatment for rheumatoid arthritis, MS, and lupus.
7. It deployed a third of its 1,000 researchers to pursue new drugs to fight autoimmune disease.
8. Its scientific journey has been guided by executives who more closely resemble the staff of an academic medical center.
9. It tries to hire scientists who could win the Nobel Prize not just someone who will do a good job.
10. Its CEO gets deeply involved in research even when it isn't anywhere close to yielding marketable products.
11. It has redesigned its Rituxan trials, building in extra patient checkups in hopes that physicians would spot dangerous side effects fast. It carefully tracks patients after they leave clinical trials.
12. It is looking for clues that will help "personalize" new drugs to groups of patients that are most likely to respond
13. It hired five autoimmune specialists from a single lab at the University of Minnesota to better match patients with drugs, 14. It is working on some completely new approaches to autoimmune disease considering ideas others might overlook.

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REVENUE STRATEGY - BRISTOL-MYERS SQUIBB

1. Bristol-Myers Squibb Co. will focus on developing new drugs for cancer, diabetes and heart disease.
2. Its restructuring effort will allow the company to focus resources on developing new drugs and buying products and companies that can add to its lineup of experimental treatments
3. It reduced its sales force in 2002 to focus on specialist doctors instead of primary-care physicians as its drug portfolio changed.

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EXPENDITURE STRATEGY - BRISTOL-MYERS SQUIBB

1. Bristol-Myers Squibb Co. will eliminate about 4,300 or 10 percent of jobs over three years and close half its plants to trim $1.5 billion in costs.
2. It may seek buyers for its medical imaging, wound care and baby formula units. Mead Johnson Nutritionals, the infant-formula unit could be worth about $10 billion, while ConvaTec, the wound-care unit, may fetch $3.3 billion
3. It plans to reduce the number of brands from its older product lines by 60 percent by 2011.

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REVENUE STRATEGY - ROCHE

1. Roche Holding AG, the world's largest maker of medical diagnostic tests, has sought partnerships and purchases to strengthen ties between its diagnostics and pharmaceutical units.
2. In June, it began its tender offer for Ventana Medical Systems, the Tucson, Arizona-based maker of diagnostic tests for cancer.
3. It has extended its tender offer for the outstanding shares of Ventana three times
4. It has refused to raise the $3 billion or $75-a-share offer price.

[1. Ventana started negotiations with Roche after months of resistance.
2. It signed a confidentiality agreement with Roche that will allow Roche access to non-public information regarding Ventana to better understand the company's business prospects.
3. Its board still considers Roche's offer grossly inadequate.]

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EXPENDITURE STRATEGY - ACTELION LTD

Actelion Ltd., Switzerland's largest biotechnology company, which moved an experimental drug Pivlaz aimed at reducing blood vessel spasms into late-stage clinical testing will make a 15 million Swiss franc ($13.3 million) milestone payment to former shareholders of the medicine's developer, Axovan, which Actelion acquired in 2003.

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REVENUE STRATEGY - ABBOTT LABORATORIES

1. Abbott Laboratories won U.S. approval of a lower dose of the AIDS drug Kaletra in tablet form to treat children, the first step toward making the medicine available to 2.3 million children with the virus worldwide. The new tablets offer more flexibility in dosing. They can be taken with or without food and don't require refrigeration, an advantage in poorer countries.
2. In April, it cut the price of the drug to low and low-middle income nations by more than half, responding to pressure from the United Nations and Thailand's threat to make a generic version.

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REVENUE STRATEGY - SIGMA PHARMACEUTICALS

Sigma Pharmaceuticals Ltd., Australia's biggest contract maker of drugs, may make a rival offer for the vitamin-making unit (which makes Cenovis and Nature's Own brands) of Symbion Health Ltd., Australia 's largest health-care company.

Acquisitions that avoid cannibalization of own products allow greater revenue.

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REVENUE STRATEGY - J&J

How is J&J enhancing revenue of its consumer health division?

Acquisition
1. J&J acquired Pfizer’s consumer health unit last year for $16.6 billion and their shared mission is: to keep their storied brands up to date by constantly tweaking the ingredients, redesigning the packaging, and finding whole new uses for the contents. (Pfizer had won the right to pitch Listerine as much more than a breath freshener simply by running some inexpensive clinical trials.)
2. It gained a foothold in the skin-care market by buying pimple-potion purveyor Clean & Clear and RoC, a French maker of anti-wrinkle creams, followed by soapmakers Neutrogena and Aveeno.
3. It preserves the independence of operations it acquires.

Focus on new products and new uses for old products
4. It put together small teams of up to a dozen scientists and charged each with tackling a cosmetic challenge, like an acne team, a pigmentation team etc, which gather input from marketing and development folks and partner with small, forward-thinking companies.
5. Its new system is helping aging brands such as Neutrogena expand in unexpected directions including an at-home version of something called microdermabrasian - a skin-smoothing procedure that can cost up to $200 at health spas.
6. It produced 400 new products last year, and the acquisition of Pfizer pushed it to the top of 22 consumer categories.
7. It keeps investing technology and innovation into baby potions to perpetuate revenues.
8. Its Pfizer scientists have mastered a formula for generating revenue from minor breakthroughs, which don’t cost a fortune, like the melt-in-your-mouth film for Listerine PockectPaks, which has become a new drug delivery platform that may be expanded to other over-the-counter drugs.
9. It is putting its new Helioplex, a broader and longer-lasting sunscreen, into several products, including Neutrogena's sunscreens and anti-aging lotions.
10. It drives demand for products by adding new claims about them – like Listerine can prevent gingivitis
11. Its unit managers are constantly weighed against internally designed “composites” made up of competitors in each of J&J's three major industries, consumer, pharmaceuticals, and medical devices. The goal is to outpace the composite on a top- and bottom-line basis.

Marketing experiments
12. It built buzz for Rembrandt toothpaste as the whitener of choice for the hip and youthful, by hosting makeover parties, book readings, and concerts. Just before Valentine's Day, its Rembrandt team placed an ad on YouTube that featured a young couple kissing passionately for 30 seconds. It was so racy that the video site relegated it to its adult section prompting viewers to click on the ad 180,000 times.
13. In 2006, it opened a satellite office in New York staffed by designers who spend their days devising fresh ways to serve up decades-old products, from how they're packaged to how they're displayed on store shelves.
14. It sponsors more than 700 baby centers in China to teach Chinese parents the art of therapeutic touch
15. It expanded a consumer research center in India in 2004, and has just broken ground on a similar center in Shanghai to garner insights on how to tailor products to local markets
16. It is using Pfizer to plug some holes in its geographic reach, for example, in Mexico

Acquisitions + new products + new uses of old products + marketing buzz + an eye on the competition = REVENUE.

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EXPENDITURE STRATEGY - J&J

1. J&J’s merger with Pfizer will allow it to squeeze $500 million per year out of its cost structure and enable it to break even on the transaction in 2009--a year earlier than expected.
2. It is increasing its quarterly dividend, this time by 10.7%.

Cost savings are jewels under the feet of mergers and acquisitions

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REVENUE STRATEGY - SANOFI-AVENTIS

Prostate cancer is the third-most-common cancer in the world and ranked sixth in cancers fatal to men

Sanofi-Aventis SA, the world's third- biggest drugmaker, developed Taxotere treatment for advanced prostate cancer. It had a 21 percent lower death risk than those on another treatment.

(Taxotere generated 449 million euros ($606 million) in sales for Sanofi in the three months ended March 31, 10 percent more than a year earlier)

Successful cutting edge R&D for our quest for survival will generate revenue.

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REVENUE STRATEGY - TAKEDA PHARMACEUTICALS

1. Takeda Pharmaceutical Co., Japan's largest drugmaker, is spending 19 percent more on drug development this year to find successors to Actos before its best-selling product faces generic competition in 2011.
2. It will provide novel treatment options as early as possible by (a) dropping the development of Actos plus TAK-536 a medicine combining its Actos diabetes pill with an experimental blood pressure drug and (b) prioritizing other projects.

Cutting-edge R&D is good for revenue despite inevitable failures.

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REVENUE STRATEGY - RANBAXY LABS

Ranbaxy Laboratories Ltd.'s, India's biggest drug producer, wants revenue growth in Europe, Africa and the Commonwealth of Independent States during the next three years.

1. It made at least eight acquisitions since January 2006, half of them in Europe and South Africa, to cut distribution costs and spur sales of generic medicines.
2. It will spend about 100 million rand ($14 million) to upgrade the Be-Tabs Pharmaceuticals (Pty) Ltd. plant in South Africa it bought for 500 million rand last year. The facility will eventually produce Ranbaxy's anti-AIDS drugs for the South African market and may supply other products to its international operations.

“Go forth and multiply” has taken on a whole new meaning.

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REVENUE STRATEGY – DR.REDDY'S LABORATORIES

1. Dr. Reddy's Laboratories Ltd., India's third-biggest drugmaker, has made its version of Roche Holding AG's rituximab 50 percent cheaper than the original, allowing more access to the cancer therapy (non-Hodgkin's lymphoma, a blood malignancy).
2. Reddy's released Reditux in Hyderabad, India and also will seek to sell the treatment elsewhere, including the U.S.
3. Reddy's and bigger rivals Ranbaxy Laboratories Ltd. and Cipla Ltd. built billion-dollar businesses copying blockbuster medicines and selling them at a fraction of the price in the U.S. and Europe.
4. They are developing the capability to produce complex drugs, known as biologics, whose sales are growing at 14 times the pace of traditional chemical compounds and are among the most expensive prescriptions.
5. Reddy's Reditux is priced at 20,000 rupees ($486) for a vial, or about half the price Roche charges for Mabthera, which is patent-protected until 2013 and there are no immediate plans to change its price.

The medicine man has come a long way but survives as before by ingenuity.

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EXPENDITURE STRATEGY - ALLIANCE BOOTS

1. Alliance Boots has improved profitability with inventory control, improved buying terms.
2. It plans to cut costs by 100 million pounds a year by 2010. KKR bidding to take it over wants to accelerate its cost-reduction plans
3. It plans to relocate some stores and close others.

Frugality and asceticism are clearly not for hermits alone.

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REVENUE STRATEGY - ASTRAZENECA

To ensure a gathering flood of revenue in the future a business needs a developmental pipeline clogged with great new well-differentiated products in well spaced out stages of development. AstraZeneca Plc was struggling to develop new medicines and reported the failure of its fourth experimental drug in the last year.

So what did it do?
1) It agreed to buy U.S. biotechnology company MedImmune Inc. for $15.2 billion in cash to gain flu vaccines and an antiviral treatment for babies at $58 a share, about 11 times sales or 21 percent more than MedImmune's April 20 closing price of $48.01 (considered by some to be a huge premium under the circumstances). It will be helped by MedImmune's FluMist for influenza and Synagis for infant lung infections and 45 products in development. MedImmune also gets royalties from cervical cancer vaccines sold by Merck & Co. and GlaxoSmithKline Plc.
2) AstraZeneca will merge MedImmune with Cambridge Antibody Technology Group Plc, a biotech company it bought in May.
3) The company is taking on debt for the first time.
4) The company has spent $1.4 billion on in-licensing and other deals to bulk up its offering of early-stage drugs to 120 from 106 a year ago.
5) MedImmune employees will get a one-time retention grant to retain as many people in the organization as it can.
6) It will buy closely held Arrow Therapeutics Ltd. for $150 million in cash to boost research into compounds that fight bacteria and viruses.

Drugmakers in recent months have been purchasing companies to add medicines as patents expire and the number of products in development shrinks.

What is the secret of a pipeline full of great new products - a focus on the bottom line or a focus on the fulfilling of hunman needs?

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EXPENDITURE STRATEGY - ASTRAZENECA

1) AstraZeneca plans to eliminate 3,000 jobs to reduce expenses to counter competition from copycat versions of Toprol XL.
2) About 4 cents a share was charged to cost of sales from the company's supply chain improvement program.
3) It forecast $500 million in synergies from the acquisition of MedImmune in the next five years.

Isn't there a way to prevent employees from being the first and largest shock casualties in business rationalization programs? Say a proactive, realistic, and continuously readjusting staffing policy with its ear to the ground?

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