Products with Higher Barriers to Generic Competition Yield Sustained Cash Flows: Expert Analyst David Amsellem Discusses the Brand Specialty Pharma Space with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - May 2, 2013 - The Wall Street Transcript has just published its Biotechnology and Pharmaceuticals Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Health Care - Biotechnology and Pharmaceuticals - Executive Officer Interviews - Biotechnology and Pharmaceutical Investing - Orphan Drug and Biologics Manufacturing - Biotechnology and Pharmaceutical Companies Valuation

Companies include: Teva Pharmaceutical Industries (TEVA), Akorn Inc. (AKRX), Allergan Inc. (AGN), Valeant Pharmaceuticals Intern (VRX), Forest Laboratories Inc. (FRX), Salix Pharmaceuticals Ltd. (SLXP), Jazz Pharmaceuticals, Inc. (JAZZ), Mylan, Inc. (MYL), Endo Pharmaceuticals Holdings (ENDP) and many more.

In the following excerpt from the Biotechnology and Pharmaceuticals Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Which categories of drugs or specific drugs that have either recently been released or are in development are you most excited about?

Mr. Amsellem: Let me start with generics. I think the generic drug makers that are focused most heavily on alternative dosage forms, I think, are going to have the most success. The reason I say that is because these are products that don't have quite the same kind of competition as your garden variety or solids, and as a result of that, injectables, ophthalmics, topicals and inhalable products are less likely to become generics that are commoditized. These are products that can sustain relatively good margins, so I think companies that are focused, to a significant extent, on alternative dosage forms, any generics that - I think they're going to be able to sustain cash flow generation over the long term.

Regarding brand specialty pharmaceuticals, I think that in terms of brand specialty pharma, the thing to keep in mind is it's a highly fragmented space that is essentially fragmented among different therapeutic categories. And within brand specialty pharma, in terms of therapeutic categories, I don't have any specific call to make, but I am favorably disclosed toward products that tend to have higher barriers to generic competition - in other words, products that are more difficult to copy.

And so, I think that companies that have the ability to make products that have manufacturing complexity, that has some delivery complexity, I think those are the kind of products that are going to have, number one, long duration, are going to have greater protection from generic competition, and ultimately that's a recipe for more sustained cash flows.

So I think that in terms of brand specialty pharma, in order to pick the winners that's really what you need to focus on. You need to focus on the assets that are more likely to have longer durations - in other words, relatively free from generic...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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