Dr John Padfield
Chief Executive, Amersham Health
Amersham Health
Amersham Health is a world leader in medical diagnostic pharmaceutical
products for the early and accurate diagnosis of disease, and a
major provider of therapy products for the treatment of cancer.
Every other second, a patient somewhere in the world is having
a procedure using one of our products. We focus on the management
of heart and circulatory disease, diseases of the brain such as
stroke, Alzheimer’s Disease and Parkinson’s Disease, lung disease,
and various cancers. The ageing population with its higher incidence
of such diseases, combined with advances in scanning technologies
and procedures, are driving demand for our products.
Turnover in 2001 increased by 13 per cent to £922 million. Sales
in the final quarter of 2001 were higher than expected due to £7
million of forward purchasing by customers in advance of price increases
in the USA. Trading profit reached £324 million, an increase of
10 per cent. After R&D expenses of £83 million,which were 10 per
cent higher than the previous year, our operating profit was £241
million, up 10 per cent.
Our patented medical diagnostic products had continued strong growth,
up 25 per cent to £299 million, and our unpatented products increased
10 per cent to £353 million. During the year, we increased our overall
global market share1 from 35 per cent to 37 per cent
due to the ongoing success of the patented product portfolio underpinned
by active life cycle management. In X-ray diagnostics, sales were
£324 million, up 14 per cent. Sales in magnetic resonance imaging
(MRI) were £86 million, up 19 per cent. The radiopharmaceuticals
diagnostic business grew 17 per cent to £241 million.
Therapy products returned to growth with sales nine per cent higher
at £78 million. The full portfolio of brachytherapy seeds for prostate
cancer treatment achieved sales of £59 million, up 13 per cent.
This growth was driven by four new sole source contracts with US
group purchasing organisations in the first half of the year and
by the addition of the echogenic EchoSeed™ and the palladium product
TheraSeed™ to the portfolio.
This year we also achieved significant milestones in operations.
In September we celebrated the opening of a new, state-of-the-art
production facility at our Lindesnes chemical plant in Norway, further
strengthening our cost efficiency and providing environmental benefits
as well. Our pharmaceutical plant in Shanghai, China, which was
inaugurated in 2000, is fully operational and exporting to a variety
of markets. The expansion of our secondary manufacturing facility
in Cork, Ireland is progressing well and new capacity is planned
to come on stream progressively, as approvals are received, during
2002-2003.
Our operating margin was, as expected, lower in the second half
of 2001, due to lower sales of bulk product and lower profits from
Nihon Medi-Physics in Japan, commissioning expenses for the new
plant at Lindesnes, and the cost of building a sales team for promotion
of the ultrasound product Optison™.
Portfolio development
Amersham Health is actively managing and developing its portfolio
of diagnostic and therapeutic products, which are focused in the
areas of cardiology, neurology, oncology and pulmonology.
Over the last few years we have placed increasing emphasis on effective
life cycle management of our leading brands, extending their indications
and clinical benefits. We are also adding new products to our portfolio
through in-licensing and partnerships. And finally, in our own research,
we are focusing in particular on the development of innovative,
disease-specific products that work at the molecular level to detect
the onset of disease and monitor its progression. Whereas traditional
diagnostic tests show a patient’s current condition, our goal is
to develop diagnostic products that will also predict the outcome
of various treatment possibilities.
Cardiovascular disease
Coronary heart disease is the single largest killer. A distinguishing
feature of our company is the broad range of product offerings that
can work in tandem, irrespective of modality, to enable physicians
to gain a more complete cardiovascular picture of their patients.
In November, the FDA approved the use of Myoview™ with pharmacological
stress agents in patients with known or suspected coronary artery
disease who are unable to exercise physically. This additional indication
introduces a major new opportunity for the continued growth of Myoview,
which in 2001 grew sales 27 per cent to £110 million. Myoview is
our leading radiopharmaceutical diagnostic for visualising the supply
of blood to the heart. It can quickly identify regions of reversible
myocardial ischaemia in the presence or absence of infarction under
exercise and rest conditions.
Visipaque™, an X-ray product used to help doctors diagnose coronary
artery stenosis, has been designed for patient comfort and safety,
promoting a lower incidence of complications in patients at high
risk due to other health factors. Visipaque sales increased by 28
per cent to £80 million. The X-ray diagnostic Omnipaque™ was launched
20 years ago and it is still the best selling product on the market.
Amersham Health’s sales of this product rose by 10 per cent to £222
million in 2001.
Last year we entered the cardiovascular ultrasound market with
Optison™, for imaging heart wall abnormalities. In 2001 we expanded
our commercial rights to this product, originally obtained from
Mallinckrodt Inc in settlement for litigation, and will sell the
product globally, with the exception of the Pacific Rim. In August,
we strengthened our marketing support by establishing a specialist
field force in the US for Optison. In addition, we significantly
strengthened our intellectual property rights in the ultrasound
field in 2001 through the purchase of all of the ultrasound patent
rights of Sonus Pharmaceuticals and a cross-licensing agreement
with Bristol-Myers Squibb which allowed us to drop infringement
litigation without incurring further expense.
We made good progress last year on our ultrasound product Sonazoid™,
which is being developed for the diagnosis of both heart and liver
disease. In cardiology, Sonazoid entered phase IIb dose ranging
studies to assess blood flow to the heart muscle following successful
completion of phase IIa efficacy studies. For the liver indication,
phase IIb clinical trials on Sonazoid were completed in Japan and
phase III trials have commenced. The prevalence of primary liver
cancer in East Asia is seven times higher than in the rest of the
world. In the US and Europe, phase IIb trials for the liver indication
were also completed, and subject to satisfactory independent evaluation,
phase III trials are planned for the second half of 2002.
Phase IIb clinical trials are under way to extend the uses of our
MRI product Omniscan™ in diseases of the cardiac and vascular systems
and will be concluded in the first half of 2002. The rapid improvements
in instrumentation which have added value to the use of extracellular
fluid agents such as Omniscan, have also diminished the market potential
for blood pool products such as Clariscan™. As a consequence we
have decided to discontinue the development of Clariscan.
As we look ahead, our pipeline will further expand physician knowledge.
For example, phase I clinical trials began in November 2001 on NC
100668, a technetium-based molecular diagnostic for the detection
of thrombus formation. This product will initially target the important
pulmonary embolism market.
Neurological disease
Omniscan™, our leading MRI product, is used in neurology for detecting
stroke and cancers of the brain, and as noted above, it is also
finding use in cardiology. This versatile product grew sales by
20 per cent to £85 million in 2001.
Sales of our innovative molecular diagnostic DaTSCAN™ have shown
good progress since its launch in Europe last year and interest
among neurologists is growing. DaTSCAN is the first product in the
market that can distinguish true Parkinsonism from other conditions
having similar symptoms but quite different treatment regimes. In
the US, we are entering pre-clinical studies with Trodat, also for
the diagnosis of Parkinson’s Disease.
In July, Amersham Health entered into an agreement with Neurochem
to collaborate on a product for the diagnosis of Alzheimer’s Disease.
The goal for this innovative diagnostic will be the early identification
of amyloid plaques in the brains of Alzheimer’s patients, even before
the symptoms of the disease are observed.
Cancer
Amersham Health is the world leader in brachytherapy seed implants
for the treatment of prostate cancer, and we recorded double-digit
growth for our comprehensive portfolio including OncoSeed™, RAPID
Strand™ and TheraSeed™. Prostate cancer is the most common form
of cancer in men, and last year in the US, approximately 25 per
cent of prostate cancer patients were treated using seeds. In 2001
we launched a new generation of brachytherapy seed, EchoSeed™, which
enables better visualisation of seed placement with conventional
ultrasound imaging. We also expanded our agreement with Theragenics
to distribute TheraSeed globally.
In October, through an agreement with Corixa Corporation, we agreed
to manufacture and market Bexxar™ for the treatment of non-Hodgkin’s
lymphoma in Europe. This is a strong addition to our portfolio of
therapeutic products. Non-Hodgkin’s lymphoma is a form of cancer
that affects the blood and lymph tissues, and 40,000 patients have
been diagnosed with this disease in the US alone. Bexxar (a different
name will be chosen for Europe) is a novel radioimmunotherapy that
combines the targeting ability of a monoclonal antibody and the
therapeutic power of radiation, with the precision of patient-specific
dosing. Until now, patients suffering from this disease had very
few options when chemotherapy proved unsuccessful.
Under a separate agreement, Corixa will co-promote Metastron™,
our treatment for cancer that has spread to the bone. In some patients,
a single administration of this radiopharmaceutical will relieve
bone pain for up to six months. We are pursuing registration for
Metastron in Japan, where the product is in phase III trials.
In April, we launched NeoSpect™, a new molecular diagnostic product
for the diagnosis of suspected lung cancer. Lung cancer continues
to be the most common cause of death for all cancers in both sexes.
Pulmonary disease
There is a great unmet clinical need for early detection and management
of lung diseases such as asthma and Chronic Obstructive Pulmonary
Disease (COPD), often called ‘smoker’s cough’. Lung disease is the
third leading killer behind cardiovascular diseases and cancer.
Currently, imaging of the lungs is difficult because they consist
primarily of air. To make the invisible visible, Amersham Health
is developing a technology known as Spin Signal™, which for the
first time allows high-resolution, high speed imaging of gases using
MRI.
Spin Signal is anticipated to have a wide range of applicability
within both medical diagnostics and in life sciences. Amersham Health’s
first target area is in high-resolution ventilation imaging of the
lungs. Our clinical programme is targeted at early detection, staging
and monitoring of lung diseases and our first product, Helispin™,
is in phase II.
R&D partnerships
In August, we entered into a research agreement with Affitech AS,
in Oslo, Norway, for the discovery of human antibodies for diagnostic
applications. Affitech will combine its proprietary antibody library
technology to generate human antibodies to develop and test Amersham
Health’s novel concepts for molecular diagnosis. In November we
signed a broad collaborative research agreement with GE Medical
Systems to accelerate the development of new positron emission tomography
(PET) based molecular diagnostic imaging technologies and systems.
The first products to be developed will use a novel PET synthesis
system to produce a new generation of high pharmaceutical quality,
targeted molecular radiopharmaceuticals, FDG and F-Dopa, to aid
the diagnosis and evaluation of patients suffering from cancer and
Parkinson’s Disease.
Through our Imanet™ initiative, Amersham Health is working with
leading pharmaceutical companies to identify the role that PET can
play in the creation of novel diagnostic products that can complement
new therapeutic drugs. In January 2002, we announced a major research
collaboration in this area with Pfizer Inc.
Through collaborations such as these, Amersham Health is making
a firm commitment to become a global leader in the PET radiopharmaceutical
market. 2001 was a year in which we strengthened those factors needed
to assure our continued success. Seizing the opportunities and challenges
posed by a changing demographic base, ever evolving technology,
and marketplace demands, we moved forward in the emerging markets
of the world, we strengthened our product franchises and we continued
our dedicated pursuit of innovative products for the diagnosis and
treatment of major diseases.
Amersham Health looks forward to contributing to the advancement
of medicine. Our goal as the global leader in medical diagnostics
is to enable the physician to prescribe the right medicine, for
the right person, at the right time, with the right outcome. This
is only possible with early and accurate diagnosis and the confidence
that the potential for side effects from therapy is greatly abated.
Our research efforts and the collaborations we are forging bring
us closer to achieving this goal, and offer tremendous promise in
finding new and powerful products for the future. The health, economic
and patient management benefits will be substantial.
1 Company estimates.
The Chief Executive's review continues
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