iNova Pharmaceuticals: Marketing The Cure
iNova Pharmaceuticals is an Australian owned and operated company. They pride themselves in being a premier healthcare supplier in over 15 countries in which they have developed their offerings to meet the demands of a market that is constantly changing. They do not see themselves as a big player, rather as a medium sized institution that has made innovation and powerful marketing tools part of their history and future.
“We are a private equity owned business that came out of the old 3M Pharmaceuticals business,” says Andrew Howden, the CEO and Managing Director of iNova. “3M sold their pharmaceutical interests in 2006, and split the world up into three: Asia Pacific/Africa, US, and Europe and sold them as separate groups. Two private equity companies in Australia, Archer Capital and Ironbridge Capital, purchased the Asia Pacific/Africa business and created iNova Pharmaceuticals.”
What they got with the purchase was a number of well-known brands, a factory facility and established businesses across Asia Pacific and South Africa. “We own the rights to all those products throughout Japan, China, Asia, Africa and Australia,” he says.
Meet the CEO
Andrew Howden is celebrating his 30th year in the pharmaceutical industry, where he worked his way up from sales and marketing to his present position as CEO. “A lot of my experience was from working with Astra and AstraZeneca,” he says. “I worked in Australia, but left Australia in the early 1990s to go and work in Singapore for Astra as the head of sales and marketing in South East Asia.” He moved a fair bit, from Europe to work for Quintiles, and then back to SE Asia for AstraZeneca in 2002. “AstraZeneca were investing very heavily in China, building our field forces and building a presence there. It was very exciting times. In 2006, I left to work for IMS Health – they offer all the data for the pharma industry – and did that for a few years.” Howden then got the call to come back to Australia and work for iNova as CEO.
The offer was appealing to him after spending so much time working for “the big boys” and learning all he thought he could from them, he thought it was time to try something new. “Being here and working for a private equity owned company, running your own business is quite stimulating and challenging every day,” he says.
With all the globetrotting that Howden has done he has managed only to pick up some Swedish, he laments with a laugh. “My Asian languages are a bit wanting, I can order a beer in a lot of languages, but that is about it. I may not have picked up the languages but the experiences I have gained have truly enriched my life.”
Making it at home, selling abroad
“About 70 per cent of our products are manufactured here in Sydney and exported to the rest of the world, the other 30 per cent we in-licence from other Australian manufactures or European companies,” says Howden, making it clear that the majority of what iNova manufactures they make themselves.
“We have a good mixture of prescription and OTC (over the counter), so we are not totally reliant one particular part of the market. Some of the larger pharmaceutical companies are focused on prescription, some only on OTC, where as we are pretty much 50/50 which gives us great balance,” says Howden. For iNova’s prescription side they have products for skin cancers, heart conditions, weight loss, asthma, and pain control. The product range has brands that were carry overs from Riker Laboratories and 3M Pharmaceuticals catalogue, as well as ones developed in-house as new and successful product lines.
iNova is also tackling one of the most important health issues of our time, obesity and weight management. Most of the prevalent western diseases can be related to obesity and iNova recognises that by managing body weight the overall health of patients can be improved. As such iNova has concentrated on supporting doctors with the most widely used prescription weight loss medication and they are about to launch a new Very Low Calorie Diet which has been developed in-house with the guidance of nutritionists and Professors of Nutrition. With added support from websites with diet and exercise programs iNova is committed to helping patients manage their weight and ultimately their health.
One of the most interesting offerings, and most expensive per shot, is their Dicobalt edetate injection. This is an antidote for cyanide poisoning. When you think of cyanide poisoning your mind might be thrown into spy novels or Cold War intrigues, but the chemical can be found in everyday things, such as apple seeds, almonds, bacteria, fungi, cigarette smoke and car exhaust (hydrogen cyanide in the latter two cases). This means that people can have casual exposure to the toxin over a long period of time, and gradually become contaminated. This leads to blood toxicity that manifests itself as weakness, and even paralysis. At higher levels, it can cause the feeling of coldness in the blood of the body, blurred vision, and shortness of breath. At lethal levels cyanide completely blocks the body’s ability to process oxygen, with death occurring within minutes of exposure.
“The product itself comes from the US, and very little is manufactured, but we always have to make sure we have a few. When we are carrying that sort of product you have to make sure there is someone there ready to take an order 24 hours a day 7 days a week. This is important because someone could want this in the middle of the night in Perth, and need it very quickly. It is a very unique product,” says Howden.
“On the OTC side we have products that originally came out of the 3M stable, but were originally developed right here in Australia. The DURO-TUSS cough range, and the Difflam throat products are very well known in the market. We are particularly proud of these because they are number one in their categories,” he says. “In the cough segment for in pharmacy purchases, DURO-TUSS is the number one selling product. These days if you go into any pharmacy in Australia and you have a cough you will be more likely to be recommended DURO-TUSS than anything else.” This stands in testament to iNova’s marketing strategy, Howden and his team has focused on working closely with pharmacists and doctors, and making sure that their brand is well understood.
Brand name power
To maintain their image as a true medicine, even an OTC one, they have avoided putting their products in general supermarkets and corner stores. “This gives us a lot more support at the pharmacy level, but also gives us a different position in the market as a medicinal, professional brand,” says Howden. The Difflam products have also maintained themselves as the premier product in their category as well, using much the same strategy. “Even though Strepsils is a big name, we win in the pharmacy,” he says and this makes iNova very proud, not only because it is their product, but it is an Australian one that holds this place.
Along with the cough and cold medications iNova offers allergy relief products, urinary tract medications, supplements, and topical pain relief gels and creams. “Across the board we have a fairly balanced portfolio, with many products in the top three of their categories. We don’t market products that are going to be number seven in the market – we make sure they are going to be in the top three,” Howden says. He also says that iNova stays away from some of the categories that the “big boys play in” because he knows that they just don’t have the market clout, money, or resources to compete against them.
Their customer base has been developed through directly interfacing with doctors and pharmacists. In Africa, Asia and Australia they work with their clients to make sure their products meet their needs and are affordable to them. This also means that their products end up having professional recommendations.
Getting bigger, staying ahead
“Part of our strategy is going to be geographic expansion. Australia is extremely good for us- it is half of our business, but Asia, as everyone understands is a much larger market and a larger opportunity for us. So a lot of our expansion plans are focused on Asia.” Since Howden had so much experience in the regional markets in Asia, he was the perfect fit for iNova’s business expansion plans. “We would have liked to more in Asia so far, but the opportunities in Australia and Africa have been high on our agenda and tied up a lot of our resources. What we have done is tidied up the operations of the Asian business to be more profitable, so a big play into China is next on the agenda,” he says. “We have always been pretty focussed in developing our marketing process, and for a current launch in Australia we increased our field force size this year. This is something we do to make sure that our sales and marketing can compete with the big boys so that we can get our products out to patients and doctors,” says Howden. “We have products we are developing in house with our own internal R & D team,” he says, stressing the importance of continuous innovation in the product pipeline.
“Our scientists are always looking at new product development as well as how to improve our current portfolio. Half of our products that we launch come out of our own research, the other half comes from our in-licence brands,” says Howden.
By owning most of their own manufacturing process they are also able to streamline the process with a minimal amount of bureaucracy, allowing each individual to make decisions. “For the last four years we have also upgraded the factory and put in new machinery to make us more efficient,” he says. “This has changed a lot over the last few decades, efficiency in manufacturing has moved to be a higher priority than it was 20 or 30 years ago.” This is important if they want to maintain their market share with the growing trend of outsourcing.
Investing in the iNova name
“Globally the industry has been going through changes over the last few years, with a lot of medications coming off patent and being genericised, and that is going to have a big impact on the market. The industry, however, has proven to be resilient for hundreds of years and will still stay there,” says Howden. “As an industry we will continue to provide for patients and the patients’ needs. The industry has never been more focused on finding new ways to treat diseases we have not been able to treat for so long.”
Because the patents are expiring in major markets, companies, large and small, have new impetus to innovate. “Some treatments of cancers that were perilously neglected have been re-examined now that the industry has realised that there is a good return to be had, which is great news for patients,” he says. They are also refocusing on heart conditions and weight control, both of which are emerging as very strong product categories, and ones that iNova already has strong contenders in.
“Our reaction to the GFC was to invest more in sales and marketing, because our belief was that if we did that during that difficult period, when the market turned around again we would be in a much better position,” says Howden, and the plan worked. “We did not take our foot off the accelerator, and we came out the other end with a better market share,” he says. With the present well-in-hand Howden says that they look to double their sales numbers in the next five years. “This year alone our objective is to surpass 180 million dollars in sales, so in the next five we hope to double that,” he says.
They are also looking to expand their businesses in China, Korea and Japan. “So its two things, its product pipeline development and geographic expansion.” They have also examined how they can educate to patients, and one of the methods they are looking at is mobile technology that will allow patients to track their conditions with a mobile app. One day iNova will have “an app for that”, Howden laughs at the suggestion, but says that is basically the idea. “Diabetics are one of the biggest groups that are looking for information about their condition, and if you can have an app for them, and lets them know if they are under control, they will embrace this sort of idea,” he says. This not only demonstrates the company’s forward thinking but their grasp of consumer technology as a marketing and educational tool. This is hardly surprising coming from a company that Howden has described as excellent marketers, but it may become an unpleasant one for their competitors.