Alternate dosage forms
Akorn’s (AKRX) extensive alternate dosage form portfolio is comprised of topical creams, oral liquids, nasal sprays, injectables, ophthalmics, and otic solutions. It’s expected to be a key driver of the company’s growth in 2016.
The above diagram shows that Akorn has substantial opportunities to grow in the alternate dosage forms market. The company also targets multiple market segments such as generic drugs, branded prescription drugs, OTC (over-the-counter) drugs that also involve private label OTC products, controlled substances, as well as animal health products.
Akorn’s strong product portfolio will enable it to pose tough competition to peers such as Teva Pharmaceuticals (TEVA), Pfizer (PFE), and Perrigo (PRGO). This will also benefit share prices of the iShares Core S&P Mid-Cap ETF (IJH). Akorn accounts for ~0.17% of IJH’s total portfolio holdings.
Akorn has been aggressively developing its alternate dosage forms portfolio either through focused R&D (research and development) activities or through partnerships or acquisitions of strategic targets.
Currently, Akorn’s R&D pipeline is comprised of 86 pending ANDAs (abbreviated new drug applications). According to IMS Health, if approved, these 86 generic drug applications—including 27 ophthalmic drugs, 12 topical drugs, and 34 injectable drugs—will target market worth of $9.2 billion. While six of the ANDAs are tentatively approved, while 50 of the filings are currently being approved by the U.S. Food and Drug Administration.
Akorn expects 25 ANDAs to get approved by 2017. The company planned its R&D expense at 5%–6% of its annual revenues. It expects to file 20 new ANDA filings in 2016. Akorn also focuses selectively on para IV ANDA filings to ensure maximum revenues from its marketed products. Read Is a Para IV Filing Rewarding for a Generic Company? to learn more about para IV filings.
In the next part, we’ll explore Akorn’s inorganic growth strategy in more detail.