BMI View: The Netherlands has a well-developed healthcare sector and a highly competitive pharmaceutical industry. With the Dutch economy entering a cyclical growth upswing, we expect higher consumer spending will provide a small boost to pharmaceutical sales in the near term. We forecast the pharmaceutical market will return to growth in 2016, the first time since 2011. Over the long term, medicine demand will be driven by the country ' s ageing population. However, market potential will continue to be dampened by the patent cliff, rising use of cheaper generic products and further drug price restrictions.
Headline Expenditure Projections
Pharmaceuticals: EUR5.92bn (USD7.93bn) in 2014 to EUR5.83bn (USD6.41bn) in 2015; -1.5% in local currency terms and -19.2% in US dollar terms. Forecast in line with last quarter.
Healthcare: EUR73.31bn (USD98.23bn) in 2014 to EUR74.33bn (USD81.76bn) in 2015; +1.4% in local currency terms and -16.8% in US dollar terms. Forecast revised downwards slightly from last quarter.
The Netherlands continues to rank in the lower half of BMI's Risk/Reward Index (RRI) for the 15 key Western European markets, ranking 11th in our index for Q415. At 64.7, its overall RRI score remains unchanged from last quarter and is still slightly below the regional average of 66.9. While the country offers drugmakers a relatively low-risk operating environment, poor market prospects - due to pressures on pricing and reimbursement and the market's maturity - will continue to weigh down the country's overall standing.
Key Trends And Developments
Dutch drugmaker Kiadis Pharma is planning to raise funds for research through the listing of its shares on the Amsterdam and Brussels stock exchanges. The company's lead product, ATIR 101, is currently in Phase II trials for leukaemia. The drug acts by facilitating the transplantation of stem cells from family donors. Trial results are expected in Q116. Furthermore, Kiadis' second product, ATIR 201, which is focused on treating thalassemia, is due to start clinical trials at the beginning of 2016. Netherlands-based investment bank Kempen has been appointed as the sole global coordinator, and joint book-runner together with US-based KBC Securities. US-based broker Peel Hunt has been appointed as co-manager (Reuters).
Pfizer has acquired a minority equity interest in AM-Pharma, a privately held Dutch biopharmaceutical company focused on the development of recombinant human alkaline phosphatase (recAP) for inflammatory diseases, and secured an exclusive option to acquire the remaining equity in the company, exercisable upon completion of a Phase II trial of recAP in the treatment of acute kidney injury (AKI) related to sepsis. Under the terms of the agreement, Pfizer has made an up-front payment of USD87.5mn for the minority equity interest and exclusive option, with additional potential payments of up to USD512.5mn upon option exercise and potential launch of any product that may result from this agreement.
Synthon announced that data from the open-label extension of the Phase III GATE study of the company's glatiramer acetate in patients with relapsing remitting multiple sclerosis have demonstrated that efficacy, safety and tolerability were maintained over the entire two-year study period. Synthon's product is a potential generic equivalent of Teva Pharmaceutical Industries' Copaxone.
BMI Economic View
The Dutch economy has entered a cyclical growth upswing. Consumer spending, which has been a drag on growth over the past few years, will help drive a well-balanced growth acceleration over the next two years, supported by rising house prices and strong disposable income gains.
BMI Political View
The Dutch coalition government's loss of its senate majority will usher in a period of legislative deadlock, as the Senate has the power to block the passage of legislation. Unless a workable majority can be formed through fresh negotiations with opposition parties, the chance of governmental collapse will remain ever-present.