What value does Nivagen bring to buyers?

The buyers in the market are consolidating, especially in the generics area. For example, Walgreens and AmerisourceBergen are buying as one group; Rite Aid, Walmart and McKesson also buy as one group, and so do CVS and Cardinal Health. This puts pressures on suppliers and lowers prices. It decreases the market size for suppliers to sell to. It also exposes business to risks when issues arise in areas such as regulation, patenting and logistics. In the pharmaceuticals space this is a particularly delicate scenario because when production halts, it is time and resource consuming to restart it.

Nivagen stresses the value of our supply track record and our role in helping buyers diversify risk. Most of our products are vertically integrated and this represents robust supply. Buyers have the following considerations: product, price, supply and quality. Price used to be the main determinant of business, but supply has superseded it, as companies have become conscious of the importance of consistency. We have an excellent track record with almost zero supply issues and an attractive portfolio of services.

What types of drugs do you provide to buyers?

We do not have a specific therapeutic area. Instead, we go after the generics with the least competition. Our strength is to identify the niche generic, execute fast and reach the market. We focus on what is less crowded and provides good return margins.

Two years ago, we changed our focus from B2 generics to developing generic injectables and ready-to-use premixes. They are not yet on the market as we are in the process of review and approval. We look at our buyers’ needs. For example, being innovative in the dose form: if a pain patch is more convenient for the buyer than a gel, then we work to make that convenience a reality.

Pending patent cliffs are a big news item today. To what extent is this an opportunity for Nivagen?

In the big billion dollar plus molecule space, there are multiple filers. Most of them are vertically integrated from API to manufacturing and commercialization. For us to compete with them in the long run is difficult. We are not going after the big molecules unless there is an additional challenge we can address – something to do with formulation or manufacturing. Niches are our expertise, and we work closely with the buyers to understand how we can tailor to their needs. There is a lot of opportunity in the field of unapproved drugs. We do safety and clinical studies to make these drugs effective.

How important are partnerships to Nivagen’s business?

The cornerstone of Nivagen’s success is our partnerships. We co-develop products with FDA qualified manufacturing facilities. We bring value through our market intelligence capabilities, and insuring the right product selection. We also bring regulatory and product management support. Finally, and of key importance, we provide a distribution platform. There is an abundance of cost advantages and benefits from a shared construction of infrastructure. Partnerships also help in diversifying risks.

How does Nivagen’s commercialization platform help foreign companies access the US market?

Nivagen helps foreign companies avoid costs associated with manpower, warehousing, distribution, customs clearance, vendor agreements and government contracts. In their route to the US market, we take care of everything. They get paid for the inventory and for royalties. To date, business has come mostly from India and Europe, but we are seeing growing interest from Chinese and Taiwanese companies. Smaller companies value partnering with us because our size allows for preferential monitoring and attention.

Over the next two to three years, what goals do you wish to achieve at Nivagen?

We want to expand and are looking to raise money through a funding round, which will allow us to scale up our team and platform, and set up a small sterile unit.

We are looking for a partner with manufacturing capabilities in the injectable space. They must be interested in a profit split. We bring them a ready-to-go product and, in turn, we expect the partner to eat up the cost of scale up. Then we split the filing fee and profits.