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EF: What does 2023 have in store for Stendhal Pharma?
RR: We are showcasing impressive growth in Central America and the Caribbean in most therapies, becoming the leading company in orphan drugs and even closing deals with other companies in the region. Our vision for Stendhal Pharma is to become the leader in the orphan drug business in Central America & the Caribbean, and we will achieve it. Managing this is complicated because you usually have only one or two products in your portfolio, which can be a big burden for investment. But since we already have a portfolio in place, we have been able to create important structures in medical and commercial aspects. The good news is that companies are now looking at us to represent them in Central America and the Caribbean.
Our operations are performing well in the Andean region (Ecuador, Perú, and Colombia), particularly with our orphan drugs portfolio. Despite some uncertainty due to a possible health reform, we are expanding our partnerships in Colombia, and we are on track to consolidating our operations in the Andean region. As for Mexico, even though we are changing our current business model, our focus on innovation remains part of our DNA, and we are committed to bringing innovative products to patients. However, external challenges could hinder innovation, especially in the public sector.
In 2023, we will have six innovative products in our pipeline with different partners, which will help us continue to capture long-term value for Stendhal and bring new partners to the Mexican market. We are also diversifying our business. At the end of 2022, we signed an agreement with Danone to represent Nutricia for all their nutritional business in Mexico. This is a big opportunity for us, as 60% of the total sales for Danone come from the nutritional business, which is not a small sector.
Nutricia is the leading company in specific sectors such as allergies, metabolism, and growth. We are going to focus on those three sectors. One reason for this is to diversify our business; the second is that we are looking for products with existing regulatory approvals. That is our strategic plan for 2023: to capture what we call third-party promotions.
We have a detailed mapping of the products we aim to capture from Innovative companies. Currently, we are in talks with four companies to help them enhance their portfolios in the short term to extend this after 2024. We will also continue fostering innovation and capturing value for our partners. For companies seeking to redefine their business models, overcome challenges in the regulatory environment, and face questions about their business model. Stendhal stands out as a partner of choice that allows them to ensure sustainability.
We focused on capturing opportunities during the COVID-19 pandemic to continue our operations, which helped us to continue helping patients with our vision of providing innovation with a diverse portfolio. Our unique business model enables us to pursue R&D through discussions and conversations with potential partners worldwide, as our compliance policies align with the IFPMA (International Federation of Pharmaceutical Manufacturers & Associations), giving us an advantage as the only Mexican company in AMIIF.
EF: How do you decide which companies to partner with, and how do you manage your resources to transition from an innovation-focused portfolio to a more generic one?
RR: We are centered on innovation and have various stages in our R&D process. First, we prioritize the therapeutic areas where we already have a portfolio. Then, we explore different products in different stages, from phase 1 to phase 3 and beyond and assess the potential market forecast for those products. After a thorough analysis, we discard products owned by big pharmaceutical companies and instead focus on products developed by small biotechnological companies.
We present different options to these companies and are willing to invest in some cases, for example, by funding phase 2 or phase 3 clinical studies and obtaining a license for a hundred years or a perpetual license. Another business model we have is paying a milestone for a license when the molecule is ready to launch. We also distribute products for other companies and develop a tailor-made value proposition depending on the partner's needs. Some partners require funding, while others need compliance operations and full representation in the countries where we operate. This is the beauty of our business model.
EF: What lessons have you learned thus far, and what are your predictions for the future of digital business models in pharma, marketing, and patient access within the Latin American region?
RR: In my experience, the pandemic and the following months of digitalization generated a lot of data that we needed to be equipped to analyze properly. At Stendhal, we invested heavily in analytics, which we continue to strengthen by using information from audits and the CRN. As a result, we now have a growing database that will enable us to use robots and, in the near future, AI technology to make more personalized calls to physicians. This individualized approach is the future, and we are actively working towards it rather than relying on generic promotions.
During the pandemic, we diversified how we approached our physicians and used marketing tools, but the level of adoption did not increase as much as we expected. In fact, in Mexico, it almost returned to how it was before the pandemic. We invested a lot in this; it remains to be seen if we are getting the return on investment or sustainability we had hoped for. However, we learned a lot from the data we collected and processed during this time, which allowed us to make different decisions in the future. We are starting to use this valuable learning, particularly in the primary care business, where we compete with companies with far more sales representatives than we do. Our multichannel approach is still effective, but we are fine-tuning it by delivering personalized messages to physicians rather than just using tools to approach them. We have learned much from the pandemic and can use this knowledge to improve our approach.
EF: From your perspective, what will be the key driving factors for innovation in Mexico?
RR: The drive for innovation in the healthcare industry should come from the needs of patients, physicians, and even the government. Finding common ground between these sectors is crucial in delivering innovation to those who need it most. The current dialogue between these sectors must be reversed as it could be more effective in driving innovation. The industry has a pipeline for innovation, but willingness from other sectors to invest in innovation is also necessary to change people's lives. Even though the pandemic has shown us how innovation can save lives, we are yet to fully appreciate this fact as we took the availability of the vaccine for granted without analyzing what happened. We need to put everyone in the same direction to be able to align everything and bring innovation to our country's healthcare industry.
EF: How can we advance innovation in Latin America?
RR: To enhance innovation in Latin America, we need to concentrate on building bridges. We must focus on financing innovative start-ups with promising products in phases one and two of clinical trials. However, as an investor, it is important to bear in mind that many of these companies might not go to market, but that is the essence of investing. This is a limiting factor of innovation, which we must address as a unified sector.
EF: When celebrating Stendhal’s anniversary next year, what message would you like to send?
RR: The main message we want to convey is that we are the right partner to provide innovation to patients across all of Latin America despite the challenges posed by working with different governments and guidelines. Our business model is well suited to delivering that innovation. We do not need to reinvent the wheel. We have the right gloves to play in that ring and provide benefits to potential patients. Our 20th anniversary is actually this year; we started operations in 2003 with our first HIV business unit.
EF: If you had to create a roadmap to the future of healthcare, what would your key pillar be?
RR: We must genuinely put the patient at the center of everything we do. It is easy to say that the patient comes first, but our actions should align with our words. We should continue to engage and bring together all stakeholders involved, such as the government, associations, physicians, and patients, to collectively work towards achieving this goal.