When the business now known as Adalvo first emerged in 2018 as Alvogen B2B (it rebranded itself in 2020), Anil Okay had been employed and the business unit had just two products in its portfolio. Okay set an ambitious target of achieving $100 million in revenue within five years, a timeline typically required for product development and launch in the pharmaceutical industry. In fact the business had reached the $100 million revenue target by 2022, which was its fourth commercial year.
Adalvo currently has a team of 150 employees, a portfolio of 110 products, and 120 strategic partners. The company has successfully launched products into 75 markets. Over the past five years, it has completed over 600 transactions, averaging one every third working day, fully realizing its vision to rapidly evolve into a leading B2B player.
Okay attributes this remarkable success primarily to the ‘people element’. He emphasizes the strategic retention of key talent, saying: “What was very fundamental to our business was to retain key talent. I was fortunate to have brought on board several highly talented employees from Alvogen and we added new capabilities by undergoing targeted external recruitments.
“Having a team who really were very committed to our journey and having exceptional know-how and experience, we built up a thriving business from the ground up. Our staff turnover rate is one of the lowest in our industry and our employee satisfaction rates are above 95%.”
Adalvo remains under the same ownership as Alvogen and Alvotech, operating within the Aztiq group of companies, where Okay himself is a partner. However, since 2021, it has functioned as an entirely independent entity, with standalone corporate functions, management processes, and quality systems. While collaboration with sister companies remains a possibility, Adalvo is currently executing its own strategy and building a business based on its own expertise and portfolio.
Four-Pillar Differentiated Strategy
At the time Adalvo started out, Okay adds, there was a lot of talk about specialty generics and differentiated products, but many of the companies only had one or two points of differentiation. Many who went into that space struggled because they found it hard to attract capital to invest in multiple differentiated high-risk products. Adalvo took a different and, he believes, unique approach based on multiple pillars. It now offers four different product types to its customers:
- Complex and niche generics
- Branded products
- Peptides and biosimilar products
- 505b(2) and value-added medicines
“This multi-faceted strategy has attracted the market and investors, enabling Adalvo to grow at an exceptional rate,” Okay says. “The company has nearly doubled in size each year since its inception and anticipates similar growth in the coming year.”
Adding Value to Drugs
The term '505b(2)' originates from the US, where it refers to value-added medicines. In Europe, the concept is less familiar and is described more broadly as medicines that enhance the value of existing products for patients. This may involve improving accessibility, potency, pharmacokinetic (PK) profiles, or dosing frequency or any other clear benefit. One could argue that value-added products represent true innovation and differentiate themselves within the complex generics space.
From its inception, Adalvo strategically aimed to introduce the 505b(2) concept to Europe. Its 505b(2) portfolio now comprises 15 products, with a significant focus on central nervous system (CNS) therapies, accounting for 20-30% of the company’s R&D pipeline. Notable successes include a successful Phase III trial for a controlled-release form of Pregabalin, reducing dosing frequency, and expanding the indication of an existing product through new clinical trials in Europe.
Technology- And Indication-Agnostic Approach
“Adalvo aspires to become the preferred partner, setting a new standard for the pharmaceutical industry.” With this, Okay highlights the company’s ability to be a complete one-stop shop for its partners. In conjunction with the 25 different technology platforms available in its current portfolio and pipeline, this offering is unique within the B2B space.
The company has a diverse portfolio, including the broadest range of generic drugs for diabetes and obesity in Europe, over 30 oncology products in Europe and emerging markets, and multiple CNS products. Key therapeutic areas also include cardiology, chronic pain, urology, dermatology, infectiology, mental health, and women's health.
Diabetes infectiology and oncology are primary drivers of growth. Adalvo's portfolio includes eight peptides, primarily focused on rare diseases and diabetes. Some are very big products with an addressable market size of $32,421 million in 2022, according to IQVIA
Award-Winning Effort
Adalvo’s success over the past five years has not gone unnoticed. The company was awarded Most Innovative B2B Pharmaceutical Company, 2022 - Europe at Global Health & Pharma Magazine’s 2022 Global Excellence Awards and received an award for its sustainability efforts at CPHI Worldwide in 2021. Just this year, it received nine finalist nominations from the CPHI Awards and the Global Generics & Biosimilar awards.
Okay himself won Leader of the Year at the Global Generics & Biosimilar Awards. However, the award he is most proud of achieving is the Best Places to Work certification, which was awarded in 2021 and again in 2023. “This certification stands as a testament to our unwavering commitment to creating a workplace where employee satisfaction and well-being take precedence, showcasing our dedication to fostering a positive and engaging work environment,” Okay comments.
Culture of Initiative
Adalvo's culture, as highlighted by Okay, is a cornerstone of its success. The company is known for its strong work ethic and a solution-oriented mindset. “A half-hour meeting typically comprises of one minute of problem definition and the remaining 29 talking about solutions,” he says.
With employees spanning 17 countries, Adalvo values talent above geographical location. It currently employs people in Switzerland, the UK, Netherlands, Spain, Iceland, Austria, Romania, Hungary, Bulgaria, Portugal, Czech Republic, Turkey, Italy, Slovenia, Uruguay, India, and Malta.
“In a construct like this, it is absolutely critical to trust our people and encourages a culture of performance and initiative. My key expectation from our people, is that they take charge and make decisions. We are a bottom-up culture, very entrepreneurial, a ‘take the initiative and move on’ culture,” Okay says.
This is the reason why, in Okay’s view, Adalvo is able to attract and retain talent. Its low staff turnover rate, below 2% per year, reflects the preference of employees to stay with the company, driven by the appealing culture and the sense of ownership in their roles. “Our employees prefer to stay with us. They like the culture, the company and its developmental opportunities, and they like to take full ownership and accountability. I think businesses today are changing. People want to work for companies where they can have a meaningful impact, rather than simply becoming part of the routine.”
Growth Through Partnerships
Adalvo’s growth has been primarily fuelled by its strategic partnerships. The company has collaborated with over 120 pharmaceutical and generic companies and is in discussions with an additional 80. Thus, Okay believes that Adalvo has collaborations with essentially all major players in the generics industry, often spanning over ten products and at multiple levels.
This is exemplified in as strategic collaboration with Teva, where five deals were closed in 2023, the most recent being a licensing deal for a blockbuster small molecule in the oncology segment aimed at addressing rare diseases with limited treatment options. The total market value of the products involved to date is said to exceed $1 billion.
Breaking Into The US
One significant development came in May 2023, where Adalvo announced its expansion within the US market through a strategic distribution and collaboration agreement with Sandoz for six products in the oncology and antibiotic segments. These products are scheduled for near-to mid-term launches beginning in 2024 and have a total addressable market size of approximately $3 billion.
The company’s US strategy stands out. Instead of pursuing an extensive product portfolio for the US market, Adalvo focuses on the development of three to five 505(b)(2) drugs and other niche assets that face little competition. This strategy is executed by a dedicated US portfolio team, all of whom possess expertise in intellectual property.
“We have one product for which we were first to file in the US and it faces competition from fewer than three competitors. Additionally, we have another product indicated in the treatment of ADHD, that we plan to file within the next six months. We expect no immediate competition for the next five years, thanks to our patent protection covering the formulation,” explains Okay.
Branded Transactions
In October 2022, Adalvo completed the acquisition of its first brand, Onsolis, an opioid analgesic, from BDSI. This is indicated in the management of persistent breakthrough pain in cancer patients who have already received, and are tolerant to, opioid therapy. Adalvo has obtained full rights to the product, taking over all existing business and all market authorizations globally, including business in the US.
More recently Adalvo announced a collaboration with Ireland-based Cosmo Pharmaceuticals, giving it the exclusive right to develop, register, and commercialize Rifamycin SV MMX 200mg, an orally administered, delayed-release, non-systemic antibiotic that has been approved for the treatment of travellers' diarrhoea. Five more branded transactions are in the pipeline.
Sustainability And Strategy
Sustainability, including ESG considerations, has been integral to Adalvo’s strategy since inception. It is a recurring topic at the core management team meetings which are held every Friday morning. Initiatives have included materiality testing, reporting, and comprehensive compliance programmes.
Adalvo also actively contributes to environmental initiatives, planting a tree for each deal closed, and supporting university-based pollination research centre to create bee-friendly habitats, symbolised by its own production of honey. The company further provides a 24/7 external support program for employees, offering confidential assistance for personal and professional matters, including mental health. Adalvo also demonstrates its commitment to diversity, with approximately 65% of its employees being female.
Outlook
It is always extremely difficult to project what might be coming next in the pharmaceuticals industry. “Traditionally, emerging markets have been predominantly influenced by branded products,” Okay notes. “However, there's a noticeable shift as numerous European companies are increasingly aiming to establish both branded assets and branded structures across diverse markets. For example, in Germany companies are reverting to the practice of dispatching sales and marketing teams to personally engage with doctors and promote their products, reminiscent of approaches employed two decades ago.”
Anticipating the expansion of this trend, Okay envisions a future where companies will increasingly rely on branded products to enhance their profit margins, recognizing the unsustainability of the current tendering environments. This perspective has significantly influenced Adalvo's 505(b)(2) strategy, as the company plans to maintain an asset-light approach while actively pursuing additional branded transactions.
Looking ahead, Okay expresses a growing concern regarding the ongoing shift of API and drug production to China and India. He observes a steady decline in the number of producers within Europe. From a sustainability standpoint, he contends that governments ought to seek the optimal model for the future of generic pharmaceuticals. In 2024, Adalvo anticipates launching over 15 products and entering 30 new additional markets. Its ambition is to be the leading B2B pharma company in Europe in 2025.
