Modern Strategy Moves Like a Crab
Leqembi Would "Work" Better By Collaborating with GE Healthcare
Eisai slashed 2027 sales projections (again) for Leqembi, its Biogen-partnered Alzheimer’s drug, by roughly half. Eisai says it now expects annual sales of around $1.7 billion to $1.9 billion in fiscal 2027 in presentation slides published yesterday. Last March, Eisai had projected $3.3 billion in 2027 sales.
Biogen and Eisai have faced a series of challenges in Leqembi’s global rollout, including bottlenecks in US health systems, writes Nicole DeFeudis in her reporting for EndPoints. Eisai cut its fiscal 2024 sales expectations for Leqembi by about 25 percent in November. But during Eisai’s third-quarter earnings call last month, COO Keisuke Naito said the company is “moving towards a growth expansion phase of Leqembi.”
Last year, the company’s CEO Haruo Naito waxed poetic as Eisai laid out an ambitious goal to hit roughly $364 million in global Leqembi sales for the 2024 fiscal year, quoting Japanese poet Takamura Kotaro’s famous work Dōtei (Road): “There is no way before us, but there will be a way after us.”
Dōtei was an innovation in the sense that it made a hard break from the traditional form of Japanese poetry — it was the first book by a Japanese poet to use Western free verse. Dōtei was Punk. It was published in 1914, right around the time the current form of the ‘drug market’ was born (Pfizer was founded in 1849; Bayer was founded in 1863; Eisai came later, being founded in 1941).
Eisai said in its presentation that a “Key Focus on the Future Market” (read ‘future drug market’) is “Establishing Collaborative System between Neurologists and PCPs* that orbits around the amyloid hypothesis of Alzheimer disease, even though science is now signaling that viruses trigger Alzheimer’s). Biogen is growing its U.S. field force by 30 percent as it works with Eisai on direct to patient and caregiver omnichannel marketing campaigns, the expansion is part of a broader push to throw more sales and marketing muscle behind the recently launched drug.
In other words, doubling down on the kinetics powering the traditional form.
Eisai is also hoping that “the need for burdensome diagnostic tools (PET/CSF) may be significantly reduced, simplifying and standardizing the AD diagnosis process”. Which is not an incorrect hope, in a linear logic sort of way. But it’s under conceptualized — at a system level, Eisai’s storyline of value doesn’t align with the economic reality of the customers it’s trying to influence: PET scans are a source of revenue for the IDNs, whose business is based on utilization, not to mention GE Healthcare, Siemens Healthineers and Shimadzu Medical Systems, all of whom want to grow the $3 billion market in PET scans, all of whom sell into the same IDNs-as-customers that Eisai does.
Part of The Problem facing big business innovation in the ‘drug market’ generally: the pharmaceutical industry is operating with a form, a system of concepts about identity and value, that hasn’t changed much in almost 200 years. Differently, an entire economic system keeps doubling down on a form of competition based on a center-of-gravity that no longer “works” strategically, in a world spinning itself into a whole new orbit that is beyond anyone to forecast.
A Crab-Like Move Sideways
The conventional language of business success moves in only one direction: in a straight line, hopefully up, although that hope is increasingly risky economically and professionally (see Corporate America’s Euphoria Over Trump’s ‘Golden Age’ Is Giving Way to Distress in today’s Wall Street Journal.) You scale the ladder by being better operationally, with the Standard Model, a linear frame of reference, a narrow definition of market (or ‘enterprise’) bounded conventionally. If you do well with the old form, you have a rapid ascent.
But there is another type of growth trajectory. Sideways moves.
The crab-like move has other things going for it beyond better matches and value alignment between markets. One is that it is a good way to learn new things. Eisai could learn a lot about the IDN customer (and hospital revenue and operations) by collaborating with GE Healthcare (or Shimadzu) on its ‘dementia ecosystem’ to serve and support the 42 percent of men and women who will develop dementia in their life times, a risk dramatically higher than previously thought (per a study published Monday in Nature Medicine).
By the same token, Shimadzu (or GE Healthcare) collaborating with Eisai, or Eli Lilly, for that matter. With ecosystems, the markets themselves and in isolation are commodity inputs; what matters more is a market’s ‘positional value’ to the ecosystem vision, how its integration enables something better, how it changes things. The systems theorists out there will understand this as “emergence” — new energy in the space in between the elements, voltage, sparking something different.
‘Intense Collaboration’ is a feature of good ecosystem-centered market strategy.
Intense Collaboration fits the working definition of collaboration (working together for a common purpose), but goes beyond it to build ‘lateral strength’ as a new muscle — the collaboration process is continuous, all the participants are highly active and likely to be using a variety of advanced communication technologies, the amount of information exchange and discussion is high because the perspectives and goals of the participants differ and must be reconciled, and there is considerable time pressure to reach workable solutions.
Ecosystems are a unique frame of reference for creative leadership.
They’re more of a biological orientation to understand how to position leverage, a different perspective from which to displace incumbents. The roadmap starts with vision to intentionally construct a system of markets to act as a single organism, and then draw innovative power from their connectivity.
For Eisai, that new energy means a different approach to its business objectives. For Eisai + GE Healthcare, it could mean big system change, particularly around compressing the ‘test-to-treat’ timeline. For Alzhiemer’s patients + caregivers worldwide, it could mean progress that, so far, has been painfully slow and incremental, at best.
Another Type of Growth Trajectory
There’s a lot of hand-wringing and head-scratching going around, a mushrooming cloud of chaos that’s beyond normal cognitive patterns to understand, much less get in front of, “an overriding sense of helplessness” among executives now, says Sean West, co-founder of the software firm Hence Technologies and the author of a new book on modern business risks. “CEOs are feeling stunned, and they’re not used to feeling like they don’t have good moves.”
I suppose that all depends on how you think about movement.
/ jgs
John G. Singer is Executive Director of Blue Spoon, the global leader in positioning strategy at a system level. Blue Spoon specializes in constructing new industry ecosystems.