Novartis is to slim down its insecticide range of 26 active ingredients to focus largely on 11 key a.i.s. Several additional niche market products will be maintained, but six older products (dichlorvos, disulfoton, formothion, isazofos, monocrotophos and phosphamidon) will be phased out.
The merger of Ciba and Sandoz in 1996 and the acquisition of Merck's agrochemical business in 1997 (Agrow No 280, p 1) presented Novartis with a "once in a lifetime opportunity" to reassess the company's insecticide portfolio, says John Atkin, head of insecticides at Novartis. A further spur was the rapidly changing insecticide market, with increased demand for more effective products with better environmental characteristics. Novartis's aim is to establish clear priorities in its insecticide business and a strategy for focusing its resources in terms of product management, marketing and R&D. Candidates for the new product portfolio were assessed on performance, current market share, profitability, growth potential, ability to fit in with integrated pest management programmes, and importance in terms of specific geographical or niche markets.
These criteria are reflected in the list of 11 key a.i.s, which contains the older well established products, profenofos and methidathion, alongside abamectin, cyromazine, diafenthiuron, fenoxycarb, lufenuron and tau-fluvalinate, which are still in the development phase. In addition, newer products are represented by emamectin benzoate, pymetrozine and thiamethoxam (ISO proposed name for CGA 293,343).
This list is not exhaustive, stresses Dr Atkin. The company will continue to maintain some other products of local market importance, in response to local customer needs. In addition, continuing R&D investment may well lead to a further re- prioritisation of the portfolio. "This is not the end of the story," he says.
Novartis has already taken the first step towards redefining its insecticide portfolio with the sale of its spray-on Bacillus thuringiensis biopesticide business to Thermo Trilogy in 1997 (Agrow No 291, p 1). Other selected divestments could be possible. A timetable for the replacement of the six older ais, all organophosphates, has yet to be finalised but the process has already started and will be carried out on a country by country basis. Novartis is aware that some products are of considerable importance in local markets in Asia and Africa, and it is liaising with local authorities, non-governmental organisations and international organisations such as the World Bank and the United Nations Development Programme about its intentions. The speed with which these products are replaced will be influenced by local marketing and regulatory considerations, says Dr Atkin. Despite their importance in some countries, these products have decreasing market potential, Novartis believes. Generic competition means there is often less justification for investment in product stewardship and some countries have already imposed restrictions or bans on use. The company regards product stewardship as a priority, particularly in developing countries. Novartis has also considered its other products in coming to this decision. It considers it can offer viable alternatives to farmers from the new portfolio, which covers just about every crop use application in every important market and offers different modes of action. "If we want to grow this technology to its full extent, we really need to replace some of the older products," says Dr Atkin. The company is also keen to maintain a product range that will fit with the introduction of insect-resistant crops. These crops are only one solution, points out Dr Atkin, and Novartis does not expect them to result in a decline in the total insecticide market. However, they generate an added value crop market and it will be important to offer agrochemical products that also provide better value to customers.
The new product priorities will impact production, formulation and packaging systems. The company is confident it has the capacity to adapt its existing facilities to the new strategic direction, but recognises this will take time. Any changes are expected to be accomplished over the next two years. There are also implications for future arrangements with third parties, such as co-development agreements. "Clearly, with the broad range of products available, our need for licensed-in products is very low," says Dr Atkin.
Product Development
Among the newer products, emamectin benzoate, acquired from Merck, is considered to have "tremendous" growth prospects, says Dr Atkin. Emamectin benzoate received its first global registration in Japan last month and will be launched there this year. It will be sold under the name Affirm and is for the control of lepidoptera pests on leafy vegetables, brassicas and as a trunk injection in pine trees to control the pine sawfly. The insecticide has been granted an emergency exemption in Hawaii, additional exemptions are possible elsewhere in the US this year, and full approval by 1999.
The insect growth regulator, fenoxycarb, is for lepidoptera control on pome fruit and nuts. The product is sold in several countries and Novartis intends to register it worldwide. In 1997, it was registered in the UK, as Insegar, and received an emergency exemption in the US, as Comply.
Another IGR, lufenuron, is for use against lepidoptera in maize, vines, soybeans and some vegetables. Its activity makes it a particularly good fit in Latin American markets and the product was very successful in Brazil in 1997, says Dr Atkin. It is also sold in Europe and Asia, mainly as Match. In 1997, it was registered in Italy, Portugal, Greece, the Czech Republic, Slovenia, Taiwan, Thailand, Venezuela, Peru (as Axor), Honduras and Nicaragua.
Pymetrozine controls sucking pests in rice, vegetables and hops. Its novel mode of action makes it useful in resistance management and IPM programmes. In 1997, it was registered in Turkey (as Chess), Germany (Plenum), the Czech Republic, Panama and Costa Rica. It is also registered in Taiwan and Malaysia and Novartis hopes to gain Japanese registration this year, followed by approval in the US and southern Europe in 1999.
The company hopes to apply for US approval of thiamethoxam this year and intends to gain worldwide registrations over the next two to three years (Agrow No 295, p 18). The product is for use against sucking and some chewing pests on vegetables, cotton, rice and as a seed treatment. It was registered and launched as Cruiser in New Zealand in 1997, as a seed treatment for maize, and has been registered in Paraguay and Indonesia (as Gammon) as a cotton seed treatment and a foliar spray on rice.
Of the more established products, Novartis is evaluating new crop and pest uses for abamectin, the insecticide/acaricide acquired from Merck. One such area of investigation is its potential use as a nematicide. Abamectin is sold as Vertimec, Agrimec and Avid for use on fruit, vegetables and ornamentals.
As part of plans to establish profenofos in the Indian cotton market, Novartis plans to produce the ai at its Goa plant in India. Supplies are currently shipped from Novartis's production plant in Monthey, Switzerland. Profenofos is marketed worldwide as a broad spectrum product for use on cotton and vegetables and is sold as Curacron and Selecron.
The company also hopes to establish Polo (diafenthiuron) in the Indian market. It was registered in Japan in 1997, as Gamba. Diafenthiuron, also sold as Pegasus, controls whitefly in cotton and is used mainly in the Near and Middle East, Africa and the Asian subcontinent.
Other products include cyromazine, which is an important niche product with unique qualities, says Novartis. Sold as Trigard, it controls difficult pests such as leaf miners in ornamentals. Methidathion (sold as Supracide and Ultracide) controls scale insects in fruits, nuts and citrus. Tau-fluvalinate is important in the European market as a pyrethroid that is safe to bees and other beneficial insects. It is for use on small grain cereals and fruit and was registered in the UK, as Mavrik, in 1997. It is also sold in Asia.
Beneficial Insects The new insecticide strategy includes Novartis BCM (Beneficials for Crop Management), a UK-based company producing beneficial insects and nematodes for crops grown under glass or plastic. The business was formerly Ciba Bunting (Agrow No 176, p 3). With the acquisition of abamectin and the development of thiamethoxam, Novartis wants to set up a clear strategy for protected crops. It intends to co-market the BCM products with its crop protection chemicals, so it can offer a complete management solution for these crops. The business will be maintained as a separate unit within Novartis Crop Protection.
"It is not easy to make money out of beneficial insects," admits Dr Atkin, but he believes Novartis BCM has a strategic role to play. The target for BCM in 1998 is to break even.
Novartis's total insecticide sales exceeded SwFr 1,000 million ($667 million) for the first time in 1997, partly due to the Merck acquisition and also to strong sales of profenofos and lufenuron. Insecticides represent 17% of Novartis's crop protection business, smaller than herbicides or fungicides. But 1997 was just the start of the impact of recent decisions on the insecticide portfolio and Dr Atkin is confident that the full impact of the new and acquired products will be seen in 1998 and beyond.