The Big Red Biotech Blog

Well, yeah! And your point.....

"No man but a blockhead ever wrote, except for money."            --- Samuel Johnson

Put Myriad vs AMP to Bed

I've been away awhile and haven't been posting as regularly as in the past.  Hence, I wasn't writing on the day the Supreme court issued its ruling in the AMP vs Myriad.  Of course, by now you know they said that "a naturally occuring DNA segment is a product of nature and not patent eligible merely because it was isolated".  This of course was in disagreement with what have been done with about 4000 genes over the prior 30 years.

However, the court also ruled that "cDNA is patent eligible because it is not naturally occuring" - at least in the usual case where the introns have been removed. If the original gene or DNA segment happened to have no introns then that cDNA might have some patent eligibility issues too. Not to worry.

By now, few if any gene patents are being filed anymore -- especially after the genome was sequenced and published. The court said you couldn't patent native DNA anymore, but you can patent most cDNA and you may be able to patent method claims related to novel discovered DNA sequences, and you could potentially patent new applications based on knowledge of novel genes. And you might also be able to patent DNA sequences where the natural sequence has been altered.

So no doom and gloom.  Those who wanted it recognized that native DNA sequences are products of nature and should not be patent eligible got their way.  And those who derive information and applications from these sequences have a way to protect their commercial value.  On balance, the world will continue to move on and all the doomsayers can stop now.  Plus the cost of BRCA tests look like they will drop slightly for those who found the previous price to be an impediment.

See here, here, here, here, here, and here for more blog posts on this topic. 

Is that All I Get for My $100 Billion?

 I saw reports in PharmaGossip and Fierce Biotech on a new study published in Health Affairs that says new drugs are becoming less and less effective against disease as judged by their relative effectiveness versus a placebo.  Wow.  This isn't good.

The Myth of the New .

The authors looked at 315 placebo-controlled clinical trials (across many diseases) that were published in 4 major journals between 1966 - 2010.  They found drugs in the 70's were 4.5x beter than a placebo, somewhat less than 4x in 80's, only 2x by the 90's and in the most recent decade only 36% better. In other words a steady decline and a suggestion of more and more incrementalism in development philosophy. When you consider about $100 B is spent annually on clinical trials, that ain't too good. 

Experts are uncertain why this may be the case.  Several explanations have been put forth:

• The low hanging targets were exploited in 70's and 80's.  Subsequent targets are more minor compared to root cause of the disease
• Patients who volunteer for clinical trials over time have become worse off, i.e. the really sick people volunteer in hopes of a cure because nothing conventional has worked
• Quality of data has improved over time so that new data better measure the true impact, i.e. the compounds are looked at more closely

Regardless of explanation, the effect does look real.  It should send shivers up the spine of developers as more and more emphasis going forward should be placed on comparative effectiveness research.  If drugs can't show clear benefits then one woudlexpect resistance by payers to using them. 

That would be bad for the drug industry certainly -- particularly given the high prices/revenues the new drugs bring in incrementally.

Posted by Bruce Lehr June 4th 2013.

Death of IPOs in Biotech -- Greatly Exaggerated?

Luke Timmerman published this morning, an accountng of IPO performance of biotech firms to date in 2013.  It looks more promising than in recent times to say the least.  In 2013, of the 17 biotech IPOs, 12 have stock values that are higher than the initial offering, one is exactly the same, and 4 are down but none disasterously.  It appears that IPOs are once again becoming a viable mechanism for some biotechs to raise cash.

It may or may not last.  We'll have to keep following.  But, its been a while since someone even suggested it was viable. See Xconomy.

Posted by Bruce Lehr June 3rd 2013.

KV is BAAAAACK!

I picked on KV Pharma a lot for its handling of the Makena product introduction a coupel years ago -- particularly for its greedy pricing decisions.  The decision was basically so egregious that it caused the FDA to continue to allow compounders to compete with Makena -- even though they were now making non-approved formulations of an approved drug.

KV ultimately was forced to file for bankruptcy as a result.  And I thought that would be the end of them.  Yes, they sued FDA for allwoing this situation.  Not unpredictably, they lost that too.  I thought -- aha -- their last gasp and goodbye.

Not so fast.  The New England Compounding Center, through its scandalous distribution of contaminated product leading to a national meningitis outbreak, single-handedly revived KV's and Makena's fortunes.  They validated any concerns that KV was promoting that "compounders" are dangerous when supplying at a geographical diverse scale (and one clearly beyond their charter).  What's more? Additional compounders managed to further bolster the case.

Now KV may be making a comeback (again). It's Alive!  They are back promoting Makena and saw scripts rise from 2000 per quarter last year to more than 8419 in the last quarter.  Zounds! It took rotten performance by compounders to bolster the KV case on safety. But those pesky compounders pulled it off. See Pharmalot.

Posted by Bruce Lehr June 3rd 2013.

FDA Oncology Chief Promises Use of Breakthrough Designation

Richard Pazdur, oncology chief at FDA, says he plans to push the breakthrough drug program hard.  He says the staff at FDA view this as a potentially game changing mechnism to get new therapies on the market and change lives -- provided the drugs show their stuff early in clinical programs.

Pazdur says he is prepared to make this a priority in his division and the FDA will partner with companies with breakthrough status to conference early and often to help shepard drugs through the agency. This could shave a couple years off a program's reaching the market. The agency will even work to adapt trials as information becomes available.

Industry observers are cautiously optimistic.  But, like everything FDA (or government for that matter), the proof is in the actual performance.  Right now, companies like Merck, Roche and BMS have oncology drugs with this designation. We'll see how they progress to the market or not. See Fierce Biotech.

Posted by Bruce Lehr June 3rd 2013.

 

SAFC is Out and About

SAFC announced today that it will be presenting at several major investor conferences in June 2013. See attached for the whole scoop.  Download June Conferences 2013  

 

Posted by Bruce Lehr May 29th 2013.

J&J Coming to Grips

I saw this today in Pharmalot.  Apparently, J&J, after a seeming unending stream of gaffes, manufacuring problems and ethical slip ups, is asking its employees do some "soul searching" and examine the 70+ year old corporate credo. 

The health care giant is asking employees to take time to  "reflect, reaffirm, question, challenge and share" their thoughts credo and then take a survey for the purpose of “identifying opportunities for improvement and action.”

Wow! Who'd thunk?  It's like all the physician's in the world sitting down to "think about the Hippocratic Oath".  When I was in business school in the late 80's, J&J was the poster child of ethical behaviour.  In the wake of the Tylenol tragedy (if you are old enough to recall), its management team was held in complete esteem for its safety first, profits second (or third) approach to pulling products off the shelf to protect consumers. It was THE CASE study used in business ethics classes.

Would you ever think you'd see a blog post reflecting the activities that are going on in J&J now?  Neither would I.

Posted by Bruce Lehr May 29th 2013.

How are R&D Chiefs Graded in Big Pharma?

Sort answer. It's the Bottom Line, Stupid!

I guess that gives away the punch line.  Regardless, here's an interesting post on the topic from Stewart Lyman in this morning's Xconomy.  In it, he notes that the average tenure for a top R&D exec in pharma is only 7 years.  Think about that when comparind the average length of time it takes to get a drug on the market -- usually reported in 10-15 year range. It doesn't take a math major to figure out that the your average R&D head won't actually be around for new product he/she (mostly hes of course) starts in development. 

The post questions -- how do you really say who did the best job in getting a drug to market?  The R&D guy who started the project or the one who was in residence when it was approved to market?  Don't know.  Not easy to figure out.  Further, given that length of time, the main way an R&D head can make an impact now is to acquire drugs that can be launched on his (or her) watch. 

Brings us back to the punchline.  As R&D head, you are only as good as your company's revenue and stock performance --- regardless if you caused it or not. Just be in the chair at the right time. Sounds fanciful huh?

Maybe it makes sense if you buy into the premise of this Forbes article about CEO's and their lack of [people] management skills. In a recent survey, 160 CEOs and directors were polled with regard to CEO strengths and weaknesses.  It turns out that directors rank their CEOs as poor people managers.  It further indicates that the MOST important thing that CEOs were rated on by boards was their company's "accounting, operating or stock performance."  Not their ability to mentor, develop people, listen, resolve conflict, delegate ,etc.

It was how well the company performed on the bottom line.  Given that CEOs are only in their jobs about 8.4 years (and pharma even less), it's likely you have the same phenomenon going for you at the CEO level as you do for head of R&D.  The secret is being in the right place at the right time.

Posted by Bruce Lehr May 29th 2013.  

 

Better Late than Never for Japanese Pharma R&D Effort

Japanese Pharma companies have traditionally not participated in the support of product development for the emerging world.  They've typically chosen to allocate R&D funds to their own market and faster growing Western economies. Apparently this is about to change.

Five Big Pharma's in Japan, along with the Bill & Melinda Gates Foundation, are pledging to spend $100 M over the next 5 years to make a dent versus HIV, malaria, TB and other tropical diseases.  The Japanese government will kick in as well.  The spending will come in the form of research grants and will also provide access to company chemical libraries.  See Fierce Biotech.

Better late than never.

Posted by Bruce Lehr May 28th 2013.

 

Marketing vs. R&D Spend Debate in BIG Pharma

There has been an interesting (though not new) debate this week on In the Pipeline about whether Big Pharma actually spends more money on marketing its products than on developing them. Many of the detractors for this industry think much more is spent on the former -- as if Big Pharma were purely a bunch of hucksters. 

This morning In the Pipeline produces some data from 2010 that bascially indicates about 2x is spent on R&D as is spent on marketing.  This should end the debate.  Anyway, I'm not sure why critics would think that a company would take the time to develop its products but not to market/sell them?  Why should pharma be any different than other industries?  I guess if you believe pharma actually spent 10x on marketing compared to development, you might have some sort of point, but short of that I'm not sure what that point might be.............are critics really suggesting pharma is just selling snake oil?  Seems far-fetched doesn't it?

Posted by Bruce Lehr May 23rd 2013.

Mythbusters: Biotech Venture Capital

This from the LifeSci VC blog this morning.  A post on the myths that persist in the popular conscience about biotech venture capital. Since they are characterized as "myths", then it follows that data shows them not to be true.  Without further ado:

• Returns in Life Science venture investing lag other venture capital sectors.
• When biotech deals blow-up, they blow-up BIG.
• Biotech takes far longer from inception to "exit" than other sectors.
• The overall biotech venture capital funding environment is drying up.
• Early stage venture capital is even worse -- it's a "barren wasteland"
• Life Science VC's can't raise new funds.

Read the post for yourself for all the details. Suffice it to say that direct evidence or sources are cited where you can go to debunk the myths.

Posted by Bruce Lehr May 22nd 2013.

Pharma R&D Spending vs Other Industries

Here's an interesting post from the In the Pipeline blog that comments on the amount of R&D spending that is seen in Big Pharma versus what occurs in all sorts of other industries.  It turns out that Big Pharma spends more as a percentage of sales than any other industry besides semi-conductors.  That is eye opening to a degree -- eh? 

The post also provides a link to the Booz study that was the source of this information and lays out R&D spending for a host of industries.  It is a good reference piece to have I'm certain.

Posted by Bruce Lehr May 20th 2013.  

Innovation as Illustrated by Beer

It's not often that you get a blog post that talks to innovation and uses references to both Homer Simpson and beer to drive home its point.  Today's award goes to the Innovate on Purpose blog for -- well -- bringing us this innovation in writing.

The thrust of the article is that when aspects around the product become the focus - rather than innovations in the product itself -- you know you've reached the point of diminsihing returns.  This kind of hits home in the pharma industry in the past decades where maybe as much effort was put in evergreening through reformulation, new delievery systems and maybe indication extension as was put in developing novel meds in many instances.  Maybe that's why pharma return on R&D has been so dismal the past decade (if not longer).

Time to get back to real innovation with the actual PRODUCT -- for new meds, new mechanisms of action that effectively address unmet needs and perform BETTER than what we have already.  BTW - I think we're starting to move in that direction again.

Posted by Bruce Lehr May 17th 2013.

 

Global Biosimilar Market Report 2013

Visiongain published a new report on the global biosimilar market in 2013 and says the market size will reach $2.45 B, or approximately 20% higher than last year. Biosimilars now account for about 2% of the biologics market. 

PharmTech Talk » Global Biosimilars Market to Reach $2.445 Billion in 2013.

Monoclonal antibodies and insulin submarkets are expected to grow fastest for biosimilars over the next 10 years and should acont for 57% of the 2023 biosimilars market. Biosimilar erythropoietin and filagrastim are also expected to have increasing impact.

Said pharma industry analyst, James Evans, "Biologics are going to become so prevalent that every major company will be interested in having a stake in that expanding market."

Emerging markets, particularly China and India, have been leaders in biosimilars, accounting for the majority of global revenues in 2012.  By contrast, the US, EU and Japan combined only made up 20% of the market. Visiongain predicts the pace will pick up in the developed markets from 2013 to 2017 as many of the biggest blockbuster mAbs come off patent.

Posted by Bruce Lehr May 16th 2013.

The Outcomes Era

Here's another post on the importance of "outcomes" research in gaining acceptance for a new drug.  It quotes results from a new Camelot Management Consultants study -- where 60% of US and European companies agree outcomes research to show the effectiveness of a new drug is important in gaining acceptance --- yet disturbingly 30% say they don't plan to change the way the go about launching their products.

The Outcomes Era .

Camelot says new launches will have to have the following features:

• Aim at expanding the market not just take share
• Re-define therapy guidelines
• Develop smarter pre-launch activities, with more investment in early phases
• Have stakeholders awaiting product and its differentiating features at launch
• Win recognition for creating multi-shareholder value (i.e. patients, prescribers, payers)
• Adapt to changes in the environment during and after the launch

Posted by Bruce Lehr May 16th 2013.

 

Latest Myriad Case Commentary

I like to keep info flowing on the Myriad ("gene patent") case as it percolates through the Supreme's toward a final decision.  This from Patent Docs blog yesterday summarizes some findings in a recent Nature Biotechnology paper as to the impact on existing patents -- and this effect is expected to be less impactful than it might have been 30 years ago.

Frankly, one wonders why this case is even going to court now.  Many of the diagnostic techniques being challenged are effectively obsolete (or soon will be) due to the fruits of the genome project and sequencing.  But there is some level of trepidation that a sweeping ruling with regard to "products of nature" by the Court could actually damage other fields of biotechnology.  That might cause harm to economic incentives for commercializing genetic technology, which in turn could lead to inhibited disclosure of knowledge to the detriment of progress in the industry.

And more to the point, any ruling in Myriad at this juncture is unlikely to alter the current access to diagnostic testing that the case was purportedly about.

Posted by Bruce Lehr May 16th 2013.

 

Related articles

The Myriad Case and "Gene" Patents: Much Ado about Nothing?

Pharma Need for Adapting to Change

When I was a youngster, my father used to ask us kids in the family a question: Why did the dinosaurs go extinct?  It was an interesting question to us as we all loved dinosaurs and knew a lot about them.  Not long after the question was posed, possible answers started flying around -- an asteroid collision, more volcanic activity, disease, ice age (climate change), movement of tectonic plates, etc.  My father's response no matter the proffered answer was No, no, no, no and no. 

The RIGHT answer was -- Dinosaurs became extinct because they couldn't adapt to changing conditions.

PharmTech Talk » Adapting to Change.

I thought of that when I saw this post this morning.  It deals with the need of pharma and biotech companies to be able to adapt to the changing healthcare climate in order to survive.  The post points out that increasingly, it is not enough to get a drug approved by regulators. To thrive, you need to get the drug accepted by payers. 

As such, companies need to be attuned to Changing Conditions. What is the competitive standard of care out there at any moment in time?  If it changes, can you adapt your clinical trials in progress to examine relevant endpoints to the new standard?  Can you add a drug to a study in oncology, for example, if a new therapy is demonstrated using two or more drugs?

Bascially, you need to think about how to differentiate yourself from competitors.  Can you show enhanced safety, fewer side effects, greater efficacy, lower toxicity, or identify a patient niche where your drug outpeforms?  You need to be able to adapt on the run. 

If you can, you will be set up to thrive under the new conditions.  If not, you (or your therapy) may be the one who next goes extinct.

Posted by Bruce Lehr May 14th 2013.

US Drug Market Contracts for First Time - EVER!

As Fierce Biotech reports via IMS data, te US drug market shrunk by 1% in 2012.  This is the first time that has ever happened. This is due, of course, to the much talked about patent cliff arriving in a big way -- mpacting market share and revenues of some of the world's top selling small molecules. The US market is now down to $325.8 B. 

Patent cliff drugs took a $29.8 B dollar hit. Yes, with a Big B.  Branded producers in general saw revenues decline by $11.8 B.  Generics producers of course saw he upside of things as their sales increased by $8 B. A drug market Yin and Yang as it were. Generics now account for 84% of all drugs prescriptions dispensed in the US.

The bright side for branded manufacturers are for their new drugs (< 24 months old). These actually grew by $0.5 B to a total of $10.8 B.  These all fell into the specialty category with drugs like - Incivek (hep C), Eylea (macular degeneration), Xgeva (bone drug), Gilenya (MS), and Yervoy (melanoma).  At least the FDA is on an upward trend with approvals, so there may be hope for a continued flow of more new drugs to bolster brand name revenues. 

However, the next wave over the patent cliff is also still coming.  Here's a report from the end of last year in Fierce Biotech that outlines the next 15 top sellers to go off patent this year.

Posted by Bruce Lehr May 9th 2013.

 

 

 

R&D Spending may not be ALL Bad

Fierce Biotech yesterday reported that R&D spending was up as many significant biotechs -- like Gilead, Amgen, Celgene, Shire, Regeneron, Onyx and Biomarin.  In other words, many of the darlings of biotech investors -- companies who have experienced significant share price appreciation of late. Overall, the top 10 biotechs spent $11.8 B on R&D in 2012 -- nearly a 15% increase over the prior year.

So while it may be very trendy in Big Pharma to be trimming the internal R&D budget in favor of seeking outside collaborators or properties to fill the pipeline, focused, smart R&D spending in biotech seems to be working.  That suggests R&D spending is not inherently BAD as you could be led to believe if you spent all your time listening to Big Pharma CEOs and their R&D Heads. Rather, R&D appears to require focus with spending on the right projects at the right time -- while minimizing waste -- not eliminating the budget.

This suggests that the top 10 biotechs will continue to thrive and may well find themselves to be the well sought after beauties at the ball. That means possible acquisitions, partnerships or licensing deals on the horizon -- and expect the Big Pharma guys to be the callers.

Posted by Bruce Lehr May 9th 2013.

Myriad BRCA Test Cost is In-Line

This post from Patent Docs blog is self-explanatory.  Suffice it to say that any hoo-haw over the exhorbitant price of a BRCA diagnostic test at $3000 is -- shall we say overblown.  Assertions of this sort couldn't be more wrong-headed.  If you want to blame somebody on this front, it is likely more apt to blame a particular insurer for NOT covering the test cost. 

Posed by Bruce Lehr May 3rd 2013

 

Pharma vs Society - Let's Get Ready to Stuuuummmbbble!

Both In the Pipeline and PharmaGossip today recounted comments by Bernard Munos in Forbes on the state of pharmaceutical industry.  To wit, drugs cost too much to create and the R&D return is lousy and unsustainable.  Plus all the new drugs, e.g. cancer meds cost too damned much. 

Maybe it will eventually occur to the industry that this model will not continue to work.  Governments with struggling economies, in particular, just don't have the stomach for it.  Thus, it is unlikely that policy will allow this to continue and that pharma management teams that continue to stumble around pursuing this model will soon meet their comeuppance.

All will likely struggle with low sales, possible imposition of severe price controls on their products, and struggles to get thrid parties to pay for their drugs -- especially without clear cost benefits.  and the likely result is that more of the weaker parties will be absorbed by the strong(er) and the industry will continue to consolidate.  Adapt or perish still holds.

Posted by Bruce Lehr Apr 29th 2013

Biotech Needs to Focus on Demonstrating Product Value

According to a recent Ernst & Young study, future success in launching and selling new drugs will increasing depend upon the Company's ability to "show value" for its product -- i.e. comparative effectiveness.  This recognizes the increasing reality that to be successful -- you don't only need regulatory approval (FDA, EMEA, etc) but also it is critical that you get 3rd party payer approval in a timely manner to support launch.  Otherwise, you can look forward to lagging sales -- which can lead to a dramatic collapse in stock price and threaten a "one-hit" wonder Company's very existence.  See Dendreon's Provenge as a poster child for this effect -- though there are others like HGS' Benlysta.

PharmTech Talk » Biotech Needs to Focus on Demonstrating Product Value.

Curiously, the E&Y study found that small and mid-size biotech's in particular seemed blind to this possibility.  While 94% agreed that it is “important” or “very important” for biotech companies to have a strategic focus on matters of evidence. most companies indicated that they are unlikely to undertake specific evidence-focused initiatives. Of the respondents who rated evidence measures as “important” or “very important,” 11% have added payer/reimbursement expertise to their management teams, 13% have brought such expertise to their clinical development teams and only 4% have included people with such expertise in their boards of directors. 

E&Y advised biotech companies to debunk any myths that are holding them back, stressing that the shift to evidence is happening faster than anticipated, and it will affect companies regardless of their size, maturity or disease focus

You know what they say about failure to learn from history and impending doom to repeat it? 

Posted by Bruce Lehr Apr 26th 2013.

M&A Activity - Usual Suspects

Fierce Biotech reports on latest Moody analyst's take on M&A activity for 2013 in the pharma industry. The news was similar to predictions that I've seen for the past couple of years -- that being a few cash flush Big Pharma players will be looking for bolt on acquisitions from the biotech flock to bolster their pipelines -- to help fill in lost sales due to patent expirations within the existing product portfolio.

Potential big acquirers on the latest list included: Pfizer, Novartis, Roche and AstraZeneca. Their purposrted prey might include these analysts favorites: Theravance, Onyx Pharmaceuticals and Cubist Pharmaceuticals. There is no particular word out there that this is actually happening as we speak but these companies have profiles the analysts love to love as acquisition targets due to their relatively smaller size, existing commercial products and current pipelines.

In the past (May 2011), rumors have circulated that AZ was interested in buying Cubist for its antibiotics versus MRSA.  So some of the candidate deals on the table are not new notions -- at least for analysts.

Posted by Bruce Lehr Apr 23rd 2013.

Supremes Hear Oral Arguments in Myriad v. AMP? Or do they?

I've written about this before, but wouldn't it be nice if the arguments presented before the Supreme court in a potentially pivotal patent eligibility definition case like Myriad, actually contained discussions of science to illustrate the Law? 

We're trying to discern whether isolated DNA should be patent eligible or not.  OK.  Then why do we have to resort to analogies like if the DNA were a tree, sap from a tree, chocolate chip cookie, baseball bat, or a liver or kidney? Huh?  Why can't we discuss isolating and replicating a DNA sequence from say .... DNA?

I know we are science challenged as a Nation at least across the population as a whole -- but you'd think we'd have the ability to discuss the science and that Supreme Court justices could have access to ANY experts that they wished to explain basics to nuances of what was being presented.  I'm not arguing that arcane jargon should be the basis of oral arguments but can we do a bit better than comparisons to baseball bats and chocolate chip cookies?  See Patent Doc blog.

Posted by Bruce Lehr Apr 19th 2013.

VC Deals - especially Life Science - Have BAD 1st Quarter

New reports from PricewaterhouseCooper (MoneyTree Report) and National Venture Capital Association (Reuters data) show that VC investment in Qtr 1 2013 dropped 12% by dollars and 15% by number of deals as compared to Qtr 4 2012.  In a Qtr over Qtr comparison with Q1 2012, the amount of dollars invested this Qtr was down 6%. 

VC funding was therefore $5.9 B for 863 deals in Qtr1 vs $6.7 B for 1013 deals in Qtr4.  Life Science specific investment fared even worse - with $875 M for 96 deals versus $1.3 B for 138 deals in Qtr 4.  That represented a 33% drop in dollars and 30% drop in deals. Even worse, first-time deals dropped 52% and garnered only $98 M dollars for 20 companies, the worst performance since Qtr 3 1996 and Qtr 2 1995 respectively. See Fierce Biotech.

If there is a silver lining (and maybe there is), some speculation exists as to whether more companies are preparing for IPOs, as 175 IPO filings have been submitted to the SEC for review. This is discussed extensively in Xconomy. 

Posted by Bruce Lehr Apr 19th 2013.