The Big Red Biotech Blog

EX-CELL EBx Platform

SAFC and Vivalis team up to produce the EBx cell line and medium system for the production of viral vaccines.  EBx, an embryonic duck stem cell line,  has been successfully applied to the production of human vaccines, like the flu, and has been shown to be permissive across an array of virus vaccines. 

EX-CELL EBx Platform .

SAFC produces the EBx media as catalog products that are used in conjunction with the EBx cell line for viral production. SAFC can also provide custom versions of the formulation through development agreements. Several clients are in clinical trials using the EBx system.

Posted by Bruce Lehr July 16th 2010.

UltraSafe Drugs Worth the Cost?

Here's an interesting post from the Forbes blog.  It notes that Americans may not understand the trade off they are making to obtain "ultrasafe" drugs.  It takes the position that all the testing that is required with new oncology drugs, like Provenge for example at $93,000 per patient, results in long delays getting to market and forces producers to charge high prices to earnback their investment. 

Is this what the public really wants?  And do they understand this possible trade off in demanding that drugs be "ultrasafe".  The post further suggests that alterations in IP laws which would effectively extend patent life on these medications post approval could help ameliorate the situation - similar to what is now seen in rare disease models/markets.

I'm sure consumer advocates and regulators, and generic competitors would adopt a differing view. What's yours?

Posted by Bruce Lehr July 16th 2010.

Real Costs of Quality Lapses at J&J

Here's a post from the NY Times Helath blog via the PharmaGossip blog. It details J&J's decision to layoff 75% of the workers in the J&J Fort Washington, PA plant responsible for producing a series of recalled children's and adults OTC medicines - including Tylenol, Benadryl, Motrin, and Zyrtec among others.

PharmaGossip: Tylenol Plant Lays Off 300 - Prescriptions Blog - NYTimes.com.

The recalls have not only resulted in economic loss to the Company in terms of sales of those products, the recalls have cost J&J dearly in terms of its reputation. Congressional investigators are still probing how J&J conducted itself during this so-called "phantom recall",  as J&J tried to pull back product from the distribution channel without informing consumers and regulators that there was a problem.  This type of ethical lapse has gone a long way toward undermining (destroying) the reputation of a company known for high ethical standards in its handling of the famour 1982 Tylenol crisis.

Now more than 300 workers in the Fort Washington plant pay with their jobs.  J&J indicates that it may never reopen this plant and it could close for good in early 2011.  The Pharmalot blog asks this morning if job losses should be confined only to these workers?  Or should the management Team at McNeil lose their jobs? 

Given the hundreds of millions in lost revenues, lost Company reputation, lost morale internally, and the closing of the facility with concommittent employee job loss - I think 'sauce for the goose' is appropriate.  Key management didn't do its job to produce a safe and effective product, and then tried to cover it up.  Why not share the pain at the top?

Posted by Bruce Lehr July 16th 2010.

SAFCLive Lives!

Check out the SAFC social media hub - SAFC Live - for news on SAFC facilities, new technologies and capabilities.  Also, tune in for discussion of market trends and analysis.

Re-Posted by Bruce Lehr July 14th 2010.

What Keeps Pharma Execs Awake At Night?

Here's another good one from Ed Silverman's Pharmalot blog.  It is a survey of 211 pharma execs done by Cegedim Dendrite reporting on their goals & challenges.  Some of the responses may be surprising to you.

What Keeps Pharma Execs Awake At Night? // Pharmalot.

For example, the leading fret of these executives (40%) was whether their strategy for gaining market access was solid or not. This took higher priority in their thinking than other potential weaknesses in their business model (35%) or pipeline holes (24%) and generic competition (16%).  That may be a little surprising given how much ink the patent cliff, innovation gap and healthcare reform (biosimilars) has been given recently.

Read the survey to find out more on whom these execs consider to be their primary customers and which forms of social media they use. 

Published by Bruce Lehr July 14th 2010.

Chasing Alzheimer's Mega-blockbusters

Fierce Biotech has reported the past few days on Alzheimer's programs of several Big Pharma companies including Lilly and a group consisting of J&J/Pfizer/Elan.  Alzheimer's remains a hot-bed of exploration for better therapies, as there really are no good choices.  This is seen as a potential gold-mine for the first companies to come to market with any drug that has a measurable benefit in delaying key memory loss symptoms. Some analysts have predicted annual sales potentials of $5 B or more for such therapies.

Elan et al's bapineuzumab has shown promise (J&J has invested $1 B) in Phase II trials in targeting amyloid-plaques and in also lowering the level  of the toxic tau protein. Both features are thought to be important although there is no well described mechanism of their involvement.  Results of Phase II have been encouraging enough to push toward Phase III.

Similarly, Lilly's semagacestat and solanezumab drugs are also targetting amyloid plaques via different pathways. The company is no in the process of recruiting late stage trial participants - over 1000 patients for each study.

Again, the payoff for a successful Alzheimer's therapy is expected to be huge - so the race is on.

Posted by Bruce Lehr July 14th 2010.

Genzyme to Expand R&D & Manufacturing Facility

As reported in Fierce Biotech, Genzyme plans to build a 757,000 sq ft expansion in Framingham to its existing space, 400,000 ft of which will be new R&D space. The R&D time frame is slated between 2015 and 2018.  Genzyme will add 600 to manufacturing and another 400 employees to R&D by the time the expansion is completed. 

This is somewhat remarkable given that Henri Termeer was being ousted as President only last month by some observers' accounts.  Termeer seems to have recovered nicely and is on the "offensive" so to speak with not only these manufacturing & R&D plans, but with a large stock buy back, and plans to divest non-core parts of the business.  Genzyme also received good clinical news n several of its products. 

Quite a turn around in perception in just over a couple of months.

Posted by Bruce Lehr July 12th 2010.

Comparative Effectiveness Research May Alter Care Standards in US Too

The Tufts Center for the Study of Drug Development (CSDD) just a published a report assessing the probable effects that Comparative Effectiveness Research will have in the future of the US drug industry. Increasingly, new drugs will have to show proven benefits in relation to their costs to gain 3rd party payer and goverment reimbursement approvals.  It likely will no longer be enough to get your drug through the licensing process with FDA, EMEA, etc. - you also have to prove its cost effectiveness.

In comparing the access to oncology drugs in the US versus Australia, the CSDD study found that regulatory approval in Australia was not synonymous with reimbursement.  Only cost-effective drugs (under their criteria) received reimbursement status.  However, the following features of the Australian system were noted:

• Oncology drug prices were about 30% lower than the US
• 100% of drugs in Australia were designated with prior authorization whereas the comparable US figure was only 60%
• Australian patient cost sharing was lower and more evenly spread, where in the US the average co-insurance rate per cover drug was 35%

So in Australia, the use of cost-effectiveness standards led to lower prices and more affordability for approved medications.  As compared to the US, drugs not seen as cost effective had their access severely limited.

It will be interesting to see what occurs - as the US system generally has allowed patients to immediate access drugs more or less on demand (comparatively).  But, under an increasing cost-conscious and under cost pressure system, will the US also find itself moving much more into a more critical cost-effectiveness based standard that will make drugs put up?  Is Provenge an early case where this type of standard my first be applied?  The Medicare reimbursement decision on that drug will be interesting to watch.

Posted by Bruce Lehr July 11th 2010.

Adimab Scores 4th Big Pharma Deal

As reported in Xconomy and Fierce Biotech, Adimab just signed its 4th significant development deal with Big Pharma in the past year - this time with Novartis.  The deal is for access to Adimab's "synthetic immune system" that speeds (< 3 months) the mAb selection process.  This comes on the heels of similar deals with Merck & Co., Roche and Pfizer. On the strength of these deals, Adimab was cash flow positive in the most recently completed quarter - less than 3 years after start up, according to CEO Tillman Gerngross.

The Novartis deal allows the company to use Adimab technology for the discovery of two targets in the therapuetic area of its choosing. Novartis chose to go this route even though it has an up to $1 B deal in place for use of the Morphosys technology. Adimab believes this serves as an endorsement of the power of its technology.

COO, Erik Anderson predicts more deals with major partners for Adimab in 2010, and projects that the company will earn its first full year profit this year.

Posted by Bruce Lehr July 11th 2010.  

Takeda - What Will 50 billion Yen Get Me per Year? Let's See!

Fierce Biotech reports that Japan's Takeda will set aside 50 billion Yen per year for the next 3 years to fund the acquisition of new products for its portfolio. That's 50 billion incremental Yen to what it normally sets aside for this purpose.

Got a new drug to sell?  You now have another company to call!

Posted by Bruce Lehr July 9th 2010.

NIH's Collins Clamors for Public War Chest to Fund Rare Disease Trials

Last week I wrote post about FDA playing bigger role in disseminating research results to spur progress with rare diseases.  Yesterday, Fierce Biotech published a story stating the Francis Collins of the NIH wants Congress to set aside a $500 M fund that would allow the NIH to back up to $15 M trials in biotechs pursuing rare disease indications.

This would represent a shift in emphasis from support of basic research toward more applied research - an innovation!  It also represents a possible new source of trial funding for the cash-strapped small biotechs who really lack as much access to capital as they once had. Collins goal is to secure funding for up to 20 new entitites.

 

Some in the more basic research camp are concerned that this shift in emphasis will rob Peter to pay Paul.  But, I think it makes good sense to try to capitalize on research that has already resulted in a discovery and attempt to make it more commercially viable.  One big gap now is sufficient funding for small biotechs to take their drugs through early clinical stages - a necessary step to secure either Big Pharma funding or a direct buy out from Big Pharma.  This could serve to help this along and is targeted to neglected disease areas so serves an additional good purpose to increase development in those areas known to be deficient now.

I hope the program secures funding so it can be tried.

Posted by Bruce Lehr July 9th 2010.

Merck Closing Numerous R&D Facilities

Merck announced yesterday that it will be closing 8 R&D facilities.  This is parto fits planned initiative to save up to $3.5 B annually as a result of its purchase and megamerger of Schering-Plough. 

Merck Closing Numerous Labs & Manufacturing Sites // Pharmalot.

Ultimately, the company has stated it will layoff 15,000 workers.  Merck also has plans to close 14 manufacturing facilities since the merger reducing its worldwide total to 77 from the original 91 at the time of the purchase.

"These changes are crucial to drive future growth and realize the promise of being a global health care leader for the long term" said Merck CEO Richard Clark as reported in Fierce Biotech.

Once again, a megamerger really results in immediate loss of jobs as the company has to restructure to help pay for the merger which ironically provides some short term revenue relief but may not provide the boost out the the pipeline that is really needed.  Merck will still be pursuing many other outside collaborations to fill that pipeline - thus the R&D layoffs and manufactuirng closings.

Posted by Bruce Lehr July 9th 2010.

Follow Up Provenge Doom - US Insurers Views

I'm following up to the Provenge post I did a couple days ago.  That was a summary of a Seeking alpha analysis of the issues Provenge would face in the reiombursement arena. The conclusion was that Provenge was very very expensive versus the ultimate benefit delivered - at least by standard methods for estimating QALY (quality of life year).  The Seeking Alpha analysis concluded that be using even charitable assumptions in estimating QALY - best case would yield $282,000 per QALY. It noted that the UK's NHS rarely funded a QALY in excess of $60,000.

What Insurers Say About The Provenge Vaccine // Pharmalot.

In the Pharmalot post above, US insurers indicate that Provenge likely will score a QALY in range of $300,000 under best case calculations.  An unnamed participant in the analysis was quoted as saying "Provenge is an extremely expensive treatment and will probably be limited to as small a niche as possible. The price ($93,000 per patient) is not justified by the incremental survival (average 4 months)."

Most 3rd party payers will place restrictions on this drug's reimbursement, and up to 65% may restrict patient access.  They all foresee its usage based strictly on the label.

Posted by Bruce Lehr July 9th 2010.

SOCMA Quality Agreement Guidance for Foreign CMOs

A couple weeks ago, I posted about a recent HHS report on the increasing number of foreign clinical trials that received no FDA oversight.  The HHS report found that 80% of all drugs approved in the US in 2008 relied on some foreign trial data, 78% of all study enrollees were at foreign sites, and 10 new drugs had no US derived data at all. Some members of Congress and others consider that to be a dangerous situation.

A similar situation unfolds when you look at the manufacture of active pharmaceutical ingredients (APIs) made in foreign facilities.  According to the SOCMA website, many of these are rarely inspected by the FDA, especially in the case of ingredients going into OTC drugs.  The majority of foreign facililties manufacturing APIs used in generics rarely see an FDA inspector after the initial inspection. 

To help address the situation, SOCMA created the Bulk Pharmaceuticals Task Force (BPTF) to provide guidance to companies seeking foreign outsourcing partners.  The BPTF several months ago put together a standardized quality agreement for general manufacturers of APIs.  Now, the BPTF announced that it has put together a very similar quality agreement for CMOs and its customers.

BPTF Chairman Brant Zell of Cherokee Pharmaceuticals LLC says, "With today's supply chain issuesand the potential for misunderstandings in a global environment, a quality agreement is the best way to ensure compliance and meet FDA's expectations and filing requirments."

See Quality Template - Download Final-Quality-Agreement-Custom-Template-7-6-10-clean-protected

It is good to see that people, companies, organizations and even governments are now playing closer attention to the integrity of the supply chain. BPTF's role is very valuable in seeking to clarify the current regulatory requirements and to interact with government agencies on emerging issues that impact its members and the public.

Documents like the template rely on the collective wisdom of BTPF members and serve to standardize and educate users on drafting appropriate quality documents for their situation.  Hopefully this guidance also helps streamline the process for the industry.

Posted by Bruce Lehr July 7th 2010.  

CMC Icos Bounces Back from the Economic Downturn

A story in Xconomy reports that CMC ICOS has bounced back from the economic downturn.  The company experienced 90% growth last year over prior year results and reached breakeven.  Now it is running at 85% capacity and has begun hiring once more - up from 130 to 175 in past year.

CMC Icos Mounts Comeback, Resumes Hiring, After Pausing During the Downturn.

CMC-ICOS says it has stable customer base of 8-10 clients currently. The CMO focuses on mid-size projects and clients not trying to compete head to head with the likes of Boehringer Ingelheim or Lonza.

Right now the company is making product for use in clinical trials exclusively and has no products that have reached commercial stages of approval. The goal is to make that transition in the next 12 months.

The company tries to compete by being nimble and responding very rapidly to customer needs.

"We're gaining market share, things are picking up," said President Gustavo Mahler.

Roche Seeks FDA Nod for T-DM1 and files BLA

As reported in Fierce Biotech and Xconomy (below), Roche reviewed its encouraging clinical results with T-DM1 and filed a BLA with the FDA. 

Genentech Seeks FDA Nod for T-DM1.

T-DM1 is the next generation of Roche's Herceptin conjugated to a cytotoxin for the treatment of breast cancer in women who are Her2 positive and have been treatment resistant.  T-DM1 is an antibody conjugated drug (ADC) developed with technology coming from a partnership with Immunogen.  T-DM1 is xconsidered to have a chance to be another blockbuster in the cancer arsenal.

With an accelerated review, Roche could get marketing clearance in as little as 6 months for treating advanced breast cancer. The drug has performed so well in Phase II trials in shrinking previously treatment resistant tumors that expedited approval is considered a real possibility.

Posted by Bruce Lehr July 7th 2010.

Doom for Provenge-type Drug in Managed Environment?

Here's a thought-provoking post by Douglas Krohn in Seeking Alpha.  In it he asks, What would be the prospects of Provenge being accepted by the UK's National Health Service (NHS) based on its perceived cost-efficacy?

Good question to ponder. Provenge, as reminder, is a newly approved innovative approach to treat late stage metastatic prostate cancer.  In clinical trials, it was able to extend life by an average of 4 months as compared to a placebo. It is expected to cost an average of $93,000 per treatment course. Medicare last week indicated that it would initiate a coverage determination on the new drug - a process expected to last a year. Dendreon's stock dropped rather precipitously last week on the initial news.

Applying the NHS' National Institute for Health and Clinical Excellence (NICE) criteria for quality-adjusted life year (QALY) to Provenge results in an estimated cost lying between $282 K and $547 K per year.  That is to say the NHS and NICE formula would estimate Provenge costs that much to buy those 4 extra months. As a practical matter, the NHS rarely if ever funds a treatment with a QALY greater than $60 K. So Provenge would never be covered there.  And likely, not in most other Western European countries.

If the US ever goes to a UK type system, what does that say about new Provenge-type therapies?  What do you think about Provenges chances now in its Medicare review under a new healthcare doctrine?

Posted by Bruce Lehr July 7th 2010.  

Lilly's Approach to Patent Cliff

In this morning's WSJ, Lilly CEO, John Lechleiter explains some of the company's strategy as it faces 8 major drugs coming off patent in 8 years - representing 75% of its current revenues. 

Lechleiter states that Lilly won't be pursuing any type of mega-merger like rivals such as Pfizer and Merck have recently completed.  He believes there is little evidence that these larger companies are any more innovative than Lilly can be by itself.

Lechleiter is very bullish on the Lilly pipeline - 65 drugs in some stage of clinical development.  The pipeline is heavily focused on finding cures for big, difficult diseases like Alzheimer's, diabetes and cancers.

Nevertheless, Lilly is also slashing costs (reducing 5500 heads) to keep pace with the expected loss of revenue when as it arrives at the patent cliff.  Zyprexa being the first drug to reach the precipice in October 2011.

In addition to its pipeline of 65 drugs, Lilly will also pursue more external partnerships - particularly in the area of diagnostics but with no intention of acquiring such a company. 

So it looks like Lilly will resist merger mania, will cut costs, will emphasize the innovative portions of its pipeline and will try to boost its external collaboratons to cushion the patent cliff drop.

Posted by Bruce Lehr July 6th 2010.  

US And European Prices Aren’t So Different After All

Are drug prices significantly different between the US and Europe?  If so, does this difference lead to less product innovation ?  PhRMA argues that European price controls do lower prices in the EU or OECD countries as compared to the US and that this does lower innovation, makes investors less likely to invest.

Novartis recently commissioned a study from the European School of Management and Technology in Berlin. This group concluded that there is a "direct link between strict price regulation and low innovation".

However, in the post below from the Pharmalot blog, a study conducted by the London School of Economics disputes the former findings.  The LSE study found that the previous study comparisons were flawed.  They compared 68 "market basket" brand-name drugs and found US prices are a maxium of 25% higher than the Europena ones.  This in marked contrast to a GAO study citing one and half times price differences.

US And European Prices Aren’t So Different After All // Pharmalot.

The LSE study confirms data presented recently by AZ and GSK that shows drug profits in Europe are only marginally less than those seen in the US.  Europe therefore remains a fairly attractive market based on price and volume -- despite price cuts by some governments recently.

Posted by Bruce Lehr July 6th 2010.

Contract manufacturing sector growing at 12 per cent

The global contract manufacturing market was worth $22.5bn (€18.9bn) at the end of 2009, according to new research from RNCOS which also predicts a 12 per cent growth rate through to 2012.

Contract manufacturing sector growing at 12 per cent, report.

The report reinforces predictions that contract manufacturing services will increasingly shift to China, India or Brazil driven by continued cost reduction efforts from large pharma.

Posted by Bruce Lehr July 5th 2010.

AstraZeneca secures deal with academia for early stage compounds

The PharmaGossip blog reports that AstraZeneca and the UK's Medical Research Council have agreed to share experimental drug compounds - 100,000 from AZ's library and 50,000 from the Council.

PharmaGossip: FT.com - AstraZeneca secures deal with academia. See FT post here.

Both academic groups and AZ will have access to wider array of drug for screening. Under the deal, AZ will alos have earlier access to academic findings.  It will have options to license promising leads for commercial development.

This deal is in alignment with AZ's stated R&D strategy of seeking outside partners and outsourcing new drugs candidates. This comes on the heels of AZ recent agreement to share 500,000 compounds with the non-profit Medicines for Malaria venture.  Other large pharma, like Pfizer, have recently cut deals with academic groups providing access to heretofor proprietary company libraries to widen the search and hopefully speed discoveries.

Posted by Bruce Lehr July 5th 2010.

Too Much Sanofi Cash! That's a problem?

From FT.com via the PharmaGossip blog, one reason that Sanofi is on a purported spending spree is that it has too much cash on hand.  It generated $10.7 B from operations in 2010 and now analysts and investors want the company to do something with it.

CEO Chris Viehbacher is under pressure to spend, spend, spend.  We should all have such troubles. Would he rather be on the edge of a big patent cliff with a gaping hole in his pipeline and have ZERO to spend to get out? 

At least he has money levers to pull, and seems to be diversifying the portfolio through acquisition of small and leaner companies - thus not adding a mega-merger bloat to contend with. 

Recent rumors have Sanofi chasing either Allergan, BiogenIdec, Genzyme, Celgene or Gilead -- and at least one analyst has mentioned Amgen too. 

As I said, it is good to have the cash on hand and to at least have spending options. 

Posted by Bruce Lehr July 4th 2010.

SAFC - New Cell Culture Raw Materials Centers of Excellence

SAFC is investing in the expansion of its manufacturing sites to support biopharmaceutical cell culture production in Lenexa, KS, St. Louis, MO, and Irvine Scotland - creating new Centers of Excellence. This is a $17.3 M program aimed at optimizing its global manufacturing footprint in the US and Europe.

The Lenexa site will be enhanced as the US Center of Excellence for dry powder medium manufacturing. This $6.25 M program, supported by a $250,000 grant from the Kansas Bioscience Authority, will include explanded pin milling and blending capability. The expansion will increase batch capacity by 30% and is slated to be complete by the end of 2010. It will also result in completely separate Animal Component Containing (ACC) and Animal Component Free (ACF) manufacturing spaces. Powder scale up will be seamless from 25 to 4000 Kg in pin milling technology.

Similarly, the St. Louis, MO and the Irvine, Scotland facilities will be augmented as the liquid media, feeds and reagents Centers of Excellence. The improvments will result in an additional ACF manufacturing space in Irvine, and both ACC and ACF dedicated spaces in the St. Louis Broadway facility. Batch capacities will range from 1L to 10,000L at both sites. These are also slated to have construction completed by the end of 2010 with qualification extending into the 1st Qtr of 2011.

"As the biopharm market continues to mature and place an increasing emphasis on efficiency, cost containment and increased regulatory compliance, SAFC will continue its strategy to invest in manufacturing capabilities and facilities that uniquely address these requirments," said SAFC President Gilles Cottier.

Posted by Bruce Lehr July 4th 2010.

Are Pharma Layoffs Slowing Down?

This from the Pharmalot blog on layoffs in the Pharma industry since the beginning of 2010.  At halfway point for year, pharma is in number three slot for losses by an industry. Certainly May represented less axes than previous months. 

But are we slowing down or catching second breath?  There are a few mega-mergers out there that still need to reduce staff to meet their announced goals for R&D reductions and cost savings.

Are Pharma Layoffs Slowing Down? // Pharmalot.

  You make the call.

Posted by Bruce Lehr July 3rd 2010.

Biosimilars Near Term Require Big Bucks

The Biologics Price Competition and Innovation Act passed this year gives biologic drugs a new pathway to market - if it can be shown to be biosimilar to a marketed (reference) drug. Previously this could only be done through a complete clinical trial program.  The idea is to introduce more competition for these bio drugs similar to what has been done with Waxman-Hatch for the small molecule generic market.

A Fierce Biotech story this week explains that in order to really play in the biosimilar market in the next 5 years - a company will reqire heavy investment and infrastructure. This may seem counterintuitve as biosimilars are projected to eventually represent a cheaper (estimated at 30%) source of biologic drugs - at least that is the plan.

However, one will need to take proof of concept data with a biosimilar and ramp that up through expensive stages of clinical development - stages not suited to skills or pocket books of cash strapped small and medium biotechs.  It also means having to run fairly expensive comparison studies to marketed therapeutics.  The drugs of course will not be nmarketed prior to patent expiration on the reference product.

Experts estimate that it will take up to 8 years and $100M to $150 M dollars to get biosimilars to the point of being marketed. You also have the 12-year data exclusivity period for the reference products - a period keeps competitive drugs from being approved through a biosimilar pathway. This period starts when the reference product is first approved - and no biosimilar application filing can take place with the FDA until 4 years after approval.  By contrast, NCEs now get about 5 years of regulatory exclusivity.

Given the costs and the still substantial regulatory requirements for biosimilars, it remains likely that only a hnadful of big pharma players will be able to exploit this pathway in the next 5 years.

To learn more about this topic, the PatentDoc blog provides a link to an SMi Conference entitled, "Biosimilars & Biobetters: Aligning Business & Science for Success".  The conference is slated for London from September 22nd-23rd. Topics will cover changes in regulation and legislation in both the US and EU framework. More details on the program and pre-conference workshop can be found on the SMi site.

Posted by Bruce Lehr July 3rd 2010.