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Amicus Therapeutics believes that it has the opportunity to make a move in the rare disease market - competing with companies like Genzyme for Fabry's Disease patients as an example. This year, Amicus' Amigal was able to capture market share during Genzyme's supply problems with its drug Fabrazyme.
Amicus CEO, John Crowley says "It is good for people to have options for the treatment of rare diseases." See Fierce Biotech.
Posted by Bruce Lehr Feb 16th 2011.
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This Reuters story covers new findings from the Global Funding of Innovation for Neglected Diseases (G-FINDER) report. In it, the author's record that overall research funding went up by 8.2 percent to $3.2 B in 2009 but funding to important product development partnerships (PDPs) dropped.
PDPs are collaborations between drugmakers and research groups. These have been successful in the past few years bringing an inexpensive meningitis A vaccine to market and there is another PDP produced tuberculosis vaccine in late stage testing. The authors of the G-FINDER report say other similar projects could deliver many more useful products - compared to other research groups.
Both Jon Pender, of British drugmaker GlaxoSmithKline, and Joe Cerrell of the Bill & Melinda Gates Foundation which funded the report, said there was a "worrying trend" away from investment in PDPs, just when they need more money to further a potentially promising pipeline. The report said such partnerships currently have around 140 drugs, vaccines and diagnostic tools in development, including a malaria vaccine from GSK which is in late-stage trials.
The potential impact of these products could be enormous in terms of public health in neglected regions. It is not just spending the money - but how it is spent. And, these authors at least favor more, not less spending with PDPs.
Posted by Bruce Lehr Feb 16th 2011.
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Here is the follow up to the Sanofi-Genzyme deal announcement with commentary from the analysts. We can't do anything anymore without winners and losers it seems. Some harsh opinions expressed here.
Sanofi Gobbles Up Genzyme: What The Wags Say // Pharmalot.
You can judge for yourself if you agree or disagree with comments - but ultimately it won't matter as the market will tell us if the deal as constructed was good for both parties or favored one set of participants over the other. It shouldn't take more than a few years to know.
Posted by Bruce Lehr Feb 16th 2011.
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It's finally in the books. Sanofi will acquire Genzyme in a deal valued at $20.1 B - agreeing to a price of $74 per share plus a CVR. The CVR provision was very important to reaching the final agreement and each CVR could ultimately be worth as much as $14 in cash. Most of the CVR value will rely on performance of Lemtrada (Genzyme's new MS drug) working its way through phase III and onto the market. Genzyme believes it could reach a peak sales value of $3.5 B annually within the next 5 years.
Sanofi-Aventis and Genzyme Finally Agree to $20.1B plus CVR Acquisition Deal.
Initially the CVR will derive value from the production volumes achieved by Cerezyme and Fabrazyme in 2011. Patients for both drugs have had to suffer through shortages most of the ast two years due to production problems at Genzyme's Allston plant. Thos problems are expected to abate in 2011.
Sanofi plans to make Genzyme its global center for excellence in rare diseases. Genzyme’s late-stage pipeline includes three products for which it projects regulatory approval by the end of 2013. These are alemtuzumab for multiple sclerosis, mipomersen for familial hypercholesterolemia, and eliglustat tartrate, for type 1 Gaucher disease. Regulatory approval of and sales milestones for alembuzumab for MS are central to the CVR agreement.
Posted by Bruce Lehr Feb 16th 2011
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Fierce Biotech reports on new study from BIO and BioMedTracker that shows the overall success rate for drugs moving through clinical trials to FDA approval dropped to one in ten, from a previous rate of one in five or six. The period covered by the study is 2003-2010.
Oncology drugs were hit hardest (no surprise if you watch clinical trial results). Surprisingly (to me), large molecule drugs are twice as likely to be approved as small molecules (more me-too's I guess).
"This groundbreaking study highlights the depth and breadth of risk inherent in the drug development process more comprehensively than any other previous study," said Alan Eisenberg, executive vice president of emerging companies and business development at BIO.
Insert your own lobbying effort [here] calling for more R&D grants and supports for the biotech industry. I may make fun - but do think support announced by Obama administration for increased biotech investment is good idea. The trend described here does need to be reversed - policies that boost innovation and support greater R&D should help.
Posted by Bruce Lehr Feb 15th 2011.
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This interesting post from the BioProcess Blog examines the worldwide capacity for mammalian cell culture based manufacturing. It notes recent studies have concluded there is a worldwide excess. But, in looking deeper one really needs to examine the 10 companies that control 80% of the world's capacity.
A Closer Look at the Capacity Glut.
Due to mega-merger activity, some capacity is being retired (or mothballed) as the merged firms rationalize their internal production. Examples would include Pfizer's shutting down capacity in Pearl River due to the Wyeth acquisition, and Roche's closing manufacturing in Nutley and mothballing Vacaville-2 near SF. Lilly is also closing one Erbitux plant (BB-36) due to its age. These reduce "world" supply but clearly are not needed by the companies shuttering them to produce their planned production.
A few new CMO facilities are slated to be coming on line - namely DSM's Australian facility in 2013 and CMC's expanded Seattle site. BI also announced last month that it will be taking over the Fremont manufacturing site from Amgen. There is some suggestion in this activity that CMO capacity needs to ramp up and that is further bolstered by Lonza's earnings report showing its capacity utilization is up.
The blog notes that 10 new products have progressed to phase II in the past few months and 50% will go to CMOs. This includes GSK utilizing Lonza to make 5 of its new antibody drugs. So with the growth on the CMO side, will that specific capacity be enough to serve the market's needs or will CMO space be scarce resulting in price competition between clients to secure needed space? We'll need to watch in the next few years.
Posted by Bruce Lehr Feb 15th 2011.
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Lilly announced a new program to expand its R&D reach through a new program that has established three VC funds to help allay risk. Lilly will contribute $50 M to each fund and will rely on VC partners to raise an additional $600 M. See Fierce Biotech.
Targeted experimental drugs will be explored by virtual drug companies, with Lilly geting first right of refusal at licensing any properties that come out of the development program. In this manner, Lilly can expand its early stage pipeline without bearing all the financial risk. It can also cherry-pick the most promising candidates for advancement into phase II and III trials.
Said John Lechleiter, LIlly CEO, "This way we are not limited by our own resources and we can have more 'shots on goal'."
It's nice to see a novel approach.
Posted by Bruce Lehr Feb 15th 2011.
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Here's one from the In the Pipeline blog, recounting the uproar in the academic research community over the NIH's plan to open a Translational Medicine center to help move discoveries quicker toward commercialization - based on the debatable assumption that Big Pharma is not acting on all the leads that are available to it in a timely manner.
On the pro side, the NIH program will be successful in helping to move more drugs to market. In fact, there was a recent study published in NEJM that supports the notion that academic centers have been very instrumental in helping to deliver about 20% of newly licensed drugs since the 1970's. So maybe Francis Collins is right and a new translational medicine effort by NIH will bolster even these figures substantially.
On the con side, naysayers lament that medical research can't really be run according to a business timeline and that any effort to do so will result in wasted dollars/efforts that will seriously deplete the NIH coffers for years to come - and effectively produce a demonstrably negative impact on the science in the future.
In the Pipeline cites a Biocentury article that concludes that there is too much tendency among basic scientists to "sell their work" - which simplifies the process from basic discovery to practical cure.
"There is a real danger of over-promising," states Keith Yamamoto, executive vice dean of the University of California San Francisco School of Medicine, "Scientists too often take an intellectual short cut.......they just say if you give me money we are about to cure the disease."
Well, let's hope that if the NIH does get the money for the translational medicine center that it will help promote some cures and bring some new therapies to market -- and that this will substantively augment the current Big Pharma R&D model.
But, I'm always reminded by my boss that "hope is not a strategy."
Posted by Bruce Lehr Feb 15th 2011.
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This article represents a great group lament by Big Pharma CEOs at a recent pharma gathering in London. One chief executive after another mounted the stage and bemoaned the industry's falling R&D productivity and the rising cost of innovation. Throw in a little market worry over government pricing policies.
PharmaGossip: Desperate remedies for pharmaceutical industry - The Irish Times.
Then add a little more hand-wringing over loss of industry reputation - supposedly 11% in a recent Harris poll said they believed Big Pharma was trustworthy. What's not to trust? Pretty soon, you have full blown industry armageddon.
My biggest issue with this article is that it outlines a plethora of issues and provides no intended solutions.
Posted by Bruce Lehr Feb 15th 2011.
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Here's an article addressing changes needed in Big Pharma's R&D approach that advocates the Shire model (quoting Shire CEO Angus Russell) of buying Phase II and III projects and finishing off the clinical trials rather than spend heavily on its own R&D.
PharmTech Talk » Leaner, Meaner R&D.
That's great for Shire (perhaps) up till now, but what would happen if every Big Pharma company took that approach? Wouldn't we tend to run out of properties that would have the needed value? And wouldn't the price for these go up with all the extra bidders? I'm not even sure Shire could remain in the game if everyone took that approach simultaneously.
At best, this could be a supplementary strategy for some companies in my view. I think someone will still need to fuel the innovation to keep the pipeline alive.
Lean. Mean. Fighting-machine.
Posted by Bruce Lehr Feb 15th 2011.
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There are a spate of articles appearing the past couple weeks in biotech/pharma publications and the blogosphere with regard to struggles Big Pharma R&D groups are facing and what exactly to do about it. It can be generally stated that there is agreement within the industry and by industry observers that the current model is broken.
It takes too long. Costs too much. And fails to deliver too often - often spectacularly in phase III trials so as to maximize the loss of time and money. Big Pharma CEO's have commented on individual company plans at recent pharma meetings - variously calling for some level of retrenchment, cost cutting, out-sourcing to CROs, partnerships with academia and the public sector, narrowing the focus to niche areas or pursuing orphan drugs, or even diversifying into other businesses altogether like OTC or animal health.
I'm going publish a selection of these recent article and/or reblog several posts from leading commentators on the industry. Somewhere in there, the right models might be identified - at least for some companies. Happy hunting.
Posted by Bruce Lehr Feb 15th 2011.
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Eisai is funding H3 in Cambridge, MA with $200 M over 10 years to develop new oncology drugs. The idea is to create an entrepreneurial start up with presumably a better chance for success than the plodding Big Pharma R&D groups that we see being reduced all around us.
Eisai, with Oncology Group H3 Biomedicine, Doubles Down on Boston.
The entrepreneurial unit will presumably have access to Eisai's drug discovery resources but will also enjoy more autonomous decision making power to allow it to be more agile. H3 believes one of its strengths are through relationships with Todd Golub and Stu Schreiber of the Broad Institute of MIT and Harvard, and who serve as scientific advisors. Schreiber is an expert at synthesizing drugs to home in on disease proteins, and Golub is an authority on the genetics of cancer.
H3 will hire a chief scientist for its Cambridge lab and expects to employ 40 scientists by April with plans to expand to 75 in the future. H3 scientists will be compensated based on their successes.
Posted by Bruce Lehr Feb 14th 2011.
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Also from PharmaGossip today is a report that GSK will aim to sign up to 10 academic "superstars" this year for long-term partnerships to augment its drug discovery efforts.
http://pharmagossip.blogspot.com/2011/02/ftcom-gsk-looks-to-academia-for-new.html.
The relationships are expected to go from discovery all the way through product launch - a period of more than 10 yeras typically. GSK will provide facilities, funding and incentives paid on the treatments success. Under this new model, GSK plans to collaborate with the universities well past discovery stage - thus utilizing any necessary expertise throughout the process and rewarding universities more handsomely for successful projects.
GSK will also cut back on its in-house efforts to help pay for the new model. This will require GSK to invest in fewer fixed assets and the university model offers more flexibility.
Posted by Bruce Lehr Feb 14th 2011.
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PharmaGossip reports via the WSJ that Sanofi has finished its due diligence with Genzyme with no major issues uncovered, but still hasn't agreed to final price yet. The question remains whether Sanofi will agree to a CVR and if so at what price - previous reports have pegged the initial CVR value at $2 per share with it having the possibility to reach $5-6 per share.
PharmaGossip: Sanofi's Finishes Examination of Genzyme - WSJ.com.
This report says Sanofi may not agree to any CVR and merely wish to stick to an offer or about $74 per share or about $19 B. Ok. OK Already. Let's get this deal done. It's like lingering death and each of these reports add little if anything new to the story.
Wake me when it is over.
Posted by Bruce Lehr Feb 14th 2011.
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Reuters writes that the final grade on the Merck-Schering-Plough mega-merger may depend on how the J&J and Merck arbitration hearing over Remicade concludes. If Merck loses, then its stock will likely go down another 5-9% according to analysts. What's more? Remicade (and its follow on Simponi) and S-P's Vytorin (vorapaxar) were two of the three big reasons Merck bought S-P. Vytorin is already by the boards and should Merck also lose rights to Remicade and Simponi in Europe - it will make the S-P acquisition look like a real bust.
What looked like a "cheap" acquisition as mega-mergers go, at a multiple of 13 times sales (compared to 27 to 56 seen at the time), will now look and feel more expensive. The bloom will be off the rose.The arbitration result could come at anytime between now and the Spring.
Posted by Bruce Lehr Feb 11th 2011.
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Boy, talk about pessimism.
This article from Fierce Biotech covering comments of CEO's from several major Big Pharma's had to be a real downer if you work in R&d in ANY of these companies. A lot of doom and gloom about how R&D groups aren't earning a good ROI and that it's an end of an era. Look at these comments [at London pharma conference] from CEOs of the likes of GSK, Lilly, Bayer,
I am absolutely convinced that this will be the last generation of R&D spending
The industry will not go forward another 10 years spending the money that it has been spending
Investors see us as investing large sums of money and .....hitting for the fences with less hope of being able to achieve a blockbuster
There is less belief on their [investors] part that we would make the sort of returns that make this sort of risk justifiable
There is real doubt about whether the sustainability model of pharma can be maintained with our current R&D productivity
Wow! Wouldn't that fire you up to go to work in Big Pharma on Monday morning? Might want to get that resume polished up. Sounds like we will continue to have R&D restructuring and cost cutting. What's not clear to me is what model will be our replacement. It is clear to me that pharma needs innovative products coming from somewhere and it will not be able to save its way to prosperity.
Comments like these though lead me to believe that Big Pharma will become a bunch of bankers backing outside product development and will also do a little sales/marketing on the side. I have think company's like Roche -- that still are speaking about a commitment to R&D -- will prevail in this environment of R&D cutting.
Investors might like slashing R&D in this quarter and the next. Let's see how thrilled they ar ein a couple more years if no products are coming to market in companies who take out the big knife on R&D. I guess you can fight for a new model and better productivity or you can throw in the towel.
Posted by Bruce Lehr Feb 11th 2011.
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No news on Sanofi's expected aquisition of Genzyme in this week's earnings call.
The call did show that Sanofi reported only a 0.5% increase in 4th Qtr sales up to $10.1 B and reported a net drop in profits by 64% due to a large restructuring charge that relieved them of thousands of sales people and R&D scientists. Sanofi indicated the sales staff was no longer needed as they were losing business from their Taxotere, Plavix and Lovenox frachises to generics competitors. This trend is strong enough that Sanofi chose to revise its EPS estimates for 2011 down by 5-10%.
The above estimates on EPS does NOT include any possible beneficial effects that a Genzyme acquisition might provide. This speaks volumes as to the need Sanofi has to make a Genzyme-type deal a reality to get back into growth mode in the short-term.
Sanofi CEO Chris Viehbacher said talks with Genzyme are proceeding on its expected timeline. He told reporters and analysts "we'll keep you posted" when there is something to report. See WSJ here and here.
Posted by Bruce Lehr Feb 10th 2011.
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A new NEJM study casts doubt on the dogma that academic researchers contribute by discovering underlying mechanisms and pathways for diseases but don't contribute much to applying the research for creation of commercial drugs. According to the study, the public sector contributed heavily to the development of more than 20 percent of new drugs between 1990 and 2007.
Who Discovers Innovative Meds? The Public Sector // Pharmalot.
Public sector was defined as universites, research hospitals, nonprofit research institutes, and federal labs. Using patent database informaton, the study authors determined that the public sector produced 21.2 percent of all new drugs receiving priority review -- a marker signaling the innovativeness of these products. Innovative drugs from the public sector were disproportionately overrepresented in the totals.
Wow! Put another way, 46.2 percent of NDAs from the public sector received priority reviews, as compared with 20 percent of applications from the private sector - a 2.3 fold difference in rate. The study authors also noted that the public sector concentrated more efforts on different disease areas than the private sector - particularly in the areas of hematology, oncology and infectious disease (not the heartbreak of psoriasis, restless leg syndrome or female sexual dysfunction).
The public sector helped finance the development of some of the world's biggest blockbusters including Remicade for rheumatoid arthritis and the pain drug Lyrica (see Fierce Biotech). Seventy-five public sector sites discovered or co-discovered at least one product, with the NIH taking first place with 22 products. Who'd thunk? Maybe Francis Collins Translational Insitute has legs afterall.
Posted by Bruce Lehr Feb 10th 2011.
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So says Lilly CEO John Lechleiter in a London speech recounted in Fierce Biotech.
Too long to develop new proudcts. Too much money spent. Too little revenue returned for the effort. Lechleiter says the model needs to change to become both more entrepreneurial and to evolve to the formation of global networks of collaborators.
In this way, developers can share investment, risk and rewards stemming from new drug development efforts. It needs to be done now. And -- regulators have to participate to help trial design and evaluation. The goverment also has to help create the "environment where innovation can thrive" (see yesterday's Lechleiter post on clusters).
In the meantime, whiile these type sof changes are beginning to work their way through various Big Pharma players -- we can continue to expect to see M&A activity (if anyone is left to buy) and restructuring (i.e. downsizing) of R&D departments that have failed to deliver.
Sanofi CEO Chris Viehbacher says, "You really have to put your portfolio through the R&D equivalent of a bank stress test. Most companies have not been as tough as they should be in figuring out what products should be in there..."
Posted by Bruce Lehr Feb 10th 2011.
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Xconomy reports on Amgen's next pipeline drug for bone treatments. Its current drug denosumab (or Dmab) is sold under the name Prolia for osteoporosis treatment and Xgeva when used to treat bone fractures in cancer patients. Now it is working on AMG785.
Amgen Pushes Ahead With Son of Dmab; For Treating Broken, Frail Bones.
It is a misnomer to call it Son of Dmab in my mind -- more like Cousin to Dmab as the drug is different and has a completely different mechanism of action. However, it may be very complementary in use for the treatment of patients with bone ailments - like osteoporosis or fractures.
AMG785 is early in the pipeline but does offer interesting possibilities if it reachesd approval. Dmab blocks osteoclast function and prevents normal bone breakdown. AMG785 conversely can be used to enhance osteoblast function (by inhibiting action of sclerotin) and stimulate bone build up. Thus, Amgen will be able to attack bone healing problems from two perspectives and has the beginnings of a portfolio to sell to bone treatment specialists.
These drugs could help Amgen grab a good portion of the $9 B per year market for the treatment of osteoporosis. That's a chunk of change Cuz.
Posted by Bruce Lehr Feb 9th 2011.
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Here's a follow up story from the Pharmalot blog to a post here yesterday on FDA scrutiny of the accelerated approval program. Bascially, the post concludes that many approvals under the program really come with inadequate clinical trials in terms of safety and effectiveness asssessments.
Should FDA Hit The Brakes On Accelerated Approval? // Pharmalot.
However, the quandry is that if all drugs required randomized, controlled trials for all drugs -- especially oncology drugs -- the thought is that most of these would be greatly delayed in making these available to patients. Of course if they don't work, what's the problem? It's the other side of the coin. Big delays for drugs that do have clinical value and life-extending effects.
So where do we draw the line? When should we accelerate availability of medicines to dying patients? I suspect we ought to look at the bigger picture and approve based on science and not solely on compassionate grounds. However, it is extremely naive to think that individual dying patients, their families and their advocates are going to like that answer.
Posted by Bruce Lehr Feb 9th 2011.
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Here's a Financial Times piece that is fairly critical of the pharma industry that is likley appearing now in response to Pfizer's recent decision to cut back it R&D in Sandwich, UK and in Groton, CT. It starts by remembering Merck and J&J in their more "glory years" period where both were very highly regarded from a business and ethical point of view.
PharmaGossip: Now the FT chimes in as well.
It then talks about how Big Pharma has changed to become less patient and more financially focused with negative consequences as a result. Some of these being the industry's seeming fascination with me-too drugs, drugs for minor ailments of the rich countries versus more glarign medical needs of developing nations, focus on marketing over development -- all of which appears to have driven the industry to be less successful and more reviled by the public - the sterling image of yesteryear being despoiled. The Times article claims the industry's response to these woes is to increase lobbying efforts to delay further sales/profits erosion.
The article concludes with this thought:
"When an industry is broken, the best business strategy may be to manage its decline."
Ouch! Let's resolve that we're not there yet, and with some retooling of the development model and government support with tax policy can spur innovation -- so that the indsutry can recapture its momentum and restore some of it lost luster.
Posted by Bruce Lehr Feb 9th 2011.
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Lilly CEO John Lechleiter spoke on a familiar theme -- that of promoting regional innovation clusters to spur economic development -- at a recent Brookings conference. The text of his speech has been made available on the PhRMA site.
In his speech, Lechleiter touts the success of the Indiana innovation cluster - supported by a broad coalition of industry, academia, philanthropy and government - in drivng capital to the area to fund start ups thus spurring innovation and creating jobs.
Lechleiter notes that as an innovative pharmacueitcal company - helping to create a viable innovation cluster in Indiana is in line with Lilly's mission to create a "fully integrated pharmaceutical network or FIPNet". The FIPNet is essentially a value chain orchestrated by Lilly that assembles key pieces from partnerships, alliances and other relationships and transactions -- and not always outright ownership. Lechleiter points out Lilly deals with Covance and Evonik as successful examples.
Finally, he puts in a plug for the federal government to invest in these regional clusters and suggests it can lead the way through certain policy initiatives:
He concludes that fostering innovation clusters provides an engine for jobs and economic growth - and promotes a competitive advantage. But, he also points out when innovation is promoted in health care arenas -- it also results in longer, healthier lives.
Posted by Bruce Lehr Feb 9th 2011.
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The WSJ reports this afternoon that the FDA said six drug makers, who received accelerated approval for their cancer treatments, did not complete follow-up studies that were promised in exchange for that approval. Among the six are Amgen, GSK and Eli Lilly.
Richard Pazdur, head of the FDA's cancer division, said, "These confirmatory trials are as important -- if not more important -- than the initial trials leading to the accelerated approval." Some of the companies have been delinquent for more than six years.
The FDA has the power to fine companies millions of dollars or to even withdraw approval. My question, "Have they ever done so?" If not, I wonder what the Company's incentive for doing the follow up studies might be? I know their disincentive.
For example, Roche's Avastin and AZ's Iressa are two drugs that failed to show benefit in follow up studies for certain approved applications. The result was the drugs lost their approval - a powerful disincentive to report I'd say. To date, five drugs failed to confirm benefit in follow up studies.
Would the number have been higher if all the drugs receiving accelerated approval had met their post-market reporting requirments? We may never know.
Posted by Bruce Lehr Feb 8th 2011.
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