The Big Red Biotech Blog

Jury Still Out on FDA Approval Rate

The jury is still out on whether the FDA increased drug approval rate in 2011 represents the start of a more positive trend or is just a one year hiccup. By November the FDA had 35 approvals to claim--with 24 coming ahead of OKs in other countries. The agency publicly noted that 2011's approval rate will go down as one of the best years in the past decade after years of anemic approval rates. 

True, but will it be sustained?

Most industry execs aren't ready to cheer just yet. The industry is still struggling with a poor productivity rate over the past decade, and is undergoing an unfinished revolution on the development front.  Next year, we could see a drop in approvals.  And if that happens, the FDA will be under even more pressure to work more closely with developers to better turn the odds in their favor.  See Fierce Biotech.

Posted by Bruce Lehr Dec 26th 2011.

More on Relative Value of Patents for Bio Drugs in a Biosimilar World

More from the Patent Doc blog on why biologic drug producers in the future will stay away from patents and rely more on trade secrets to protect their interests. The Biologics Price Competition and Innovation Act of 2009 (particularly the litigation provisions) contains incentives for biologic drug innovators not to rely on patents to protect these drugs and the return on investment.  A recent analysis also showed that patent protection provides (on average) about one additional year (~327 days) of exclusivity past the end of the 12-year exclusivity provided by the BPCIA. So statutory protection is about equivalent with patent protection and the former can be accomplished through much less information disclosure on one's biological drug.

The blog post below talks about using trade secret approach more in late stages of development for process related steps like cell line optmization -- that generally doesn't benefit from patent protection.  This would make it harder on a follower to try to copy a bio-drug.

...the expected de-emphasis on patent protection for later-stage development (including regulatory approval) can be expected to change the relative importance of patents in the two stages.  Such de-emphasis will also change where the valuation in biologic drugs may lie, because there will be a relatively greater advantage in optimizing cell lines and other process parameters (which even today rarely benefit from patenting) than in patents on the biologic drugs per se. 

So less emphasis on composition of matter and more emphasis on the process. The author further concludes that "the future will be different than the past regarding biologic drug development and efforts to obtain the benefits of biologic drug development at a reduced price."

Posted by Bruce Lehr Dec 26th 2011.

ImmunoGen and Lilly Cut ADC Deal

From Fierce Biotech, ImmunoGen and Eli Lilly announced a deal for the latter to gain an exclusive license to a defined number of treatments utilizing the formers antibody drug conjugate technology.  ImmunoGen will receive $20 M in upfront payments, can earn up to $200 M in milestones and also can earn royalties when the drugs reach commercialization.

Lilly plans to exploit the ADC technology with its pipeline of oncology drugs to "develop agents with clear clinical benefit in specific patients populations."

Posted by Bruce Lehr Dec 20th 2011.

Bio-drug Innovators Eschew Patents in Future to Block Biosimilars?

Here's interesting post from the Patent Doc Blog that argues that there are incentives for producers of innovator drugs to NOT file patents to block information access to biosimilars producers in the future.

The writer argues that instead of filing patents innovator drug producers could file the bare minimum information with the FDA to get their drug approved.  Because biologic drugs are so complex, this degree of stealth would prevent knowledge flow to biosimilar producers who wanted to copy their drug. Thus, the innovator would not disclose the cell used to produce the drug, or any optimization of that cell line.

The bloggist argues that this would produce obstacles for the biosimilar follower and would also avoid litigation under the biosimilars statute. The innovator could thus avoid protracted biosimilar patent infringement lawsuits. 

It is an interesting post.  But if non-filing is this easy, why doesn't someone do it now? It would save time and money.  It may protect from a biosimilar follower but does it protect from a fellow innovator?

Posted by Bruce Lehr Dec 20th 2011.

Analysts Pick at Logic of Amgen and Watson Biosimilars Deal

Here's some follow up on the announced Amgen and Watson biosimilars deal yesterday where the analysts weigh in on their impressions of the deal.

Amgen, Watson & Biosimilars: What The Wags Say // Pharmalot.

Said Bernstein Research analyst Ronny Gal, “we tend to think there is not enough money in biosimilars to justify the host of branded companies marching into the field (Pfizer, Merck, Lilly, Biogen and now Amgen), especially as their entry provides a self-fulfilling prophecy for product commoditization.”

Moreover, Amgen may find itself in a tortured position trying to explain to physicians why they should choose certain brand-name meds over future biosimilar rivals, while at the same time taking the opposite tack to co-promote any biosimilar that is developed and marketed as part of the collaboration with Watson. He uses an example of a Roche and Genentech drug, since these are the key targets for the deal, to illustrate his point.

“This feels a lot like branded company participation in generics in the ’80’s, which ended with mass exit from the field. It will require some serious mental gymnastics to explain to an oncologist why Avastin can be replicated while Aranesp cannot. Further, the argument will be used against Amgen well before its biosimilar products come to market.”

Valid points to raise with regard to the marketng challenges in this deal.  One also neds to remember that some of the traditional powers in generics, e.g. Teva, Sandoz, Hospira, will also be trying to sell into this space.  That's pretty heady competition in a market segment with acknowledged lower profit margins.  It's hard to see that some big competitors won't be chased from the field of battle.

Posted by Bruce Lehr Dec 20th 2011.

Amgen and Watson to Team on Cancer Biosimilars

As reported in Xconomy, Amgen and Watson have announced a pact to produce and sell cancer biosimilars together.  The companies didn't say which drugs they would be targetting other than to say they wouldn't be going after Amgen's drugs. 

Who does that leave? Roche's (Genetech's) Avastin? Herceptin? Rituxan?

“This collaboration reflects the shared belief that the development and commercialization of biosimilar products will not follow a pure brand or generic model, and will require significant expertise, infrastructure, and investment to ensure safe, reliably supplied therapies for patients,” Amgen and Watson said in their joint statement.  The products that this team introduces will be sold under a joint label.

Let the Games begin. Teva, Samsung/Biogen, Merck, Pfizer, Sandoz can't be too far in the distance.....

Posted by Bruce Lehr Dec 19th 2011.

 

Top 10 Biotech Deal Terminations in 2011

Fierce Biotech recounts the Top 10 biotech deals with big pharma partners that were axed in 2011.  They state that the right deal can make a company and when it sours it can break it too. Pharma partners look to pull the plug ASAP on souring deals to save as much money as possible. It's a "Terminate often, terminate early" philosophy at work many times.

Analysts (passing out advice & when don't they) say under that scenario, it is critical that the biotech gets back all licensing rights without paying reverse royalties -- so they can repartner the deal!  Many deals are repartnered in just this manner. With regard to blockbusters coming from these type of deals, analysis reveals that 8% had been partnered, re[partner4d and launched to successful outcomes.

Top 10 Terminate Deals for 2011:

• GSK and Targacept (neuronal nicotine receptors)
• Shire and Renovo (Justiva for scarring)
•  Merck and Addex Pharmaceuticals (ADX63365 for schizophrenia)
• Janssen Pharmaceuticals (J&J) and Diamyd Medical (GAD65 for type I diabetes)
• Cephalon and ImmuPharma (lupus)
• Novartis and Peptimmune (PI-2301 for MS)
• Novartis and Paratek Pharmaceuticals (PTK 0796 wide spectrum antibiotic)
• Merck and Portola Pharmaceuticals (Betrixaban anticoagulant)
• Eli Lilly and Amylin (Byetta for type 2 diabetes)
• Solvay and Depomed (DM-1796 for pain)

Time to repartner up.

Posted by Bruce Lehr Dec 19th 2011.

 

 

GE Enters Turnkey Bioplant Partnership for Emerging Nations

GE and engineering firm, M+W Group, announced that they will team up on a complete biomanufacturing plant development service to serve the growing global demand in the emerging markets. The partnership will provide a single point of contact for customers, primarily governments, including IP access, financing, plant start-up, construction, and staff training. 

GE wont say if turnkey bioplant partnership will cut prices for emerging nations.

The partnership's goal is (to make money) to aid emerging nations in satisfying their unmet needs for the biological products that are predicted to have major positive health impacts. The regional focus of the partnership will highlight the Middle East, Central and Latin America, and SouthEast Asia. They will also sell to Big Pharma looking to upgrade vaccine manufacturing capabilities in emerging nations.

Posted by Bruce Lehr Dec 19th 2011.

 

Preaching to the Choir on Merck's R&D Spend

I agree whole-heartedly with Mike Wokasch's comments on industry views of Merck's CEO Ken Frazer staying the course with R&D spending.  I do think it is consistent with Merck's mission to remain a leading supplier of innovative medicines that are clinically effective and differentiated -- and that can prove their value.

See post from Pharma Reform blog.

Let the view from the cheap seats from analysts who are interested in short-term financial results be damned. AMEN.

Posted by Bruce Lehr Dec 16th 2011.

Atlas Shire's Up Investors Rare Disease Portfolio

Yesterday, Atlas Ventures announced a new alliance with Shire Pharmaceuticals to explore investment opportunities in early-stage rare disease therapeutics. The partnership leverages Shire’s capabilities and knowledge in the research and development of rare diseases with Atlas’ expertise in the formation and growth of early stage companies. 

The creative alliance structure provides an opportunity early in the venture process to utilize all of Shires capabilities in rare diseases from research to commercialization, while leveraging the extensive Atlas network and experience in company formation. Under the agreement, professionals from both Shire and Atlas will be dedicated to work closely together to advance the collaboration effort.

Financial terms of the deal aren’t being disclosed. But Atlas indicated that Atlas and Shire will seek to create a small portfolio of investments over the years of the partnership. Shire will also get option rights in these deals, through which it will have the opportunity to acquire the companies at a pre-determined price if the startups reach certain scientific goals. 

By structuring the investments to give Shire the option to acquire, the partnership “secures access to these innovations for Shire, while mitigating the downstream liquidity risk for the team and investors." An Atlas spokesman said,  “We are quite excited about how these unique platforms will enable us to further experiment with the early stage venture model.”

See Life Sci VC Blog, Xconomy, and Fierce Biotech.

 

ADCs are Hot and Offer CROs/CMOs Opportunities

As covered in the BioProcessBlog, BPTC's first bioPULSE survey found that the market was bullish on the prospects of antibody drug conjugates (ADCs) to become a major therapeutic area going forward.

Increasing interest in ADCs.

Key findings in the web-based survey included:

• 83% of respondents expect to see a signifcant increase in the number of ADCs entering the pipeline in the next 5 years
• 24% indicated that they were not currently working on ADCs but expected to be doing so soon
• 24% indicated that they were already working on ADCs
• 95% of respondents said ADCs would be as big as mAbs or very important but not quite as big as mAbs (only 5% felt it was a niche application)

Conjugation technology and linker chemistry was seen to be the biggest challenge. Survey participants cited this as an opportunity for CROs/CMOs who could provide help with conjugation and linkers and provide manufacturing.  See Big Red Biotech posts here and here.

Posted by Bruce Lehr Dec 16th 2011.

Old "Car" Model Applied to "New" Pharma Industry

Fierce Biotech reports that some Pharma manufacturers are looking to the car industry for ideas on how to adjust their business model to be more profitable as well as perhaps shorten drug delivery times. Auto makers are very familiar with outsourcing many aspects of manufacturing and primarily concern themselves with design and marketing.  The pharma equivalent might be drug R&D and marketing.

GSK and AZ in particular were cited as two big pharma picking car makers' brains, drawing on companies like McClaren, Jaguar and Renault. In addition to outsourcing expertise, Porsche (for one) has crowed that it reduced product development time by 28%.  Contrast this by industry watchers claims that Big Pharma development times have increased by 31% -- there might be something to learn here.  Porsche actually has a consulting arm that is starting to market to pharma.

One big caution though -- auto makers haven't historically always been able to recoup their costs of capital -- not exactly a ringing endorsement for someone who wants to compete in pharma industry with dwindling capital markets to support it. Auto makers may have the most to teach in manufacturing and reducing costs there.

Interestingly, Pharmalot reported yesterday that 38 manufacturing plants were closed in the US this past year as pharma looked to downsize (and outsource like autos?).  While, Fierce reported on comments by Merck's CEO Ken Frazier indicating he would buck the Pharma R&D downsizing trend to continue to invest in R&D (consistent with auto internasl development model?) instead of cutting back R&D more severely (to also outsource) like GSK or Pfizer. The debate will rage as to which is best until more data emerges supporting a winner.

From an innovation standpoint though, it is good to see companies willing to consider other tried and tested business models for applicability to their situation -- especially cross industry like this.

Posted by Bruce Lehr Dec 15th 2011.

Ben Venue Labs Pisses Off FDA

I saw this unusual story in the Aspen Brook Alert concerning Boehringer Ingelheim's Ben Venue operation. According to the story, during the most recent inspection of the facility a 38 liter stainless steel mixing vessel was found to contain an "unknown liquid".  Subsequent creatine testing identified it as urine. 

A related dusting for fingerprints found nothing, and DNA testing was inconclusive due to contamination. Briefly, there was consideration to polygraph the staff with access to the area but when it was determined that 700 exams may be required that concept was rightfully dismissed.

 Ben Venue did not follow its SOPs to invesitgate the "unknown substance" in the 30 days required and therefore was cited by the FDA for being past due. So now, we apparently have a pot to piss in but no hard suspects.

Posted by Bruce Lehr Dec 14th 2011.

What Goes Around Comes Around for KV Pharma

You may remember KV Pharma running into trouble earlier this year for pricing its drug Makena (a form of progesterone already on the market) at $1500 per dose versus the $10 to $20 charged by compounding pharmacies.  The resulting uproar caused them to lowe price to the bargain rate of $690 per dose. Too little too late though.

KV Pharma May Not Be A Going Concern Very Long // Pharmalot.

Now in a recent filing with the SEC, KV discloses that "conditions raise substantial doubt about the company's ability to continue as an ongoing concern." Karma strikes again.

Posted by Bruce Lehr Dec 14th 2011.

ADC Biotechnolgy Wins Grant for new ADC Production Technology

ADC Bio received a new development grant from the Welsh government for its new antibody drug conjugate manufacturing technology that it hopes will make drug production cheaper.  The new "lock and release" method will minimize production steps and cut costs.

ADC Bio wins development grant for new ADC production tech.

The new technology is performed on a solid support versus current methods done in solution at high dilution. Binding the antibody to a solid support prior to the conjugation step provides some of the following advantages according to ADC Bio:

•  column binding of the antibody followed by conjugation to the cytoxic drug allows all superfluous reactants to be washed away from the immobilized antibody
• structural integrity of the antibody binding activity is maintained
• the antibody is protected throughout the process and can't be lost by leakage providing signficant risk management for pricey material
• reportedly production yields are increased in the new process by minimizing antibody aggregation

ADC Bio expects to begin testing commercial scale production in the next year and a half.  It plans to license the technology to CMOs and drug companies. The prospect of ADC's making a much bigger splash in cancer therapeutics over the next decade bodes well for demand for ADC manufacturing services and technologies.

Posted by Bruce Lehr Dec 13th 2011.

 

Venture Funding Decrease is Big Pharma's Gain

From Fierce Biotech, it seems that big pharma has happily stepped into the funding void created by the collapse of venture funding for biotechs to do more deals earlier and cheaper than before.  Says Dan Zabrowski, head of Roche's drug partnership unit,  "We are doing around 50 to 60 partnership deals a year now, compared to around 30 deals per year before the crisis [of 2008]. Today, we start deals earlier with less upfront payments and share the risk with our partners."

Who says a funding crunch is so bad?  This is not exactly a hardship for big pharma.

Posted by Bruce Lehr Dec 12th 2011.

The Big Squeeze Coming in Pharma

From In The Pipeline, it quotes Roche CEO Severin Schwan commenting on trend whereby pharma companies will divide into two camps - the R&D intense or the generics/biosimilars.  Schwan predicts that there will be companies that have managed to find drugs new enough and efficacious enough to convince regulatory agencies and payers that they're worth the price. And you'll have the generics competing on cost/price. The guys in the middle, the me-too drugs and line extensions and things that don't work as well as anyone had hoped - that's going to get squeezed, and if that's all you have in your product portfolio, you're going to get squeezed, too.

 

 

 

Posted by Bruce Lehr Dec 12th 2011

Continued Intrigue in AMP v USPTO with Certiorari Petition

The Patent Doc blog reports that the American Civil Liberties Union (ACLU) and the Public Patent Foundation (PubPat) have filed a certiorari petition with the Supreme Court in connection with two issues connected to the AMP v USPTO (Myriad) case.

The two issues at question? 

1. Are human genes patentable?
2. Did the court of appeals err in ruling that petitioners who have been indisputably deterred by Myriad's "active enforcement" of its patent rights still lack standing to challenge those patents if  they haven't been personally and directly threatened with an infringement action?

The Patent blog writers say that "it is clear that plaintiffs (ACLU and PubPat) are interested in not only reducing the scope of patent eligibility (no genes) but in expanding the scope of declaratory judgment jurisdiction, so that members of the public affected by a patent but not threatened by suit would have standing." 

The authors continue, "In many ways, this argument is much more threatening to an effective patent regime in this country, since garnering Supreme Court agreement would make the recent spate of patent litigation look benign.  For example, if every consumer who purchases a patented product had standing to challenge the patent."

I'll be following this thorugh the Patent Doc blog and suggest you do the same if interested in this case and its implications.

 

 

Posted by Bruce Lehr Dec 12th 2011. 

 

 

FDA Inches Towards a Biosimilar Approval Pathway

In addition to the FDAs plan to solicit pharma input on proposed user fees for biosimilars, the FDA has also published proposed performance goals and procedures for the review.

PharmTech Talk » FDA Inches Towards a Biosimilar Approval Pathway.

The draft performance goals outline the following:

• timelines for review of applications
• timelines for review of proprietary names 
• procedures for resolving disputes.
• the procedure a sponsor should follow to get specific questions answered about protocol design, or about scientific or regulatory questions pertaining to their submission
• timeline for the agency’s response.
• there is an explanation of the types of meetings the sponsor should schedule with FDA
• the information required by FDA before scheduling the meeting 
• the timeline or conditions during the submission process that would require scheduling each type of meeting

As stated in the previous post, we're edging closer to getting a functional biosimilars process in the US to bring this important new class of drugs to the market.

 

 

 

 

 

 

Posted by Bruce Lehr Dec 12th 2011

PhRMA backs FDA plans for biosimilar fees

 Biosimilars are coming! Biosimilars are coming! in the USA and the FDA is planning to seek pharma industry input to design a set of users fees to defray costs and help expedite review of these new class of medicines.

PhRMA backs FDA plans for biosimilar fees discussion.

PhRMA says it is on board with this proposal and is eager to provide input at the hearings.  It is also in favor of a "science-based, separately funded regulatory program for biosimilars that is supported by appropriate dollars and user fees."

We're getting closer all the time.  Now if the FDA can just issue their guidelines.

Posted by Bruce Lehr Dec 12th 2011

Merck to Build New R&D Center in China

Pharma giant Merck will build 47,000 square meters of new lab and office space in Beijing that is planned as its new Asian R&D headquarters. The first phase should open in 2014 for 600 workers, who will handle everything from discovery through clinical development and regulatory projects.

Peter S. Kim, Ph.D., president of Merck Research Laboratories, stated "By strategically locating in China, we are able to complement our existing R&D capabilities and facilitate new collaborations with scientists in the region and across emerging markets." The R&D complex is part of Merck's ambitious $1.5 billion plan to grow a major research operation in the country, which it sees as an important emerging market.

Primary disease focuses for the Merck investigators will be CVS disease and diabetes, both big growth markets in China. Merck expects its relatively low-cost China R&D operations to tackle new drugs that can be marketed around the world. Shifting research work to China helps eliminate some costly overhead--and employees--in the U.S. and Europe while giving the company a more prominent place in the Chinese pharma industry.  See Fierce Biotech.

Posted by Bruce Lehr Dec 6th 2011.

Samsung and Quintiles' biosimilars JV teams with Biogen Idec

Biogen Idec and Samsung announced that they are teaming up to develop and market biosimilars. The two companies will form a joint venture, based in Korea, which will be funded by $255 million from Samsung and $45 million from Biogen, giving the latter a 15 percent stake in the venture.

Samsung and Quintiles' biosimilars JV teams with Biogen Idec.

Biogen said that it expects biosimilars to constitute “a meaningful revenue stream” and that the company was working on several biosimilar molecules. Biogen emphasized today that the Samsung joint venture would not pursue biosimilar versions of proprietary Biogen drugs. 

Samsung has laid out plans to invest close to $2 billion in the biosimilar business in expectation of developing a new subsidiary that can earn roughly that amount annually in about a decade. "We are taking a significant step toward becoming a major player in the biopharmaceutical industry and investing in an important growth engine for our company," Samsung Biologics CEO Tae-han Kim said in the statement.

Biogen CEO George Scangos made no secret of his own interest in biosimilars. He indicated Samsung could shoulder sales and marketing while Biogen concentrated its efforts on the manufacturing end of the deal.

"The manufacturing facilities have costs to run them, so the more products you run through them, the more efficient they are," Scangos said. "To set ourselves up commercially could be a big distraction. I'd like a partner to take over that."  Looks like we have a match.  See Fierce Biotech and Xconomy.

 

Posted by Bruce Lehr Dec 6th 2011.

Glaxo Scientists ‘Live or Die’ With Project in Research Overhaul

Related to the previous post no doubt, three years ago Glaxo reorganized its R&D department into smaller, presumably more empowered and entrepreneurial units (called DPUs) to hopefully improve the level of success.  The catch?  The Discovery Performance Units are evaluated every three years to determine how well they've met milestones.

Glaxo Scientists ‘Live or Die’ With Project in Research Overhaul - Businessweek .

If they haven't met their goals?  Then they can lose funding, be disbanded and reassigned to other projects. It's the sink or swim approach to R&D.  The first three year cycle evaluation is upon us so we will get some idea as to how this is actually working -- or if it is working. Some rivals say the three year time line is too short.  We shall see.

Posted by Bruce Lehr Dec 4th 2011.

Drugmakers Go From Abundance To Scarcity

A new report from Oliver Wyman puts numbers to the dismal trend seen in Big Pharma R&D from 2005-2010 as compared to "boom" years of 1996-2004.  The down period was named the "drought" years and some of the more disturbing statistics appear below:

Drugmakers Go From Abundance To Scarcity // Pharmalot.

• R&D spending doubled to an average of $125 billion during the drought period, from $65 billion in better times. And the ROI dropped like a stone to an average of $75 million in sales during a product's fifth year for every $1 billion spent on R&D, down dramatically from $275 million in better days.


• The development drought also led to a declining economic value of approved drugs, to an average $430 million from $515 million. 


• Drug approval itself plunged about 40% in the dry years, amounting to 22 FDA approvals per year on average, versus 36 in the better years.


• Drugs produced an average of $9.4 billion in fifth-year sales in the dry period, half of the $18.3 billion during the more productive years. Fewer blockbusters and fewer new drugs overall contributed.


• In all, 17 of the 20 companies faced productivity declines, though Novo Nordisk, Bristol-Myers Squibb and Johnson & Johnson did better than most.  Dips in high levels of productivity hit everyone though.

What to do about it?

The paper's authors recommend raising standards for product innovation and working more closely with payers as they face pressures to hold down costs. They also want companies to treat new compounds as rare (don't take development success for granted), with focused investments that don't rely as much on speed to market, .i.e. actually create better products and understand more about their mechanism of action in treating disease.

Another recommendation: Play to win. This means using strategies like closely assessing the competition (to create novel products), seeking alternative financing and joint R&D efforts with other parties (including rival drug makers), and making everyone focus more on business development. (See Fierce Biotech).

Posted by Bruce Lehr Dec 4th 2011.

 

Place Your Bets on the Onyx Auction Winner

According to Fierce Biotech, GSK or Pfizer have been named as the front runners by industry observers as most likely to acquire Onyx.  Takeda was also mentioned as being in the race. Onyx makes Nexavar (kidney cancer) and has the hotly watched carfilzomib (multiple myeloma) under FDA review.  Analysts project Onyx revenues more than doubling in the next 5 years. 

That will help any acquirer fill in some of those nasty revenue potholes caused by drugs going over the patent cliff. Let the bidding begin and place your bets on the winner.

Posted by Bruce Lehr Dec 1st 2011.