News on trends and issues in the biopharm and pharmaceutical industry. Commentary on current events,clinical pipelines, facility expansions, competition, technology, legal and economic matters. M&A and licensing activity across the globe.
I am a Director of Research and Devopment for a leading supplier to biopharmaceutical producers. The views expressed are mine. I do not speak for any company or corporation.
Hey, I've got something for you Stat Junkies who like to review performance stats from various goverment agenices -- a new report from the Patents Doc Blog -- that outlines the 2012 US PTO performance in processing patent applications. Wow! Are you excited or what?
In a nutshell, the US PTO processed more patent applications in shorter times than their goals for 2012 called for and they improved across the board in all categories (see link above). Some highlights include:
Average first action pendency (21.9 months versus target of 22.6 months)
Average total pendency (32.4 months versus target of 34.7 months)
Patent applications filed electronically (97.1% versus target of 96.0%)
Number of applications filed increased from 537,171 in FY 2011 to 565,566 in FY 2012 (5.3% increase in both years)
Number of applications awaiting action dropped from 690,967 in FY 2011 to 633,812 in FY 2012 (4th consecutive year drop)
Total number of pending applications also decreased, dropping from 1,168,928 in FY 2011 to 1,157,147 in FY 2012.
For the next few years though, the sledding gets much tougher with respect to first action and total pendency. For first action pendency, the annual performance target drops from 22.6 months for FY 2012 to 18.0 months for FY 2013 and 15.8 months for FY 2014, and for total pendency, the annual performance target drops from 34.7 months in FY 2012 to 30.1 months in FY 2013 and 26.1 months in FY 2014.
Lilly CEO John Lechleiter, who is also the head of PhRMA this year, told China regulators that they need to speed up their review of drugs in the clinical pipeline if they want to be competitive with the rest of the world. He characterized current China review practices as "being 8 years behind the pace of major regulatory groups" (some might snarkily say the same about Lilly's pipeline).
The Chinese government is known to have a hankering for Western cash so it is likely they will take heed of this advice and look for ways to improve -- as it is in their best interest to speed new drug introductions and commerce in China. And -- oh by the way -- it could also raise health care level of care in China too. See Fierce Biotech.
Roche and Broad Institute are the latest groups to partner on "re-purposing" drugs. That is to say, Roche will give Broad insititute 300 or so drug candidates that have failed in clinical studies with their original "purpose". Presumably, these drugs have been found to effect a specific target and have shown safety in humans before -- so the hope is that if you can find a disease where these show a therapeutic effect then you are a lag up in getting the drug more quickly to market (with appropriate clinical trials, etc).
Some may view this as throwing stuff against the wall and seeing what sticks -- others think it is a rationale shortcut to try that has small relative cost and perhaps a big upside if you can find a good target. This is becoming a more popular approach to try with libraries of compounds sitting around in various companies, and apparently has academic centers like Stanford, Broad, or NIH who are willing to screen. Given that's the case, then we shoudl have data sooner rather than later as to whether this is really worth the effort or not........See In the Pipeline and Fierce Biotech.
In case you think Big Pharma is completely powerless against the patent cliff and the forces of generics, we have ths new study from Express Scripps with some counter data. It seems generics have made a whopping impact on drug prices in 2012 -- as prices for these drugs dropped by an amazing 21.9% since last September. Markedly different from the meager 2.9% decrease seen for the same drugs in 2011.
On the other hand, a "market basket" of widely used brand name drugs was able to command a 13.3% increase in price during that same time period -- in a time when inflation was only 2%. Clearly, with loss of revenue facing them from drugs that have gone "over the cliff", Big Pharma has been able to counter by some degree with substantial price increases on brand name drugs. Biologics in fact were able to up their prices by 22.6%. Still these types of branded "specialty meds" represent only about 21% of the total market with generics making up the rest. So Big Pharma has to work hard to squeeze profits out of the existing pie.
Generics are making their impact clearly. Anyone doubt that pay for delay may actually prevent this from being worse (from Big Pharma point of view)? And Express Scripts uses the generic price drop coupled with the big biologics increase to lobby for more emphasis on getting a biosimilar pathway in place so it can start profiting from big drops in the biologicals arena too when the first biosimilar drugs are approved. Not such a rosy profit picture for Big Pharma unless they have the ability to get new brand products on the market and extend the indications for the existing brand drugs -- before either generics or biosimilars start eating their lunch.
Gilles Cottier will continue to lead the SAFC business. This business will be renamed the SAFC Commercial Markets Business Unit and will continue to serve customers in the life science and electronic markets.
Company officials intend to provide more information about the structure, sales and growth prospects of each of the three business units early in 2013, according to a statement.
Fierce Biotech this morning reports on the top 10 Big Pharma companies investing in China. Clearly, these companies are jockeying for position to be able to exploit commercial opportunities in the BIG Chinese market. In many cases, these is seen as essential to future company growth and survival given some of the issues with patent cliffs, and stagnant growth in many of the traditional Western markets.
Pharma investments are aimed at gaining market access and in particular gaining face time with health budget decision makers. Investment in China is certainly seen by the government to be a "good thing" and goes a long way toward establishing credibility. Hooking up with local drug companies and developers is a good way to enter the market. Alliances with local players may ultimately be a necessity for the Western companies to crack this market -- and many have established early relationships accordingly.
This is interesting to me in that many of these same companies right now are trying to eliminate China-produced raw materials from their supply chains. Yet, if their goal is to crack the Chinese market and to partner with local developers and manufacturers to do so, then how can they eliminate Chinese suppliers in the long-term? They can't. You will want to source locally for manufacturing support -- maybe not some specialty items but bulk of raws will likely come from local sources. The economic drivers and incentives are just too great in my view -- and local goverment will expect it.
So time is now to start qualifying the best local suppliers, and to educate and incentivize them to continually improve their quality systems in anticipation of them being integral to a long-term supply chain. It only makes sense.
Thirty-one State AG's have filed an amicus brief with the US Supreme Court in favor of ending pay-for-delay deals between pharma innovators and generic producers. The AG's are backing the US Federal Trade Commission position that says these deals cost States and consumers dearly in increased healthcare costs. The FTC estimates the increased cost at approximately $3.5 B per year. The AMA has also come around to support the FTC position.
Drug manufacturers say the deals are legal and that they actually get generic drugs to market faster than might be possible otherwise. In fact the GMA (generics trade group), says the deals have never stopped a drug getting to market beyond a product's patent expiration date -- and in many cases months or years sooner.
Opponents counter that the deals prevent patent challenges and thereby weaken the patent system by allowing marginal patents to stand. This in turn allows holders of those patents to maintain a monopoly position witha drug longer than they might otherwise -- and this is anticompetitive.
So far, lower courts have sided both ways. The 3rd, 6th and DC Circuits have generally ruled to make pay-for-delay harder, and the 2nd, 11th and Federal Circuits have made rulings more likely to allow pay-for-delay. Normally, the US prefers to have law that is a bit more consistent across the land, so the Supreme court is being asked to review the issue. But will they hear the case and break the ties? Hard to say.
The Cell Culture Dish reprinted data from Nature Biotechnology that lists the top 10 selling biological drugs in 2011. It also indicates that 7 of the top 10 drugs are produced in CHO cells, 2 in E. coli, and 1 in mouse myeloma. So despite reports that more clinical development progams may be working with systems other than CHO -- particularly a resurgence in prokaryotic systems -- the dominant sellers are still in CHO and will remain so in the foreseeable future.
Margaret Hamburg in testimony before Congress tells them that there should be two classes of compounders. The first is traditional compounding for individual patients on an as needed basis. Non-traditional compounding, the kind practiced by NECC and others, poses a higher risk according to Hamburg and should require federal (i.e. FDA) oversight.
Hamburg suggests non-traditional compounders would be distinguished by characteristics or activities like -- sterile compounding, the amount of product made, production prior to prescriptions received for a patient, shipping drugs interstate, shipping drugs to sellers or distributors other than the patient (or their physician). etc.
Hamburg says these compounders should have to adhere to GMPs and be under more oversight. Addtionally, compounders should not make copies of drugs approved by FDA (i.e. Makena) except under extremem shortage situations, should not make complex dosage forms -- extended release, transdermal patches, liposomal products, etc -- or make biologics.
Why? I say if compounders want to act like small drug manufacturers they shouldn't be called compounders and should be required to adhere to the existing drug manufacturing regulations and be overseen as such. Then the FDA would have clear oversight without any more legislative needs for "clarity".
Alnylam, on the eve of trial with Tekmira in an appropriation of trade secrets suit, agreed to pay the latter $65 M now and up to $10 M next year to settle. That's a lot better than the $1 B that Tekmira was pursuing in its suit.
Alnylam paid $30 M to terminate a contract manufacturing agreement with Tekmira, and the additional $35 M to terminate previous license agreements to use Tekmira's lipid nanoparticle drug delivery technology. The additional $10M could come from milestones payments related to 3 Alnylam drugs in the clinic. Tekmira would get the money in 2013 and forgo potentially higher milestone and royalty payments in the future.
Alnylam will still have a license to use the Tekmira technology in conjunction with its own delivery systems to deliver RNAi drugs to the inside of cells. But, Alnylam will have to do its own manufacturing or find someone else who will. It won't be Tekmira or Alnylam's erstwhile partner Alcana Technologies. The latter is also being removed from the palying field in a settlement with Tekmira that will preclude Alcana from playing in RNAi for 5 years. Tekmira has alleged that Alcana was an "instrument of Alnylam."
Now Tekmira can pursue its clinical program with the extra $65 M. And Alnylam can pursue its three clinical candidates. And each can try to establish the real utlity of an RNAi drug in the clinic which heretofore has not happened. See Fierce Biotech and Xconomy.
Just when you thought the compounding scandal at the New England Compounding Center (NECC) couldn't get any worse, it does. It seems that another compounder sharing the NECC owner's also has been cited by the FDA with serious breeches in its quality systems.
Among other things found in its sterile processing and packaging areas -- besides the expected drugs -- were bugs, birds, rodents, mold, bacteria, and cracked and corroded walls. How did they miss bat wings and eye of newt?
Based on the meningitis outbreak caused by NECC preparations shipped to 24 States, Congress is now holding 2 sets of hearings to investigate why FDA does not have more oversight in this area -- or is not exercising more enformcement power that it may already have. I don't expect this issue to go away.
Unless of course, we find that it is a GMP bird trained to catch mice and bugs.
Takeda has decided to become a global player in vaccines challenging some of the biggest names out there like Sanofi, Merck, GSK, Pfizer and Novartis. They've hired Tadataka Yamada, GSK's former R&D chairman to spearhead the effort. He previously also worked at the Bill Gates' foundation and gained a global view of the vaccine world in that position.
The strategy at Takeda's new unit is to advance vaccines that combat bugs for which there are no vaccines. Last month they bought LigoCyte ($60 M) and its lead vaccine aimed at treating norovirus gastroenteritis. Approximately 21 million Americans are afflicted by this disease annually and there is currently no vaccine. Takeda notes that vaccines take a long time to develop compared to many pharmaceuticals but have a higher rate of success than pharma products at each clinical stage. See Fierce Biotech.
The Bill & Melinda Gates Foundation made another equity investment ($13 M) in a startup biotech company, Visterra, aiming at a universal preventive as well as therapeutic approach to influenza. Much of that money is being earmarked to take the preclinical program for VIS410--a broad-spectrum antibody -- into the clinic in 2014. VIS410 has the potential to work against any strain of seasonal or pandemic influenza.
Visterra is taking a unique antibody approach to flu. Its scientists identified a networked cluster of amino acids on the hemagluttinin protein, which the flu virus uses to enter cells and infect the host. That target gives them a potential key to treating or preventing all flu strains, coming up with a drug that the virus won't be able to mutate away from--a key problem with today's vaccines. And Visterra emphasized that this antibody approach is not a vaccine. This is the type of novel appproach that the Gate's Foundation likes to fund. See Fierce Biotech.
Drug marketers must be pulling out their hair there. Marketing 101 says you should price your product or service based on its value to the market -- not on production costs. Egads!
Instead, the National Pharmaceutical Pricing Authority (NPPA) will visit manufacturing facilities to look at things like yields, capacity utilization, maintenance of plant and machinery, cost of raw materials, R&D expenses, plant expansion and machinery replacement. The NPAA will up its oversight from 74 bulk pharmaceuticals to 348 bulk drugs.
The underlying motivation seems to be an "effort to get drugmakers to justify the prices they charge for products based on production costs." Double Egads! Wonder what drug company investors and shareholders think of that?
Anyone still think India is really lucrative new drug market for the MNCs to enter? Volume basis maybe, but what about margins?
MA state health officials fired Jim Coffey, state pharmacy board chairman, and suspended board attorney Susan Manning in the wake of the New England Compounding Center scandal. Not only have more than 400 people been sickened with over 30 deaths, but apparently these too ignored a complaint in July from the State of Colorado over NECC activities.
Not only didn't the Pharmacy Board fail to investigate but they failed to pass on existence of the complaint to their bosses at the Department of Health. OOPS! It's one thing to kill people -- it's even worse when you make your bosses look bad and catch them off guard. Predictably under those circumstance, heads will roll.
The NECC was clearly acting as a small drug company and it deserves all the negative attention it is getting. Equally clear, if the Pharmacy Board didn't do its job in regulating/investigating their activites, then the firings and suspensions are merited and well earned.
As seen in the previous post, it is time to make sure we all know who is regulating this type of activity and make sure that it is crystal clear who has enforcement power and the responsibility to use it. It now appears that it will explicitly end up with the FDA.
The New England Compounding Center mess has certainly made it tough for compounders to continue to fly under the radar, especially when they are effectively acting a small pharma companies as the widespread meningitis outbreak attests.
Massachuesetts Congressman Ed Markey has introduced the Verifying Authority and Legality in Drug (VALID) Compounding Act which would clearly give FDA powers to oversee compounders activities and remove any doubt/gray area.
"Compounding pharmacies have been governed by fragmented regulations for too long, leading to the worst public health disaster in recent memory. The VALID Compounding Act ends this regulatory black hole by giving the FDA new, clear authority to protect patients and oversee these companies," said Markey.
The FDA and MA authorities have been heavily criticized for their inaction in this case -- given NECC was clearly acting like a small pharma compnay selling interstate meds to many States. However, Markey did recognize the FDA since 2001 had issued warning letters to dozens of pharmacies seen to be operating outside the law -- apparently to no effect. If VALID passes, maybe FDA will have a bigger hammer.
Should we blame all the higher costs of clinical trials on the regulatory bodies, like FDA? No, suggests a new study from Tuft's Center for the Study of Drug Discovery. The study claims that one 1 in 5 procedures performed in late stage drug development is done to pursue "supplementary secondary, tertiary, and exploratory endpoints." This adds on average $1.1 M per trial. Across the industry that accounts for $4B to $6B per year for non-core endpoints -- enough to fund 2 x 2 Presidential campaigns!
Tuft's says that biopharm and pharm companies should take heed of this study result and can act on it to reduce development costs. Maybe that would save a few jobs in this industry. It certainly would likely make shareholders happier. See Fierce Biotech.
Roche reported today that the FDA has granted it (and partner ImmunoGen) a priority review for its breast cancer drug T-DM1. The decision is due by Feb 26th. When approved, T-DM1 will be the second approved ADC on the market. The EMA also accepted Roche's marketing application for the key European market. Phase III results for T-DM1 have been strong and the drug is considered to be a potential blockbuster by many analysts. Peak sales volumes of $5B or greater have been projected upon its approval. See Fierce Biotech.
India continues it adminsitrative attack on drug makers' IP. The Intellectual Property Appellate Board revoked the patent on Roche's Pegasys hepatitis C treatment. Maybe they don't like flying horses? In fact, they didn't like Roche's patent extension from pegylating the drug and said it didn't enhance efficacy compared to existing treatments. This will open the door to cheaper generic alternatives in India.
This is India's second override of a big pharma company's patent. Earlier this year, Bayer was forced to grant a compulsory license to Natco for Bayer's Nexavar cancer med. In both cases, one of the main issues seems to be the perceived high price of the innovator medicine compared to what generics competitors would offer in the market. This is a big deal to movers and shakers responsible for India's healthcare policy.
"This victory will facilitate early entry of generics which is likely to lower prices. If this happens, millions suffering from hepatitis C, both in India and globally will benefit," said Anand Grover, senior counsel and director of Lawyers Collective HIV/AIDS Unit (a patient advocacy group).
Not only are we targeting lower prices in India but apparently for the World too! A Roche spokesman retorted that the company remained "concerned that a policy of neglect for patent rules would inhibit research into future treatments." No Drugs for You, India.
Posted by Bruce Lehr Nov 6th 2012 - Get the Vote Out