The Big Red Biotech Blog

Actual Companion Diagnostics Sighting!

Xconomy published today on Qiagen's recent application to the FDA for the approval of a diagnostic test that looks at a mutation in the EGF receptor.  The test is useful in the diagnosis of the speed of disease spread in non-small cell lung cancers (NSCLC) -- 10 to 15 percent of Caucasions and 40 percent of Asians carry the mutation.  The test was developed in conjunction with Boehringer Ingelheim's cancer therapy, afatinib that targets the mutation -- and they've asked the FDA to approve both products simultaneously.

This type of "companion diagnostic" has long been talked about, particularly with cancers, as being advantageous to define the target patient population that will respond to the drug. This helps recruitment for clinical trials and to better ensure the drug will actually be effective in the trial. The proto-type for this concept is Roche's combination Herceptin and the HER2 positive breast cancer from the late 90's. But not much else has really reached the market since then.

With Qiagen's/BI's application, we expect to see a new surge in companion diagnostics-therapeutic combination being developed and brought forth. In fact, co-development of the therapy and the diagnostic is the major difference in these programs now compared to what may have been done in the past where a test was typically developed sometime well after the therapy was available.  The result is that the tests didn't work particularly well and only 1% of drugs in the US actually have a companion diagnostic -- most in cancer area.

That's changing as the FDA has encouraged this approach.  Qiagen says it now has 15 programs in progress -- including with not only BI -- but with big companies like Pfizer and AZ. Last year, Roche had a companion diagnostic it developed with its Zelboraf treatment for melanoma. Pfizer's Xalkori has a companion diagnostic developed by Abbott. Other drug-companion diagnostic programs in progress include the following companies:

• Synadex Pharmaceuticals and Ventana Medical with entinostat & NSCLC's 
• Seattle Genetics/Takeda and Ventana Medical with Adcetris & hopefully various cancers
• Qiagen and Bayer with tests therapies and tests for solid tumors
• Qiagen also has a similar deal with Pfizer
• Astellas Pharma and Roche with Tarceva and lung cancers

The industry and FDA are looking for more of these to be successful -- and would expect clinical trials to flow more smoothly and result in more approved drug applications. It remains to be seen if this will translate into reality -- though the promise is clearly there.

Posted by Bruce Lehr Jan 31st 2013.

 

AZ Crashes into Speed Bump in Earnings

AstraZeneca reported its fourth quarter earnings today and it was a t least as bad as the analysts had expected.  And according to CEO Pascal Soriot, you can expect more downturn into next year too with a "mid- to high- single digit percentage" drop in sales.

AZ has already announced that it is killing a few big program in its pipeline. Soriot further communicated that is will not be buying back its own stock and will watch its dividends.  But to soften blow, profit magins will also suffer. What?

Soriot says, "We will be open to more disruptive acquisitions, larger acquisitions if they make sense."  Analysts quickly latched onto companies like Shire being a possible target -- such an acquisition would be expensive and much more than the $20 B mark being propped up as the current barrier Big Pharma wished to stay under. 

Surprisingly, AZ stock only dropped about 2.7% -- maybe all discounting has already occurred.  Need to check to see if Shire is going in the other direction or not.  But if you are a company with asserts to sell -- good or bad -- you might want to get Soriot on speed dial. This is especially true if you have more than a $20 B property to move as analysts believe there won't be much competition up in that stratosphere.  Likely true. See Fierce Biotech and In the Pipeline.

Posted by Bruce Lehr Jan 31st 2013.

Orphan Drugs Good Business

I like to publish market research, data and facts to this site -- because they often interest me and it make it easy for me to find the information again in the future with the indexes. 

I pulled this data from a GEN article by Gail Dutton that cites a Thomas Reuters study as the original source.  The thrust of the article is that making orphan drugs makes good economic sense now.  As a reminder, an orphan drug (in US) is one directed to a disease that affects fewer than 200,000 people, in Europe it is to a disease with an incidence lower than 5 in 10,000.  The EMA recognizes 8,000 rare diseases and the FDA 6,000. 

Since the Orphan Drug Act was passed in 1983, the FDA has approved 350 new drugs to about 200 diseases. Orphans grew at a CAGR of 26% between 2000-2010 versus a 20% CAGR for non-orphans. Orphans account for approximately 22% ($50 B) of total drug sales.  It's further interesting, orphan drugs (developed and filed) have a 93% chance of success versus 88% success rate for non-orphans. It pays to be in a niche by yourself. The PV for the two drug types are virtually the same as well $637 M per year and $638 M per year respectively.

Companies (e.g. Shire, Genzyme, Biomarin) with Orphan Drug Business models are successful now and that would seem to be the case for the immediate future too.  Here's the list for the Top Selling Orphan drugs:

• Rituximab                    Oncology
• Ranibizumab                Opthamology
• Somatrophin                EPR, metabolism
• Lenalidomide               Oncology
• Imatinib mesylate        Oncology
• Filgrastim                    Hematology
• Glatiramer acetate       MSP
• Rec Factor VIII              Hematology  
• Bosentan monohydrate  Cardiovascular
• Bortezomib                   Oncology                            Source: Thomas Reuters

Posted by Bruce Lehr Jan 30th 2013.

Report on 2012 Biotech M&A

The LifeSci blog reported this morning on some key statistics and trends in Biotech M&A in 2012.  Not surprisingly, some data were good, some bad and some ugly (according to LifeSci).  Here's the summary:

• Median investor multiples in the US have risen from 1.2x in 2005, to 2.5x in 2011 to a nice 3.5x in 2012.  Going my way?
• Unfortunately, this is NOT the case in Europe where the comparable 2012 figure was only 1.3x
• The ugly trend is that the time from founding the company to trade sale is lengthening -- from about 5 years in 2005 to more than 9 years in 2012.  Looks similar to trend line for FDA approvals on new drugs.  Coincidence?

Posted by Bruce Lehr Jan 30th 2013.

Antisense Drug Gains FDA Approval

Isis Pharmaceuticals antisense drug, mipomersen (Kynamro), recieved FDA approval for the treatment of a rare familal hypercholesterolemia (say fast 3x).  The drug was developed in partnership with Genzyme (now part of Sanofi) and triggers a $25 M milestone payment to Isis.

This is the first time a drug of this type has been approved and Isis says that this validates its strategy and platform. Isis CEO, Stanley Crooke, said that the drug is "the culmination of two decades of work to create a new, more efficient drug technology platform."  Isis says its pipeline shows the validity of the antisense approach which can be applied to a variety of diseases -- including rare or orphan ones. See Xconomy.

Posted by Bruce Lehr Jan 30th 2013.

Big Biotech Influences Biosimilar Legislation at the State Level

Fierce Biotech reports this morning that Amgen and Genentech (parent Roche) are starting to expend noticeable energy on influencing biosimilar legislation at the State level.  In particular, both companies are trying to make it difficult to for a biosimilar achieve regulatory interchangeability with the reference product.  This would prevent pharmacists from just switching to a new biosimilar without consulting with a prescribing physician. At the Federal level, both companies are also lobbying to prevent a biosimilar from having the same generic name as the branded product. In both cases, these efforts raise more hurdles to easy substitution.

Of course, if you were a shareholder of either company, and of Big Pharma companies in general, you'd be infavor of them competing however they needed to in order to maintain profitability as long as possible by preventing easy biosimilar competition. Patients, thrid-party payers and the government may have different ideas when it comes to saving money on drug costs.  In the small molecule world, generics have already shown their ability to liquidate the sales and profits of blockbuster drugs coming off patent in a mere matter of months.  The Big Biotech's would like to slow this down considerably in the case of biosimilars.

 Right now, they are doing this by raising possible safety questions and challenging interchangeabililty attempts before the biosimilar competition gets entrenched. Of course, some of these companies are playing both sides of the fence -- they don't want to copy their own drugs but do copy the drugs of others.  We'll have to see how this plays out.

Posted by Bruce Lehr Jan 25th 2013.

What's in a Drug Namzx?

Several commentators have recently mentioned all the new drugs with odd syllables and letter combinations -- often centering on the use of X's and Z's.  This is supposedly due to these types of names being "memorable" for prescribing MDs and to the public -- and due to regulatory requirements that names not be "confusing" with those of other drugs.

Although this might sound sensible -- I think on closer inspection it may not be when you consider how some of these names can be confused with other similar more popular names.  Zelboraf for instance, may be a drug, but is also a prison in Afghanistan.  Xalkori?  Best known as being the consort of Xena, Warrior Princess.  Jakafi is of course a new blend at Starbucks, while Xeljanz is a popular flavor of Gelato. 

See Fierce Biotech and In the Pipeline.

Posted by Bruce Lehr Jan 28th 2013

Rule on CGMPs for Combination Products Released by FDA

The FDA's Office of Combination Products (OCP) has released a new final regulation on the current good manufacturing practices (CGMPs) used in the manufacture of combination products. 

Combination products are a combination of two or more product classes, such as a medical device, biologic and a pharmaceutical product. They are typically regulated by analyzing their constituent parts to determine their primary mode of action, which is then analyzed by the appropriate regulatory center.  Because the devices combine two or more products that on their own might be regulated, they are subject to careful scrutiny in regards to their manufacturing.

Long-Sought-After Rule on CGMPs for Combination Products Released by FDA.

Pharmaceutical and biological products are largely governed by a set of drug quality regulations under CGMP (21 CFR 210-11 and 600-680, respectively), while medical devices are manufactured under Quality Systems Regulation (QSR) regulations (21 CFR 820) and blood- and tissue-based products are regulated under 21 CFR 1271.

If the devices are physically separate, such as those packaged together, then they will follow their own separate product-specific quality regulations.  The application of those rules to single-entity products is considerably more difficult and the agency explained that it wished to put forth a rule that would make the standards unified regardless of which center took the lead on regulating the product.

The new rule specifies that good manufacturing practices for combination products can be satisfied by either demonstrating compliance with all applicable regulations on a separate basis, or by meeting either:

• the CGMP regulation and applicable sections of 21 CFR 820's; or
• the quality system regulations (QSR) and the applicable 21 CFR 211's and 221's 

Posted by Bruce Lehr Jan 27th 2013.

 

Synthon Unveils Another ADC Facility

ADCs are a hot topic in drug development even though only two have been approved so far and one of those withdrawn.  Regardless, Roche's (Genentech) T-DM1 is widely expected to gain approval in 2013 an dmany many more ADCs are in development in a large number of companies.

Synthon Unveils ADC Facility as Data Show Promise for First Candidate.

With that as backdrop, Synthon has just opened a new ADC facility in Nijmegan, Netherlands.  The facility is geared to bring Synthon's internal pipeline of HER2-ADCs to market (same target as T-DM1).  HER2 is overexpressed in breast cancers and non-small cell lung cancers. Synthon refers to its therapy as second generation ADCs. Synthon also has other ADCs in development (at least two other targets) and has not closed the door on partnering with other companies to manufacture these products.

Posted by Bruce Lehr Jan 27th 2013.