The Big Red Biotech Blog

Random Biotech News

Pfizer said it now plans to cut more than the 15% of jobs that it stated would go when it acquired Wyeth.  The information was disclosed in a regulatory filing. Pfizer has already cut its staff 14%, but is facing steep revenue losses from the Pfizer portion of the product portfolio due to loss of patent life.  Wyeth products are providing the only growth year over year. See WSJ.

Targeted Genetics (Seattle) needs a merger and appears to have found a willing partner in Biocontrol of London. Set up in 1997, Biocontrol has been developing the clinical use of bacteriophages – literally “eaters of bacteria” – that attack dangerous infection-causing bacteria.  This will be combined with Targeted Genetics technology for using adeno-associated viruses to deliver genes inside cells. Biocontrol shareholders must approve the deal.

 

 

Posted by Bruce Lehr November 12th 2010.

Big Biotech to go the Way of the DoDo

Frederick Frank, the former vice chairman of Lehman Brothers, says Big Biotech is dead once Genzyme is successfully purchased by Sanofi and the few companies left like BiogenIdec meet a similar fate. According to Frank, no one else will ever rise "to fill their shoes".  The investment community is only interested in funding biotech through mid-level trials then they want to sell to earn their return.  See Fierce Biotech.

"You are not going to see a lot of new Amgens or Genentechs," he said. Only DoDos.

 

 Posted by Bruce Lehr November 9th 2010.

More on Prostate Cancer News

 

The Washington Post this week wrote again about the Centers for Medicare & Medicaid Services review of whether the federal government insurance program will reimburse patients who receive Provenge -- and if so under what circumstances and for how much.  The national coverage review has been controversial since it was announced -- as patient advocacy groups for prostat cancer have repeatedly pointed out that Medicare is not supposed to take cost into consideration when determining coverage. 

As a reminder, Provenge was approved for use in late stage prostate cancer patients by the FDA in April. Provenge costs $93,000 per patient treated and on average is expected to extend survival by 4 months. Therefore, Provenge has a QALY (quality of life for  1 year) of $272,000 - the 4th highest among cancer drugs.  Drug companies and cancer experts are concerned that if Medicare makes an independent decision on which drugs will be used after FDA approval - it will effectively amount to a "second approval" that drug companies need to navigate.  This may cause drug firms to shy away from the cancer area with new innovative therapies. Private insurers tend to follow Medicare's lead so the Medicare decision can have a huge impact on a drug's availability based on the reimbursement policy adopted.

The counter argument is that society can't pay for everything and that choices need to be made.  The fear is that if we keep paying for high priced treatments with marginal clinical benefit (and we can debate what 4 months is worth to a dying man or woman), then we won't be able to afford health care. The debate rages on and the Provenge decision by Medicare needs to be closely watched.

 Fierce Biotech reports today that Bavarian Nordic is close to announcing that it's found a "big pharma" partner to fund phase III clinical trials for its prostate cancer vaccine called Prostvac.  Analysts have pegged Prostvac as a potential strong competitor with Dendreon's Provenge.  The Bavarian Nordic drug more than doubled Provenge's survival rate in phase II trials (only phase II though), and also bettered survival with J&J's abiraterone by 3.9 months on average. Bavarian Nordic may be able to cash in with a royalty stream in excess of 25% with its partner.  Bavarian Nordic has experienced a very tough revenue year so they could use the success.

 

 

 

Posted by Bruce Lehr November 9th 2010.

Genzyme in the News

Reports from France today indicate that Sanofi CEO Chris Viehbacher sent Genzyme CEO Henri Termeer a letter indicating Sanofi's continued interest in buying Genzyme. Viehbacher continues to push for meetings for limited due diligence with regard to Genzyme's remedial manufacturing actions and a review of Campath's commercial prospects.  Both are necessary moves for Sanofi to feel confident in upping its $69 per share bid to something closer to Vermeer's liking - last stated as $89 per share given bullish Genzyme forecasts for Campath.

In more ominous tones, Viehbacher stated to Termeer that if Genzyme did not want to negotiate that it should bring the matter to a vote before its shareholders.  He also said Genzyme should refrain from enacting anti-takeover manuevers (poison pills) like lengthening and staggering the terms of its directors thus preventing a proxy fight at their next shareholders meeting in May 2011.  Let the shareholders vote seems to be the thrust of the message. See WSJ and Fierce Biotech.

PharmaGossip also reports that Genzyme has begun to reduce headcount in accordance with its previously announced plan to reduce staff by 1000 as a cost cutting measure.  The company announced 392 cuts from its worldwide staff of more than 12,000 on Friday.  The cost cutting move will cause Genzyme to take 4th Qtr charges of between $24 and $27 M. 

 

Posted by Bruce Lehr November 8th 2010.

Bayer looking to Acquire Biocompatibles?

According to Bloomberg via PharmaGossip, Bayer may be in discussions with Biocompatibles to acquire the specialty drug delivery firm. Bayer is already collaborating with Biocompatibles and its controlled-release, gel-based drug delivery system with Bayer's Nexavar. 

http://pharmagossip.blogspot.com/2010/11/biocompatibles-may-be-discussing.html.

Biocompatibles has acknowledged it is in advanced talks with an unidentified potential bidder.  Bayer is looked at by analysts as a logical candidate for the bidder role given its Nexavar project, its heavy cash position, and its stated desire to acquire assets in cardiologym, oncology or women's health.

However, rumors are not restricted to Bayer as the potential acquirer.  Analysts have also floated companies like Terumo Corp, AngioDynamics, Inc, SciClone Pharmaceuticals, BTG Plc, and AstraZeneca as well.  All of these companies have partner projects ongoing with Biocompatibles. 

Biocompatibles is trading at 335 pence per share and analysts have pegged its potential value as an acquistion candidate anywhere from 400 to 520 pence per share. Rumored suitor companies all had no comment - DUH!

Posted by Bruce Lehr November 3rd 2010.

Sanofi's Latest Move - Let's Have a Campath Working Group

Sanofi used its earnings call as a forum to restate that it has no interest at this time in upping its $69 per share bid for Genzyme.  They say they need more information from a due diligence process to justify and bid change.  Genzyme still refuses to engage in such talks at a bid price of $69 per share - rumors indicate that it will take at least $75 per share to get them to engage in discussions.

Sanofi has now suggested that a small working group be formed to look at potential earnings of Genzyme's lead candidate MS drug, Campath.  This could be viewed as a modified due diligence request as projected Campath revenues are a large basis for the rosy modified projections that Genzyme showed at its conference call last week.  In it, Genzyme revised its 2011 EPS figure to $4.30 to $4.60 per share up by 20% over consensus analysts estimates.  See WSJ Health Blog.

For those further interested in reading about "inside the game" strategies that could be employed by both sides, I recommend checking out the WSJ Deals blog story.  It would appear that December 10th looms as a big date on the calendar.  Genzyme could try to bring in a white knight candidate at the 11th hour to confound the negotiations and make it even more expensive for Sanofi to remove such a bidder. Or alternatively, if such a bidder is not there, Sanofi can threaten to walk from negotiations at that point and we can all watch where the stock goes then.  Sanofi could also try a proxy fight early in the year at Genzyme's shareholder meeting. High stakes poker prevails.

Posted by Bruce Lehr October 29th 2010.

 

Some Good News for Myriad - Abbott Testing Deal

Fierce Biotech reports that Myriad Genetics and Abbott have struck a testing deal where Myriad will perform genetic testing on breast cancer patients. The testing will help Abbott identify the patient populations who likely will respond to drugs under test in clinicals. Abbott declined to name the drugs.

Myriad of course has been in the news a lot this year due to Judge Sweet's ruling that several parts of the patents it had licensed as the basis for its breast cancer testing service were invalid.  Myriad filed an appeal to this decision late last week.

This new deal injected some life into Myriad's stock price which went up 3.2% on the news.  There were also takeover rumors in the market as Myriad was described as "more of a potential takeover candidate" due to the Abbott deal and other similar deals it has in place.

 

 

 

 

Posted by Bruce Lehr October 28th 2010.

Biogen Rumored to Restructure Soon

According to Reuters, new Biogen Idec CEO George Scangos is drafting plans to restructure the company to enable it to be more competitive in the future.  The paln is said to include staff reductions, facility consolidations and the termination of non-core R&D programs. In other words, they will implement the "Big Pharma cost savings strategy" .

Last week, Biogen announced a restructuring of its deal with Genentech on its MS drug ocrelizumab whereby Genetech will take over costs and responsibilities for clinical trials. Biogen will retain about a 30% interest in future revenues.  Biogen can expect more competition in the MS arena as both Genzyme and Sanofi reported positive results from the clinics last week. Biogen's Tysabri also has had some well chronicled problems with safety that have hampered its MS revenues.

Look for restructuring to commence soon. 

 

 

 

Posted by Bruce Lehr October 25th 2010.

Lilly Cornered? Need to Buy Way Out?

Lilly reported this week 3% growth in revenue and 7% in earnings for Qtr 3 - slighlty better than expected.  Nevertheless, Lilly has experienced several setbacks in its pipeline this year.  First it lost Semagacestat in a Phase III Alzheimer's trial, yesterday it reported that teplizumab went down in a phase III type 1 diabetes trial, and the prior day was told Bydureon will need to wait at least until the end of 2011 before it can apply for approval for the treatment of type II diabetes.

It also faces the steepest patent cliff in the industry with products coming off patent by 2014 that constitute fully 50% of its current revenues. And, in legal battles this year, a Michigan court invalidated its method-of-use patents for Gemzar and a NJ court did the same to method-of-use patents for Straterra.  Both drugs will now face earlier generic competition that will eat their market share.

So what's a CEO like John Lechleiter to do?  John holds steadfastly that Lilly will stay the course and focus on its internal R&D capability while coupling that to a strong cost savings program.  Lilly has already announced a headcount reduction of 5500 over the next two years and says it has already eliminated about half of those positions, and will continue to prudently reduce headcount. Mr. Lechleiter also reports that Lilly's is growing by double digits in Japan, double digits in its Elanco animal health business and by double digits in its emerging pharma markets.  All will add needed revenue as Lilly approches the 2014 cliff.

But will Lilly consider buying a large competitor? Is that back on the table as a possibility?  Lechleiter says No. "We continue to believe that our innovation-based strategy while not without risk will provide the greatest value to our shareholders and to society."  The CEO further notes Lilly still has 68 assets in human trials, 28 in phases II and III.  These include Imclone's 1121B for breast and gastric cancer, another phase III treatment for heatocellular cancer, and a phase III trial for solanezumab. 

Smaller niche company buys are on the table.  One of those might be Amylin - its partner on Bydureon.  Amylin shares plummeted by more than 50% on the news of the FDA decision.  Some analysts believe the stock has not yet hit bottom (Seeking Alpha).  It would be a very cheap time for Lilly to buy to stabilize its partner and boost its diabetes portfolio. 

Analysts from Leerink Swann's and Capital Markets have also nominated: Cephalon, Endo Pharmaceuticals, United Therapeutics and Forest Labs as other possible acquisition candidates.  Lilly has more than $5 B on its balance sheet to finance deals.  As Lechleiter remains committed to continuing Lilly's annual $2 B dividend - he may also have to buy his way out of the anticipated 2014 corner.  (See Fierce Biotech and Seeking Alpha Lilly earnings call).

Posted by Bruce Lehr Ocotber 22nd 2010.  

Genmab Seeks Money Partner to Fund Phase III Trials in US

Genmab's head and neck cancer drug zalutumumab performed well enough in a Phase III trial versus the standard platinum-based therapy that they will go for approval in the EU.  However, it looks like the FDA will require new studies costing hundreds of millions.

Now, Genmab is out looking for an appropriate "big bucks" partner to fund these US directed clinical trials.  Based on EU regulatory feedback, Genmab feels the new partner will be able to file in the EU now while chasing the needed data for the US.  Fierce Biotech notes in their coverage of this story that GSK may be one company interested in Genmab and as they have been rumored to be a takeover suitor in the recent past and currently have a co-development project with them on ofatumumab.   

 

 

Posted by Bruce Lehr October 19th 2010.

 

 

 

Canadian Rumor re: Myriad Companies Possible Suitors for Myriad Genetics

According to Fierce Biotech, a rumor out of of the Royal Bank of Canada Capital Markets that Myriad Genetics may be a takeover candidate has resulted in a 7% surge in its stock price. Named possible suitors included - Roche, Sanofi-Aventis, and AstraZeneca to gain access to Myriads cancer marker diagnostics tests to pair with oncology drug development and identification of best responder patient populations for clinical trials.

Recent posts here, here and here have indicated a need for coupling diagnostic development with drug development for the reasons cited above.  Biomarker discovery is considered a key area that would aid progress in the oncology field.

Several analysts consider Myriad Genetics to be undervalued due to the recent court ruling against it and the University of Utah that ruled some of its patents on BRCA1 and BRCA2 were invalid. Patents on these two antigens are important to protecting Myriad's breast cancer screen testing service.  Many believe this ruling will be overturned on appeal (and of course that will generate another appeal).

Myriad did not comment on the rumors per se other than its CEO commenting that the company prefers to remain independent.

Posted by Bruce Lehr October 15th 2010.

Termeer out $11 M @ $69 per share - Buddy can you spare a dime?

Fierce Biotech reports on WSJ story that calculates Genzyme CEO Henri Termeer will be out about $11 M from a personal gain point of view if Genzyme were to sell out to Sanofi at the offered $69 per share.  For him to break even, Sanofi needs to up it's bid to $71 per share.  Anything over that is gravy!

Previously, I had offered the opinion that the court system would not rule in favor of shareholders suing to make Genzyme enter negotiations with Sanofi at $69 per share (Henri and the Board have consistently said they want at least $80 per share).  But, I wonder how information around Termeer's personal stake in the negotiations might affect a ruling?  Seems like a conflict of interest. It also seems like Sanofi could solve pretty easily in the structure of its offer.

Failing in that, can anyone spare a dime?

Posted by Bruce Lehr October 14th 2010.  

WSJ Predicts Sanofi-Genzyme Endgame

Ronald Barush in his WSJ blog outlines his take on possible endgame scenorios for the Sanofi-Genzyme acquisition dance that's been going on since the summer. He articulated his comments after Sanofi went public with a tender offer this week.

According to his analysis, Sanofi will eventually make a take-it-or-leave it offer to Genzyme management (and effectively the shareholders). He predicts Genzyme will flat out reject the offer - especially if it is in range of the $69/share proffered by Sanofi up to now.  Then the fun begins.

• Poison Pill will be adopted by Genzyme which will allow its board to take control of timing of takeover.  Sanofi can't make its move until Pill is redeemed
• Board Divisions (internal positioning or infighting) will ensue. The Icahn side of board won't be fixated on fighting off the acquisition but rather will want to extract the highest price.
• Proxy Fight (Oh boy!, Fight! fight!) follows. Sanofi tries to replace board at Genzyme annual meeting and inactivates the Pill. Could drag on to June under this scenario.

The easiest way for Sanofi to end the game is to raise its offer and make a deal Genzyme board can live with.  Genzyme of course is now scurrying off to find a White Knight to shift the dynamics and ratchet up the bid.

 

Posted by Bruce Lehr October 8th 2010.

 



Genzyme: Anybody seen a White Knight?

The WSJ reports that Genzyme while not exactly looking for a White Knight - well - is looking for a White Knight, if for no other reason than to establish their market value to force Sanofi to up its offer.  

"The company board, in order to be fully informed about the company's value in comparison with the company's stand-alone strategic plan, has authorized the company's advisers and management to probe and evaluate alternatives for the company and its assets, which will include contacting third parties," Genzyme said in a Securities and Exchange Commission filing. "These probes do not constitute authorization of a process to sell the company or any of its assets."

The paper also reported that Chris Viehbacher had offered Henri Termeer $69 to $80 per share to open negotiations. Termeer rejected Viehbacher's offer to open in this range because the range's low end wasn't good enough. If the Sanofi CEO "had said $75 to $80, it would have been a completely different ball game,'' a source commented. "It's pretty clear Viehbacher wants to get it [Genzyme] for between $69 and $75" a share.

Termeer is expected to offer "an updated view of what 2011 will look like." And the outlook will be far rosier than what company officials described this May, based on manufacturing improvements and signficant cost cuts.  Viehbacher has promoted Sanofi's offer by claming $69 represents 19 times Genzyme's 2011 expected earnings, based on the earlier forecast. "If he thinks 19 times is a fair price, it will have to be 19 times what the real number is" likely going to be next year.

So far, no rival bidders have emerged to challenge Sanofi in its pursuit of Genzyme. Earlier this year, Pfizer Inc., GlaxoSmithKline PLC and Johnson & Johnson made casual, preliminary approaches to remind Genzyme they could be interested if the company decided to sell itself. Time for Henri to go to his Rolodex.

Posted by Bruce Lehr October 7th 2010.

WSJ Speculates on Next Pharma Takeover Targets Post-Genzyme

The Source puts its analytical skills to the test in trying to suss out who might be the next logical takeover targets in the pharma industry once the Sanofi-Genzyme deal gets done. Their conclusion is the picking are getting slim and there likely won't be much more activity in the offing.

Their concensus middle-size US candidates are trimmed down to three companies: Allergan, Biogen Idec and Celegene.

• Allergan - offer diversification opportunities with its eye care products but its valuation is too high given its growth expectations
• Biogen Idec - has a reasonable portfolio of biologicals in the MS treatment area and is more reasonalby valued. But, its Tysabri has some well publicized risks potentially.
• Celegene - very good growth numbers expected in the mid-term but has high valuation and is one-drug heavy with its Revlimid providing most of the revenue. Could be attractive to Pfizer and GSK though.
• Shire -  Was identified  as a fourth candidate that lies outside the US.  It has good gowth potential and a diversified product line - but is relatively small at under $10 B.

Other than that, the authors name Eli Lilly, AstraZeneca and Novo-Nordisk as potential Big Pharma companies that might be pursued. They state this wold require heavy borrowing and it woudl amount to swapping expensive equity for much cheaper bonds.

Beyond that, there doesn't appear to be any other likely candidates in a big purchase merger. Big Pharma values will tend to decline until R&D productivity improves. "Drug companies, as it turns out, must make drugs in order to prosper." 

Posted by Bruce Lehr October 7th 2010.

"Stonewall" Termeer Ready to Sashay if Sanofi Price is Right

According to Financial Times via the NY Times, Henri Termeer in an interview indicate that he is prepared to leave Genzyme to facilitate the deal.  He further indicated that he may be on schedule to do so sometime next summer after the Genzyme Campath results are available from an MS trial.

Termeer, who has been accused of "stonewalling" negotiations in the recent past by Sanofi CEO Chris Viehbacher, says he is more open to a takeover than any time in past.  He also says he is in 'no hurry' to get deal done and that neither is Viehbacher.

"This process is a dance," said Termeer. "i have loads of things that I could spend more time on but I love Genzyme"

Posted by Bruce Lehr September 29th 2010.

Sanofi Looking to Up Ante to Bring Genzyme to Table

The WSJ reports that Sanofi is looking to arrange more financing to enable it to up its bid for Genzyme and thereby bring Genzyme principals to the negotiating table.  In playing thi styp eof high stakes poker, it is uncertain what Sanofi's raise must be to gain Genzyme's interest.

Nevertheless, Sanofi is reportedly talking to Sanofi big lenders, such as Citigroup Inc. and Bank of America Corp. about funding an offer that already has backing from J.P. Morgan Chase & Co., BNP Paribas SA and Société Générale SA, according to the Journal report.

The pressure may be building on Sanofi with its recent pipeline failures, see Tamaris last week. Until Sanofi gets their opening ante correct (from Termeer's viewpoint), CEO Chris Viehbacher is going to be lonely at the table.

Posted by Bruce Lehr September 26th 2010.

Genzyme Boss Henri Termeer Not Ready to Ride Into the Sunset!

Doesn't sound like anyone is going to shuffle Henri off quietly into the night. Does it?

Genzyme Boss Henri Termeer Not Ready To Sell to Sanofi, Ride Into the Sunset, Sources Say. by Ryan McBride of Xconomy.

”Henri does not want to sell the company. Henri never would want to sell the company. He’ll fight it tooth and nail to the extent that he can,” said a former Genzyme executive who asked not to be named. “.... The trouble is that his view of the shareholders’ best interest is probably not the same as what some of the shareholders think are their best interest.”

“Henri wants to stay long enough to fix all the problems at Genzyme so he can go out on a really high note,” the former Genzyme executive said.

“Everybody who’s dealt with Genzyme or knows much about Genzyme knows that the ultimate decision always came to Henri’s desk,” the biologist said. “He is central to the decision making at Genzyme..."

Termeer said, “I like perfection and courage and innovation.”

This is one Cowboy that Chris Viehbacher better be prepared to be on the fightin' side of.  Instead of a sunset, we're more likley to see gunplay at High Noon.

Posted by Bruce Lehr September 23rd 2010.

 

 

 

Abbott to cut 3,000 jobs following Solvay deal

The day of reckoning approaches.  Abbott management has announced that it will cut 3000 jobs over the next two years as a result of rationalization following its acquisition of Solvay a year ago. Most of the cuts will be felt at former Solvay facilities in the US, Germany, and The Netherlands.

PharmaGossip: UPDATE 1-Abbott to cut 3,000 jobs following Solvay deal | Reuters.

The move will require Abbott to take a one-time $810 to $970 M pre-tax charge.  Abbott had hoped to sell the Solvay vaccine business at one time and there was speculation that it would fetch up to $600 M. Now, they will retain the vaccine business - but curiously will close down cell-based manufacture and retain the egg-based processes and research.

 

Posted by Bruce Lehr September 21st 2010.

Protez Down - Another One Bites the Dust!

From Fierce Biotech, Novartis has decided to close down Protez Pharmaceuticals, a company that it acquired a skant couple years ago for $400 M.  The crown jewel of the acquisition at that time was Protez's antibiotic PZ-601 targeted to combat MRSA.  But, that is now history along with all the potential milestones Protez investors may have been counting up.

Novartis has shuttered the doors and another one bites the dust.

 

 

 

Posted by Bruce Lehr September 20th 2010.

Amgen in Acquisitive Mood?

This from Beaker's Blog.   Amgen is in a cash position to acquire another company(s) and it is only a matter of time.  Amgen is sitting on $12.3 B in cash in international accounts and would have to pay 35% tax if they tried to repatriate funds.  This makes spending on a foreign company particularly favorable -- meeting all other business and strategic criteria of course.  It would be an acquisition with tax free profits.

Who are likely candidates?  Beaker suggests UCB-Belgium, French drugmaker Ipsen (oncology, hematology, endocrinology), or Actelion (Europe's largest orphan drug producer).  In the US, perhaps Dendreon-Seattle (oncology) or Human Genome Sciences - MD.

Again, seems like only a matter of time given cash position and need to grow revenues.

 

Posted by Bruce Lehr September 20th 2010.

Cell Therapeutics Goes for 400 M Shares of Life Support

As reported in Xconomy, Cell Therapeutics has received shareholder approval to sell another 400 M shares to hopefully raise enough money to stay in business. Five time is a charm - as four previous attempts to get permission to sell had failed.  The company has no products and no other sources of cash -- and continues to burn money. 

Shareholders finally relented but what other choice do they really have? CTI has already burned through $1.5 B of investor money since 1991 and was soundly thrashed at the FDA hearing on its latest product (pixatrone) in April 2010.  This latest move would seem to be one of too little, too late.

Posted by Bruce Lehr September 17th 2010.  

J&J Ponies Up $2.3 B for Rest of Crucell

Dutch biotech Crucell has accepted J&J's $2.3 B to buy up the rest (82%) of the company to gain full access to its vaccine and drug development programs.  This is a 58% premium on its closing price from yesterday.  Crucell shareholders should be pleased.

J&J now has a much better vaccine platform to pursue the burgeoning opportunities in this market including continuing their development program toward a "universal flu" vaccine.  Crucell will become a center of excellence for vaccines with J&J and will remain headquartered in Leiden.

Some analysts also commented that this deal should lay any rumors to rest that J&J would consider entering the Genzyme sweepstakes.

See Fierce Biotech and PharmaGossip for more.

Posted by Bruce Lehr September 17th 2010.

Please, Sir. May I have some more? Fabrazyme

According to WSJ just now, Genzyme expects to stop rationing its Fabrazyme during the 1st half of next year - which could still be up to 9 months from now by my calendar.

For the patients who are waiting on their meds to return to normal, I hope it is sooner rather than later.

The timing may be a little curious for this announcement since its not really effective until 2011 at the earliest.  Would this have anything to do with positive PR at a time when the company is under acquisition rumors?  Perhaps, a few kudos for current management?

Posted by Bruce Lehr September 15th 2010.  

Roche and Genentech R&D Won't Mix

Today in interviews, Roche's CEO Severin Schwan said that he had no plans to mix the Roche and Genentech R&D groups together.  "You would kill innovation" he said.

Analysts have expressed some level of concern that maintaining the two separate groups might inhibit Roche's ability to hit its $2-3 B savings goal just announced on September 3rd.  The savings are needed in the short term to compensate for some recent set backs Roche has had with taspoglutide, rejection of early registration for T-DM1 and loss of a breast cancer treatment indication for Avastin.

Schwan insists the Roche pipeline is among healthiest in the industry and that new drugs coming through it will more than compensate for any short term set backs that Roche may see. While R&D may remain uncombined, it may have more limited budgets to work with going forward. Announcements on where cuts will occur are expected in October.  The primary care sales force appears to be in harm's way.

Posted by Bruce Lehr September 15th 2010.