The Big Red Biotech Blog

Before The Whip Comes Down via Innovation

The Innovate on Purpose blog points out that the buggy whip manufacturers serve as the whipping boys (pardon the pun) of academics and business people as businesses who failed to recognize market disruption and the need to innovate. This of course led to their rapid extinction and their now infamy as poster boys who failed to change with the times.

But as the post goes on to explain, we shouldn't be feeling too safe ourselves as most (not all) leading businesses tend to strike defensive positions in their markets that are more geared to defending their positions by counting on being able to fall back on their efficiencies, size and market share position.  That's great as long as you can see the attackers from a distance andthey have to cover the same groudn to reach you, and that the attackers will have to take time to build up the critical mass to attack. Unfortunately, that may not be the case anymore and may become even less so in the future.

The post goes on to delineate many major structural, political and social changes that are taking place right now that accelerates the changing rules of engagement (e.g. internet, Euro-zone, Arab Spring, Russia and China policy, US Government borrowing to meet budget, etc). It also goes on to offer an observation on how traditional business building is declining in effectiveness. 

If you look at the Return on Invested Capital over the last 50 years for the 20,000 top US firms, it is on steady decline.  It has dropped from about 5% to 1%. The writer takes this to imply that there is much more new competition, substitutes and alternatives in the market than ever before and that the capital investors can no longer command high prices - a signal the firm is focused on defense and cost cutting while the market shifts. The average lifespan of a Fortune 500 company is only 15 years now and falling Uh-oh!

Attacking firms on the other hand are creating new products that command higher margins and forcing their competition to respond to them -- kind of like Dexter last night "I don't run. I make other people run".  Innovation must become a core competency to and not an occasional activity to survive in this environment.   And if you don't innovate?  You may become the next "buggy-whip" manufacturer in the business school of your choice's new case study. 

Posted by Bruce Lehr Oct 22nd 2012.

 

Alnylam Cashes RNAi Check from Genzyme for $22.5 M

Cha-ching!

RNAi pioneer Alnylam announced that Genzyme will be paying it $22.5 M in upfront fees to license its phase I drug ALN-TTR02 in Asia.  The drug performed very well in studies completed in July 2012 for the treatment of transthyretin-mediated amyloidosis.  The disease effects primarily adults in the 30-40 yrs range and can damage their nerves and/or heart. 

Genzyme agreed to the upfront and a royalty that could run to the mid-teens for the TTR program.  It is an orphan disease that will fit well with the Genzyme portfolio.  It is somewhat unusual for a company to pay this much upfront for a phase I program, but the results we very good in a phase 1 trial (knocking down the disease causing TTR protein by 94% when 50% is considered therapeutically relevant) and it is an orphan disease.  A defined patient population in a growing part of the world, a very good clinical result and a prospect for quicker/cheaper clinical trials and commercialization means you cut the deal.

Alnylam's stock took off on word of the announcement.  The company plans to pursue therapies in 5 other areas with the licensing and royalty proceeds. See Fierce Biotech and Xconomy.

Posted by Bruce Lehr October 22nd 2012.

Indian Drugmakers Fight No Brand-Name Rule

Earlier this week, I described the India drug controller's, GN Singh, plan to prohibit the use of brand names in selling drugs.  This is an effort to promote generics' use to reach a greater portion of the population and to save money for the government.  I had the impression that it was aimed at the multi-nationals operating in India.

Indian Drugmakers To Fight Brand-Name Rule // Pharmalot.

However, the local Indian Drugs Manufacturer Association is the first to voice a vehement dissenting response to this concept.  They contend the controller has NO jurisdiction on the use of brand names and pledge to fight this legally if necessary.

"Just as you cannot tell a carmaker or a chocolate maker to stop branding their products, you cannot ask pharma companies to do away with branding their products," said Vinay Pinto, managing director of Wallace Pharma. 

Ironically, the trade association that represents foreign multi-nationals is taking more of a wait and see approach.  The government has indicated a desire to get comment on this proposal and the MNCs want to participate in that exercise first. This story has more to come.

Posted by Bruce Lehr Oct 19th 2012.  

Lechleiter Touts the Value of Biopharm Innovation on the Economy

Lilly's CEO John Lechleiter takes to the bully pulput again to inform the Presidential candidates to not forget the importance of the biopharm industry to a healthy US economy.  He wants data exclusivity provisions (similar to US Affordable Care Act) included in the new Trans-Pacific Partnership agreement.

PharmTech Talk » Eli Lilly Chairman Stresses the Importance of Biopharmaceutical Innovation on the Economy.

Lechleiter believes TPP is a vital channel to allow US pharma to shine across Asia and its expected large and fast-growing markets.  But, investors will only play in supporting this if US IP is protected.  With this protection, investors will invest to fuel job growth,help maintain US global leadership and to extend life-saving medicines to the rest of the world. The TPP participants will also be setting the standard that non-participants like China must meet.

If we want to build on the 4 million plus jobs of the US biopharm industry, we need to support it through reasonable IP protection in balance with free trade.

Posted by Bruce Lehr Oct 19th 2012.

 

Is There Still a Race to Biosimilar Rituximab?

A few weeks ago Teva and Lonza pulled back from the race to introduce a biosimilar version of rituximab, and now Samsung and BiogenIdec have pulled up lame.  Both companies through unnamed sources indicated the decisions were made due to an uncertain regulatory environment. Seems odd to me, nothing particularly surprising came out of the FDA guidelines issued in the US and I can't think of any other major area of the world that threw up a road block suddenly.

Samsung halts biosimilar rituximab trial on regulatory concerns.

Apparently, according to the In-pharma Technologist post above, that leaves Boehringer Ingelheim as the only major declared competitor still in the running.  This bears some watching.

Posted by Bruce Lehr Oct 18th 2012.

India Serious About Pushing Generics

Are you a Big Pharma Compnay looking to make up sales shortfalls in emerging countries?  Well, scratch India off your list of profit centers.

India Pushes To End Sale Of Branded Drugs // Pharmalot.

India's drug controller, GN Singh, wants to prohibit the sale of branded pharmaceuticals in India in favor of lower cost generics.  States have been ordered to stop issuing licenses for manufacturing licenses for drugs under brand names. Manufacturers have been asked to submit their products for licensing under generic names -- not brand names.

"We have sent the order to all state health secretaries asking them to instruct their drug licensing issuing authority to issue licenses only on generic names and not on branded or trade names, which is the usual practice now.  A branded drug can be 10 times more expensive than a generic variant," said Singh. In addition, the government will open its own chain of medical stores to make generics available at a reasonable cost.

They seem to be as serious as a heart attack in cutting drug costs in India.

Posted by Bruce Lehr Oct 17th 2012.

Latest Shot in Comparative Effectiveness Battle

Memorial Sloan Kettering has announced that it will choose NOT to use one of the latest cancer treatments for colorectal cancer.  The drug?  Zaltrap.  Rejected because of the funky name? No.  Eschewed due to its cost? Yes, wholeheartedy says center representatives.

Rational Or Rationing? Saying No To A Cancer Med // Pharmalot.

Zaltrap costs on average $11,063 per month of treatment or about twice as much as the older drug, Avastin.  And, it has not proven to be any better than Avastin either. Doctors at Sloan argue that drugs need to prove themselves and they feel responsible for taking the financial consequences into account as well. Neither drug really knocks your socks off as they extend median life expectancy by a mere 1.4 months over standard chemotherapy.

So you can have Avastin for half the cost, with slightly fewer side effects and the clinical effect is very similar in terms of life extension.  Sounds rational to skip its use then, eh? 

No doubt this is the latest salvo in a battle that will rage on for some time -- especially if the Presidential race latches on to this issue.

Posted by Bruce Lehr Oct 15th 2012.

Our Posts at Big Red Described Exactly

"Never ascribe to malice that which is adequately explained by incompetence" -- Napoleon Bonaparte

FDA Signals Possible Endorsement of "Special Meds"

Margaret Hamburg's comments this week indicate a predisposition in the FDA to consider accelerated drug approvals for "special medicines" that provide societal benefits despite their possible risks.  These would include treatments for conditions like obesity or life-saving antibiotics. 

In keeping with recommendations handed down by a White House advisory committee last week, Hamburg told scientific advisers that the agency is considering letting makers of such products conduct faster trial with smaller patient groups.  The idea is to get drugs faster to patients in dire need.

The plan would also allow drug companies to get products on the market quicker and may provide some level of respite to companies who need to fill revenue holes due to patent expirations of top selling products.

"This is an issue of having the right science and data to assess risks and benefits but also a broader societal discussion about risks and benefits that individuals and communities are willing to take on and under what circumstances," said Hamburg.

I like the idea of trying.  In particular, I'm intrigued by passing some responsibility for risk to certain high risk patient classes for diseases like obesity treatment.  It is interesting to me because many obesity issues relate to patient [high risk] behaviours in the first place.  Getting treatment for some of these type of patients might provide high levels of benefit. 

Still, we need to look at the science to make sure risk is not ridiculously high in approving these drugs, and post-market surveillance will need to be bolstered too.  Regardless, I think it is an idea that I would like to see tried on a pilot basis. See Bloomberg News.

Posted by Bruce Lehr Oct 12th 2012.

Biotech/Pharma Patent Facts

Here's a piece in Patent Docs blog referencing the IPO Association's 29th annual list of the top 300 organizations receiving US patents.  It seems Biotech/Pharma patent issuances are up again in 2012 (by 4.9%) but the number of applications is down (by 12%). This continues a trend seen since 2010. 

Posted by Bruce Lehr Oct 12th 2012.

Do Pay Attention to the Data Behind the Curtain

Today, GSK announced it will part the curtain that previously obscured access to data from clinical trials.  In a move aimed at boosting transparency, GSK has pledged to make its clinical trial results available on a public website.  It has already published summaries of 4500 trials.

Now in a further, and unprecedented move, GSK will also seek to publish the results of all its clinical studies -- regardless of results -- in peer-reviewed journals. It will also create a system where researchers can access anonymous patient level data from clinical trials. This will enable researchers to examine data more closely and to combine data across studies to conduct further research. 

This is great.  Transparency is always good in my view.  It's nice to have a summary but even better to be able to see the raw data so you can do independent analysis and draw your own conclusions -- which may differ from those in a summary.  This is a step forward in openess and will put pressure on other Big Pharma peers to follow suit.

See Fierce Biotech and In the Pipeline for more details.

Posted by Bruce Lehr Oct 11th 2012.

Compounding Errors Strike a Chord with Mike

Pharma Reform has something to say about pharma regulation or lack thereof, spurred by the continuing issues raised by the meningitis outbreak fueled by a compounded (and less regulated) steroid formulation that has been sold inter-state.  Who's responsible?  Should there be more regulation? 

Pharma Reform takes a stand.

Posted by Bruce Lehr Oct 10th 2012.

 

Compound(er) Errors May Bite FDA in Butt

KV Pharmaceuticals may be vindicated with respect to one of its arguments with the FDA -- that being compounders do NOT offer the same level of manufacturing control as a validated GMP process. 

KV Pharma & Compounding: We Told You So // Pharmalot.

I've been openly critical of KV in its introduction of Makena -- but most, if not all, of the criticsim has been aimed at its marketing/business decisions.  If you rememeber, Makena is essentially a GMP version of a compounded product -- a synthetic progesterone -- that had been commonly used to treat some high risk preganancies.  Under the Orphan Drug Act provisions, KV made a licensed version of the product and called it Makena.

So far so good?  Company recognizes a market need and takes advantage of Orphan Drug Act to produce a more controlled version of the product.  So what's the problem? Due to its inherently shaky finances, the company decided to hike the price from $20 per dose to over $1500!  The resultant hue and outcry from doctors, insurers, congressman, etc essentially sunk the product before it even started.  Rightfully, so in my view.

On top of this background though, the FDA made the unusual decision to not "go after" pharmacies who continued to supply the compounded product.  That's unusual when there is a licensed version of the product for sale -- which normally the FDA would support the use of. More in keeping with its QbD and other quality enhancng initiatives.

KV finally reacted (with its back against the wall and few other options) by suing the FDA for allowing compounders to continue to operate.  The FDA has maintained that they haven't seen any proven problems with compounders of a Makena type product.  And that is true -- so far.

However, the recent problem with fungal meningitis being spread by a compounded steroid product highlights the potential safety issues that can come with compounding -- where GMP type controls are lessened.  This would seem to me to at least bolster KV's legal argument that FDA is erring in not treating the licensed Makena as a superior quality product --- regardless of its unsavory pricing.  Normally, the FDA is charged with safety and efficacy and not economics -- which should be left to other policy makers like insurers or elected government.

Posted by Bruce Lehr Oct 9th 2012.

Place Your Bets on Next Round of Blockbusters

Fierce Biotech published thumbnails on 15 top late stage drugs that it says analysts have pegged at having a chance to exceed $1 B in peak year sales.  Predictably, most of these come from the biggest of Big Pharma and attack some of the reallybig disease classes like breast cancer or Alzheimer's.  A drum roll please for our list:

1. TDM1 - Genentech - breast cancer - $5 B peak
2. BG-12 - Biogen Idec - multiple sclerosis - $3 B peak
3. Darapladib - GSK - atherosclerosis - multi-billion peak
4. Gantenerumab - Roche/Morphosys - Alzheimer's - TSTL*
5. GS-7977 - Gilead - hepatitis C - $3.8 B
6. REGN727 - Sanofi/Regeneron - cardiovascular disease - $6 B
7. Odanacatib - Merck - osteoporosis - $2.5 B
8. Anacetrapib - Merck - cardiovascular disease - $10 B
9. Eliquis (apixaban) - BMS/Pfizer - atrial fibrillation - $5 B
10. Tofacitinib - Pfizer - rheumatoid arthritis - $3 B
11. Bardoxolone - Reata/AbbVie - chronic kidney disease - multi-billions
12. LuAA21004/vortioxetine - Lundbeck/Takeda - major depression - $2 B
13. QVA149 - Novartis - COPD - $1.5 B
14. Macitentan - Achelion - pulmonary arterial hypertension - $3 B
15. Alpharadin - Bayer/Algeta - cancer - $1 B

There's the roster. Now you can place your bets -- though I didn't I did neglect to post the remaining odds of success.

Posted by Bruce Lehr Oct 8th 2012.

Titantic, Challenger, Bapineuzumab

How do you spell disaster?  BMS-094 maybe?

In 2012, we've seen our share of big Phase III flame outs, as high profile drug programs have failed utterly in meeting their clinical endpoints.  Many of these were being conducted by companies counting on the success of these projects to fill in flagging sales due to recent patent expiration of blockbusters. They also were trying to make their mark in lucrative therapeutic categories that have few good alternatives now.

Fierce Biotech lays out its TOP 5 failures in 2012:

• Bristol-Myers Squibb's BMS-094 for hepatitis C
• J&J and Pfizer's Bapineuzumab for Alzheimer's
• Eli Lilly's Solanezumab for Alzheimer's
• Roche's Dalcetrib for cholesterol management
• AstraZeneca's TC-5214 for depression

In 2012, all of these hit an ice berg.  Fierce listed them in descending order of magnitude of disaster but maybe you have additional nominees or a different order?  Feel free to comment or reorder to your desire.  Drug development though remains a tough business.

Posted by Bruce Lehr Oct 4th 2012.

 

20 Major Pharma-Academic Alliances in 2012

Fierce Biotech reminds us of 20 major alliances that were established between pharma companies and academic institutions in 2012.  This reflected a shift towards down-sizing R&D groups in pharma companies -- particularly those with steep patent cliffs over the past 3 years -- and more investment with outsource partners.  In this case, those partners were academic institutions.

20 Major Pharma-Academic Alliances in 2012.

Check out the list and learn where Big Pharma is placing its bets and seeding projects that could yield big-time products in the future --- at least that is the strong desire.

Posted by Bruce Lehr Oct 3rd 2012.

New Biopharma Industry Report from GBI Research

According to a new report by GBI on the global biopharm market, we can expect it to grow from $138 B in 2011 to more than $320 B by 2020 upping biopharmaceutical's percentage of market from its current 15.6%.

PharmTech Talk » Biopharma Industry Set to See New Technologies and New Therapies.

The report says more companies will incorporate disposables into their manufacturing to become more efficient and will use more microbial systems too. I'd like to see the data supporting the latter and what products that are expected to be made using microbial systems -- instead of say CHO cells.

Biosimilars are expected to boom (surprise, surprise).  GBI is projecting biosimilar sales in the US to reach $9B by 2020.  India, China and Korea are also expected to have very active biosimilar programs. India alone has more than 20 active biosimilar companies now with 55 products on the market -- including products like Enbrel and Rituxan that are still on patent in many Western countries.  The South Korean government is heavily backing the biosimilars industry and has a goal of taking 22% global market share by 2020.

Posted by Bruce Lehr Oct 3rd 2012.

A White House White Paper On Drug Approvals - Helpful?

It's Election time.  Time for another terrific "white paper" from a Blue Ribbon panel of experts outlining several recommendations as to how the federal Government (e.g. FDA and others) can speed drug approvals.

A White House White Paper On Drug Approvals // Pharmalot.

Like most such august panels, their recommendations in a robust 110 page report is long on advice and short on specifics. Some of these include:

• More funding for National Center for Advancing Translational Sciences (Francis should be happy)
• Create "broad-based" partnership to improve clinical trials and provide the FDA with more input on developing a pathway for "innovative medicines"
• Have the FDA do more to grant accelerated approval for drugs meeting the standard for addressing an "unmet need" for a serious life threatening condition
• Create a new pathwy for initial approval of drugs aimed at specific subgroups, dubbed Special Medical Use approvals
• Have the FDA run pilot studies to look at "adaptive approval mechanisms".  Congress should pony up $40 million annually to pay for this
• FDA should enact a "range of reforms', including the use of pre-market review leaders to oversee drug applications from investigative stages to final approval
• USDHHS should commission a study of economic incentives to promote innovation, i.e stimulate companies to chase drugs like treatments for Alzheimer's or antibiotics

So all we have to do is follow the advice -- blah blah blah blah -- and figure out how to put it into concrete actions. 

White paper + Blue Ribbon panel = Red Herring.  Will it get the Green light?

Posted by Bruce Lehr Sep 29th 2012.

 

Get Your Mind Right with Big Red

 

What We've Got Here is Failure to Communicate

Myriad is Baaaaaaaaaaaaaack!

I would ask you to read this very brief post in the Patent Doc blog. No doubt we can look forward to a thorough discussion and analysis of the points raised by the ACLU and PubPat in their petition for certiorari to the Supreme Court.  For now, just check out the questions raised in the brief:

1. Are human gene patentable?
2. Did the court of appeals err in upholding a method claim by Myriad that is irreconciable with this Court's ruling in Mayo v. Prometheus?
3. Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court's decision in MedImmune v. Genentech, that petitioner's who have been indisputably deterred by Myriad's "active enforcement" of its patent rights nonetheless lack standing to challenge those patents absent evidence that they have been personally and directly threatened with an infringement action?

Oh Boy! I can hardly wait for Kevin's discussion on this one.

Posted by Bruce Lehr Sep 25th 2012.

Times Tough or Rebounding for Biotechs?

I guess that depends if you read the Pharmalot version or the Fierce Biotech version of the recent study published by BDO.

Sooooooooo. Either we focus on Small biotech's decreased R&D spending, job cutting and dampening revenues, or on Big biotech's (> $50 M revenues) increase in R&D spending, hiring rebounds and rising revenues. 

Apparently, 90% of small biotechs reported losses in 2011 by an average of 12%, and decreased workforces by 3%. The industry as a whole though grew to $76 M from $62 M, and large biotech increased staff by 16%.

Twenty-four percent of Big guys raised equity capital while 64% of small biotech had to go that route as they had little cash from operations to rely upon. At years end, biotechs, on average, held 2.63 years worth of R&D spending in cash or liqud assets. And, a model employing virtual biotechs is gaining momentum.

Posted by Bruce Lehr Sep 25th 2012.

And The Outlook For Pharma Is… Improving?

Let me translate that headline for you.  It's based on Moody's Investor Services revising its outlook for the global pharma industry as "stable".  Since 2007, Moody's had given the industry a negative credit rating.

And The Outlook For Pharma Is… Improving? // Pharmalot.

Why the change?  Moody's believes the Industry is stable as it has hit rock bottom and will reach an earnings trough (caused by its latest patent cliff) in late 2012.  Then there's no where to go but up from here.  So after the industry has lost Lipitor and Plavix to generic competition -- what else can match that rapid free fall? 

Nothing. To paraphrase the Doors, "Pharma's been down so god damned long, that it looks like up to we."  Maybe its not time to crack out the bubbly though.

Posted by Bruce Lehr Sep 25th 2012

Newsflash! You Can Lose Money as VC Biotech Investor

Apparently, it has been recently discovered that investing as a VC player in biotech ventures can result in a LOSS OF CAPITAL.  Yes.  Let me repeat.  If you invest in a biotech VC fund (or company), you could lose it ALL. 

Shikhar Ghosh, a senior lecturer at Harvard Business school, made this startling discovery. In studying over 2000 companies that received venture funding between 2004 and 2010, he found that at least 75% did not return investor's capital.

Ok now.  What might this mean to you as an investor? Hmmm.  Maybe you shouldn't invest money in a VC deal if you can't afford to lose the capital. There I said it.  Now how is this different than your understanding about this type of investment say --- 5 minutes ago? See the WSJ story for the details.

Posted by Bruce Lehr Sep 23rd 2012.  

Timmerman Recommends These Biotech Tweeters

Luke Timmerman put together his definitive list of biotech movers and shakers that you should follow on Twitter (or at least a group of interesting Tweeters who offer insight in their areas of expertise). Luke should know, so check this esteemed "A list" out.

See Xconomy.

Posted by Bruce Lehr Sep 24th 2012.

 

10 Pharmas Form Non-profit to TransCelerate Their Profits

Or is it to just stem their R&D losses which have continued to climb? 

Regardless, 10 Big Pharma companies announced they formed a new non-profit organization in August to speed up the R&D of new drugs and save some money. These include the big names like:

• Abbott
• AstraZeneca
• Boehringer Ingelheim
• Bristol-Myers Squibb
• Eli Lilly
• GlaxoSmithKline
• Johnson & Johnson
• Pfizer
• Roche
• Sanofi

10 Pharmas Unite To Combat R&D Woes // Pharmalot.

The 10 companies state the new organization's goal is to boost the quality of clinical trials and speed up the typically slow pace of drug development.  New paradigms they believe will lead to substantial cost savings. Specifically, the group has agreed to focus on five initial projects:

• Development of a shared user interface for investigator site portals
• Mutual recognition of study site qualification and training
• Development of risk-based site monitoring and standards
• Development of clinical data standards
• Establishment of a comparator drug supply model

These pre-competitive type projects are expected to improve efficiency and reduce costs leading to better returns on R&D investments.

The FDA is on board with the idea.  Said Janet Woodcock, FDA's chief of drug regulation, "We applaud the companies in TransCelerate BioPharma for joining forces to address a series of longstanding challenges in new drug development. This collaborative approach, utilizing the collective experience and resources of 10 leading drug companies and others to follow, has the promise to lead to new paradigms and cost savings in drug development, all of which would strengthen the industry and its ability to develop innovative and much-needed therapies for patients." 

Here. here. See Fierce Biotech and PharmaTech Talk for more.

Posted by Bruce Lehr Sep 24th 2012.