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Biotechnology, Health and Business in Canada, the United States and Worldwide

Tag Archives: GlaxoSmithKline

Monday Biotech Deal Review: June 20, 2011

Welcome to your Monday Biotech Deal Review for June 20, 2011.  Notable transactions from the previous week included the public offering of units by Resverlogix, as well as investments by HTX and the Business Development Bank of Canada in each of Milestone Pharmaceuticals  and Profound Medical Inc.  Read on to learn more. Read more of this post

Monday Biotech Deal Review: June 6, 2011

Welcome to your Monday Biotech Deal Review for June 6, 2011.  This week’s deal review is brought to you by Norton Rose OR LLP summer student Steven Zuccarelli who, before entering law school at Osgoode Hall Law School, obtained his B.Sc and M.Sc at McMaster University in Biochemistry and Health Sciences, respectively, where he was involved in researching peptide vaccine models.  Steven will be assisting over the summer months with the Monday Deal Review, and it’s great to have him aboard. 

Aside from some interesting commercial deals, as well as CardioComm’s related-party announcement of a $788k asset purchase, things were fairly slow last week.  Read on to learn more. 

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Patent Cliff Will Not Save Biotech: Abbott Buys Indian Generics Company Piramal Healthcare

I often hear how the upcoming loss of patent protection for current blockbusters creates an insatiable demand at pharma companies for new pipeline products from biotechs. Here’s an example from 2007. Here’s one from last week. This is not true. Upcoming loss of patent protection creates a insatiable demand for revenue, but new products are not the only source of new revenue.

Abbott’s $3.7 billion deal for a unit of India’s Piramal Healthcare last week is a perfect case in point. This deal, which follows Abbott’s license of a slew of products from Zydus Cadila, will feed the company’s new “established products division.” Abbott’s purchase of Solvay in February also built its emerging markets revenue, which now accounts for over 20% of the company’s business.

Abbott is far from alone: Sanofi is the biggest generics manufacturer in Latin America, Pfizer also has an established products division, Novartis is diversifying into eyecare and has long sold generics, Merck is into follow-on biologics and GSK tapped South Africa’s Aspen Pharma for emerging markets growth through branded generics. These alternatives look even better as payors worldwide are setting more demanding standards for reimbursement, the placebo effect is mysteriously strong, and personalized medicine makes clinical trials even more expensive.

My bottom line? Emerging markets and generics opportunities create plenty of growth, thank you very much, with a far lower risk profile than most product in-licenses or biotech acquisitions (even the option deals). As big pharma gets more comfortable with “established products” and biosimilars, biotechs are going to have to demonstrate even higher value. Plenty of companies are being built and funded with that in mind; but anyone counting on pharma’s desperation will be disappointed.

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Personalized Medicine Conference Highlights a Busy Month

Last week, Harvard Medical School held a conference entitled “Personalized Medicine: The Time is Now.”  Is the time now?  Looking around, it seems like personalized medicine has had a pretty good month:

PBMs Drive Demand

CVS Caremark, the country’s largest pharmacy services provider, partnered with Generation Health to expand pharmacogenomic testing for cancer, cardiovascular diseases, and HIV.  According the GenomeWeb story, CVS Caremark joins Medco‘s 60 million people, meaning the top two PBMs in the U.S. are investing heavily in personalized medicine.

Though note that PBMs’ interest in personalized medicine isn’t wholly neutral, as this post at IVB by Michael McCaughan points out.

Corporate Deals

Three pairs of corporations found the economics sufficiently attractive to strike new partnership deals:

NCI Investment To Advance Research

Finally, helping ensure that there is sufficient research output to advance the field, the National Cancer Institute put out a program announcement entitled “Development, Application, and Evaluation of Prediction Models for Cancer Risk and Prognosis,” which NCI says will be “essential for tailoring therapy to appropriate groups of patients.”

Counterpoint

Still, as the Washington Post notes in its article on the new “Ignite Institute” in Fairfax County: “[y]ou’d be right, of course, to be a bit skeptical,” citing decades of promise and so far few commercial successes in the region.

Bottom Line

Given this month’s developments, our Magic 8-Ball says “Outlook good.”  Stay tuned to see what develops, particularly as personalized medicine and comparative effectiveness grow in prominence at the same time.

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Dreaming of REMS: A Second Reason Why FDAAA Risk Evaluation and Mitigation Strategies Might Be a Benefit to Drug Developers

Over at The In Vivo Blog, Michael McCaughan has another thought-provoking piece on REMS — the FDA’s Risk Evaluation and Mitigation Strategies that impose tight controls on the distribution channels for certain drugs.

Michael compares two drugs for the same indication — opioid-induced constipation therapy, if you must know — and though they have similar mechanisms of action and were both developed by small biotechs and picked up by big pharmas, they met different ends (har).

Wyeth gave Progenics back the rights to Relistor last week, paying $10 million to do so; but GSK is continuing to market Adolor’s Entereg.

The difference? According to Michael, Wyeth was facing big marketing commitments, but GSK was not. Here’s the rub: GSK’s marketing commitments were limited because Entereg is marketed under a REMS that limits its use to an “ultra-restrictive indication.”

So, we now have two situations where REMS confer an unexpected benefit:

  1. Limiting marketing expenditures for a marginally successful partnered drug (the partnered part is key — without that, marketing budgets can be adjusted at-will, without regard to minimums); and
  2. As previously noted by Michael and discussed here, limiting generic competition for off-patent drugs (REMS don’t die or fade away, they just complicate life for generics).

In each case, I’d leave it to the math guys to calculate whether the benefits outweigh the costs of the sales limitations that come with a REMS (not to mention the direct compliance costs); but if your partnered product isn’t looking like a blockbuster or is closer than you’d like to patent expiration, maybe it’s a good time to look over the FDA’s recent draft REMS guidance — a “useful blueprint for how to develop these important safety strategies.”

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Planned UK Bioscience Park Features “Open Innovation,” is Brought to You By GSK, the UK Government, The Wellcome Trust and the EEDA

A new biotech “hub” (aka campus, park, centre, cluster…) is being planned at GSK’s Stevenage Campus in the UK.  Whatever you call it, the organizers are pitching two novel features:

  • An “Open Innovation” model; and
  • Access to GSK management and expertise.

I’m not sure how far “open innovation” could really go, in an industry that depends on patents and compliance, but in this particular case the description from the reports on this new park sounds mostly like a good set of core facilities:

“shared access to specialist skills, equipment and expertise to stimulate new innovation in drug development”

It will be interesting to see how far the “open innovation” really goes.  It will also be interesting to see how often “access to GSK” turns into “access for GSK.”  As the Telegraph article says, the park will:

“provide the UK’s largest drug company with first-hand evidence of business projects in the biotechnology sector, which GSK could then choose to acquire.”

Why invest in this project?  The pitch to the government funders is the usual one: jobs.  Up to 1,700 jobs.  No, wait, up to 3,000 jobs!  The total funding of around £37.6m comes from the UK Strategic Investment Fund (£11.7m), GSK (£10.9m), the Wellcome Trust (£6m), the Technology Strategy Board (£5m) and the East of England Development Agency (EEDA) (£4m).

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No Company is an Island: More Pharma and Biotech Collaboration

Island Nihoa_aerialTwo deals this week showcase collaborative efforts between major pharma players:

 

 

These follow last month’s earlier-stage collaborations between GSK and Pfizer for HIV treatments and betwen AstraZeneca and Merck for cancer treatments.

Why are we seeing these collaborations?  I have a couple of thoughts:

  1. This is a tough regulatory environment and companies are going to reach for every advantage they can get … maybe putting more effort into initial approvals that they might otherwise dole out over time.
  2. I think it’s notable that these projects are all aimed at HIV and cancer, two complex and incredibly tenacious diseases.  The low hanging fruit is (a) gone, and (b) not finishing the jobs. 

Is this the end of magic bullets and the beginning of biotech patent pools?  Too soon to say.

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Trends Update — IP Constituencies: Rumors about GSK-Shantha Biotech

B&W_BlankMap-World-nobordersSince we’ve been following innovative activity in India and China as part of our Trends in 2009 series, we had noted a report at the end of March that GlaxoSmithKline and Sanofi-Aventis were each in talks to buy a majority stake in the Indian company Shantha Biotech from France’s Merieux Alliance, which owns 80 percent of the company.

A report in India’s Economic Times today, picked up by FierceBiotech, says that Sanofi had dropped out and that the deal with GSK has “[o]nly a few matters relating to the valuation” remaining.  This is a bit like saying Israel and the Palestinians are close to a peace accord with only a few matters related to borders remaining.  Hopefully GSK and Shantha/Merieux are closer (and friendlier) than that, but valuation is obviously a big issue, so I wouldn’t be counting any biosimilars before they hatch.

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Wednesday Brain Dump: Deal-O-Rama Edition

There’s still plenty of deal activity in the pharma and biotech sector this week, even outside Canada, so here’s a roundup of what’s done, what’s pending and what’s in the rumor mill:

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Disclosure, Disclosure, Disclosure

Disclosure issues have permeated the news lately.  Pharmaceutical companies need to do a better job of disclosing adverse clinical trial results and side effects; companies and doctors need to do a better job of disclosing payments; and journals need to do a better job of disclosing author conflicts.

You could view the question of whether to disclose from a lot of different perspectives, but I’m hard pressed to find one that argues in favor of secrecy: economic (efficient markets), legal (Exchange Act, FDAAA, FTC), and corporate (reputational harm) considerations all seem to point to disclosure.

While there will always be some level of outright fraud, and there is risk to individuals who do disclose (risk to future work, inability to publish, etc.), institutions should be moving toward increased disclosure. 

Some have:

  • GlaxoSmithKline is heading in the right direction.  Last year they promised to publish payments to U.S. doctors for consulting and other services starting in 2010, and to cap those payments at $150,000 per doctor a year. Now, the company is planning to expand its disclosure to include money paid to doctors and their institutions to carry out clinical trials, and fees it pays European doctors for advice on developing new drugs.
  • The American Psychiatric Association (pdf) Board of Trustees voted this month to phase out industry-supported symposia along with industry-supplied meals at its annual meetings.

I vote for more.

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