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Tag Archives: GSK

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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Monday Biotech Deal Review: December 21, 2009

This week’s deal review shows no signs of a holiday showdown.  In Canada, BioMS’ deal with Spectral Diagnostics was interesting as a possible indicator of more to come and internationally, 5 new pharma deals were announced this morning including a $430 million deal that OncoGenex landed from Teva joining new links between Athersys and Pfizer, Lilly and Incyte, sanofi-aventis and Chattem and Seattle Genetics and GSK.  Check out the past week’s Canadian deal-making (and breaking) after the jump…

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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Novel Deal Structures Becoming More Common

Outside the BoxAt the RIC/OCETA talk I participated in last month, one of the trends in deal-making that I mentioned was novel structures.  At the time, examples included option deals and new ways to split rights and territories. 

More recently, we’ve seen GSK and Pfizer form a joint venture to develop HIV treatments, and two more interesting ideas came up this week:

  1. Index Ventures, a VC firm, is forming a joint venture with Amunix Inc., a biotech company.  The idea is, according to the WSJ Venture Capital Dispatch blog, to focus entirely on drug development, not research, and advance three candidates quickly through Phase I proof-of-concept.
  2. AstraZeneca and Merck are teaming up for what FierceBiotech calls an “unusual, early-stage clinical program” where each company is contributing an experimental cancer drug candidate that, in combination, should attack complementary pathways.  From the joint press release:

    Under the terms of the agreement, AstraZeneca and Merck will work together to evaluate co-administration of the compounds in a Phase I clinical trial for the treatment of solid cancer tumors. All development costs will be shared jointly. Following the Phase I trial, the companies will consider opportunities for further clinical development.

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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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IVB’s Great Take on the GSK-Pfizer HIV Joint Venture

The In Vivo Blog has a really interesting post by Roger Longman discussing what they view as the groundbreaking and innovative aspects of GSK and Pfizer’s HIV joint venture, announced just over a month ago

The gist is:

  1. The venture allows flexibility and accountability in an R&D operation with pharma-scale resources; and
  2. The JV has its own equity that it can use to reward employees directly and to raise new funds.

IVB’s bottom line: “whether it works or not, the drug industry should be paying close attention to this deal.” 

My bottom line:  I certainly hope it works, because it seems like it would be a bear to unwind.

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BIO 2009: Ontario Premier’s Breakfast

BIO 2009The speeches (s-peach-es?) just finished this morning at the Ontario Premier’s breakfast.

Minister of Research and Innovation John Wilkinson announced that Ontario has recently completed 2 new BIP investments:

Ontario’s Premier — Dalton McGuinty, winner of BIO’s second annual International Leadership Award — spoke next, highlighting the Ontario Innovation Agenda, including BIP, business tax reductions and recent funding in the Emerging Technologies Fund and the new $100 million for genomics research.

Dr. Nagy also spoke, emphasizing the $100 million of new funding and the value of a peer group of 95 P.I.’s in Ontario working on stem cells and regenerative medicine. Current work focuses on cell type switching without regression to pluripotency.

On to the omelet…

P.S.  First time here at the Cross-Border Biotech Blog?  Welcome! Check out who we are, check out our Trends in 2009 series, or hit the search and navigation tools on your right and see if you see anything interesting.

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Trends Update: ChinaBio and Shantha Biotech

One of our Trends in 2009 posts last week talked about the increasing innovative activity in India and China and increasing generics activity among innovator pharma.  This week starts with a relevant update on each front:

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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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Friday Science Review: March 6, 2009

Cool Canadian science stories this week…

Stem Cells: The big Canadian science news this week was the report by Dr. Nagy’s lab at the Lunenfeld that they have found a much safer way to make pluripotent stem cells from adult tissue.  Their publication (co-authored with Keisuke Kaji’s team at the University of Edinburgh) appeared in Nature this week.

Also on the stem cell front, Dr. Kremer, the co-director of the Musculoskeletal Axis of the Research Institute of the McGill University Health Centre, used Interferon gamma to induce the differentiation of mesenchymal stem cells into osteoblasts in vitro, and that IFNγ knockout mice also show reduced bone density and that isolated mesenchymal stem cells from the knockout mice show a differentiation defect.  Long story short: a potential new target for improving bone density.

Clinical Trials: Good news for GSK and for scientists at McMaster University, who showed that GSK’s Mepolizumab (pdf), an anti-IL5 humanized antibody that blocks eosinophil production, helps severe asthmatics improve asthma and reduce their need for prednisone by close to 90 per cent, a result that was seconded by a group in the UK.

Nanotechnology Costs: We noted a few weeks ago that there were changes coming to nanotechnology regulatory environment, and now researchers in BC and Minnessota estimate that testing the toxicity of existing nanomaterials in the United States could cost between $249 million and $1.18 billion and that full-scale testing could take decades to complete. They propose a tiered approach, similar to the EU’s REACH program for testing toxic chemicals, to define priorities.  Hat tip to ScienceInsider.

Hosted Services: Canadians, being hospitable types, are hosting World Diabetes Congress in Montreal in October, as well as a new Occupational Cancer Research Centre – charged with “improving knowledge and evidence to help identify, prevent and ultimately eliminate exposures to cancer-causing substances in the workplace.”

Musical Chairs: A group at Ryerson University’s centre for learning technologies in conjunction with the science of music, auditory research and technology (SMART) lab have developed a chair that allows the hearing-impaired to experience music by using the skin as a hearing membrane. 

Global Issues: An Amazon drought caused a major release of carbon dioxide; but don’t worry, because we’ll find a new planet in no time.  Sound painful? Don’t worry – a spoonful of sugar really does help the medicine go down.

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M&A Update

Following our last update, there have been a considerable number of bio/pharma M&A developments, so to bring you up to speed here is the latest deal info we’ve found…

Wednesday Brain Dump: February 4, 2009

Some good news on the gene therapy front in adenosine deaminase-deficient SCID patients and in rheumatoid arthritis.

But mostly bad news on the job front at GSK, AstraZenecaAbbott,  GenVecPatheon, and others.

Other good news on the approvals front for Parusgel (despite process concerns), KapidexLamictalGelnique and Taxus Liberte.

Really small news: Nanomaterials may be heading for increased regulation in Canada, with a mandatory reporting program reportedly pending and a new guide from IRSST in Quebec (pdf) (although the IRSST guide doesn’t mention bio-materials).

Just NICE news: Comparative Effectiveness may be headed for some changes in the UK, where NICE is working on a review.

Positively Biblical news: The lion lies down with the lamb (or something equally unlikely)

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