Wednesday, May 28, 2008

Alnylam and Takeda Form Strategic Worldwide Platform Alliance in RNAi Therapeutics

Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY) and Takeda Pharmaceutical Company Limited recently announced that they have formed a strategic platform alliance in RNAi therapeutics in the fields of oncology and metabolic disease with the option to expand to additional therapeutic areas. This alliance is the first major RNAi therapeutics partnership between a Japanese pharmaceutical company and a U.S. biotechnology company, representing a new frontier in the advancement of RNAi therapeutics to patients on a global basis.

The cost? $100 million to play, $50M in technology transfers and options/extras for a non-exclusive license in two therapeutic fields that is valued at potentially over $1 billion in future research and development and commercial milestones, upon successful commercialization of multiple products. Wow, that's some deal for an unproven technology and a company with a poor pipeline clearly needs to spend it's way out of the hole.

So what exactly is RNAi? Well, it is a new approach for the discovery of breakthrough medicines that utilises a natural mechanism found within the body to inhibit expression of certain genes. Harnessing the activity of RNAi may create an opportunity to develop specific and potent new medicines for the treatment of a broad range of diseases, including those that are difficult to treat with today’s drug approaches. The discovery of RNAi was awarded the 2006 Nobel Prize and the advancement of RNAi is recognized as one of the most important advances in biomedical sciences in decades.

This collaboration clearly shows that Takeda means business and provides the company with broad, worldwide, non-exclusive access to and enablement with Alnylam’s RNAi therapeutics platform technology and intellectual property in the fields of oncology and metabolic disease, with the right to expand the number of therapeutic fields in the future. The agreement also includes the transfer of platform technology from Alnylam to Takeda, a collaboration and cross-license of delivery technologies between the two companies, and a drug discovery collaboration on certain RNAi therapeutic targets, subject to certain Alnylam third party obligations.

Takeda becomes Alnylam’s strategic partner for RNAi therapeutics over a five-year period and the only Asian company to obtain a right of first negotiation to develop and commercialize Alnylam RNAi therapeutic development programs for the Asian market, excluding Alnylam’s ALN-RSV01 program. In addition, Alnylam obtains opt-in options to co-develop and co-commercialize Takeda RNAi therapeutic programs in the U.S. market on a 50-50 basis.

At Takeda’s option, the scope of the partnership can be expanded to include additional fields with a $50 million per field expansion payment. Alnylam is also eligible to receive research and development funding related to the drug discovery collaboration. In addition, Alnylam is eligible to receive up to $171 million in development and commercial milestone payments and significant royalties per product. Alnylam plans to update financial guidance when it announces its second quarter 2008 financial results.

Wednesday, May 21, 2008

Market trends: New drug fights MRSA

Scientists at Destiny Pharma in the UK hope they have developed a drug which can destroy the most virulent strains of MRSA. Destiny is dedicated to the development of novel antimicrobial products. Their XF series compounds have a mechanism of action that is fundamentally different from all existing antibiotics. As a result, it may offer potential advantages in controlling the drug-resistant bacteria that are becoming more common both in the community and hospital setting. Destiny are currently testing the drug, XF-73, in the clinic and it may potentially be available in hospitals by 2011.

Photo: Destiny Pharmaceuticals

Study results of the new drug, which is applied as a gel into patients’ noses, showed methicillin-resistant Staphylococcus aureus bacteria (MRSA) did not develop resistance to the compound despite being exposed to it 55 times. XF-73 has been extensively studied in vitro and shows great potential. To date, it has shown:

* Rapid bactericidal activity
* No emergence of resistance in stringent multi-passage testing
* Broad spectrum of activity against Gram-positive bacteria, including multiple strains of MRSA

Methicillin-resistant Staphylococcus aureus (MRSA) infection is a global problem. First reported in the early 1960s, MRSA can cause life-threatening infections in patients admitted to hospitals. When such infections occur, they are known as healthcare-associated MRSA (HA-MRSA). Many hospitals in the UK now have MRSA specific teams to handle the infections.

Photograph: BBC

According to the Centers for Disease Control and Prevention (CDC), 57% of Staphylococcus aureus found in US hospitals in 2002 were methicillin-resistant, compared with just 2% in 1974. There has been a dramatic increase in MRSA resistance in the UK from 2% in 1990 to >40% in the early 2000s. Today, 60-70% of all ITU (Intensive Therapy Units) Staphylococcus aureus infections in the US and the UK are methicillin resistant.

Approximately one-third of patients who carry MRSA develop infection, including the more serious invasive infection – which may result in death. The mortality rate from MRSA blood infection is 64% and there has been a 15-fold increase in MRSA-associated deaths since 1993 (see graph below). Unfortunately this is becoming a public health issue on a global scale unless new treatments are developed and marketed to destroy MRSA.

Adapted from "Hospital stays with MRSA infections 1993-2005
Source: AHRQ, Center for Delivery, Organization and Markets, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, 1993-2005."

Tuesday, May 20, 2008

Cervical Cancer: could Pharma companies do more?

Cervical cancer is linked to the human papillomavirus (HPV) and can be prevented by innoculation with a vaccine or detected early by Pap smears. It is not very common in the USA or Western Europe because the introduction of frequent pap smears has reduced its incidence quite considerably.

It is, however, much more common in the developing world. For example, it kills 33,000 women in Latin America and the Caribbean a year, according to a new study. Based on the western experience, better screening and an affordable vaccine for girls could reduce the deaths, which could increase to 70,000 a year by 2030 if nothing is done, according to a recent study.

The study was sponsored by the Sabin Vaccine Institute, the Pan American Health Organization (PAHO), the Centers for Disease Control and Prevention and others. It compiled 15 years of research and is the first major assessment of the effects of the human papillomavirus in the region. The goal of the study was to estimate the burden of the disease on the region and to calculate how many years of life could be saved in each country with Pap smears or affordable vaccines. It is the first major assessment of the effects of the human papillomavirus in the region.

The virus, which is sexually transmitted, and causes most cases of cervical cancer, infects 20 percent to 30 percent of young women in the region, as well as 20 percent of young men.

Not enough cases are detected early, however, so it is a common cause of cancer death in developing countries. In the United States, where Pap smears are a routine part of medical care paid for by health insurance, just 2.5 percent of all cancer deaths among women are from cervical cancer. In Haiti, 49 percent are. In Latin America, the countries with the highest rates were Haiti, Bolivia, Paraguay, Belize, Peru, Guyana, Nicaragua, El Salvador, Colombia and Venezuela (see map above).

A vaccine that prevents infection by the most dangerous strains of the virus costs $360 in the United States, far more than the health systems of most Latin American countries can afford.

"We found scenarios where from an economic perspective, widespread adoption of an HPV vaccine makes sense, but we also wanted to be clear that even at a reduced price, the vaccine would have significant financial implications for national health care systems," said Cuauhtémoc Ruiz Matus, Chief of the Immunisation Unit, PAHO.

Recently, the former Merck CEO, Roy Vagelos noted at a conference that he wished more companies would do more philanthropy. Merck and GSK are two companies who market cervical cancer vaccines (Gardasil and Cervarix). I wonder what efforts they are making globally in Latam and Africa where the disease is very prevalent and preventable?


NY Times
Executive Summary of the study (downloadable report)

Wednesday, May 14, 2008

Market Intelligence: China muscles in on pharma competition

Hot on the heels of news that Wal-Mart and Target have lowered the cost of prescriptions for cheap generics, China is preparing to compete in the generic market.

Reuters reported on the Chinese strategy as follows:

Pharmaceutical information group IMS Health Inc said last year's first okay from the U.S. Food and Drug Administration for a Chinese generic, a copy of AIDS drug nevirapine, was a sign of things to come.

China is already the world's biggest producer of active pharmaceutical ingredients (APIs), the chemical raw materials needed to manufacture medicines, but to date it has not been a significant supplier of finished generic pills.

Zhejiang Huahai Pharmaceutical Co Ltd won a U.S. green light last July to sell generic nevirapine, once the patent held by Germany's Boehringer Ingelheim expires in 2012. At least 10 other Chinese companies are set to follow suit with other generic products, according to IMS. Some could be available as early as this year. The result will be increased competition in a generic drugs industry that is already struggling with tumbling prices.

Overall, the Chinese move is expected to drive down generics prices below current market rates. After the recent heparin scare where questions were raised about the quality of the raw and integrity of materials in China, consumers and healthcare professionals may be nervous.

Sunday, May 11, 2008

Takeda's bid to become a world class oncology player

Takeda recently offered to pay $8.8 billion for Millennium, the Cambridge based Biotech company that manufactures Velcade. The $25/share offer, a hefty premium to Millennium's recent share price, reflects the ongoing demand for new products by pharma and Takeda's drive to be a world-class oncology player. If the deal terms remain the same, Millennium will become the 8th largest market value in the biotechnology industry, roughly twice as much as the next ones in line for takeovers; Cephalon, ImClone, and Vertex.

Takeda is clearly aggressive about becoming a player in the global oncology market. Previously, it had a $640 million two-part, 13-compound deal with Amgen and its even more recent $320 million worldwide deal for Cell Genesys’ GVAX prostate cancer immunotherapy. The tremendous advantage of the dollar’s low value relative to the yen is a major factor why Takeda could afford to pay the 65% premium to Millennium’s closing price, even without a share of the valuable ex-US Velcade rights owned by J&J.

What is Takeda getting for its money? In addition to Velcade, Millennium has 10 drugs currently in clinical trials, primarily focused around oncology and inflammatory bowel disease. The company’s next most advanced product, MLN-0002, an antibody against the gut-specific alpha-4 beta-7 integrin for ulcerative colitis and Crohn’s disease, has yet to enter Phase III clinical trials and isn’t likely to be approved before 2011 or 2012 so the pipeline is very much a long term project, something the Japanese are renowned for.

It also means it gets to rebuild a pipeline. By acquiring Millennium, Takeda will help address a short term revenue problem. The patents on two of Takeda's biggest-selling products, ulcer drug Prevacid and diabetes treatment Actos, expire in 2009 and 2011, respectively. Revenue from Millennium's sole marketed product is growing quickly and is widely expected to reach as much as $345 million this year.

In addition, sales of Velcade could get another big boost this summer when the FDA rules on an application from Millennium to sell the drug as a first-line treatment for multiple myeloma. Currently, the drug's labeling indicates it should be used only as second-line treatment. A label allowing for broader usage of the drug would likely result in more patients using Velcade for longer periods of time and generate more revenues.

Tuesday, May 6, 2008

Market trends - cheaper drug prices in US

Walmart announced yesterday that it was lowering the cost of a number of a broad range generics to $4 or $5 for a months supply and $10 for some on 90 days supply. These include generic anti-hypertensives, anti-cholesterol agents as well as may others, including even cancer drugs such as tamoxifen.

No doubt Target and K-Mart are forced to follow suit in order to compete.

The days of US citizens having to surreptitiously order and pay for prescriptions through Canadian internet pharmacies may be under threat.

Meanwhile, the several companies continue to kick the pharma industry while it's down, profiting off the patent losses of others and further extending their grip on the generic marketplace.

As healthcare costs continue to rise in the United States and big pharma companies watch their pipelines dry up, generic companies such as Teva Pharmaceuticals are doing well with a number of products that have recently gone off patent, such as the multiple sclerosis drug, copaxone. Aventis held the original approval, but since it went off patent, Teva manufactured Copaxone (glatiramar acetate), which passed over $500M in quarterly sales.

Monday, May 5, 2008

Exelixis - an interesting oncology biotech

There are a number of small biotechnology companies focusing on developing novel oncology compounds, but one that caught my eye recently was Exelixis, in South San Francisco.

Exelixis have quietly built up a decent sized portfolio focusing on oncology, mostly phase I and II small kinase inhibitors, which target a particular protein defect such as VEGF, EGFR, IGF-1R etc.

Rather than take on a large commitment to building a sales and marketing organisation, they have chosen to license the products to big pharma/biotechnology companies such as GSK, BMS and Genentech. Their strength is in research and development, so that's what they are focusing on. If the products do well, they will reap the benefits in terms of royalties and milestone payments, creating more cash to invest in R&D.

One to watch out for.

Saturday, May 3, 2008

Market Intelligence: Pharma drug pricing

Roy Vagelos, former CEO of Merck was moved this week to comment:

“There is a shocking disparity between value and price, and it’s not sustainable. The industry will bring about government price controls which will be devastating for the industry… I don’t care what the cost is, it’s inappropriate. The industry has a black eye. And the market will correct that.”

Mick Huckman reported on the presentation on his CNBC blog.

A victory for common sense.

Vagelos did say that "Most drugs are a terrific bargain." He also believes that high prices are justified if the drug offers high value. The challenge is that greed and delusion by a few irresponsible companies will inevitably lead to not only broader price controls in the US, but much tougher regulatory hurdles such as the UK's NICE, which demands companies demonstrate pharmacoeconomic benefit, in addition to safety and efficacy.

How can anyone justify spending $50,000 for extending someone's life for less than 6 months?

That is a moot point only the patient and their family can decide.

Thursday, May 1, 2008

Market trends - J+J woes lead to more cuts

Johnson & Johnson notified employees on Tuesday that it will consolidate the sales and marketing operations of two subsidiaries, Ortho Biotech and Centocor, leading to roughly 400 job cuts nationwide.

The move is a response to the declining sales of a class of anemia drugs that includes Johnson & Johnson's Procrit, a company spokesman said. Prescriptions for Procrit fell sharply last year after the Food and Drug Administration placed new safety warnings on the agents, known as erythropoiesis-stimulating agents.

The move is a response to the declining sales of its Procrit anemia drug, a spokesman told the New Jersey Star Ledger. Procrit prescriptions fell sharply last year after the FDA issued new safety warnings, which were also placed on anemia therapies sold by Amgen.

Earlier this year, an FDA panel recommended that current use should be restricted over concerns the drugs can increase the risk of tumor growth and death. The Oncologic Drugs Advisory Committee (ODAC) did decide not to completely restrict the use in cancer patients, but recommended that anemia drugs should not be used in patients with metastatic breast cancer or cancer of the head and neck.