Genentech and Roche

The recent news that Roche are looking to purchase the remaining shares in Genentech has certainly caused a a big stir in the Pharma industry.

One of the main reasons the partnership blossomed was because Roche left Genentech largely alone and they had very clear marketing distinctions with Genentech responsible for the US and Roche handling the rest of the world.

The two cultures are very different with a conservative Swiss company versus a dynamic US biotech, so it will be interesting to see what happens. If the deal goes ahead, the big question is will Roche continue to leave them alone, or will it change the relationship?

This looks a good deal for Roche on paper, but if I were Genentech, I'd probably be a little nervous; will the creativity and dynamism go down the pan if it become more integrated with a big Pharma company?

Time will tell on both fronts.

Lilly to acquire SGX Pharmaceuticals

In a surprise announcement, Lilly declared today that they have signed a definitive merger agreement with SGX Pharmaceuticals in an all-cash transaction. Under the terms of the agreement, Lilly will acquire all of the outstanding shares of SGX common stock at a price of $3.00 per share, for a total value of approximately $64.0 million. Lilly were one of the existing companies who had partner deals with SGX.

SGX is a biotechnology company based in San Diego. It is focused on oncology drug discovery and development.

The acquisition will give Lilly an opportunity to integrate SGX's structure-guided drug discovery platform into its drug discovery efforts. It will also give them access to FAST™, SGX's fragment-based, protein structure guided drug discovery technology, and to a portfolio of pre-clinical oncology compounds focused on a number of high-value kinase targets.

One of the promising agents, SGX393, may be active in Gleevec resistant T315I mutations in CML, which are also resistant to other therapies currently available including Tasigna (nilotinib) and Sprycel (dasatinib).

The acquisition, if successful, will give Lilly a promising oncology pipeline for the future.

Source:

Lilly

Merck buys theatre advertising for cancer vaccine ads

Has anyone seen the ads in US cinemas for Gardasil?

Apparently, Merck purchased ad time from May 30th through June 26th. The commercial will run during the trailers before SATC but also at screenings of The Incredible Hulk, Get Smart, The Happening and You Don't Mess with the Zohan among others. They're all films that will potentially attract the 19 to 26-year-old females, the likely target for the vaccine shots.

Merck is also hoping the Food and Drug Administration will soon approve Gardasil for women into their 40s, so perhaps the SATC campaign is also intended for them?

The company plans to file for the FDA approval of Gardasil for young men and boys who can carry and transmit HPV. Given the selection of summer movies Merck's marketers have made, I suspect the commercials are an attempt to raise awareness among guys as well.

Interesting approach.

Meanwhile, GSK are winning the battle for Europe, snapping up the tenders with it's cervical cancer vaccine, Cervarix. Unfortunately, Cervarix doesn't protect against genital warts although Gardasil does.

FDA and EMEA to Consider Additional Test Results When Assessing New Drug Safety

In the first use of a framework allowing submission of a single application to the two agencies, the Food and Drug Administration (FDA) and the European Medicines Agency (EMEA) worked together to allow drug companies to submit the results of seven new tests that evaluate kidney damage during animal studies of new drugs. The tests measure the levels of seven key proteins or "biomarkers" found in urine that can provide additional information about drug-induced damage to kidney cells, also known as renal toxicity.

The new biomarkers include KIM-1, Albumin, Total Protein, β2-microglobulin, Cystatin C, Clusterin, and Trefoil Factor-3. Both FDA and EMEA have long required drug companies to submit the results of two blood tests, called blood urea nitrogen (BUN) and serum creatinine, to evaluate renal toxicity. In addition to those tests, the FDA and EMEA will now consider results from the seven new tests as part of their respective drug review processes. A decision by the sponsor to collect information using the new tests is voluntary, if collected, it must be submitted to FDA.

Such human tests could one day open the door to the approval of more powerful drugs, especially for diseases where renal toxicity currently prevents promising experimental drugs from being approved. With more sensitive tests for renal toxicity, FDA could approve such drugs because health care professionals could closely monitor patients and halt the drug if early signs of renal toxicity appear.

Development of the new biomarkers was led by the Predictive Safety Testing Consortium (PSTC), whose members include scientists from 16 pharmaceutical companies. The PSTC was organized and led by the Critical Path Institute, a nonprofit organization that works to support FDA research collaborations that improve the development of medical products.

Researchers from Merck and Novartis AG identified the new biomarkers, tested them to prove their accuracy and usefulness, and then shared their findings with the other consortium members for further study. The consortium subsequently submitted applications for use of the biomarkers to FDA and EMEA.

The project is the first in which a group of drug companies has worked together to propose and qualify new safety tests and then present them jointly to the FDA and EMEA for consideration. The FDA and EMEA laid the groundwork for these specific joint-agency biomarker reviews in 2004 when they developed a framework called the Voluntary Exploratory Data Submission review process.

The new process allowed the PSTC to submit a single biomarker data application to both regulatory agencies, and then to meet jointly with scientists from both agencies to discuss it in detail and to address additional scientific questions posed by the regulators. Each regulatory agency then reviewed the application separately and made independent decisions on use of the new biomarkers.

Big pharma and innovation

The next few years are likely to be tough for the pharma industry with a number of blockbusters going off patent and pipelines looking thinner than usual across the board. Companies are looking at ways of driving the innovation process.

The FT reported that Patrick Vallance, the head of drug discovery at GlaxoSmithKline, saying research at the company would be reorganized to become 'more biotech-like' in efforts to stimulate innovation. The plan was to split drug discovery into small units focused on specific disease areas, reward people based on successful 'value creation', while providing 'disincentives' against destroying value.

Meanwhile, Pfizer and the University of California, San Francisco (UCSF), announced a partnership in which the company will contribute $9.5 million to early-stage research at the university over the next three years.

Usually, industry funding targets specific projects, but in this case, researchers at the UCSF's Institute for Quantitative Biosciences will collaborate more broadly with the company, with both parties working together to identify promising ideas in different health disciplines. The academic researchers and their institution will retain patents to any inventions, while Pfizer will have the right to negotiate licenses on the technology.

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.

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."

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.

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.

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.

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.

Market intelligence: Genentech's Rituxan fails late stage trials in Lupus

Genentech, Inc. (NYSE: DNA) and Biogen Idec, Inc. (Nasdaq: BIIB) announced today that a Phase II/III study of Rituxan® (rituximab) for systemic lupus erythematosus (SLE, commonly called lupus) did not meet its primary endpoint defined as the proportion of Rituxan treated patients who achieved a major clinical response (MCR) or partial clinical response (PCR) measured by BILAG, a lupus activity response index, compared to placebo at 52 weeks. The study also did not meet any of the six secondary endpoints. Genentech and Biogen Idec will continue to analyze the study results and will submit the data for presentation at an upcoming medical meeting.

The Phase II/III randomized, double-blind, placebo-controlled, multi-center study was designed to evaluate the efficacy and safety profile of Rituxan in patients with moderate-to-severe SLE on a background immunosuppressant. This study excluded patients with lupus nephritis (LN). A total of 257 patients from approximately 55 sites in the U.S. and Canada were randomized 2:1 to receive Rituxan plus prednisone or placebo plus prednisone in two infusions 15 days apart. The patients were retreated six months later with the same regimen. Patients were evaluated for efficacy every four weeks for 52 weeks. The majority of patients are being monitored to Week 78.

The primary endpoint of the study was the proportion of patients who achieved either a Major Clinical Response (MCR) or Partial Clinical Response (PCR) using the BILAG instrument at 52 weeks. Additional endpoints included: time adjusted area-under-the-curve minus baseline of BILAG score over 52 weeks; proportion of patients who achieve a MCR, and proportion of patients who achieve a PCR (including MCR) at Week 52; proportion of patients who achieve BILAG C or better in all domains at Week 24; time to moderate or severe flare over 52 weeks; change in SLE Expanded Health Survey physical function score from baseline at Week 52; and proportion of subjects who achieve a MCR with 10 mg prednisone per day from Weeks 24 to 52.

The news has not pleased investors and the stocks are diving as a result because the negative result has implications beyond Rituxan. The company has been developing a second-generation anti-CD20 antibody, ocrelizumab, which has the same mechanism as Rituxan, and is currently in Phase III for RA and Phase II for MS. This drug is being developed as a more benign version of Rituxan for use in patients witw non-life-threatening conditions, including the autoimmune diseases. Rituxan, a more potent drug, was unable to meet a single endpoint in this trial, and failed in MS, so the lupus news does not instill confidence in the prospects for the next-generation version, making investors wary and nervous about the future of the pipeline. In addition, there have been no new significant treatments for this debilitating disease for nearly 30 years.

Market intelligence - more layoffs, this time Wyeth

On Friday, Wyeth apparently announced to its employees that another 1,240 sales positions were being eliminated as part of an internal cost cutting program called "Project Impact".

These are troubled times in the Pharma industry and Wyeth appears to be no different. The FDA recently approved its Pristiq antidepressant, but company has experienced various challenges with its pipeline. Over the past year, the FDA has declined to approve a drug, demanded more data or required a new patient study.

In addition, its recently marketed new oncology product, Torisel, was third to market in renal cell cancer behind Nexavar and Sutent. Meanwhile, Wyeth expects generic competition for the Protonix, one of its biggest drugs with sales of $1.9 billion for heartburn. The outlook looks gloomier rather than optimistic so far.

Company market intelligence - GSK, Sirtris

GlaxoSmithKline have made an offer for Sirtris - $720 million, a hefty premium (84%) to what the company was trading for previously.

Sirtuins are emerging as potential therapeutic target to treat diseases such as aging, metabolism and stress tolerance. Amongst genes that have been shown to affect aging in model organisms, sirtuin genes are unique in that their activity level is positively correlated with lifespan (i.e. they are anti-aging genes).

For example, there are seven human Sirtuins (SIRT1-7) that display diversity in cellular localization and function. Growing evidence suggests that small-molecule activators of SIRT1 may counteract age-related afflictions such as type 2 diabetes. Inhibitors of SIRT2 may be useful in the treatment of neurodegenerative diseases such as Parkinson's disease. Recent discoveries of small-molecule and protein modulators of Sirtuin deacetylation activity have provided insight into the biological and molecular functions of Sirtuins and have validated their potential as therapeutics.

Sirtuin 1 (SIRT1) in cells may have a role in regulating important aspects of mitochondrial biology. Mitochondria have been linked to aging, and also to diseases of aging. Thus, sirtuins might provide a key link between mitochondrial dysfunction, aging and metabolic disease.

Essentially, GSK are betting that this biochemical pathway will turn out to be critical for chronic aging diseases and therefore will generate future revenues by slowing the aging process.

While this novel concept may offer huge potential, it will also have some interesting challenges along the way for GSK and Sirtris to navigate. Imagine how might the FDA approach a a drug for aging and life extension? How would you design a Phase II trial for longevity? How long would it take? What are the clinical endpoints and measurables of clear benefit? Then it all starts to get very murky and uncertain from a regulatory perspective.

A cynic might, however, wonder whether GSK laid off a large number of employees so they could have this injection of cash (because as Dilbert's boss says "firing employees is like printing money") to bid for Sirtris.

The science I'm very impressed with, the corporate shenanigans considerably less so.

Company market intelligence - Merck

Hot on the recent Vytorin debacle comes another disappointment for Merck after the FDA issued a non-approval letter for Cordaptive (MK-0524A) yesterday. The good news, however, was that the EU authorities approved it, but the US market clearly remains sceptical. Merck did not elaborate on the reasons for the FDA's rejection.

Cordaptive is a combination drug that contains an extended-release form of niacin, a vitamin, and a chemical called laropiprant to stop flushing, a dilation of blood vessels that causes redness and an unpleasant burning sensation on the neck and face. Flushing is a common side effect of niacin-based drugs, and the biggest reason many patients stop taking current products, including Niaspan.

Given the failure of Pfizer’s torcetrapib, the current market news is hardly surprising. The Pfizer pill caused unexpected deaths, and a recent Cordaptive study revealed an increase in liver enzymes and had an impact blood sugar for diabetics.

Abbott are likely to be happy with the news - their related cholesterol medication, Simcor, was approved 2 months ago. Simcor was also a combination product, simvastatin and niacin; both components have separately demonstrated an ability to reduce heart attacks and death.