Thought for the Day

The dog days of summer have ended and the pharma industry heads into the Fall season leaner and focused on year end targets. 'Tis is the season for getting things done.

There haven't been any blockbuster breakthroughs yet this year in the oncology or hematology space, but AACR, ASH and the San Antonio Breast Cancer conferences have yet to come.

I wonder who the eventually winners and losers for 2008 are going to be?

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.

The other side of cancer vaccines...

Recently, there has been quite a surfeit of information in the news about various vaccines such as Oncophage, Gardasil and Cervarix.

In theory, they sound promising either as protection from cancer developing, as in the case with the HPV vaccines for cervical cancer or as maintenance therapy after initial treatment with other agents or surgery, as with other vaccines.

There are downsides though, as Merck are discovering this week. CBS, CNN and other news channels are running stories on Gardasil's side effects including paralysis and wart outbreaks. That's not good news for a company that has gone through the scandals associated with Vioxx and Vytorin, followed by an ongoing battle with the FDA over the approval of Cordaptive.

Meanwhile, the WSJ reported that Wall Street had become a little nervous with news of flattening sales and thus the stock price took a hit. The stories of serious adverse events may lead to further skittishness over the next few weeks until they are addressed with robust data.

This is a big headache all around for a pharma company and a PR nightmare. Once stories get out about serious adverse events, more often come out of the woodwork.

Panel urges stricter diabetes testing

Yesterday, a panel of FDA advisers voted 14-2 that the FDA should require drug makers to show that experimental diabetes drugs don’t increase cardiovascular risks.

If the FDA takes the panel’s advice, it could be more expensive for drug makers because it takes a much bigger, longer trial to prove heart safety than to prove blood-sugar control.

AstraZeneca and Bristol-Myers Squibb could be on the short list of those affected by any changes; the companies are planning to submit their diabetes drug saxagliptin for FDA approval soon.

Merck could benefit from the changes because its diabetes drug Januvia has already been approved, and would compete with saxagliptin, which is in the same class.

GlaxoSmithKline’s Avandia found itself at the center of a storm last year after an analysis suggested the drug raised the risk of heart attacks. The company claims the drug is safe, and it remains on the market, at least for now. Ironically, that debate may well have led to the FDA being pressured to reconsider how it approves diabetes medications.


Sources:

FDA
CNN

Can the pathogenesis of pulmonary hypertension be reversed?

Pulmonary hypertension (PH) is diagnosed by observing an elevation in mean pulmonary arterial (PA) pressure above 25 mmHg at rest or 30 mmHg with exercise. Patients usually present with much higher levels of PA pressure, but only vague and insidious symptoms of increasing fatigue and dyspnea. Some patients are diagnosed only after syncopal episodes.

Category I PH, also known as PA hypertension (PAH), includes idiopathic PAH (IPAH), familial PAH (FPAH), and acquired PAH (APAH).



Recent research has suggested that it might be possible to reverse the pathology of pulmonary arterial hypertension (PAH), a disorder that can be rapidly progressive and fatal despite current treatments including prostacyclin.

The role of chronic inflammation and autoimmunity will be important in the development of novel models of PAH. Emerging treatments for the disease are currently aimed at inducing apoptosis of abnormal vascular cells that obstruct blood flow and also at promoting regeneration of “lost” distal vasculature.

Sources:

J. Clin. Investigation

New clue to Alzheimer's found in brain protein

It has been known for a while that the brains of people with the memory-robbing form of dementia are cluttered with a plaque made up of beta-amyloid, a sticky protein that accumulates in the neurons of the brain.

The big question, however, was whether this is a significant cause of the disease or a side effect.

Other suspects included tangles of a protein called tau; some scientists thought this was the cause.



Researchers at Harvard Medical School have begun to address these issues and look at what caused Alzheimer's symptoms in rats by injecting them with one particular form of beta-amyloid. Injections with two other forms of beta-amyloid did not cause dementia, which may explain why some people have beta-amyloid in their brains but do not show disease symptoms.

The injected rats had impaired memory function, especially for newly learned behaviors. When the mouse brains were inspected, the density brain cells was reduced by 47 percent with the beta-amyloid seeming to affect synapses, the connections between cells that are essential for communication between them.

If the results are confirmed in humans, they this discovery may lead to interesting new therapies to either remove, reduce or prevent the build-up of the particular form of beta-amylin that causes dementia.

News coverage from CNN

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.

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."

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?


Sources:

PAHO
NY Times
Executive Summary of the study (downloadable report)

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 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.

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 - 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.

Amgen oncology franchise in free-fall?

Amgen announced their 1st quarter performance last week, and the results aren't pretty.

Sales of their growth factor franchise are suffering as Aranesp and Epogen revenues continue to decline since the FDA reviewed the risks associated with such therapies in March 2007.

There was a sequential (4Q07 to 1Q08) drop of $66 million and $84 million respectively. The FDA has yet to announce its new guidelines (read restrictions) on the use of the drugs on certain cancer patients who get fatigued from chemo, which could put even more pressure on sales. This is not good news for the already disgruntled shareholders.

The company is currently going through a major cost cutting and restructuring program. New product launches are needed to boost confidence and enthusiasm. The next likely candidate for approval, denosumab (D-Mab) for fracture data in postmenopausal osteoporosis, may contribute to the bottom line but whether it has the potential for blockbuster status remains to be seen.