FiercePharma

Astellas scores highest in Japanese M&A bout

Tracy Staton — Fri, 03 Feb 2012 09:33:56 -0500

Japan’s biggest pharma players have been roaming the world in recent years in a restless search for new acquisitions. They've been looking for deals to put an extra oomph into their earnings. Now The Wall Street Journal is reviewing the biggest buyers and seeing who scored the juiciest gains, and who harvested bitter losses.

Astellas Pharma, which acquired OSI Pharmaceuticals in 2010, comes out on top. A big reason is OSI's cancer drug Tarceva, which racked up a 55% increase in sales for the 9 months through December. The biggest loser: Daiichi Sankyo, which has been wrestling with a major league headache after its deal to acquire a majority of Ranbaxy left it with a mountain of manufacturing woes. Its $500 million provision to settle the issue is driving a 79% plunge in annual net profit.

Takeda Pharmaceutical is slated for the next big test after completing the $13.7 billion deal for Nycomed. As the WSJ notes, Takeda is pushing through a rapid streamlining effort to bring down some hefty costs. But it's also seen a big jump in emerging market sales--a key criterion for success in the Big Pharma world.

- see the story in the WSJ

Mediator probe rolls on with searches at Afssaps, executives' homes

Tracy Staton — Fri, 03 Feb 2012 09:30:10 -0500

The Mediator scandal in France continues as investigators searched the offices of healthcare regulators Afssaps and the homes of several of its executives. The agency faced a public outcry over its decision to keep the weight-loss drug on the market years after it was pulled in other countries. Report

FDA talks, but doctors don't necessarily listen

Tracy Staton — Fri, 03 Feb 2012 09:13:06 -0500

Poor FDA. It takes flak every time a drug spawns unexpected side effects. But when it tries to warn doctors about those side effects--and offers advice for preventing them--few physicians are listening. As AMedNews reports, researchers looked at 16 drugs that got new label warnings or were mentioned in "Dear Doctor" letters from 1990 to 2010. And they found that doctors' behavior often changed very little after those cautionary tales were told.

When the FDA recommended that patients using atypical antipsychotics--such as Eli Lilly's ($LLY) Zyprexa and AstraZeneca's ($AZN) Seroquel--be monitored for signs of diabetes, rates of blood-sugar testing in those patients didn't increase, AMedNews reports. When the agency repeatedly warned against combining the acid-reflux remedy Propulsid with the blood-pressure pill Atacand, prescribing habits didn't change for 18 months.

In other cases, the study found, warnings did change behavior--but not in the way FDA intended. Warnings against antipsychotic use in dementia patients ended up affecting prescription levels for on-label use in psychiatric patients.

The FDA's red flags were most effective when the messages were clear and communicated repeatedly, the study found. That conclusion prompted co-author G. Caleb Alexander to suggest borrowing from Big Pharma's marketing playbook. "The agency might learn a thing or two from the pharmaceutical firms that it regulates with respect to risk communication," Alexander told AMedNews. "They should be using principles of market segmentation to identify high-volume prescribers and then disseminating or conducting messaging of drug risks to those specific physicians."

- see the AMedNews story
- get more from HealthWorks Collective

Gloom for the pharma industry, yes. Doom? No

Tracy Staton — Fri, 03 Feb 2012 08:49:38 -0500

AstraZeneca's ($AZN) layoffs announcement yesterday touched off more than its share of hand-wringing. It may be a straw-that-broke-the-camel's-back case; this shedding of 7,300 jobs follows a spate of payroll-cutting news from Novartis ($NVS), Sanofi ($SNY), Teva Pharmaceutical Industries ($TEVA), Takeda Pharmaceutical, and more. And it adds to AstraZeneca's already daunting total of 21,000-plus since 2007.

Still, so many government officials and media outlets have been aflutter about the news that the Association of the British Pharmaceutical Industry felt the need to issue a statement: No, AstraZeneca's job cuts don't signal doom for the U.K. pharma industry. The company's restructuring, ABPI helpfully points out, is global. WBB Securities analyst Steve Brozak went so far as to tell the AP that the industry's situation is "suicidal."

Just take a look at this quarter's pharma earnings for more evidence on that score. The majority of drugmakers are expecting a lackluster year at best, with slight to no sales growth. Some expect revenues to drop. Others predict earnings increases, but only on the back of cost-cutting. AstraZeneca is just one company that announced another round of dividend increases and share buybacks to keep investors interested.

The problems are familiar to anyone who's been following pharma. Patent expirations on the industry's biggest-selling drugs. Pricing pressures from austerity-minded European governments. New Medicare rebates in the U.S. Ever-more-challenging R&D, with higher costs and fewer successes. "It's just an immensely challenging time for big pharmaceutical companies," EvaluatePharma CEO Jonathan de Pass told the BBC. "Their whole business model is under huge strain--the whole research model is under pressure."

Thing is, though, that the industry has been preparing for this ugly scenario for years. Knowing they would lose billions in sales to generic competition, companies have either diversified into related businesses--eye care, consumer health--or broadened their geographic reach, or brought in promising new products, or all of the above. Those who haven't moved into other businesses have focused more tightly on their cores. Most have put more effort into specialty drugs, even meds targeted at very small, genetically selected populations.

Some drugmakers have been more successful than others. Some will no doubt disappoint their stockholders. But others are sloughing their way through this year on their way to upward-facing sales trends. It's deciding which is which that's the real challenge.

- see the ABPI statement
- read the Guardian story
- get more from the BBC
- check out the AP piece

Botox delivers for Allergan, Dr. Reddy's sees big profit increase during quarter

Liz Jones Hollis — Fri, 03 Feb 2012 08:36:20 -0500

Another day, another round of earnings calls. Today's roundup includes Allergan, which received a boost from Botox, a widely known wrinkle-fighter that is now garnering approvals around the world for a number of therapeutic uses. Also profiled is rising generics company Dr. Reddy's, which posted its biggest quarter ever. Gilead Sciences and Vertex Pharmaceuticals wrap up the profiles with both boasting gains during the fourth quarter and full-year 2011.

Botox was big news for Allergan ($AGN) in Q4 and full-year 2011--particularly for its increasing number of therapeutic uses. For the year, therapeutic sales of the drug accounted for about 51% of total sales of the med, the company says in a release. The company got two regulatory wins in Canada at the end of the year, with the health officials there approving Botox as a prophylactic treatment for headaches in adult patients with chronic migraines and subsequently as a therapy for a certain type of urinary incontinence. Also, don't look for the company to rely on big revenues from the U.S. in coming years. Like others in Big Pharma, it will instead look to make strides in Asia (especially China), Reuters notes. "China is going to grow very quickly over the next decade. We are starting somewhat late; Botox was only approved over a year ago and therefore levels of penetration are low," Ian Bell, corporate VP and president for Asia-Pacific, told the news service. Allergan release | Story

Dr. Reddy's Laboratories ($RDY) raised some analysts' eyebrows with an 88% rise in third-quarter consolidated net profit. This number represents its highest-ever profit, the company says in a statement. It credits the launch of its generic version of Eli Lilly's ($LLY) schizophrenia med Zyprexa (olanzapine) 20 mg in the U.S. as helping it achieve this goal. And it could be the U.S. that helps the company going forward. "The numbers are ahead of estimates simply because of the marketing exclusivity for generic Zyprexa in the U.S., while other regions are just in-line with expectations," Pinc Research analyst Sushant Dalmia explains, according to Reuters. "Going forward, the U.S. should continue to grow strong and would be a saviour ... while other regions are facing (growth) troubles." Dr. Reddy's release | Report | News

Gilead Sciences ($GILD) saw total revenues for the fourth quarter of 2011 increase 10% to $2.2 billion. Product sales increased 11% for the quarter driven by growth in the company's antiviral franchise, which includes Atripla and Truvada. But despite its gains, analysts had expected a little more, as the company's earnings came in below Street estimates, RTTNews notes. Still, as ISI Group analyst Mark Schoenebaum points out, R&D expenses were higher than expected. "Overall, good top-line quarter, but expenses rose faster than expected," he told Investor's Business Daily in an email. Gilead release | More | Item
Fresh off the FDA's approval of its cystic fibrosis therapy Kalydeco, Vertex Pharmaceuticals ($VRTX) has reported a big increase in total revenues for Q4 2011 compared with the same period in 2010--$563.3 million versus $65.5 million. Vertex can thank its probable hepatitis C blockbuster Incivek for its gains--the med brought in net revenues of $456.8 million. In addition, the company's net income for the fourth quarter of 2011 was $158.6 million, compared with a net loss in 2010 of $180.4 million. And the company is vowing to push on in 2012. "We will continue to advance our pipeline of eight other potential medicines and expect to generate proof-of-concept data for many of these programs throughout 2012," said Jeffrey Leiden, Vertex president and CEO, in a statement. Vertex statement

As blockbuster drugs fade, so does TV advertising

Tracy Staton — Fri, 03 Feb 2012 08:06:06 -0500

The DTC juggernaut is weakening. As The New York Times reports, industry spending on TV ads fell by 2% in 2011, the fourth consecutive year of decline. Altogether, TV spending is down 20% from 2007 levels. While it's quite a turnabout from the run-up in drug-brand advertising over the previous decade, the dwindling TV ad budgets aren't a huge surprise.

After all, the advent of pharma advertising on TV coincided with a wave of new mass-market medications that would lift brand revenues to unprecedented heights. Merck's ($MRK) cholesterol pill Zocor and Pfizer's ($PFE) Lipitor; Sanofi ($SNY) and Bristol-Myers Squibb's ($BMY) blood thinner Plavix; Sanofi's sleep drug Ambien; GlaxoSmithKline's ($GSK) antidepressant Wellbutrin (now marketed by Valeant Pharmaceuticals ($VRX)); Merck's Fosamax... the list goes on. Not coincidentally, it's these very drugs that have been falling off patent--or soon will--as brands accelerate over that cliff through 2014.

The New York Times points out advertising controversies may have played a role in the DTC decline. It can't have helped, for instance, the heavily advertised Vioxx and Avandia both ended up facing big safety scandals. Plus, payers have grown increasingly aware that ads push patients toward newer--and thus more expensive--products. And then there's the TV viewers' lamentation about erectile dysfunction drug ads during prime time, which ended up prompting Eli Lilly ($LLY), which makes Cialis, and Pfizer, which boasts that little blue pill, to release their commercial scheduling in advance.

But by far the biggest driver has to be the dwindling stable of mass-market blockbusters. Between 2007 and 2012, drugs worth some $63 billion in sales lost market exclusivity. And between 2011 and 2015, the NYT says, the total is $100 billion. Drugmakers have been laying off sales reps by the thousands, because detailing those fallen brands isn't necessary, and the specialty drugs of the future are highly targeted, so they can be handled by fewer reps. Same goes for TV ads: As fewer new primary-care drugs hit the market, there's less need to reach the masses with commercials.

- get the blog post from NYT

Novo amps up 2012 expectations on strong Victoza sales

Tracy Staton — Thu, 02 Feb 2012 12:22:18 -0500

Novo Nordisk ($NVO) boosted its sales outlook for 2012 after sales of the diabetes drug Victoza more than doubled to 2.1 billion crowns, beating analyst estimates. It's counting on new long-acting insulins that are awaiting approval to help it compete with Amylin Pharmaceuticals' ($AMLN) newly approved weekly injection Bydureon. Report

Novartis investor group urges vote against Vasella's pay

Tracy Staton — Thu, 02 Feb 2012 12:17:45 -0500

Daniel Vasella (photo) is wearing a bulls-eye again. The Novartis ($NVS) chairman is drawing fire for collecting a multimillion-dollar compensation package, just a few months after activists literally showed up on his doorstep to protest company layoffs. And it's far from the first time that Vasella has faced indignation over his pay.

The latest complaints come from the shareholder group Ethos, which is calling for Novartis shareholders to vote against compensation committee members up for re-election to the board. Lodging votes against the two men--William Brody and Srikant Datar--would be a way for shareholders to object to Vasella's 2011 compensation of $14.8 million during a year in which the company has no official scheduled say-on-pay vote. Ethos director Dominique Biedermann says Vasella earns "a million Swiss francs a month, which goes too far."

Some 38% of the Swiss drugmaker's shareholders voted last year against Vasella's 2010 compensation plan, which included a $12.2 million one-time retirement payment that Ethos deemed "scandalous" at the time. In 2010, a Swiss proxy advisor took issue with Vasella's 2009 bonus of almost $6 million, saying it was about $3.8 million above par.

- read the Reuters news

Special Report: Daniel Vasella - 2010 CEO Pay

GSK resolves 20K more Avandia lawsuits, lawyer says

Tracy Staton — Thu, 02 Feb 2012 11:25:18 -0500

GlaxoSmithKline ($GSK) has reached a deal to settle another 20,000 lawsuits over its diabetes drug Avandia, a lawyer for the plaintiffs told Bloomberg. The settlement came out of court-ordered mediation, attorney Paul Kiesel said, and included one case that had been set for trial in a state court in Los Angeles.

The Avandia litigation has been dragging on for years. Waves of new suits were filed after studies linked the drug to risks of heart attack and stroke and again after U.S. regulators decided to tightly restrict its use. (European regulators pulled Avandia off the market at the same time.) As Bloomberg notes, the company has already agreed to pay $700 million to wrap up 15,000 patient claims that Avandia caused their heart attacks and strokes.

The latest settlements "are covered by existing provisions and those payments will be funded through existing cash resources," GSK spokeswoman Bernadette King told the news service. Last January, the company said it would set aside $3.4 billion to cover the Avandia litigation and provide for settlements in U.S. government probes of its marketing practices. That legal provision came on top of a $2.4 billion Avandia-related legal charge taken in July 2010.

- read the Bloomberg story

Merck's diabetes drugs offset Remicade sales decline

Tracy Staton — Thu, 02 Feb 2012 10:46:50 -0500

Merck ($MRK) managed to beat analyst estimates for fourth-quarter profits and supply slight sales growth of 2%. That's saying something during a quarter when some drugmakers saw profits drop by half or more. But the company is forecasting a relatively flat 2012, and analysts say the year won't be easy. "They face lots of pressure in 2012," Aparna Krishnan of IHS Global told Bloomberg. "It is going to be very challenging."

The biggest short-term challenge is replacing revenues soon to be lost when Merck's asthma drug Singulair--far and away its top seller, with $1.5 billion in Q4 sales--faces generic competition later this year. The company can't count on growth of its arthritis drug Remicade; sales fell by 28%, now that a marketing partnership with Johnson & Johnson ($JNJ) has been renegotiated. The cholesterol drug Vytorin also slipped, with a 16% decline in sales for the period.

Merck's diabetes franchise looks promising, however; as Reuters notes, Januvia sales grew by 42% to $960 million, and its sister pill Janumet grew by 34% to $386 million. The human papillomavirus shot Gardasil also posted solid gains, with a 24% increase to $274 million. And the AIDS fighter Isentress grew by 24% for the quarter, 25% for the year, to $387 million and $1.36 billion, respectively.

Some changes on the expense side raised eyebrows: The company's sales and administrative spending came in at $141 million above expectations. Fortunately for Merck's EPS numbers, that spending was counterbalanced by R&D expenses that were $145 million below forecasted levels.

- get the release from Merck
- check out the Reuters news
- read the Bloomberg story
- see the WSJ piece

Special Report: Merck - 10 Largest U.S. Patent Losses