News

Pfizer abandons Viagra suit against Lilly

Tracy Staton — Thu, 18 Mar 2010 10:43:45 -0400

Pfizer agreed to drop an 8-year-old patent infringement lawsuit against Eli Lilly over Viagra after a U.S. government agency rejected part of the male impotence drug's patent. Report

Novartis move clears threat to Advair

Tracy Staton — Thu, 18 Mar 2010 10:40:21 -0400

The folks at GlaxoSmithKline must be celebrating today: Rival Novartis has handed back U.S. rights to a drug that might have become a copycat version of the GSK blockbuster Advair. That move gives Glaxo one less problem to worry about.

GSK chief Andrew Witty has been pooh-poohing the potential of generic rivals to that best-selling lung drug, which accounted for $7.6 billion in 2009 sales. The inhaled drug isn't easy to make, Witty has said, making it even tougher to copy. For that reason, it called on the FDA to set strict standards for any generic form of the drug.

Nonetheless, Novartis and others have been working on their versions; after all, even a daunting task is worth it when billions in sales are at stake. With Novartis handing the rights to an experimental compound--presumed to be copycat Advair--back to Vectura Group, that removes one potential rival; analysts say Vectura doesn't have the resources to come up with copycat Advair on its own.

Despite the news, Vectura expressed confidence this morning. "Regaining complete ownership of the VR315 U.S. program is in line with this strategy and offers Vectura significant financial advantages. We are confident that we have the high level of expertise required to develop and successfully commercialise inhaled products, and with a robust balance sheet, we believe we have the ability to gain an enlarged share of a major market opportunity," Chris Blackwell, chief executive of Vectura, says in a statement.

And it could be a sign that others will eventually give up, too. "For Sandoz (Novartis' generic arm) to hand back development of what could be a potentially significant generic immediately questions whether it views taking a generic of this type to the U.S. market as viable," Jeffries International analyst Jeffrey Holford writes to investors (as quoted by Bloomberg). "Although the risk of Advair generics is not fully mitigated, this can now be assumed greatly reduced," another analyst writes. Understandably, GSK's shares are up on the news.

- read Vectura's announcement
- read the Bloomberg piece
- see the story from Reuters

Why do Americans pay more for their meds?

Tracy Staton — Thu, 18 Mar 2010 10:28:37 -0400

Why do Americans pay so much for their pharmaceuticals? That's the question posed by Sen. Herb Kohl, a Democrat and chairman of the Senate Special Committee on Aging, who has written to the world's top drugmakers to demand an explanation.

"Americans pay, on average, twice as much as people in other industrialized countries," Chairman Kohl states in the letter. "While I firmly believe that drug quality should not be sacrificed for cost, the large discrepancies in the cost of identical drugs cannot be explained by differences in production or manufacturing." Recipients of the letter included top drugmakers AstraZeneca, GlaxoSmithKline, Lilly, Novartis, Pfizer and Sanofi-Aventis.

What say ye, Big Pharma? Well, Novartis says it's reviewing the letter and will respond to Kohl and his committee. A GSK spokeswoman wouldn't comment. Pfizer's spokeswoman says the company stands behind the value of its drugs and reminds Reuters that it had programs that provide free or discounted meds to uninsured or needy patients.

Only Eli Lilly takes a stab at a substantive response, saying that drug prices are lower in other countries for a lot of reasons, including currency exchange rates, individual market dynamics, and government price controls. U.S. prices tend to be higher, says Lilly spokesman Ed Sagebiel, because Americans rely "on competition rather than government-imposed price controls that contain costs." Plus, Americans have the greatest access to new drugs, which also tend to be the most expensive, he adds. In other words, the free market gives the U.S. free access, but at a higher cost. What do you say to that?

- here's the committee's release
- click here to see links to the letter
- read the Reuters story

J&J's Weldon sees pay top $30 million

Tracy Staton — Thu, 18 Mar 2010 10:12:36 -0400

Well, now we know the pharma chief who made the most money in 2009. It's last year's winner, Johnson & Johnson CEO William Weldon (photo). In a year when many pharma CEOs have seen their paychecks shrink at least slightly, Weldon's compensation grew to $30.8 million. That's an increase of 5.5 percent.

Here's how Weldon's compensation package breaks down: Base salary was $1.8 million, up very slightly from 2008 levels. Stock awards, at $2.76 million, also came in just above the previous year's. Weldon's stock options for 2009 increased by a healthy $1.3 million or so, to $5.24 million. But the bulk of his compensation came as bonus pay: $12.83 million.

Let's take a closer look at that bonus. It's a combination of an annual cash bonus and "CLC units" that vest over time and pay dividends equal to J&J's common-stock dividends. Those CLC units are designed to help executives focus on long-term as well as short-term goals. Weldon's cash bonus for 2009 was $3.6 million, or almost a third of the total; some $5 million in CLC units vested during the year; and his CLC units paid a little over $4 million in dividends.

Now for some background: J&J didn't have a stellar year; two big drugs went off patent, annual sales dropped, and the company launched a restructuring plan that will claim some 6 percent to 7 percent of its workforce. But the proxy cited these difficulties as reasons why Weldon deserved more pay, because he "made difficult personnel decisions with the restructuring" while continuing to focus on the company's long-term goals. Call it the grace-under-pressure bonus.

- check out the SEC filing

- read the Dow Jones news

Pay-for-delay ban dropped from reform bill

Tracy Staton — Thu, 18 Mar 2010 09:45:40 -0400

Healthcare reform just started to look better for pharma: That ban on pay-for-delay deals has been dropped from the legislation. The provision would have barred patent settlements in which generics firms agree to hold off on their copycat-drug plans in exchange for something of value.

The Federal Trade Commission has been fighting the deals for some time, saying that they keep lower-cost generics off the market, costing taxpayers billions. Drugmakers, however, say that generics often make it to market more quickly under those arrangements. Generics firms often wouldn't bring patent challenges without the prospect of some negotiated settlement, the Generic Pharmaceutical Association (GPhA) tells the Wall Street Journal.

"Imposing a ban on patent settlements would have the unintended consequence of preventing pro-consumer settlements that would actually allow generic competition sooner than if the generic company had taken the case to its conclusion and lost--always a possibility in patent litigation. Sweeping the good settlements out with the bad settlements is simply bad health policy and a misguided approach to cost containment. Such an across-the-board ban would reduce the number of patent challenges brought by generics, creating an unnecessary hurdle to bringing lower cost generic drugs to the market," GPhA President and CEO Kathleen Jaeger says in a statement.

European antitrust officials have been on their own quest to stop pay-for-delay deals as well. Various antitrust investigations are under way involving generics deals made by GlaxoSmithKline, Teva Pharmaceutical Industries, and other big-name drugmakers.

And just because it's been left out of the reform bill doesn't mean a pay-for-delay ban isn't in the offing. Sen. Herb Kohl (D-WI), chairman of the Special Committee on Aging, plans to resurrect the idea after the reform fight is over.

- see the GPhA release
- read the WSJ story

Teva comes out on top with $5B Ratiopharm bid

Liz Jones — Thu, 18 Mar 2010 08:49:25 -0400

And the winner is... Teva. This morning, the generics giant announced that it was buying Ratiopharm for just under $5 billion, beating out Pfizer and Actavis for the German company. Ratiopharm is Germany's second largest generics producer and the sixth largest generic drug company worldwide. And the Ratiopharm purchase marks the biggest takeover in the generic drugs market since Teva bought Barr Pharmaceuticals for $7.46 billion in 2008, the Wall Street Journal notes. The company expects to close the deal by the end of this year.

The combined entity will hold the leading market position in 10 European markets, including the U.K., Hungary, Italy, Spain, Portugal and the Netherlands, as well as a top three ranking in 17 countries, including Germany, Poland, France and the Czech Republic. Teva also expects its sales to nearly double in Canada as a result of the deal. Shlomo Yanai, Teva's president and CEO, said during an investors call that the acquisition was key component in its 2015 strategy. By that time, the company expects $31 billion in revenue and $6.8 billion in net income.

Company officials also said that the buyout will complement the acquisition (through Barr) of Croatian drugmaker Pliva, through which Teva gained a toehold in the Balkan, Eastern European and Balkan markets. With Ratiopharm, Teva will be well positioned in Western and Central Europe.

Ratiopharm also will help Teva with it biosimilars know-how, as it already sells a number of generic biologics in Europe, Yanai said during the call. Teva has taken steps over the last year to position itself as a major player in the biosimilars game--despite the lack of a regulatory pathway in the U.S. It inked a deal with Lonza Group in January 2009 to establish a joint venture to develop, manufacture and market a portfolio of biosimilars. And in December, it submitted a BLA for XM02, which was principally developed as a similar biological medicinal product to Amgen's Neupogen.

Pfizer had been very interested in Ratiopharm, but wasn't prepared to put significantly more than €3 billion on the table, according to the Wall Street Journal, citing sources. But don't count the pharma giant out of the European and German generics game yet. Sources say that Pfizer might cast its eye on Stada, another German generics maker. Stada's stock shot up 2 percent to an 18-month high after news of the Teva-Ratiopharm deal broke, according to Reuters.

- read Teva's release
- check out the WSJ coverage
- see the Reuters report

Sanofi agrees to boost female reps' pay

Tracy Staton — Wed, 17 Mar 2010 10:45:13 -0400

Sanofi-Aventis and its female sales reps in the U.S. have come to a deal. The drugmaker has agreed to pay $15.4 million to settle a class-action discrimination suit that alleges Sanofi underpaid and underpromoted its female reps.

The settlement agreement also requires Sanofi to analyze its sales-rep compensation and, wherever disparities between men and women are found, to adjust pay accordingly. The company also has to be more equitable about promoting women; in the past, Sanofi had favored men over women for training courses that prepare employees for management, the suit claims. Finally, the company has to boost its female reps' base pay, to the tune of $2 million now and up to nearly $10 million over the next three years, Pharmalot reports.

In fact, it's this pay adjustment that's the real win for women at Sanofi, as BNet Pharma points out. "Any female sales force employee who receives an upward base pay adjustment will then receive future pay raises from a higher base-level salary," the settlement states, "thus potentially having a significant future impact on class members' total compensation."

- see the Pharmalot post
- read the piece at BNet Pharma

Sources: Pfizer to place Ratiopharm bid today

Tracy Staton — Wed, 17 Mar 2010 10:30:49 -0400

It's coming down to the wire: Ratiopharm bids are due Thursday, and Reuters sources say Pfizer will come to the party early. The world's largest drugmaker is planning to submit its final bid for the company today, they say.

The Merckle family put Ratiopharm up for sale to raise money to pay down debts. The company has a couple of big inducements: Its solid position in Germany, Europe's largest pharma market, and its role as a generics maker at a time when many top drugmakers are looking to diversify into that market.

So, the company has attracted quite a lot of interest; the bidders that remain include Teva Pharmaceutical Industries, the world's largest generics maker, and Actavis, the generics firm based in Iceland that reportedly could take Ratiopharm public. Word is that Actavis' offer is the largest now on the table at about 3 billion euros ($4.1 billion); sources have also said the winning bid could come in as high as $4.4 billion.

Pfizer reportedly has pledged to plow lots of money into growing Ratiopharm, making it the flagship of its new established products unit. However, it may also look at Stada as a "consolation prize" if it loses out on Ratiopharm, Reuters reports. And some see Stada as a better fit for the pharma giant. "It would make a lot of sense for Pfizer to look at [Stada] and, in fact, it is probably a more attractive fit because it also has some emerging market businesses which Ratiopharm doesn't," Reuters quotes one banker as saying.

Still, one can expect some drama over the next two days. Whatever the promises, whatever the bids, we're likely to get news of a winner soon. The waiting is almost over.

- read the Reuters news
- get more from Reuters

Astellas aims to take over OSI board

Tracy Staton — Wed, 17 Mar 2010 10:09:15 -0400

You can't accuse Astellas Pharma of timidity. Rejected by OSI Pharmaceuticals management, Astellas took a $52-a-share hostile bid directly to the shareholders. Now that OSI's directors have scoffed at the offer--and advised shareholders not to participate--Astellas is now trying to take over the board.

Astellas has nominated 10 independent directors for consideration at the annual shareholders' meeting, saying that the current board shouldn't turn its back on a "compelling offer" for the company. OSI said that $52 bid simply isn't up to snuff, and that the nominees have only been put forward "to support Astellas in acquiring OSI at an inadequate price."

Astellas says it's just offering shareholders a choice: "We have taken this step to provide OSI's stockholders with an alternative to the current board," CEO Masafumi Nogimori says in a statement. In any case, this soap opera is developing rapidly. Will Astellas raise its bid? Will OSI find a white knight? Stay tuned.

- read the OSI release
- see Astellas' release
- get more from Reuters

Number of unfilled scrips approaches 15%

Tracy Staton — Wed, 17 Mar 2010 09:57:18 -0400

Congratulations! Your quality products, savvy advertising and canny sales reps have put new prescriptions in patients' hands. But what if those scrips never make it out of a pharmacy?

That's exactly what's happening--more often than ever. According to a new report, the number of prescriptions never picked up from the pharmacy grew by 24 percent in 2009--and it's up a full 68 percent since 2006. A full 8.6 percent of new prescriptions for branded meds are abandoned at the drugstore, according to Wolters Kluwer Pharma Solutions. Meanwhile, the number of filled prescriptions rose just 2.8 percent.

In a troubled economy, people tend to put off adding new drugs to their regimens. But this is different, experts say. "What's peculiar is that the rate of increase among patients walking away is almost unprecedented," Dea Belasi, consulting practice leader at Wolters Kluwer Pharma Solutions tells Medical Marketing & Media. "The [abandonment] trend that we are seeing is just going up and up and up." And if you add insurance-coverage denials to the mix, almost 15 percent of new prescriptions are going unfilled, MM&M reports.

What can drugmakers do? First, learn all they can about the change; for instance, abandonment is most prevalent in Delaware, North Carolina and Florida, while the highest rates of insurance denials happened in California, Delaware and Florida. Then, come up with strategies--such as coupons or vouchers--to help people pay for their meds in those areas. Any other ideas? Let us know.

- see the Wolters Kluwer release
- read the MM&M story

Related Article:
One-fourth of new scrips go unfilled

IMS to Big Pharma: Get moving!

Tracy Staton — Wed, 17 Mar 2010 09:41:44 -0400

Is it possible that Big Pharma isn't moving fast enough into emerging markets? That's the implication of a new report from IMS Health. According to the market research firm, 17 "pharmerging" markets will account for almost half of the growth in drug sales by 2013, up from 37 percent last year. By then, emerging markets will make up 21 percent of total pharma sales. The fastest-growing is China, which will account for $40 billion in additional sales. Brazil, Russia and India are following close behind.

That's lots of growth and lots of sales. And if the big kahunas of pharmaceuticals don't change quickly, they'll miss out on the lion's share. Right now, the top 15 drugmakers get less than 10 percent of their sales in these fast-growth areas. That average masks big individual differences, but even the emerging markets pioneers risk losing out to local drugmakers with their local distribution networks and local manufacturing--not to mention local drug approvals.

"Our experience points to the clear advantages that exist for the early movers," IMS Health's David Campbell says in a statement. "Pharmaceutical manufacturers that lead in building out organizational competencies, tailoring portfolios and adapting business models to these new markets will reap the benefits of differentiation and entrenched presence compared to those that wait."

- check out the IMS release
- see the New York Times story

Lilly hit hard in $70M warehouse heist

George Miller — Wed, 17 Mar 2010 07:05:53 -0400

In a departure from the recent M.O. of in-transit drug cargo thefts, emboldened thieves hit Eli Lilly's 70,000-square-foot east coast distribution facility in Enfield, CT. And they hit it hard: $70 to $75 million worth of Prozac, Cymbalta and Zyprexa--enough to fill a large trailer, according to press reports. Report

Canada to reevaluate vaccine system

Liz Jones — Tue, 16 Mar 2010 11:06:43 -0400

Federal and provincial health officials have launched a sweeping review of Canada's flu vaccination system in the wake of the H1N1 scare. In a notice sent to the drug industry yesterday, government officials signalled that they plan to overhaul the supply system and move away from the current model of having only one Canadian-based supplier for pandemic vaccines. Story

Novartis: Tekturna doesn't help after heart attack

Liz Jones — Tue, 16 Mar 2010 10:49:09 -0400

Novartis will not pursue an outcomes trial of its high blood pressure med Tekturna (aliskiren) in combination with standard therapy for heart attack patients after the drug failed to demonstrate a statistically significant benefit in preventing changes in the heart's shape and worsening of its blood pumping ability, the company said today.

Patients receiving Tekturna in the ASPIRE trial, which included 820 patients, also had a higher rate of hyperkalemia, hypotension and kidney dysfunction compared with the group receiving standard therapy alone. ASPIRE is one of 14 trials in the ASPIRE HIGHER clinical trial program evaluating Tekturna's potential benefit beyond blood pressure reduction.

"Our results... showed no benefit and potentially greater risk of adverse events when combining two inhibitors of the renin-angiotensin system," said Dr. Scott Solomon of Brigham and Women's Hospital in Boston, who presented the data at the American College of Cardiology scientific meeting in Atlanta, according to Reuters. "Given these results, we are not currently recommending the use of this agent in addition to other inhibitors of the renin-angiotensin system in this specific patient population," he added.

Tekturna is the first in a new class of medicines known as direct renin inhibitors, which target an enzyme responsible for triggering a process that can contribute to high blood pressure. When it was approved in 2007, analysts predicted that it would gradually replace the company's blockbuster Diovan--which had $6 billion in sales last year--when the patent on that drug expires. Tekturna--or Rasilez, as it is known elsewhere--had sales of $290 million last year.

- see the Novartis release
- check out the Reuters' coverage

AZ: We'll pick our emerging-markets fights

Tracy Staton — Tue, 16 Mar 2010 09:00:48 -0400

Picky, picky, picky. That's what AstraZeneca says it will be as it pushes for double-digit growth in emerging markets, Reuters reports. Rather than leaping into branded generics indiscriminately, the company plans to focus on about 100 medicines in 30 markets where it can get the sort of prices that make the selling worthwhile.

"We will be very selective in branded generics," AstraZeneca's Tony Zook told reporters before an investor briefing today (as quoted by Reuters). The company just made its first branded generics deal in India, with a supply pact with Torrent Pharmaceuticals. Other deals could follow, Zook said, but then again, maybe not. The company could just expand organically--with the help of the Torrent arrangement, of course.

One way or the other, branded generics will make up some 10 percent to 15 percent of AZ's emerging markets sales by 2014, Zook said, with emerging-markets sales on the whole coming in at 25 percent of company sales, up from 13 percent now. Given that emerging markets are expected to account for some 70 percent of industry growth over the next five years, that goal may be a bit conservative.

- see the Reuters news

The scramble to save PhRMA's $80B deal

Tracy Staton — Tue, 16 Mar 2010 08:52:01 -0400

An honest-to-goodness vote on healthcare reform is getting closer, and you can bet that pharma and its advocates are working double-time behind the scenes. After all, PhRMA has already laid out millions on advertising in support of reform; that was its end of that ballyhooed $80 billion deal with the Senate and White House. Will the industry see lawmakers uphold that pledge?

The new healthcare proposal includes a clause that would allow an independent advisory board to cut Medicare prices for drugs. That's one of the major things PhRMA and drugmakers wanted to avoid, but the industry has opted not to continue fighting it for now, Politico reports. Instead, drugmakers will push back against that board if the reform package becomes law.

And that $80 billion in cost cuts is going to increase--at least to $90 billion. Lobbyists have been scrambling to contain that figure as lawmakers look to impose fees on the industry to help pay for the bill. The last-minute wrangling has caused "real heartburn" in the industry, one source told Politico.

- see the Advertising Age piece
- get more from Politico
- read the Bloomberg update

Astellas' hostile bid for OSI heats up

Tracy Staton — Tue, 16 Mar 2010 08:35:48 -0400

The plot thickens: As OSI Pharmaceuticals' board rejected that $3.5 billion takeover offer from Japanese drugmaker Astellas Pharma--and the company started casting about for higher offers from other companies--a group of shareholders has sued the board to block the company's "poison pill" provisions, which would scotch the deal. Meanwhile, Astellas says it's pushing ahead with its bid.

The major point of contention--and the company's golden egg--is Tarceva, the cancer drug. OSI says it expects Tarceva sales to be worth much more than Astellas is bidding, as its potential for new indications is realized. And then there's the value of OSI's drugs in development. But Astellas claims that its $52-a-share offer is fair, and a spokesman wouldn't comment on whether the company might raise that bid.

At this point it's anybody's guess just where the battle will end, but analysts agree that Astellas will have to boost that offer. OSI shares hit a five-year high yesterday on the latest deal news, closing at around $58. Astellas could find itself in a bidding war; then again, Astellas might just call OSI's bluff by waiting to see if any other offers materialize. Whatever happens, it certainly won't be boring.

- see the Wall Street Journal story
- get more from the WSJ
- see the shareholder article from Reuters

Abbott CEO pay drops 7% to $26.2M

Tracy Staton — Tue, 16 Mar 2010 08:18:34 -0400

Abbott Laboratories chief Miles White (photo) always ranks near the top of our executive compensation list, and it looks as if this year will be no exception. Although his total package declined by 7 percent in 2009, he still brought in $26.2 million worth of salary, bonus, stock awards, and the like.

White's base salary grew by about 3 percent to $1.85 million, and his stock awards jumped up 66 percent to almost $12.5 million. The value of his pension and deferred comp grew to $4.29 million. But the amount of stock options Abbott awarded him dropped by more than $7 million, to a bit over $3 million. That's a decline of 71 percent. His incentive plan cash also dropped slightly, to $3.9 million from $4.2 million.

If you look back at 2007, when White made about $32 million, the differences are even more striking: He got $14.77 million worth of options that year, compared with $3.016 million this year. The overall decline between 2007 to 2009: About 18 percent.

Now, last year White came in second place on our ranking behind Johnson & Johnson's Bill Weldon (photo). Where will White stand this year? Looks like we won't know until we hear from J&J.

- check out the SEC filing
- see the news from Dow Jones

Analysts see continued Vytorin decline

Liz Jones — Mon, 15 Mar 2010 11:17:37 -0400

Despite safety board's recommendation to continue a study comparing Merck's Vytorin versus Zocor, at least one analyst is predicting that Vytorin's sales will keeping falling with increased competition from brand and generic rivals. The news initially sent Merck's stock down Friday. But the drugmaker broke into positive territory later in the day, ONN.tv notes.

Bernstein Research analyst Tim Anderson gave his assessment after Merck provided an interim analysis halfway through the IMPROVE-IT trial comparing Vytorin with the cheaper Zocor. Some had feared that the study results would further harm Vytorin, but Anderson sees this as "highly unlikely." Instead, generics and cheaper brand drugs will likely eat into Vytorin sales. As BNET's Jim Edwards points out, Pfizer's mega-blockbuster Lipitor goes generic in 2011--before the Vytorin results come out in 2013.

Vytorin had been battered after a 2008 study found the drug worked no better than much lower-priced cholesterol medicines, the Star Ledger notes. Sales of Vytorin and Zetia, which formed the center of a cardiovascular drug partnership between Merck and Schering-Plough, declined. Merck now owns Schering-Plough.

The interim efficacy analysis was conducted by the data safety monitoring board after the trial had reached approximately 50 percent of the 5,250 pre-specified clinical endpoints called for in the study design. Merck remains blinded to the actual results of the interim analysis and other IMPROVE-IT data, the drugmaker says in a brief statement.

- see Merck's release
- read the BNET coverage
- see the Star Ledger story
- check out the ONN.tv story

Will Plavix black box prompt gene tests?

Tracy Staton — Mon, 15 Mar 2010 11:16:40 -0400

Will a new FDA warning on Plavix help the personalized-medicine cause, or will it just confuse people? That's the question the Wall Street Journal Health Blog asks today. A new "black box" warning has been added to Bristol-Myers Squibb/Sanofi-Aventis' anti-clotting medicine Plavix, which is poorly metabolized by up to 14 percent of patients who use it. Those patients, who have a particular genetic variant, could do better on another anticoagulant or on higher Plavix doses, the warning states.

Perhaps the FDA envisions that doctors will now be more likely to follow its recommendation to test patients for that variant before prescribing Plavix. But do enough doctors have access to the tests? Will they have time to wait for the results? Before such an approach grows common, cardiology associations will have to develop treatment protocols, experts tell the WSJ. Meanwhile, says one Harvard Medical School associate prof, "I expect mass confusion in response to this FDA warning."

This could be an opportunity for upstart Plavix competitor Effient, from Eli Lilly and Daiichi Sankyo, but that drug carries an increased bleeding risk. Or it could be an opportunity for Medco Health Solutions, which last week said it was expanding its personalized-medicine programming--and planned to extend that program to Plavix at some point. Maybe that point has arrived.

- read the FDA release
- see the WSJ Health Blog story
- get more from the WSJ

Crestor, Plavix make new Chinese formulary

Tracy Staton — Mon, 15 Mar 2010 10:57:25 -0400

China is a promising new market for Big Pharma. And when its government makes a healthcare-related move, the news reverberates throughout the drug industry. Today, it's a good reverberation: China's National Reimbursement Drug List is being updated for the first time in six years--and many Western drugs are making the grade.

That means more sales for AstraZeneca, whose cholesterol drug Crestor and heartburn remedy Nexium leaped into a category that allows patients a rebate of up to 50 percent. Sanofi-Aventis' clotbuster Plavix also made that list, Reuters reports.

This move is just part of the big growth in Chinese drug spending that's attracted so much attention from Big Pharma. Investment firm Morgan Stanley calls that growth a "windfall" for Western drugmakers. Pharma spending only amounts to less than 5 percent of Chinese GDP, but Morgan Stanley expects that to grow by 18 percent annually for the next three to five years.

"Our previous calculation of around 10 percent uplift to EPS in 2015 from [emerging markets] could be conservative in timing and magnitude," the analysts note (as quoted by Reuters).

As for AstraZeneca, we're expecting to hear more tomorrow about its activities in China and other emerging markets during an investor meeting and update. We'll keep you posted.

- read the Reuters news

Ex-Schering chiefs join up at Bausch

Tracy Staton — Mon, 15 Mar 2010 10:47:29 -0400

Everyone was watching to see where ex-Schering-Plough chief Fred Hassan (photo) would land after the big Merck merger put him out of a job. Which drugmaker would he end up leading next?

Well, we have the answer now. And it's not a drugmaker--or at least not primarily a drugmaker. It's eye-care specialist Bausch & Lomb. Hassan will take over as chairman of the board, and one of his ex-Schering deputies--Brent Saunders, who served as president of the Schering consumer healthcare unit--will be his CEO.

It's easy to see where this move came from: Hassan has been serving as a senior adviser to the investment firm Warburg Pincus since the merger went through. And Bausch is majority owned by that very same firm. But Hassan's interest in the job says a little something about where the pharma business is going these days. You know the word: Diversification. Just as Novartis is laying out big money for Bausch competitor Alcon as a way to diversify beyond prescription drugs, Hassan is branching into eye care, too. Call it a diversification of his resume.

- see the Bausch & Lomb release
- read the story from Reuters

Trial failures put onus on Roche

Tracy Staton — Mon, 15 Mar 2010 10:40:12 -0400

The pressure's on at Roche. Some months into its full ownership of Genentech, Roche has seen a couple of setbacks in its development program for that "pipeline-in-a-drug," Avastin. Will it fare any better with its future efforts to broaden Avastin use? Can it win new indications for Avastin's fellow cancer med Herceptin? What about Rituxan/MabThera?

Executives will seek to quell any fears about these efforts at a meeting Thursday. Analysts are looking for reason to believe, the Wall Street Journal reports. "Roche will have to prove that with the takeover of Genentech it can turn into a real leader in pharma and biotechnology," Zuercher Kantonalbank analyst Michael Nawrath told the paper. "[I]t needs to prove it can produce growth out of these candidates."

New indications are important for Avastin, Herceptin and Rituxan to keep those three key meds growing; after all, they represent more than one-third of the company's sales. Analysts will be looking for info on how much Roche expects these three drugs to grow--this year and as time goes on. The company will also talk about its experimental drugs. Stay tuned later this week for an update.

- read the WSJ piece

Inspire: Azasite doesn't meet goals in trials

Liz Jones — Mon, 15 Mar 2010 10:08:36 -0400

North Carolina-based Inspire Pharmaceuticals announced this morning that Azasite, a drug already approved to treat conjunctivitis, failed to reach the main endpoint in two Phase II clinical trials evaluating it in blepharitis patients. The company says it will conduct additional work to refine trial parameters for an anticipated Phase III program. Inspire's release

Bayer staffing up in India, Vietnam

Tracy Staton — Fri, 12 Mar 2010 10:45:03 -0500

Bayer Schering Pharma plans to invest heavily in Asia by doubling its sales team in India and tripling its workforce in Vietnam. Report

Roche, Pfizer cancer meds fail trials

Tracy Staton — Fri, 12 Mar 2010 10:43:45 -0500

Talk about a double whammy: Two big cancer drugs failed late-stage trials that could have broadened their use considerably. Roche's Avastin didn't make the grade against prostate cancer, failing to improve overall survival in combo with chemotherapy and prednisone. And Pfizer's kidney and gastric cancer drug Sutent flopped against breast cancer in two separate studies.

For Roche, this latest Avastin failure makes it two out of three of the big studies expected this year. The drug performed well in an ovarian cancer study, but failed to meet its endpoint in a gastric-cancer trial. Had the drug beat prostate cancer in this latest study, it was expected to add somewhere between 500 million and 1 billion swiss francs, or $471 million to $943 million. The setback means that sales forecasts for the company may need cutting by up to 2 percent, analysts tell Reuters.

In Pfizer's case, this was the second type of cancer Sutent has failed to beat over the past year; earlier, Pfizer stopped a trial of the drug in advanced colon cancer. One of the new studies looked at Sutent as a first-line treatment with chemo in patients with HER-2 negative breast cancer. The other focused on patients who had been previously treated. In neither case did the drug significantly improve progression-free survival.

Both companies say they intend to continue their development programs for the drugs. Roche is studying Avastin in other tumor types and in earlier stages of the disease. Pfizer continues to look at Sutent as a treatment for solid tumors such as non-small cell lung cancer, prostate cancer, and others.

- get the Avastin release
- check out Pfizer's release
- read the Bloomberg article
- see the Reuters story
- find more news from Reuters
- get the InPharm piece

Daiichi aims to double profits by 2013

Tracy Staton — Fri, 12 Mar 2010 10:10:00 -0500

Daiichi Sankyo is aiming high: The Japanese drugmaker announced that it aims to almost double profits in three years. To do that, it intends to boost revenue by 20 percent, counting on a.) overseas expansion, b.) the resurgence of its generics subsidiary Ranbaxy Laboratories, and c.) strong sales of Effient, the new blood thinner it developed with Eli Lilly.

Here are the details: Daiichi expects overseas sales to represent 56.5 percent of its total revenues in three years, six percentage points higher than they are right now. Part of that growth has to come from Ranbaxy, which is still struggling under U.S. import bans, so Daiichi has sent a quality-control expert to India to help get that operation up to snuff.

The sooner that happens, the better for Daiichi. Ranbaxy can't launch a generic version of the prostate drug Flomax as planned because it lacks U.S. regulatory approval; that's quite a setback, given that the company would have had that coveted 180-day marketing exclusivity for the drug.

Then there's Effient; Daiichi expects global sales of that product to hit 50 billion yen ($552 million) within three years.

Just how likely is it that all three of those cylinders will fire as planned? "The numerical targets gave me the impression of being a bit aggressive, although I don't think it's impossible to achieve them," Kenji Masuzoe, an analyst at Deutsche Securities, told Reuters. Guess we'll just have to wait and see.

- read the Reuters news
- get more from India's Economic Times

Indian pharma eyes $60B in lost patents

Tracy Staton — Fri, 12 Mar 2010 09:56:19 -0500

While Big Pharma bewails the forthcoming loss of patent protection on many top-selling drugs, the knock-off drug business is rubbing its hands in anticipation. Just witness the Indian pharma industry, which is positioning itself to capture as much of that business as it can.

Considering that nearly $60 billion worth of drugs fall off patent over the next four years, who could blame Indian drugmakers for angling for their share? After all, they've spent years building up their generics businesses. "While we are not too much into new drug inventions, we are quite strong in manufacturing formulations and bulk drugs," J. Jayaseelan of the Indian Pharmaceutical Association tells the Times of India. "When the $60 billion worth of patents expire ... Indian companies will be able to capture a major chunk of the market."

In fact, Indian pharma firms are gathering over the weekend to discuss how they plan to do that. One strategy has to be hooking up with multinational drugmakers. After all, Pfizer, GlaxoSmithKline, Daiichi Sankyo and now AstraZeneca have forged ties in India for that very reason: To gain access to that generics capability and the attached sales-and-distribution networks. It may just be that when Indian drugmakers capture a share of the off-patent market, they'll be bringing Big Pharma along, too.

- read the Times piece

Have pharma promos gone too commercial?

Tracy Staton — Fri, 12 Mar 2010 09:43:55 -0500

Over the past few years, we've seen some drugmakers choose new executives from the ranks of consumer-products companies. Joe Jiminez, Novartis' new chief, says his experience hawking Heinz ketchup helps him manage more effectively in the pharma world. Pfizer CEO Jeff Kindler is famous for his status as a former McDonald's executive.

So if pharma's going to borrow talent from consumer goods, why not borrow consumer-goods marketing? A New York Times story takes a look at one current pharma campaign--ads and rebates pushing Dysport, the wrinkle-relaxer from Medicis--and asks experts that very question.

To compete with the well-entrenched wrinkle drug Botox, the Dysport campaign takes a satisfaction-guaranteed approach: If patients don't like their results from Dysport, then Medicis will foot some of the bill for a Botox treatment. "We are so confident that we are literally willing to bet our money that patients will love their Dysport treatment," CEO Jonah Shacknai told the Times.

Other examples: Sepracor's free trial of its sleeping drug Lunesta, Merck's free 30-day supply of the diabetes drug Januvia. And so on. In fact, there are so many free trials and discount offers, you'd have to have a coupon organizer to keep track of them all.

Some experts tell the Times that treating medicine as a consumer product "seems a little creepy." But there's no FDA rule against coupons or other offers. Just think of that staple of drug promotion, the free sample. Are rebates and money-off coupons really that different?

- read the NYT story

Genzyme: CEO compensation down 25%

Liz Jones — Fri, 12 Mar 2010 08:34:01 -0500

Bad news for Genzyme CEO Henri Termeer (photo): The company has declined to give him a bonus this year, citing manufacturing woes at the Allston Landing plant. His total compensation came in at 25 percent below 2008 levels. But that lack of bonus isn't a surprise; Termeer had told the board not to award him one.

But that still left him with $9.5 million in total compensation. Salary accounted for $1.7 million of that, up slightly from the $1.6 million he drew in 2008. He also got $124,000 in additional retirement savings, up slightly from last year. Most of his compensation came in the form of restricted stock and stock options: $7.7 million.

When shareholders study Termeer's compensation package in the company's new proxy statement, they can also take a look at the latest salvo in the proxy fight with activist shareholder Carl Icahn. As you know, Icahn plans to advance four nominees to the Genzyme board.

The company makes clear that voting for those nominees would be a no-no: "We do not believe that this is in your best interests, and we do not endorse the election of any of the Icahn Entities' potential nominees as director," the company said in its first official response to Icahn's proxy-fight notification. Does this mean that Termeer is still open to hearing Icahn out? Stay tuned.

- see the SEC filing
- read the Boston Globe coverage