Scrip Editors' Blog

Clinical trial results and the lay press

2008-07-22T17:13:00.003+01:00

On the BBC lunchtime news, only the arrest of former Bosnian Serb leader Radovan Karadzic stopped a report about a potential new treatment for prostate cancer from being the lead story.

A Phase I study has shown that the experimental drug abiraterone causes significant tumour shrinkage and reduction in prostate specific antigen levels in up to 80% of men with advanced, chemotherapy-resistant prostate cancer.

The study is shortly to be published in the Journal of Clinical Oncology

Abiraterone is an inhibitor of cytochrome P17, a key enzyme in androgen synthesis.

It was described by the BBC as �??potentially the most significant advance in the treatment of prostate cancer for 70 years�??.

The trial was carried out by the Royal Marsden Hospital and the Institute of Cancer Research in the UK, where the drug was originally discovered in the early 1990s.

Abiraterone was subsequently acquired by BTG, which funded its early development and secured its intellectual property position. In 2004, BTG licensed the product to Cougar Biotechnology, a company based in Los Angeles, California.

The payback for BTG will come when, and if, abiraterone is eventually approved for sale, which the BBC suggested could be as soon as 2011.

The BBC�??s story was very upbeat, and included an interview with a patient who had been in so much pain before he entered the trial that he could not even put his own socks on. In very short order, he said, not only could he put his own socks on but his PSA level dropped by a couple of orders of magnitude.

His only side-effects were tiredness and occasional hypokalaemia, �??which was easily dealt with by eating bananas�??.

BTG �?? and Cougar �?? must be well pleased with all the coverage, although their names were not actually mentioned in the BBC report. By early afternoon, BTG�??s share price had risen 6% to £1.84 (it was already trading well above its level at the beginning of the year).

But one has to wonder whether all the brouhaha was entirely justified. After all, the trial involved only 21 patients (although data has apparently been collected on a total of 250 worldwide), so for the BBC to call it potentially the biggest advance for 70 years could be regarded as ever so slightly over the top.

In fact, more extensive �?? and, it must be said, equally positive �?? data on abiraterone was released at the ASCO 2008 Annual Meeting at the beginning of June, so it�??s not even really news.

Don�??t get me wrong �?? if the results are confirmed in larger trials, and the response to the drug is sustained (and so far some patients have taken it for as long as two-and-a-half years with no loss of effectiveness), it will be extremely welcome news for the 10,000 men in the UK alone who are diagnosed with this usually fatal form of the disease each year.

Cougar is currently carrying out Phase III trials of abiraterone in 1,166 patients with metastatic, castration- and chemotherapy-refractory prostate cancer in Australia, Europe and North America. A further trial in chemotherapy-naïve patients is also planned for later this year.

The BBC is not alone in running upbeat stories about promising new treatments from time to time. But given the uncertainties about drug development, and the public�??s appetite for a good story, perhaps they would be well advised not to be quite so fulsome in the future.

US unapproved drugs crackdown ensnares 400 products

2008-07-18T21:14:00.019+01:00

The US FDA's two-year enforcement crackdown on the sale of unapproved medicines has taken more than 400 products, made by over 100 different companies, out of circulation.

The initiative has spurred the filing of numerous NDAs, ANDAs and INDs for unapproved products still on the market, and resulted in many pre-IND meetings and more than 100 phone calls to the agency by interested companies. And firms that sold unapproved products not subject to any of the enforcement actions taken by the FDA to date have, in some cases, voluntarily stopped marketing the medicines or begun ramping down production.

Compliance officials in the FDA's drugs centre touted the success of the programme during a recent briefing with reporters. The crackdown began in June 2006, when the FDA released a final compliance policy guide explaining the agency's risk-based approach to removing unapproved medicines from the market and encouraging companies to seek formal approval.

Marketing of the ingredients at issue dates back to a time before sponsors were required to demonstrate both the safety and efficacy of their products. These medicines have not been formally licensed by the FDA and are not subject to the same adverse event reporting requirements as NDA, BLA or ANDA products.

In the past two years the agency has taken regulatory action against seven types of unapproved products: carbinoxamine; quinine; ergotamine; trimethobenzamide-containing suppositories; extended-release guaifenesin; hydrocodone-containing cough suppressants; and injectable colchicine. All were ordered off the market because of safety or efficacy concerns, or because FDA-approved versions were available. The agency also has begun adding unapproved drug marketing violations to warning letters that cite GMP deficiencies.

Cough/cold medicines and narcotics account for the two biggest categories of unapproved drugs. Some unapproved medicines, such as the anti-seizure agent phenobarbital, are well established in clinical practice and have an important place in the healthcare system, and the FDA says it is mindful of not wanting to take away medicines that patients need.

In 2006 the agency estimated that unapproved drugs accounted for about 2% of all prescriptions. FDA officials concede they have not recalculated that figure to quantify the impact of their enforcement programme, but they deem the crackdown to be a big success nevertheless.
"We do believe we've had a significant impact," compliance office director Deborah Autor said. "I think you can expect to see continued aggressive enforcement."

A vision of the future?

2008-07-09T07:18:00.005+01:00

Listening to two keynote speakers at a recent major international conference and exhibition in Tokyo, it was striking how their views of the future of medical practice saw a very different role for the pharma industry and its products compared with today. While similar visions have certainly been put forward before, the two presenters - the head of a US research institute and a physician from a US medical centre - basically gave out the same message: the industry must adapt to new realities or much of it will wither.

The future will be all about cheap, early, pre-symptomatic diagnosis of disease, based on genetic mapping of disease "fingerprints" and tiny blood samples which will be able to reveal the state of all the major organs. Similar genetics-based diagnostics technology would be used to determine which treatments would be most effective in which patients, allowing more tailored treatments. The heavy handed "one size sort of fits all" approach represented by blockbuster drugs would die, creating a much more fragmented market of smaller, but highly targeted and effective, therapies. This in turn would enable dramatic reductions and improved efficiency in healthcare systems.

It all sounded pretty convincing and raised some big questions about whether the pharma industry is indeed ready for such a revolution, and will this actually come about? Some might argue that many companies are already well down such a path, with oncology one area where molecular-targeted therapies and associated genetic profiling to identify responders are already well established.

But the most striking aspect of the presentations was just how much bigger a role cost-effective and compact bedside diagnostics would play in the future, with advances in technologies and mass production, alongside an exponential rise in data processing and storage power, enabling massive strides, which were seen also trickling down to developing economies. Some firms, notably Roche, are maintaining a presence in both diagnostics and therapeutics, betting that the two will indeed become much more closely aligned in the future.

Does anyone out there in the industry have any views on the validity or otherwise of this vision of the future?

Perhaps a glimpse of things to come has been provided by recent developments in South Korea. A small company there claims to have successfully cloned a dog from Japan which had been trained to smell out cancer, based on tiny emissions from the body of marker compounds related to malignancies. Its apparent aim is to commercialise these - a living bio-diagnostic device for the future?

But in another, perhaps reassuring, sign that some aspects of the industry will probably never change, two US cloning firms almost immediately claimed infringement of their cloning patents and licences.

Anniversaries galore - 60 years of effort

2008-07-03T11:10:00.002+01:00

This week marks 60 years since the UK's national health service was set up.

But it is not the only anniversary being celebrated. This year also marks 60 years since the World Health Organisation was founded. And the years immediately after the end of the Second World War also saw the birth, or rebirth, of many pharmaceutical companies around the globe.

The UK government's NHS celebrations have mentioned pharmaceuticals, but only in passing. So, for example, the work of Professor Ken Murray of Edinburgh University is feted. Professor Murray used cloning techniques to develop the first vaccine made from subunits of the hepatitis B virus. The NHS has also highlighted a meta-analysis of 23 human trials from 1990 that showed that corticosteroid treatment reduced respiratory distress syndrome.

So slim pickings indeed. Which is rather a shame, as the industry has helped health services around the world achieve their aims. Not only does the development of antibiotics, vaccines and cholesterol lowerers immediately spring to mind, but also the huge and continuing effort to develop antiretrovirals for HIV/AIDS, targeted monoclonal antibodies for numerous cancers, and new therapies for Alzheimer's disease.

Taking just the UK as an example, the industry spends around £3.5 billion a year on R&D, compared with total investment in health research by the government which is expected to reach £1.7 billion per year by 2010-11.

Yet there is hope that the industry will be more central to anniversary celebrations in the years to come. The WHO makes much of the collaborative and partnering efforts needed to bring 21st century healthcare to emerging nations around the world, and the industry is responding to these calls much better than in the past.

The renewed moves in the UK to tackle the inequality in healthcare and medicines provision for patients in different localities and sectors of society will be watched closely by other countries that are also struggling with this issue. Lord Darzi's NHS Next Stage review may bring the quality, rather than the quantity, of healthcare to the forefront, something that the industry is in a position to provide help.

The access to medicines race

2008-06-30T15:33:00.003+01:00

Hands up if you like to use league tables to benchmark your company�??s performance against that of your industry peers.

One of the latest company rankings comes from consulting firm Innovest, which since August 2006 has been working on behalf of the Netherlands-based Access to Medicine Foundation, developing a robust set of indicators of pharma�??s performance regarding access to medicines for neglected diseases.

It�??s the first time research from the academic community, governments, NGOs, investors and industry has been turned into an evaluation of pharma company performance, says Veronique Menou, a senior analyst for Innovest who presented a Webinar on the study last week.

The aims of Ms Menou�??s access to medicines (AtM) index research project were:

To benchmark companies�?? performance and highlight best practices;
To promote action across the board by all stakeholders;
To improve access to medicines for people in need.

Included in the study were 20 companies comprising the 17 largest pharmas and biotechs by market cap and three generics firms �?? details of the rankings have been posted on the Access to Medicine Foundation website.

Top of the list were GlaxoSmithKline, Novo Nordisk, Merck & Co, Novartis and Sanofi-Aventis. These companies are supposedly excelling on all the indicators defined by themselves and their stakeholders.

Medium performers, explains Ms Menou, are those that have good access to medicines programmes, but don�??t necessarily address all the key areas in this debate. �??This is the case for Eli Lilly, which is considered a leader in public policy influence and advocacy, but demonstrates average performance in equitable pricing.�??

At the bottom of the pile were companies found to lack, or those that have not disclosed, a formal access to medicines strategy.

A few examples of best practices highlighted by Ms Menou include:

Lilly�??s recent opening of a research centre devoted to TB;
Industry/R&D institute partnerships, such as the Novartis Institute for Tropical Diseases;
Merck granting royalty-free licences for a HIV drug to five generics manufacturers in South Africa;
Roche�??s technology transfer initiative, which provides local manufacturers in the least developed countries and sub-Saharan Africa with the expertise needed to produce HIV drugs.

Interestingly, the 20th ranking company in Innovest�??s AtM index was Schering-Plough (which scooped three Scrip Awards last year), highlighting the need for continuous innovation across the board, even for those companies widely considered to be among the pharma industry�??s winners.

Still work to do on a new PPRS

2008-06-24T14:44:00.013+01:00

There is a palpable sense of relief in the UK industry that a deal looks in the offing for a new voluntary pharmaceutical price regulation scheme, although there is still work to be done on the fine details.

Hence the positive comments from industry. Eddie Gray, president of European pharmaceuticals at GlaxoSmithKline, said that the company believed a reasonable balance had been struck in the new PPRS agreement. "This five-year deal, with no break clauses, will provide stability and predictability for industry," he commented.

"Important founding principles have been preserved in the new agreement, namely that industry will retain its ability to freely price medicines and to increase pricing on medicines which offer genuine value to patients and the NHS."

Smaller companies were also pleased. The Ethical Medicines Industry Group (EMIG), which represents small- to medium-sized companies in the UK, noted that proposals to increase the exemption thresholds for price cuts five fold will improve the viability of smaller companies. Such companies have felt unfairly treated in previous PPRS negotiations �?? they provide 40% of the branded products used in the NHS but only account for around 10% of the drugs bill.

The linking of out-of-patent branded product prices with those of generics prices was welcomed by the British Generic Manufacturers Association. The BGMA has long argued that applying different reimbursement regimes to the two types of product was distorting the market, said BGMA director Warwick Smith.

As one commentator pointed out to me several months ago, the trade union background of the current UK health secretary, Alan Johnson, made a negotiated deal much more likely than any new price-setting process, particularly one that is untested and likely to create turmoil during the 60th anniversary celebrations of the formation of the NHS. Much better to show that money is being saved to fund all the bright ideas, such as polyclinics, that are being pursued by the NHS at the present time, it was suggested.

The alternatives were unedifying. A statutory scheme would have sent all the wrong signals to the international business community, while a scheme based on value-based pricing would have been complex and burdensome to apply to the thousands of products on the UK market, and would have taken much longer to pull together than the 18 months that have passed since the Office of Fair Trading called for radical reform.

Nevertheless, some aspects of value-based pricings have attractions to industry, such as gaining higher prices for products that, for example, show they prolong the survival of cancer patients.

Treadmills for all

2008-06-13T11:47:00.014+01:00

Do gym instructors help Europeans live longer, happier lives than cancer researchers? Are treadmills for 30-year-olds a better investment than statins for 50-year-olds? I have never heard these questions asked in public before, but it may only be a matter of time.

Europe's self-medication industry association, the AESGP, has been meeting in Stockholm this week. Although innovation is the general theme, the subject of most of the presentations has been how to cope with radical change. I also covered the European full-line wholesalers' annual meeting earlier this month in Prague, my colleague attended the European Generic medicines Association meeting in Paris at the same time, and there is still the EFPIA meeting, for the innovator industry, in Paris next week.

The pharmaceutical industry is the sum of many parts, and there are even more elements to be considered when looking at the whole edifice of Europe's diverse, mainly state-run healthcare systems.

One clear trend in European healthcare is emerging: every act, every intervention, every product and every service that might be involved in bringing good health to citizens is struggling to prove its value as governments across the continent try to obtain the best value for money in their healthcare systems.

Once the value of every contribution to health has been established, the tough decisions will start.

- Best slides

Powerpoint is everywhere, but some slides are clearly better than others. At the AESGP meeting, I spotted two winners:

Sandor Szabo of the Hungarian chamber of pharmacists provided a short summary of pharmacy in his country since 1980. INPUT (a chicken eating its feed, representing investment in the industry), OUTPUT (a chicken laying an egg, as pharmacy investments begin to deliver benefits) and KAPUT (a chicken roasting on a spit - obviously he feels the situation has deteriorated).

The switch of GSK's Alli (orlistat) from prescription-only to OTC status in the US is helping Americans to lose weight. How much? In his presentation, the company's Manfred Scheske speculated: more than 200 Boeing 747s, more than 10,000 Volkswagens and more than 1,900 elephants.

- Apoteket

Monica Hagman, representing Sweden's (still) state-owned monopoly pharmacy retailer Apoteket, encouraged delegates to visit one of her company's outlets while in Stockholm. During one of the breaks, I found one a few minutes' walk from the conference hotel, near the central train station.

Although I never visited Soviet Russia, I somehow imagined it to be something like this. Long queues, overwhelmed staff, bored patients clutching queue numbers as they sat on wooden benches. OK, the benches were very stylish and highly designed - this is Sweden, after all - and the shop was spotlessly clean, but the tedious atmosphere was so different from pharmacies in other European countries, I wondered why the Swedes would put up with it.

From next year, they may not have to. The government is still working out the details, but Apoteket's monopoly is due to end and the number of retail pharmacies is set to increase.

- French exception

OTC products are about to be allowed shelf space in front of the pharmacist's counter in France, but they are not getting any closer to the pharmacy door. You will not find them in supermarkets or petrol stations any time soon. Dr Muriel Wizman-Dahan, who advises France's health minister on pharmacy topics, insisted that pharmacists guarantee the safe and effective use of medicines. After all, no counterfeit medicine has ever been detected in the country's legitimate supply chain, she said.

A short time before, Hungary's Sandor Szabo had named one of France's large hypermarkets, Auchan, as a new entrant in the more liberal Hungarian OTC market. Perhaps French patients will now travel to Hungary to buy their aspirins in a French supermarket?

Cherries and cream

2008-06-11T09:06:00.011+01:00

When an elderly patient in a remote village in the Alps goes to the local pharmacy with a prescription for a seldom-used medicine - perhaps a product that has been on the market for 20 years and costs only a couple of euros - there is every reason to expect that the prescription will be filled promptly. If the pharmacist has no stock available, two or more full-line pharmaceutical wholesalers will be competing to deliver the required medicine in the hours following the patient's request.

In this respect, full-line wholesaling contributes undeniably to public health in Europe. Delivering any prescribed medicine to any patient who might need it, quickly and safely, is an obligation that full-line wholesalers take seriously. They create an essential link in a vital supply chain between pharmaceutical companies and patients.

Alongside their role as healthcare providers, Europe's full-line wholesalers are also businessmen. They provide high levels of service, but not as government agencies or non-profit organisations. They buy products from their suppliers and they sell them to their customers, earning a profit as middlemen. A myriad of remuneration schemes for their services has emerged in Europe - fixed margins, floating margins and per-pack fees, among them - but wholesalers generally prosper by driving costs out of the distribution chain. The more efficient they are, the more they earn.

Other companies have been attracted to the business of pharmaceutical distribution. Cherry-picking, whether by short-line wholesalers or parallel traders, brings some medicines to some patients at very low cost, and the margins can be handsome. These operations are licensed and tightly regulated, but they take a narrower view of public service than their full-line counterparts.

Innovator pharmaceutical companies have also directed closer attention to the commercial aspects of full-line wholesaling. The distribution margins on high-value originator products may be helping low-cost generic competitors to put their products in pharmacies on equal terms. Pfizer, for example, now pays for the distribution of its products in the UK through a logistics service agreement, allowing it to sell its high-value products directly to pharmacists. Once this cream is skimmed off the full-line wholesaling model, the whole business becomes less attractive.

Deprived of cherries and cream, Europe's full-line wholesalers will have to turn to the nuts and bolts of full-line distribution. Their contributions to public health must be rewarded; the question now is whether cash-strapped public healthcare systems can afford them. Generics will be more expensive when the cost of their route to patients is factored in.

Patients may wait months for a hip replacement in some healthcare systems. Europe's politicians will now have to decide how long they should wait for their medicines.

Building trust, one joint inspection at a time

2008-06-09T22:17:00.011+01:00

A US/EU plan to begin piloting joint inspections of drug manufacturing facilities later this year is an exercise in confidence - and trust-building between the partners, FDA commissioner Dr Andrew von Eschenbach believes.

During a recent interview with healthcare reporters in Washington, Dr von Eschenbach said the joint inspections are part of the agency's "Beyond Our Borders" initiative to bolster overseas regulatory capacity to ensure the safety of medical products coming into the US.

As reported by Scrip late last month, the pilot programme will involve joint inspections of finished pharmaceutical product facilities in the EU and US, and active pharmaceutical ingredient producers in other countries. Although the FDA is not saying much about details of the programme (such as how the inspections will work in practice, how long the pilot might last, how many facilities will be involved), Dr von Eschenbach did share his views on what the FDA, EMEA and European Commission hope to gain from this experiment.

"The responsibility for the regulatory decision will always rest with the regulatory authority, but there is information, there is data, that competent regulatory authorities are all simultaneously acquiring, and the greater confidence and trust we can have in each other with regard to that process, the greater we're going to be able to make use of that common information without unnecessary replication," Dr von Eschenbach said.

"This joint inspection really gives us an opportunity to actively engage in the inspection in a way that we begin to understand each other's approach ... and see where those compatibilities and overlaps are, or where there are things in that inspection process that are not necessarily meeting our requirements and our needs." This, in turn, will give the partners confidence in the data and information generated by each other's inspections. "It's an initiative of growing and creating a partnership, a collaboration."

Leverkusen to feel Bayer's green glow

2008-06-06T16:15:00.006+01:00

From Spring 2009 the Leverkusen region of Germany will live under a green shadow cast by Bayer Group's "media façade".

Bayer's former headquarters are to be gutted leaving only a steel skeleton and the floors replaced with a green core of Makrolon, its semi-transparent high-tech polycarbonate. This core will be wrapped in a stainless steel fabric of more than 5.6 million LEDs.

Some of the tower's energy will be provided by environmentally friendly photovoltaic units installed on the roof. The building's central motif, the Bayer cross (see image), will measure 40 metres in diameter and will be visible day and night.

While erecting an incandescent tower is pretty shameless self-promotion, it is encouraging to see Bayer flex its green credentials with the use of solar energy and LED bulbs.

However, it may have been greener to knock down the old tower and replace it with something more traditional and even more environmentally friendly. Possibilities include a glade of trees or and idyllic garden.

Give your dog a REMS

2008-06-05T22:25:00.013+01:00

The world of medicines risk management is literally going to the dogs.

The US FDA has approved a reformulated version of a heartworm prevention drug that was withdrawn in 2004 because of serious and life-threatening adverse events suffered by dogs. However, the reintroduction of ProHeart 6 (moxidectin) brings with it the first risk management scheme for animal medicines.

"This is the first veterinary drug to be marketed under a risk minimisation and restricted distribution programme," said Dr Bernadette Dunham, director of the FDA's veterinary medicine centre. "Numerous drugs for use in people have been successfully marketed under similar programmes."

The drug's manufacturer, Fort Dodge Animal Health (a division of Wyeth), said its postmarketing surveillance programme is, in fact, based on similar schemes used to monitor the safety of human drugs. Like human medicine risk minimisation plans (which are being transformed into risk evaluation and mitigation strategies - or REMS - under the FDA Amendments Act), the ProHeart 6 scheme is aimed at educating veterinarians and pet owners about appropriate use and possible risks, and collecting postmarketing surveillance data.

Veterinarians who wish to purchase the drug must register with Fort Dodge and participate in a web-based training programme prior to obtaining the product. The programme also involves pet owner education and consent forms, and data collection.

One wonders if, in a year or two, we'll be hearing an outcry from vets and puppy owners about the troubles they are having accessing ProHeart 6 under the new system, and whether we'll eventually see REMS-type measures for risky bovine and poultry medicines as well.

Like the Vioxx and Ketek drug safety controversies that rained down unwanted scrutiny on the FDA, ProHeart 6's return to market is likely to do the same. Senator Charles Grassley, the top Republican on the finance committee, has been investigating the FDA's handling of ProHeart 6 safety issues. He is now asking how the agency decided the drug could be returned to market because, he alleges, some FDA safety officers were left out of internal agency deliberations.

This assertion may sound all to familiar to anyone who has followed Mr Grassley's investigations into the FDA's safety oversight of drugs for people, and it shows, yet again, that where man goes, man's best friend is wont to follow.

AstraZeneca's take on personalised medicine

2008-06-03T22:06:00.005+01:00

AstraZeneca is actively pursuing a personalised medicine approach for one of every 10 drugs in its pipeline.

The company recently hosted a tour of its R&D facility in Wilmington, Delaware for a group of US healthcare journalists. During a pipeline update company officials shared insights into how AstraZeneca is investigating biomarkers and diagnostics that will help predict which patients are most likely to benefit from a new medicine.

To be clear - the company is not looking at all medicines in its pipeline as potential targeted therapies, but has asked all drug development teams to "at least consider a personalised healthcare approach", said Dr Howard Hutchinson, AstraZeneca's chief medical officer. About 20% of pipeline medicines are being evaluated from a personalised medicine standpoint, and 10% are being actively pursued.

"Every compound that comes through the oncology group has to have a personalised medicine plan," said Donna Francher, global product vice-president and worldwide product lead for Zactima (vandetanib), a VEGF/EGF inhibitor with RET-kinase activity being studied for non-small cell lung cancer and other solid tumours. It is on target for US and EU filing in the fourth quarter.

Ms Francher cites Zactima's potential in thyroid cancer as "a really good example of targeted therapy and personalised medicine". The drug has received FDA fast-track status and orphan drug designation for use in hereditary medullary thyroid cancer, which occurs in 90% of patients who carry a certain genetic mutation, she said.

The company is also seeking to turn to its advantage research showing that other cancer therapeutics, such as Amgen's Vectibix (panitumumab) and Imclone Systems/Bristol-Myers Squibb's Erbitux (cetuximab), do not work in patients with a mutated KRAS gene. KRAS, she said, is the first biomarker where there's an indication that an oncologic won't work, and this has allowed AstraZeneca to go back and analyse how its own anti-cancers fare in this population.

New investor activism shocks Japan

2008-06-02T01:04:00.006+01:00

It might not have much to do with pharma, but recent events elsewhere in corporate Japan might be causing senior executives across all industry sectors to lose their hair.

Goings-on at major domestic wig manufacturer Aderans are shaking up the image of passive shareholders whose main function is rubber-stamping management proposals at AGMs, themselves marked by a lack of questioning of management's decisions. Prodded by the US equity fund Steel Partners, a major investor in the firm, shareholders in Aderans last week succeeded in voting out virtually all the company's board, in a move aimed at showing their strong dissatisfaction with share price and general company performance.

This victory for investor activism has sent shockwaves through Japanese boardrooms, signalling that shareholders are now prepared to take drastic action to get their demands for better returns, improved corporate governance and information disclosure heard properly.

Japan's top pharma firms might feel less exposed than some, as most have been making efforts over the last few years to raise dividends (including through large share buybacks), improve the timely disclosure of share-sensitive information and increase transparency. In some cases, the contrast to just five years ago is quite remarkable, although stock market regulations governing disclosures from listed firms have played their part. Measures to enhance corporate value now form an important part of investor briefings by most large firms.

Forays into Japanese pharma by foreign activist private equity groups have so far been rare, perhaps as a result, although Brandes Investment Partners of the US did try last year to get Ono Pharma to share more of its large cash pile with investors via a one-off dividend. The proposal was eventually voted down, however, with most investors accepting Ono's arguments that it needed the cash for R&D, collaborations and product acquisitions.

Whether Japan's mid-sized pharma firms - some of which are struggling with weak pipelines and lacklustre performances - might be open to pressure similar to that applied to Aderans remains to be seen. Things could get hairy.

US, EU moving closer on orphan drugs

2008-05-21T22:36:00.005+01:00

US and EU efforts to harmonise orphan drug designation requests may soon move beyond the use of a single application form and into development of joint guidelines and common terminology.

Dr Kerstin Westermark, chair of the EMEA's committee for orphan medicinal products (COMP), told a Drug Information Association meeting in Washington, DC, that the common application form unveiled last year was only the first step in harmonising FDA and EMEA requirements for orphan drugs.

The goal, she said, is to simplify the administrative process for sponsors seeking to develop and license therapeutics for rare diseases. The common form allows companies to apply for orphan drug designation with the FDA and EMEA simultaneously, despite the fact that the two regulators continue to have unique requirements and conduct their own independent assessments. The FDA has already received 16 requests for orphan drug designation using the common form.

Since more than 90% of orphan drug designation applications accepted by the EMEA are also granted by the FDA, there are good reasons to work toward further harmonisation, Dr Westermark said. This includes encouraging cross-submissions for orphan drug designation and allowing companies to file a single annual progress report on their orphan drug development with both regulators instead of separate reports.

Also on the horizon are the potential development of joint guidelines on orphan drug designation and harmonisation of terminology.

Yann Le Cam, CEO of Eurordis, the European association representing patients with rare diseases, has even more ambitious harmonisation goals. He said the next step should be globalisation of protocol assistance and scientific advice on orphan drug development, as well as the designations themselves and marketing authorisations. "I guess we all have the right to dream, but I say we have to think about the future," he told the DIA meeting.

The friendly face of Merck & Co

2008-05-20T17:21:00.001+01:00

Merck & Co's deal-making scouts had more than 5,500 'interactions' in 2007, of which over 4,000 were genuine opportunities.

But the number which made it to review under a CDA (confidentiality and disclosure agreement) was around 500, and the actual number of major deals signed was just 55, Scrip found out recently.

These numbers sound quite demoralising to smallish biotechs which are currently 'interacting' with potential pharma partners.

Margaret Beer, who recently took over the post of executive director of licensing and external research in Europe for Merck & Co's subsidiary Merck Sharp & Dohme Research Laboratories, assured companies planning to approach Merck with a potential opportunity that they would be greeted with a friendly face.

"We treat all the people we interact with as potential partners. We answer queries in a timely fashion and we try and give reasons when we decline an opportunity. Look at it as free advice."

Dr Beer, who apparently also answers to the name of "Mrs Merck", said that the chance of signing a deal on the back of a first meeting was highly unlikely, as striking a deal was often a matter of timing. The time might not be right now, but it could all come together a few years down the line, as it did for Addex Pharmaceuticals. The Swiss firm recently signed two deals with Merck in two months, having been tracked by Dr Beer as 'one to watch' since 2003, and it obtained the expertise of Dr Beer's predecessor Ray Hill when he joined Addex's board of directors following his retirement from Merck last month.

So if you come across one of Merck's deal-making scouts, form an orderly queue, because if nothing else comes of it you'll get some free advice, and if you're really worth your salt, you could make a very useful friend. sukaina.virji@informa.com

Japan's shopping spree not over yet

2008-05-19T09:22:00.005+01:00

At a recent conference in Tokyo, I had the chance to speak privately to several visiting executives from US biotech firms. Some could barely conceal their excitement at moves by major Japanese firms over the last year or so to acquire technology and in some cases whole companies in the biologicals and oncology areas (or ideally both) - the implicit hope being that they may be next in line.

To point to the main examples, Eisai has bought the antibody firm Morphotek and cancer company MGI Pharma, both in the US, where Astellas acquired Agensys, another oncology antibody specialist, late last year. The icing on the cake of these deals, themselves valued at hundreds of millions of dollars, was Takeda's close to $9 billion buy-out of Millennium, which has as its main commercial asset - no surprise considering the gathering trend - a cancer product (Velcade).

"We are definitely in the sweet spot right now," one executive said privately. While arranging meetings with Japanese companies on past trips had sometimes been difficult, "now I can't fit in all the meetings that are being requested," he admitted. The interest in novel technology and products that will add to pipelines that in some cases are thin in the oncology area seems to be at an all-time high.

Japan as a whole might be well known for fickle trends which soon peter out, as well as for companies which can tend to follow one another's strategies closely. But the serious money involved in these deals suggest it is much more than that. The main driving factors include fears over the impact of looming patent expiries for top products (which, interestingly, are being faced by Takeda, Astellas and Eisai), a desire to boost independent R&D and marketing capability in the critical US market and to reduce reliance on a large but mostly stagnant pharma market at home. Oncology is seen as a major area of unmet medical need and thus market growth over the mid-term.

The big question now is who's next? While the Millennium deal - which ranked among the largest Japanese M&A deals ever - is unlikely to be topped in value terms, simply because of Takeda's substantial cash reserves, there are surely many smaller US and European firms and technology ventures being looked at very closely at the moment. Due diligence lawyers and financial advisors will no doubt be kept busy for a while yet.

YouTube improves outreach for the ABPI

2008-05-09T15:24:00.003+01:00

The UK's pharmaceutical industry association is making commendable efforts to harness new ideas to get its message across.

It has placed videos of patients' experiences in finding information about their treatments on YouTube. It has also used a central radio studio to link up with radio stations around the UK, on topics such as medicines research, asking about medicines, and multiple sclerosis.

The involvement of a charity at the annual dinner has also gone down well with those present, which includes the great and good among academics, civil servants and regulators, as well as executives from companies both large and small.

But it is also surprising how the association's assets can be used. Its offices, close to Trafalgar Square, have apparently been earmarked for use in a forthcoming "Harry Potter" film.

Although magic has not previously been invoked to improve the fate of the industry, perhaps some of Harry's luck might rub off on the ABPI, and be used in its battles with the department of health (aka, the ministry of magic?).

Should the NHS be marketing-led?

2008-05-02T14:57:00.002+01:00

The UK Chartered Institute of Marketing has launched a white paper on the benefits of adopting a marketing approach within the NHS. It argues that for the NHS to become patient-led, it must first become marketing-led, and examines how this can be achieved.

The Institute points to a number of benefits that a market-focused NHS would bring, first attempting to dispel any myth that it's about sales and advertising: "It's about giving the NHS greater direction".

An initial step in injecting a corporate attitude into the health service would be recruiting staff with appropriate commercial skills, the paper says. This, it believes, would deliver improved care services to patients.

Marketing would allow for the better allocation of funds, the paper says. Staff productivity rewards would motivate staff to achieve better results, thus improving profits, and the profit could then be ploughed back into research and development, resulting in more equipment and resources, better service and better treatment.

The paper explains that patients no longer want to assume a passive role in their treatment _ they now come to their GPs armed with information about their conditions and treatments, and the institute believes a more market-focused health service can allow patients to take an active involvement in their own needs.

But would injecting more of a commercial attitude into the NHS actually benefit patients themselves in the long run? Or would it only result in a competitive, market-driven enterprise in which trusts compete for patients, thus compromising their individual needs?

Currency: curse or cure?

2008-04-28T14:19:00.006+01:00

EU pharma might call it a curse, while US pharma might refer to it as a cure. It is certainly pandemic in its reach but its symptoms vary depending on whom it hits. European firms get covered by the cloud, while US companies get the silver lining. But what is "it"?

Well, "it" is the dollar's weakness against the euro and other European currencies, and "it" is shaping product sales across the pharmaceutical industry. Let's take two of Switzerland's biggest pharmaceutical companies, Roche and Novartis.

At Roche's first-quarter results, CEO Dr Severin Schwan (shown above) lamented: "If we compare ourselves with our American peers, in fact growth [in sales] in US dollars would have been 17%."

Conversely, Novartis's first-quarter growth of 9% was driven by currency effects. How? Well, the company reports in dollars and therefore benefits from that currency's weakness. However, its pharmaceutical revenues were actually down by 3% when the dollar effects were stripped out.

Meanwhile in the US, Merck & Co was able to book a marginal increase. Its sales growth of 1% to $5.8 billion required a 4% favourable impact from foreign exchange. J&J noted that without positive currency effects, its drug sales would have declined by 0.6%.

Unified FDA/EMEA medicine reviews not in the cards

2008-04-23T22:16:00.005+01:00

The different levels of risk tolerance among the US and EU countries would preclude any sort of single, unified review of new medicines, a top US FDA official believes.

At a recent FDA advisory panel meeting on efforts to coordinate paediatric research in the US and EU, the deputy commissioner for international and special programmes, Dr Murray Lumpkin, suggested a unified FDA/EMEA review would be impractical, not just because the agencies lack authority in each other's region but also because medical practices are not harmonised and risk tolerance within communities varies.

It is not unusual for medical reviewers in separate countries to reach different conclusions about the same data in an application, Dr Lumpkin said. Recent examples of this include recent US approvals of two biologicals for Crohn's disease - Biogen Idec/Elan's monoclonal antibody Tysabri and UCB's pegylated anti-TNF product Cimzia - that received negative opinions from the EMEA's CHMP.

The situation has been reversed, as well. Novartis' type 2 diabetes treatment Galvus received EU approval but was blocked in the US by the FDA's request for a new clinical trial.

Despite some calls for a unified review and approval system, this could be a double-edged sword for companies whose products get a negative vote by one regulator but might have succeeded elsewhere. "If they're competent to say yes, they're competent to say no," Dr Lumpkin said.

"I think the idea of having one review, one decision worldwide has its upsides when you kind of hear it at a theoretical level, but it really has some downsides too," the FDA official said. "It's still an issue at the end of the day of putting it in the context of your own clinical community, of your own jurisdiction, of your own medical practice and trying to figure out how does this fit? .... And how does it fit within the context of what the company is asking for as far as marketing profile within that jurisdiction, which is often not exactly the same because of medical practice issues."

US debates role of inspections in heparin scandal

2008-04-23T19:16:00.004+01:00

US FDA commissioner Dr Andrew von Eschenbach's repeated assertions that the agency would not have detected contaminated heparin even if it had conducted a pre-approval inspection of the Changzhou SPL facility misses the mark, some agency critics are saying.

At Tuesday's House subcommittee hearing on foreign drug inspections, the commissioner said standard testing would have been insufficient to detect the presence of over-sulfated chondroitin sulfate in heparin API at the Changzhou SPL site. However, some lawmakers and critics said an inspection would have uncovered serious manufacturing violations earlier, potentially precluding the Chinese facility from being allowed to produce heparin for the US market.

Changzhou SPL is not the only Chinese company implicated in the heparin fiasco - the FDA says it has identified 12 Chinese firms in the supply chain for contaminated heparin and still does not know at what stage the over-sulfated chondroitin sulfate got into the product. However, the Changzhou plant did supply API for Baxter International's heparin, which was recalled following a spike in adverse events.

The FDA never conducted a heparin pre-approval inspection of Changzhou SPL because of a mix-up involving the facility's name. An emergency inspection in February after the Baxter recall revealed multiple GMP violations, including cleanliness and validation issues. The FDA cited Changzhou SPL for failing to assure that processing steps used to manufacture heparin API were capable of removing impurities and failing to adequately evaluate the acceptability of crude materials.

"I disagree entirely with the theory that the inspection couldn't have had a significant impact in preventing this," Benjamin England, a former 17-year agency attorney who is now an industry consultant, testified at the House hearing. "If the FDA had been there prior to the adverse events during a pre-approval inspection, I'm inclined to believe they would have seen a facility in even worse condition, in which case [Changzhou SPL] would not have been in a position to be a source for this product."

House subcommittee chairman Bart Stupak said the lag time in FDA inspections of foreign drug facilities (the agency visits only about 10% every year) reduces the deterrent effect of inspections and actually encourages the introduction of unsafe (and cheaper) ingredients in the manufacturing of medicines.

"If I'm not going to be inspected for 30 years, instead of using the pig intestines that you're supposed to use, why not a chondroitin sulfate? No one's going to catch it, right?" Stupak said. "One could easily argue that the lack of inspections actually encouraged a less safe product in some of these plants."

"That's certainly one possibility sir," the FDA commissioner conceded.

Look for this to be an area of further probing in upcoming House and Senate hearings on the heparin disaster, along with questions about whether the FDA previously had been alerted that heparin API was coming into the US from an uninspected facility.

Pharma sector Q1 profits to lean on cost-cutting and weak dollar

2008-04-16T15:16:00.003+01:00

This week sees the launch in earnest of the pharmaceutical financial results reporting season. While the global economy in general seems to be buckling under the pressure of the credit crisis, analysts may start to pay closer attention to big pharma debt levels, especially if M&A begins to play a bigger role in companies' attempts to drive sales and profitability.

Meanwhile, keen observers of big pharma will be on the lookout for any significant developments in the industry's battle against genericisation on the one hand and its quest for R&D productivity improvements on the other. And of course, positive news on late-stage pipeline drugs could help to mitigate expected gloom over the sector's performance.

With innovative pharmaceuticals no longer seen as such a safe bet for rapid growth, any companies attempting to take a more tangential approach to expanding sales and/or profits are likely to be applauded. More information on developments like Johnson & Johnson's plans to cover more sections of the healthcare sector, and Novartis's acquisition last week of a 25% stake in eye care firm Alcon, could help shed light on how the sector is shifting its focus and which companies have the best prospects for success.

Among companies reporting this week is Roche (on April 17th), which does not reveal first-quarter earnings but will only report sales figures. Early indications based on first-quarter results reported by Genentech (majority owned by Roche) are fairly positive. Genentech drugs account for nearly half of Roche's top 15 pharmaceutical products, including its three best-selling products, the anticancers Rituxan (rituximab), Herceptin (trastuzumab) and Avastin (bevacizumab). While US Avastin sales have been flat for three quarters now, the company still posted strong revenues overall, and its earnings per share exceeded analysts' expectations.

Analysts at Dresdner Kleinwort believe Roche's pharma business should see growth of 8% to CHF9.9 billion ($9.9 billion) in the first quarter. Roche has already said it expects to see a continuing drag on sales because of the decline in big pandemic deals for its flu drug Tamiflu (oseltamivir), but Dresdner Kleinwort believes the expansion of existing drugs for new indications could drive growth in the latter part of the year. For example, the approval in March in the US of Avastin for breast cancer should help the product's sales, while data could be reported in the second half regarding Avastin for adjuvant colorectal cancer therapy, and Rituxan for multiple sclerosis and lupus.

Also on the agenda this week are results from Johnson & Johnson, Abbott and Pfizer.

With each deriving around half of its sales from non-US markets, all three are likely to benefit from the continuing weakness of the US dollar. According to Credit Suisse analyst Catherine Arnold, earnings per share among big US pharma groups should grow by about 6% overall, driven by price increases and cost savings. However, there will be a wide discrepancy in year-on-year EPS changes between the different companies, with Abbott predicted to see growth of around 16%, compared with 4% for J&J and no change at all at Pfizer.

The consensus opinion among analysts puts J&J's sales in the first quarter at $15.8 billion (compared with $15.0 billion in the first quarter of 2007), Abbott's at $6.5 billion (up from $5.9 billion and driven by strong growth of the anti-TNF drug Humira (adalimumab)) and Pfizer's at $12.0 billion (down from $12.4 billion).

J&J's pharma business is expected to show sluggish growth, and Ms Arnold said she would be looking for several positive late-stage pipeline developments this year, along with details of the recent cost-saving initiatives, to improve the division's prospects and offset downsides like the impending patent expiry for the antipsychotic Risperdal (risperidone), the poor uptake of the newer antipsychotic Invega (paliperidone) and the negative impact on Procrit (epoetin-alfa) of the recent regulatory scrutiny of erythropoiesis-stimulating agents. Analysts think the company needs to make acquisitions to boost its pharma pipeline. Short of developments in this sphere, any indication that the company is ahead of its target to cut $1.3-1.6 billion in costs this year could help improve its standing among industry observers.

Pfizer may also need to make a significant acquisition if it is to convince analysts that it can grow in the future as it faces drastic revenue reductions from generic competition to major products over the next few years. However, this seems unlikely as it has said it does not intend to pursue mega-mergers any more or to diversify from its current pharma focus. But also in common with J&J (which acquired Pfizer's consumer products business), it has major cost-saving plans under way, and further details of plant closures and staff redundancies could be outlined this week.

Among the smaller reporters this week, HIV drug specialist Gilead Sciences has been on good form with strong sales growth and positive trial news, and unlike many of its rivals it has long patent life on key products. Forest Laboratories, meanwhile, is under pressure to find alternative sources of growth to its top-selling product, the antidepressant Lexapro (escitalopram, licensed from Lundbeck), which loses US patent protection in 2012. The company has already indicated that it is willing to sacrifice short-term profits to secure new products.

Novartis favours deregulated eye-care market

2008-04-10T14:09:00.007+01:00

Daniel Vasella, CEO of Novartis, has shed more light as to why the firm agreed a two-step option to acquire a majority stake in Alcon.

Dr Vasella told the Wall Street Journal that Alcon's eye surgery business was attractive for several reasons. Alcon's surgical products have good growth potential in emerging markets, such as China and Russia, as the demand for products is unmet in these regions at the moment.

He also noted that differences in reimbursement and regulation between the pharma and eye care markets was appealing. "You have a different reimbursement system for surgical products�?�We see less price sensitivity. You can pass on price increases easier," he said.

He later added: "As soon as you get into regulated markets such as pharma, it's more difficult. We see prices for pharma worldwide declining."

However, there was no mention of Novartis's new enemy in the interview. No, it is not the regulatory authorities or shareholders, but the Lincolnshire Wildlife Trust. The trust has criticised Novartis over plans to erect three wind turbines on its facility in Grimsby, UK.

A spokeswoman for the trust told a local newspaper that they objected to the wind farm "because they were not satisfied that there would be no adverse impacts on the important populations of birds using the Humber Estuary".

The trust added that "there is potential for both collision impacts and the disturbance of roosting and feeding birds". Novartis said it would seek provisional approval for the wind turbines. The full story can be read here.

Did Novartis pay too much for 25% of Alcon?

2008-04-08T15:50:00.007+01:00

In a conference call with analysts, Daniel Vasella (shown right), CEO and chairman of Novartis, shed some light on the $10.5 billion deal for a 25% share of Alcon.

A two-step approach for the deal was agreed in order to "accommodate the seller's desire not to sell in one step", which is the opposite to what Novartis wanted, he said. This disclosure indicates that Nestlé may have been hesitant to sell all, or even any, of its Alcon stake, adding weight to claims by analysts that Novartis paid over the odds.

One analyst at WestLB, Andreas Theisen, is reported to have said the deal represents "a very rich price, in our view, despite double-digit growth projected for the company [Alcon]".

Dr Vasella also fended off several attempts by analysts to lag out any synergies should Novartis exercise its option to acquire a controlling stake in Alcon. However, he did say: "The biggest synergy probably would be with the CIBA Vision business."

But he warned that there would be no changes as long as Novartis was just a minority shareholder. "You cannot just integrate two businesses," he commented.

US Congress keeps heat on ESAs

2008-04-07T15:46:00.002+01:00

The US Congress is pressing Amgen and Johnson & Johnson to explain whether marketing and sales practices for their erythropoiesis-stimulating agents (ESAs) have helped fuel "excessive and dangerous off-label use" of the anaemia drugs that are now the subject of intense safety scrutiny.

Last week Democratic leaders of the House Energy and Commerce Committee and Republican senator Charles Grassley, the ornery ranking member of the finance panel, separately sought documents pertaining to the companies' marketing practices and rebates.

The House panel is focusing on J&J's direct-to-consumer advertising (now halted) for Procrit, including marketing claims that the ESA improved quality of life for cancer patients although these were not supported in the product's label. The panel wants to know how much J&J spent on Procrit TV and print ads since 2001.

J&J defends its promotional activities as balanced, educational and accurately reflecting risks and benefits. "We do not believe that Procrit promotional campaigns have had any negative impact on patient safety."

The House committee's letter to Amgen focuses not so much on advertising for either of the company's ESAs, Aranesp and Epogen, but rather on marketing plans and advertising for the neutropenia agents Neupogen and Neulasta. This is because Amgen has apparently marketed Aranesp to physicians in conjunction with the neutropenia agents in a practice known as "bundling", whereby discounts or rebates for the products are linked together based on volume of purchases.

Senator Grassley takes a similar interest in this area, asking Amgen to explain why group practices and physician clinics in some states have received significant rebates for Aranesp that in some cases have doubled over a few years.

Critics say Amgen's contracting practices have created financial incentives for physicians to over-use the ESAs, and J&J has filed an antitrust challenge against the bundling practices in New Jersey federal court.

Amgen said it provides rebates and discounts to customers, as do many other companies. "While Amgen does not believe these practices have led to inappropriate or excessive off-label use of ESAs, to avoid even the appearance of such concerns earlier this year Amgen restructured the rebates of its Aranesp contracts to be based on share of sales rather than sales volume."

Funny thing - Amgen didn't mention this change to the FDA's oncologic drugs advisory panel last month, despite criticisms from some panellists about the company's contracting practices. In fact, an Amgen vice-president asserted that there was no evidence physicians are incentivised to use the products to achieve high haemoglobin levels.