With cash burning holes in their pockets, withering prospects in their pipelines and Merck and Bristol Meyers Squibb recently having dipped into the BioTech trough, people expected more pharmaceutical companies to make moves in this space before long.

Sure enough, GlaxoSmithKline and Pfizer got BioTech deals done before the close of Q4.

GSK struck first, inking a global alliance with Dynavax to develop and commercialize toll-like receptor inhibitors for the treatment of autoimmune and inflammatory diseases.

TLRs are immune system receptors that activate inflammatory processes.

Terms of the deal call for GSK to give Dynavax $10 million up front in return for rights of first refusal on programs focusing on rheumatoid arthritis, psoriasis and lupus.

Dynavax carries out early R & D for these programs and can receive up to $200 million per program by hitting development milestones.

If GSK exercises its RFR to license the outputs of each program, it then assumes responsibility for ongoing development and commercialization. Dynavax would receive royalties on sales.

Pfizer bellied up to the bar too, signing a European marketing deal with Auxilium Pharmaceuticals for XIAFLEX , a first-of-its-kind, late-stage biologic used to treat Dupuytren’s contractures and Peyronie’s disease.

Auxillium gets $75 million upfront and can achieve $410 million more by hitting milestones, the first third of which are regulatory in nature, while the remaining are tied to sales.

The arms-length relationship in both cases is similar to the deal BMS cut with Exelixis a few weeks ago. More deals structured like them are sure to follow, as Big Pharma seeks arrangements that mitigate risk during the economic crisis.

The Great Economic Crisis of 2008 has cast a pall over public offerings in general, but in health care it’s been surreal. There have been 3 measly new stock offerings the whole year and that includes pharmaceutical, biotech and medical device companies combined.

That’s down from 38 in 2007 according to Dealogic.

And the ones that made it, MAKO Surgical Corp., CardioNet Inc, and Bioheart, Inc., went forward in QI. There hasn’t been a single health-care IPO since March.

“It’s very troubling,” says Steve Brozak, a medical devices and biotech expert and the president of WBB Securities LLC. “These companies are like the farm team for large pharmaceutical makers to buy novel technology and drug discoveries,” he added in the Wall Street Journal.

The famine represents a reversal of fortune for the sector which outpaced all others between 2004 and 2006 and finished second to tech offerings in 2007, according to Renaissance Capital’s IPOHome.com.

But the spigot did not close as suddenly is it appears. In the 6 months before MAKO went public in February, 13 health care deals were yanked before the big day. Twenty-four have been withdrawn since.

Maurice R. Ferré, MAKO’s CEO believes his company succeeded in part because its IPO made it out just before the roof collapsed.  “We faced a huge amount of headwind going into the deal,” he told the Journal.

No doubt they did, but it’s a Cat 5 hurricane out there now.

Like so much else, it began with Viagra.

When Pfizer introduced the blue pill in 1998, British health authorities worried it could wreck its budgetary process. It restricted access to the stuff, which prompted a suit claiming the government’s decision was capricious.

That inspired the government to consider a standardized, transparent approach to rationing medical interventions and a year later NICE, the National Institute for Health and Clinical Excellence was born.

Since then, NICE has received acclaim for limiting health care cost escalations and using evidence-based practices to assure that government spending buys the maximum amount of good quality life.

No one thinks this is easy. The British press is filled with heartbreaking stories of people who cannot access effective cancer drugs for example, but NICE responds that permitting these drugs means sacrificing others that are more cost-effective.

For years the British system was the only one to ration care this way, but spiraling health costs and souring economies have changed everything.

Now according to the New York Times, officials in at least 4 countries, Austria, Thailand, Colombia and Brazil say they either rely on NICE’s decisions or want to establish NICE-like institutions of their own.

Can something like NICE work in the US?

Actually, we may have no choice, according to Mike Leavitt, the secretary of health and human services. If we don’t do something to curb spending on health, it “could potentially drag our nation into a financial crisis that makes our subprime mortgage crisis look like a warm summer rain,” he said.

When Merck announced plans a few weeks back to open a BioTech production unit that would produce generic versions of protein-based drugs, some analysts worried that the new business model would be quite risky and expensive for the pharmaceutical giant.

Similar reasoning probably underlies Bristol-Meyers Squibb’s recent decision to pay Exelixis $240 million to develop 2 cancer drugs rather than acquire the troubled, mid-sized BioTech company.

In addition to the $240 million upfront, BMS forks over several hundred million dollars more if and when the compounds pass regulatory milestones and meet sales targets.

Last month Exelixis riffed 78 people—10% of its employees—and announced plans to focus exclusively on its most promising drug prospects including 2 known as  XL184 and XL281.

The arm’s length deal makes sense for BMS which was looking to make a splash in oncology ever since it lost ImClone Systems in a bidding war with Lilly (BMS co-markets ImClone’s cancer fighter Erbitux in the US, receiving 61% of US sales for the honor).

XL184 and XL281 are 2 of 16 compounds developed by Exelixis since 1994. None has received FDA approval and only XL184 has reached human testing.

XL184 is furthest down the regulatory road as a treatment for thyroid cancer, but human testing for that drug is also underway for cancers of the brain and lung.

As Big Pharma celebrates the tenth anniversary of the direct to consumer advertising bonanza in the US, there may be more good news for the industry coming out of Europe.

The European Commission had steadfastly prohibited the practice on the continent, but last week its officials proposed legislation allowing drug companies to provide consumers “objective and non-promotional information” about their drugs in magazines and on Web sites.

The legislation would allow drug companies to provide “medicinal, product-related information” that “does not go beyond the elements” of the inside drug packaging.

The information could cover for example side effects, prices or anything that “presents the medicinal product in the context of the condition to be prevented or treated,” according to Commission documents reviewed by the Wall Street Journal.

No one’s holding their breath of course because this is Europe: the legislation must be approved by the European Parliament and the Council of Ministers, and that could take years.

The Commission, which is the Executive arm of the European Union, believes the current ban is woefully out of date in an era when consumers are heavily involved in their care and routinely seek out medical information on the Web.

Speaking for the Commission, Gunter Verheugen VP of enterprise and industry emphasized the EU is not relaxing its ban on drug advertising. “There will be strict rules regarding content and these will be tightly monitored,” he told the Journal.

European consumer protection groups do not support the Commission’s decision, because they don’t believe Big Pharma can be trusted.

“It’s just a disguised way of giving pharmaceutical companies greater flexibility to provide the information they want on prescription medicines,” Monique Goyens told the Journal.

It’s safe to say that Goyens, director of the European Consumers’ Organization, would not encounter many in the US who disagree with that.

In the decade since the FDA began permitting Big Pharma to market drugs directly to consumers, the ads have become ubiquitous on TV and radio and in print media.

The industry spends $5 billion per year on DTC and no one argues the ads move mountains. For example, ads for the highly effective cholesterol-lowering statins have increased their utilization and almost certainly saved lives as a result.

But it’s galled more than a few folks that DTC ads have been equally effective promoting lifestyle drugs that line Big Pharma’s pockets without doing much to improve overall population health.

Rep. Bart Stupak (D-Mich.) for example, never did warm to the DTC concept. In May, he called out Pfizer for Lipitor ads featuring Robert Jarvik, the well-known inventor of the artificial heart because Jarvik is not a practicing physician.

So Big Pharma knew what to expect from Stupak when PhRMA, its trade group announced last week it was tightening its own guidelines governing DTC practices.

The new “voluntary guiding principles” include halting the practice of using actors to role-play physicians on DTC ads, requiring that celebrities cease claiming they use drugs unless they actually do, and ceasing the promotion of drugs for indications not approved by the FDA.

The guidelines also limit ads with adult-oriented DTC content (that would be Viagra and congeners) to programs that normally draw adult audiences.

Stupak offered lukewarm praise and quickly added that the guidelines don’t go far enough.

He wants Big Pharma to wait 2 years after drugs are marketed before releasing ads DTC to assure all drug effects are fully understood.  He also wants the FDA’s toll-free number to appear on DTC ads to facilitate reporting of side effects.

Industry spokespeople indicated they’d be happy to review the issue in a few years if critics remained unsatisfied. There’s no chance the issue remains quiet that long.

Perfume makers want guys to believe they’ll have more success attracting women if they apply a scent. It turns out that’s probably true, but not for the reason members of either sex would expect.

Craig Roberts and his team from the University of Liverpool showed that that when a man alters his normal body odor by adding fragrance, it positively impacts self-confidence and that creates visual cues women find attractive.

The scientists, working with a research team from Unilever, gave half the male volunteers in their study an unlabelled spray containing a commercial fragrance. The other half received an identically-appearing aerosol that contained no scent at all.

The men knew whether their spray contained a scent because they could smell it, but they didn’t know their behavior was being compared to men in the other cohort.

Psychological testing revealed that self-confidence increased in the group of men that had applied a scent, but not in the fragrantless control group.

Next, the scientists showed women brief, silent videos of men in both groups. The medium removed scent from the equation, yet women found men in the fragrantly-scented group to be more attractive.

Follow-up testing revealed the women were attracted equally to both groups when they were shown still photographs of the men, so something about the men’s posture and movement, and not their physical appearance, was decisive.

Thus when Unilever claims its deodorant Lynx renders men irresistibly attractive it’s hard to argue but the attraction has nothing to do with the smell of the fragrance and everything to do with the confidence-building effect it has on the men wearing it.

The study will be published in the International Journal of Cosmetic Science.

Genetic mutations can cause or prevent disease and scientists at the University of Maryland recently came across an interesting case of the latter.

The scientists asked folks from an Amish community near Lancaster, Pennsylvania to swill down a creamy milkshake and then tracked what happened to fat levels in their blood.

In nearly all participants, triglyceride levels rose for several hours then slowly declined to baseline as would be expected. But in about 5%, the levels started out low and jumped no more than a smidge.

Tori Pollin and colleagues traced the favorable phenotype back to a gene mutation that had already received the inauspicious name apoC-III. The gene codes for APOC3, a protein that normally slows down triglyceride metabolism.

According to Pollin’s report in Science, the cohort with the gene mutation also had higher levels of HDL (good)-cholesterol and lower levels of LDL (bad) –cholesterol. And they had fewer coronary artery calcifications on CT scanning. In short, the mutation was cardio-protective.

The isolated nature of the Amish population enabled the scientists to trace the apoC-III mutation to a man born more than 200 years ago.

In commenting on the study, Daniel Rader told the New York Times, “this is among the strongest human evidence we have that APOC3 is quote, unquote, bad.”

We love it when University of Pennsylvania cardiac researchers talk like that. He added, “if you had a drug to turn off the gene to prevent as much APOC3 being made, this study suggests that that would be beneficial to do.”

We’re on it.

In 1960, 13% of US adults were obese. Now it’s 31% and it’s looking like obesity might surpass cigarette smoking as the numero uno preventable cause of premature death.

How can we get people to get serious about losing weight?

Kevin Volpp and colleagues at the University of Pennsylvania thought why not try financial incentives and you know what? They worked like a charm.

The scientists randomized 57 obese healthy male volunteers aged 30-70 years to either of 2 incentive programs or a control group. The goal was to lose 16 pounds in 16 weeks.

In both incentive schemes, participants had to pay to play and could only win if they met weight loss targets during the study. The first involved a cash lottery. In the second, players doubled their money straight-up if they met the targets.

In both schemes, the payout came out to about the same, $300 per qualifying player. The control group received educational materials and monthly weigh-ins.

At the end of 16 weeks, only 10% of the controls achieved the weight loss target. Fully half those in each incentive group made it and the difference was significant.  The findings were not impacted by age, income or initial BMI.

At 7 months, scientists found that the weight of control group participants had returned to pre-study values. Weight of participants in the incentive groups was significantly below baseline levels, although they had packed on some pounds since the study ended.  

And almost no one in the incentive groups was lost to follow-up!

Scientists will want to study the long-term benefits of incentive programs, determine whether the findings can be generalized to women and assess program cost-effectiveness but yea, we know how get their attention all right!

76% of people approve of the Big O’s performance since election night, including nearly 6 in 10 Republicans, according to a Washington Post-ABC News poll of 1,000 adults conducted between December 11 and 14.

And while most people say he needs to bear down on the economy right away, many want him to expand his policy focus quickly.

A shade less than half of the survey respondents believe the Big O can do a “great deal” or “good amount” to fix the economy, and 55% percent think he’s done well so far on this matter.

A higher number, 65% favor a stimulus package of the sort recently floated by the president-elect’s transition team.

A majority of respondents support major health system reform, and 65% of Democrats and 52% of Independents want immediate action on the matter.

But 44% of Republicans say they don’t favor major health system reform and an equal amount could swallow something big but don’t think it’s something he needs to focus on immediately.

A majority of respondents from both parties think the federal government should expand health coverage for children by extending the State Children’s Health Insurance Program, which at the moment has a March sunset provision.

The stem cell issue remains contentious with most Republicans opposing new federal funding and most Democrats saying the Big O should authorize exactly that right away.

Democrats and Republicans also disagree in predictable ways on the Big O’s pledge to pull troops out of Iraq in 16 months.

There was strong bipartisan support for increased use of renewable energy and a nationwide moratorium on home foreclosures. Most people want the Big O to address these issues right away.

More than 11% of US children and teens take herbal supplements or another type alternative medicine, according to a study by the Centers for Disease Control and Prevention.

The study is the first to assess utilization of oral supplements, acupuncture, meditation and chiropractic care among children. The same study concluded that adult utilization of these treatments remained stable since 2002 at about 37%.

Herbal supplements were the most frequently used alternative therapy in all age groups. Children were particularly common users of Echinacea, fish oil, combination herb pills, flaxseed oil, and prebiotics or probiotics.

The most common symptoms triggering use of herbal supplements were head or chest colds, anxiety/stress and back or neck pain. Insomnia, attention deficit hyperactivity disorder and body aches made the top 10.

Kids were 5 times more likely to use alternative therapies if a parent or relative used them. Those with higher incomes and education, and those covered by private health insurance were more likely to use them than children who were uninsured or covered by public programs.

It’s hard to say whether this degree of utilization is useful or harmful since few of the therapies have been tested rigorously according to Richard Nahin, a study author head of the National Center for Complementary and Alternative Medicine.

The study relied on a 2007 survey of 23,000 adults representing themselves and 9,000 other adults who spoke for a child in their home.

The study did not examine use of vitamin and mineral supplements, folk medicine practices or religious healing.

Use of alternative therapies is likely much higher in immigrant communities, particularly those from China, Africa and the Caribbean.

The Great Economic Crisis of 2008 has blown the doors off every sector of the economy and the government has selectively bailed out insurers, bankers and auto makers, so no one can blame industry leaders in other sectors from giving it the old college try.

Take BioTech for example. The sector has been soundly thrashed, especially the little guys.  In fact BIO, a trade group reports that 33% of the 370 publicly traded US BioTech companies have less than 6 months’ cash on hand—twice as many as last year.

Whew, so last week BioTech executives had their day with Congress.

They proposed a deal: if you give us cash now, we won’t take our tax credits when we become profitable (when and if, they should say). And there’d be a cap, say $30 million, on the cash a single firm receives.

Ahem. How in the heck is Congress going to assess all that risk, or are are these people also proposing a built-in BioTech Czar?

Actually, it may be a good deal, but Congress has to weigh it against proposals from other sectors. And for all the bluster, BioTech is small. Only 200,000 people are at risk.

In its defense, CombinatoRx chief exec Alexis Borisy told the New York Times BioTech is “one of the few places where the US is the undisputed leader of the world.”

The plan has at least one ally in Rep. Allyson Schwartz (D-Penna.) who wants to include the proposal in the Big O’s stimulus package. “Innovation and technology are growth areas for American businesses and American workers and should be part of this package,” she told the Times.

Schwartz’ district is home to several BioTech and Big Pharma offices.

It was nice while it lasted, but the days when Web-based start-ups could focus on building traffic and cash in later on ad-based revenue models are going, going, gone.

Online display-ad spending will likely plummet in 2009, and probably stay low through at least part of 2010, and the line-up of affected companies looks like an Internet murderer’s row: Twitter, Facebook, AOL, CNET and Yahoo among others, according to Silicon Alley Insider.

In the Great Economic Crisis of 2008, Web companies need a balanced revenue model according to Roger Lee, a general partner from Battery Ventures.

Lee told the New York Times that most start-ups in his portfolio offer premium services, subscription products or e-commerce elements in addition to free services.

Pizaazz has covered several companies like this including comScore, LinkedIn, and Yammer.

Angie’s List does this as well. It provides reviews and ratings of local businesses for a monthly fee, as well as earning income from ads. World Golf Tour is yet another. The site lets people play famous golf courses for free on their computers, but charges tournament fees and has a virtual store that sells duds for avatars and tips from pros.

Or, as David Weiden said, “If a company approaches investors with a plan to lose money for three or four years while building an audience, it will encounter many closed doors.”

The partner at Khosla Ventures told the Times, “It’s gone from plausible to almost implausible.”

“What’s changed more than the ability to make money from ads is the ability to raise money at the same valuation it had six months ago (using an ad-based revenue model),” he added.

It’s a shame that blood pressure recordings from the doctor’s office aren’t great predictors of future cardiovascular events due to white-coat hypertension, but it is what it is.

The long-recognized phenomenon is characterized by office-based BP readings that are higher and more labile than those taken during the course of normal everyday life.

Thankfully, scientists have shown that ambulatory blood pressure recording devices provide useful predictive information, particularly in those having severe hypertension, a cardiac history, multiple cardiovascular risk factors, pregnancy and elderly folks.

Now Gil Salles and co-investigators at University Hospital Clementino Fraga Filho in Rio de Janeiro, Brazil have shown that ambulatory blood pressure recordings can predict CV risk in another subset of patients, the ones with resistant hypertension.

Sales’ was a prospective study of 556 patients with resistant hypertension, defined as persistently elevated blood pressure despite treatment with 3 anti-hypertensive agents.

After median follow-up of 4.8 years, the scientists found that 109 patients (19.6%) either died or incurred a cardiovascular event.

After controlling for age, gender, prior cardiac events and other CV risk factors, Salas’ group confirmed that office-derived blood pressure recordings were not predictive of future events, but higher mean ambulatory BPs did predict these events.

Ambulatory systolic and diastolic blood pressure recordings were both effective predictors, and nighttime recordings were superior to those obtained during the day.

Russia’s cyber attacks on Georgia and Estonia didn’t do it. A US citizen’s big hack into the Pentagon’s computer system didn’t do it. Even a special Congressional commission’s warnings about China’s advanced cyber warfare capabilities didn’t do it.

But Agent.btz did. When the embarrassingly simple, 3 year-old worm infected the bejeesus out of the whole US Army necessitating a costly pan-continental thumb-drive scrubbing, the US government finally got the message.

And now, maybe, it will get serious about beefing up the nation’s cyber security systems. 

The likely starting point will be National Security Presidential Directive 54 a program that has languished since the day President Bush signed it into law.

Directive 54 set aside $15 billion to develop a national cyber security program that would protect the federal government’s computers as well as critical energy, electric and water systems.

The main reason Directive 54 has gone nowhere is the lack leadership on the issue, according to a special commission set up by the Center for Strategic and International Studies.

So the commission plans to recommend appointment of a cyber czar, a person that would report directly to the President and have at his or her disposal all the proper diplomatic, military and intelligence tools to confront cyber threats.

The recommendation is likely to trigger the same furious debate around privacy that surfaced during Bush’s domestic wiretapping caper, so the Big O, who long ago recognized the cyber problem and promised during the campaign to appoint a “national cyber adviser,” better save some chips.

Hopefully, the Big O prevails because according to the commission, “America’s failure to protect cyberspace is one of the most urgent national security problems facing the new administration. The battle in cyberspace…is a battle we are losing.”

It wasn’t a pretty process, but FDA officials finally agreed to proscribe Serevent and Foradil as treatments for asthma while allowing asthma sufferers to continue using Advair and Symbicort.

The 4 inhalational drugs all contain long-acting beta agonists, but only the latter 2 contain steroids as well. Advair and Serevent are made by GlaxoSmithKline. The former is, at $6.9 billion in annual sales, GSK’s biggest seller.

Symbicort is marketed by AstraZeneca and has annual revenues of about $350 million. Foradil is marketed by Novartis.

All 4 drugs are still OK for use by patients with COPD, according to the FDA.

The FDA’s decision followed a hectic week in which officials openly disagreed about the drugs’ safety after a meta-analysis they commissioned on the subject was found to have methodological flaws rendering the study worthless.

Some physicians believe that long-acting beta agonists can prevent asthma attacks if used properly. The problem is that unless they are used in conjunction with inhaled steroids, they seem to increase the risk of particularly severe attacks.

And a lot of people don’t always use the long-acting beta agonists correctly.

The long-acting drugs are not effective treatment for acute exacerbations of asthma. If people use them for this purpose instead of rescue inhalers (which contain short-acting beta agonists), they delay proper treatment which can lead to unnecessary complications.