Archive for December, 2008

Big Pharma’s Xmas Shopping Spree

December 31st, 2008 | No Comments | Source: TJOLS

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.

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What Was Rarer than an IPO in 2008?

December 31st, 2008 | No Comments | Source: Wall Street Journal

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.

whoturnedoutthelight 223x300 What Was Rarer than an IPO in 2008?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.

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NICE Try in the US

December 30th, 2008 | No Comments | Source: NY Times

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.

nice NICE Try in the USThat 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.

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Bristol-Meyers going BioTech

December 30th, 2008 | No Comments | Source: Wall Street Journal

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.

bms Bristol Meyers going BioTechSimilar 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.

exelixis Bristol Meyers going BioTechLast 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.

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DTC Europe-Ban Loosened

December 29th, 2008 | No Comments | Source: Wall Street Journal

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.

freeourmoney 203x300 DTC Europe Ban LoosenedThe 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.

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DTC North America-Bonanza

December 29th, 2008 | 1 Comment | Source: Wall Street Journal, WSJ Health Blog

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.

geniesoutofthebottle 225x300 DTC North America BonanzaBut 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.

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What Women Want

December 26th, 2008 | No Comments | Source: Economist

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.

cantgetenough 300x200 What Women WantThe 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.

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Amish Gene Mutation Fights CAD

December 26th, 2008 | 1 Comment | Source: NY Times, 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.

bloodtesttoday1 300x199 Amish Gene Mutation Fights CADIn 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.

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Skin in the Game

December 24th, 2008 | No Comments | Source: JAMA, WSJ Health Blog

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?

wewon 300x199 Skin in the GameKevin 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!

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Thumbs Up for Obama So Far

December 24th, 2008 | No Comments | Source: Washington Post

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.

doingoodsofar 300x200 Thumbs Up for Obama So FarAnd 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.

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