Tuesday, July 29, 2008

Amgen's Denosumab: NOW How Much Would You Pay?

Monty Hall is back, because it sounds like it may be now or never to secure a partnership with Amgen for one of the most eagerly awaited Phase III projects in the industry—the post-menopausal osteoporosis treatment denosumab.

Recall that Amgen is considering partnering the project, a once-unthinkable option but now an oh-so poignant sign of the times for an industry struggling to reinvent itself. Recall also that we offered you complimentary access to the profile of denosumab from Elsevier’s Inteleos database to help you decide how much to pay for a share of this potentially huge market opportunity—and to shoulder some of the risk that denosumab will instead become another spectacular Big Pharma flameout.

The latest development: Amgen has announced positive Phase III results in a big osteoporosis trial, involving about 8,000 patients studied for three years. The company certainly isn’t underplaying the results. R&D chief Roger Perlmutter told The New York Times that the trial “exceeded my expectations”--which seems hard to do, given that denosumab is essentially a bet-the-company project for Amgen at this point.

During Amgen's quarterly call July 28, Perlmutter explained his ebulliance. “The fact that we saw statistically significant reductions across all primary and secondary endpoints was really very impressive. I will also say that when you look at the safety database, you have nearly 24,000 patient years of experience here, so it is far greater than anything else that we had to look at. The fact that the safety profile is so balanced as compared to placebo was extremely encouraging.”

Now, we might take those comments with a grain of salt, since all indications are that Amgen is still actively soliciting interest in partners for the drug. As CEO Kevin Sharer noted during the call, the positive study “certainly doesn’t preclude the necessary work we will do to see what our options are.”

Amgen, of course, wants to raise the price of any deal: “This data certainly makes us more confident in our ability to launch ourselves,” Sharer declared.

And Amgen certainly faces other pressures. The company is deep into cost-cutting mode as it adjusts to the new, sharply reduced realities of its flagship EPO franchise. The last thing it wants to do is embark on aggressive new spending to build a massive primary care sales presence to support denosumab.

Sharer, understandably, declined to provide any estimates on how much Amgen would have to spend to support a go-it-alone launch—no sense showing all your cards, is there?

"Our view is that we've got really strong data here," he said. "We're going to have to take this data, look at it carefully, see what physicians think. But I just want to assure our shareholders that we're going to make a full and complete analysis and surface the right set of options, and I'm confident we'll pick the right one.”

Sharer also suggested that an internal launch might not be as expensive as the conventional Big Pharma model would suggest. "We see this medicine with its high science component as being something that will take the kind of high science and medicine approach that we've historically taken. So we do not see this as a normal general practitioner kind of sales product that you just throw in the bag."

On the other hand, Sharer clearly has a bit of a one-track mind when it comes to thinking about the importance of denosumab to Amgen. Asked to comment on Amgen's overall approach to infrastructure-building, and whether there might be any opportunities in the current climate of consolidation, Sharer replied succintly. "I can't imagine buying a company to acquire a sales force. That' s inconceivable."

So I guess those Genentech sales reps are going to have to look elsewhere....

1 comment:

Anonymous said...

Biopharmaceuticals: A New Paradigm In Clinical Pharmacology

Beginning in the late 1970s, biopharmaceuticals were being researched for conceptual production in those places once called academic institutions, and is was here that actual researchers conducted basic research to identify new product candidates and applied a great amount of time and effort. The same protocol is applied with biopharmaceutical companies today as it was then.
It is believed that the first biopharmaceutical therapy ever was synthetic insulin called Humulin made by Genetech in 1982, that utilizing what is called rDNA technology, which also is used to produce human growth hormones. Later the rights were sold to Eli Lilly for this insulin. Yet Genetech was the catalyst for biopharmaceutical growth. And they are truly research-driven. Today, they employ near 1000 scientists to continue their drive to research. And so far, remain independent.
Biopharmaceuticals are distant and covert relatives of big pharmaceuticals, whose products are typically small molecule and carbon based in their design. Due to the lack of innovation and creation of truly unique products, large pharmaceutical corporations in particular have become intimate with the innovative biopharmaceutical companies more often now than ever. In fact, large pharmaceutical companies often acquire biopharmaceutical companies. These large pharmaceuticals do this because of the unlikely possibility that biopharmaceuticals will have generic products with therapeutic equivalents for some time. In addition, biopharmaceutical companies have historically been and experienced accelerated growth that has proven to be quite lucrative for them.
Biopharmaceuticals are a type of biotechnology medications, also known as red biology.
How do these drugs differ from typical drugs that have been made before this advent of biopharmaceuticals? Unlike the small molecule, synthetic, carbon based pharmaceuticals of yesterday, biopharmaceuticals, classified under what is called Red biotechnology due to this being a medical process in the biotechnology world, essentially are larger and very complex modified proteins derived from living biological materials that vary depending on what medication will be manufactured and for what disease state. In fact, it is difficult to identify the clinically active component of a biopharmaceutical drug, which is why there is no pathway for generic copies of such drugs, as it would require expensive and meticulous clinical trial processes.
Amgen recently had to pay a settlement to JNJ, who makes an identical drug called Procrit, for rebates and incentives Amgen was giving Oncologists for using Nupogen, and this will be addressed later, as the drugs are identical with different names.
One method of these creations is that a transformed host cell is developed to synthesize this protein that is altered and then inserted into a selected cell line. The master cell banks, like fingerprints, are each unique and cannot be accurately duplicated, which is why there are no generic biopharmaceuticals as of yet, as there is no known process to create them. So the altered molecules are then cultured to produce the desired protein for the eventual biopharmaceutical product. These proteins are very complex and are manufactured from living organisms and material chosen for whatever biopharmaceutical that may be desired to be created. It is difficult to identify the clinically active component of biopharmaceutical drugs. So manufacturing biopharmaceuticals clearly is a different and innovative process, and a small manufacturing change could and has raised safety issues of a particular biopharmaceutical in the developing process. Also, it takes about 5 years to manufacture a biopharmaceutical. And each class has a different method of production and alteration of life forms to create what the company intends to develop. Yet overall, their development methods are rather effective.
Over 20 biopharmaceutical drugs were approved in 2005, I believe, and their growth tripled of what large pharmaceuticals experienced then. Also, just last year, biopharmaceutical companies made close to 80 billion in sales as well. Presently, over 20 biopharmaceutical products are blockbusters by definition. They are overall very effective treatments for what are viewed as very difficult diseases to manage. This is due to the fact that some pharmaceutical products target specific etiologies of these diseases, while limiting side effects because of the specific way in which such products work.
Unlike traditional medications that have been created in the same way for decades, biopharmaceutical companies seek through their research specific disease targets by genetic analysis and then search for a way to manipulate this target in a very specific way to provide superior treatment for such patients. Furthermore, these products are biologically synthesized and manipulated to maximize their efficacy while not crossing into a patient’s bloodstream.
There are about a dozen different classes or mechanisms of action of biopharmaceuticals that have about a half of dozen different types of uses today. Label alterations for additional disease states occur often as well due to the progressive and novel effectiveness of biopharmaceuticals. Some of these drugs are catalysts for apoptosis of tumor cells. Others may cause angiogenesis to occur to block blood supply to the tumors of cancer patients. Then some biopharmaceuticals have multiple modes of action that benefit certain patient types and their diseases greatly, as with most biopharmaceutical products, the safety and efficacy is evident and reinforced with clinical data and eventual experience with the biopharmaceutical that is chosen to be utilized. And this clinical data is of a different method as well in comparison with what are traditional medications. For example, patients in the clinical trial involving a pharmaceutical are profiled, which allows better interpretation of this clinical data on their products.
Partnering of biopharmaceutical companies and larger pharmaceutical companies began during this time as well, if not being acquired by large pharmaceutical companies. Needless to say, large corporate pharmaceutical companies have a very high affinity for potential blockbusters. Roche recently made a bid for Genentech, which Genetech declined.
The country of Belgium provides the most biotech products to the biopharmaceutical companies in the United States, and the U.S. leads the world in regards to biopharmaceutical product creation- with more than 70 percent of both revenues and research and development expenditures in this country. Canada is ranked number two in this area, others have said.
And with the government health care programs who are the largest U.S. payers for pharmaceuticals, Medicare pays 80 percent of the cost of biopharmaceuticals, as many are administered in the doctor’s office.
One other controversial, yet profitable biopharmaceutical class is known as EPOs. The two that are available are actually identical, yet have different names of Procrit and Epogen. Both are indicated for anemia that is experienced in patients on dialysis or who have cancer in particular. Doctors are monetarily incentivized to exceed dosing requirements of these agents for their anemic patients. When this happens, it potentially causes premature deaths as well as accelerating the progression of cancer patients placed on one of these meds. Once this tactic was exposed, there are now limitations regarding the amounts authorized to be given to particular patients placed on these EPOs. They are in the class of hormone biopharmaceutical drugs, which is another type of several classes of biopharmaceuticals, and they reduce the need for blood transfusions as they increase RBC proliferation safely and effectively if dosed properly.
Another controversy involving biopharmaceuticals is that, while they overall are very efficacious and safe, the typical cost of biopharmaceuticals is rather unbelievable, as the cost approaches 10 thousand dollars a month or more for many of them. Furthermore, with cancer drugs, they are used together with chemotherapy for their treatment regimens in many treatment centers, so the quality of life comes into question if one considers the devastating side effects of chemo treatment. Another criticism of biopharmaceuticals is that, with cancer patients in particular, they normally provide an extension of their life of only a few months.
Several years ago, I saw Roy Vagelos, former CEO of Merck Pharmaceuticals, and heard him speak to others at Washington University in St. Louis about his views on medicines. And during his presentation, he stated something similar regarding the cost of biopharmaceuticals and asked as well about whether or not the value related to the cost of biopharmaceuticals is truly clinically beneficial for such a brief life extension of cancer patients in particular, for the most part.
An issue or issues are always associated with new paradigms and innovations. Yet there are only a few biopharmaceuticals out of many available with debatable benefits with the high price tag. It ends up being what the market will bear for what their makers charge others. Yet the real question is the clinical evidence behind biopharmaceuticals: If a biopharmaceutical stops tumor progression without harming such patients is clearly both safe and effective.
Another difference with biopharmaceuticals is that they are also are additionally regulated by what is called The Public Service Act, and are involved in authorizing the marketing of biopharmaceuticals.
Safety protocols regarding biopharmaceuticals are a mystery to me as well. What is known is that biopharmaceuticals have the potential to discover therapies to treat the cause of a particular disease state instead of treating such a disease only symptomatically. They set out to solve unmet clinical needs by science that has yet to be proven. Biopharmaceuticals save, enhance, and extend the quality of life of patients with terrible diseases, and over 250 million people have benefited from their products.
Yet presently, few biopharmaceutical companies are actually profitable. Also, with biopharmaceuticals, some years are better than others from a revenue and market share growth point of view. Yet like any business, some years are better than others, and biopharmaceuticals are anticipated to offer quite a bit to public health in the future, with a focus on cancer patients in particular.
The total cost of developing a biopharmaceutical exceeds a billion dollars, with about a third actually making it to market to recover this cost. The market size of biopharmaceuticals is rapidly approaching 100 billion dollars a year, with average annual growth between 10 and 20 percent, some have said.
With many biopharmaceuticals, such as those used to treat cancer, between70and 80 percent of them are believed to be prescribed off-label, so it will be interesting on how these drugs will be used in such disease states now and in the future.
So the future looks good for this industry, as biologics have tremendous marketing power along with superior therapeutic value with some of the products available, but not all.
Regardless of the challenges and flaws that exist with biopharmaceuticals and their makers, I’m pleased to see the results and realization of true innovation in pharmacology by taking a different path of drug development. Furthermore, I believe others should behave in a similar manner and be inspired by the biopharmaceutical companies and what they have done and continue to do for the benefit of patients regarding the issue of innovation.
“The progressive development of man is vitally dependent on invention.” --- N. Tesla
Dan Abshear (what has been written is based upon information and belief)