Friday, August 26, 2011

Deals Of The Week Battens Down The Hatches

Mother Nature, you've been busy this week. The entire East Coast population remains glued to Wunderground or The Weather Channel as it tracks the path of the lumbering hurricane Irene. The good news? After the strongest earthquake in nearly seven decades struck outside Washington DC, everyone should have already stocked up on batteries and bread. Just in case, you know, there's an after shock.

Yes, residents of the bankrupt but beautiful California mocked the twitter outcry that ensued after the 5.8 temblor. Consider it pay back for the repeated digs about our obsessions with tree-hugging, organic grass-fed lamb, Steve Jobs, and the Facebook IPO. Maybe the daily lack of humidity just makes us mean. Based on this blogger's perspective, the only truism that matters is that residents of neither coast know how to drive in the snow -- or rain.

If it's been quiet in biopharma land on the deal front, companies like Seattle Genetics are finding ways to make noise. Lots of noise. Hundreds of thousands of dollars per patient worth of noise. Yes, hard on the heels of the Friday August 19 approval of Adcetris came the Monday August 22 unveiling of SeaGen's pricing strategy for the new conjugated antibody. And it's ambitious: depending on the course of treatment, the biologic, which is approved for late-stage Hodgkin lymphoma and systemic anaplastic large cell lymphoma, could cost as $121,500 based on the clinical trial experience.

We applaud the company's chutzpah; the company's CEO, Clay Siegall has come out swinging as to why this hefty price will pass the ever higher bar payers set on "value". Indeed, this is the first drug for Hodgkin lymphoma in 30 years and boasts a strong objective response rate. And we understand that the two approved indications in the drug's label are not the most prevalent cancers, meaning insurers likely won't balk at paying the price tag, given the total dollars won't quickly run into the billions.

All of which is not so subtle messaging from Seattle Genetics execs that they think Adcetris won't suffer from what is now widely being termed the "Provenge Problem" (and before that "the Folotyn Foible") -- essentially the lackluster launch of a new oncologic in part because of the drug's high price tag. Still, given the lack of traction for Dendreon's Provenge in the marketplace, it's not surprising that investors reacted to SeaGen's pricing news with all the enthusiasm of Cleveland welcoming home its prodigal son, LeBron James.

Siegall and his commercial team are confident they won't repeat Provenge's mistakes. As we write in this week's "The Pink Sheet", the biotech has a plan -- an extended payment plan to be exact -- to overcome the reluctance of physicians, who may hesitate to front the cost of the drug before there is clarity on its reimbursement. That has apparently been a major issue for urologists when choosing between Provenge and other alternatives, like the significantly cheaper Zytiga from Johnson & Johnson.

But the twinning of Adcetris and Provenge may not ultimately prove the best comparison. What Seattle Genetics really wants to avoid is the Avastin issue. You see, while payers may not balk at shelling out $120K (or whatever the drug ultimately costs, since labeling permits administration of up to 16 cycles of the drug, which potentially raises the price tag north of $200,000) for a few thousand patients, eyebrows could rise as the biotech and its partner, Takeda Pharmaceuticals, look to expand the drug's label into more prevalent cancers like non-Hodgkin lymphoma. Especially if there aren't overall survival data and/or quality of life measures to support Adcetris's use in a particular indication.

You can bet the topic will be front and center at this year's 21st annual Pharmaceutical Strategic Alliances meeting (tune in September 22 for a discussion officially titled "The Changing Oncology Landscape and watch for #PSA11 tweets).

We know. You haven't had time to check out the agenda because you've mistakenly been crooning "Come On, Irene" all week. By now, you've bought the candles and the water. You've unearthed the hand-crank radio. Take a break from battening down the hatches and tune into another Category 5 edition of...

Baxter/Baxa: Publicly traded Baxter International made a move to expand its medication delivery business by acquiring Baxa, a closely held maker of pharmacy products used to prepare and administer fluid drugs. Baxter will pay $380 million in cash to acquire Englewood, Colo.-based Baxa, which posted $157 million in 2010 sales. Founded in 1975, Baxa still sells its first product, an oral syringe, but also manufactures automated compounding devices used in pharmacies, as well as dose preparation systems for intravenous and oral drug delivery. Baxa is thought to have about a 65% share of the automated compounding device market, placing it ahead of the larger but more diversified Baxter, which also has a bioscience division and significant sales from renal health products. Baxter’s medication delivery division, which includes a variety of pre-mixed drugs, syringes, drug reconstitution systems, infusion pumps, and nutrition products, brought in $4.8 billion in 2010 sales, about three-eighths of its $12.8 billion in overall sales. Baxter has since merged its medication delivery and renal businesses into a single unit; the company also bought irregular heartbeat drug developer Prism Pharmaceuticals for $170 million up-front, plus contingent payments worth up to $168 million, earlier this year. Analysts regarded the Baxa deal as sensibly-priced and low-risk. – Paul Bonanos and Zach Miners

Par Pharmaceuticals/Anchen: The earthquake and impending storm didn't stop Par from making s.its second acquisition this year: the $410 million purchase of privately-held generic drug maker Anchen Pharmaceutical. The latest acquisition, announced August 24, is significantly larger -- and thus, more important -- than the company's May purchase of Edict Pharmaceuticals for $37.6 million. Chairman and CEO Patrick LePore said during a same-day conference call that the Anchen buy would be immediately accretive to earnings, expand the Woodcliff Lake, N.J., company's R&D capacity and nearly double its pipeline of ANDAs awaiting FDA approval. The company, which has both a generics and a proprietary drug business unit, called Strativa, has been focused on topping up its generics portfolio, which generates 80% of its total sales. Through the deal, Par acquires 218 Anchen employees, including about 70 R&D staff, greater expertise in extended release technology, and manufacturing capabilities in southern California. Anchen also brings with it five marketed products that are expected to generate about $125 million in gross revenues this year, including generic versions of GlaxoSmithKline's antidepressant Wellbutrin XL and Bayer's Cipro. Par had $307 million in cash as of June 30, 2011, and plans to finance the acquisition with cash and a $350 million loan.--Joseph Haas

Sanofi/Universal Medicare: After rumors started to circulate early in the week that Sanofi was eyeing acquisitions in India, came Wednesday's news that the French pharma's subsidiary, Aventis Pharma Ltd., will purchase the over-the-counter drug biz of Mumbai-based Universal Medicare. The final purchase price was undisclosed but The Indian Express reports the take-out could cost around $110 million based on discussions with undisclosed sources. The deal gives Sanofi, which has been a nominal player in the Indian OTC space, around 30 brands with estimated annual sales of around one billion rupees. It's no secret big pharmas have been moving aggressively into high growth emerging markets, especially India and China, as sales of key drugs in emerged arenas like Europe and the U.S. stall due to patent expiries. Even as companies eventually look to sell their expensive, on patent medicines in these markets, much of the initial effort has been on creating a presence via a stable of more affordable products aimed directly at consumers. Sanofi has been among the most aggressive of the big drug makers in its pursuit of local EM players (it's recent hunt for Genzyme not withstanding). This latest bid doesn't eclipse its 2009 take-out of the Indian vaccine player Shanta Biotechnics, which cost the French pharma an estimated $784 million. But hopefully the revenue pay back will be better. Shanta hasn't turned out to be such a great deal for Sanofi, given the vaccine company's manufacturing woes.--EL

Image courtesy of

Friday, August 19, 2011

Deals Of The Week's Tale of Two Drugs

It was the best of times (Vacation!). It was the worst of times (Market turmoil, London's riots, and unemployment; the Middle East.) It was the age of wisdom (Drug reprofiling! Warren Buffett. A new Muppets album); it was the age of foolishness (2012 Presidential election! Phone hacking scandals!).

We had everything before us -- with the waning of summer, the impending season of investor meetings ought to mean renewed opportunities for deal making, after all. Or maybe not. Big Pharma's aversion to take risk could well mean that for biotechs of a certain ilk, we had nothing before us.

Meantime, if regulators weren't exactly channeling a tale of two drugs this week, news of the extension of Eylea's PDUFA and the months-earlier than expected approval of Zelboraf, announced within 18 hours of each other, sure set up an interesting comparison. (The Friday announcement of an early nod for Seattle Genetics and Takeda's Adcetris means we could have written a tale of three drugs. Alas, it messes with my metaphor.)

On the one hand you have Eylea, a VEGF-inhibitor developed by Regeneron to treat the wet form of age-related macular degeneration, whose primary commercial advantage isn't improved efficacy but a more patient-friendly dosing regimen. Its new PDUFA data has been delayed three months from August 20 until mid-November. On the other hand, you have the small molecule BRAF inhibitor Zelboraf, a targeted therapy that is being co-launched with a companion diagnostic and becomes just the second new drug in decades to treat deadly metastatic melanoma. It's original regulatory action date was October 28.

Two different medicines both treating areas of high unmet medical need. But one is first-in-class and one is a essentially a convenience play, albeit an important one given the importance of sight and the potential to avoid onerous monthly eye injections. Still, it's tempting to wonder if stealth comparative effectiveness is at work by U.S. regulators.

That seems unlikely. No new safety or efficacy concerns are behind Eylea's regulatory extension; in a call with investors Wednesday August 17, the biotech's execs emphasized questions tied to the chemistry, manufacturing and controls portion of the drug's biologics license application were responsible for the postponement of the drug's approval. And if the recent advisory committee meeting vote is any guide -- the committee voted 10-0 in favor of the drug's approval -- there's no reason to think the drug won't make it to market later this year.

Still for Regeneron, which is leaning heavily on Eylea to catapult itself into the realm of commercially-focused biotechs, the news undoubtedly came as a psychic blow. The biotech is now in hurry-up-and-wait mode, having lined up a commercial team approximately 70-people strong to launch the product, according to this story in "The Pink Sheet" DAILY. On the August 17 conference call, the biotech revealed it will take a third quarter SG&A charge in part because of the estimated $70 million to $80 million associated with Eylea's launch. Unsurprisingly, investors reacted negatively, sending the company's stock price down about 8% as of the market's close August 18. (Though it could have been worse given the general market turmoil and the massive sell-off late in the week.)

Plexxikon, the biotech which originated Zelboraf, is in a completely different position entirely. Having exercised an option to co-promote the drug in the US, the VC-backed start-up was snatched up by Daiichi, which like so many other pharmas, is looking to double down in oncology. Roche's Genentech is leading the commercial efforts, and as our colleagues at "The Pink Sheet" DAILY report, has identified a crafty plan that puts the targeted therapy's value front-and center. At an estimated $60k for a course of therapy, the drug, which can only be prescribed for patients with a specific mutation, is significantly cheaper than Bristol-Myers Squibb's competitor Yervoy.

The dichotomy between the forces now steering Regeneron and the insulation Plexxikon now enjoys as a division of Daiichi show that for biotechs, the more things change, the more they stay the same. Or in the words of Charles Dickens,
in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.
On one of the last Fridays of summer, perhaps it is a far, far better thing that I bring you another edition of...

General Dynamics/Vangent: Government contractor General Dynamics shored up its health care information technology division this week with the $960 million cash purchase of Vangent. The deal brings an exit to private equity fund operator Veritas Capital, which owned 90% of publicly traded Vangent prior to the sale. Veritas acquired Vangent’s predecessor, Pearson Government Solutions, for $600 million in 2007; Vangent has since expanded by acquiring two other companies, FDA and Medicare contractor Buccaneer Computer Systems and Service ($65 million) and the health care IT unit of Aptiv Technology Partners ($4 million). Vangent derives about 90% of its business from U.S. government agencies, including the Departments of Health & Human Services, Defense, State, Education and Labor. It provides IT services including electronic health records to military personnel and Federal employees, as well as informing Medicare recipients of health care options. Vangent will be integrated with Falls Church, Va.-based General Dynamics’ information technology division, which also recently grew by acquiring cloud computing company Network Connectivity Solutions. Arlington, Va.-based Vangent posted net income of $40 million on revenues of $762 million during 2010, and had $27 million in cash and equivalents at the end of the year. The deal comes as many government agencies seek to cut costs in anticipation of reduced budgets and buy-out firms as well as traditional venture groups see opportunity in the relatively nascent healthcare IT space. – Paul Bonanos

Paladin/Labopharm: Canadian drug formulator Labopharm had sought a suitor pour longtemps, and finally found one in acquisitive specialty pharma Paladin Labs. This week Montreal-based Paladin agreed to buy struggling Labopharm for CN 28.57 cents per share in cash, valuing the company at about CN$20 million ($20.4 million). Paladin, which markets a variety of drugs including pain relievers, contraceptives and injectable emergency treatments for hypoglycemia and allergic reactions, is already attempting to acquire cold remedy developer Afexa Life Sciences of Edmonton in a hostile bid. The offer for Labopharm is friendlier, however, and has already been accepted by its board. Labopharm, which brought in new management in March as part of a restructuring, develops drugs using its controlled-release and nano-delivery systems; in its earnings report earlier this month, Labopharm said its expenses and obligations would likely exceed its revenue and cash reserves in the coming months, and its ability to survive as a going concern was in question. While the deal seems likely to close without incident by the fall, Paladin has cause for concern elsewhere: Hours after the acquisition was announced on Aug. 17, Paladin CEO Jonathan Goodman was in a bicycle accident, and is currently hospitalized with what the company calls “serious injuries.”--PB

Human Genome Sciences/4-Antibody: Even as HGS's investors wonder what additional late-stage clinical assets the biotech will bring in to continue the revenue upsurge the biotech has enjoyed from the recent launch of its lupus biologic Benlysta, the Maryland-based biotech continues to ink early stage deals to ensure its continued access to innovative products. This week comes news that the firm is teaming up with the Switzerland-based 4-Antibody. Financial details of the tie-up weren't disclosed, but the licensing deal seems like a pretty standard early-stage R&D deal, giving HGS rights to use 4-Antibody's proprietary high through-put antibody discovery platform to produce two novel molecules. The technology is rooted in rapid flow cytometry and is designed to produce fully human antibodies that are "better behaved" (according to official 4-Antibody statements) than molecules produced via alternate methods. It's 4-Antibody's second deal; the start-up inked an alliance in 2010 with Boehringer Ingelheim worth more than $240 million in biobucks. (As with this week's HGS deal, the upfront in that collaboration was not disclosed.) HGS, meanwhile, continues to show its interest in large molecule therapeutics. Just one week after winning approval for Benlysta, it announced it would pay $50 million upfront for rights in the US, EU, and Canada to FivePrime Therapeutics' lead asset, a Phase II oncology medicine, FP1039. --EL

Pfizer/Qiagen: Is the biopharma industry finally getting real when it comes to companion diagnostics? It's hard to say given the economics of deals between biopharma and testing companies are rarely announced. But at least such tie-ups are happening with greater regularity, and this week we have another reminder (if Zelboraf's early approval wasn't already reminder enough) of the strategic importance of companion tests. On August 16, Qiagen and Pfizer revealed the two groups were teaming up to develop a molecular test to accompany the Big Pharma's Phase III dacomitinib, which works by blocking three related tyrosine kinases in the human epidermal growth factor receptor (HER) family. Details of the collaboration were undisclosed but it's a no brainer that Pfizer would align with Qiagen. The two have partnered before in the companion diagnostic realm and Qiagen has considerable expertise in developing FDA-approved tests to diagnose patients' KRAS genetic status. (Recall that mutations in the KRAS gene are commonly observed in human cancers and EGFR-inhibitors like dacomitinib are most effective in individuals who do not have these aberrations.) Indeed, Qiagen recently submitted a premarket approval application for KRAS companion tests associated with two separate drugs targeting metastatic colorectal cancer. While the Pfizer companion test is being adapted for specific use in lung cancer tissue, it uses the same core assay components as Qiagen's other KRAS diagnostics. Qiagen is a relative newcomer to the space of companion diagnostics, building its capabilities primarily through its 2009 acquisition of DxS; this additional Pfizer deal illustrates just how valuable that purchase has proved for a company whose historic strength has been as a purveyor of kits and reagents. That Pfizer is preemptively taking the step to pair dacomitinib with a companion test is a smart move; there are plenty of competing EGFR-inhibitors in development. Providing payers and physicians with a diagnostic that can help triage lung cancer patients helps provide an added level of differentiation.--EL

Bayer Healthcare/Pathway Medical: In the midst of the increased chatter about reviving the question of whether drug companies should also be in the medical device business, fueled by Endo Pharma’s recent $2.6 billion acquisition of American Medical Systems, at least one pharma company that is already in the device space appears to be quietly expanding its presence there. As reported by Xconomy, Bayer Healthcare’s Medrad device unit has reportedly reached an agreement to acquire atherectomy company Pathway Medical Technologies for $125 million, although the deal is not yet final.

Earlier this year, Medrad received CE Mark approval of its Cotavance drug-eluting balloon to treat peripheral artery disease and is selling that product in Europe, while also pursuing an IDE on the path to seeking US commercialization. Drug-eluting balloons hold great promise as the next major platform to treat vascular disease, particularly in areas where even drug-eluting stents have proven ineffective, with the peripheral vascular market representing the largest of those opportunities. Pathway’s atherectomy devices are also focused on clearing peripheral vessels. Medrad has long been a secondary player in this market, largely through its Angiojet thrombus removal system, which the company added in 2008 with its acquisition of Possis Medical. By adding atherectomy and drug-eluting balloons to their current product line, Medrad, which is located in the Pittsburgh suburb of Warrendale, PA, appears to be taking its cue from the hometown Pirates baseball team in looking to move up in the standings by assembling an armamentarium of endovascular devices for clinicians in the under-served and growing peripheral vascular market.

For Pathway, the deal appears to be a welcome exit, albeit one of uncertain return for its investors, for a company that has struggled for much of its 13 year history. The company was nearly out of business in 2004 but was able to revive its fortunes by switching its focus from the coronaries to the peripheral market. The reported $125 million acquisition price doesn’t quite match the $130 million that the company raised – and the Xconomy report suggested that only investors in the most recent Series D will see any benefit from the deal -- but $125 million is a strong acquisition price in the device space and in a glass-half-full kind of way represents something of victory for Pathway executives. --Steve Levin

Due to an editing error, the Anjojet device was inapprorpiately refered to as a drug eluting balloon. The post has been updated as of August 22, 9am ET.

Thursday, August 18, 2011

Financings of the Fortnight Cuts Its Budget

You can't talk about financings of the past fortnight without talking about the wild gyrations of the stock market, which again is doing its crazy thing as we write this. And you can't talk about the stock market without wondering what lies ahead after Labor Day, when summer vacationers (those who haven't cancelled vacations, that is) return to their trading desks, VCs return to their term sheets, and the Congress (ugh) returns to Washington, D.C.

Maybe it's that tightening belt cutting into our waistline, but we're already feeling nauseated thinking about the Stupor, er, Super Committee of 12 that's charged with sorting out the long-term U.S. budget deficit by Nov. 23. Much of the posturing, table-pounding, ultimatum-making and hand-wringing will take place in our little patch of forest. Just yesterday a Democratic member of the committee took a shot across the ever-rustier bow of Big Pharma. Some of our colleagues will be crawling all over the story from the reimbursement and regulatory angles, while some of us will be eager to see how inevitable budget cuts affect the other end of the pipeline. For example, what will happen to the fledgling programs at the National Institutes of Health to do more translational work for which the private sector -- whether Big Pharma or venture-backed biotech startups -- is losing its appetite? And what if, despite successful lobbying efforts in the past, venture investors can't fend off a change in their tax rates (as some VCs advocate)? Will biotech innovation get Buffeted?

It should be an interesting three months as we all lurch toward the next mini-Armageddon. Meanwhile, we're living day to day, endpoint to endpoint. We don't have any spiritual advice, but if you don't want to be left behind -- the curve of the latest biotech financing news, that is -- we recommend checking out the latest rapturous edition of...

Enobia Pharma: Having raised more than $100 million from venture backers since 2005, Enobia turned to a different breed of investors for its latest funds and let its existing investors conserve their cash. On Aug. 8, the Montreal biotech announced it had raised $40 million in a private placement to a syndicate comprised of undisclosed pharmaceutical companies and crossover public equity buyers. The cash will help move its lead candidate, an enzyme replacement therapy for hypophosphatasia (HPP), through the late-stage clinic and regulatory process. The new funds also replace the remaining tranches of a $47 million Series D round, $25 million of which Enobia has already drawn down. The final $20 million or so will not be necessary, said Enobia chairman Jonathan Silverstein, also a general partner at OrbiMed Advisors. The cash from new pharma and financial investors comes "at a significant premium price to the D," Silverstein said. He also noted that the pharma companies that invested did so directly rather than through their venture arms. The biotech’s lead candidate, ENB-0040, currently in Phase II in HPP, is not partnered and Silverstein indicated that the new investors included firms that might be interested in a collaboration. “I think their hope is to someday be more actively involved in the company,” he said, stressing that their investment does not give them rights to Enobia's products. Besides Orbimed, other existing investors in Enobia include CTI Life Sciences Fund, Fonds de Solidarite FTQ, Desjardins Venture Capital and Lothian Partners. Together, those five backers contributed $50 million toward Enobia's 2009 Series C round. -- Joseph Haas

T2 Biosystems: With the close this month of a $23 million Series D round, investors in T2 are sending the message: We can do candida. The company is concluding initial studies of its mobile diagnostic device, which can identify five species of the hard-to-detect fungus, a leading cause of hospital-acquired infections that affects more than 10% of sepsis patients. T2 expects to begin a trial in hospitals in the first half of 2012 geared towards an FDA submission later in the year. Currently, candida can only be detected through blood culture, which takes several days. T2 says its device can identify its presence directly in whole blood in a matter of hours using a magnetic biosensor. Other molecular methods for pathogen identification rely on optical detection, meaning the infectious agent must first be extracted from the blood sample to then be “seen.” That’s especially difficult with organisms like candida that only exist in very low copy numbers -- less than 10 per ml of sample. T2 has data on 400 patients showing over 99% concordance with culture methods, which was enough to convince Aisling Capital to lead the new round. Nine existing investors, including Flagship Ventures, Polaris Venture Partners, and Flybridge Capital Partners, also participated. With the new funding in hand, the company now aims to broaden its test panel, and earlier this year brought in Kirt Poss, formerly of VisEn Medical, to lead business development. According to CEO John McDonough, field trials of its device continue with the US intelligence community, a program started in 2008 in conjunction with an investment by In-Q-Tel as part of T2’s Series B financing. -- Mark Ratner

Pulmatrix: Insider investors have supplied $14 million in new funding to respiratory therapy developer Pulmatrix, intended primarily to support ongoing development of a dry-powder inhaler product for COPD and cystic fibrosis. Nominally a Series B-1 round, the new cash could be either converted to Series B shares at the same terms as its last funding in fall 2009, or rolled into a Series C round if a new investor takes a stake in the startup. Polaris Venture Partners, 5AM Ventures, Novartis Venture Fund and ARCH Venture Partners all participated, bringing Pulmatrix’s total funding to $60 million. Founded in 2003 to investigate therapies useful in countering bioterrorism, Lexington, Mass.-based Pulmatrix had previously aimed to commercialize a broad-spectrum antibiotic delivered via a nebulizer, but that project has been set aside in favor of PUR118, a Phase I dry-powder product with the same active ingredient. Both use Pulmatrix’s iCALM platform, which lines the airway to provoke the body’s natural defenses against pathogens. CEO Bob Connelly said the new money will support Phase Ib and Phase IIa trials in both COPD and cystic fibrosis over the next 18 to 24 months. The company will also seek a partnership in COPD, but is mulling commercialization in cystic fibrosis on its own. -- Paul Bonanos

Second Genome: First-time backers Advanced Technology Ventures and Morgenthaler Ventures have led a $5 million Series A round for Second Genome of San Francisco, a developer of diagnostic tools for gastrointestinal disorders based on the microbiome, the set of bacteria in a patient’s gut. The two-year-old startup, formerly known as PhyloTech, had previously collected $1.2 million in seed-stage funding from Wavepoint Ventures, Seraph Group, and individuals including neuroscience professor and serial entrepreneur Corey Goodman and Asuragen CEO Matt Winkler, both of whom are board members. Spun out of Lawrence Berkeley Laboratories and based on research in microbial ecology of water and soil, Second Genome is designing tools that identify microbiome “signatures,” the relative balance of various types of bacteria in the gut that can be aligned with new and existing therapies for patient subtypes. The company performs profiling services based on its PhyloChip technology, developed at LBL, which analyzes the 16S ribosomal gene sequence to deliver a “fingerprint” of a patient’s microbiome. CEO Peter DiLaura said that will eventually lead to its own discovery programs in GI disorders such as inflammatory bowel disease, irritable bowel syndrome, Crohn’s Disease and antibiotic-associated diarrhea. The new round is expected to last into 2013, when a Series B is expected. – P.B.

Photo courtesy of flickr user Matt Dinnery.

Tweeting Around Europe's DTC Ban: Bayer Named and Shamed

A press release about a new drug launch is ok; a tweet isn't.

That appears to be the conclusion of a months-long saga over drug firms' -- in particular Bayer UK's -- use of social media to allegedly 'promote' its drugs in Europe, where DTC advertising remains a no-no.

Never mind that tweets don't respect geography. Bayer will be named and shamed in various medical journals (The Nursing Standard, 17 Aug; BMJ and The Pharmaceutical Journal, 20 Aug.) for tweeting about new UK drug launches earlier this year, according to the PMCPA, which administers the UK drug industry's (the ABPI's) Code of Practice.

The German conglomerate in March tweeted on the launch of "first and only melt-in-the-mouth erectile dysfunction treatment" (Levitra), following a similarly promotional tweet the year before about multiple sclerosis drug Sativex, according to the Digital Pharma blog.

The company claimed at the time that it was issuing only 'factual and non-promotional' information, linked to approved press releases. It also said at the time that guidance from the PMCPA on the use of social media was 'far from clear'.

The guidance has been updated to include what amounts to a ban on tweeting about prescription medicines, however. But Bayer would not comment specifically on whether it now found the guidelines clearer, saying only that "as a member of the ABPI, Bayer recognises the industry Code of Practice and, as a company, is absolutely committed to compliance with all laws, regulations and good business practices."

Of course it is. And that -- could we call it contrition? -- is the effect that the watchdogs wanted this naming game to achieve. Any companies perceived as attempting to circumvent Europe's DTC ban via social media networks like Twitter had better think again, or risk being brandished as, per the ABPI code, 'bringing discredit upon' the pharmaceutical industry.

This case will almost certainly fuel the ongoing debate around a stalled piece of EU legislation attempting to harmonize and update the region's policy on information to patients (what's allowed, what isn't).

Meantime, notwithstanding the name-and-shame ads, we bet that the @bayerukireland twitter account may have picked up a few more followers-- if only to keep tabs on them. Whatever its intention, Bayer did effectively circumvent the DTC ban in the case of Levitra: plenty of non-medical professionals know what's available as melt-in-the-mouth.

image by flickrer fanie used under creative commons

Wednesday, August 17, 2011

FivePrime CEO Done After Two Years

FivePrime Therapeutics has a new CEO. As of Wednesday, August 17, the next-generation antibody company is listing its founder Lewis Williams, better known as Rusty, as chief executive. He replaces Julia Gregory, who was hired in 2009.

Through a company spokeswoman, Williams said Gregory resigned effective August 16. The company declined further comment.

The timing is somewhat of a surprise, as Gregory described the job as a "biotech CEO's dream" in an Xconomy interview a year ago. On her watch, the firm signed its largest deal to date, out-licensing its lead program, an FGF inhibitor that hadn't yet dosed in Phase II trials, to Human Genome Sciences in March 2011 for a $50 million upfront payment. FivePrime also signed discovery deals with Pfizer and GlaxoSmithKline in 2008 and 2010, respectively. The Pfizer agreement recently ended without renewal.

Gregory moved to FivePrime from Lexicon Pharmaceuticals, where she ran finance and business development. Before Lexicon, she was an investment banker, a significant addition to a private biotech with a strong scientific bent. A renowned biotech veteran, Williams founded FivePrime in 2002 after leaving Chiron, where he was chief scientific officer and a board member. The firm attracted top venture backers in Versant Ventures and Kleiner, Perkins Caufield & Byers, with Brian Atwood of Versant and Brook Byers on the board. (Byers referred inquiries back to the company.) Privately held, FivePrime's most recent publicized round of venture capital came in 2005, when it raised a $45 million C round led by Domain Associates. With the round, Domain took a board seat but no longer has representation.

Saturday, August 13, 2011

DOTW: There's No Escaping The Stock Market

Deficit reduction/reconciliation may be the real thorn in the biopharma industry’s side right now, but if you were a CEO of a major pharmaco or biotech this week – or, for that matter, an employee, individual investor, or anyone associated with any of the above -- you couldn’t help but worry about the stock market.

Standard & Poor’s announcement late on Friday August 5 that it is downgrading the U.S. credit ranking a notch (from AAA to AA+), may not substantially push up the government’s borrowing costs. Combined with weeks of political haggling over federal government debt, the news subsequently led to a week of wild volatility.

As it is, the week ended with the Dow Jones effectively flat, providing a little respite, but not before sending tremors through much of America, anywhere much of America was vacationing. One only had to look at the chaotic destructive mobs in Britain to get a sense of how bad things in our part of the industrial world could get.

Overall, the DRG index, which tracks pharmaceutical stocks, was down 1.7% for the week--not bad, given the alternative scenarios, and not far off the S&P 500 and the Dow. Traditionally a defensive sector, pharma has behaved much like the rest of the stock market in the past two years, however – and it got sideswiped as much as (or more) than other more cyclical sectors in last week’s rout.

That’s for a variety of reasons, including profit taking from an earlier run up, and worries that coming U.S. budget cuts will dig further into pharma’s pockets. The concern exists regardless of whether the Congressional Joint Committee comes up with nearly $1.2 trillion in proposed budget reductions by November 23, or, if it does not, automatic mandatory across the board cuts go into effect.

In reality, as Sanford Bernstein points out in an August 8 report, there is currently “no clarity on what is going to happen to drug spending,” following Congress’ deficit reduction deal, and “neither side of the political spectrum has yet credibly advocated anything that looks terrible for the drug industry.” Likewise, ISI Group, in presentations to investors, ran through different scenarios, without coming out in favor of one over the others, noting that areas most likely up for grabs could be Medicare Part D (likely to hit pharma more), Medicare Part B (the expensive biotech infused drugs), and/ or Medicare/Medicaid dual-eligibles. But there's a caveat: everything's on the table.

By week’s end, investors in pharma could take a breath, as stocks such as Bristol-Myers Squibb, Eli Lilly & Co., and Pfizer closed the week roughly where they started. Biotech stocks have been a different matter, trading near their year-to-date lows, hammered down by a mix of macroeconomic trends and industry specifics. ISI’s technical analysts believe a little more downside is to come. Dendreon’s surprise setbacks, which the high-profile company announced last week, were still reverberating through the sector, even as the wave of macro-trend jitters hit.

Whatever one thinks of Dendreon’s missteps, its predicament and the market reaction to it serve as a reminder of just how high-pressure the current environment is for launches.

Biopharma has had what is perhaps the industry’s best spate of new drug approvals in years – but many of those drugs, while addressing unmet medical needs, are high priced and complex to administer and launch.

The industry has seen some almost certain wins: Bristol’s Yervoy (ipilimumab) for metastatic melanoma and Vertex Incivek (telaprevir) for chronic hepatitis C, have so far both exceeded analysts’ expectations, with sales in the second quarter of $95 million and $75 million, respectively. Some others, while in their early days, look to be on target, such as Merck's Victrelis, and Johnson & Johnson’s Zytiga while the jury is out on Benlysta, the lupus drug from Human Genome Sciences and GlaxoSmithKline, and Endo Pharmaceutical’s Fortesta.

How these downstream events will affect upstream dealmaking remains to be seen. Obviously, slower launch trajectories, tougher reimbursement hurdles and political uncertainties weigh into companies’ business development strategies. But let’s not forget that the successful launches of today were built on deals struck several years ago, notably Bristol’s link up with, then acquisition of Medarex in 2009, GSK’s deal with HGSI, and J&J’s acquisition of Cougar Biotechnology in 2009.

And while this week has been quiet on the deal front, some ongoing relationships produced news: Abbott Laboratories and Biogen announced impressive top-line Phase IIb efficacy results of their drug daclizumab for multiple sclerosis, GSK and Xenoport, and Takeda Pharmaceuticals paid biotech Affymax Inc. a $10 million milestone upon the submission of an NDA for the companies’ erythropoietin stimulating agent peginesatide.

Which is why, even in a week of stock market jitters, deficit inundation, and vacations, deal details deserve our attention:

Array/Genentech: Boulder, Colo.-based Array Biopharma already has a long history with Genentech, with oncology partnerships dating back to 2004. On Aug. 8, the two companies forged a new agreement around Array’s pre-clinical compound ARRY-575 that yields Array $28 million in up-front cash, plus potential milestone payments of $685 million and double-digit sales royalties, if the drug is approved and marketed. ARRY-575 inhibits the checkpoint kinase 1, or ChK-1, which is thought to prevent tumor cells from repairing DNA damaged by chemotherapy drugs, and thus enhance the performance of those drugs. Genentech already has its own ChK-1 inhibitor, the Phase I candidate GDC-0245; it may advance one or both drugs through the clinic. Array had been preparing to file an IND and begin a Phase I trial for ’575, but will now leave those steps to Genentech, which will foot the bill for all further development of the drug. Array said it had pursued a partnership since January, and had multiple suitors negotiating for rights to ’575.– Paul Bonanos

Vectura/Sandoz: U.K. biotech Vectura Group set up two additional partnerships for its asthma/chronic obstructive pulmonary disorder candidate VR-315 this month, one of them with Sandoz, which in-licensed EU rights to the compound in 2006, expanded its rights later that year to include the U.S., and then returned the U.S. rights to Vectura in 2010. On Aug. 3, Vectura announced a new partnership for U.S. co-development and commercialization rights with the “U.S. division of an undisclosed leading international pharmaceutical company.” Unlike its previous deal with Sandoz, which including a co-commercialization option, Vectura will not be involved in marketing VR-315, thought to be a generic version of GSK blockbuster Advair (fluticasone and formeterol), but will receive $10 million upfront, $35 million in development milestones and undisclosed royalties on sales.

Sandoz, which has retained its EU rights to VR-315, then obtained rest-of-world development and marketing rights to the candidate on Aug. 5. Under this arrangement, Vectura could receive $8 million in milestones and advance pre-launch royalties, of which 2.5 million is expected by Sept. 30, 2011, along with royalties on net sales. Vectura estimates asthma/ COPD is the largest and fastest-growing segment in the respiratory therapy sector, with annual sales exceeding $11 billion worldwide, including $2.5 billion outside the U.S. and EU.—Joseph Haas

AMAG/MSMB: AMAG Pharmaceuticals Inc. told shareholders earlier this week that its Board unanimously voted against the hostile bid offered by one of its hedge fund investors, citing the inferiority of the deal to its prior merger plans. MSMB Capital Management LLC, which has a 5% stake in the Massachusetts-based maker of anemia drug Feraheme (ferumoxytol), made an unsolicited offer on Aug. 2 to acquire AMAG for $18 per share, or approximately $381 million. The takeover offer was an effort to oust current management and block the recently proposed all-stock merger between AMAG and Allos.

The companies believe the merger could help each company overcome the fallout from what many perceive to be disappointing launches of their first products, AMAG's Feraheme and Allos' oncology drug Folotyn. AMAG and Allos told shareholders that the combined company would be able to capitalize on overlapping sales teams and produce cost synergies. Yet, investors have not taken kindly to the deal; AMAG’s stock has lost 22% of its value since the merger announcement, and 47% of its worth over the last year. Allos’ stock has dropped 60% since August 2010—Lisa LaMotta

Thursday, August 04, 2011

Our Eye on the State Of R&D

Debate over pharma's R&D productivity crisis has surged again in recent weeks with publication notably of two articles, one an opinion piece in Nature Reviews Drug Discovery by John LaMattina, ex-head of Pfizer R&D, and the other a news report by Forbes columnist Matt Herper on how some in pharma are calling for nothing short of a revolution in R&D.

The two articles are a fresh reminder of how much turmoil remains in the pharma R&D community, despite clear signals for some time that the current structure isn't working. LaMattina’s article is a lament backed by data analysis over pharma's decade-long embrace of hyper-M&A, which has severely disrupted R&D and hurt, not helped, the industry’s long-term outlook. LaMattina stops far short of calling for an overhaul, and in fact, he told Forbes that the industry is improving, judging by the 2011 FDA approval rate.

Herper’s take goes much farther, as he profiles thought-provoking ideas from former Lilly exec Bernard Munos, who has been on the industry circuit proposing “radical change” in R&D strategies. Herper cites other R&D execs who support Munos, such as Corey Goodman, who helped start Exelexis and Renovis and for a brief time tried to jump-start a biotech-like research network at Pfizer; and Stephen Friend, who ran Merck's oncology R&D after it paid $620 million for Rosetta Inpharmatics, the biotech Friend co-founded.

Both these sides of the R&D debate, and others as well, have been in the pages of IN VIVO recently. In an article in the March issue, Munos said M&A was not the only precipitation of the most severe innovation crisis in industry history. Other financially-driven approaches to R&D, such as portfolio management aimed at mitigating risk and tailored therapies, were also to blame.

Munos argued in IN VIVO that in an era of multiple scientific breakthroughs, companies must embrace high-risk, unconventional innovation, more collaborative approaches, and he highlighted just how important patient-oriented research, based on astute clinical observations by physician-scientists, has been to find breakthroughs -- and it should take precedence once again.

Adding to the foment, consultants Nils Behnke and Norbert Hueltenschmidt of Bain, writing in IN VIVO last February, urge pharma to rethink how it rewards scientific behavior and encourages autonomy and flexibility. The authors surveyed successful R&D heads and came up with a number of ideas based around innovation centers. These ICs, so to speak, would focus on specific therapeutic areas and make independent decisions, all aimed at accessing the best talent and science.

Easy, right? We’ve looked closely at real-world experiences with new R&D models, such as GlaxoSmithKline's biotech-within-a-pharma model, AstraZeneca’s iMEDs, and Lilly’s Chorus and its other venturesome initiatives. Indeed, many of the Big Pharma’s are outsourcing R&D far more than in the past, and some are looking at alternative financing options.

But there's nothing simple about pharma R&D - or efforts to invoke change at big companies. GSK recently re-organized its re-org. Lilly, despite several years of piloting new approaches, is under fire from investors and others because of multiple setbacks and a dry late-stage pipeline just when it needs some gas. Add to the turmoil, the looming patent cliff and subsequent across-the-board budget cuts, along with structural changes in the commercial environment, which ultimately determines R&D success and the result is, at best, uncertainty; at worst, massive disappointment: two of Wall Street's most abhorred scenarios, both of which lead to long-term value destruction.

For the longest time now, one or two big sure-fire commercial hits have papered over a lot of failures, inefficiences, and uncertainties for Big Pharma. Everyone agrees that way of life is no longer sustainable, and indeed, a change is underway. How that change is best carried out, however, is of great debate, and it's in IN VIVO every month.

Financings of the Fortnight Sits in the Cheap Tweets

It was a fail-whale of a bad day for the stock market and especially for biotech companies that said, oh, by the way, no one's buying our drug like we promised.

But crash, schmash. This is Financings of the Fortnight -- the column with the long view. And our favorite moment came earlier this week when Russian zillionaire investor Yuri Milner made yet another late-stage, follow-the-money tech investment, this time leading a Series G round (when was the last time you saw a biotech "G" round?) for Twitter? Milner is head of the fund DST Global and -- what? We forgot something? Oh yes. The round was $800 million.

That's not a typo. Half the cash is for the company, half is to cash out investors and employees who want to have their cake and tweet it, too. $800 million -- that's $5.7 million per character.

Milner's not shy about throwing cash around long after the early money's gone in deep. He's done similar investments in Zynga, Groupon and Facebook. Apparently in the world of high-tech musical chairs these days, the music never stops, although the sound we heard Thursday at market's close might have been the fat lady clearing her throat.

So what about getting some of that silly money on the biotech side of the venture fence? As far as we could tell, Milner's closest approach to health care came this week: Nearly lost in the Twitterstorm was his $50 million investment in ZocDoc, an online appointment service for doctors and dentists. That's a long way from drug discovery, development, and so forth. But there are plenty of late-stage private biopharmas with shareholders clamoring for exit, and once an oligarch has conquered the tweeps, friends, cyberfarms and cheapskates of social media, what better way to burnish his legacy than pouring millions of dollars into potentially life-saving medical products and technologies? Call it the Bill Gates Path to Probity.

Seriously though, the latest private biotech performance stats surely won't persuade the tech-obsessed Milners of the world -- even the fake ones -- to jump in. Cambridge Associates measures venture returns, including the internal rate of return for companies in various sectors based on their initial investment years. The gross IRR for the health care/biotech aggregate sector has trailed IRR for information technology in 12 of the past 14 years. Monster returns from the dot-com era put IT off the charts before the millennium, but even in the past decade the gap between IT and health care/biotech returns hasn't been close -- from a floor of about 2.5x to a ceiling of nearly 6x.

When compared to venture returns across all industries, biotech/healthcare lags in 11 of the past 14 years, although the gap isn't as pronounced. Other than the dot-com boom years, total returns outpace health care/biotech by a factor of 2x only twice, for vintage-2006 companies and vintage-2009 companies.

But there's a a glimmer of good news. When we take just the biopharma subsector, the gap closes further. Leaving out the two fat dot-com years of '97 and '98, biopharma returns have actually outpaced total venture returns in half the years since -- such as for vintage-2003 companies, which in biopharma have generated 22.6% IRR compared to 12.1% for all companies -- and rarely has the spread on either side been more than 2x.

The upshot? If you can convince a limited partner to put cash into venture capital -- no easy feat these days -- there's an argument to be made that biopharma can keep pace with venture in general. Who knows? Perhaps when the Web 2.0 mania comes crashing down like a fail whale, or the financial black magic starts to wear off, biopharma will look like a safe harbor.

The operative phrase there is "who knows." US health care reform is inching forward, there are a world of uncertainties surrounding the "Super Congress" and medical reimbursement, and European debt problems aren't going away. The only thing certain about the future is that you're about to read the latest edition of...

Horizon Pharma: Horizon became the eighth biopharma to make its debut on a US exchange this year, and just the third with a marketed product. The IPO grossed $49.5 million on July 28 after Horizon slashed the target price to $9 a share, down from its planned range of $10 to $12. The downgrade is typical of issues since the IPO window creaked open in late 2009, but unlike others (Tranzyme and AcelRx, for example), Horizon didn’t boost the number of shares for sale; it remained steady at the 5.5 million it outlined in early July. Horizon was formed last year by the merger of US company Horizon Therapeutics and Switzerland-based Nitec Pharma. The deal combined portfolios in pain and inflammation, including Nitec’s rheumatoid stiffness medication Lodotra (modified release prednisone), which is partnered regionally with Mundipharma outside the US, and Horizon’s Duexis (famotidine and ibuprofen), just approved in the US in April for rheumatoid arthritis and osteoarthritis with a launch slated for the fourth quarter. Among the two other companies with marketed products that listed this year, only Sagent Pharmaceuticals, a seller of generic injectables, has gained value, jumping 72% from its IPO price of $16 to close at $27.46 on August 1; Sagent also priced without taking a haircut. The other, traditional Chinese medicine vendor Tibet Pharmaceuticals, has dipped in price; a third company, Pacira Pharmaceuticals, has gained value as its postoperative pain drug Exparel (bupivacaine) nears approval. Horizon closed at $9.00 on August 3, on par with its debut price. -- Amanda Micklus

Argos Therapeutics: The Durham, N.C., biotech, focused on personalized immunotherapies for cancer and infectious diseases, filed a registration statement for an initial public offering July 29. For now the placeholder is set at $86 million, but with picky public investors making hopeful biotechs sweat, it's fair to say the placeholder would make an ambitious target. Founded in 1997 on research spun out of Duke University, Argos has three clinical programs and a fourth set to enter the clinic. All are based on dendritic cell biology. Its Arcelis technology platform is the basis for its two most-advanced programs: AGS-003, a personalized immunotherapy for metastatic renal cell carcinoma set to begin a Phase III trial in the fourth quarter of this year, and AGS-004, an immunotherapy currently in Phase IIb against the HIV virus, a program completely dependent upon US government funding. The biotech also is advancing AGS-009, an anti-interferon alfa monoclonal antibody in Phase Ia for lupus, and AGS-10, a CD83 recombinant protein it plans to study in warding off rejection of implanted organs. Argos, which fully owns all four programs, most recently raised $35.2 million in 2008 through a two-tranche Series C round led by TVM Capital and also backed by a syndicate of nine other investors, including development partners Kirin Pharma. It has also raised $3.5 million in debt as a bridge to the IPO. -- Joseph Haas

BrainCells: When FOTF first met with BrainCells CEO Jim Schoeneck at a long-ago JP Morgan conference, we heard the voices of all the people in our past who warned that once you kill your brain cells through various unsavory activities, you can't grow new ones. The San Diego firm begs to differ. But its platform for neurogenesis -- stimulating the growth of new neurons via stem cells in the brain -- has yet to translate into late-stage therapeutic candidates. Last year its lead candidate failed to show differentiation from placebo in severely depressed patients, though the company said it found a silver lining in a subpopulation. On August 1 the firm disclosed in a regulatory filing it has raised the first $1 million in a planned $14 million round of debt and other securities. It comes amid a management overhaul: BrainCells' Web site shows longtime consultant and former Arriva Pharmaceuticals CEO Robert Williamson as its new acting CEO, and its chief scientific officer has moved on as well. Former CEO Schoeneck took over at DepoMed this spring. Exactly one year ago BrainCells in-licensed a Phase II compound, sabcomeline, from Proximagen Neuroscience, for up to $51 million, including an upfront fee, development and sales milestones. BrainCells aimed to put the compound into a Phase 2 clinical trial as augmentation to SSRIs for the treatment of major depressive disorder, but it was unclear as of this writing whether that trial went forward as planned. Not including the current open round, the firm has raised $77 million to date from investors including MedImmune Ventures and New Enterprise Associates. Worth noting: In START-UP Magazine's first venture survey, results to be published next month, we asked participants for the disease or technology areas they found attractive. Less than half who made biopharma investments said central nervous system was either compelling or very compelling. (Alas, we failed to poll respondents about their enthusiasm for robots that replace balding men's hair follicles.) -- Alex Lash

Baxter Ventures: The global firm Baxter International best known for its blood products is joining the corporate venture fray, joining several big firms that have recently established funds, including Merck-Serono, Shire, Boehringer-Ingelheim, J&J's Red Script fund, and Merck (the US folks). Some have invested more prominently than others; Shire alone has disclosed participation in four financings this year, which makes a sizable dent in the firm's aim to invest in 10 to 15 companies from the $50 million fund. Baxter Ventures will invest up to $200 million -- which, really, could mean anything -- in early-stage companies working on therapies that "complement Baxter's existing portfolio." So, a frank admission that this is strategic, not financial, which is no big surprise. With less R&D yet hungry pipelines to feed, it's a direction corporate venture has been shifting toward for some time. The venture group will report to Baxter's chief scientific officer Norbert Riedel, the firm said. -- A.L.

"Fail Whale Stencil" image courtesy of flickrer Podknox under a Creative Commons license.

Tuesday, August 02, 2011

It's Not About Life-Cycle Management. Really.

Here's the latest fuel for pharma industry critics' fire: Axanum. This drug, a fixed-dose combination of AZ's PPI Nexium (esomeprazole) and low-dose aspirin, received positive agreement for approval Aug. 2 via Europe's de-centralized procedure. By trying to tag Nexium, which loses exclusivity in 2014, onto the back of widely-used low-dose aspirin, AZ, critics may say, risks falling foul of industry's (and its own) claims to be delivering innovation and value-for-money.

Shame on you AstraZeneca, we were going to say. But then we thought, fair enough. The company's under pressure right now, with 80% of its global revenues at risk over the next five years. Meanwhile the more honourably (and obviously) innovative Brilinta, a better-than-Plavix heart drug approved by FDA in July, may be held back by another kind of relationship with aspirin: Brilinta works less well when used in conjunction with high-doses of the drug.

Still, it may be a bit rich to suggest that this drug isn't about protecting the Nexium patent and franchise. Instead, Axanum will fulfill "a clear unmet need for patients that who require low-dose ASA (posh word for aspirin) to prevent CV events, but who risk discontinuing their treatment due to low-dose ASA-related upper GI problems," says the company.

FDA didn't buy it. They bought Vimovo, a Nexium-naproxen cocktail developed with Pozen for osteoarthritis, in 2010, but Axanum got slapped that same year with a Complete Response Letter, as did AZ's attempt to expand Nexium's label to include reducing the risk of low-dose-aspirin-associated peptic ulcers (same ends, different means).

Europe offers drugmakers an alternative route-to-market when the centralized European Medicines Agency path looks risky, though – or when medicines don't qualify for it. Biotech, orphan drugs, gene therapies and those falling into one of six TAs (not including CV or GI) have to go through EMA; those outside these groups can choose to only if they offer "significant therapeutic, scientific or technical innovation".

AZ says it filed Axanum via the decentralized process in 2009 to "reflect markets' interest", but whatever the reason (choose from above), it allowed the Big Pharma to select a reference state (Germany) to approve the product, which other countries could then follow (or not). Apparently 22 European countries, plus Norway, have followed, agreeing to approve Axanum for prevention of CV events in patients taking daily low-dose aspirin who are also at risk of gastric ulcers.

The company claims about a third of high-risk CV patients are also at increased risk of stomach ulcers, and that GI problems are the main reason for stopping low-dose aspirin. "Axanum is the only medicine that ensures every single pill of low-dose ASA comes with built-in protection against gastric ulcers," says the release.

Patients could just take aspirin with some Nexium, though (or, dare we suggest, a bit of generic omeprazole?) AZ claims that, although taking the monotherapies separately "has been demonstrated to be effective," in high-risk CV patients, the CV treatment can't be compromised, and that current adherence to PPIs is poor among low-dose aspirin patients (patients aren't taking enough Nexium, in other words).

"The combination is based on valid therapeutic principles such as simplification of dual therapies," asserts the company.

Improving compliance is an important – and potentially cost-saving – health care benefit. So good luck to AZ in its ongoing pricing discussions with European reimbursement authorities. But with generic PPIs floating about, don't let's hold our breath for a premium. Vimovo's hardly flying off U.S shelves -- and we hear that Pozen thinks it's because AZ tried to push the price too high.

image by flickrer Will Norris used under creative commons