Deals Of The Week Notes Bayer's Partnerships Are Paying Off

Bayer Healthcare’s pharmaceuticals division has certainly had its ups and downs, and some ultra-tense relationships with partners—notably the very public lawsuit Onyx Pharmaceuticals filed against it, which the partners settled in October 2011.

 

News announced in recent days however, puts Bayer in a very different position. The company's pharma business is flourishing, based on its partnerships--as well as the fortunate position it is in because it lacks any big drugs going off patent. Bayer's alliance with the Norwegian biotech Algeta ASA, now more than three years old, is at a turning point. On Feb. 13, FDA granted priority review for the investigational oncology drug radium-223 dichloride (formerly Alpharadin), for which Bayer and Algeta submitted an NDA (and an MAA in Europe) in December.

That drug would be indicated, initially, for chemotherapy-naïve castration-resistant prostate cancer patients with bone metastases. CRPC is one of the more crowded areas of oncology, but radium-223 demonstrates a survival benefit that other bone-targeted agents haven’t shown. 

Also kicking in are sales of Eylea, the drug for wet age-related macular degeneration that Bayer licensed from Regeneron in 2006, after Regeneron’s partner Sanofi decided not to pursue ophthalmology indications for the compound. (The oncology version of the drug is Zaltrap, which received approval in the US in August.)  Bayer has exclusive ex-US rights for all eye indications to the drug, which it launched late in 2012 in Australia and Japan, and which it is slowly rolling out across Europe as payers make reimbursement decisions. The partners have a 50-50 arrangement, both on sales and profits. 

For a variety of reasons, Eylea has been an immediate hit in the US, where Regeneron launched it in November 2011, and where it is the third most successful drug launch ever, according to Robert Terifay, SVP commercial, who briefed analysts on Eylea’s status on an earnings call on Feb. 14. Bayer believes the ex-US market presents a similar opportunity and is in the process of rolling out the drug globally. 

The German health care company reports full year 2012 financials on Feb. 28, but  Regeneron executives, without giving away much detail, said they’re pleased with Eylea’s ex-US performance so far. Eylea’s sales ex-US for the fourth quarter, its first on the market outside of the US, were $19 million. EU decisions on two additional indications, diabetes macular edema and central retinal venous ocolusion are also expected in 2013, Deutsch Bank analysts estimate these are smaller opportunities, each worth less than $500 million in Bayer's territories.

In addition, Bayer is in the midst of a global launch of the Factor Xa inhibitor Xarelto, which it developed internally, and which it licensed in 2005 to Johnson & Johnson to develop and sell in the US. The drug is currently approved in Europe for a range of indications, including venous thromboembolism prevention in orthopedic surgery and for stroke prevention following atrial fibrillation. It is pending approval in Europe for acute coronary syndrome, which analysts see as a long shot.  And FDA granted Bayer approval of Stivarga, an oral multi-kinase inhibitor, in September, for metastatic colorectal cancer. The drug is pending review in the EU.  

Many of the deals now bearing fruit were signed before the company’s current head of global business development and licensing, Nigel Sheail, joined it from Roche in November 2011 and certainly before he undertook a reorganization that consolidated business development functions across the healthcare subsidiary into one unit, with the aim of fostering a focus on integrated care across Bayer’s diverse health care subsidiaries. In an interview published in IN VIVO in September 2012, Sheail outlined where he sees health care heading and provided some insights into his business development priorities. His efforts have yet to prove themselves, but meanwhile Bayer has some solid launches to buttress the cash flow- and importantly, no patent cliff before it.  

Bayer’s overall stock is trading in the 90s, close to a 52-week high, partly because of the performance of its pharma division. Even though its chairman, Joerg Reinhardt, has left to become chairman of rival Novartis, and its former chief marketing officer, and global head of strategic planning, Flemming Ornskov, is settling in at Shire PLC, where he assumes the top spot in May, its near-to-mid-term future looks more secure than many of its peers.

Even as Bayer rushes to maximize the value of its deals, others are forging their own way. It's time for this week's edition of ....

Mylan/Biocon: Close to a year after Pfizer walked out of a deal with India’s Biocon for development and commercialization of a range of insulins, the Indian company has sprung back forming what it called an “exclusive strategic collaboration” with the world’s fourth-largest generic drug maker Mylan. Under the deal, the two companies will develop biosimilars of Sanofi’s Lantus (glargine), Eli Lilly’s Humalog (lispro) and Novo Nordisk’s Novolog (aspart), the three major insulin analogs. The combined global sales of the three brands reached $11.5 billion in 2012, making it a compelling business plan as regulatory pathways for biosimilars across nations gain further clarity. Lantus alone crossed sales of $6.6 billion last year. But the terms of the deal with Mylan differ substantially from the deal Biocon signed with Pfizer in 2010. Biocon didn't disclose financials, except to note that the deal includes an upfront and cost sharing, backed by a profit sharing arrangement, and no milestones; the Pfizer deal consisted of a $200 million upfront and $150 million in milestones. Unlike the Pfizer deal, the Mylan deal does not include recombinant human insulin, which Biocon is developing on its own. --Vikas Dandekar

Merck/Lycera: The two companies, which have been partnered since May 2011 on an oral interleukin-17 discovery deal, announced Feb. 12 that they have agreed to a second collaboration to discover and develop other treatments for autoimmune disorders. The new deal will focus on multiple targets that are known to play a role in autoimmune diseases, including psoriasis, rheumatoid arthritis, and multiple sclerosis. The companies would not identify the exact targets it will be focusing on under the collaboration. Merck will pay the Ann Arbor-based biotech an undisclosed upfront, as well as $300 million in milestones.  Merck and Lycera first began working together in the field of autoimmune disease in March 2011, when Merck paid $12 million upfront and agreed to $295 million in milestones in a similar discovery and development collaboration. Work under the original partnership is still in preclinical development; that initiative is focused on a specific target -- the retinoic acid related orphan receptor (RORyt), a transcription factor responsible for the differentiation of T-helper 17 (Th17) cells. Th17 cells produce interleukin-17 (IL-17), a pro-inflammatory cytokine that is understood to play a role in autoimmune diseases. Lycera received its first milestone payment from Merck under this collaboration, an undisclosed sum, in December 2011. – Lisa LaMotta

Lilly/Qiagen: Eli Lilly has broadened its relationship with diagnostic developer Qiagen NV by signing a “master collaboration” under which Qiagen will develop companion diagnostics for Lilly medicines across all of the pharma’s therapeutic areas. In what has become a hallmark of deal-making between pharmaceutical manufacturers and diagnostic firms, terms of the arrangement were not disclosed. Lilly and Qiagen are comfortable bed fellows. The two have been partnered on the development of single tests, including a September 2011 partnership to develop a test for Lilly’s clinical-stage Janus kinase 2 inhibitor. Last year, Lilly/Bristol-Myers Squibb Co.’s Erbitux secured approval in newly diagnosed KRAS wild-type metastatic colorectal cancer patients with Qiagen’s companion diagnostic kit for the drug. Work on those tests led to the expanded deal, Qiagen said, announcing the deal Feb. 13. The new partnership will all allow for efficiencies in future development programs by standardizing interfaces and processes between the organizations, the firm said.--Jessica Merrill

MorphoSys/Heptares: In a bid to develop more G-protein coupled receptor (GPCR)-targeted monoclonal antibodies, German drug discovery company MorphoSys is to use Heptares' stabilized GPCRs as targets to screen its Ylanthia monoclonal antibody library, in a deal announced Feb. 13. AstraZeneca, Takeda, and Cubist Pharmaceuticals have already licensed Heptares' technology to use in their drug discovery programs. GPCRs are the site of action of more than 25-30% of marketed small-molecule drugs, but they've never been a popular target for monoclonal antibodies. That's because the receptors are unstable when taken out of membranes and difficult to use as antigens to produce antibodies when injected into animals. The only marketed monoclonal antibody that interacts with a GPCR is Kyowa Hakko Kirin's Poteligeo, which is indicated for adult T-cell leukemia-lymphoma and which was launched in Japan in  May 2012. It binds to chemokine receptor 4 (CCR4). MorphoSys will propose GPCR targets, which will then be generated by U.K.-based Heptares and used to screen MorphoSys' Ylanthia monoclonal antibody library. MorphoSys will have the right to sublicense to pharmaceutical companies the identified targets and therapeutic antibody candidates, with Heptares receiving upfront and research funding payments, plus a share of those sublicense revenues. Heptares, which is building up its own pipeline, will also select a GPCR target of its own against which to screen MorphoSys's Ylanthia library. MorphoSys will receive license fees, milestones and sales royalties on any Ylanthia antibody developed by Heptares as a result of that work.--John Davis

RQx Pharmaceuticals/Genentech: Just weeks after buying the entire kinase-inhibitor discovery program at Afraxis, Genentech announced Feb. 12 it is collaborating with RQx Pharmaceuticals on a discovery and development tie-up to create novel antibiotics that kill Gram-negative bacteria while avoiding the multi-drug resistance plaguing many of today’s antibiotics. Including an undisclosed upfront payment and earn outs, the deal could total $111 million along with the potential for sales royalties on any product reaching market. The transaction eventually will create an exit for RQx’s primary backer, the hybrid venture capital firm Avalon Ventures, which provided seed funding and a majority of its Series A financing. This makes the third exit already this year for an Avalon portfolio company, following January deals in which BioMarin purchased Zacharon for $10 million plus potential earn-outs, as well as the Genentech/Afraxis agreement. RQx’s work derives from research conducted at the Scripps Research Institute in La Jolla, Calif., to unlock the secret of why an exploratory antibiotic, arylomycin, no longer was effective against bacteria, said RQx CEO Court Turner. Arylomycin, discovered by Eli Lilly in the early 1980s, was used as a chemical scaffold for RQx antibiotic candidates against a novel, undisclosed target, he said. “This is kind of a standard Avalon investment, where we see an old target that gets new completely new insights from a very reputable lab,” explained Turner, also a venture partner at Avalon. Arylomycin addresses signal peptidase, a target that big pharma had wanted to direct antibiotics against for years, but never developed any successful candidates. Turner would neither confirm nor deny that RQx’s work with Genentech will focus on the signal peptidase pathway.—Joseph Haas

Bristol-Myers Squibb/ Reckitt Benckiser: After announcing a change in strategy last year to intensity investment in higher-growth consumer and emerging markets, Reckitt Benckiser entered into a $438 million three-year agreement with Bristol-Myers Squibb to expand its consumer health foothold in Latin America. The deal, announced on Feb. 12, gives Reckitt marketing rights to seven BMS OTC brands for a period of three years. Reckitt will pay BMS a $438 million fee for the right to license the products, and an additional $44 million for an option to acquire them outright after the three-year period at a price to be determined by net sales during the preceding three years. The products included in the deal include Dermodex (nystatin) for diaper rash, Luftal (simeticone) anti-gas treatment and Naldecon (phenylephrine) cough/cold remedy, all sold primarily in Brazil. The products sold mainly in Mexico are Graneodin-B (benzocaine) sore throat remedy, Micostatin (nystatin) antifungal, Picot (sodium bicarbonate) antacid and Tempra (acetaminophen) analgesic. Combined, they brought in an estimated $102 million in 2012 sales, Reckitt said. Slough, U.K.-based Reckitt hopes the BMS brands create a foundation forhealth care product distribution and growth in Brazil and Mexico, where the firm’s business currently is weighted toward household cleaners and other home care products. For BMS, the deal represents its latest move away from non-core consumer businesses to refocus energy and resources on biopharmaceuticals. In 2009, it spun off pediatric nutritionals maker Mead Johnson in an initial public offering and sold its Asian OTC assets to Taisho. --Michael Goodman

GSK/ Vanderbilt University – GlaxoSmithKline is expanding its Discovery Partnerships with Academia program, which itlaunched in 2011, in a new deal with Tennessee-based Vanderbilt University. The collaboration will focus on the discovery and development of treatments for severe obesity. The team will target the melanocortin-4 (MC4) receptor, which plays a role in energy homeostasis. Vanderbilt will be responsible for pre-clinical activities, while the pharma will handle development. The collaboration is expected to bring a compound into the clinic by 2016. Vanderbilt scientists have developed positive allosteric modulators that increase activity to the MC4 receptor. It’s believed that activity at this receptor plays a role in early-onset obesity. GSK and Vanderbilt are hoping to develop a compound that will not raise a patient’s blood pressure like some of the other recently developed therapies for obesity. GSK will provide research funding under the three-year collaboration, as well as undisclosed milestones and royalties on any products that are commercialized. - LL

AstraZeneca/ N.N. Petrov Institute of Oncology: AstraZeneca has signed a research collaboration with one of Russia's leading cancer research institutions, the Petrov Institute, to identify genetic mutations in cancer patients. The deal, announced Feb. 12, will pave the way for scientists from both organizations to identify specific types of cancer tumors that have potential drug-sensitizing gene mutations; specifics were not disclosed. AZ will be able to analyze data generated by the Institute's archive of tumor samples, which is one of the largest in Europe, with more than one million samples from over 270,000 patients.  The Institute scientist who will direct the collaboration with AZ helped establish EGFR testing of AZ's Iressa patients in Russia and Eastern Europe. The deal also bolsters AZ's efforts to help the Russian government build a local world-class innovative biopharma industry. --WD 

image by flickr user sam_goody500 // creative commons

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.

EMA Leadership: Mr. Rasi Goes to London

From out of the mists of confusion created by the European Medicines Agency’s initial ineptitude in seeking a new head – its first job advert in German was wrongly directed at physicists and not physicians – an apparent savior has charged: Guido Rasi, current Director General of the Italian medicines agency, AIFA. The reaction of delegates at the OTC-focused AESGP meeting in Rome (where this blogger is currently reporting for "The Tan Sheet") to his nomination as EMA's next Executive Director is one of relief. Rasi, it appears, is whiter than white.

Unlike some of his AIFA predecessors, perhaps. Rasi's appointment to the top position of AIFA in 2008 came after its previous head, Nello Martini, was removed after being charged with “culpable disaster” (he was indeed acquitted in 2010). Martini's alleged crime, as deemed by public prosecutors at the time, was to have delayed the updating of pharmaceutical packaging and labeling where in fact a brief rewording of the documentation would have been appropriate. At the time, this resulted in delays to access and greatly angered the pharmaceutical industry.

But worse still were the crimes of Duilio Poggiolini, another former head of the Italian committee for drug registration, a forerunner of AIFA, who was accused of amassing a fortune in the region of CHF15 billion ($18 billion). The story goes that when police lifted floorboards in his house, they found underneath millions of Liras worth of gold bullion. (Lira was the pre-Euro Italian currency, for those of you with shorter memories).

And so Rasi was brought in to balance the ship and restore credibility to the medicines authority. An academic and physician by profession – until his AIFA appointment, he held a series of high-profile posts at various research institutes in Rome – he was credited with speeding up the drug registration process and thereby patient access.

His outstanding qualities in the eyes of his Italian colleagues, in addition to his acknowledged management skills, are honesty and trustworthiness. (Rare qualities indeed in anyone anywhere near the top of any multinational organization, let alone one whose shortened name has "As" and "Fs" in it..) Pharma industry commentators have already claimed that these qualities are growing in importance at EMA, following its ticking off by the European Ombudsman in June last year for a lack of transparency, and the questionable departure of its last Executive Director, Thomas Lönngren, to join the European regulatory and market access business the NDA Group. This move was seen as raising conflict of interest issues by many in industry, political circles and public interest groups.

The European Commission may have found a man to set the EMA’s house in order, but also one who will toe the line. The word in pharma circles is that he can be told to do things, but that he will then do them his own way.

Rasi's relatively short experience within the regulatory world (he's been chief of AIFA only since 2008, though on the board since 2004) may be an advantage, say some, as he comes without the baggage of a long-serving regulator. AIFA isn't a high profile agency within Europe, either (Italy is rarely used as a reference member state for decentralized approvals, for example). It does have a strong leaning towards risk-sharing deals, however-- which may prove significant.

Mr Rasi will go before a hearing of the European Parliament's committee on environment, public health and food safety on July 13, and his nomination will have to be approved by Parliament as well.

-- Faraz Kermani

At Afssaps, Two Heads Apparently Better Than One

Whilst countries in the Middle East struggle with the concept of the democratic process, the French minister of health, Xavier Bertrand, is seeking to hand pick the next head of the national medicines agency, Afssaps.

His choice — in fact his second, as the appointment of Hubert Allemand, deputy head of the national insurance system, failed for some unsubstantiated reason — is Dominique Maraninchi, president of the National Cancer Institute (INCA). Bertrand hopes that the appointment, arising as a result of the Mediator scandal, will be rubber-stamped by parliament in a matter of days.

Maraninchi is likely to be only one visage of the double-headed eagle that health minister Xavier Betrand wants to place at the pinnacle of Afssaps. Bertrand is looking to divide responsibilities at the agency between a medical person — arise Maraninchi — and an administrator.

Upon his somewhat unwarranted, yet dishonorable, discharge from the post of Director General at Afssaps — he effectively resigned under pressure — Jean Marimbert set down three goals, the fulfillment of which would re-establish public confidence in the medicines agency: improved pharmacovigilance; increased transparency; and the abolition of conflicts of interest. The question is whether Maraninchi has the determination, the ambition and the credibility to pursue these aims.

Aged 61, Maraninchi has been involved in the fight against cancer for over 30 years, having co-authored in excess of 275 articles, founded a pilot unit for bone marrow transplant in the Paoli-Calmette Institute in 1981 and established a pilot unit for research into treatment with cytokines and immunotherapy techniques at the same instate in 1988. He was appointed Director of the institute in 1990, President of the National Centres for the Fight against Cancer from 2002-2004, permanent advisor to the interministerial mission for the fight against cancer in 2003 and President of the National Institute for Cancer in July 2004.

Whilst nobody can argue about Maraninchi’s impressive pedigree in the field of cancer, there is only limited evidence to suggest that he will be able successfully to nurse an ailing Afssaps back to health. Maraninchi has understandably limited experience of pharmacovigilance, having led an institute that predominantly looks for cures and not faults. Pharmacovigilance is unlikely to fall under the auspices of the next administrator, and therefore there appears to be a slight gap in Bertrand’s plans for Afssaps. Presumably he either expects Maraninchi to learn on the job, or to rely on the expertise of his staff.

Maraninchi is well-known for expressing the view that transparency and the effective provision of medical care go hand in hand. At a meeting organized by the Socialist MP, Gérard Bapt, president of the group for the study of environmental health at France’s National Assembly — the lower house of parliament — Maraninchi, at the time president of the national cancer institute, commented on the benefit of opening up the institute’s advisory bodies to include public health interest groups. It is likely, therefore, that he will pass the health ministry’s transparency test.

The issue that is perhaps likely to catch the imagination of the general public, however, is that of conflict of interest. Media reports highlighting potential links between the government and Servier have incensed the public. More recently, at a grilling of the Afssaps hierarchy at the National Assembly, one deputy took particular satisfaction in pointing to connections between Philippe Lechat, director of medicines evaluation at Afssaps, and Servier.

The connection was tentative at best, with Lechat only taking part in the past in administering clinical trials involving a couple of the companies’ products. However, in turbulent times such as these, the public interprets a relationship between doctors and drug manufacturers as being on a par with the pact between Faust and the devil.

What then, will the media make of a similar link between the esteemed — and, to quote the French media, charming — Maraninchi and both GSK and Roche, particularly in the event of a new health scandal? It appears that Bertrand is banking on the fact that Maraninchi’s medical pedigree — in contrast with Marimbert’s background as a civil servant — will inspire enough confidence to quash public concerns.

Afssaps Boots Marimbert, a Victim of His Own Success

Jean Marimbert’s resignation from his post as the Director General of the French medicines agency, Afssaps, carries the whiff of scapegoating and smacks of a blunt sense of irony. His departure, however, prompted by revelations concerning Servier’s diabetes drug, Mediator, which is rumored to have caused upwards of 2,000 deaths, may cause France’s regulatory establishment more problems than it might solve.

Marimbert wasn't a born regulator, but since being appointed as head of Afssaps for a three-year term in 2004, he has become known in European regulatory circles as a solid and determined leader. He was re-appointed in 2007 and once again in 2010. This alone is testament to his ability and the respect accorded him by the health ministry.

His tenure hasn't been without challenges. Since 2004 the number of marketing authorization applications seen by Afssaps has risen by over 30%. At the same time, the agency has had to contend with a plethora of new laws from Brussels, including the Orphan Drug, Paediatric Medicines and Advanced Therapy Medicinal Products Regulations. Over the same period, the number of staff at the agency has risen by barely 6%.

The Vioxx withdrawal prompted Marimbert to focus on specific measures to promote drug safety. Spurred on by politicians who claimed that Afssaps was not doing enough in this area, Marimbert had all of the minutes of the agency’s regular committee meetings published online, starting with those for pharmacovigilance. This was a first for Europe.

Moreover, he tightened the pharmacovigilance system itself, and placed more emphasis on risk management plans within this framework. The irony is that it is transparency and pharmacovigilance, linked with Mediator, that have prompted his downfall.

The Mediator scandal has grown in size since breaking last November, and links between Servier, government ministers and even President Sarkozy have been called into question. Health Minister Xavier Bertrand has in the first instance pointed the finger of blame at Servier, but he also referred to severe failures in the functioning of the regulatory system, a veiled reference to Afssaps and Marimbert. The government’s main aim, it would appear, is to put an end to the Mediator scandal well in advance of the presidential elections in 2012. Marimbert’s departure serves well to deflect attention.

Bertrand is now looking at whether pharmacovigilance should be carved out of the medicines agency and set up a separate entity to carry out this task. This is unequivocally the height of folly. What’s more, it comes at a time when European competent authorities have identified and begun to consolidate the link between risk-benefit assessment and the regular monitoring of marketed drugs.

For example, the Heads of Medicines Agencies, the network of the Heads of the EU National Competent Authorities says that an effective medicines regulatory system must be able to estimate the risk-benefit of medicines, communicate that information effectively and take regulatory action when necessary to protect health. All of this must be ongoing in unison during the life cycle of the product.

This approach benefits not only patients, but also manufacturers. Thus, if an adverse incident is flagged up through effective pharmacovigilance, instead of simply withdrawing the product, a re-assessment of the risk-benefit of the product in light of the new information can be made. Marimbert made this point clear in his resignation letter, published in the French daily Liberation, last week.

What direction he will take is as yet uncertain. However, there is a job going at the European Medicines Agency, following the departure of its Executive Director, Thomas Lönngren on Dec. 31, 2010. However, whilst Marimbert hovers in limbo, Lönngren has been snapped up by independent regulatory and market access consultancy NDA and has been asked to play a strategic advisory role.

The problem for Marimbert is that he may have to wait a while before the taint of scandal fades. On the other hand, he should be safe in the knowledge that the government owes him one. -- Faraz Kermani

Ideal Replacement for Sharfstein; Right Down the Hall at FDA

Josh Sharfstein's departure back to the friendly Democratic climes of Maryland left HHS management and FDA Commissioner Margaret Hamburg with a decidedly tough bill to fill.

Where do you find someone who (1) has expereince testifying on Capitol Hill, (2) does not incite more animosity from the GOP House investigators, (3) who understands the arcane inner workings of FDA recalls and enforcement authority (a current Congressional interest), (4) is viewed favorably by regulated industry, and (5) still embodies the qualities of diversity and activism espoused by the Democratic administration?

Luckily right in the commissioner's current staff. Hamburg has already recruited that individual previously and he currently holds a top position at FDA: John Taylor, Counselor to the Commissioner for the past 14 months.

Taylor was named acting principal deputy commissioner on the day of the official announcemnet of Sharfstein's departure to head the Maryland Department of Health. Taylor's first term is for 60 days.

Taylor has 20 years of working experience with FDA issues (four outside the agency working for Abbott, 2005-2007, and two with BIO, 2007-2009) and virtually a lifetime of understanding of the agency, having grown up in a family with long service to FDA.

Taylor has worked within FDA's chief counsel's office during the Bush I and Clinton Administrations (1991-1996), was a senior policy advisor to FDA Commissioner Jane Kenney. He stayed on into the Bush II administration and served in enforcement and regulatory affairs positions under Mark McClellan.

The expereince with McClellan and with former GOP Congressman Jim Greenwood (the head of BIO) gives him the type of GOP sponsors who may get him a more civil hearing on Capitol Hill than would have been been given to Sharfstein, a protege of California Democrat Henry Waxman.

Taylor is a great immediate choice. It may be hard to find someone better after 60 days.

"Dear Colleagues...", From Ian Read

Funny what drops into inboxes, isn't it? We found a copy of Ian Read's "good morning, I'm-taking-over-from-Jeff" letter to Pfizer colleagues dropped into ours the other morning. Figured some of you might be interested. Read on, it's below.

We are trying to resist adding too much to existing speculation about the real reasons behind Kindler's abrupt departure; so abrupt that it smells suspiciously like a boot-out (which other CEO would stay for less than two years after pulling off the industry's biggest-ever merger, widely seen as necessary for Pfizer's survival, and then disappear on a Sunday night to recharge his batteries?). No, we won't be caught up in the media-frenzy. We stand by our intelligent, fact-based reporting.

Oh alright, just a bit then: A well-placed source tells us that Kindler didn't look the least bit tired, family-deprived or in need of a pick-up, last time said source saw him. Apparently even very senior folk within Pfizer didn't see this coming (let alone Wall Street). There are rumblings that Kindler and Read had, shall we say, different styles. Kindler being more the listening type, we hear; Read perhaps less warm and fuzzy. So to speak. So -- 110% speculation -- perhaps that explains the claim in this wire report that Kindler left after refusing to appoint Read as COO. He just couldn't face effectively sharing the driving-seat with a different kind of driver.

And let's face it, Kindler had done his share of hard driving. Not least through the Wyeth merger, and the usual post-merger chaos, the widely-headlined head-count cuts, the non-stop babble about what will happen post-Lipitor. Oh yes, Lipitor. That $11.4 billion about-to-go-away problem that isn't going away. And yes, there was torcetrapib and Exubera and, ahem, a few late-stage hiccups this year.

Still, regardless of whether Kindler could have done more to make the road smoother, some feel he deserved a somewhat more dignified departure. And some feel he deserved a rather warmer valedictory letter than this, including our source, who calls it "the most cold, blunt and unemotive missive I have ever seen" in relation to such a high-profile departure.

Judge for yourselves.

Dear Colleagues,

Today the Pfizer Board elected me as President and Chief Executive Officer. I am honored to be taking on this new role.

Over the past five years Jeff has made significant contributions to Pfizer. He moved aggressively to drive change, refocused and streamlined the company’s operations and he diversified the company through the game changing Wyeth acquisition. Under Jeff’s leadership the company is now stronger, more diversified and competitively positioned for the future.

Let me assure you that our business remains sound and I remain optimistic about our future. I believe Pfizer is a company with world-class products, people and a commitment to provide patients and payers around the world with the high-quality, safe, reliable, and affordable medicines that we are known for.

Starting today I will work with the Executive Leadership Team to ensure we are making decisions and satisfying our customers, colleagues, and shareholders to position the company for the long-term.

Throughout my career I have seen and know what Pfizer’s people can accomplish. I also know I can count on your support. Together we can build a culture that creates a new Pfizer that becomes the pre-eminent global pharmaceutical company and the envy of the industry.

I ask that you stay focused on doing what you do best, working each day to help patients.

Regards,

image by Flickrer Earl under creative commons

A Leaderless European Medicines Agency: Does it Matter?

Will it matter if Europe’s top medicines regulator, the European Medicines Agency (EMA), is without an Executive Director for the next six months or so?

A headless EMA is on the cards because of a translation mistake in a European Commission recruitment advertisement – the use of “Physiker” in German, meaning physicist, rather than the German word for physician.

This meant that the recruitment process, which started earlier this year, had to be repeated, and will not be finalized before Thomas Lonngren, the current Exec Director, bows out at the end of December.

The EMA is really only a co-ordinating center for the 27 national regulatory agencies in the EU, and it’s these agencies, and their employees, that do most of the actual work.

So, it is a totally different beast to a more politicized regulator like the U.S. FDA, where the top position is a political appointee and the agency itself makes the regulatory decisions.

And let’s face it, the FDA has been without a Commissioner in the recent past, and has not gone completely awry, so it should be relatively easy for EMA to do the same. EMA’s recently appointed Acting Executive Director, Andreas Pott should have no problem keeping everything ticking over, anyway; he has been EMA’s head of administration for 10 years.

Maybe there's more required than ticking over, though. Europe has a new Health Commissioner, John Dali, who is keen to make his mark, and there is draft EU legislation rumbling around on counterfeit drugs, patient information, pharmacovigilance and the like. All of this needs EMA's input.

Furthermore, the agency is halfway through deciding its work priorities for the next five years via its “roadmap for 2015”. And what would happen if the region had to confront another public health crisis, like the swine flu epidemic?

On the plus side, when the new (non-physicist?) Executive Director does show up, he or she will (hopefully) be well placed to reinvigorate the agency.

Despite new websites and rebranding initiatives (the infamous pestle-and-mortar logo) and a new, shortened acronym (EMEA is so passé), the agency and its Executive Director are still largely invisible to Europe’s general public.

What EMA really needs is an individual who is comfortable with having a high public profile, someone who is not only a highly skilled regulatory bureaucrat but who communicates effectively to the public, and becomes a publicly recognized figure.

Yes, the agency is excellent at putting “regulatory affairs” documents on its website, but is this what the public wants, or needs? As I write, the communication heading the “What’s New” category on the EMA website is titled: “Guidance on centrally authorised products requiring a notification of a change for update of annexes”. Not something that is likely to grip the attention of many of the EU’s population of half a billion souls.

Perhaps there is an opportunity here to move beyond considering national regulators for the post, and to consider academics, or even individuals with a more political background.

But one major regulatory stakeholder, the pharmaceutical industry, is sure to remain quiet during the recruitment process. Any indication that the industry backs or favours a particular candidate is not likely to enhance that candidate’s prospects. Expect nothing from the industry until the decision is made.

Potential candidates should hurry, however. The closing date for submitting applications is Nov. 24.

-- John Davis

image from flickr user sebr used under a creative commons license

Ipsen CEO Leaves...Coz of Too Many Deals?

It's always fun to read between the lines--and put in a few calls--when CEOs depart over 'strategic differences' with their boards. Such was the wording in a release issued by mid-sized Ipsen yesterday, announcing the departure of CEO and Chairman Jean-Luc Belingard.

After nine years at the helm, during which he oversaw the group's IPO in December 2005 and undertook some bold and interesting transactions including a cross-licensing and step-wise acquisition of Tercica beginning in July 2006 and a similar tie-up earlier this year with hemophilia-focused Inspiration, Belingard apparently agreed to step aside to make way for Amgen veteran Marc de Garidel.

We don't know precisely what the 'strategic differences' were, but they were almost certainly something do to with the speed and nature of Ipsen's internationalization. Garidel takes over "to lead the group's strategy in this new [deeply changing] market environment, in particular to strengthen its US and emerging markets operations," says the PR.

Belingard can't be accused of sitting still and doing nothing, though. As well as steering the group away from primary care drugs towards specialist, biotech products, he enlarged its footprint beyond France's borders: in 2002 almost half of Ipsen's sales came from France, now that figure's less than a third. Nor did he ignore the US: Tercica provided the first foothold, the 2008 acquisition of Vernalis' US operations another, and, although the US still accounted for less than 5% of Ipsen's overall sales in 2009, the Inspiration tie-up will increase that.

No, deals (or lack of) aren't the problem. Indeed, if our well-placed source is anything to go by, it's the opposite: too many deals, too little post-deal integration, not enough organic growth. (After all, Amgen's hardly the dealmaker of the century, is it?)"It was a divergence over the frequency of dealmaking," the source revealed.

Belingard, it seems, was poised for his next move, but the Board decided it was time to digest what had already been swallowed before forking out some more millions (albeit, usually these days, risk- and cost-mitigated millions). With less room to maneuver, Belingard decided it was time to go--apparently with no hard feelings. Indeed, he was involved in choosing his successor.

Garidel--another Frenchman, was this a criterion for this 68% family-owned, Paris-based group?--joins Ipsen from his position as VP International for Amgen's South region, which includes Southern Europe plus MEA and Latin America. So he ticks the emerging market box, and having spent about a third of his career in the US (first at Lilly, then at Amgen's HQ as chief accounting officer), he ticks the US box, too. (And the very fact that Garidel's Amgen background is considered so relevant must, at least, validate Ipsen's transformation biotech-wards.)

Now Garidel is hardly going to come in and tread water, either. (And anyway, imagine luring an upwardly-mobile executive into a job, even one based in Paris, where you want to slow things down.) He was apparently involved in Amgen's significant growth in Europe and beyond--though, perhaps tellingly, this has mostly been organic, rather than deal-driven. We likely won't know what he'll do--or be told to do--until the group's annual results announcement next Spring.

Our reading between the lines suggests that we may not be seeing any more Inspiration-al deals for a while (even though Ipsen's BD head Sean McKercher said last week in London that "many companies are now approaching Ipsen, wanting an Inspiration-like deal"...perhaps that's the problem? They're too sweet?). Chances are, if the source is to be trusted, that Garidel's tenure, at least initially, will be more about building on what's there than buying more.




image by flickr user oncle tom used under a creative commons license

This Charming CEO

Well, well, well. Of all the people to replace CEO Jim Mullen, the ever-more-Icahnized Biogen Idec tabbed George Scangos, the chief of Exelixis. Scangos' replacement is less of a surprise (small hint above), but more on that in a moment.

There are plenty of fun juxtapositions -- East Coast/West Coast, rumpled Mullen/dapper Scangos -- but one that can't be waved away is that Biogen Idec is squarely a commercial company, squeezing as much revenue as possible from its multiple-sclerosis leader Avonex and turning more and more to business development to bolster its pipeline; while Scangos, for all his revving of Exelixis' oncology discovery engine, has never brought a drug to market, let alone run a four-billion-dollar commercial operation.

"The Pink Sheet" Daily will dissect the major move in greater detail, so we don't want to steal our sister publication's thunder. [UPDATE: Here's the PSD piece.] Meanwhile, we point you to the other man behind the Exelixis engine, Michael Morrissey, the R&D chief who now steps into Scangos's CEO shoes.

Morrissey? We can't help wonder which song he'll use to take the stage at his first investor conference as CEO...

"A Rush and a Push and the Kinase is Ours"
"How Soon is NDA?"
"Please Please Please Let Me Get XL184 Approved"
"Panic" (Hang the VP, hang the VP, hang the VP...)

Feel free to suggest your own. If you're not a Smiths fan, just tap your foot to whatever song is in your head.

Photo courtesy of flickr user Djenan.

All In The Family: Genentech and Roche Together At ASCO

In the immortal words of one Archie Bunker those were the days, weren’t they? Back when biotechs were biotechs (small and innovative—and usually cash poor) and pharma companies were pharma companies (big and blockbuster-focused and hugely profitable), everyone knew their place in the industry. But the disappearance of the DNA ticker symbol has made things so much more confusing. Should we think of Roche as pharma or biotech? Is Genentech a stand-alone biotech within Roche or the Swiss pharma’s future?

In one of their first appearances together since Roche officially took Genentech private, the two drug makers chose to make a big splash at the American Society of Clinical Oncology. (The Roche-Genentech business development dynamic duo of Joe McCracken and Dan Zabrowski also stepped out at BIO. Look for an indepth Q&A in a coming issue of IN VIVO.)

And what a splash they made. The newly consolidated Roche-Genentech oncology portfolio is soooo big that the industrious executives at the newly blended company couldn’t fit it into one night.

Indeed, the two organizations dominated ASCO, presenting 12% of the entire scientific content in various break-out sessions, plenaries, and posters. But it was the two-night event aimed at analysts—four hours of oncology updates—that illustrated what the future might look like for Rochetech (or is it Genenroche? It doesn’t have quite the same ring as Wy-Pfi, does it?)

The IN VIVO Blog couldn’t help but see the occasion as a wedding of sorts, with the requisite awkwardness and strained politeness of a rehearsal dinner on full display. (We aren’t revealing the identity of the drunk uncle.) The “head table” on stage was loaded 8 across with managers. And by night two, Roche felt compelled to put up nameplates—a move necessitated by the fact that analysts typically follow either Roche OR Genentech but not both and so might not have a sense of the cast of characters.

Much of the first night was spent rehashing the failed adjuvant colorectal cancer trial for Avastin, C-08. (There’s a slight possibility you’ve already heard about that, but see “The Pink Sheet” DAILY coverage here.) The firms also talked about new uses for old drugs – Herceptin’s move out of breast cancer with the ToGA trial in gastric cancer – and some new offerings from the early stage pipeline, like hedgehog inhibitor GDC-0449 and the BRAF-targeted PLX4032 partnered with Plexxikon. (Check back with the DAILY and “The Pink Sheet” in coming weeks for more coverage.)

But time was also spent addressing two particularly large elephants in the room: the on-going Roche/Genentech integration; and the impact the C-08 trial failure had on both the deal offer and the newly combined organization’s bottom line. Outgoing Roche head of U.S. pharma Bill Burns gave a finely orchestrated bit of messaging as he tried to dispel certain misperceptions.

“Since we are all sitting together as a united family now, and I know that this may be something in the back of many of your minds, I want to lay to rest two or three elements I think the mischief makers in the media were playing on in the run up to the family coming together.” (Us? Make mischief? Your Honor, in our defense, Roche made it fairly easy to categorize “the family” as dysfunctional.)

Burns delved first into continued questions about the ability of Genentech to remain an independent entity with its traditional characteristics of a quirky culture, high science, and individually-driven success. Ever since Roche announced its hostile bid for Genentech last July, that fear has been one of the brightest issues burning. Noting incessant references in the press to questions such as “Will people stay?” and “What will happen?” Burns emphasized the quick steps Roche took to establish a management team.

IVB cannot tell a lie. Roche did in fact move swiftly—within weeks of the disappearance of the DNA ticker came the April 14th announcement outlining changes at Genentech. But what Burns conveniently forgot to mention is that those changes included losing some of Genentech’s most talented leaders: Arthur Levinson and Susan Desmond-Hellman stepped down from their roles as CEO and Product development president, becoming mere advisors. A few weeks later Desmond-Hellman confirmed what media had speculated: she would be leaving Genentech to take the reins as UCSF’s chancellor, a position that starts in August.

Burns also pointed out that Roche has followed up on its intention to keep some of the innovation coming out of the Genentech labs operating “as is” in South San Francisco. (We are willing to bet however, that G’s researchers would have given up their iphones and their apple computers if it would have kept Levinson and Desmond-Hellman on board.) Moreover, said Burns, operations are continuing as normal under the leadership of Richard Scheller and his more than able assistants, Marc Tessier-Lavigne and Andy Chan.

“The team is fully in place and we have given them also the elements like business development that are required to make sure that accessing some of the bright new elements, either enablers in science or early programs, can continue,” he told investors.

Along with those tortured phrasings, Burns unveiled the creation of an internal acronym that describes Genentech’s function in the Roche family: “GReD”, for Genentech Research and early Development. IVB’s reaction? The “pharmafication” of Genentech is complete—it has its own nutty alphabet descriptor that is just one letter shy of the word greed. (Defn. Greed: (noun) the excessive desire to acquire or possess more—especially more material wealth—than one needs or deserves.)

Burns also tried to “put on the table and lay to rest” allegations that the then-pending C-08 trial results played a critical role in both the timing and the price of Roche’s even more hostile move in January, when it lowered its offer price from $89 to $86.50. Acknowledging that the potential for Avastin use in the adjuvant setting had “raised the rates” and was clearly “an inflection point for the then independent Genentech stock,” he maintained it was just one more data point Roche execs used to calculate their valuation. Acknowledging that the C-08 trial results were significant, Burns asserted “you do not go into a $46 billion privatization on the basis of one clinical trial.”

--by Mary Jo Laffler and Ellen Foster Licking

Merck/SGP: Change of Control and Executive Pay Collide

There are several reasons Schering-Plough chief executive Fred Hassan sounded upbeat on the conference call this morning to discuss the $41 billion deal he worked out with Merck. One possibility is that Fred, 63, may walk away with nearly $60 million in the event of a change of control, according to the proxy statement filed last spring, which is the most recent available.

Granted, this could change a bit, because the payout is calculated, in part, by using the Dec. 31, 2007, closing stock price of $26.64. And who knows? Maybe Merck will try to argue the change of control provision doesn't apply, since the deal is structured as a reverse merger. On a conference call, Merck execs insisted the deal isn't a change of control in order for Merck to keep Johnson & Johnson from grabbing international rights to Remicade and a follow-up drug.

However, Schering-Plough's corporate secretary, Sue Wolf, says the deal will likely be considered a change of control for the purpose of executive payouts, according to a Schering-Plough spokesman. So maybe these drugmakers want things both ways?

In any event, it would appear from reading the proxy that Schering-Plough execs were given big incentives to get a deal done. For instance, Fred would get only $37 million if he were terminated prior to a merger, but would receive $56.3 million if booted after a change of control, roughly the same amount under a change of control in which he remains without being terminated.

And Carrie Cox, an executive vp, would get $22.8 million if there's a change of control and $23.7 million if terminated after a change, but just $13.3 million if terminated prior to a change. And Bob Bertolini, the CFO, would $19 million with a change, $12 million if booted before a change and $27.5 million if shown the door after a change. With paydays like that, why hang around? The SGP execs could be big winners, and walk away with enough money to dole out their own stimulus packages (take note former Schering-Plough employees).

Assuming Fred wins, he may receive close to $60 million, anyway. His options may have been underwater or certainly worth less in recent months, but the deal with Merck is moving the stock closer to the December 2007 closing price. And that doesn't include another $3.9 million in phantom stock awarded late last month, while negotiations with Merck were taking place.

Whatever the final number, the payout will likely be memorable and may even generate some debate. On one hand, Fred managed to get a 34 percent premium out of Merck's board, which is better than nothing given the stock market these days. And for all we know, maybe a higher price will materialize if Johnson & Johnson were to bid over fears of losing those Remicade rights.

However, the flap over Vytorin clinical trial data happened on Fred's watch. There's also the notion that, at a time when the global economy is tanking and corporate excess is not cool, perhaps the payout is too large and the Schering-Plough board should have been stingier. What do you think?

The Horse Race at Bristol

We admit to being impressed with the smaller-is-better strategy from Bristol-Myers Squibb under CEO Jim Cornelius.

He didn’t really have much choice, of course. The company’s got nearly $8 billion in revenue at risk by 2012 from the patent expirations of Plavix and Abilify. And Bristol doesn’t have the pockets Pfizer does to go buy itself a couple of years of earnings respite (see our analysis of Wy-Pfi here).

Instead, Bristol is going to take its lumps – and then re-set the growth clock from a smaller base with the products that will then be maturing from its “string of pearls” deals. And those products will have made Bristol a very different company – a specialist biopharma.

So granted Bristol is still independent when that time comes, who should run it? In creating a four-man executive committee, including himself, Jim Cornelius looks to have fired the starting gun in a three man race, with president and COO Lamberto Andreotti in pole position. Andreotti is a marketing guy – with as much or more experience in the kind of products Bristol is getting away from as in the products Bristol is going towards. He’s never run a biotech company, certainly. But since the directors appoint the CEO, a betting man would wager they’ll go with one of their own -- and Andreotti's just been appointed to the board. That's what the directors did last time, after all, appointing Cornelius to what was then supposed to be an interim role.

Then there’s Jean-Marc Huet. Smart young guy – and if not entirely the architect of Bristol’s spin-off strategy, then certainly its field commander (he arrived in ’08, after the sale of the imaging business and when the Convatec deal was well underway). And he was a pretty successful officer, too: the Mead-Johnson IPO managed to raise $720 million in what seems like the only IPO in forever. He gets pretty good marks from investors – Bristol’s stock has done better than most Big Pharmas since Huet’s arrival. And Cornelius was a CFO as well (a dim memory tells us he was the youngest CFO in Lilly’s history). But Huet doesn’t have much experience in health care (his background is more in the consumer world) – and right now, Big Pharma’s front-and-center example of a non-health care exec running a pharma, Jeff Kindler, hasn’t been winning too many admirers.

Elliott Sigal, the last member of the triumvirate: a biotech guy (was CEO of Mercator Genetics) and quite definitely the architect of the company’s scientific externalization strategy and its focus on high-medical-value, focused-market drugs. Along with an impressive string of deals, Sigal’s presided over an extraordinarily productive time for Bristol’s R&D – nine NMEs approved in five years, by our count (and yes, we know – can’t give him all the credit for that good fortune; have to acknowledge his predecessors, including the late James Palmer). So could Sigal get the top job? Maybe. But since Merck’s Roy Vagelos, Big Pharma’s been too chicken to appoint an R&D guy to run the business.

So the smart money’s on Andreotti. But Cornelius – as anyone who knows him can tell you – is a pretty close-to-the-vest guy. And he’ll undoubtedly have the biggest say in who gets to be his successor.

Image from Flickr user BiggerPictureImages.com and used under a creative commons license.

Changing of the Change Agents: Exit Wyeth’s Ruffolo, Enter OrbiMed’s Dolsten

We just heard the news that Bob Ruffolo, Wyeth’s R&D boss, is retiring.

A few points to make: first, from our auslander’s point of view, Ruffolo took a Wyeth research group which had already been significantly improved in the almost reverse takeover by the former Genetics Institute crowd (including its head of R&D Pat Gage) and made it a lot more business-like.

Ruffolo is not an executive to suffer fools (or those he thought fools) gladly. He rubbed a lot of people the wrong way – including colleagues running competitive R&D organizations, who didn’t like his outspokenness. And he was a particularly harsh and public critic of the FDA (at least when he talked with us – as you can read in The RPM Report here)

But he ran an organization which got stuff done. In the otherwise horribly dry year of 2007, Wyeth managed to push through two drugs (Torisel and Lybrel) – punching far above its R&D weight (Wyeth is on the small side of Big Pharma’s R&D organizations).

Wyeth is already ahead of the game this year, with two approvals, both of which your blogger had – incorrectly – written off (and we weren’t alone): Relistor (methylnalrexone), which they’d licensed from Progenics, and Pristiq, which is an isomer of their near-patent-expired anti-depressant Effexor. Pristiq in particular ran into FDA trouble last year, with the agency dinging it twice – first for its major depression indication, then for its use for post-menopausal hot flashes. Still hasn’t been approved for the latter – but scooted in on the former.

And Ruffolo has been the outspoken exponent of the statistical strategy of R&D – that for all the theories on how to improve the odds of drug discovery and development, with new markers and “model” diseases (á la Novartis – see an IN VIVO discussion here), ultimately R&D is a numbers game. You’ve got to put a certain number of compounds in the front end to get out a set number at the back end.

Science isn’t making us any better at improving those odds, Ruffolo would almost take pride in pointing out. It was Ruffolo, speaking at Windhover’s Pharmaceutical Strategic Alliances meeting in 2005, who, at least to our knowledge first among major R&D chiefs publicly, noted that attrition rates in Phase II were going up. Before you knew it, everyone was talking about it. And Ruffolo kept insisting that the only real solution to the attrition problem was to add in more compounds.

So now enter Mikael Dolsten, the former head of Boehringer Ingelheim research, whom not so long ago the IN VIVO Blog had named as a potential candidate for the top R&D job at Pfizer. (OK – we spelled his name wrong there. We may be spelling it wrong now. But we’re not alone – either Wyeth spelled it wrong in their PR (they use an “h” in Dohlsten) or Boehringer spells it wrong in theirs (they leave out the “h”).

In the brief interregnum between leaving Boehringer and landing at Wyeth, Do(h)lsten parked himself as a private equity partner at the OrbiMed, the health-care focused investment firm. Which leads us to speculate: damned few Big Pharmas are going to be able to pay themselves for all their development programs, a fact that most of them are as yet unwilling to admit. Project financing is eventually going to play a role in this game.

When we first wrote about Dolsten, one recruiter told us he was a “change agent.” So was Ruffolo, of course. But Dolsten’s few months at OrbiMed could make him a change agent of a very different kind.

High Noon Haiku: Endo, RNAi, and EPO

Sometimes we don't have the time to cover all the stories we'd like. But occasionally we'd like to link over to them anyway, while encouraging you, the reader, to give us a short take on the rest of the day's news. Welcome to High Noon Haiku. Give it your best shot in the comments (remember, it's 5-7-5) ...

AZ and Silence
New deal in RNAi
Where are the details?

***

Amgen, J&J:
EPO benefits outweigh
The risks, FDA!

***

Peter Lankau's gone
Endo didn't waste much time
Holvek's the new boss

***

Wall St. Journal blog
Has good piece on new blind gov
Too bad they're Mets fans

(image via threadless.com)

Why Doesn't Pharma Hire from Biotech?

At this week’s BIO-Europe meeting, Vaughn Kailian asked his panelists: why don’t biotech’s most innovative executives ever join pharma? But they do, argued back panelist and Merck VP Barbara Yanni: look at Peter Kellogg, who joined the company from Biogen-Idec.

Irrelevant, countered Kailian. Counting money in biotech or in pharma: same thing. What about research?

In fact, biotech CFOs could probably contribute some innovation to Big Pharma, in particular perhaps Kellogg will begin applying some of the lessons of biotech finance to Merck – like figuring out some alternative strategies for financing a broader pipeline.

But Kailian is mostly right.*

The key contribution biotech's management can make to Big Pharma is in R&D -- but by and large Pharma doesn't really go after biotech's R&D stars. While big-name academics regularly join Big Pharma – Merck has made a habit of plucking its research bosses from academia (like Peter Kim, Ed Scolnick and Roy Vagelos) – rarely do biotech’s research poo-bahs.

Sometimes they get there by acquisition, like J&J’s research chief Paul Stoffels – Janssen to Tibotec-Virco and back, via purchase, to J&J. Or Harlan Weissman, who stayed at J&J following the purchase of Centocor. And yes, every once in a while there appears in Pharmaburg a Corey Goodman (ex-Stanford and Berkeley, then Renovis CEO, now running Pfizer’s new Biotherapeutics center). But biotech’s innovators are vanishingly rare in the top echelons of pharma.

Mostly they don't get asked to join. Big Pharma likes to promote from within. Fewer square pegs in round holes. And leaders of large research organizations, goes the argument, need experience in running large research organizations. Which in turn perpetuates the problems of large research organizations.

Talk to the top researchers in biotech and what you’ll hear is that they don’t want the Big Pharma jobs. Maybe. But we know of a few who ended up in biotech because they didn’t get the top jobs in Pharma. And most would probably at least like to be asked. Some might even say yes.

So should Pharma go after biotech for their R&D bosses? Yes, and for the same reasons it should probably go after their CFOs: a sense of creative urgency. Paul Stoffels, we understand, is forcing his research executives to submit business plans, not budgets (the latter permits spending; the former posits results). And he tapped J&J’s top biz dev guy (a lawyer—no scientist)—Tom Heyman—to run J&J’s discovery (and force into the open arguments about the relative quality of internal vs. external projects).

We don’t know whether Stoffels will be any more successful than his recent predecessors (J&J’s research has been manifestly unproductive). But at least he’s thinking differently. And that’s a good start. [UPDATE: J&J is shaking things up at the top as well.]

*OK, OK, we admit: we had to say that because Kailian is also a director of Windhover Information, whose employees churn out this blog. But we swear on a stack of SEC filings, we would have said the same thing even if he were, well, not on Windhover’s board.

Musical Chairs at Novartis, Except When the Music Stops, 1250 Fewer Chairs

Novartis posted its third quarter results this morning and missed its profit guidance. Genericization, delays to Galvus, and the withdrawal of Zelnorm all contributed to a 12% decline in earnings. And so out comes the axe. Oddly enough, the press release was titled "Novartis delivers record earnings in first nine months of 2007 thanks to strong operational performance and divestment gains." Is it time to revive IN VIVO Blog's 'press release of the week' feature?

Novartis is cutting 1250 jobs (mostly in sales, and including 510 'third-party' sales positions) in the US, a move cheered by analysts and expected to result in savings of about $230 million in 2008. The layoffs are part of a restructuring of its pharma development and commercialization organization.

Most conspicuously Thomas Ebeling, the current head of pharma, will be shuffled over to Novartis' consumer business--a position perhaps more suited to his background: he came to Novartis from Pepsi a decade ago. At pharma he'll be replaced by American Joe Jimenez, the current head of the consumer business who joined Novartis earlier this year (and was until 2006 European president and CEO of the food giant Heinz), effective immediately, "to expand management experience and provide fresh impetus." That might be a new euphemism, we're not sure.

Less surprisingly, the company is also establishing Novartis Biologics "as a focused unit to accelerate and optimize the potential of research and development of innovative biologic medicines." We've noted before (and discuss at length here) certain pharma's need to bulk up in large molecules. Novartis says:

This unit will unify and expand the expertise within Novartis by bringing together the key elements necessary for fast and high-quality R&D activities and to help attract top talent. Biologics comprise 25% of the pre-clinical research pipeline at Novartis and are increasingly a priority in R&D activities.

It will be interesting to see whether Novartis feels the need to augment its internal biologics capabilities with the kind of external moves being pondered by Sanofi-Aventis and Pfizer. The company has inked some 22 deals in large molecules over the past five years and most impressively has bulked up in vaccines (through the full acquisition of Chiron) and in RNAi, though a first-mover deal with Alnylam.

But back to the layoffs for a moment. Novartis' cutbacks don't approach the level of some of the other Big Pharma that have cut back this year--see the chart below from the September issue of IN VIVO--and will mainly be executed by not filling vacant positions, the company says.

Nevertheless, can the decision be seen in the broader context of the general shrinkage of Big Pharma sales forces, thanks to a variety of factors including but not limited to the rise of biologics and a shift toward specialist medicines? Which brings us back to the pharma/consumer reshuffle; both execs' backgrounds are more grounded in consumer marketing than pharmaceuticals. To say the least appointing Jimenez to the pharma post goes against the grain of the specialist marketing trend.

While You Were Watching the Upsets

This weekend we were in Cardiff for the Rugby World Cup quarterfinal between France and New Zealand, which saw France upsetting the favorites. Earlier in the day defending champs England upset heavily-favored Australia, setting up a very surprising all-Europe semifinal next weekend. Suckers for a lost cause, we managed to keep tabs on the Phils into the wee hours, and showed our support on the streets of Cardiff amongst the hordes of Kiwi and French fans (see below--it's a jungle out there).

So what'd we miss?

• The repercussions of the failure of Merck's HIV vaccine are being felt across the entire field, points out the Philadelphia Inquirer.
  
• Roche isn't raising its offer for Ventana, the company said this weekend, but it remains convinced Ventana shareholders will see the light.
  
• And the winner is ... Andrew Witty. GSK's head of Europe appointed CEO-designate, will replace JP Garnier in May 2008.

gotta support the team

How Much Does Pfizer Want to Succeed?

Yesterday, Pfizer’s Jeff Kindler ended the speculation around what we think is his most important appointment, elevating development chief Martin Mackay to the top R&D job (an appointment, by the way, which we predicted--here).

As the WSJ’s health blog pointed out, Kindler has chosen managerial continuity. If Mackay does some of the requisite R&D reforming, it will at least come from within the Pfizer context – and theoretically won’t generate the antibody response an outsider’s initiative would (like Peter Corr’s attempts when the former Warner-Lambert chief was briefly R&D boss).

Second, Mackay is not John LaMattina. He clearly recognizes the need to change Pfizer—as he’s noted to IN VIVO and as he’ll explain at Windhover’s FDA/CMS Summit on December 6.

But two big issues will determine how successful Mackay can be—one more or less in his control; the other out of it.

The first: just how far is he willing to go in reforming Pfizer R&D? A $7.5 billion annual cost, it is vastly too expensive for what it produces. And it’s got too many people working on too many projects to manage effectively.

To succeed—our view, of course--Mackay will have to reduce headcount; start and objectively judge experiments in development (like its Project Fisher, a parallel to Lilly’s Chorus division); figure a way to push biologics into the mainstream of Pfizer’s discovery and development and create systems for monitoring the likely but as yet unknown safety challenges they’ll present; push for independent (and probably independently traded) R&D organizations, on the models of Genentech or Theravance, to whose output Pfizer will have post-Phase II options; and figure out ways of partnering Pfizer’s own de-prioritized drug candidates.

Among other things. But that’s enough for right now.

Problem is: Pfizer’s commercial and financial sides (including its CEO) will have to accept and adapt to the kind of output a revitalized Pfizer R&D must generate—high-value specialty drugs, including biologics. That will mean a smaller, more focused commercial Pfizer--or even Pfizers (we’re all for disaggregation and spinouts—therapeutically focused mini-Pfizers, for example). When Pfizer has followed its instincts, taking a mass-market approach to specialty drugs, it’s failed: witness the disappointing performance of Rebif in multiple sclerosis or the disaster of its inhaled insulin, Exubera.

We know and respect Martin Mackay. And we know he has his work cut out for him. But if he does his bit, Pfizer then needs to let him succeed.