Merck Serono Re-Shuffle:Deckchairs on the Titanic?

Okay, so the Titanic analogy is a bit unfair. But it just kept springing to mind, reading about Merck Serono's latest two Big Pharma hires, Annalisa Jenkins (ex-BMS) and Belen Garijo (ex-Sanofi) who will, respectively, drive a new R&D organizational structure and re-shuffle the group's global commercial and marketing organization. The Merck Serono ship isn't exactly going full-steam ahead: oral MS drug cladribine, the post-Rebif hopeful with peak sales once slated at $1.5 billion, was officially scrapped June 22, after both European and U.S regulators had turned up their noses (mostly at a potential link to cancer). Cladribine's trip-up followed a string of other development setbacks and most probably prompted the departure of pharma CEO Elmar Schnee in December 2010.

Enter the Big Pharma blood to sort things out. (One thing Big Pharma execs should by now be highly-trained in is how to cut costs and try to boost R&D productivity). Stefan Oschmann, previously head of Merck & Co. Inc.'s emerging markets business, joined in January as President of Merck Serono (and also heads the company's consumer health division). After six months assessing the damage, he's now hiring in the troops to sort things out.

Belen Garijo, previously SVP Global Operations Region Europe and Sanofi Aventis, will take on a newly-created COO role and "define a highly competitive commercial and marketing strategy to strengthen Merck Serono's product brands and lead its global business to profitable growth across all therapeutic areas," says the release. Make what we've got work harder, in other words. And no doubt she'll also leverage some of the synergy-extracting experience gleaned from latterly leading the integration of Genzyme at Sanofi, as well as draw on Oschmann's emerging markets background.

Jenkins' appointment as Global Head of Drug Development & Medical marks the first step of a R&D overhaul that, certainly at first glance, appears familiar to anyone following Bigger Pharma's attempts to invigorate their innovation engines: the creation of a pre- and post-POC divide, with Jenkins heading post-POC development including life-cycle and regulatory functions, and Bernhard Kirschbaum, until now head of all R&D, looking after Global Research & Early Development to proof-of-concept. (This isn't the first time Merck has split R&D: earlier in his six-year career at Merck, Kirschbaum ran pre-clinical and global technologies, reflecting an older-fashioned R&D dividing line).

Yes, and the new R&D operation is going to be all about fostering agility, creativity and entrepreneurship, to allow more efficient use of resources, etc. etc....We've heard many similar stories before. What's more, if Eisai's R&D experience is anything to go by, Merck Serono's mid-cap credentials -- it has just 2500 R&D employees -- needn't rule it out of creating small, biotech-like autonomous units either, a la GSK's DPUs.

As yet, there are scant details on offer of Merck Serono's makeover: Oschmann isn't talking until at least the end of the year, we are told; perhaps understandable given that Jenkins and Garijo don't start until September.

But Oschmann likely knows the broad outlines of what he needs done, and has hired the appropriate troops to execute on the plan. Cost-cuts and efficiency drives will almost certainly feature strongly, as will in-licensing, especially to salvage the MS franchise. Line extensions for 13-year old, three-times-a-week injectable MS therapy Rebif (interferon beta-1a) continue (the company recently submitted an application to EMA for Rebif in early-stage MS) but are unlikely to be enough, particularly with MS competition from the likes of Biogen's Tysabri, Novartis' oral Gilenya and, perhaps soon, Sanofi/Genzyme's Lemtrada (though recent Phase III results for that drug were mixed).

Merck has done two neuro-degenerative diseases focused deals this year so far; expect that rate to increase. If it doesn't, maybe that deckchair analogy will creep back in after all, even though the company is somewhat protected from the full force of the elements by its 70% family ownership and its minority non-pharma operations.

image by flickrer Steve Parkinson used under creative commons

While You Were BBQing (on Mars)

In the event your Memorial Day / Bank Holiday weekend didn't involve a glance at the news, let us inform you that NASA landed another probe on Mars, to scoop up some Martian ice and cook it up to 1800 degrees Fahrenheit to sniff out trace chemicals in the vapor, in an attempt to find signs of previous life there. With luck your own barbeques were less costly, not as burnt, involved fresher food and were at least a little tastier. It's tough to beat Phoenix's view, however, and we can't be the only ones who want a grill that looks like that (so long as it's made by Weber, naturally).

The budget for Phoenix's 422 million mile trip was about $420 million, most of which came from NASA aside from a $37 million weather instrument supplied by Canada (presumably already paid for, because now that Canada's mad at FDA--see below--checks could start bouncing).

With yet another big-upfront technology licensing deal (this time with Japan's big dealmaker Takeda), Alnylam Pharmaceuticals can probably afford to foot the bill for NASA's next mission, providing the destination may provide them access to new companies eager to spend a ton of money to non-exclusively license Alnylam's RNAi platform.

This time they didn't have to go as far afield, though for the first time they've branched out into Japan. We'll have more to say on the deal later today so watch this space. For now we give you the basics: $100 million in up-front cash and $50 million in near-term technology transfer payments for non-exclusive license to Alny's platform in oncology and metabolic disease, first right of negotiation on Alny's RNAi programs in Asia (excluding ALN-RSV01). Alnylam also gets opt-in rights for 50/50 co-dev/co-commercialization deals on Takeda programs in the US market, plus the usual gajillion biobucks in development and commercial milestone payments.

UPDATE: We've written a post on the Alnylam/Takeda deal, here.

And what else went on over the long weekend?

• On Monday Novartis said the EU had greenlit Extavia, its brand of interferon beta-1b for multiple sclerosis. Extavia is the same as Bayer-Schering's Betaferon/Betaseron; Novartis gained the right to market its version in a 2007 settlement with Bayer after it bought Chiron (which manufactured the drug for Schering) in 2006. Launch of the interferon in the US and Europe in 2009 should allow the company to secure a beachhead in the MS market before introducing its novel oral therapy fingolimod (FTY720), which is currently in Phase III.
  
• HHS Sec. Michael Leavitt says red tape is slowing FDA's push to get boots on the ground in China. (AP, at WSJ.)
  
• Health care stocks are no longer a port in an economic storm, reminds the Wall Street Journal on Sunday. The paper quizzes a few fund managers on why, and looks for exceptions to the rule.
  
• The Sunday Times is reporting that Elan is mulling a spin-off of its drug delivery business (Elan Drug Technology), but that any move will likely wait until later this summer when it has a better handle on the success or otherwise of its Alzheimer's disease program. (via reuters.) Wait. Haven't we heard this before?


• And finally ... look out FDA! You've gone and pissed off Canada ...

image: NASA

While You Were Considering the Alternatives

"When you come to the fork in the road, take it."

We hope the weekend gave you a chance to look in on the news of the day, Strategic Alternatives: Biogen Idec edition. We saw it coming (and said so here last Thursday). Late on Friday Biogen Idec confirmed that it is up for sale, having received offers from both strategic and financial buyers (the latter being Carl Icahn). We've noted the folly of buying Biogen for its current products, since any acquirer would have to share Rituxan with Genentech and since Elan has a change-in-control right to buy Tysabri (and the Irish drugmaker has brought in Lehman Bros. to help decide what to do with Tysabri in the event of a sale). But beyond a beef-up in biologics, such a move--likely to cost at least $30 billion--would help a primary-care acquirer to radically shift from primary care drugs into specialist marketing, an expensive kind of reality-show makeover for Big Pharma.

But what else happened this weekend?

• A team of scientists at Stanford University and elsewhere have published preliminary bu promising results of a new Alzheimer's diagnostic. The New York Times reports on the Nature Medicine article. Satoris is the company that aims to commercialize the test.


• News out of ECTRIMS in Prague: Bayer and Genzyme's good-news-bad-news Phase II results for Campath in multiple sclerosis. A Phase III is in progress.


• Reformulation specialist Orexo is buying Swedish R&D co Biolipox for SEK 856 million ($133 million). "The acquisition will create an innovative specialty pharma company [there's that term again!] with a broad product pipeline, global partnerships with major financial potential, and established sales channels" says a statement.


• Second prize, two weeks in Philadelphia! Glaxo considers CEO-also-rans for its board, says the Financial Times.


• The FT also interviews Sanofi-Aventis CEO Gerard Le Fur. What do we learn? Well lets just say there's a lot of color. For starters, Le Fur doesn't smoke marijuana. He prefers the Continental two-kiss to the Anglo one-smooch. And he's a rugby guy, so he probably had a very bad weekend!