But What if I Drool?

A ton of resources at Big Pharma are devoted to developing or licensing drug delivery technologies, for sure. But here's a publicly funded organization putting its money where, well, where its mouth is.

European researchers are developing an orally implantable drug delivery system that could improve compliance in patients on a wide variety of therapies. According to the developers, IntelliDrug, the fake-molar implant works thusly:

The micro-system comprises a medication reservoir and release mechanism, a built-in intelligence, micro-sensors and micro-actuators. IntelliDrug device will be placed in the oral cavity. The medicine is contained in the small reservoir. It will be released in a controlled manner accordingly to patient’s needs, for periods lasting days, weeks or months. The device will be reloaded in a simple non-invasive way. The released medicine will be either absorbed by the oral mucosa or swallowed by the patient.

Actual implant sans toothbrush and smile.

Source: BBC (via Onpharma)

Galvus Misses Its Window; Is this All Good for Merck?

The Galvus delay is terrible news for Novartis.

Competitor Januvia, from Merck, has already seen the single best launch in recent memory for an anti-diabetes product. With a 40% share of new written scrips just four months after introduction, it may be the best launch of any new drug into a crowded category. Given its labelling -- “similar to that reported with placebo” -- doctors are rushing to prescribe what one clinician called a "no-brainer drug": zero training required in administering it; once-a-day dosing, with or without food, with or without any other medication. Once they're comfortable with Januvia, why would doctors switch to anything else, unless they're dramatically differentated?

Originally estimated to be three months behind Januvia, Galvus was already at a big timing disadvantage. Things are now much worse. Galvus seemed to have little differentiation over Januvia before (and therefore little chance of gaining a market-share advantage--now its only differentiation is negative: the skin lesions in primates, linked in FDA's mind to the toxicities seen with the drug at very high doses. That won't encourage doctors to try new patients on Galvus, particularly if, as a number of experts believe, Galvus' label--granted the drug's ultimately approved--comes with restrictions on use.

The potential time bomb for Merck is that Galvus' problems will redound to its detriment--just as the problems around Merck's own Vioxx KO'd Pfizer's Celebrex. FDA's metabolic division has been under severe scrutiny and it's possible they could do the cautious thing and start looking at lot more closely at Januvia. And when they do, will doctors too start thinking a lot more before prescribing what was once a no brainer?

Abbott Joins In: Sales Force too Kos-tly

The conversation over at Cafepharma is even more colorful than usual these days in the wake of news that Abbott is slashing 20% of its newly enlarged pharmaceutical sales force.

After it's $3.7 billion acquisition of Kos we expected Abbott to reduce headcount in sales--much the same way Lilly had little need for Icos' extra infrastructure after it acquired the company last year. Expect more companies to follow suit, as Big Pharma bulk up fading pipelines via acquisition of specialty pharmaceutical companies, or smaller companies with specialty pharma assets.

Shire nipped a potentially similar problem in the bud when it bought New River. Had the companies moved forward with their co-promotion agreement on Vyvanse (New River had previously opted in to this portion of the companies' deal), Shire would have found itself footing the bill for New River's 25% contribution to the cause.

Meanwhile, Abbott's axe falls this Wednesday.

First flagged up at Pharmalot

UPDATE: The AP is reporting that Abbott will also shed 200 jobs in R&D:

The majority of the 200 scientists and researchers to be cut will come from the company's offices in northern Illinois, Abbott spokesman Scott Stoffel said Monday night. The bulk will come from a research unit that deals with the early discovery of treatments for metabolic disorders such as obesity and diabetes, he said.

Right on Schedule

Over the weekend Shire announced approval of Vyvanse, its next-generation ADHD drug licensed from soon-to-be-acquired partner New River.

Once it is launched in the second quarter this year, Vyvanse should quickly inherit ADHD market share from Shire's current leader Adderall XR, for which a soft landing has already been orchestrated via a variety of authorized generics deals. But despite the new drug's approval, despite the $2.6 billion Shire paid for the 50% of Vyvanse it didn't already own, and despite all the talk of potential resistance to abuse, the FDA has recommended to the DEA that Vyvanse join the majority of ADHD drugs as a Schedule II controlled substance.

(editorial aside: is the DEA logo intentionally trippy?)

Shire isn't letting that get them down, and the decision--surely a disappointment to Shire--has been expected for some time. Quoth Shire CEO Matt Emmens in a statement announcing the approval: “The label we received with the approval letter includes information about the extended duration of effect and abuse-related drug liking characteristics of VYVANSE which illustrate benefits that differentiate this compound from other ADHD medicines."
But the authorities' equivocation here won't give Shire much wiggle-room on price and message.

Payday for RJ Kirk & New River

Once again, ally turns to buy.

Eager to land 100% of the two companies' profits from the soon-to-be-approved ADHD drug Vyvanse (formerly NRP-104), Shire Pharmaceuticals bought New River Pharmaceuticals today for $2.6 billion in cash. The broad smile of New River chairman, CEO and founder RJ Kirk, who owns 50.2% of the biotech, can now be seen from space.

Buying out the junior partner on a potential blockbuster is hardly unusual these days--see Lilly/Icos, Genentech/Tanox, and Amgen/Abgenix: partners can be expensive, as we've pointed out before. At $64 per share the deal is a solid one for Kirk and his fellow New River shareholders, though the acquisition premium hardly reaches the heights of previous deals in the space: 10% over New River's closing price on Friday, February 16th and 14% greater than the shares' average over the past four weeks.

Perhaps given New River's backstory, and the company's subsequent growth over the past two years, the size of the premium matters less than the company's spectacular takeout valuation. In the eight years from foundation to IPO, New River was largely funded by Kirk and other managers, acquaintances and friends, and toughed out a tricky IPO market in 2004 before finally raising public funds at $8 per share in a Dutch auction run by WR Hambrecht. Not bad.

Shire consolidates the value of Vyvanse, a probable blockbuster expected to launch in the second quarter of 2007 after FDA and DEA review. The drug has received two FDA approvable letters so far, the latter in December 2006.

Notably Shire is raising $2.3 billion in debt to pay for the transaction (along with a placing of new ordinary shares that should bring in around $800 million) leaving its roughly $470 million cash for additional in-licensing or acquisition deals.

New River's product candidates beyond Vyvanse, NRP290 (in phase II in acute pain) and NRP409 (preclinical, primary hypothyroidism) are non-core to Shire and likely to be out-licensed, though Matt Emmens, Shire's CEO, said today that no decisions have been made.

AZ-BMS Diabetes Deal: Two Paths for Big Pharma

If there is a schism among Big Pharma it is between those companies clinging on to the notion that pharma's future role is--as it is today--as a massive marketer of mass-market drugs, and those that see specialism as a means to avoid imploding under the weight of their own infrastructures.
The diabetes deal announced yesterday by AstraZeneca and Bristol-Myers illustrates the pursuit of each strategy: AstraZeneca, eager to play in what one pharma CEO described this week as "the disease of our epoch," has paid BMS $100 million upfront for worldwide (except Japan) co-development and co-commercialization rights to two late-clinical stage diabetes projects. For BMS the move is another big step back from primary care marketing and confirmation that the company's future lies along a specialist path.

AZ will fund the majority (75%) of development costs through 2009, the companies said, after which costs will be split 50-50. Should each of the two drugs--saxagliptin, a DPP-4 inhibitor currently in Phase III and dapagliflozin, a SGLT2 inhibitor in Phase IIb--reach global markets BMS will earn $650 million in pre-commercial milestones and could land an additional $300 million per drug in sales milestones. Post launch expenses and profits will be split evenly on a global basis and BMS will manufacture both products and book sales.

Acquisition of diabetes projects to shore up its primary care portfolio has been high on AZ's agenda since the PPAR agonist tesaglitazar (Galida) crashed out of clinical trials in May 2006; ironically the decision to yank Galida was based on thought-leader and regulatory reaction to BMS's own PPAR, muraglitazar (Pargluva) and intimations that Galida was in for similar treatment. Pargluva was killed after analysis published in JAMA by Cleveland Clinic CV chair Steve Nissen, MD, questioned the safety of PPARs and FDA said further long-term clinical studies would be needed to approve the product. (See "Anything but Academic: Lessons from the PPAR Failures," The RPM Report, June 2006.)

By the time saxagliptin hits the market the best AZ and BMS can hope for is only two entrenched competitors: Merck's Januvia and Novartis' Galvus will likely await. Dapagliflozen is a sodium glucose co-transporter-2 inhibitor, which blocks the re-absorption of glucose from urine in the kidney; a more novel, yet riskier prospect.

BioShield Giveth, BioShield Taketh Away

Yesterday the Dept. of Health and Human Services notified Vaxgen that since the biotech was in default of its $877 million contract to provide the government with 75 million doses of anthrax vaccine for missing a milestone, HHS was canceling the order. The New York Times has the story here.

The grant--the largest chunk of the government's $5.6 billion Project Bioshield program--wasn't payable until Vaxgen started delivering vaccine. As such, the company is pretty much out of luck, although it can appeal HHS' decision. Making matters worse for the California biotech, HHS reserves the right to hold the company financially liable for costs associated with finding a replacement, noting that "Vaxgen's failure to perform is not excusable," according to a HHS letter sent to the company. Happy Holidays!

BioShield hasn't turned out as hoped. Most of the cash is earmarked for products only once they've neared or received approval, but deep-pocketed firms have been reluctant to assume the R&D risk for at-best uncertain financial gain. And the Vaxgen debacle illustrates some of the problems that those willing but much smaller firms with few resources can run into.

Congress may attempt to remedy the situation by throwing more money at it--as announced in mid-November. The proposed additional $1 billion could support research and early development at biotech companies. Critics suggest the boost is unlikely to fix BioShield, and regardless, whether HHS has any luck playing VC remains to be seen.

Move Over Erbitux

Genmab's fully human antibody HuMax-CD20 just took the title for the biggest single-product biopharma collaboration: up to $2.1 billion in biobucks with an impressive $1o2 million in cash and $357 million in equity (at a 50% premium to Genmab's previous 20-day average) up-front. The price tag underscores the rabid demand among pharma companies for new projects and the relative lack of available late-stage compounds.

While new partner GSK suddenly finds itself out a few hundred million bucks, it has landed global rights to one of--if not the--most promising unlicensed projects available. If Genmab had a list of conditions for a potential deal, it's fair to say they probably ticked all the boxes on that list. You can check out the details here.

HuMax-CD20 is being developed in chronic lymphocytic leukemia (B-CLL), follicular non-Hodgkin's lymphoma (NHL), and rheumatoid arthritis (RA). Expect expanded development--Genentech and Biogen Idec's anti-CD20 mab Rituxan, which boasted nearly $2 billion in US sales last year--is thought to be effective in a variety of oncology and autoimmune indications.

In October Genmab CEO Lisa Drakeman, PhD, told analysts that a deal was imminent. "I don't want to overpromise [on the timing]," she said at the company's R&D day in London. "We don't need more data, it's about finding the best possible fit." That same day she also noted that since Genmab had so far invested approximately $100 million in HuMax-CD20, any potential deal's upfront payment should reflect that expense. Job done.

Torcetrapfffffff: Pfizer's Big Bust

Pfizer's decision to discontinue the development of it's HDL-boosting torcetrapib candidate/savior over the weekend leaves the Big Pharma with little choice but to 1. accelerate its restructuring plans and 2. start eyeing up some of its pharmaceutical competitors for a 2007 snack.

It is unknown right now whether torcetrapib's fatal flaw--it raises systolic blood pressure along with HDL which led to more, instead of fewer, deaths and an increase in a raft of cardiovascular problems like angina--spells the end of the entire CETP (cholesterol ester transfer protein) class. Roche will have to decide whether to send the Phase II R1658, another CETP inhibitor, into pivotal trials next year. R1658 as well as Pfizer's early-stage torcetrapib backups allegedly do not raise systolic BP, but then again we didn't know about torcetrapib's problems until Pfizer's $800 million, 15,000-patient Phase III was well underway.

While it's been a disappointing couple of years for Pfizer shareholders torcetrapib was always the light at the end of the tunnel. Can they persevere in its absence? The company has, though belatedly at times, attempted to press all the right buttons: back in April 2005 it suggested it was open to change and that it would save $4 billion by 2008; this past summer an overdue management shake-up saw the elevation of Jeffrey Kindler, a relative outsider, to CEO; its R&D show had analysts in a forgiving mood, enjoying the newfound "transparency and accountability" from Pfizer management even while at the same time acknowledging the company had significant business development goals to accomplish if it were to return to growth after a flat 2007-8.

But despite all the upbeat prognosticating at that meeting ("we are first in class, we are best in class," etc.) torceptrapib tanked. A week before that, Pfizer bailed on asenapine, the Phase III antipsychotic it put a $100 million downpayment on in 2003 via a deal with Akzo Nobel, when that drug disappointed in pivotal trials.

The cuts to Pfizer's vaunted sales force announced in November will now likely be augmented with further restructuring. And in-licensing and M&A will be ramped up--but how? It's hard to see how continuing its string of interesting but relatively small acquisitions--Rinat, PowderMed, Vicuron, Idun, Angiosyn, even stretching back to Esperion in 2003--can fill the massive hole created by the genericization of atorvastatin (Lipitor) in 2011.

Torcetrapib was supposed to be by Pfizer's own estimation the most important new cardiovascular medication in years. What a difference a day makes.

Pfizer UK Gets “Closer to Customers”

“Increased patient safety” drove Pfizer’s recent deal with UK wholesaler Alliance UniChem, according to the partners. But no one’s buying the story.

Following a tender process allegedly involving all UK wholesalers, Pfizer earlier this Fall chose UniChem as its sole distribution partner in the UK. The move, says Pfizer, will reduce the number of counterfeit drugs getting into the system—including those from parallel trade—and ensure ease of supply and simplified logistics.

Critics claim that patient access is put at risk by reliance on a single supplier for such a wide portfolio of drugs. Perhaps. But that’s not the biggest concern—Alliance is one of the biggest distributors, and it’s not likely to mess around where its largest and most lucrative customer is concerned. Which brings us to the next problem: the deal smells highly anti-competitive. Alliance promises to “maintain excellent service all around,” but the Office of Fair Trading isn’t convinced. Nor are 33 Members of Parliament who have signed a motion opposing the deal.

Pfizer has gotten into deeper political waters than it might have liked. The Big Pharma's UK division has written to MPs defending the deal.

Trouble is, this tie-up is more than about two partners getting extra-friendly. It introduces an entirely new model to UK drug distribution—a model that is clearly about price and market share. From March 2007, Pfizer will deal directly with customers—pharmacists—on cash discounts for its products, with UniChem acting only as a “logistics service provider” (its own words).

So Pfizer ekes out better deals across its entire range by cutting out the middleman and leveraging the breadth of its offering to compel pharmacists to choose its products over its rivals---take our statin and we’ll discount the nasal sprays---and UniChem, in exchange for its cut on the cash discount, accesses a bunch of new customers that want—need—to keep buying Pfizer’s drugs.

It’s all about patient safety.