"FDA Doesn't Have to Follow the Panel's Recommendation, but It Usually Does"

How often have we seen that caveat in news reports about FDA advisory committee meetings? But seldom is it as close as it was yesterday, when Genentech/Roche's Avastin fell 5-4 before the agency's oncologic drugs advisory committee, which was considering the blockbuster cancer drug as a treatment for recurrent or metastatic breast cancer.

Reuters notes that so far Roche stock has fallen more than 4% on the news on Thursday morning in Europe, while Genentech took a whopping 9% hit on Wednesday.

The WSJ reminds us that docs in the US are already prescribing Avastin in these indications off label, but that the FDA's stamp would allow Genentech to promote in that indication and make it more likely insurers would pick up the tab.

What's more, Genentech based its application on a National Cancer Institute study that acutally shows a significant Avastin benefit in a measurement called "progression-free survival," which nearly doubled to 11.3 months for patients on the drug plus paclitaxel vs. 5.8 months on paclitaxel alone.

There was no meaningful difference in overall survival, however.

So, will FDA look at the panel's slim margin and go ahead and approve the drug on the progression-free survival data? If not, are other drugs out there in the clinic that show little in the way of survival benefit (yet solid surrogate-endpoint data) going to cause heartache for companies and their investors?

A Precision Move

We couldn't help but find a few interesting tidbits regarding the announcement that diagnostics maker Precision Therapeutics Inc. would merge with Oracle Healthcare Acquisition Corp.

First off, this is the first deal struck in the life sciences industry involving a special purpose acquisition company that we've seen in some time, not since Ithaka Acquisition Corp. acquired cooling company Alsius Corp.

Second, we'd just finished writing an article showing how well public investors have embraced diagnostics and imaging companies like Genoptix Inc. and Virtual Radiologic Inc. much to the benefit of the VCs in those companies. (Check out the upcoming START-UP for the full analysis.)

So here we have a diagnostics company that opted to pass on an IPO and embrace a SPAC-buyout. Why? Well, if the deal is consummated it'll likely turn out to be a good move for Precision.

Despite the rational exuberance for diagnostics, IPO buyers weren't likely to give as warm an embrace of Precision as they've given Genoptix simply because the financials aren't there yet. Nanosphere Inc., for example, is doing well but not nearly as well as Genoptix, possibly because its business isn't as developed.

With its cancer diagnostic product on the market (go here for details) Precision brought in $1.7 million in revenue over the first nine months of this year while reporting a loss of $13.5 million. Genoptix is pulling in far more revenue and now is actually making millions. Obviously, public investors prefer companies that actually report income rather than losses or they'll suspend that rule for biotechs and device companies with high upsides.

That certainly isn't to say Precision won't get there. It's just not there yet.

So Precision management probably is wise to put down the IPO dice and accept the merger with Oracle, which comes with a ticker symbol and, more importantly, $120 million in cash.

The company's board likely will have to share power and returns. But the capital and ticker give Precision's investors a surer route to an eventual exit.

With venture investors already committing $73 million to the company, finding attractive terms for more private capital likely would have been difficult if the IPO failed. According to Precision's S-1 filing, the company's largest shareholders include Adams Capital Management, Quaker BioVentures, TVM Life Science Ventures, Birchmere Ventures, Stephens & Co.

So what's in it for Oracle, which was started in 2005 by hedge fund manager Larry N. Feinberg, who founded of Oracle Partners,L.P., a healthcare-focused hedge fund in 1993. David Hamilton at VentureBeat asked that very question today.

We obviously can't say for sure other than to draw on Feinberg's standard comments about the company's strong management team and the fact that "the ChemoFx test has been validated in numerous clinical studies and has been reimbursed by both Medicare and commercial payors."

But one very real issue might have been that Oracle appears to be running out of time.

SPACs are not open-ended things. IPO investors acquire shares in a SPAC because they trust the management team will take that money and buy a company at an attractive price, thereby creating a strong business with valuable shares. But they'd like to get that money back at some point if such a deal can't be made. So all SPACs have an expiration date, so to speak, when investors are promised their money back--minus fees and other costs--if no company is acquired. Oracle shareholders must vote to approve any deal.

Oracle Healthcare raised its capital through an IPO of its own on March 8, 2006. As per the structure of most SPACs, Oracle management had 18 months to find a company to acquire or else return the capital back to its investors.

On Sept. 8--the final day of the deadline--Oracle signed a letter of intent to acquire another company, according to Oracle's most recently quarterly filing. The signing of the letter gave Oracle management a six-month extension.

However, the filing goes on to state that the letter of intent regarding that purchase was terminated on Oct. 17, freeing up Oracle to find another deal before the pending March 8, 2008 deadline.

Enter Precision.

We're not suggesting this is merely a marriage of convenience. Precision--with Oracle's support--could grow into a diagnostics powerhouse.

But given how long such a deal can take--ask Alsius and Ithaka management about the six months or so the SEC took to review their paperwork--this may be Oracle's last shot at completing a deal that could produce some real returns for its investors and managers, unless there is a provision for another extension that we can't unearth.

Seems like a potential win-win.

A NICE New Business: Fee-for-Advice

The UK’s National Institute of Clinical Excellence (NICE) is piloting a fee-for-service business that would see companies paying to receive early advice on what kind of cost-effectiveness and pharmaco-economic data they might require to secure drug reimbursement.

Speaking at the Financial Times’ Global Pharmaceutical and Biotechnology Conference in London on Monday, NICE CEO Andrew Dillon talked about the need for earlier engagement with industry, and mentioned a test-run it was carrying out with Novartis. “We’ve just completed the formal part of the process, in an attempt to provide some sort of proof-of-concept for the idea,” he told the audience. He declined to specify which Novartis drug candidate is the guinea pig.

NICE will present an evaluation report to its Board at the end of the first quarter of next year, according to Dillon, outlining how valuable the process has been, and what resources are required. It will presumably also outline in more detail how many meetings take place and at what stage in the drug candidate’s development. "I would envisage companies seeking advice as they prepare their phase 3 studies, although in principle they might approach us at any stage in the development of a product," noted Dillon in an email after the meeting.

As pressure mounts on drug companies to prove not just that a product works and is safe, but that it's also cost-effective, many firms want and need to engage with bodies like NICE well before approval stage. Sure, some are now being more creative in circumventing negative reimbursement recommendations--as we saw in the case of Johnson & Johnson and the risk-sharing rebate scheme it suggested for blood-cancer drug Velcade. But better still to have the appropriate data in the first place, ideally at minimum extra cost.

If the early-advice scheme is adopted, drug firms will have to pay for the privilege, though. “This will be a fee-for-service business,” Dillon told IN VIVO Blog. NICE will have to charge companies given the additional resources required, he explained.

But isn’t there a conflict here—companies paying NICE for advice on whether their drug might be labelled cost-effective? Not really, according to Dillon. “Regulators charge extra for early consultations with companies,” he says, “so why not us? It’s what everyone wants.”

That’s for sure. And given NICE’s influence beyond the UK, the agency may find clients seeking advice on how to best design their trials and provide optimal pharmaco-economic data even if the UK isn’t their target market.

Potentially a nice bit of business on the side for NICE, then.

Prasugrel: Lilly Tries to Stop the Bleeding (Part 2)

The speculation about the prospects for Lilly’s clot prevention drug prasugrel continues.

The latest turn has been a rebound for Lilly, prompted at least in part by a November 28 note by Credit Suisse analyst Catherine Arnold. The note reports some interesting survey data on projected use of prasugrel by cardiologists. What Arnold heard in the responses is further support for her view that the drug will indeed be a significant new product for Lilly, with peak sales in the range of $2.5 billion.

Lilly shares have been on a rollercoaster ride for six weeks now surrounding release of the pivotal trial data for prasugrel. Unfortunately for Lilly, most of the ride has been downhill. (We wrote about Lilly CEO Sidney Taurel’s response to the media and investor frenzy surrounding prasugrel last week.)

For now, many analysts remain concerned about an increased risk of major bleeding associated with the drug. In today’s world, they fret that even a demonstration of superior efficacy vesus the market leader, Bristol-Myers Squibb/Sanofi Aventis’ clopidogrel (Plavix), isn’t enough to overcome any hint of a safety risk.

The pivotal trial data undeniably limit the market for prasugrel (approximately 20% of the patients enrolled in the trial were in one of three subgroups Lilly says shouldn’t get the drug). Some analysts expect that the impact will be greater than that, with doctors choosing the more conservative approach of using Plavix first as much as possible. And the biggest fear of all is that FDA simply won’t approve the drug.

Arnold, clearly, is in the more bullish camp. In her view, investors have over-reacted to the safety issue. Even with limitations on the patient population, prasugrel only needs to capture about a 25% share of the current market for Plavix to generate $2.5 billion in peak revenues.

That type of market share is very achievable, Arnold says. The survey suggests that cardiologists will use prasugrel in more than a third of their PCI patients.

“Surprisingly, the respondents were also very likely to use prasugrel in patients with coronary artery disease who are being medically managed (patients with unstable angina or a recent MI who do not undergo PCI) and patients with established peripheral arterial disease,” Arnold reports. “These are large segments of the antiplatelet market where there is no data to support the use of prasugrel currently but, based on these results and other research we have conducted, we think prasugrel will generate modest off-label use.”

That sure sounds like good news for Lilly. But is it?

The willingness of cardiologists to shrug off the safety questions about prasugrel may be perfectly justified medically, and it would certainly be a great boost for the drug commercially. But it is also exactly the reason why FDA has been so tough on NDAs—and why Congress has given the agency new drug safety tools to control the use of new drugs after approval.

To us, the path for approval of prasugrel seems clear. First, Lilly needs to convince FDA that the subpopulations it has identified where the drug should and should not be used are indeed supported by the data. Lilly says the risk/benefit profile is not supported for the drug in patients over 75 years of age, patients who weigh less than 60 kg, and patients with a prior history of stroke or transient ischemic attack. If those patients are excluded from treatment, the relatively benefits of prasugrel look even better compared to Plavix.

Second, and most important, Lilly will need to convince FDA that the drug will in fact only be used by the subpopulations for which it is appropriate. In that case, the perception that cardiologists are eager to use the drug more broadly actually hurts—rather than considering the risk benefit profile if only the right patients use it, FDA has to consider the risk benefit profile if the wrong patients use it.

FDA’s decision on prasugrel will almost certainly come down to Lilly’s ability to present a credible risk management plan that will give FDA the confidence to say yes to the drug. In that context, the survey data showing a readiness for cardiologists to use prasugrel off-label is an obstacle, not an opportunity.

While You Were Dealing

The weekend was not without some dealmaking action. More to come on Monday, for sure. But lets kick off the weekend roundup with a big biologics deal between Novartis and Morphosys ...

• Morphosys has signed a "transforming" deal with Novartis. The two companies are building on their existing 2004 alliance with a potential 10-year deal to develop monoclonal antibodies. Morphosys will receive $600 million in committed payments--in addition to potential milestones and royalties and co-promotional options. The deal reduces Morphosys reliance on fee-for-service antibody collaborations, and make no mistake, in terms of guaranteed payments, it's a monster. But it also seems to entwine Morphosys' fate with Novartis Biologics', as Novartis will have near exclusive access to the biotech's platform (Morphosys is ending existing collaborations with J&J's Centocor and Bayer-Schering). We may have more to say after Morphosys' conference call on Monday.
  
• Forest Labs received an approvable letter for its nebivolol beta blocker, a decision related to FDA issues with a manufacturing plant in Belgium. As we wrote last week, approval of nebivolol could buck the trend, and Forest (and partner Mylan's) insistence that FDA found no safety or efficacy reasons to deny the drug will be heartening to the companies. Forest is continuing to plan for a January launch.
  
• Hey, did you know that Biogen Idec was up for sale? No, really, we swear. Apparently they look expensive, given the current credit crunch and aversion to Big Pharma paper.


• The FT points out that the UK's Human Genetics Commission is warning the public off the various consumer genomics information providers. For background, David Hamilton at Venture Beat Life Sciences has been all over the recent consumer genomics news.


• GSK to Viehbacher and Stout: Thanks for playing. Second prize, two weeks in Philadelphia £2 million!


• Addex has announced that it has something to announce--most likely a deal on lead project ADX10059, which is in Phase II trials for GERD, migraine, and anxiety. The details on Monday morning. [UPDATE: Nope, Addex announced an alliance with Merck & Co. this morning to discover and develop positive allosteric modulators targeting the metabotropic glutamate receptor 4 (mGluR4) in Parkinson's disease. Addex gets $3 million up-front and up to $106.5 million in first-product milestones, plus royalties, and retains co-promote options in certain European territories.]

Prasugrel: Lilly Tries to Stop the Bleeding (Part 1)

We were a bit taken aback by Lilly CEO Sidney Taurel’s editorial in the Wall Street Journal earlier this week recounting the damage done by the frenzy of speculation about the prospects for the platelet aggregation inhibitor prasugrel.

Taurel takes financial journalists to task for trading in “leaks and rumors where scientific data are concerned” and calling on “would-be pundits” who “have not had firsthand exposure to the scientific results or specialized knowledge under discussion” to “qualify your comments if you must make them at all.”

Its not that we disagree with Taurel. Like most self-respecting journalists, we are only too happy to join in any critique of the sloppy practices of our competitors (since we of course are the exception that proves the rule, right?).

No, what took us aback about the piece was its premise: the almost quaint notion that pharmaceutical companies can somehow put the genie back in the bottle and have the final say in when or how information about their products—even unapproved products like prasugrel—will be disseminated to the public.

Taurel’s argument, in effect, is that journalists, analysts and investors should have waited patiently for the release of the pivotal trial data on prasugrel (the TRITON study) at the American Heart Association meeting November 4, rather than engaging in a frenzy of speculation based on news that Lilly had suspended two other trials of the drug. Lilly decided to report that data there, and in a companion piece published by The New England Journal of Medicine.

Lilly, of course, couldn’t release the data early because it committed to an embargo prior to the AHA presentation. “Such guarantees of exclusivity are not only common, but also appropriate, in focusing expert attention on important research,” Taurel writes. “A definitive source and a ‘zero hour’ of first-hand disclosure for complex scientific data help to limit misinformation.”

Ah, the good old days. Things used to work that way for sure. But in the era of the internet, clinical trial registries, managed care claims databases, FDA drug safety newsletters, and emerging active surveillance systems, it is simply no longer possible for drug sponsors to hope to control the information flow about their products. (Not too mention the unbelievable proliferation of would-be pundits known as bloggers.)

In this case, Taurel laments, “10 days before our ‘zero hour,’ word leaked out, causing us to confirm that the two prasugrel trials had been suspended, although our promises to NEJM and AHA prevented us from explaining why.”

The truth, as Taurel explains, was that prasugrel performed very well in the pivotal trial, but that there were “three small subgroups of patients” in whom a risk of excessive bleeding appeared to outweigh the benefits. “Based on the small chance that patients in the three identified subgroups might be given prasugrel and experience serious bleeding, we advised our researchers to suspend the two trials pending a review,” Taurel writes.

But the damage was done. “The media entered a feeding frenzy, catered by commentators on Wall Street and elsewhere who speculated that prasugrel posed broad risks and had probably failed its major trial. Our stock began its trip south and, more seriously, some doctors and patients were left with false impressions.” Lilly’s shares recovered somewhat after the data were finally reported on November 4.

We might quibble a bit with choosing prasugrel as the case to make this argument—claims of patient harm seem overdone here when we are talking about a drug not yet approved by FDA. Commercial harm, yes. Harm to Lilly’s investors, yes. But it is a bit of stretch to say patients were harmed.

But still, Taurel is right about the potential for media feeding frenzies to cause tremendous harm. Its happened before, for sure. Maybe Avandia is an example, or even Baychol—cases where coverage of an unexpected side effect led many patients to discontinue treatment on their own, leaving at least the possibility that more harm was done by untreated diabetes or high cholesterol than by the adverse events in question.

Even so, Taurel sounds a bit like Lear raging against the storm. We understand his concern, but it is hard to imagine any way he or any other industry CEO can reverse the winds.

We aren’t the only ones who think that. Plenty of smart people in government and industry are talking about the revolutionary changes in information flow about medicine—including a whole bunch of executives at Lilly. In fact, though this is impossible to handicap, we would be willing to bet that Lilly is at the forefront of recognizing and adapting to a world where the pharmaceutical company sponsor is no longer at the center of the information flow about drug products.

We have heard several Lilly executives speak publicly and privately on this very theme. During a panel discussion on clinical trial policy at the University of North Carolina in February, one Lilly executive talked about the move towards active surveillance as potentially engendering a “Wikipharmacy” model in which product use information is no longer generated by FDA and the sponsor in labeling negotiations, but rather by a global community of users exchanging information on real-world experiences with the drug.

And Taurel himself has talked about it. During a policy address at the Cleveland Clinic early this year, Taurel focused on the revolutionary potential of healthcare IT advances. He even talked about the importance—and benefits—of public access to data once jealously guarded by manufacturers.

“For businesses that generate health data and new knowledge, it’s time to learn the benefits of openness," Taurel said in Cleveland. He went on:

"We need to open our minds to the notion that electronic outcomes data – once the privacy of individual patients is protected – represent a legitimate ‘commons,’ a resource to which access should in most cases be widespread and easy.”

“That’s not to ignore the fact that great effort and expense goes into collecting many types of health information. Certainly at Lilly, we spend hundreds of millions of dollars every year on clinical trials. But the key insight in our situation, and I think it applies quite broadly, is that unlike most other assets, health information actually becomes more valuable the more it is used, studied, and applied. It does not depreciate.”

So what gives with the Journal editorial? Did Lilly decide that openness is wrong? Hardly. Taurel even repeats his argument that openness is critical for industry: “Trust hinges on our openness in sharing everything we know about who should use our products—along with when, how and at what dose—and who should not.”

What we are really seeing here is not a vain attempt by a pharma company to turn back the storm, but an example of one way to try to advance against the wind.

The frenzy around prasugrel hurt Lilly, but it also provided an opportunity for the CEO to talk about the product in a prominent forum. The fact is that Lilly (and its partner, Daiichi Sankyo) plan to submit a new drug application based on TRITON to FDA before the end of the year. Anything Lilly can do to shape the climate for that review is critical.

When you look at it that way, maybe the most important line in the editorial is the sentence at the end of the fifth paragraph, citing a quote from the Journal’s earlier reporting on prasugrel: “If you can't get a drug on the market with that kind of data, we should stop developing drugs.” That is a message not just for business and science reporters, but for FDA reviewers as well.

So will Lilly get this drug on the market with this kind of data? Coming Monday, one would-be pundit will share his thoughts on what it will take to make that happen.

Deals of the Week: For Sale By Owner

For some US home owners, this week brought bad news: the National Association of Realtors reports sales of previously owned homes hit their lowest level since 1999 and single family homes suffered the biggest price drop on record in October.

Thank heavens lower sales forecasts haven't spilled over into pharma land, where M&A is the sector's only bright spot. (It certainly isn't R&D.) Hoping to take advantage of pharmas' hunger to acquire, a number of companies--including MGI Pharma, GPC Biotech, and QLT--decided this week to put themselves up for sale. In honor of their entrepreneurial spirit--or as QLT's press release noted, a willingness to "review all strategic alternatives"--IN VIVO Blog gives you Deals of the Week: The For Sale By Owner edition.

• MGI Pharma/GPC Biotech/QLT: All three companies hung out for sale signs this week. (Okay, we know this probably shouldn't count as a "deal". Try and think of it as the preamble to a deal.) It may be a sellers market in pharma land, but its tough to think either GPC or QLT will fetch a high price. As we've noted here, GPC has taken a beating for the failures associated with its lead drug satraplatin. QLT, too, has suffered in recent years as its lead therapy Visudyne competes with new anti-VEGF drugs such as Genentech's Lucentis. (Interestingly, QLT just spent $42 million on a drug-eluting punctual plug technology developed by Forsight Labs. For more, check out this recent START-UP article.) It's possible that an unlisted company seeking a route to the public markets might find attractive the significant cash reserves of either company--$90 million for GPC and $300 million for QLT. The picture may be rosier for MGI Pharma, however. As we wrote a couple of weeks ago, Celgene was willing to spend nearly $3 billion for Pharmion, a rival of MGI's. Reuters reports potential suitors could include Amgen, which might be interested in MGI's Aloxi, which treats chemotherapy-induced nausea, and BMS, which given its focus on specialty markets such as cancer, might be very interested in the biotech's Dacogen. Still all three companies should be wary of becoming the next BiogenIdec, which hung out its own for sale sign over a month ago, and still hasn't closed a deal.


• TPG Capital/Axcan Pharma: Here's a lesson for BiogenIdec and the other companies that have put themselves on the block. If you can't find a pharma company to buy you, maybe you should consider private equity. On Thursday Nov. 29, TPG Capital ponied up $1.3 billion for the Canadian Axcan Pharma and its portfolio of treatments for gastrointestinal disorders. As the NYT's Dealbook blog notes that this is the latest in a string of smaller buy-outs brought on by the credit crunch and the halt in mega-merger deals.


• GSK/Merck: Merck sold GSK exclusive US rights to an OTC version of its cholesterol lowering drug Mevacor for undisclosed milestones and royalties. It was the company's second big deal in less than a week, and came just as US workers were emerging from their tryptophan-induced hazes. (Only a British company would announce deals the day before Thanksgiving and the Monday after.) Despite the dearth of details disclosed, the announcement is intriguiing. Mevacor lost patent protection back in 2001 and Merck, in conjunction with Johnson & Johnson, tried twice to obtain OTC status for the drug--the last time back in 2005. What makes the GSK-Merck team think its more likely to succeed this time around? Perhaps it's the more open outlook FDA has embraced in approving OTC versions of Plan B and Roche's diet pill Xenical. (For more on the FDA and OTC, read here and here.) More likely, its the tremendous success Glaxo has had selling Xenical as Alli. In its earnings call last month, GSK estimated it would sell between 5 and 6 million weight-loss kits this year for about $1 billion in revenue. Merck certainly has nothing to lose. And who knows? If GSK can succeed with OTC Mevacor, it could pave the way for a US version of OTC Zocor, which has existed in the UK since 2004. An FDA advisory panel will discuss the switch at a meeting on Dec. 13.


• Astellas/Agensys: On Tuesday, Astellas Pharma announced plans to buy cancer antibody play Agensys for $387 million, including a $30 million net cash balance. The deal comes a few months after another Japanese pharma, Eisai paid $325 million for a different cancer antibody player, Morphotek. The Japanese pharmas tend to adopt US and European companies' fads a little later, so it makes sense that Astellas is only now jumping on to the large molecule bandwagon (For more on this, read here.)


• Sanofi Aventis/ Regeneron: One company that isn't, so to speak selling-out, is Regeneron. Instead, it's done a fantastic job of monetizing its therapeutic platform, called VelociSuite. In addition, to this deal with Sanofi, worth $85 million upfront plus $475 million in research funding over the next five years. the company has also inked partnerships with Bayer and AstraZeneca in the past year. (For more on the Bayer deal, click here.)

Has Forest Found a Successful NDA Path?

Is there a way out of the woods for pharma companies hoping to win approval from the Food & Drug Administration for products for broad primary care populations?

FDA’s imminent decision on Forest Lab’s pending new drug application for the beta blocker nebivolol for hypertension may show one way.

Because of a two-and-half year delay, the product is coming up for a final decision at one of the worst times for applications aimed to provide treatment for an indication which is already served by a broad array of existing products.

FDA’s senior staff has been telling astonished sponsors that the new de facto approval criteria being imposed by FDA reviewers require convincing arguments of comparative safety or efficacy advantages for primary care drugs. (You can read more about that in “Straight Talk from FDA” published by The RPM Report in November.)

By serendipity, Forest may have the type of relatively familiar and market-proven product (from outside the US) that can satisfy the new climate.

The delay in the NDA may actually have helped the cause for the product by taking some of the pressure off the NDA review schedule for FDA. The product has a well-defined tolerability profile and an extensive marketing record outside the US.

Forest is facing an approval decision at the end of 2007 because Forest’s partner on the product (Mylan Labs) received an approvable letter in May 2004 when it was developing the product by itself. Mylan quickly put nebivolol up for out-license after the setback. Forest bought rights to the product in January 2006.

Mylan submitted an update to the original application with answers to FDA’s questions on preclinical data in early May of this year. Nebivolol falls into a familiar class. It is a third-generation beta blocker where two other third-generation products have been on the market for many years. The broader class of all beta blockers has been around for forty years. Nebivolol itself has been marketed in Europe for over ten years.

Throughout its development phase in the US, Forest and Mylan have stressed the product’s improved side effect profile. In a summary of the first published data from a US clinical trial in September of this year, Forest reports that the incidence of adverse events “commonly associated with traditional beta blocker use, including fatigue (3.6% vs. 2.5% with placebo), erectile dysfunction (0.2%), and depression (0.2%) was low. Moreover, nebivolol was not associated with adverse changes in blood glucose values.”

Mylan and Forest suggest a potential added benefit as a vasodilator based on an effect on nitric oxide. One of the researchers who has been writing about the product frequently during clinical development, George Bakris, MD, Rush University Medical Center, wrote in a managed care journal recently “the risk for diabetes is lower, the metabolic effects are lower, and people with diabetes who have clear NO dysfunction may have particular benefits from this agent.”

Forest is obviously eagerly awaiting this launch and says it has committed $80 million in 2008 to fund the marketing support. Is FDA ready to take the risk of approval on even an old product? If not, 2007 already a memorably bad year for drug approvals will go down as even a worse nightmare for the industry.

Sanofi Aventis Walks the Talk

Sanofi Aventis had already promised at their September R&D meeting that they wanted to increase the number of biologics in their pipeline, and to be “more proactive” in business development. Today they showed that they meant it, by announcing a wide-ranging fully-human antibody collaboration with Regeneron.

Sanofi will pay Regeneron $85 million up front and up to $475 million in research funding over the next five years ($75 million in the first year and up to $100 million in years 2-5), during which time Regeneron will lead research efforts across a range of antibodies, developed using its VelociSuite of technologies. At IND-stage, Sanofi has the option to co-develop candidates identified within the collaboration, and if it chooses to do so, will take the lead and foot most of the cost.

Indeed, although the press release describes development costs as “shared”, Regeneron will only pay its portion if the candidate is successful. “We’ll fund 100% of Phase I and Phase II,” said Jean-Michel Levy, SVP Business Development, and 100% of the Phase III costs in the first indication. Additional Phase III trials would be 20% funded by Regeneron, and the biotech will “reimburse half of the overall development costs from its share of future profits to the extent that they are sufficient for this purpose,” according to the release.

Will they be? Well, Regeneron will receive 50% of profits in the US, although Sanofi will lead commercialization and consolidate sales. Elsewhere, the smaller party will receive between 35% and 45% of the profit pie, although its co-promote option—still a popular deal feature these days, even though there are signs that might change—is on a worldwide basis. If aggregate sales reach $1 billion, Regeneron will be entitled to up to $250 million in sales milestones (which would help with the development-cost pay-back…)

Big Pharma laying rich stakes in antibodies is hardly a new concept; we’ve tracked the trend extensively, including here. What’s perhaps more surprising is that this is but a licensing deal. Granted, Sanofi has increased its 4% stake in Regeneron to 19%, for $312 million. But a standstill agreement prevents it from increasing its share beyond 30% four years hence.

By that time, it’ll be clearer whether the deal’s as productive as Sanofi needs it to be. The most advanced candidate, targeting the IL-6 receptor, has already begun clinical trials in rheumatoid arthritis and a follow-on antibody to Delta-like ligand-4 (an anti-angiogenic approach) should reach the clinic next year. The deal’s potential output “will reinforce our presence in oncology and internal medicine” (including RA), noted Jean-Claude Muller, SVP, Admin and Resources, “but it’s not limited to these areas. Any target coming out will help our portfolio.”

Indeed, Sanofi’s a bit desperate these days, following the rimonabant (Acomplia) flop and a large patent expiry cliff due at the end of 2012. So why didn’t they just buy Regeneron? Management didn’t answer that question on the call. Perhaps they don’t think exclusive rights to the technology are necessary--Regeneron in February this year licensed its technology, for the first time ever, to AstraZeneca, and shortly after to Astellas. “We don’t expect this deal to have any impact on those arrangements,” Sanofi said.

Besides, Regeneron hasn't got a drug on the market yet. And Sanofi already has a large stake, through a 2003 collaboration, in Regeneron's most advanced program, VEGF Trap (aflibercept), which began Phase III trials in prostate and non-small-cell lung cancer in August.

Sanofi may feel it doesn't need to spend billions of dollars (Regeneron’s market capitalization was about $1.1 billion this morning, although well short of its Spring peak) buying a group that may work better as a standalone. It wouldn't be the first time the Roche/Genentech-style model has been emulated. And anyway, with Sanofi holding a 19%-plus stake, any other predator’s going to struggle.

Sirtris Strikes Again

In a short paper to appear in tomorrow’s Nature, scientists at Sirtris Pharmaceuticals describe the in vitro and in vivo data supporting the development of their next-generation activators of Sirt1, one of the members of the sirtuin family of proteins. It’s another opportunity for their persistent PR machine to talk up the company’s founding premise: that activating sirtuins, which appear to play a role in the aging process, may be useful in treating a variety of things, including diabetes.

Unlike its first drug, a formulation of resveratrol (a Sirt1 activator found in red wine, which is now in early-stage trials), Sirtris found the molecules analyzed in the Letter to Nature by specifically screening for activity against Sirt1. “From a pharmacological perspective, we’ve proved the mechanism,” Sirtris CEO Christoph Westphal said yesterday in a phone interview.

The next-generation Sirt1 program, along with its development of other sirtuin activators, puts Sirtris firmly in the lead in sirtuin field. So much so that Lenny Guarente, the scientific founder of rival company Elixir Pharmaceuticals (now in registration for an IPO), whose discovery that the sirtuin-expressing gene sir2 is an important regulator of life span in several species, has jumped from Elixir to the Sirtris Scientific Advisory Board.

For years, Guarente and Sirtris co-founder David Sinclair, a former member of the Guarente lab, were estranged. And while some news outlets cast Guarente’s bolting as validation for Sirtris -- and it IS a good story -- it’s at least as much a reflection of Elixir’s affirmative determination several years ago that sirtuin-related drug development was just too early to support a company, leading to the in-license of an oral diabetes drug from the Japanese pharma Kissei in March 2006 and an early-stage growth hormone stimulator (a ghrelin agonist) from Bristol-Myers, both of which Elixir’s S-1 rank ahead of its sirtuin program.

No doubt Elixir abandoned Guarente a long time before he actually split. And the circumstance could have been predicted as far back as 2004, when Vaughn Kailian, ex of Millennium Pharmaceuticals and Cor Therapeutics, became Elixir’s Chairman. Kailian, a general partner at MPM Capital who focuses on late-stage investments (and also – DISCLOSURE, DISCLOSURE -- is a director of Windhover Information, IN VIVO’s publisher), is well known for advocating the rapid build-up of commercial capabilities. Indeed, during his tenure at Millennium, the competing interests of research and commercialization created a duality of cultures: what IN VIVO described at the time as “The Two Millenniums.”

Sirtris continues to build its sirtuin platform and expects to bring the first next-generation Sirt1 activator into the clinic in the first half of 2008. It's also got the benefit of buzz from frequent scientific publications in the evolving sirtuin field -- including their link to cell survival/protection mechanisms, which we discussed in the Science Matters column in START-UP a few months back -- as well as the elucidation of the roles of other anti-aging genes/proteins.

That said, it'll be interesting to see if the momentum lasts as it approaches the challenges of later-stage clinical trials.