While You Were Gearing Up for BIO

We hope your father's day weekends were relaxing and sunny, and if you're heading out to BIO, safe travels. A couple of your IN VIVO Bloggers will be making the trip, so we hope to meet some of you readers out in San Diego. Hopefully Tiger and Rocco will have settled their differences by the time we arrive.

As always here are a few stories you may have missed from a lazy weekend.

• The New York Times highlights a debate within the prostate cancer treatment community regarding the generic drug finasteride. The drug shrinks the prostate, and may drop the incidence of prostate cancer by up to 30% and prevent the routine over-treatment of the disease which can result in side effects like impotence or incontinence. But others suggest that widespread use of the drug would probably not lower prostate cancer death rates and could in fact make the most aggressive tumors more deadly.
  
• All conferenced out after ASCO and ADA, hoping for a respite before BIO? Too bad: this weekend the European Hematology Association met in Copenhagen, where Celgene reported Revlimid survival data and J&J presented Velcade survival data. All the press releases can be found here.
  
• GSK's once daily version of ropinirole (Requip XL) received approval in Parkinson's disease, partner Skyepharma said this morning. The slow-release version of the drug uses Skye's geomatrix technology and is already approved in Europe.

image from flickr user >WouteR< used under a creative commons license.

DotW: The Heat Is On

The temperature has been hot--and so has the deal-making. We counted at least 273 deals in the past five days. Not really. We actually stopped counting on Tuesday because there were already too many to keep track of. And that was before the week's biggest deals: the Ranbaxy/ Daiichi Sankyo and Invitrogen/ Applied Biosystems tie-ups (see below).

It's an odd week for heavy deal flow, coming so quickly on the heels of the ASCO and ADA meetings and in advance of next week's shin-dig in San Diego. But perhaps the soaring temperatures provided various biz dev teams no incentive to leave their nicely air-conditioned offices. And maybe this was a way for Invitrogen execs to ensure that the masses came to their tacos and beer party next week. (BIO Nebraska's Omaha steak fete and Positively Minnesota's raffle for a universal electronic charger offer stiff competition, after all.) Alternatively, it's possible staffers were simply jonesing to play BioRad's shoot-em-in gene transfer video game.

Other news hot off the computer screen? AstraZeneca is burning up the competition when it comes to market share in China, according to this Wall Street Journal article. And employees at Jazz Pharmaceuticals, Schering Plough, Mylan, GlaxoSmithKline, and Sanofi-Aventis are on the hot seat: all firms announced lay-offs this week. Perhaps the job cuts include the people responsible for the name of Sanofi-Aventis's new injectable insulin, Apidra. Doug Farrago, MD, a hilarious, disruptive physician, lambasts the company in this YouTube send-up.

Need to cool off? By all means, dive in to another edition of ...

Genentech/Symphogen: Danish polyclonal antibody play Symphogen said on Tuesday that it was collaborating with Genentech in the infectious disease space. The three-undisclosed-target deal has a total potential value of $330 million inclusive of an upfront payment, equity investment and milestones, and grants Genentech worldwide exclusive license to any candidates. This is the first external demonstration of Genentech’s stated commitment to developing large molecules against infectious diseases and Symphogen’s third deal, but by far the biggest validation of its Symplex and Sympress technologies.

Janssen/Astex: Johnson & Johnson’s Janssen Pharmaceutica is taking a license to Astex Therapeutics’ novel fibroblast growth factor receptor (FGFR) inhibitor program and is starting new discovery programs on two additional drug targets. The deal, announced Monday, sees Janssen paying $37 million in upfront, cash and equity payments and research funding to Astex as well as potential milestones and royalties. Janssen’s Ortho Biotech arm is responsible for all preclinical and clinical development on all three programs. Astex retains an option to co-commercialize any FGFR projects in the US. Astex CEO Harren Jhoti, PhD, told IN VIVO’s sister publication “The Pink Sheet” Daily that the lead FGFR program is only at the lead optimization stage but given the strong interest in the program—which, he says, is highly specific and should therefore avoid side effects that have hindered other firms’ efforts—“we were able to command pretty significant financials.”

Daiichi Sankyo/ Ranbaxy: On Wednesday, Daiichi announced it had agreed to buy a 34.8% stake in Ranbaxy from the Indian company's founders, the Singh family. The company will finance the acquisition--priced at a handsome 31% premium to Ranbaxy's closing price Tuesday--with a combination of cash and financing. Analysts reckon the combined company will be worth about $30 billion and called the transaction "bold and entirely out of character." Unlike Japanese brethren Takeda and Eisai, which have inked their own multi-billion dollar transactions in recent months to increase R&D capabilities and a US presence, Daiichi chose to invest in a company focused primarily on generics and geographically situated in a very important emerging market. The deal could also give Daiichi an important leg-up in its home generics business. According to an article published on in-Pharma technologist's website, Alan Thomas, IMS Japan's global account director, compared with the rest of the world, Japan has an extremely high proportion of brands that have come off patent - 41 per cent - but an extremely low generic penetration on the market - at only 3.4 per cent. And Japan's generics industry is expanding at an annual rate of nearly 9%. That may seem like small pills (er, potatoes), but it's currently the fastest growing segment of that country's drug business. Seems like there are now two clear schools of thought in pharma, those pursuing a focused approach (Bristol-Myers Squibb and Takeda have both made important moves in this direction) and those pursuing a diversified strategy – Novartis and now Daiichi. Perhaps Pfizer is interested in jumping on the diversified bandwagon? The Business Standard reported late Thursday that Pfizer may bid for the 65 per cent non-promoter stake in Ranbaxy.

UCB/ Otsuka Pharmaceuticals: Daiichi wasn't the only Japanese pharma gunning for a deal this week. The smaller company Otsuka Pharmaceuticals teamed up with UCB to co-promote the Belgian firm's anti-epileptic drug Keppra and the anti-TNF alpha drug, Cimzia for the treatment of Crohn's Disease. UCB and Otsuka will also co-develop and co-promote both medicines in other indications, while UCB will join Otsuka in co-promoting the anti-platelet agent Pletaal to selected accounts for a limited period. Deal terms were definitely on the small side: UCB receives up-front and milestone payments of up to €113 million, as well as funding for clinical development. Contrast that with Takeda's February deal with Amgen, where the deep-pocketed pharma paid out $300 million up-front, or the company's early April deal with Cell Genesys worth $50 million up-front and likely a great deal more for a Phase III immunotherapy product.

Invitrogen/ Applied Biosystems: Invitrogen offered to acquire Applera Corp.'s Applied Biosystems Group for $6.7 billion, in a move that would unite major players in the life-sciences tools field to create an end-to-end outfit that can tap into the very hot personalized medicine market. Applied Biosystems produces advanced instrumentation, while Invitrogen makes chemical kits that help analyze DNA samples. The companies hope that combining their specialties will better serve their overlapping customer base. Invitrogen CEO Greg Lucier said the complementary product lines would create a company "unrivaled in the world" for the breadth and depth of its life-sciences capabilities, but investors didn't buy the heady language, sending Invitrogen shares down $4.62, or 11%, to $38.73 Thursday. The WSJ reports that Alastair Mackay, of Garp Research & Securities Co. in Baltimore, said it isn't clear how well the merged entity will fend off competition from rivals such as Roche's Molecular Diagnostics division and Illumina. It's an interesting twist in what has been a long and storied history for Applera, which also owns Celera, once hoped to be a premiere pharmaceutical player that has retrenched to focus on diagnostics. The merger of Invitrogen and Applied Bio is consistent with a trend we've been watching for some time--the migration of tools companies into the testing market. (For more, read here.) Still, the new entity won't be competitive with Celera in the short run. Invitrogen/ Applied Bio signed a non-compete agreement with Celera in the specific areas where Celera is on or near market with products. Still executives claimed on the conference call announcing the news that this “won’t constrain the company” in terms of its diagnostic ambitions.

(Photo courtesy of Flikr user Roger Smith via a creative commons license.)

Drug Safety = New Drug Review

FDA’s “Safety First” initiative imagined a world in which different agency offices (and two in particular) would be able to easily resolve disputes over regulatory policy. So unlike past practice, experts in one area (say, drug safety) would be on equal footing with experts in other areas (say, drug review).

Center for Drugs Evaluation & Research director Janet Woodcock discussed this, among other topics, during a recent interview with The RPM Report. The solution to tension between offices like the Office of New Drugs and the Office of Surveillance & Epidemiology, she said, was ensuring that drug safety was as important—if not more so—than approving new drugs.

More than that, “Safety First” relies on the “expertise model,” Woodcock said. “I want the experts to be advising me or making decisions in the Center on whatever matters they’re expert in”—whether that’s chemists deciding how to make the product, or compliance experts ensuring that people are following the law. And, she said, “I want OSE to be expert in pharmacovigilance and medication errors.”

Given the comments made at a recent public meeting on the brand name approval process, it looks like the implementation of “Safety First” is going quite swimmingly.

FDA called the meeting to consider a new way to review proposed proprietary brand names for new products by transferring the responsibility for testing for potential medication errors over the drug sponsors. (You can check out our earlier blog post on that meeting here.)

Right now, not only is industry facing high rejection rates for proposed names, but last-minute rejections that can lead to the classic “train wreck” scenario. In the worst case, the pre-approval testing process misses problems with look-alike/sound-alike drugs, leading to medication errors. In those circumstances, it’s not uncommon for FDA to ask a manufacturer to change a product’s name after launch—the worst nightmare for marketing execs.

During the meeting, Mike Cohen, the president of the Institute for Safe Medication Practices, expressed concern that disagreements between OSE and OND about the approval of drugs names would continue to hinder the process. Cohen specifically pointed to GSK/Reliant Pharmaceutical’s fish oil Omacor (which went through a post-approval name change to Lovaza) and asked whether that situation could happen again under FDA’s proposed review process for proprietary brand names.

The answer, according to OSE director Gerald Dal Pan, is no. And here's why: “Some of you might have heard that Dr. Woodcock announced a ‘Safety First’ initiative. One of the features of that is that our office, the Office of Surveillance and Epidemiology...will have an equal voice with the Office of New Drugs.”

In the past, Dal Pan acknowledged, the drug safety office had more of a “consultative role where our opinions could be accepted or rejected.” That, he said, “is changing to one of an equal voice and equal role where we will have to work these things out. We’re also working out for our office...to really take the full lead in this area of proprietary name review as well as other aspects of the error prevention review.”

For drug sponsors, it’s something to watch. Under “Safety First,” the rules have changed. No longer is the Office of New Drugs calling all the shots—and the brand name review process is only the latest example. We're on the prowl for other examples of how FDA is implementing “Safety First.” We'd love to hear from you—send them our way.

(Ying/yang photo courtesy of Flickr user Paddl via a creative commons license.)

What to Expect for Drugs in Pregnancy

What To Expect When You’re Expecting has become bedside reading for many pregnant women. For curious regulatory professionals, there’s no book yet titled “What To Expect When You’re Expecting To Submit An Application For FDA Approval,” but FDA has just published a proposed rule that might fit well under that title. The proposed rule would specify how information about pregnancy and lactation should appear in product labeling.

The reg would scrap FDA’s current five-sizes-fit-all category system. Drugs wouldn’t be rated X anymore, but they couldn’t score an A either; FDA feels the categories oversimplified many risk issues, especially the question of whether the information was based on human or animal studies. In place of the categories, FDA would call for more narrative description to put a product’s potential side effects in the context of the background risks of birth defects and the dangers of not treating a condition.

The new labeling could lead to wider prescribing during pregnancy. The agency is aware of that and is simultaneously asking drug sponsors to provide better data collection about products. It’s another sign of how FDA wants to use a better post-marketing system to allow access to even drugs with outstanding safety issues.

That’s the positive side of the increased regulatory and safety burdens that has the drug industry tied up in fits. (Subscribers to “The Pink Sheet” can read about how the proposed reg offers a template for other risk communications and how FDA hopes it will encourage the use of registries. “The Pink Sheet” also has the scoop on what parts of the proposal FDA seems most amenable to changing.)

One part of the reg that caught our attention was the prominence given to asthma. In a portion of the document discussing the importance of treating chronic diseases during pregnancy, asthma has its own section. “Other chronic conditions” -- including diabetes, hypertension and epilepsy -- are all lumped together in the next section.

Also, the first example of a mock label showing what the new format would look like uses a made-up asthma drug, Alphathon. “Prescribers should consider alternative treatments,” the fictional example states. In all, asthma is mentioned 15 times in the proposed rule, compared to five times for diabetes.

Whether this leads to a heavier dose of relabeling for asthma drugs remains to be seen, but sponsors should be on notice: This regulatory action is now more than just a twinkle in the agency’s eye.

– M. Nielsen Hobbs

Scoring Follow-on Biologics

When it comes to follow-on biologics, time keeps on slipping. There was a lot of optimism that legislation creating an abbreviated pathway for approving FOBs could slip in by the end of 2007. Not so much. Talk turned to 2008 as the year when a bill gets passed through Congress.

Well, there’s good news and bad news on that prediction depending on where you stand on the issue. Word on the street is the staff of Sen. Ted Kennedy (D-Mass.), who serves as Chairman of the Senate Health, Education, Labor & Pensions, doesn’t expect legislation to move in 2008 because of the high number of other high-profile legislative priorities ahead in the queue and the fact that Kennedy was diagnosed with a malignant brain tumor.

The good news, again depending on where you stand, is the Congressional Budget Office appears to be moving forward in scoring the 10-year savings presented by having follow-on biologics in place. Specifically, CBO is reaching out to stakeholders to determine what impact, if any, the issue of “evergreening” could have in scoring savings over 10 years. The appropriate definition of a “new” biologic threw a monkey wrench into negotiations during the last days when the bill was being considered as part of the drug reform legislation in 2007.

In other words, where is the line drawn between a new, innovative product and one that is incrementally improved, but not “new” per se? The concern among generic hopefuls is that a product that is slightly changed would get another 10 to 12 years of data/market exclusivity (meaning FDA wouldn’t allow a FOBs maker to reference that product in an application to the agency seeking approval).

If the Hatch/Waxman experience serves as a benchmark, you can bet the farm, the car and whatever else you own that whatever lines the legislation draws between “innovative” changes to biologics that merit additional exclusivity and non-protected changes will be the source of controversy and legal actions for many, many years.

CBO officials are understood to be of the opinion that “evergreening” would not wipe out savings during the 10-year scoring period because approvals couldn’t happen that quickly during the study timeframe. Biogenerics stakeholders, however, point to the relatively quick development and approval of Roche’s “next-generation” EPO Mircera as evidence that those types of products can impact savings analyses.

It will be difficult, however, for CBO to identify significant savings over such a short period of time, primarily because follow-ons will be deemed interchangeable on a case-by-case basis and new FOBs entrants will be few and far between.

The law firm Engel & Novitt on behalf of the Pharmaceutical Care Management Association estimated cost-savings from FOBs for the top 200 Medicare Part B-reimbursed therapies would be approximately $14 billion over 10 years. Two other studies, conducted by Howrey/CapAnalysis Group and Avalere Health, estimated considerably smaller savings in the range of $2 billion to $4 billion over 10 years.

We’ve said all along that if CBO comes out with numbers closer to the Howrey and Avalere analyses, that won’t do much to motivate lawmakers to push for the legislation.

There are a number of challenges to getting a bill done in 2008 and beyond that fall outside of the trenches separating the innovators and the biosimilars proponents:

1) Kennedy’s health: Kennedy took the lead on trying to get a compromise bill into the FDA Amendments Act, signed into law in September 2007, but the Senate Biologics Price Competition and Innovation Act (BPCIA) just missed getting through. With Kennedy out of the day-to-day operations in Washington while he receives treatment, it’s unlikely there will be someone to take his place in championing new legislation. Still, most with chips in the pot agree that any law will have the BPCIA provisions at its core.

2) The Medicare bill: The Medicare compromise, which includes the physician payment fix, looks to be the major piece of health legislation that will make it through Congress in 2008. So if FOBs has a chance, then it most likely has to be attached to that legislative vehicle. Well, as of right now, FOBs isn’t in either the Democratic legislation (sponsored by Senate Finance Committee Chairman Max Baucus) or the Republican counter-bill (sponsored by Iowa Republican Charles Grassley). And that means FOBs are almost assured to be left out of any final bill the two sides hash out. No one is going to be interested in tacking on a controversial piece of legislation to a must-pass bill.

3) The Election: As summer comes to an end, the election will heat up quickly, with many key Congressional leaders out campaigning for the Presidential candidates or otherwise indisposed. That pretty much knocks out 2008. Then much of the first half of 2009 will be focused on setting up the new administration. Good luck getting FOBs through in that environment. More on this in my next post.

4) General hatred and disdain between biotech and generic drugmakers: This is a half joke. But like all half jokes, half of it’s true. Both sides appear to be coming around, but the amount of rhetoric put forth by both sides leading up to final negotiations in 2007 clearly damaged their positions. The RPM Report has heard this from numerous staffers and stakeholders. Whether it was extending data exclusivity or how easily understood the science is for developing and approving follow-ons without clinical burden, Senate and House leadership staff, as well as senior FDA officials, were put off by the rhetoric.

5) Making Dingell and Waxman happy: One of the major reasons FOBs didn’t make it into FDAAA was the Senate and House schedules and views of the compromise didn’t match up. House Committee on Oversight and Government Reform Chairman Henry Waxman (D-Ca.) was and still is a key player in the follow-on biologics game, and any compromise will most likely have to have his sign-off as well as that of House Energy & Commerce Chairman John Dingell (D-Mich.); Dingell has expressed interest in getting legislation passed. But there is a lot of ground to cover between the Waxman proposal (the Access to Life-Saving Medicines Act) and the Kennedy bill in the Senate. Most importantly, the issue of data exclusivity.

So when will FOBs happen? We recommend targeting PDUFA V as the vehicle for follow-on biologics.

We expect a compromise to be hammered out over the next year or two and attached to the user fee bill when it comes up for reauthorization in 2012. Sound far away? It really isn’t. The first negotiations to gear up for PDUFA V will start taking place in 2010, and it will be much easier to attach a ready-made piece of legislation to the next user fee iteration then than to try and rush something through Congress that doesn’t meet everyone’s threshold for satisfaction.

It’s possible the follow-on biologics debate could accelerate due to some unforeseen catalyst—anything’s possible in Washington—but the safest bet is that the legislation will move in 2010, with 2012 as the finish line. Is that too safe? I would love to hear your thoughts.

Daiichi/Ranbaxy: Eating Big Pharma's Lunch

Could Japanese pharmas be the Godzillas of the drug industry? With the money these outfits have been throwing around, they are certainly putting pressure on Big Pharma to up their deal ante. Consider that in the last six months there have been three multi-billion dollar buy-outs by mid-sized Japanese companies: Eisai bought MGI Pharma for $3.3 billion in cash in December; Takeda purchased Millennium for nearly $9 billion; and now comes news that Daiichi Sankyo is taking a controlling interest in the Indian drug giant Ranbaxy for $4.6 billion.

On Wednesday, Daiichi announced it had agreed to buy a 34.8% stake in Ranbaxy from the Indian company's founders, the Singh family. The company will finance the acquisition--priced at a handsome 31% premium to Ranbaxy's closing price Tuesday--with a combination of cash and financing. Analysts reckon the combined company will be worth about $30 billion and called the transaction "bold and entirely out of character."

It should not come as a surprise that Daiichi, a company with a cash war chest of $6 billion, is doing a big deal. Last year the company reported consolidated net sales of ¥880.1 billion, a year-on-year decline of 5.3%. To remain competitive with its Japanese brethren, particularly Takeda and Eisai, the firm needed to ink a major transaction that would extend its reach beyond the stagnant home market, where annual government-mandated price-cuts on drugs and a slower regulatory approvals process make for a tough business climate. (For more on the pressures facing Japanese pharmas, check out this story from our January 2007 IN VIVO.)

And like Takeda and Eisai, which are facing patent exipirations on crucial drugs such as Prevacid, Actos, and Aricept, Daiichi has its own pipeline worries to think about: the company's website lists just three Phase III compounds, including the oft-discussed and risky prasugrel it has partnered with Eli Lilly. In May it acquired the German antibody developer U3 Pharma, presumably to increase its large molecule capabilities.

What is surprising about the Daiichi/Ranbaxy deal is that Daiichi chose to invest in a company focused primarily on generics and geographically situated in an emerging market. While India is undoubtedly an important arena, companies such as Takeda, Astellas, and Eisai have focused their efforts on building a US presence, especially in oncology.

Indeed, this recent tie-up has a very different flavor from the Eisai/MGI Pharma and Takeda/Millennium tie-ups. For the billions Eisai ponied up for MGI, it got several marketed oncology products, including Aloxi and Dacogen, as well commercial infrastructure and an increased presence in the US. Takeda, meanwhile, eschewed a specialty pharmaceutical play, preferring a company with its own internal R&D efforts, an interesting but early stage pipeline and a potenial blockbuster in Velcade, a first-in-class proteasome inhibitor approved to treat multiple myeloma and mantle cell lymphoma.

But instead of bulking up on R&D capabilities or marketed products, Ranbaxy swung the other way, spending a large chunk of its available cash to obtain access to what Takashi Shoda, president and CEO of Daiichi Sankyo called "a strong presence in the fast-growing business of non-proprietary pharmaceuticals."

While many analysts seem surprised by the deal, Kenji Masuzoe, of Deutsche Bank, thinks it's welcome news. "A pure, 100%-pharma based business is a tough model," he says. Still, despite the challenges, most pharmaceutical companies have not embraced such a diversified business model. (BMS anyone?) Indeed, only two of the top 20 drug companies have major generics businesses: Novartis with its Sandoz unit and Teva (which let's face it is mostly a generics company anyway).

The acquisition raises a critical question: How will a proprietary company effectively run a generics business with its vastly different culture and vastly different economics?

It's worth noting that this isn't the first non-pharma type acquisition Daiichi has done. Back in 2006 the company purchased Astellas's OTC business unit, Zepharma Inc., for about $200 million. Last year Daiichi reported that net sales of its healthcare products, which include the skin blemish product Transino and the pain-reliever, Felbinac, increased 4.9% to ¥50.3 billion in year-on-year terms for the period ending March 2008.

Perhaps purchasing a big generics play at a time when the Japanese government is extremely anxious about the cost of healthcare and looking for ways to boost generic sales has a modicum of sense?

Indeed, there's also a certain logic to having a major stakehold in what should prove to be an important market, India. Hirohisa Shimura, an analyst with BS pharmaceuticals, told The Times that Daiichi may have accepted that its future growth lies with the fast-growing middle classes of Asia's emerging markets. "Emerging markets are absolutely the sort of expansion that the Japanese pharmaceutical companies will be thinking about now that their international competitors are doing the same," he says.

(Photo courtesy of Flickr user tumatigre via a creative commons license.)

ADA Wrap-Up: Where's The Chocolate?

Trying to understand all that data released at the American Diabetes Association’s 68th Scientific Sessions in San Francisco? Attempting to make sense of the company posturing and resulting fallout in the marketplace? It’s enough to make anyone a little hypoglycemic.

But getting a handle on the market potential of the various medicines in the lucrative Type II diabetes space, such as Januvia and Byetta, is worth a potential sugar low.

Here's a quick review for those who need it. By 2012 a gazillion people in the US will have Type II diabetes--actually only about 25 million but you get the point. BIG MEDICAL PROBLEM. Januvia, the first FDA-approved DPP-4 inhibitor, is proving to be a useful weapon--or at least a highly prescribed one. In 2007, the drug racked up worldwide sales of $668 million. And Catherine Arnold, an analyst at Credit Suisse, projects global sales will grow to $3.1 billion by 2010. But there's competition. (See below.)
The curve for Amylin/Lilly’s Byetta, a GLP-1 analog on the U.S. market since 2005, hasn’t been so steep. At $158 million in revenue for the first quarter, twice-daily Byetta missed its mark due to a number of factors – among them lack of up-take by primary care physicians. That’s one reason why Amylin told the street in January it would speed up its filing for once-weekly Byetta LAR to the second quarter of 2009.

At ADA this week, Amylin reported data showing its Byetta LAR injection improved glucose control at or below ADA’s 7% goal for 72% of patients, with an average weight loss of 9.5 lbs. Jim Reddoch of FBR Capital Markets said, “We think LAR is a potential best-in-class drug, well ahead of the competition.” He’s modeling $2 billion-plus in peak sales for the drug in 2012. But the news did little to help Amylin's share price, which slid June 9 on news from Novo Nordisk and Roche.

Novo released new Phase III results pitting its once-daily GLP-1 analog liraglutide against Byetta. Liraglutide was significantly more effective at lowering A1c and resulted in slightly more weight loss. JPMorgan’s Cory Kasimov noted, “With liraglutide’s approval expected by 1H09, we believe the drug could take significant market share from Byetta.”

Amylin isn't taking the news sitting down--but it will likely have to invest considerable money and resources to keep a leadership position. The biotech's CEO, Daniel Bradbury, told “The Pink Sheet” DAILY the firm is considering head-to-head trials of Byetta vs. liraglutide.

Meanwhile, Roche and partner Ipsen’s taspoglutide (R1583) also demonstrated impressive A1c control. Rate of nausea, however, appeared high at 52% with the 20 mg once-weekly dose, although patients weren’t titrated. The firm announced at ADA that it will begin a head-to-head trial of taspoglutide vs. Byetta. It plans an NDA filing in 2010. Maybe Amylin needs to add another arm to that trial its considering?

(We understand if you are getting a bit dizzy. Great summaries of all the news are available at our sister publication, "The Pink Sheet" DAILY.)

But the news wasn't all GLP-1. The DPP-4 class is looking more crowded as two contestants vie for the prize of being second to market. The Bristol-Myers Squibb/AstraZeneca drug, Onglyza, when taken alone, apparently significantly improves A1c levels compared to baseline in just three doses. Bristol plans to file an NDA for the compound mid-year. Meanwhile, Takeda issued a slew of reports about its alogliptin, widely expected to be approved later this year. Good news for Merck--analysts don't seem to think either drug looks superior to Januvia.

And that's definitely bad news for Takeda. The company has a thin pipeline and is counting on this compound to generate sales to offset the revenue losses caused by the 2011 patent expiration of its blockbuster Actos. (We'll have more on Takeda's strategy in an up-coming IN VIVO feature. )

Which brings us to our final point. How much should we care about HbA1c anyway? In a previous post, we wrote about the ACCORD trial’s finding that lowering hemoglobin A1c levels doesn’t correlate with a lowered risk of adverse events such as heart disease and stroke. Amylin CEO Daniel Bradbury told IN VIVO Blog that he believes the finding won’t result in modified endpoints. HbA1c is still a valid endpoint because it’s directly proportional to microvascular complications of type 2 diabetes, Bradbury said. But if that's just wishful thinking, it could spell trouble for any company currently playing in this arena, necessitating the expensive redesign of clinical trials.

Time for some chocolate while we ponder that issue.

--Pamela Taulbee

(Photo courtesy of Flikr user the Princess of Ilyr via a creative commons license.)

MDRNA: RNAi Noses Out Nasal Delivery

When trying to avoid throwing the proverbial baby out with the bathwater, it helps to know which is which. And sometimes that takes a while to figure out.

Consider Nastech--as of today renamed MDRNA and re-focused on RNA interference. Back in November, Nastech announced it was in fact offloading its RNAi assets--which are built around IP licensed from LA's City of Hope Hospital. This so-called Dicer substrate IP--potentially a new doorway into the RNAi space that may avoid the significant patent estates amassed by the field's pioneers Alnylam and Sirna (now owned by Merck & Co.)--is also the basis of another newcomer to the RNAi field, Dicerna Pharmaceuticals.

The day Nastech announced it was spinning off that IP (which was developed by Dicerna co-founders John Rossi, PhD, from the City of Hope National Medical Center’s Beckman Research Institute and Mark Behlke, MD, PhD, from Integrated DNA Technologies) was coincidentally the day that Dicerna announced its $13 million Series A. Back then we reported:

Nastech chairman/pres/CEO Steven Quay, MD, PhD, said on today's conference call that the current plan was to seek a private investment in MDRNA from institutional investors or VCs, followed by a Nasdaq listing for the firm. Beyond the company's core IP and ongoing RNAi programs at Nastech that will be transferred to the newco, relatively little is known about MDRNA. Quay offered no details on who will manage the company, who will advise it and who will comprise the board--though "the boards are being built as we speak," he said.

A follow-up interview a few days later with the Nastech chief executive yielded zero additional insight save for this blogger's inkling that no details were forthcoming because no decisions had been made. The impulse to offload its Dicer-substrate IP and programs into a separate company was promped by a restructuring in the wake of a dissolved partnership with Proctor & Gamble on Nastech's nasal-delivery osteoporosis project. What was needed at the time was an immediate cost reduction program; RNAi wasn't core. It had to go.

Seven months later and the dust has settled; analysts have dropped Nastech coverage; the firm's market cap is an anemic $37 million. Nasal drug delivery, once-considered low-risk, instead crashed out; RNAi--the subject of some of the most impressively lucrative alliances and acquisitions of the past few years (see most recently Alnylam/Takeda)--has been the star performer.

And at Nastech MDRNA, now it's those nasal delivery programs that find themselves on the block. J. Michael French, formerly SVP corporate development at Sirna, is stepping in as MDRNA's CEO (Quay remains CSO and chairman as well as chairman of the firm's SAB). The firm is focused on its Dicer substrate and next-generation "meroduplex" technology (the latter appears to comprise at least three oligonucleotide strands--patent application here--but we don't pretend to understand it yet.)

The company even has a fancy new ticker, ditching NSTK for MRNA (those microRNA guys are gonna be pissed).

MDRNA isn't the first company to revamp itself as an RNAi player during extremely tough times. On the brink of bankruptcy in February 2003, a small, $3 million-market-cap biotech focused on ribosome science was rescued by a handful of VCs with a $48 million recapitalization. Not even four years later that company--rechristened Sirna--was bought for $1.1 billion.

image from flickr user davidbole used under a creative commons license

Frank Torti: FDA’s Next Commissioner?

FDA Acting Commissioner Frank Torti. It kind of has a nice ring to it, don’t you think? Given some of the things we’ve been hearing inside the Beltway recently, it may just come to pass.

Torti came on board as FDA chief scientist and Andy von Eshenbach’s second in command in April. At the time, we commented on the choice of an academic as Janet Woodcock’s successor, and Torti as a particularly non-controversial pick.

But the early word—at least from his colleagues at Wake Forest—was that Torti wasn’t long for the job, and that he’d be returning to academia as soon as the next president took office.

Some industry observers are now speculating that Torti’s tenure at FDA will be a lot longer than first thought. Conventional wisdom inside Washington has held for some time that von Eschenbach’s tenure is winding down, and that he will be asked to leave FDA the morning of November 5, regardless of who ends up in the White House.

Once that happens, Torti is likely to be asked to hold down the fort until von Eschenbach’s permanent successor is named. And depending who takes over the White House, Torti very well could be that permanent successor. That shouldn't come as much of a surprise: von Eschenbach himself was only supposed to be a temporary replacement when he came on as interim commissioner in late 2005.

Either way, Torti is someone that industry should get to know. If you’re looking for some insight into Torti’s policy plans, his May 30 appearance at the FDA Science Board might be a good place to start. You can find a partial transcript of his presentation through The RPM Report by clicking here; if you don’t subscribe, you can sign up for a 30-day trial to view the article.

In it, Torti outlined his plan for his first 100 days as FDA’s chief scientist, very much sounding like someone who is ready and willing to settle into the job for the long haul—at least until he is called up for higher service. Even the title of his speech had a political ring to it: “Science at the FDA: Vision, Plans and Timetable.”

At least for now, Torti is being coy about his future plans at FDA. When our colleagues at “The Pink Sheet” asked him about the rumors surrounding his tenure at the agency, he smiled and said, “I’m not in the habit of taking a job no one’s told me about yet.” Perhaps not. But we have a feeling his phone will be ringing soon.

Acclarent, By a Nose

Maybe Acclarent Inc. knows something we don’t.

Okay, let’s skip the obvious nasal puns. Acclarent—which is selling a device to treat sinusitis—might salvage what has been an absolutely dismal year for medical device VCs. The four-year-old device company ignored all the stop signs and filed to go public last week. No terms of the offering have been set.

Medical device investors would welcome any lucrative exits at this point. One medical device VC says he’s having a hard time looking his biopharma bretheren partners in the eyes these days. The biopharma folks are racking up big exits, primarily by selling their portfolio companies to industry leaders. Acquisitions, of course, have been the device VC's best friend in the past. The problem is, nobody is buying venture capital-backed device companies these days. Big device companies aren’t willing to place big bets and make big-time purchases in this questionable market.

The IPO market has been just as dismal for everyone. As we noted in our earlier post, CardioNet was the last venture-backed health care company to go public. It’s doing fine but so many other recent IPO companies are sagging under single-digit stock prices.

But Acclarent’s confidence isn’t the real story here. Founded in 2004, Acclarent is the spawn of an incubator (accelerator, whatever you’d like to call it) run by serial entrepreneur Josh Makower and backed by mega-venture fund New Enterprise Associates. Acclarent’s origin is a classic inventor’s tale as reported by colleague Steve Levin in this article.

For many serial entrepreneurs, one of the most difficult challenges is finding their next project. For Josh Makower, MD, who had launched device start-ups Endomatrix (incontinence; acquired by CR Bard Inc.) and TransVascular (cardiovascular; acquired by Medtronic Inc. ), the answer was right under his nose. A long-time sinusitis sufferer, Makower was frustrated with the existing standard of care for treating this condition.

Acclarent developed a small balloon that could be inserted deep into the nostril and inflated, opening up sinus passages and relieving the pressure associate with sinusitis. Since the traditional treatment involves highly invasive surgery that calls for cutting and removing bone and tissue to get at the sinuses, the company’s approach would seem like a no-brainer. But the company’s success depends largely on its ability to convince ear, nose and throat surgeons to be open to game-changing innovation.

We wouldn’t bet against Acclarent. In 2005, the company received FDA approval for the device. In 2006, it launched the device in the US and obtained a CE Mark. By 2007, it had an international sales effort in place. As of the end of last month, 3,000 surgeons have been trained on using the device.

However, Acclarent is a story, not a profitable enterprise. Over the first three months of the year, it brought in $10.2 million in cash but had a net loss of $8.6 million. It’s also carrying a deficit of $62.5 million.

Conventional wisdom suggests Wall Street wants proven businesses, not stories. Yet Acclarent obviously holds other opinions, or at least is positioning itself to be acquired by a larger player.

Either way, the company stands to be a huge win for NEA, which owns 44% of the company. Versant Ventures and Meritech Capital own 15% and 8%, respectively.

All together, Acclarent raised more than $70 million from investors. True, that’s a significant sum for a medical device company, but the quick sprint Acclarent made from start-up to IPO candidate not only puts its VCs in a good position for a strong return on investment, it also serves as another example of incubators bearing fruit for their VC sponsors.

For more on the tightening relationships between venture firms and incubator programs go to our START-UP here.

image 'By a Nose' from flickr user Chris Breeze used under a creative commons license.