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Merck reorg reimagines sales force

Merck reorg reimagines sales force | The Pharmaceutical Industry |
The company will "fill the bag" of its sales reps, as part of a reorganization that also includes 8,500 job cuts and a more refined R&D focus.
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Ten Pharmas Aim To Cut Red Tape To Speed Drug Development

Ten Pharmas Aim To Cut Red Tape To Speed Drug Development | The Pharmaceutical Industry |
Can cutting red tape and duplicated work help rein in the skyrocketing cost of developing new medicines? That’s the hope of a new company ten of the world’s biggest drug makers announced they were forming yesterday.


The new outfit, Transcelerate Biopharma, was created out of a regular meeting of drug company research chiefs and will focus on five areas where the clinical trials that are used to test medicines wastefully duplicate procedures like training physicians, running websites, or creating procedures to document the benefits and side effects of new medicines.


Transcelerate plans to register as a non-profit, and is looking for a chief executive. It’s backers are: Abbott, AstraZeneca, Boehringer-Ingelheim, Bristol-Myers Squibb, Eli Lilly and Company, GlaxoSmithKline, Johnson & Johnson, Pfizer, Genentech a member of the Roche Group, and Sanofi. The cost of the project will largely consist of contributing the time of experts on company payrolls.


“We in fact cause a lot of confusion by each using different computer systems to fill our data, different ways of handling our drugs,” says Paul Stoffels, the worldwide chairman of pharmaceuticals at Johnson & Johnson. “The ingoing assumption is that by simplifying we can save a lot of cost for pharmaceutical organizations and also make it easier for clinics and physicians to work with us.”


Elias Zerhouni, the head of research and development at Sanofi and the former director of the National Institutes of Health, says a concerted effort was needed to make sure that existing efforts at cutting clinical trial costs do not fail. “We want to be able to conduct large trials at reasonable cost,” says Zerhouni. “Otherwise what will happen is what we’re seeing more and more already: People are focusing on specialty drugs and not trying to develop primary care drugs such as diabetes drugs.


Transcelerate’s job will be to create industry standards. Zerhouni compares it to Sematech, the nonprofit formed by U.S. semiconductor companies in 1986 to help them create manufacturing standards to eliminate waste and compete with Japan. On a simpler level, it’s analogous to making sure that all the screws have the same threading and are interchangeable.


The idea of creating a standalone nonprofit to create these standards was first hatched by Garry Neil, then a Johnson & Johnson vice president, last August.


“Why do some [companies] record that male is a 0 and female is a 1, and others use 1 and 0, and others use M and F. Where is there any competitive advantage to doing that?” says Neil. “We do 38% of the clinical trials but 70% of the [spending on them]. IF we were to come together and try to define some of these standards it would be an enabler for efficiencies for everyone.”


The Hever Group, a council composed of the research and development heads of many of the biggest drug companies, met in November and Neil convinced them to back the initiative. He will serve as interim chief executive. He has retired from J&J, and is also a partner at Appletree Partners, a private equity firm. A group of consultants came up with 30 potential tasks for Transcelerate to tackle, and Neil has settled on five:


1. Creating clinical data standards, as with the case of notation of gender, so that all clinical trials note things like gender, changes in blood pressure, and such in the same way.

2. Standardizing the way that risk to patients is measured in studies, so that side effects are always handled in the same way.

3. Building a common Web site for doctors enrolling patients in clinical trials to use, so that each company isn’t running its own portal with a different look and feel.

4. Standardizing the process of training doctors and qualifying clinical trial sites, so that a physician doesn’t need to go through separate but similar training programs in order to work in clinical trials run by two companies.

5. Standardizing the process by which companies strike deals to do clinical trials that compare an experimental drug to a standard regimen made by another company.

There is no question that the costs of developing new medicines has spiraled out of control, with companies reporting late-stage studies for some medicines costing billions of dollars. An analysis I did of research and development productivity earlier this year found that the amount companies spend per approved drug varies wildly. There have been concerns on Wall Street that research and development expenses are no longer justifiable with current success rates.


But the biggest driver of costs is the number of drugs that make it into late-stage studies and fail. Can the growth in costs be slowed by being more efficient and wasting less money? It’s possible – and it makes sense that companies would at least want to try to pinch their pennies by pooling resources, given the alternatives.

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Pascal Soriot appointed Chief Executive Officer of AstraZeneca

AstraZeneca announced that Pascal Soriot has been appointed as the company’s Chief Executive Officer. Pascal Soriot will take on his new responsibilities and join the AstraZeneca PLC Board as an Executive Director on 1 October 2012. Simon Lowth will remain as AstraZeneca's Interim Chief Executive Officer until Pascal Soriot joins. At that point, Simon Lowth will resume his responsibilities as Chief Financial Officer and will continue to serve as an Executive Director on the AstraZeneca PLC Board.

A French national, 53 year old Pascal Soriot joins AstraZeneca from Roche AG where he has served as Chief Operating Officer of the company's pharmaceuticals division since 2010. In his current role he has global responsibility for development, manufacturing, commercial operations and administration for a pharmaceuticals business that recorded sales of $34 billion in 2011 and has approximately 44,000 employees worldwide. Prior to that Pascal Soriot was Chief Executive Officer of Genentech, where he was credited with leading the successful merger between the San Francisco-based biologics business and Roche. Pascal Soriot joined the pharmaceutical industry in 1986 and has worked in senior management roles in the US, Asia and Europe.


Pascal Soriot said: "I am excited and honoured to have been asked to lead AstraZeneca. Throughout my career I have had enormous respect for the people of AstraZeneca and what they have achieved. No-one is blind to the challenges that confront the pharmaceutical sector and this company, but the underlying strengths of AstraZeneca in delivering on its strategy are clear. AstraZeneca will continue to make a positive difference to patients over the longer term and I'm looking forward to playing my part in shaping that future."


Leif Johansson, Chairman of AstraZeneca PLC, commented: "This is a key appointment at an important time for AstraZeneca and we are certain that Pascal's leadership qualities combined with his strategic thinking and relevant experience make him the right person to drive the company to success over the coming years. I am confident that Pascal's approach and his track record of delivering results in innovation-driven businesses will be valued by shareholders and employees alike."


"The Board would like to record its appreciation for the excellent job done by Simon Lowth as interim CEO and his impressive leadership in this period. Supported by a highly capable and committed executive team, Simon has maintained the organisation's focus on key business priorities during a period of significant change for the company."


About Pascal Soriot


2006-2012 Roche Holding AG, Basel

Chief Operating Officer, Head of Pharmaceuticals
Chief Executive Officer, Genentech
Head of Commercial Operation
Head of Global Strategic Marketing


1986-2005 Sanofi-Aventis, INC, New York, Tokyo, Sydney, Paris

Chief Operating Officer, US Commercial, Aventis
Senior Vice President, Global Marketing & Medical Affairs, Aventis
Vice President, Asia-Pacific Region, Hoechst Marion Roussel, Japan

Managing Director, Hoechst Marion Roussel, Australia
Global Marketing Director, Roussel UCLAF Pharmaceutical Division, Paris

Managing Director, Roussel Australia/New Zealand
Financial Controller, Asia Pacific Region, Pharmaceutical Division, Roussel UCLAF, Paris


Prior to his commercial career, Pascal Soriot practiced as a veterinarian. He holds an MBA with a major in finance from HEC Paris.

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Merck filings could expand heart division

Merck said Monday that it's readying two FDA submissions for drugs that could bolster its cardiovascular portfolio, the company's third-largest sales division.


The first will be for anti-clotting medication Vorapaxar. The submission is a bit of a retread – the company abandoned clinical trials just two years ago among patients with a history of stroke and acute coronary syndrome. This time Merck's approach is as a preventive measure among patients with a history of heart attack, but no history of stroke. The company said in a statement that it expects to file for this indication in the US and EU next year.


The second application is for cholesterol-lowering drug Tredaptive/MK-524-A, and is also on target for 2013 in the US and EU, the firm said. The extended-release niacin/laropiprant straddles a touchy category—an FDA study from 2011 found that niacin didn't do much in the battle to lower CV mortality. Merck shelved its niacin/simvastatin combination known as MK-0524B earlier this month.


Approvals of the drugs would expand a segment of Merck's portfolio responsible for $2.4 billion in sales last year, good enough for third among the contributors to its sales tallies, behind respiratory's $5.5 billion in sales and the diabetes division's $3.3 billion in revenues.

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Roche cuts 1,000 R&D jobs

Roche cuts 1,000 R&D jobs | The Pharmaceutical Industry |

Roche will make major cuts to its research operations in the US and revamp operations in Europe.


Roche will close its US site in Nutley, New Jersey, with the loss of around 1,000 positions.

The firm said it would move its US R&D activities to Germany and Switzerland, with the aim of curbing drug development costs. The sites in Switzerland and Germany are expected to add around 80 jobs, the company added.


But it is not all bad news - Roche said it would continue building its new US East Coast Translational Research Clinical Center, which should be operational by early 2013, adding 240 new jobs.

Its biotechnology subsidiary Genentech, which handles most of Roche’s R&D, will not be affected, the company said.


The firm also announced that Jean-Jacques Garaud, head of pharmaceutical research, would leave the company at the end of this week. Mike Burgess, currently head of cancer drugs at the firm, will replace him.


Roche’s chief executive Severin Schwan, said: “Our R&D programmes were exceptionally successful over the last 18 months, with 24 out of 28 late-stage clinical trials delivering positive results. The overall number of programmes in clinical development has grown substantially.


“The planned consolidation of our research and early development organisation and the refocusing of R&D activities in Switzerland and Germany, will free up resources that we can invest in these promising clinical programmes while also increasing our overall efficiency.”


He added: “In its 80-year-old history, our Nutley site has made significant contributions to Roche’s success. We will do everything we can to find socially responsible solutions for the employees affected by these changes.”


Roche said it would publish details of the expected financial impact of the planned measures, in particular one-time costs associated with the closure of the Nutley site, as part of its half-year results announcement this week. The financial outlook for 2012 remains unchanged.


‘Good’ cholesterol drug failure


The firm has a strong oncology pipeline but was hit by a major Phase III failure last month when it had to pull its experimental HDL cholesterol drug dalcetrapib.


The firm said this drug could have produced peak annual sales of around $10 billion, but its failure would have left a large gap in Roche’s future revenue; meaning it would be looking to cut costs.

It is one of many big pharma firms that are making major cuts to R&D staff to save money, and follows recent announcements by Novartis and AstraZeneca.

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Lundbeck, building European commercial model of the future, lays off 600

Lundbeck, building European commercial model of the future, lays off 600 | The Pharmaceutical Industry |
Lundbeck announced Thursday that it plans to lay off up to 600 employees that are part of its European operations. Spokesperson Mads Kronborg told MM&M that the 600 number is flexible – the company has to negotiate with local work councils, and won't have a definitive number until those talks end.


The company said in a statement that the proposed layoffs will help the drugmaker mitigate price pressures of healthcare reform and generics and to weather “uncertainty regarding pricing and reimbursement in Europe.”

The transition is part of a larger shift within the company.


“Today's GPs do not decide in the same extent as they did earlier on what they prescribe today," Kronborg said. "You tend to address regulators and payers and make sure your have your medicines on your central lists, and that [requires] an organization that is capable of addressing market access."


At the same time, the company is moving into heavily specialized areas. Its Phase III pipeline includes drug candidates for treatment of psychosis, ischemic stroke and depression, and the company has filed for approval on products for alcoholism and schizophrenia.


Despite seeing generics trigger a 55% falloff in US Lexapro sales in the first quarter of this year, and generic Cipralex taking a bite out of sales in Spain for that same period, the company said in its earnings statement that it is on track for sales in the $2.6 billion range this year. Some first-quarter highlights included the Alzheimer's medication Ebixa (memantine), Parkinson's treatment Azilect (rasagiline) and Huntington's therapy Xenazine (tetrabenazine), which all had double-digit sales increases for the period, compared to the same time last year.


“We are aiming here to build the pharma commercial model for the future in Europe,” Kronborg said.

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European Medicines Agency boosts EU transparency with online publication of suspected side effect reports

The European Medicines Agency has today begun publishing suspected side effect reports for medicines authorised in the European Economic Area (EEA) on a new public website: The reports come directly from the European Union (EU) medicines safety database EudraVigilance, and are one of the many types of data used by regulators to monitor the benefits and risks of a medicine once authorised. The launch of the new website is part of the Agency's continuing efforts to ensure EU regulatory processes are transparent and open and is a key step in the implementation of the EudraVigilance access policy.

The information published today relates to approximately 650 medicines and active substances authorised through the centralised procedure, which is managed by the Agency. Information on the website is presented in the form of a single report per medicine or active substance. Each report pulls together the total number of individual suspected side effect reports submitted to EudraVigilance by Member States and marketing authorisation holders. These aggregated data can be viewed by age group, sex, type of suspected side effect and by outcome. Within a year the Agency aims to additionally publish suspected side effect reports for common drug substances used in nationally authorised medicines.


A side effect (also known as an adverse drug reaction) includes side effects arising from use of a medicine within the terms of the marketing authorisation as well as from use outside the termsof the marketing authorisation, including overdose, misuse, abuse and medication errors, and those associated with occupational exposure.


All information on the website relates to suspected side effects. Suspected side effects may not be related to or caused by the medicine, and as a result, the published information cannot be used to determine the likelihood of experiencing a side effect or as an indication that a medicine is harmful. All users of the website are asked to read and accept a disclaimer explaining how to understand the information before they view a web report.

Medicines are an important part of modern healthcare, providing effective treatments for many diseases and conditions. For a medicine to be authorised for use in the EU the benefits of the medicine must always outweigh the risks.

Today's launch also highlights the importance of side effect reporting and pharmacovigilance in safeguarding public health within the European Union. Side-effect reporting is a key element in ensuring the detection of new or changing safety issues, and the Agency continues to further strengthen its work with partners and stakeholders across Europe to ensure a robust system for safety signal detection.


In June, the Agency will launch the website in the remaining 22 official EU languages.



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Sales forces shrank in 2011, but not everywhere

Sales forces shrank in 2011, but not everywhere | The Pharmaceutical Industry |
Pharmas shrank their US sales forces by 7% between 2010 and 2011, but the pain wasn't shared evenly between the biggest of pharmas, as a number of players scaled up.


Roche cut deepest among big pharmas, lopping off a third of its Full-Time Rep Equivalents, while Abbott and Sanofi were close behind, downsizing 23% of their FTEs, according to an analysis by Cegedim Strategic Data. GSK cut its FTE force by 22% and Bayer by 19%.


But Boehringer Ingelheim and Novo Nordisk went on hiring sprees, bumping up their FTE numbers by 15% and 13%, respectively, while AstraZeneca and Warner Chilcott increased FTEs 11%. Amgen's FTE count was up a whopping 32%. A number of smaller and mid-sized pharmas were hiring, too, including Gilead, Endo, Elorac and Somaxon.


Driving hiring at AstraZeneca was promotion of Crestor, the nation's most-detailed brand in 2011 with around 2.5 million details. The next-most-detailed brands were Cymbalta and Bystolic, with 2.1 million details, followed by Celebrex and Seretide, with 1.9 million, Lipitor with 1.7 million, Spiriva with 1.6 million and Symbicort and Pradaxa with 1.5 million.


The average length of details declined again in 2011, to under 5 minutes. In 2007, 70% of details were over 5 minutes. Increasingly, said Cegedim, physicians' offices, under pressure from managed care and having increased patient volume to make up for less reimbursement, “are setting aside only a small, highly competitive window of time per week for details,” while others stop seeing reps altogether.

Complicating access for reps is the fact that their employers, seeking cost-savings, are pulling back on samples, which dropped again in 2011, while brochure leave-behinds increased. Reps armed with samples are more likely to get a foot in the door than those carrying only brochures, but samples are costly to companies.

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Bristol-Myers hits estimates for the quarter but still faces tough going

Facing a generic onslaught next month for its best-selling Plavix, Bristol-Myers Squibb managed to bring in earnings that at least met expectations.


The company reported $1.1 billion in net income, up 12%, or 64 cents a share, hitting on the head what analysts had predicted, Bloomberg reports.


Its attempt to fill in behind Plavix with a big acquisition was short-circuited last month, when Amylin Pharmaceuticals roundly rejected Bristol's $3.5 billion offer to get hold of its once-a-day diabetes treatment Bydureon. Its run at Amylin followed the rejection by the FDA in January for its own diabetes treatment, dapagliflozin, which it is developing with AstraZeneca. More data was sought, and the drug may yet get approval in the U.S. and Europe.


Having been rebuffed by Amylin, Bristol still has a strategy. In January, it spent $2.5 billion to acquire Inhibitex and its hepatitis C drug. And last week it announced an agreement to test hepatitis treatments with Medivir AB and Johnson & Johnson.


Responding to that deal, Les Funtleyder, an analyst and portfolio manager with Miller Tabak & Co., asked the question on everyone's mind. "It's pretty clear after last week that Bristol's going to be a player in the segment, but what time frame and in what way can we expect?"

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What's Really Driving The Pharma M&A Frenzy

What's Really Driving The Pharma M&A Frenzy | The Pharmaceutical Industry |

What is it with pharma and M&A? It is hard to tell whether the deals announced (or attempted) by pharma companies in recent weeks are a sign of the early stages of a pharma feeding frenzy or simply a blip in an otherwise consolidating sector.


In just the past couple weeks, the acquisition market has heated up:


- AstraZeneca announced it is buying Ardea for $1 billion
- Roche abandoned its $7 billion bid for Illumina
- Glaxo got rebuffed from Human Genome Sciences in a $2.6 billion bid
- ISTA Pharmaceuticals accepted a $380 million takeout offer bid from Bausch & Lomb after turning down a bid from Valeant
- Pfizer announced the $12 billion divestiture of its infant nutritional business to Nestlé
- Watson Pharmaceuticals announced it will be buying European generic company Actavis for approximately $5.6 billion, to make the 3rd largest generic company


Also yesterday, J&J’s brand new CEO stated that despite being days away from closing on its $21 billion acquisition of Synthes, they too will continue to look for deals. While it is easy to think that this spate of news is part of a new change, it is part of a longer-term trend of a consolidating drug sector and one where a premium is being placed on innovation and growth.


There are a number of factors that are going into the continued consolidation of the drug industry. In part, it was originally fueled by the consolidating buying groups – the rise of hospital chains, HMO’s, and chain pharmacies – made the selling activity more concentrated. Through the years, as the large drug companies consolidated (Pfizer and Warner Lambert, Merck and Schering-Plough, Astra and Zeneca, Novartis and Alcon, Glaxo and Wellcome, Sanofi and Genzyme), their size alone made maintaining growth rates difficult.


But for now, the top reason for increased consolidation and partnering is that drug companies have a host of blockbusters going off patent at a time when the industry is facing fewer drug approvals. With slowing sales, most drug companies are looking for growth by buying the companies that have solid pipelines that will deliver growth.


Peter McDougall, a noted pharmaceutical analyst who runs top-tier boutique pharmaceutical investment research firm DRUGANALYST in the UK, even went so far yesterday to write a humorous letter to AstraZeneca’s CEO with a prescription of whom they should partner with to fix their pipeline and growth woes: Abbott and Amgen. In his letter, he implores:


“Please, please don’t continue with the comments such as I am reading this morning: “we are neck deep in deals”, “we are sticking with small deals”, these aren’t helping me. I assure you that there are no deals of around a billion or two dollars that will ever make a pennyworth of difference.”


But will it continue and will it be mergers-of-equals or small company deals that large drug companies pursue? One biotech CEO who had sold his first company for several hundred million dollars, who is now on his second, with half a dozen pharma partners signed for his new technology put it this way to me:


“Large pharma can’t develop drugs any more. They are too slow. They make decisions for political reasons. Their hurdles are too high. They have to keep buying companies like us just to stay innovative.”


While this conclusion of drug companies not being able to develop new drugs and get them approved is clearly an overstatement, it is a sentiment shared by a lot of institutional investors. And he is right about one thing: large pharma keeps tapping the speed, inventiveness, and entrepreneurial talent of smaller drug companies.


But there are many other factors that are driving the continued consolidation of the drug industry, including:


- Opportunity for cost cutting earnings boost – the most obvious way for two large drug companies to “create value” was to merge, and fire a lot of people. While some costs are unavoidable, others are duplicative. There are still a large number of deals done for this reason, and this reason alone. With the lower number of approvals, especially for large-market, general practitioner drugs, the large selling organizations have capacity.
- The rise of the emerging markets – with China now the second largest drug market, and with China and other emerging markets growing 2 – 3 times faster than the US, large drug companies are finding it necessary to have a meaningful presence in countries that before were on the back burner.
- Focus on biologics. Biotech drugs are not subject to the same risks of generic drugs as regular small molecule drugs, so their commercial life tends to be longer. Drug companies are looking to monoclonal antibodies not just because of their advanced science, but because they can get paid for the innovation.
- Buying a salesforce – sometimes companies that had historically partnered away their drugs to different territories, are looking to capture more of the value chain – or own more of the distribution. If a company has a hot new product soon to be approved in the US, for example, buying a company with a salesforce is one way to avoid having to out-license. This is among the least attractive reasons to acquire a company in my opinion, as it is often done because a purchase hits the balance sheet, while actually hiring the salespeople and bringing them on hurts reported earnings in the short term on the income statement. Companies often wrongly overpay just to avoid an income statement impact.


While investors are focused on acquisitions, partnering is a far greater trend in pharma than the one-off acquisitions, and this is a trend that is accelerating. Several drug companies spending more than 20% of their budget on partnered product R&D. Just last week, Merck announced a $1 billion deal to in-license a cancer drug from EndoCyte, with $180 million of the deal paid up front. These deals are far more common, but get little attention from investors.


The scope of the partnerships is wide and the sheer number of partnerships at drug companies is staggering. Merck, for example, has listed on it website more than 75 partnerships with drug companies and academic institutions – and these are only the publicly announced deals, with scores of others are yet unannounced. Lilly has over 100 active partnerships, according to the company. Glaxo has a whole unit, the Academic Discovery Performance Unit, whose whole focus is to partner with academic researchers to bring their discoveries to market. Based on publicly available data including company websites, it seem like each large pharma company is now managing over 100 R&D and commercial partnerships.


I have seen many investors chase overvalued companies on the prospect that another company just has to buy them only to see the stock price collapse. One good example of this (and there are many) is Cypress Biosciences (CYPB) which at $17 had a new drug approval, a partnership with drug company to market the drug and a steady stream of analysts pushing the idea that someone would buy them. When that didn’t happen, the stock eventually dropped to $2.50 before later being acquired for $6.00 by a hedge fund.


So will we see more consolidation within the pharmaceutical sector? Yes. It is inevitable. But who is next? Investing by trying to pick which drug company will be next to be acquired is not investing, but speculation and foolhardy in my opinion. Attractiveness as a takeout candidate is only one part of what makes a good company – the key for healthcare investors is to look for innovative pipelines and potential for commercial success at an attractive valuation, then takeout or not, one has increased the likelihood of a winning investment.



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Have BMS and Gilead found the killer app for hep. C

Scientists are getting closer to finding the killer app in treating hepatitis C, but it may be too soon to pick a winner.


Bristol-Myers Squibb and Gilead said this morning that an all-oral therapy joining two drugs the companies are each developing suppressed the virus in more than 95% of patients across a broad spectrum of genotypes.


The drug combo of daclatasvir from BMS and Gilead's GS-7977 reached a 100% sustained virologic response (SVR), or cure rate, at week four in one common subgroup, genotype 1 patients who have not been previously treated with interferon—an injectable associated with flu-like side effects.

The 100% cure rate held even when ribavirin, another traditional mainstay of treatment, was left out of the mix, bettering a roughly 90% SVR rate seen for an Abbott triple therapy in a trial a few weeks ago.


“It obviously doesn't get any better than this,” cheered ISI analyst Mark Schoenebaum in a quick note to investors this morning after BMS and Gilead announced their results. Data from the Phase II combo trial are “best case,” he added, in that only 2% of respondents to an informal survey he fielded earlier this month said they expected the 100% SVR rate.


The findings accelerated momentum in an already fast-moving category, in which drugmakers are swooping up assets to pad HCV pipelines and experimenting with a variety of regimens and combinations. Last November Gilead agreed to pay almost $11 billion for biotech firm Pharmasset's GS-7977, and BMS in January said it was buying Inhibitex for about $2.5 billion and getting access to that firm's potential HCV drug, INX-189.


The direct-acting antivirals (DAAs) from BMS, Gilead and Abbott are showing the best efficacy and tolerability to date.


Not that there haven't been speed bumps along the way. In February, Gilead's ‘7977 had come under assault when data showed that six out of six subjects treated with the pipeline drug, who were prior “null” responders (i.e., had a negligible response) to an interferon-containing regimen, experienced viral relapse within four weeks of completing an all-oral regimen of '7977 and ribavirin. Gilead's stock tumbled after the news.


Analysts had predicted that patients who are naïve to therapy would be easier to treat with a non-interferon regimen than null responders, and the Gilead/BMS data furthered this notion. Several analysts now believe daclatasvir, an NS5a inhibitor, and ‘7977, a nucleotide analog (or “Nuc” as the class is called), may form the best treatment “backbone” option across all genotypes.


“It appears that the ‘killer app' in HCV is probably an NS5A plus a nuc without ribavirin,” Schoenebaum declared.


The newer protease inhibitors—Vertex's Incivek and Merck's Victrelis, both launched in 2011—look like they will be vulnerable to the all-oral regimens, but not for a few years.


“These results obviously reinforce the expectation that DAA-only (IFN and RBV-sparing) regimens will likely quickly supplant current HCV treatments when they become available in the 2015/2016 timeframe,” wrote Deutsche Bank's Barbara Ryan in a note today.


In a Thursday dispatch to investors, Credit Suisse's Catherine Arnold said the data also “takes a little shine off” Abbott's HCV program, “but we still view it as a competitive presence.” The triple therapy combines the firm's protease inhibitor ABT-450 + non-nucleoside polymerase inhibitor ABT-333 + ribavirin.

While the Gilead/BMS combination sets the bar high for competitors, scientists are still debating where the best treatment synergy lies, and firms are awaiting more data before finalizing their commercial plans.


The Gilead/BMS combo “represents the most compelling all-oral, interferon-free data in the highly visible [HCV] marketplace,” noted Arnold. “Despite this strong data,” she added, “a partnership is unlikely in the near term as both companies wait for additional data sets related to their HCV assets to fully evaluate their options.”


Ryan cautioned that other factors—side effects, dosing convenience and, of course, cost—“will be important considerations in determining market share. In our opinion, it is premature to conclude who the ultimate winners and losers will be in the ‘new' HCV market on the basis of the data available to date.” Ryan doesn't think any one or two players will dominate the field. Null and non-responders could also be a factor in determining long-term HCV dominance.


Results from a cocktail joining Gilead's ‘7977 and ribavirin also surprised, hitting an SVR rate of 88%—far better than the 50% the Street had expected, according to Schoenebaum. Abbott's all-oral triple combo may be another good backbone option, while daclatasvir so far looks like a solid add-on option—one that has pan-genotype efficacy and excellent tolerability—and BMS is exploring multiple pairing options (including with its own Nuc, INX-189).

Other Nucs in development include Vertex's ALS-2200 and ALS-2158, and biotech firm Idenix's IDX184, which can be combined with its NS5A inhibitor, IDX719.

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Roche abandons Illumina bid takeover

Roche abandons Illumina bid takeover | The Pharmaceutical Industry |
Roche has conceded defeat in its bid to buy Illumina, after shareholders of the diagnostics firm blocked the takeover - at least for the meantime.

Shareholders voted to re-elect the incumbent directors of Illumina at its annual meeting, thereby snubbing Roche’s candidates for the posts, who would have opened the door to the takeover.


The decision is a major blow to Roche, which had repeatedly raised its offerings culminating in a $6.7 billion for the firm. The Swiss pharma company said it would consider raising its bid further if it were allowed to conduct due diligence and value Illumina’s business with more information, but this offer was also rebuffed.


Roche’s offer will expire at the close of business tomorrow and it looks unlikely to pique the interest of shareholders.


Severin Schwan, chief executive of Roche said: “We continue to hold Illumina and its management in very high regard but, with access only to public information about Illumina’s business and prospects, we do not believe that a price above Roche’s offer for Illumina of $51.00 per share would be in the interest of Roche’s shareholders.”


Schwan said Roche wanted 'constructive dialogue' with Illumina, but in the absence of such discussions, would not raise its bid any further. He concluded that Roche would continue to look at other possible acquisitions and 'options and opportunities' to expand its diagnostics business.


It is rare for such bids to be successfully blocked by the takeover targets and their shareholders. Roche had looked set to add Illumina to its roster of major acquisitions, including its takeover of another diagnostics firm, Ventana in 2007 for $3.4 billion and the buy-out of Genentech in 2009 for $46.8 billion.


Analysts say Roche will keep an eye on Illumina's performance - if it fails to match shareholder expectations, it could pounce again within the next year or two.


Illumina's chief executive hailed the decision as a victory, and will now have to deliver on the company's growth prospects.


Jay Flatley, president and chief executive of Illumina said: “We thank Illumina stockholders for their support and appreciate their confidence in our ability to execute our strategic plan and create compelling value. Our Board will continue to protect and hold paramount the interests of our stockholders as we continue to cultivate Illumina's leadership position in a rapidly innovating and growing industry,” he said.


Flatley added: “We are pleased that Roche has decided not to extend its inadequate offer to acquire Illumina and that we can now return our full focus to growing our business, making the most of the expanding opportunities in our space, and delivering superior results for our customers and stockholders.”

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Is Health Care in America As Market-Oriented As in France?

Is Health Care in America As Market-Oriented As in France? | The Pharmaceutical Industry |
There’s something that I haven’t seen discussed and yet seems striking to me: how similar the French and U.S. healthcare systems are. On its face, this seems like a preposterous notion: whenever the two are mentioned together, it’s to say that they’re polar opposites. France has been called the best healthcare system in the world by the World Health Organization. And if there’s something everyone in the U.S. seems to agree on, it’s that U.S. healthcare, well, horribly sucks, although they strongly disagree about why and what to do about it. And yet, to me, the similarities are glaring.


First of all, the French healthcare system is built on a large, highly-regulated private sector. Unlike Britain’s NHS, the government doesn’t own everything. Some hospitals are public, but many are private and for-profit. Indeed, there are publicly-traded hospital chains, just like in the U.S. Most doctors and nurses work in private practice. Even most of the ambulances are private. The sector is highly regulated and subsidized to be sure, but that’s also true in the U.S.


Secondly, there’s a crucial feature at the heart of the French healthcare system that is also at the heart of the U.S. healthcare system–and that all U.S. wonks hate: employer-provided insurance.


France achieved universal coverage in the late 1990s


France has had a U.S.-style employer-based healthcare system since the end of World War II, but the Couverture Maladie Universelle (literally: universal healthcare coverage), the government program that covers people who can’t get insurance, was only enacted in the late 90s (ah, global macro booms). Given how tantalizingly close Bill Clinton was to passing universal healthcare in the early 90s, it’s easy to imagine a parallel universe where Americans had universal healthcare before the French, again something you wouldn’t guess from reading stories on French healthcare.


The way healthcare works in France, basically, as I understand it from living here (and I may be wrong about this because it gives me migraines), is that you get insurance through your employer which they deduct from their taxes. You can also buy it on the market (and don’t deduct it from your taxes).

If you can’t get insurance, the government will pay for your treatment in a system similar to (I think?) Medicaid, i.e., you go to the doctor or the hospital you want, and the government will pay for it in a stingy way that incentivizes you to not want to rely on the government too much but still ensures no one is left to die on the streets. French doctors frequently grumble about CMU reimbursement rates as American ones do Medicaid/Medicare rates. Conversely, if you have a job with coverage, you can buy additional coverage and/or services out of pocket.


Employer-based insurance is the heart of the U.S. and French systems


Some jobs have better healthcare than others: my wife works for a big management consulting firm and has very generous healthcare coverage; as her husband, I get coverage through her policy, since as a freelancer my options are mediocre.


When we had our baby, my wife and I sprung for a private clinic. We chose this clinic because it is a religious institution that provided religious services on top of medical ones, which was important to us, and only later discovered that it’s one of the best clinics in Paris and therefore the world. And indeed we were stunned by the quality and level of service and the awesomeness of everything.


The way we paid for it, or rather, didn’t, is that the government paid a sizable minority of the bill, and my wife’s insurer paid the rest. We sprung for extras like a private room. If we had no or stingier insurance, we would have been free to pay the difference out of pocket. Or we could have gone with a less pricy private option, or with the public hospital which would have been free beyond a token deduction but much less nice...

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Boehringer Ingelheim prepares to launch oncology franchise

Boehringer Ingelheim has long been associated with treatments for stroke prevention, COPD and HIV/AIDS, but not cancer. That's about to change, if a cornucopia of 13 abstracts presented at the European Society for Medical Oncology (ESMO) is any evidence.


Closest to market is afatinib, an oral tyrosine kinase receptor inhibitor, which is currently in Phase III clinical development in advanced non-small cell lung cancer (NSCLC), head and neck cancer, and breast cancer. Next is likely to be nintedanib, an oral triple angiokinase inhibitor that is also in Phase III clinical development in NSCLC and ovarian cancers. A third candidate for which early stage trial data were presented is volasertib, an inhibitor of polo-like kinase.


Kevin Lokay, who heads BI's oncology franchise (and whom MM&M interviewed last month) had this to say about the company's preparation to build its oncology footprint:


“Our commitment to enter the oncology space over 20 years ago has resulted in a robust oncology pipeline with investigational agents in all stages of clinical and pre-clinical development, including several in Phase III trials, that address a variety of targets across a range of tumor types. These are targeted therapies that can lead to a more personalized approach to lung cancer treatment, with the goal of improved patient outcomes. The rigor and breadth of the data we presented at the ESMO 2012 Congress, which include patient-reported health-related outcomes from the pivotal Phase III trial, LUX-Lung 3, demonstrate our commitment to oncology patients and their families.”


“Commitment is crucial when developing personalized cancer therapies,” Lokay continued. “Boehringer Ingelheim is focused on bringing a broad range of potential therapies to patients through its diverse pipeline.”


The financial community also is starting to take note of BI's moves. Dr. Marc Engelsgjerd, senior analyst, inThought Research sees the data as an encouraging milestone in BI's gear-up to participate in this market: “Boehringer has a very extensive lung cancer program for Afatnib which is great to see because they are asking a lot of different questions, looking at different combinations and patient subsets. That's really the right way to develop a drug; you have to make sure you don't leave any stone unturned.”

Among the multiple abstracts presented during ESMO, the one the company spotlighted is the afatinib LUX-Lung 3 results, a pivotal Phase III trial that demonstrated a significant progression-free survival (PFS) advantage vs. standard chemo and impressive quality of life improvement among first-line treatment of advanced NSCLC patients with an EGFR mutation.


According to a company representative, “Results of the LUX-Lung 3 trial -- the largest trial of patients with EGFR mutation-positive advanced NSCLC -- showed a median improvement in PFS of 11.1 months (the primary endpoint) with afatinib within the general study population, versus 6.9 months for those patients treated with pemetrexed/cisplatin, which is considered a standard chemotherapy in advanced and metastatic lung cancer.”


Dr. Engelsgjerd points out that the LUX-Long 3 trial has resuscitated hopes for the development of this candidate: “In lung cancer, Afatnib had a failed trial a couple of years ago, but the most recent positive study -- the LUX long 3 study -- has really renewed interest and made people focus again on the potential of this compound.”

Based upon these datasets, BI is working on marketing applications for afatinib in a number of countries in the US and EU. The company was unable to comment on whether it would seek accelerated approval for the product.


Dr. Engelsgjerd added: “The LUX Lung-3 data was impressive in terms of the PFS benefits. We'll have to wait until next year to see if there is an overall survival benefit. Part of me is wondering if regulatory bodies will want to hold out for an overall survival benefit. I assume Boehringer will want to push ahead for approval and there is precedent for that.”


Lokay is keen to point out that the strategy behind the compound is a personalized one. “The strategy behind afatinib is to focus on developing a personalized therapy for patients who can benefit from the treatment.”


In keeping with this approach, the LUX Lung 3 trial incorporated a diagnostic test to confirm an EGFR mutation status and mutation. BI has partnered with Qiagen to develop a real-time polymerase chain reaction assay (real-time PCR) companion diagnostic. Of note, between 10-15% of Caucasians and approximately 40 percent of Asians with NSCLC have EGFR mutations – 90 percent of which are the result of two mutations (Del19 or L858R). In Lokay's words, “We've taken the personalized medicine approach further … to develop a companion diagnostic to determine a patient's biomarker status to better matching their unique genetic profile with an appropriate targeted therapy, like afatinib.”


The question now is how these assets will fare in comparison to existing treatments for NSCLC, which include Avastin (bevacizumab), marketed by industry heavyweight Genentech, Tarceva (erlotinib), which is co-marketed by Genentech and Astellas Oncology, and AstraZeneca's Iressa (gefitinib).


“There are other lung cancer studies with Afatnib where they are pitting it against Tarceva and Iressa. Those are gutsier trials but those are the exact kind of trials we need to see more of because it's one thing to show that your drug works against placebo but the relevant question is, is it better that what is currently being used,” asks Dr. Engelsgjerd. “Many companies shy away from those types of studies but lung cancer is a crowded space and Boehringer really has to swing for the fences.”


From a promotional standpoint, the company already has launched an unbranded disease awareness program called Let's Test, which is designed to educate HCPs and the oncology community about the important role of biomarker testing.


Lokay notes, “Five or six years ago, there were a relatively low number of patients who were tested for biomarkers in cancer. With advances in personalized medicine and the discovery of unique biomarkers -- like EGFR, ALK and HER2 -- this number has increased, but not all lung cancer patients are tested. It is our hope that biomarker testing will become an immediate first step that a doctor takes when diagnosing a patient with lung cancer. We want it to be automatic, or reflexive, which means that the oncologist will be able to get the right treatment to the right patient at the right time. In fact, the aim of our ‘Let's Test' program is to encourage the adoption of biomarker testing as standard practice and thereby increase the frequency of testing. We're encouraging a multidisciplinary approach by working with physicians involved in the diagnosis process, such as pulmonologists, pathologists and oncologists, to demonstrate the importance of biomarker testing with the goal of improving patient outcomes.”


Another effort the company has made to carve a footprint out in the category is in building an online community called My Cancer Circle -- a free, private, customizable tool for caregivers of people facing cancer. Company market research found that while the information needs of patients themselves was largely satisfied, there was an unmet need for information among caregivers. The company collaborated with CancerCare, a patient advocacy organization, to build the tool, which helps caregivers organize and coordinate support from their circle of family and friends. According to Lokay, “We are excited that to date, over 100 private communities, or ‘circles,' have been created.”


At the end of the day, the company recognizes that the health care system is no longer simply rewarding innovation, but is looking for value. In response to how BI plans to position its franchise for optimal success in light of the Affordable Care Act, Lokay points out, “Boehringer Ingelheim is committed to providing patients who currently have limited treatment options with therapies that have a demonstrated value. As a company committed to the health of patients and their families, we are not aiming to develop treatments that work 10% of the time, in 90% of the population – but rather products that work 90% of the time, in 10% of the population.”

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New product launches - maximise your chance of success | InPharm

New product launches - maximise your chance of success | InPharm | The Pharmaceutical Industry |
You don’t have to look very far to see that the pharma industry business model is under increased pressure, and many of these growing pressures have chipped away at the odds of making a success of bringing a new product to market.


The pressures are many: pricing and constrained healthcare budgets, an increasing need to demonstrate cost effectiveness; increasing generic competition and restrictive market access, and diminishing access to physicians.


Finally in some markets, there is a declining ability of patients to pay for their treatment.

A fast start across multiple markets is now a must, given that performance in the first year tends to predict peak sales, and after that you are rushing headlong towards the end of an ever-contracting competitive product life cycle. The consequence of these internal and external pressures is that pharma companies have to get product launches right first time.


And whilst the industry has plenty of experience in successful launches, historical approaches to launch can only help so much, given the ever-changing environment. In the same vein, relying on launch ‘processes’ is risky, as they are only as good as the information you put into them.


The key to success is to ensure you have joined-up, good quality thinking preceding co-ordinated and timely action. This will ensure that the market is properly primed to receive the new product; to create a powerful brand, and to make sure that that the organisation itself is in the right shape and prepared to act quickly to seize the launch opportunity, during the brief time envelope in which it exists.


Priming the market


To get to the point where the various external stakeholders - payers, clinicians and patients - see the benefit your brand brings, and your new product is actually going to be prescribed, first you have to ensure they understand the problem that your new product addresses. Vitally, they must believe the evidence you put forward: that the problem exists, that it needs to be taken seriously, and that your product actually provides something different and better in solving that problem.

The starting point for this process is setting up the problem your brand will solve, whether that is a clinical, health economic or purely financial problem. You need to establish clearly where your brand will fit into current and, perhaps more importantly, future treatment pathways. To do this in a way which shows added value, you need to identify any shortcomings in the current treatment pathways, and then provide evidence about how your brand will overcome these shortcomings. Alternatively, you need to show how to re-engineer the treatment pathway in a way that meets your external stakeholders’ needs and drivers.


Of course, this will be as much about the cost benefit as the clinical. Your evidence will need to show the economic outcomes as well as the health outcomes. So when we talk about evidence, it’s not just the clinical trial evidence, but the bigger picture. And that evidence must go beyond the ‘givens’ (efficacy, safety, tolerability) and show how your new brand will actually fit in practice, and what the consequences of its use will be.


That is because regulatory acceptance of any new drug is only a ‘ticket to play’ - it does not mean that that drug will necessarily be used (see the payer reaction to tofacitinib in the US) - although increasingly it appears that to get approval you need to demonstrate ‘value’. Real usage is an area where most unsuccessful launches fall down: there is too often an assumption that the evidence needed to gain approval is sufficient. A successful launch is not about approval, it’s about access and usage.


Generally, when a new product does not get used, it is because local healthcare economies cannot see the value in sacrificing something else to fund the new treatment (and in reality, that is what it boils down to - for your new product to be used, the funding must be found by not using something else). So driving usage, and priming the market, has to be done at a local level.

That means gaining insight into each market or healthcare economy archetype to understand what the drivers are at a local level; you cannot expect your Global Value Dossier to provide everything needed.


It will contain the key elements of the overarching value proposition, but these will need to be translated to the local healthcare economy in which you are operating.


There are various factors that differ between individual markets: how information flows, the depth and type of information you need to provide, and who you have to talk to, and when.


For example, in the UK market, you need to be providing information to decision-makers 12 months before the financial year in which you are planning to launch, otherwise there is little chance that they will find budget for your product, no matter how much extra clinical and/or health economic benefit it brings.

Couple that with an inherently slow uptake of new medicines in the UK, and you are looking at below par performance from the off!


Building a powerful brand


If priming the market is about helping stakeholders understand where there might be a gap in current treatment pathways and demonstrating the value your brand brings, then building a powerful brand is all about creating and communicating a Brand Value Proposition (BVP) that encompasses that value for all key stakeholders - the BVP has to sit right at the centre of any successful launch.


Each stakeholder will look at this proposition from a different viewpoint. Healthcare professionals will be most interested in the clinical outcomes, whereas payers will be looking to add value from a health economic and population point of view. Where they are involved in the decision-making process, patients will bring a third viewpoint, with quality of life and social and individual economic factors coming into play. So the thinking behind the BVP can be complex, but the overall proposition needs to be as simple as you can make it.

It needs to encompass how the brand is both different and better than what is currently available. This can be clinical, financial, or, more likely, a combination of the two. If the new product does not have a big clinical differential, then it is going to have to be cheaper to demonstrate greater ‘value’ - unless we can find situations where that differential does offer value, perhaps in particular patient populations.

Even if the brand does have a clear clinical differential, you still have to show a strong value proposition; there is only so much that payers in tight economic situations will be prepared to pay for a clinical benefit, so you need to maximise the perception of the brand’s value in every way. Most launches in pharma will be on a global scale, and that presents its own problems in building a powerful brand. Any BVP has to have enough in it to motivate customer groups to change their (prescribing) behaviour.

The challenge for the global marketer is to understand how each market works so that you can help ensure launch success on a local basis at country level. For the local marketer the challenge is the obverse - to take the global BVP and make it meaningful within the local healthcare system while adhering to the global proposition.
Irrespective of the global local challenge, a strong, integrated Brand Value Proposition will join up external and internal stakeholder thinking and activity to gain not just approval, but reimbursement and, most importantly, usage.


Preparing the organisation


The third requirement for a launch to be successful is that the organisation behind the product must have the insight, processes and tools to deliver market access and brand usage immediately at launch.


A key factor is to prepare the organisation for launch early enough, so that the people working within it can work as efficiently as possible.

That means clarifying accountability, governance and decision-making rights at an early stage, because the whole process can otherwise grind to a halt through inertia or become incredibly inefficient, as different entities duplicate effort or start doing things before key strategic decisions have been reached.


Don’t underestimate how much of a challenge this is: getting a diverse international organisation to the same place, mentally and physically, at the same time is a significant task. Clear strategic leadership is vital, which includes providing opportunities to provide local input, discuss implications of findings and gain consensus.

It also means being clear about how and when decisions are actually made. Most people in the industry will know that if the Global team ‘talks at’ local teams in individual countries, this is seldom the best way to gain buy-in, understanding and motivation. At the same time, eventually someone has to take responsibility for pulling together all the varying views and make a decision.

Giving people the opportunity to input their views doesn’t mean the strategic leader can abrogate their responsibility to lead and take decisions; conversely, neither does a decisive style negate the need for flexibility.


Experience shows that senior management needs to have visibility on process and progress to avoid them getting too ‘involved’. Strong leadership can often mean allowing people with the right skills within your organisation to get on and do their job, avoiding temptation to meddle in the detail.


Good information systems should ensure that senior management is kept informed and can understand when their intervention is appropriate or necessary. In fact, information is key, because without the right information, it is impossible to make timely and accurate organisational decisions, such as changing resource levels.


Too often this information is delayed, inaccurate or simply not there, which both has a negative impact on effective decision-making, and will inevitably mean more management time spent involved in processes which would otherwise not require it.

When it comes to building the right organisation for a successful launch, one size can never fit all. The amount of allowable local adaptation will depend on each organisation’s view and culture, but a common theme of the success launch organisation is an element of flexibility on local execution. How much flexibility will always vary, and it is vital that everyone is clear on what will be centrally determined, and what can be adapted at a local level.


Maximising your chances


Creating that vital successful launch is not a simple process; in fact, there are increasing numbers of strands to manage. That means it is not a task which can be undertaken late on in the process. You need to ask the hard questions early on, to give yourself time to have everything lined up to maximise your chances of success.

In practice, that means preparing your organisation and your processes in advance, so that the launch strategy is sufficiently defined to be influencing stakeholders as much as two years in advance - and that means the strategy itself will need to be in an advanced state as much as three years before the actual launch.


Considering the volume of work and number of work streams involved, it is too easy to get caught up in process and forget what is required to deliver fast access and usage. Process can only take you so far: quality of thinking and quality of output is becoming increasingly critical as the hurdles new brands face get tougher and tougher. That is where the value gets added.

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Headliner WedMD chief adds pharma insights

Headliner WedMD chief adds pharma insights | The Pharmaceutical Industry |
WebMD's new chief, Cavan Redmond, brings to the company a keen understanding of the portal's biggest advertisers as well as its users, patients and professionals alike, having spent more than two decades in pharmaceuticals—most of that time in marketing and consumer healthcare. That expertise could come in handy as he seeks to burnish a tarnished, but still weighty, healthcare media brand


Redmond's predecessor at WebMD, Wayne Gattinella, left in February after a decade at its helm amid slumping ad revenues, pesky activist investors and an aborted effort to sell the firm to private equity.


Redmond's roots run deep in tech and pharma. He got started in the drug industry in the early days of computer data analytics. “We were using 8086 computers, the minis,” he says, referring to an early PC—“and we developed a little program to track Teamsters' wages and benefits as part of an agreement with the Labor Department. That led me quite serendipitously into healthcare, because at the same time, companies were looking to do that for patients, especially in oncology, and I could analyze their data easily using the methodology we'd developed.”



He joined the marketing research department at Sandoz, pre-Novartis, working on cytokine R&D before moving to Basel to serve as therapeutic area head for oncology. “You couldn't get a better hands-on introduction to R&D, commercial, marketing research and drug development,” he says. He jumped to R&D for a time before moving to American Home Products, née Wyeth, where he worked in global marketing and led the biopharma business unit before taking on consumer healthcare. After Pfizer acquired Wyeth, he was tasked with heading up the diversified (and soon-to-be divested) businesses division.


Redmond didn't have much interaction with WebMD in his biopharma days but “I did understand the brand and what they were capable of,” he says. “Because if you look at it, there's no better or more trusted consumer brand than WebMD. If you're sitting in a doctor's office and you hear the words ‘cardiovascular disease' and your husband's name in the same sentence, when you go home, you're not just searching the Web for general information, you're searching with a purpose. You're trying to find medical information that's relevant to you and that's consistent in its high quality, and that's why WebMD has such a high and loyal user base.”

WebMD is a textbook example of a trusted brand, and trust is golden in the health info game. But there are a lot of competitors looking to horn in on WebMD's business. WebMD is countering by stepping up its mobile game, with the muscular Medscape Mobile and apps for pain and new parents, and investment in news coverage and other content.


“We're controlling our content,” says Redmond, “and we believe that's what's going to differentiate us from our competitors and differentiate our advertisers who are looking to expand their audience.”


A “middle-distance runner” of half-marathons, Redmond takes the long view. He sees Medscape's architecture, with its 30 verticals, as advantageous amid the shift to specialty (on the consumer side, WebMD boasts 165 “Health Centers,” including condition-specific subsites for many maladies).


The firm is expanding into Europe with a global headquarters and a market-specific German version of Medscape ( and are available in English, Spanish, French and German) and is looking at opportunities in Latin America and Asia.

And that sale? “It's not where we're going right now,” he says. “I came to WebMD because I believed that we could build a long-term, sustainable brand and provide value to shareholders. How we execute on that is paramount, but the assets are there to do that.”

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FDA Approves First HIV-Prevention Drug

FDA Approves First HIV-Prevention Drug | The Pharmaceutical Industry |

In a milestone announcement, today the FDA approved the use of Truvada, the first drug to be used for HIV prevention in the 30-plus year battle against the virus. To be used as part of safe sex practices and continued testing, the drug, which was first approved in 2004, has already shown promise in preventing infection, with some figures placing protection rates as high as 90 percent.

Still, some concerns have been raised about the drug, not least among them the potential for mutation of the virus--there are theories that the preventative drug will encourage the virus to become stronger. To help curb that possibility, the FDA says "Truvada’s manufacturer, Gilead Sciences, Inc., is required to collect viral isolates from individuals who acquire HIV while taking Truvada and to evaluate these isolates for the presence of resistance." In other words, Truvada will, you know, watch the situation closely.

The drug may also come with a hefty pricetag of $13,900 for a year's worth of pills, but right now, it's the only drug of its kind, and so that might be expected. Most FDA regulations focus on general safe sex practices--condoms, that kind of thing--to prevent infection, but this is the first medicine approved to stop contraction of the virus. We'll bring you more on this as it develops--this is a huge deal for U.S. treatment of HIV.

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JJ gets green light for device company deal

Johnson & Johnson is set to close its $19.7 billion purchase of Swiss device maker Synthes, having won the blessing of antitrust regulators in both the US and Europe.


The healthcare giant got the FTC's go-ahead on Monday, almost two months after the same deal cleared European regulators. The approval from both sides of the Atlantic came with a caveat -- J&J must divest its DePuy Orthopedics Trauma business. The company's June press release plays down the significance of the divestiture (Biomet is getting the business for $280 million), but the FTC's demands make it clear that the original deal would have created a near-monopoly in that market, giving J&J 70% of the US market for treating wrist fractures. The divestiture, including J&J's treatment for distal wrist fractures, is expected to close during the second quarter of 2012.


J&J said the acquisition will boost earnings per share by 3-5 cents this year and 10-15 cents per share by 2013. The company initially expected it to lower EPS by about 22 cents, based on 2010 sales estimates.


The company has also kicked off an accelerated share repurchasing program with Goldman Sachs and JP Morgan Chase to pay for the deal. This move will allow an Ireland-based subsidiary of Janssen to purchase the shares from the two banks using money that is not based in the US, offering the company, and therefore shareholders, a tax benefit. “As a result of the improved financing arrangement of the Synthes merger, our Non-GAAP EPS estimates have increased 3% in 2012E and by 4-5% during 2013E-2017E,” Jefferies analyst Jeffrey Holford wrote in a research note Wednesday.

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BMS may have another Avastin in its oncology pipeline, analyst says

A Bristol-Myers Squibb compound hailed by analysts for its commercial prospects, and a Johnson & Johnson drug that may work in earlier lines of therapy are among the cancer agents drawing attention in the run-up to the year's most important oncology meeting.

The BMS cancer agent, which goes by the codename BMS-936558, showed potency and durability in treating advanced tumors of the lung, skin and kidneys, according to abstracts of the full Phase I/II studies released ahead of the American Society of Clinical Oncology (ASCO) meeting. When compared to marketed therapies Tarceva, Yervoy and Nexavar—therapies already marketed for those cancers—response rates were superior regardless of the indication.


A monoclonal antibody, BMS-936558 belongs to a class called anti-PD-1 that is designed to harness the body's immune system to fight cancer. Based on data revealed in the ASCO abstracts, analysts are enthusiastic.


“BMY's anti-PD-1 [is] looking like the better, stronger Yervoy,” wrote Barclay's analyst Tony Butler in an investor note. In treated metastatic melanoma patients, its response rate of 20-41% appears higher than the 11% response rate seen with BMS's own Yervoy in early studies, Butler pointed out.


Lung cancer could be the most lucrative of the three tumor types, analysts say, because there is a bigger pool of patients, and because evidence suggests the drug may be used earlier in treatment, introducing the possibility of longer treatment duration.

The response rate seen in refractory non-small cell lung cancer patients, 19-28%, easily bested the 8-11% rate seen with existing NSCLC therapies—Roche's Tarceva, Sanofi's Taxotere and Sanofi's Alimta. The agent produced a response rate of about 31% in patients with metastatic renal cancer, compared to 11% and 2% seen in early studies of Bayer's Nexavar and Novartis' Afinitor, respectively.


“BMY is advancing all three indications into Phase III, and we estimate a peak potential of up to $2B should all three indications deliver,” wrote Butler.

Biomarker data could further enhance the drug's appeal. “We believe anti-PD1 COULD be the most exciting clinical and commercial opportunity in oncology since Avastin,” wrote Leerink Swann analyst Howard Liang in an investor note. Among his reasons are the potential for enhanced patient selection via biomarkers and use of anti-PD-1 as a platform for immuno-oncology, meaning it could be married to targeted therapies like Tarceva or Pfizer's Xalkori to further enhance response rates.

While it's too early to determine whether either of those possibilities will pan out, Liang predicted anti-PD-1 could reach $2 billion in sales by 2020, implying a 50% chance of success on peak potential sales of $4 billion. That's somewhat less than the $6.5 billion in global revenue earned by Roche's top-selling Avastin in 2010, the year before the FDA withdrew its approval in metastatic beast cancer (it remains on the market for advanced colon, lung, kidney and brain cancers).


Another blockbuster would help BMS replace revenue losses from older brands going off patent. The drugmaker is regarded as having the most productive pipeline these days. Phase II hepatitis C treatment daclatasvir looks promising, and the company is waiting for the FDA to approve anticoagulant Eliquis (apixaban), which BMS and Pfizer plan to launch as a replacement for warfarin. But BMS lost a mega blockbuster, antiplatelet brand Plavix, to the patent cliff earlier this month, while blood pressure pull Avapro lost exclusivity in March. First-quarter revenues rose 5% vs. the first quarter of 2011.


BMS said it will release more data from a 290-patient study on ‘558, as well as for a related drug, BMS-936559, in advanced NSCLC, metastatic melanoma and renal cell cancer in five oral presentations—four on Saturday, June 2, and one on Monday, June 4—and in an ASCO press briefing tomorrow.


Data set for release at ASCO could also impact J&J, whose Zytiga prostate cancer med has already posed a threat to Dendreon's Provenge. Results of a study testing Zytiga in patients prior to their use of chemo “support further evaluation” in the neoadjuvant/adjuvant setting, according to the ASCO abstract. Additional data from the study (COU-AA-302) are scheduled to be presented Saturday.


“To an extent, consensus is anticipating positive Zytiga ‘302' results, though there seems to be a good deal of uncertainty as to what specifically should be expected,” wrote Credit Suisse analyst Lee Kalowski in an investor note.

On overall survival, Kalowski expects the data to show at least 13 months of pre-chemo duration, possibly closer to 16. That would have implications for biotech firm Medivation, as well, which is testing its own investigational agent, MDV3100, in patients with prostate cancer prior to chemo. Called PREVAIL, the trial is expected to yield data in 2013. If the ‘302 and PREVAIL studies show the drugs have uses in earlier stages of the disease, both could squeeze Provenge's outlook in prostate cancer, noted Butler.


In addition, Novartis is getting set to release data on two marketed drugs from its oncology portfolio: Afinitor in breast cancer and Tasigna, both in patients with chronic Philadelphia chromosome-positive chronic myeloid leukemia who were switched from Novartis' older drug Gleevec, and in the newly diagnosed.


Among biotech firms expecting big reveals are Ariad Pharmaceuticals, preparing to release more follow-up data on pipeline candidate ponatinib in leukemia, and Array Pharmaceuticals, whose Phase II drug selumetinib is moving into Phase III on the back of compelling results seen in NSCLC. Selumetinib is being co-developed with AstraZeneca.

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World’s first stem cell drug approved in Canada | InPharm

World’s first stem cell drug approved in Canada | InPharm | The Pharmaceutical Industry |
Canada has approved the world’s first stem cell drug, marking an historic day for the burgeoning therapy.


Osiris' Prochymal is now approved in Canada in children with graft versus host disease (GvHD), a potentially deadly complication from a bone marrow transplant, when newly implanted cells attack the patient’s body.


Prochymal is made up of bone marrow stem cells derived from an adult donor and is designed to control inflammation, promote tissue regeneration and prevent scar formation – GvHD affects around 3,500 to 4,000 worldwide.


“Today, Osiris turns the promise of stem cell research into reality, delivering on decades of medical and scientific research,” said Peter Friedli, chairman and co-founder of Osiris.


“It took 20 years of hard work and perseverance and I want to personally thank everyone involved for their dedication to this important mission.”

The approval is based on recent trial results that showed statistically significant improvement in survival in patients taking Prochymal, when compared with a historical control population of children with refractory GvHD.


Andrew Daly, principal investigator in the Phase III programme for Prochymal, said: “I am very proud of the leadership role Canada has taken in advancing stem cell therapy and particularly gratified that this historic decision benefits children who would otherwise have little hope.


“As a result of Health Canada’s comprehensive review, physicians now have an off-the-shelf stem cell therapy in their arsenal to fight GvHD.

“Much like the introduction of antibiotics in the late 1920s, with stem cells we have now officially taken the first step into this new paradigm of medicine.”

It has not been an easy road for the firm - in 2009, two late-stage clinical trials failed to show the drug was more effective overall than a placebo in treating the disease.


But it did show promise in certain subgroups of patients, and the firm later re-analysed its data to confirm that its drug could increase survival in this patient population.


The Canadian regulators have told Osiris that it must carry out further testing on the drug after it reaches the market.


Osiris, which is based in Columbia, Maryland, plans to submit its drug with the FDA by the end of this year, including its newly analysed information.


Boost for stem cell research


Dozens of adult stem cell therapies are currently moving through clinical trials, and Canada’s approval of Prochymal will be a boost to many working in the field.


But the use of stem cells remains controversial, as some are derived from the cells of embryos.

However, stem cells derived from adult tissue such as fat or bone marrow – such as with Osiris’ drug - can get around these ethical concerns.


Osiris signed a pact potentially worth around $1.4 billion with Genzyme in 2008 to develop Prochymal and another stem cell drug, Chondrogen, for osteoarthritis.


But in February Genzyme, now a part of Sanofi, said it had discontinued its project with Prochymal for GvHD.

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Customer-Centric Pharma Company Wants To Know What’s Wrong With The U.S?

Customer-Centric Pharma Company Wants To Know What’s Wrong With The U.S? | The Pharmaceutical Industry |

When someone asks how you’re feeling, the typical response is somewhere along the lines of, ‘Oh, fine.’ Not convinced this was true, pharmaceutical company Help Remedies decided to dig a bit further and find out how people were really feeling.


Tracking weekly state-level sales data for eight of their over-the counter-products (ranging from anti-nausea to blister remedies), Help created the site ‘What’s Wrong, U.S.?’ that shows the most common ailment affecting a state’s population.


The site shows a color-coded, interactive map of the United States; each state’s color matches the Help Remedy with the highest sales during the previous week. When users scroll over a state, they see the breakdown of sales for all eight Help Remedy products and how product sales in that state compare to the national average. Users can click on each state to see an even narrower geographic breakdown of Help Remedies sales, watch videos from regional experts explaining why a state might be experiencing a particular ailment, and are even empowered to make suggestions themselves about why a state has an ailment and how to solve the problem. 


For example, right now South Carolina is light blue, meaning the ‘help I have a blister‘ product has been the most popular Help product. When a user hovers over the state, they can see that people in S.C. are much more likely than the national average to have blisters, and if they click on the state, they’ll notice that people in S.C. living in the ‘low country’ region are more likely to have blisters than those who live in the ‘upstate’ region.


While Help Remedies is opening up their sales data to give people knowledge about common ailments, they more importantly want to use the data to see how they can better help people. Help Co-Founder and Creative Director Nathan Frank on creating ‘What’s Wrong, U.S.?:’


The anomalies are what we are looking for because that’s where we can help. Say there’s a massive spike in headaches in Duluth. We can send a team to figure out what’s causing the problem. If there’s a gaudily colored building on Main Street that everybody complains about, we can repaint the building. People might ask, isn’t that counter productive? Don’t you want to sell more help I have a headache?’ We want to help people. If we can do that without drugs, all the better.


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Boosted by Januvia, Merck bests expectations by a penny

It was Merck's diabetes franchise that saved the quarter for the second-largest pharmaceutical company in the U.S.


Revenue from Januvia jumped 24% to $919 million, while sales of Janumet were up 29% to $392 million. That was compensation for slowing sales of Singulair, still the company's biggest seller. The asthma treatment still managed to bring in $1.34 billion, but that was just a 1% rise. And, beginning in August, the drug will face generic competition, Reuters reports.


Net income was $1.74 billion, or 56 cents a share, a penny more than the average estimates by 18 analysts, reports Bloomberg.


Like for so many of its competitors, investors keep searching its financial results for signs that it will find a way to leap the so-called patent cliff and build value once its top drug falls to generics. Merck did make the Fierce list of biggest R&D spenders in biopharma for 2012. It spent $8.4 billion on research and development last year, down slightly from 2010.


Citing a research report from Tony Butler of Barclays Capital, Bloomberg reports that Merck has 5 drugs it will focus on for the next two years. Butler points out that Merck, however, raised concerns when it halted a study on a blood thinner.


"Merck is emerging from a challenging 2011," Butler said. "The stock has been on a path of recovery since last November, but this has been more correlated with the dividend increase and flow into the pharma sector as a whole than a restoration of sentiment around Merck's innovation core."

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Pfizer sells nutrition biz to Nestle for 11.9B

Pfizer is bagging on the baby food business. The company today announced it is selling its nutrition division to food giant Nestle for $11.9 billion.


The Pfizer product line, which includes S-26 Gold, SMA and Promil, brought $2 billion into Pfizer's coffers last year, with sales up 15% from 2010. The handover will fill out Nestle's baby brand book, which includes Gerber, Nan and Lactogen, among others. Pfizer has previously stated that it wanted to sell or spin off its nutrition and animal health divisions as part of chief Ian Read's vision of whittling the company down to its core business in pharmaceuticals.


Monday's announcement follows a weekend of speculation which pitted Nestle against Danone and comes days after Pfizer cut ties with Amgen, ceding all marketing responsibility for the anti-inflammatory blockbuster Enbrel to its partner. The sale also comes soon before Pfizer's anti-inflammatory drug tofacitnib—a potential Enbrel competitor-- heads to the FDA for its May 9 review. Its blood-thinner Eliquis also comes before the FDA June 28.


CEO Read said in a statement that the company may use the $11.9 billion to buy up shares or use the money for business development. Several analysts are alluding to the need for the latter.

“Looking three years out, approximately 15% of revenues from the remaining businesses are exposed to patent expiry, not including the annualization of the patent lapse of Lipitor during 2012,” Michael Zbinovec of Fitch Ratings said in a research note. Jefferies analyst Jeffrey Holford said in a research note that Pfizer needs to boost its R&D platform, and said Abbot spin-off AbbVie or Bristol-Myers Squibb could be good acquisition targets.


Nestle said the deal could add $2 billion to its infant nutrition sales, and that the acquisition could enhance its standing in emerging markets, which account for 85% of Pfizer's nutrition business. That includes China, where Nestle has projected the market to grow 19% between 2010 and 2016.

The deal could also potentially bring on 5,400 Pfizer employees, five factories and three R&D centers. Nestle told MM&M it was too early to discuss whether the deal includes absorbing the infrastructure and employees as well as the brands. “This is a growth story, it is not about downsizing” they said. Nestle did not comment on whether the Pfizer brands will remain or be rolled into other Nestle product lines.

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Human Genome Sciences spurns GSKs 3B offer

Human Genome Sciences rebuffed GlaxoSmithKline's advances Thursday with a press release that said, in essence, “Thanks for the $2.6 billion takeover offer, but we're worth more than that.” The company said it is looking into other options and suitors. GSK sent its unsolicited bid to HGSI weeks ago, with an April 19 deadline.


The move is a bold one for cash-strapped Human Genome Sciences (HGSI), which has struggled with a slow launch of its Benlysta lupus drug. The Rockville, MD-based firm had 1,100 full-time employees as of February 1, having just announced plans to cut 150 manufacturing and R&D jobs. Its 2006 development and commercialization deal with GSK leaves the company's sales force of 150 to shoulder the drug's US sales and marketing strategy. It also lets HGSI pocket US sales revenue, with GSK taking the rest. The drug's principal patents start to expire in 2016.


ISI analyst Mark Schoenebaum expects Benlysta US sales to peak at $1.4 billion, and HGSI says the drug's lupus population hovers around 200,000 patients in the US. But lupus is potentially just one application for the drug, which HGSI is testing in heart and kidney disease (both head into Phase III testing this year).


Meanwhile income from research partnerships has plummeted to $1.3 million last year, from a three-year high of $88 million in 2010, since HGSI and Novo Nordisk walked away from HGSI's HCV candidate Zalbin. The FDA and the European regulatory agency deemed the drug risky for patients.


Saying no to GSK, however, doesn't mean the relationship between the two companies is over. They are bound by development agreements for heart drug darapladib and type 2 diabetes drug albiglutide, both of which were in Phase III testing as of December, as well as the marketing and supply agreements for Benlysta and Phase II Alzheimer's drug rilapladib.


Bernstein analyst Tim Anderson noted that experts are divided over prospects for darapladib, first of a new class of drugs that targets an enzyme that helps clog arteries.


“It is also telling that no other pharmaceutical companies that we cover, especially those that have a cardiovascular presence, seem to be pursuing this mechanism in late-stage clinical trials,” Anderson wrote.


Independence would garner $150 million in outstanding payments for HGSI for the diabetes drug, albiglutide, which is a GLP-1 agonist. An HGSI presentation says albiglutide also offers “single-digit net royalties on worldwide sales.”


Beyond Benlysta, Human Genome Science's most mature drug is raxibacumab, for inhalation anthrax, which it has sold to the US government since 2009. The company is still in the process of filling government orders and has booked a total of $117.4 million of its projected $142 million in sales to the US government so far.


On GSK's side, the offer provides several advantages, including what the company says would amount to saving $200 million in efficiencies. The acquisition would also bolster its oncology pipeline—HGSI's hepatocellular cancer drug mapatumumab is in Phase II testing—as well as its inflammation and chronic disease franchises.


The offer comes during a relatively smooth time for GSK, which has come out on the other side of a patent cliff that cut 31% of its sales over a three-year period. A GSK spokesperson told MM&M it wouldn't comment on whether the drug giant would up its offer or how high it was willing to bid. An HGSI spokesperson was equally tight-lipped and said she could not ballpark how much money was enough for HGSI to say yes to an acquisition.

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Innovating in China’s pharma market

Innovating in China’s pharma market | The Pharmaceutical Industry |
The challenges that China and the wider Asia region face in healthcare represent big opportunities for multinational pharma companies. Cases of chronic diseases, such as diabetes, are on the rise in the region, as are lung, gastric, and liver cancers. China alone is likely to be the world’s third largest pharmaceutical market by this year, with sales of more than $50 billion.


AstraZeneca, the largest multinational pharmaceutical company in China’s prescription market, has positioned itself to take advantage of this growth - it has more than 4,700 employees in the country, in manufacturing, sales, clinical research, and new-product development. In particular, AstraZeneca was an early mover there in research and development: in May 2006, it announced a $100 million R&D investment, which included the establishment of the AstraZeneca Innovation Center China, in Shanghai. The centre’s initial research mandate was ‘In China, For China’, but it now has a broader mission as a full-fledged discovery centre focusing on diseases more prevalent in Asia.


These heavy investments in China should give AstraZeneca’s innovation efforts a boost by providing closer access to China’s scientific talent pool and to potential external partners, says Steve Yang, the company’s vice president and head of R&D for Asia and emerging markets. Yang, who joined AstraZeneca in January 2011, discussed the challenges of pharmaceutical innovation in China in an interview with McKinsey’s Jeremy Teo at the Shanghai headquarters of AstraZeneca, China.


How is China’s environment for innovation in pharmaceuticals different from the environment in other markets?


Steve Yang: In many areas, undertaking pharmaceutical R&D in China is similar or identical to the West. We basically have the same quality and compliance standards throughout our R&D efforts. We are a regulated industry, and we try to follow local and global regulations.


Still, three factors differ from other markets and present a unique opportunity for China. First, the current macro environment of China is very favourable, in terms of the growth of the pharmaceutical market, the investment of the government in infrastructure and basic research, and the availability of talent. The second advantage is timing. Our industry globally is facing a tough R&D productivity challenge. That means we have to do things differently out of necessity - and that particular mandate is very, very strong across all the companies. We’re not going to replicate what has been done in the West. We will try to innovate and transform how we do R&D. The third advantage is, to some extent, a double-edged sword. There has been limited innovative pharmaceutical R&D work done in China, so we are starting with a clean slate, both in terms of the experience of local talent and the environment. But that could be an opportunity. It could remove many of the existing constraints of organisations, allowing us to experiment more and to try different things with the hope that, ultimately, new R&D models will emerge. These could prove to be innovation driven, but different from and more effective and efficient than the model that’s been used in the past.


In this environment, how do you approach innovation in China?


Steve Yang: I can offer three specific facets. The first one, which is fundamental, is that we can leverage what our industry has learned painfully over the last few decades. There is high attrition at each step of the R&D process, and we learn from all the companies and all the products across these areas about what didn’t work. For example, we have learned that patient selection is critical to reducing the attrition rate. Selecting the right biomarkers and patients is pivotal to the success of a drug. This is a new insight, but one that is widely available to whoever wants to start a new drug discovery operation.


The second is that there are many unique disease mechanisms in China. Gastric and liver cancers, for example, have high prevalence and in many cases, could have different populations or different disease etiologies. That presents a white space on which R&D innovation can focus. We can use what we have learned in the West to understand this situation and try to develop new medicines against those diseases. I hope that will open up new markets and help us meet unmet medical needs of patients in China and the rest of Asia.


The third, which is also very important, is that China - and to some extent India - have shown the world the importance of conducting R&D with more resource efficiency, particularly by focusing on externalisation. This could mean strategic outsourcing of certain R&D functions. It could also mean collaborating with academics or biotech companies, and that’s an area in which I believe China can offer tremendous potential not only for our local R&D operation, but also for our global R&D.

Sceptics say pharmaceutical innovation in China is a long shot, and any efforts will take many years to materialise. How do you respond to that?


Steve Yang: We are a regulated industry, so our product-development time line is very long.

Look at the traditional hot spots of pharmaceutical innovation in Europe and the US and at some of the R&D sites in the West. How long does it take for a site, from its establishment, to become productive, to discover and develop new drugs? We are looking at decades. On the other hand, that’s the type of long-term commitment a company and a nation need to reap long-term benefits, economically, through knowledge development and innovation that will eventually benefit patients.

How far has AstraZeneca gone in achieving its aspirations for innovation in China?


Steve Yang: We have made great progress and built a solid foundation. But if you use as a measure the time needed to develop a new drug, we still have a long way to go. It takes 10 to 15 years to take an idea all the way from a scientist’s hypothesis to products on the market.


Our Innovation Center China was announced in 2006 as a part of a $100 million investment we made in China, and it was launched in October 2007. During the four years since then, we have accumulated a lot of data, contributed to global oncology research in the area of biomarkers and translational science, and built credibility and a strong team locally. We are ready to expand our mission to become a drug discovery centre, with a special focus on cancers prevalent in Asia, such as gastric and liver cancers. But the journey has just started.


What are the bottlenecks to successful R&D in China?


Steve Yang: There is a Chinese saying that you may have a destiny, and that final destiny may be very bright, but the road that leads there is inevitably winding and full of challenges. That’s the case at both the strategic and operational levels. The intellectual property-protection environment has been improving, but there is always room for further improvement. Also, the industry needs to work with government stakeholders to improve and bring more clarity to regulatory policies on drug development.


On a day-to-day basis, managing turnover and retaining and developing talent can be challenging, although in AstraZeneca R&D we are fortunate to have a turnover rate well below the industry average. Above and beyond these, AstraZeneca is a multinational company, and the majority of our senior leaders, our resources, and our stakeholders are thousands of miles and many time zones away. Constantly gathering their support and commitment is very important. From my experience at AstraZeneca, we have received top-level support and have good stories to tell. But we can never really rest on our laurels.


How do you rate the quality of R&D talent in China’s pharma industry?


Steve Yang: There are a large number of scientists available, trained either overseas or locally. We have seen significant quality of talent both in the returnee population and in the locally educated population. There are disciplines - for example, chemistry and general biology - that tend to follow this trend. There are also disciplines that are highly specialised and require decades of training. In those areas, the talent, particularly those with experience, is in short supply. Examples would be toxicologists, pathologists, statisticians, and clinicians. That’s one dimension to look at: the technical competency of the talent.


The other dimension, given the fast growth of the markets, includes the leadership and management capabilities of the talent. In many cases, companies like ours need to ramp up our efforts quickly, so we are giving the scientists - particularly the scientific leaders - the mandate not only to do good science and to drive projects but also to become good leaders and good managers. If we use those criteria, the number of individuals who possess all these skills is smaller.


But in general, we are optimistic. From our own experience, we can recruit talent overseas and locally. And to support our portfolio, our mission, and, more important, the Innovation Center China, we have an excellent record in retaining and continuously developing those colleagues.

Would you elaborate on your views about intellectual-property protection in China?


Steve Yang: We have seen a significant improvement in the IP environment.But, because of the rapid development of the legislative environment and the regulatory framework, there is a constant flow of amendments to policies on the IP law. In many cases, it took some time for the government, the legislature, and enforcement agencies, as well as industry, to understand fully what those new regulations meant.


That’s just natural growing pains. In IP law, there has been a recent commitment reflecting the government’s increasing understanding of the importance of IP, but we hope to have more clarity around how those new laws will be interpreted and enforced.


What will innovation in China look like in the future?

Steve Yang: One aspect is the view of the Chinese government. They have identified seven pillar industries that have strategic importance and should be innovative, including life sciences, medical, and biomedical. It is from those areas that the seeds of innovation will likely come in the future.


Another aspect is China’s urbanisation. There are consequences to the migration to megacities with populations of more than 20 million. In these environments, people will increasingly have a more sedentary lifestyle.


In such an environment, with high-density living, how do we continue to help people live a healthy lifestyle, prevent disease, and improve the quality of living? And the challenges and opportunities go beyond just inventing the next pill or vial for injection, to fundamentally thinking about what, with so many people living together, is the best way to prevent disease or at least slow down disease and some of the chronic-disease progressions? That is something I don’t think the world has really tackled before. The scale of such innovation is where China can offer ground for experimentation and, ultimately, a marketplace where the impact can be shown.

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