What’s are the root causes of this malaise?   Global economic crises? The FDA raising the bar?  Pharma squeezing our biotechs with back-ended biobuck deals?  All the “low hanging fruit” of the target universe picked?

I’m sure all those have some truth to them, and have mentioned some of them before (e.g., FDA’s view on obesity).  But in the spirit of putting all the issues on the table, I think we also did this to ourselves.

For a few decades now the biotech sector has over-promised and under-delivered, and its now coming back to bite us. Sure, biotechs have discovered some amazing drugs like Epogen, Enbrel, Herceptin, Rituxan, and Erbitux, to name just a few. But these are the rare few.  Most of our sector never delivers drugs like those.  But we have endlessly promised that we will, raised endless monies to support the effort, and allowed structural inefficiencies to persist.

In 2000, the Human Genome Project was supposed to “to lead to a new era of molecular medicine, an era that will bring new ways to prevent,diagnose, treat and cure disease”.  It certainly helped, but if this is the “new era” it doesn’t feel so good.  And the bubble wonders of Millenium, Human Genome Sciences, and many others all made huge, bold predictions about R&D productivity and the future of medicine that never materialized. More recently, RNAi was supposed to enable a drug against every gene.  Red wine’s resveratrol was to be the elixir for lots of diseases.  But its not just over-promising in the  2000s.  In the 1990s, high throughput screening enabled by combinatorial chemistry was supposed to provide the chemical diversity to enable a massive boost in drugability, but probably did the opposite.  Earlier still, drugs like IL2 were hailed by Time magazine as a cancer cure in 1988, and antibodies were pitched as the “magic bullets” to lots of diseases in 1980s.  Yet today, even Avastin, one of the most widely heralded mAbs of our time, isn’t very effective at all without toxic chemotherapy in combination.  Don’t get me wrong – the genome, RNAi, antibodies, etc.. – all are great advancements and are keys to the success of our sector, but we certainly missed the mark on the timelines for their impact.

Through our cycles of over-promising and under-delivering, biotech has relentlessly milked the private and public capital markets.  As Gary Pisano has noted previously, outside of a few huge winners, our sector has probably burnt more capital than its created over the past 30+ years.  The sad fact is that most public biotech companies dilute their existing shareholders into oblivion over time.  The list of supposedly successful companies that got sold or currently trade below their paid in equity capital is staggering.  ”Successful” biotechs like Isis and Amylin have seen their stocks fall -25% and -51% over the two decades  since their IPOs.  The majority of the IPOs of the past decade are below their offering pricesand have been for some time.  We’ve now got a large group of public equity investors who ask why should they buy into an IPO when they know they’re going to be diluted in 18 months at the next financing.

And we wonder why we’re in a somber state of despair about biotech?   The #1 issue doesn’t seem to me to be the FDA’s high hurdle or Pharma’s bad behavior.  It’s us, broadly speaking: it’s all of us that participate in the private and public capital market for biotech: venture investors, management teams, public investors, and importantly Boards.

• Venture investors: VCs are the brunt of a lot of jokes because the truth hurts: pushing for quick flips, lack of patient capital, over-hyping a story, etc…  This is no way to build a sustainable asset class.  Further, we have simultaneously under-funded many areas and over-funded others.  Many firms have fled early stage and do only clinical or commercial stage deals, largely around reformulated spec pharma assets or Pharma’s discarded compounds. The need to put large fund sizes to work drives many into high capital intensity deals and over-capitalize others.  Returns typically fall off quickly with increasing amounts of capital.  In general there are lots of lemmings in the business chasing the same ideas; fortunately for us, early stage is rather sparsely populated so we have to find our own cliffs to jump off.
• Management teams: while many have been great stewards of their shareholders capital, a whole lot more have not. Dilution is the bane of existing biotech shareholders, and many management teams (especially in the public markets) seem to forget this by serially trading down their existing investors in favor of new ones until they make it to market, get sold, or die a whimpering death.  An earlier sale of a business may be smarter for existing shareholders than being washed out to nothing, but most management teams don’t like or execute that choice.  Worse yet, most of the time management teams get reloaded with new options to keep them ‘incentivized’ with upside rewards to watch out for their current shareholders.  This is great if the team is truly aligned around dilution, but sadly this doesn’t often happen, as Peter Kolchinsky of RA Capital has noted.
• Public equity investors: Rightfully burnt by many of the public offerings in the past, many public investors shy away from allocating capital to IPOs or require ‘derisked’ late stage assets.  Its no secret that the vast majority of the IPOs in 2010-2011 were in companies that in-licensed their lead programs or reformulated known actives.  I can’t think of one who’s lead program came out of its discovery organization. [Correction: IRWD's linaclotide was discovered by their team]. This lack of demand for real innovation has skewed the type of startups VCs build and it shows in the ecosystem.  Until public equity investors take a long-term view and help build the next Vertex, Gilead, Cephalon of the world we won’t be able to grow the next crop of mid-sized players.  Sadly this is unlikely in a world where most public investors are traders rather than investors. Since most public investors are just traders, they by nature have abdicated their role in company shaping via shareholder activism.  I know many ‘activists’ get accused of being predatory, and many probably are, but having active, vocal, and well-informed shareholders pushing for better capital allocation from management teams and Boards is a good thing in my view.
• Boards: Many private company boards are full of VCs and lots of folks complain this is a bad thing.  I certainly have experienced the big venture board problems (i.e., whip-sawing between fear and greed in particular), and this is an issue. But at least these boards have a real interest in protecting the current owners of the company.  Most boards of public biotech companies don’t represent the interests of current shareholders.  And though they are ‘independent’ they are often afraid to rock the boat, ask tough questions, challenge management teams on capital allocation and serial rounds of dilution.  The failure of the public biotech universe to succeed – which is a big part of the capital market challenge today – is in many ways a failure of the public biotech board to manage shareholder value. This failure in governance has had profound impact on our ecosystem.

Now that I’ve vented about some of the stakeholders in our ailing capital market, let me reinforce a few themes for how to move forward that involve thinking differently about biotech venture creation and company building, and the nature of equity capital. To that end, at the risk of repeating prior blog posts:

1. We need to change the way we think about building companies.  As I’ve written before, “Go big, go bust” isn’t a viable strategy: raising $100M+ in equity capital and praying for a viable IPO or Pharma takeout is as bad as playing the lottery.  We need to do more than lip service to capital efficiency.  We can and should be building companies that raise far less in equity capital and leverage it through partnerships, non-dilutive funding sources, etc…  This is where the great returns will come from – like Plexxikon and Amira earlier this year, which collectively raised ~$90M in equity and could create upwards of $1.4B in value.  Both were 10x deals because they were “lean on their use of equity” platforms.
2. We should get back to the basics of backing real innovation.  Its hard to get excited about reformulated, retrofitted compounds of yesteryear.  But funding breakthrough medicine is rewarding – both because its great for patients and shareholders. Just ask Vertex’ HCV patients, or Acetelion’s, or Alexion’s.  Now all of those companies were built in a ‘looser’ financing environment, but its still viable to discover great drug candidates on venture capital today.  And great companies are all about great medicines.  Our startups should start with that in mind.
3. We have to embrace the depth and breadth of the virtualization toolbox which enables not only fully virtual enterprises (high quality outsourced labs, lean teams), but also adds superb operating leverage to bigger platform companies.  And real innovation can happen – and does happen – in virtual R&D companies.  Its a huge part of the model going forward.
4. We need new asset-centric liquidity theses that go beyond company–centric IPOs and traditional M&As.  These alternatives include things like LLC-holding company structures and defined liquidity path partnerships.  As these generate returns, they will not only be appreciated by our LP’s, but they will also help create the competitive tension for assets from buysiders and later stage investors that will improve returns to early stage investing.
5. Boards need to be more involved in governance, especially in small cap biotech companies.  This isn’t about Boards trying to micromanage teams, but about the discipline of capital allocation and strategy in a realistic way that maximizes value for current shareholders.  I hope more activist investors enter the small cap biotech world.
6. Lastly, we need closer, better, and more transparent relationships with Pharma.  At the end of the day, we’re partners in this ecosystem and we need to drop the zero-sum game mindsets.  Win-win solutions where rewards are appropriately allocated for risk-taking and risk-sharing.

I certainly agree that the FDA needs to improve, Pharma could be more productive in its biotech relationships, IPO windows could be wider, etc…  So we should work on all those, and I don’t mean to belittle those challenges.  But I think we as a sector – investors, management teams, and boards – also need to look in the mirror and recognize we’re looking at a real part of the problem.

Culprits of Biotech’s Malaise: Let’s Also Look in the Mirror is a post from: Pharmacy in jobs, news, schools

The combination pill will sell for the same price as Januvia alone, about $215 per month. Generic versions of Zocor cost roughly $30 a month.That should make Juvisync attractive for the millions of diabetics currently not taking a statin. Guidelines from the American Diabetes Association recommend that diabetics who have heart disease or are over age 40 take a statin pill daily.”This provides a way to simplify their regimen and improve adherence,” said Dr. Susan Spratt, an endocrinologist at Duke University Medical Center.Spratt said many diabetes patients are taking six or more pills a day, including different types of pills for diabetes, blood pressure and high cholesterol.

It can be hard to consistently take them all at the right time, and even with health insurance, patients’ out-of-pocket costs for their medications and diabetes testing supplies can be very high.”Anything to reduce the cost is going to be helpful to patients,” Spratt said, adding, “When you improve medication adherence, you actually lower health care costs because patients don’t end up in the ER or the hospital.”Merck shares rose 37 cents to $31.79 in late-afternoon trading, after rising nearly 3 percent.In Type 2 diabetes, the body either does not produce enough of the hormone insulin or does not use it efficiently, allowing excess sugar, or glucose, to accumulate in the blood. Over time, that damages blood vessels and crucial organs.Many of the more than 25 million U.S. diabetes patients also have high cholesterol, partly because both conditions often are linked to being overweight. The combination increases risk of heart disease, stroke, kidney disease and other chronic conditions. Diabetics also are at risk of blindness, amputations from wounds that do not heal and heart attacks.

Despite those dangers, Merck scientists estimate that up to 4 million diabetes patients over 40 are not following the medication recommendation.”Perhaps one third of the nation’s eligible patients with type 2 diabetes are not being treated with a statin, so here’s a convenient tool for doctors to target glucose as well as cholesterol levels,” Dr. Sethu Reddy, Merck’s director of clinical affairs for diabetes, said in a statement.Juvisync will be available in six different dosage strengths, to accommodate patients with varying levels of cholesterol and diabetes. Common side effects of the drug include stuffy nose and sore throat, headache, muscle and stomach pain.The approval revives Zocor, which had been Merck’s top-selling medicine before it got generic competition in June 2006. It’s now available in nearly a dozen generic forms as simvastatin.Januvia, Merck’s third-best-selling drug, was approved in October 2006. It was the first diabetes drug in a new class called DPP-4 inhibitors that now includes Bristol-Myers Squibb Co.’s Onglyza and Tradjenta, made by Eli Lilly & Co. and Boehringer Ingelheim.The drugs work by making the body produce more insulin after meals, to reduce levels of glucose in the blood, and by limiting the amount of glucose made by the liver.

Januvia brought in $1.5 billion in the first six months of this year and had sales of $2.4 billion last year. Merck already sells a pill that combines Januvia with a widely used generic diabetes pill, metformin. That combo pill, called Janumet, had sales of $626 million in the first half of this year.With Merck’s top seller, asthma and allergy drug Singulair, getting generic competition next August, the Januvia franchise becomes even more important for the company, which is the world’s third-biggest drugmaker by revenue.Merck, based in Whitehouse Station, N.J., is planning to seek approval of Juvisync in many other countries in the near future, according to spokeswoman Pam Eisele.AP Business Writer Matt Perrone in Washington contributed to this story.

FDA approves first diabetes-cholesterol combo pill is a post from: Pharmacy in jobs, news, schools

In a new study, the National Organization for Rare Diseases decided to put the FDA’s professed flexibility to the test, examining 135 non-cancer orphan drugs which had been approved by the agency. And the FDA comes out with a clap on the back, earning NORD’s seal of approval for being willing to demonstrate its flexibility in 90 of those rare drug programs. Writes NORD: “The study supports the FDA assertion that it exercises flexibil­ity when reviewing applications for orphan drugs.”

The study also notes that the FDA can demonstrate its flexibility in a number of ways, most notably by regulators’ willingness to accept a far more limited set of clinical trial data for an orphan drug, including instances where a single trial was enough to warrant an approval. In 58 cases regulators were willing to customize the approval process to the therapy.

The Wall Street Journal notes that not everyone is happy with the FDA’s approach to these orphan drugs. Public Citizen’s Sidney Wolfe, an outspoken critic of the pharma industry, had this to say: “There are all kinds of other benefits already written into law. Why should the standard of approval be different if you have a rare disease than for non-rare diseases?”

NORD does want the FDA to go a step further in spelling out its approach to orphan indications.

“It is time for that policy to be clearly enunciated as a formal FDA policy, and for FDA medical reviewers to incorporate and recognize this flexibility in a systematic way into their evalu­ations of each new therapy in development and under FDA review for Americans with any rare disease.”

Study: Orphan drugs win favored status in FDA reviews is a post from: Pharmacy in jobs, news, schools

There may never be another medicine like it. That’s because of fundamental shifts in our understanding of biology, because of the demands made by patients, doctors, and society on new drugs, and because new drugs now have to compete with the super-cheap, generic versions of every medicine ever invented. Already, eight of ten prescriptions are for generics, and the drug industry is focusing on higher priced, specialty products for patients who are not helped by existing options. Good luck creating a new cholesterol drug as potent, safe for most people, and widely tested as Lipitor.

Thanks to aggressive marketing and pricing tactics by Pfizer, Lipitor will remain a big seller for years even as sales drop. Les Funtleyder, a fund manager at Miller, Tabak, says that the the stock, which his fund holds, could perform well partly because Lipitor sales may decline more slowly than investors expect, allowing Pfizer to beat earnings expectations. In fact, Pfizer probably has more to gain in the short term by controlling Lipitor’s descent than it does from any of several experimental drug programs, including a pill for rheumatoid arthritis and the use of its Prevnar 13 pneumonia vaccine in adults, that could show results in the next year. Because Lipitor is that big.

It’s hard to remember now, but Lipitor was introduced at a time before big drug safety scandals such as  Merck‘s Vioxx being linked to heart attacks or worries that antidepressants like Paxil and Zoloft might increase the risk of suicide in some patients. It was a time when Jay Leno routinely joked about Viagra – not a terribly big seller, but one of the biggest drug launches in history – and writer Elizabeth Wurtzel made the talk show rounds talking about her Prozac. It really did seem there would soon be a pill for everything and anything, and cholesterol drugs were the era’s biggest success.

A 1994 study with Merck’s cholesterol drug Zocor proved cholesterol-lowering meds could prevent death – to be specific, four deaths and seven non-fatal heart attacks were prevented for every 100 patients who took the medicine for six years. A study of Pravachol, from Bristol-Myers Squibb, showed similar benefits. When it was introduced in 1996, Lipitor didn’t have any such study proving its worth, but it was way more powerful than those drugs. It instantly grabbed market share, and then Pfizer followed up by running a series of giant clinical trials, some of the biggest ever, in order to get more patients on cholesterol drugs and prove that Lipitor was the best option. Pfizer also got a big boost from a backfiring Bristol study that showed high-dose Lipitor was better than Pravachol in some of the sickest heart patients.

Something like 20 million Americans take cholesterol-lowering drugs, and before Zocor went generic in 2006 more than half of them were on Lipitor. But all those huge, market-expanding clinical trials came with a cost. As heart patients got healthier because of better treatment, and Pfizer sought to expand the cholesterol market by testing patients who were healthier still, the absolute benefit that needed to be shown got smaller. For instance, in one big clinical trial, 100 patients had to be treated to prevent one heart attack. It’s not that the drugs stopped working, but that patients got healthier.

You can argue that it’s still worth taking Lipitor, especially at cheap generic prices, because heart attacks, the leading killer in the developed world, are a lifelong problem and clinical trials only last for a few years. But there’s no arguing that doctors are starting to rebel against the idea of treating everybody with the same pill for years in order to get a small benefit for the average patient. Why not, many say, insist that drug companies find the patients who do great on a medicine, so people who don’t benefit don’t have to take it?

One prominent voice in this changeover is Eric J. Topol of the Scripps Research Institute, who helped establish the one-pill-for-everyone ethos a decade ago by running some of the biggest clinical trials ever, including one of Plavix, a blood thinner that, like Lipitor, prevents heart attacks. It is the second-best-selling drug in the world, with sales of $9 billion, and its U.S. patent expires in 2012, posing Lipitor-like problems to makers Sanofi-Aventis and partner Bristol-Myers.

In a forthcoming book, The Creative Destruction of Medicine, Topol remembers being in the room in an extravagant Paris hotel when he first saw the results of a study comparing Plavix, a $4 a day drug, with aspirin. “The answer was, to my mind, quite disappointing,” he writes. Two patients out of every 100 benefited. That helped launch Plavix to success, but Topol has lately been pushing new work in genetics to help figure out which patients are helped most by a particular drug and electronic health records to track how well medicines are working in the real world. The current, one-size-for-all system just cannot hold, he says.

To see how big this change is for drug companies, you only have to look at the reception to a new drug that was just found to be better when added to Plavix than Plavix alone. The medicine, Xarelto, is expected to become a multi-billion dollar seller for Bayer and marketing partner Johnson & Johnson. It’s one of a class of new blood thinners, called Factor X inhibitors, that are expected to replace the old blood thinner warfarin for many patients with heart valve problems.

But Xarelto is the only one of these drugs that succeeded in a clinical trial to best Plavix in heart patients, and you’d be forgiven for thinking that would mean it would be a Plavix-like success. The drug actually managed to save lives in its large trial, reducing the risk of death by an impressive 30%, despite increasing the risk of major bleeding. One of several Harvard-based physicians who ran the study, C. Michael Gibson, compared the findings for Xarelto to the findings with aspirin. Another, Eugene Braunwald, compared it to Lipitor beating out Bristol’s Pravachol, a study which his research group had also run.

A more revealing statement, though, came from Jessica Mega, another Harvard Medical School-based researcher who helped run the trial. She too argued that the mortality benefit was “hard to ignore,” but also said that part of the reason Xarelto is important is because it provides a new option as we start to better understand how the blood-clotting process goes wrong to cause heart attacks.

“Patients probably have heart attacks for a lot of different reasons,” Mega says. “The more we understand about the biology, the more we’re going to be able to give the patient options.” This is actually the flip side of the main argument against Xarelto, as made by Paul Gurbel of the Sinai Center for Thrombosis Research: that the bleeding rate is too high, and that doctors need a way to test which patients need their blood thinned more and which don’t. Whoever you side with, one-size-fits-all is on its way out.

Analyst Larry Biegelsen of Wells Fargo Securities estimates that there if every patient who could got Xarelto, it would be worth $2.1 billion a year to Bayer and J&J, essentially doubling the drug’s market opportunity. But he thinks that only 10% to 20% of those patients will get the drug – about $300 million of extra sales. Not a Lipitor. Not a Plavix.

That’s why the drugs with the biggest sales forecasts – medicines like Abbott’s Humira for rheumatoid arthritis or Roche’s Rituxan for cancer – are expensive, targeted at less common diseases. Without more Lipitors, the best hope for more progress against common diseases is that new technologies for understanding biology and genetics also make it easier, faster, and cheaper to develop new medicines.

Given the stakes, it should be no surprise that Pfizer is doing everything it can to slow Lipitor’s decline. The efforts started a year ago with a new coupon card that brings the patient’s share of Lipitor costs down to $4, less than a generic. (See: How Bargain Lipitor Could Raise Health Costs) Pfizer has also cut deals with the jobs.pharmacy-bg.com/”title=”pharmacy” >pharmacy-benefit managers to decrease cost to health plans, and even set up its own retail outfits. A web site called LipitorForYou will help patients stay on the brand. Pfizer says its research says a third of people don’t want to switch to generics, even though generics have an excellent track record for safety and efficacy thanks to the FDA’s regulation.

These steps work because only two companies – India’s Ranbaxy and Watson Pharmaceuticals – can make generics for the first six months after the patent expires. Ranbaxy challenged Pfizer’s patent and reached a deal with the drug giant, and Watson has a license from Pfizer. Ranbaxy does not yet have FDA approval for its copy. Watson will pay a 70% royalty to Pfizer, according to Sanford C. Bernstein. This three-way competition will drop Lipitor’s price 20% to 30%. After that, dozens of generic companies will make copies in the U.S., and competition could push Lipitor’s $5-per-pill price well below $1.

Even after cheap generics abound in the U.S., Lipitor will persist, selling more than $1 billion a year in countries where there is not an arbiter like the FDA to make sure generics are safe enough to substitute for brand names. For instance, in South Korea, the price of Lipitor dropped 20% when generics were introduced, but sales are already recovering because more Lipitor is being sold there. So Lipitor will hang around a bit, even though the economic and scientific environment that created it is gone – perhaps forever.

Forbes

Lipitor – Why There Will Never Be Another Drug Like Lipitor is a post from: Pharmacy in jobs, news, schools

Ranbaxy Laboratories Ltd. (RBXY)’s copy of the $10.7 billion Lipitor cholesterol pill was released in the U.S., sending its share up the most in six months and threatening sales for Pfizer Inc. (PFE)

Ranbaxy, India’s biggest drugmaker, won approval to sell generic versions of the world’s top-selling medicine by the Food and Drug Administration yesterday. The company, based near New Delhi, will share profit on the first six months’ sales with Israel’s Teva Pharmaceutical Industries Ltd. (TEVA), Ranbaxy said today, adding that terms of the agreement won’t be disclosed.

Ranbaxy sought to persuade the FDA that its copies are equivalent to the original and that approval shouldn’t be thwarted by an ongoing dispute about plant violations in India. The FDA approval was for products made at a plant in New Jersey which may have been contingent on a deal with Teva, said Bino Pathiparampil, a health-care analyst at IIFL Ltd. in Mumbai.

“It could well be that the Lipitor ingredients could come from Teva,” Pathiparampil said in an interview. In that scenario, “Ranbaxy will assemble the drug at their factory in New Jersey.”

Spokesmen at Ranbaxy and Teva declined to elaborate on today’s statement.

The Indian drugmaker, 64 percent-owned by Daiichi Sankyo Co., surged as much as 11 percent in Mumbai trading. The shares traded 4.7 percent higher at 454.85 rupees, the most since May 30, at 11:22 a.m. local time, while the BSE India Sensitive Index gained 2.8 percent.

Daiichi Sankyo (4568) increased 2.1 percent to 1,402 yen in Tokyo trading at 2:53 p.m. local time. A spokesman for the Tokyo-based company declined to comment on the agreement between Teva and Rabaxy, as well as on the impact on earnings of sales of generic Lipitor sales.

‘Simply Relieved’

“The market is simply relieved to hear that the drug is approved,” said Yasuhiro Nakazawa, a health-care analyst at SMBC Nikko Securities Inc. in Tokyo.

Copycat Lipitor may generate as much as $650 million for Ranbaxy in its first 180 days of sale, according to the median estimate of five Mumbai-based analysts surveyed by Bloomberg.

“This medication is widely used by people who must manage their high cholesterol over time, so it is important to have affordable treatment options,” Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, said in a statement released late yesterday in Washington.

Ranbaxy may have sought a marketing deal with Petach Tikva, Israel-based Teva in case it didn’t win timely approval, said Priti Arora, an analyst at Kotak Institutional Securities in Mumbai.

‘Backup Measure’

“There is something more in this deal than meets the eye,” Arora said in a telephone interview. “My feeling is that they allied with Teva as a backup measure in case approval was held back due to its manufacturing issues.”

Teva said on Nov. 2 that if it manages to introduce an “important undisclosed product” in the fourth quarter, it would meet the upper range of its forecast of earnings excluding some costs of $4.92 to $5.02 a share this year. Sanford C. Bernstein & Co. analysts speculated in a report last month that the new product “is ostensibly Lipitor.”

Pfizer’s medicine lost patent protection in the U.S. yesterday. Watson Pharmaceuticals Inc. (WPI) began selling a copy of Lipitor in the U.S. yesterday under an agreement with New York- based Pfizer, the world’s largest drugmaker. Watson’s version didn’t require FDA clearance because Pfizer is providing the drug to sell without the brand label in return for a share of the revenue.

Limited Competition

As the first generic to challenge Pfizer’s patent, Ranbaxy is allowed six months before other generic versions can come on the market under a 1984 law.

Mylan Inc. of Canonsburg, Pennsylvania; Teva; and Dr. Reddy’s Laboratories Ltd. of Hyderabad, India, are among generic-drug makers seeking FDA approval to sell Lipitor copies after Ranbaxy’s six-month exclusivity expires, according to U.S. court filings.

The U.S. enforcement actions against Ranbaxy, India’s biggest drugmaker, began in 2008 when the FDA cited manufacturing defects at two of the company’s plants in India and subsequently barred the company from importing about 30 different drugs. The following year, the agency said one of those plants, in Paonta Sahib, India, falsified data used in drug applications.

No Settlement

U.S. prosecutors had been negotiating a dispute settlement that may cost Ranbaxy more than $1 billion, Fortune Magazine reported in May, without saying where it go the information. There was no mention of a settlement in the FDA’s statement yesterday.

Making generic Lipitor in the U.S. instead of India will reduce the amount of profit Ranbaxy makes on each dollar of sales, Kotak’s Arora said.

“Margins for manufacturing in the India are around 60 percent compared to about 40 percent from the U.S.,” she said. The brokerage had estimated Ranbaxy would generate $560 million in generic-Lipitor sales during the six months of exclusivity.

“We will have to revise our estimates because of this and the Teva deal,” Arora said.

Pfizer Deals

Pfizer has struck deals with companies including Catalyst Health Solutions Inc. (CHSI) and Coventry Health Care Inc. (CVH) to prevent generic Lipitor from reaching some patients until the end of May 2012, according to documents obtained by Bloomberg.

Such deals may help Pfizer retain as much as 40 percent of the Lipitor market during the six-month period in which Ranbaxy and Watson will be the only providers of generic versions, Paul Bisaro, Watson’s chief executive officer, said Nov. 9 in a speech at a Credit Suisse health-care conference.

Pfizer also has reached agreements with health insurers to keep as much of the market as possible. UnitedHealth Group Inc. (UNH), the biggest U.S. health insurer by sales, said Nov. 19 it will charge a lower co-pay for Pfizer’s pill than it does for generics for the next six months, taking advantage of a price reduction from the drugmaker.

That will limit the benefit of Ranbaxy’s exclusivity, said SMBC Nikko’s Nakazawa. Ranbaxy’s copy may generate $300 million for the Indian drugmaker next year, adding 10 billion yen ($129 million) to Daiichi Sankyo’s operating profit for the year ending March 2013, he said.

Ranbaxy’s Lipitor Generic Approved by U.S. FDA, Threatening Pfizer Sales is a post from: Pharmacy in jobs, news, schools

Regulators going over the books found 1,900 instances over a 5-year period in which the lab technicians cited for doing research work weren’t even in the facility. That led the FDA to conclude that Cetero may have fixed its work, punting any data it didn’t like and ensuring it delivered desired results. And even though the agency says it’s unlikely there are any safety issues, sponsors with approved products or pending applications are being asked for confirmation of their results or a repeat of the work.

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That could affect a long lineup of companies. On its website, Cetero boasts that it completes 750 studies a year, with on-time startups 99% of the time.

The FDA concurred with Cetero’s independent auditor, who stated: “This misconduct appears to be significant enough to cast doubt on the data generated…If the foundation of the laboratory is corrupt, then the data generated will be also.”

“FDA has reached this conclusion for three reasons: (1) the widespread falsification of dates and times in laboratory records for subject sample extractions, (2) the apparent manipulation of equilibration or ‘prep’ run samples to meet pre-determined acceptance criteria, and (3) lack of documentation regarding ‘prep’ runs that prevented you from conducting an adequate internal investigation to determine the extent and impact of these violations.”

www.fiercebiotech.com

FDA cites “corrupt” CRO for widespread falsification is a post from: Pharmacy in jobs, news, schools

The FDA is notifying pharmaceutical companies that bioanalytical studies conducted by Cetero Research, Houston, Texas (Cetero) between April 2005 and June 2010 in support of marketing applications may need to be repeated or confirmed. Cetero is a contract research organization (CRO) that performs bioequivalence and pharmacokinetic testing for a number of pharmaceutical companies.

The FDA is asking drug sponsors to identify those tests conducted by Cetero during the designated time frame that were used to support New Drug Applications (NDAs) and Abbreviated New Drug Applications (ANDAs). Drug sponsors will need to determine whether any of the testing performed by Cetero should be re-done.

Also, the FDA will send letters to drug sponsors with pending applications, requesting that they either repeat the bioequivalence testing done by Cetero or retest drug samples using a different test laboratory or contractor.

It is unlikely that these concerns relating to data integrity affect the overall safety and efficacy of drugs already on the market and, at this time, there is no evidence of problems with the safety, quality, purity or potency of drugs already approved. However, as a precautionary measure the FDA is asking drug sponsors to review the testing in question conducted by Cetero to make sure that data are completely reliable.

FDA is taking this action as a result of two inspections of Cetero’s bioanalytical facility in Houston, Texas conducted in 2010, as well as the company’s own investigation and third party audit.  The inspections and audit identified significant instances of misconduct and violations of federal regulations, including falsification of documents and manipulation of samples.

The pattern of misconduct was serious enough to raise concerns about the integrity of the data Cetero generated during the five-year time frame.  FDA concurs with the assessment of Cetero’s independent auditor who stated, “This misconduct appears to be significant enough to cast doubt on the data generated…If the foundation of the laboratory is corrupt, then the data generated will be also.”  As noted in a letter FDA sent to the company, Cetero also failed to conduct an adequate internal investigation to determine the extent and impact of the violations and failed to take sufficient measures to assure data integrity within the 5 year time frame.

As noted in the July 26 letter sent to Cetero, “FDA has reached this conclusion for three reasons: (1) the widespread falsification of dates and times in laboratory records for subject sample extractions, (2) the apparent manipulation of equilibration or ‘prep’ run samples to meet pre-determined acceptance criteria, and (3) lack of documentation regarding ‘prep’ runs that prevented you from conducting an adequate internal investigation to determine the extent and impact of these violations.”

www.fiercebiotech.com

FDA Notifies Pharmaceutical Companies that Studies Conducted by Cetero Research May Require Reevaluation is a post from: Pharmacy in jobs, news, schools

The drug industry and FDA are indeed having a banner year. So far new treatments have been approved for lupus (Human Genome Sciences’s Benlysta), melanoma (Bristol-Myers Squibb’s Yervoy), prostate cancer (J&J’s Zytiga), hepatitis C (Vertex’s Incivek) and blood clot prevention (J&J’s Xarelto), to name a few. And in many cases, these new drugs offer a significant improvement over existing treatment options.

www.fiercebiotech.com

When questioned about whether the FDA has made it more difficult to obtain approval for new drugs, Woodcock pointed to the industry’s high attrition rate in drug development for low approval volume. A recent Thompson Reuters report found that the number of experimental drugs moving in to Phase III trials plunged 55 percent in 2010. The stats weren’t much better in earlier stages either: new Phase I studies dropped by 47 percent and while new Phase II trials fell over 50 percent. That high failure rate partially explains why only 21 new drugs got the green light in 2010–fewer than both 2009 and 2008, when 25 and 24 were approved, respectively.

Woodcock: New dhttp://pharmacy-in-jobs.pharmacy-bg.com/wp-admin/post-new.phprug approvals reach 20-year high is a post from: Pharmacy in jobs, news, schools

Ever since the FDA approved the HPV vaccine two years ago… is a post from: Pharmacy in jobs, news, schools