Business and Finances: December 2006 Archives

LONDON (Reuters) - SkyePharma (SKP.L) said on Wednesday that developing its biggest drug hope, Flutiform for asthma, was costing more than it expected and that it had arranged a new 35 million pound loan.

The drug delivery firm also said it was in exclusive talks with a potential buyer of its loss-making injectable drugs business and that it expected to reach a deal shortly.

SkyePharma has been hit by a string of delays in finding partners for its drugs and earlier this year a shareholder rebellion drove out founder and chairman Ian Gowrie-Smith.

Telik Inc. said on Tuesday that its experimental cancer drug failed to improve survival in patients with advanced lung cancer or in patients with ovarian cancer, sending its stock plunging nearly 70 percent.

The biotechnology company said a late-stage, or Phase III, trial of its most advanced drug, Telcyta, did not significantly improve survival in patients with advanced lung cancer who had failed other treatments, which was the main goal of the trial.

The Palo Alto, California-based company said a Phase III trial of patients with resistant ovarian cancer also failed the trial's main goal of demonstrating significant improvement in survival.

After six years of a steady trade wind of Republican influence, the climate on Capitol Hill has suddenly shifted. For an industry like biotech, which always has a finger in the air to see what's blowing their way, there is reason for both comfort and concern. Comfort comes from seeing a majority of voters around the country clearly backing stem cell research, electing federal and state officials who are opting for science over fundamentalism.

Soon enough the Democrats now in control of the House and Senate are going to put President Bush's veto of the recent stem cell bill to the test and see if they now have the votes to push through new federal funds for the field. They might pull it off, but it will be tough. President Bush has made it clear that he isn't budging on this one inch, leaving a dwindling number of Republicans willing to defend a position that has grown clearly out of favor with the electorate. The concern is justified, too. Democrats are making drug costs an issue again, vowing to do everything they can to lower the bill.

LONDON & WALTHAM, Mass.--(BUSINESS WIRE) -- GlaxoSmithKline plc (GSK) and PRAECIS PHARMACEUTICALS INCORPORATED (Nasdaq: PRCS) announced today execution of a definitive agreement providing for GSK to acquire all outstanding shares of PRAECIS’ common stock for a cash purchase price of US $5.00 per share or a total of approximately $54.8 million for the entire equity interest of PRAECIS.

“PRAECIS has created novel therapeutic programs and innovative chemical-synthesis and screening technology that will complement our own discovery capabilities,” said Allen Oliff, Senior Vice President, Molecular Discovery Research, GSK.

Altus Pharmaceuticals Inc. will make at least $15 million in a new development deal signed with biotechnology giant Genentech Inc. to create treatments for human growth hormone deficiency.

Cambridge, Mass.-based Altus (Nasdaq: ALTU) announced on Wednesday that it would work with Calfornia-based Genentech (NYSE: DNA) to develop, manufacture and commercialize ALTU-238, Altus' once-per week formulation of human growth hormone.

The alliance focuses on a collaboration and licensing deal in North America, and Genentech will pay Altus $15 million up front; The company gets another $15 million through a Genentech investment in Altus stock. Altus can make up to $140 million more if the collaboration produces milestones in development and commercialization.

By Christopher Lee, Washington Post

Drug companies are becoming less innovative, with the number of new drugs being developed failing to keep pace with the substantial increases in spending on research and development, according to congressional investigators.

A report released yesterday by the Government Accountability Office, the investigative arm of Congress, found that annual research and development spending by the pharmaceutical industry increased 147 percent, to $60 billion, between 1993 and 2004. At the same time, the number of new drug applications to the Food and Drug Administration grew by only 38 percent, and it generally has declined since 1999.

What is more, about two-thirds of the new applications were for drugs that simply represent modifications to existing medicines, while 32 percent were for potentially innovative new drugs.

Danish biotechnology company Genmab A/S signed a deal Tuesday worth up to US$2.1 billion (€1.6 billion) with pharmaceutical giant GlaxoSmithKline PLC for the global commercialization of a leukemia treatment.

The agreement for the HuMax-CD20 antibody includes an initial license fee of 582 million kroner (€78 million; US$102 million), Glaxo buying a stake of just over 10 percent in Genmab and milestone payments totaling 9 billion kroner (€1.2 billion; US$1.6 billion).

GlaxoSmithKline will invest 2.03 billion kroner (€272 million) for the 4.47 million Genmab shares.

Analysts said the value of the deal was much higher than expected, and could mean that Genmab will be profitable as early as next year.

CAMBRIDGE, Mass — Vertex Pharmaceuticals Inc. said Wednesday a safety analysis of its developing hepatitis C drug VX-950 showed 9 percent of the patients involved dropped out of the program because of adverse events including gastrointestinal disorders and rash.

The news sent shares of Vertex fell 62 cents to $38.78 in morning trading on the Nasdaq, following a drop in premarket trading.

The midstage study involved 250 patients, with the current interim data involving 74 patients for whom data was available at 12 weeks. Patients were given either the drug, called telaprevir, or placebo in combination with ribavirin. The safety study results showed that 9 percent discontinued treatment because of adverse events, with rash being the most common, compared with 3 percent of the patients taking placebo.

Shares of Pozen Inc. sank almost 15 percent Wednesday after the company said federal regulators have raised additional questions about its lead migraine treatment.

Less than two months after Pozen submitted what it called a "full response" to safety questions posed by the U.S. Food and Drug Administration about the migraine treatment Trexima, the federal agency has requested more data and analyses of the drug. Chapel Hill-based Pozen said Wednesday that the FDA has completed its review of the company's response to a June 8, 2006, approvable letter for Trexima and that the agency has "determined the response is not yet complete."

The drugmaker Merck & Co. is off to a strong start in its year-old program to cut costs, boost revenues and transform company operations, Chief Executive Officer Richard Clark said Tuesday.

The company this year launched five new vaccines and other medicines, all well received, without increasing its sales force, Clark told analysts at Merck's annual business briefing at headquarters in Whitehouse Station, N.J.

Merck is speeding up the time it takes to get experimental drugs through testing and onto the market, launching one of the five new products _ the diabetes drug Januvia _ about four years ahead of when it would have been approved under a traditional development schedule, he noted.

by Centinent Management

The pharma business is a risky undertaking, even for monster companies such as Pfizer (PFE). That was once again clearly demonstrated when Pfizer lost $20 billion in market capitalization last week, after it decided to withdraw its new compound torceptrapib. It is rumored that Pfizer lost an additional $1 billion in development costs on the drug, and the company spent almost 15 years focused on it. Other pharmas the size of Pfizer, the ones that have continued to operate consumer or generic divisions, rarely take hits this size.

The Pfizer case is by no means unique, however. Other big pharmaceutical companies have suffered similar setbacks when one of their key pipeline products failed in trials or showed signs of trouble. The torceptrapib case shows how even a few deaths can cause a company to abandon a promising drug. That is because a tainted drug is unlikely to become a blockbuster.

Those already in Washington, and those newly elected to Congress, who want to artificially control drug prices got an important lesson in economics last week. They also got a tutorial on why new lifesaving drugs are so expensive.

The lesson came as Pfizer, a leading pharmaceutical maker, canceled trials of a new cholesterol-controlling drug — torcetrapib.

As the stock market opened on Monday, Pfizer's announcement over the weekend sent its stock tumbling 14 percent, kicking the stuffing out of the company's estimated worth by more than $20 billion.

NEW YORK — Shares of biopharmaceutical company Halozyme Therapeutics Inc. jumped Wednesday after the company said it signed a deal with Roche worth up to a potential $581 million.

Shares of Halozyme soared $1.71, or 60 percent, to $4.56 on the American Stock Exchange in morning trading, following a flurry of premarket activity. The stock hit a new 52-week high of $4.93, eclipsing a previous high of $3.72.

The agreement calls for San Diego-based Halozyme's drug delivery technology, called Enhanze, to be used in Roche compounds. Roche will pay Halozyme $20 million upfront for the application of the technology to three predefined Roche biologic targets. Roche will have the option to exclusively develop and commercialize the technology with an additional 10 targets over the next 10 years.

SAN FRANCISCO, Dec. 5 -- BayBio released today the flagship industry study, BayBio:IMPACT 2007, providing an in-depth look at the impact of the billions of doses that the 393 innovative life-saving drugs and technologies from Northern California have on individual lives around the world. To ensure continued growth and address current barriers, the study calls for partnership and collaboration with public officials, healthcare practitioners and the investment community.

Northern California is home to the world's largest life sciences cluster, housing one-third of the U.S. industry. The region continues to deliver novel approaches to virtually all diseases, especially epidemics such as diabetes, obesity and infectious disease and cancer. Additionally, Northern California's life sciences industry has pioneered the path for other hubs, providing key insight based on its own unique 30 years of experience and lately leading the way to personalized medicine becoming a reality.

LONDON (SHARECAST) - Drug group Evolutec collapsed Monday after it said its rEV131 hay fever treatment performed no better than a placebo.

“No significant differences were observed between rEV131 and placebo in the phase IIb trial in allergic rhinitis and the primary endpoint was therefore not met,” it said in a statement.

“This is tremendously disappointing for Evolutec and its shareholders,” said chief executive Mark Carnegie Brown.

Shares of Dutch biotech Crucell N.V. (CRXL) rose more than 2% in European trading as the company announced it had been awarded $200 million in contracts over the next 3 years by supranational organizations for its pediatric vaccines.

Quinvaxem and Hepavax-Gene vaccines will be made available to children in developing nations by the supranational organizations.

Quinvaxem is the first liquid vaccine to harbor antigens against some of the world's leading pediatric diseases including, diphtheria, tetanus, pertussis (whooping cough), hepatitis B and Haemophilus influenzae type b. The vaccine was co-developed with Novartis (NVS) in Crucell's South African laboratories.

While hopes remain high for Pfizer's new cholesterol drug, the pharma giant is ready to run a leaner operation and look beyond its own labs

At the start of Pfizer's (PFE) Nov. 30 meeting for Wall Street analysts, a crowd gathered around a poster about torcetrapib, the drug giant's experimental product to treat high cholesterol. Torcetrapib could be the crown jewel in Pfizer's pipeline—a newfangled treatment that simultaneously raises "good" cholesterol while lowering the "bad."

But recent trial results suggest it raises blood pressure in some patients, a side effect that could stifle the market potential of what was to be a blockbuster replacement for Pfizer's Lipitor, the world's top-selling drug, which is facing generic competition. "Have you identified what causes the increase in blood pressure?" asked an analyst of a Pfizer scientist. "No," came the simple reply.

Pfizer Inc. raised its 2006 earnings estimate and said the number of experimental products it has under development, including drugs for AIDS, obesity and cancer, jumped 60 percent since early this year.

Pfizer, the world's biggest drugmaker, increased its adjusted earnings estimate to at least $2.05 a share from a previous forecast of $2 a share, the New York-based company said today in a statement. There are 242 drugs in the pipeline, the statement said, an increase of 90 since February 2006.

Pfizer needs new products to replace revenue it will lose as patent protection runs out by 2011 on drugs that generated almost half of the company's $51 billion in sales last year. The best-selling Lipitor cholesterol drug, which accounts for $13 billion a year, will face generic competition in four years. New Chief Executive Officer Jeffrey Kindler is also expanding a plan to cut $4 billion in costs by 2008.