Welcome to another posting of ‘Industry Insight with Chester’, a periodic round-up of news and views from around the Pharma and biopharma industries compiled by Chester Solack, Business Analyst at SAFC in Lenexa, Kansas.
Bayer’s bid to stop generic Nexavar fails – 17 Sep 12
Bayer lost its bid to stop generic Nexavar in its tracks. An Indian patent board denied the drugmaker’s petition to stay a compulsory license granted to generics maker Natco Pharma. That means Natco’s much-cheaper version of the cancer treatment can stay on the market, at least for now. The Nexavar fight is playing out as other multinational drugmakers suffer their own intellectual property setbacks in India. Last week, an Indian court backed domestic drugmaker Cipla and its copycat version of Roche’s Tarceva, saying the Cipla drug was distinct enough to steer clear of Roche’s patent. Meanwhile, Novartis is still waiting for the nation’s top court to rule on a patent for its cancer drug Glivec. The IP fights threaten to undermine Big Pharma’s confidence in India’s promise as a growth market.
Targacept ends development on TC-5619 – 17 Sep 12
A very bad year for Targacept just got worse. The biotech announced this morning that a mid-stage study of its program for attention deficit/hyperactivity disorder–ADHD–failed to achieve statistical significance. The failure, the latest in a string of clinical setbacks, forced the biotech to jettison the program and prepare for another round of layoffs. Its stock price slid about 10% on the news. Over the past 10 months the share price has plunged about 80%. Once again, the company had to concede that the placebo performed better than the drug. “Across the study measures, patients in the placebo dose group consistently improved more than patients in the TC-5619 dose groups,” Targacept stated in a release.
China’s BGI acquires Complete Genomics – 17 Sep 12
After watching its stock price get pummeled throughout the course of this year, Complete Genomics has accepted a $117 million buyout offer from China’s BGI-Shenzhen. The deal comes at a 54% premium over the Mountain View, CA-based biotech’s close in early June, when it announced a plan to start studying strategic options, igniting buzz about a likely takeover. But it was only a marginal improvement on a share price swelled by all the market speculation.
Boehringer to close US API Plant – 17 Sep 12
Boehringer Ingelheim is closing an API plant in the U.S. because of excess capacity in its network. The German company will shut down the 35-year-old API manufacturing facility at its three-plant complex in Petersburg, VA, by the middle of next year. Between 80 and 100 of the 340 employees that work there will be let go, spokeswoman Jaime Belitz told FiercePharmaManufacturing on Monday. “The age of the facility is a factor,” Belitz said. “The other reason is the production demands of the overall company. Boehringer Ingelheim has four other chemical facilities in Europe. This is the only one in the U.S. With too much capacity, it doesn’t make good business sense to keep it open.”
J&J continues to protect Concerta sales with generic deals – 14 Sep 12
Johnson & Johnson continues to cut generics deals over its onetime blockbuster Concerta, as it does what it can to protect sales of the attention-deficit hyperactivity disorder drug. Impax Laboratories said today that it and its partner on the product, Teva Pharmaceutical Industries, agreed to drop their lawsuit against J&J subsidiary Alza in exchange for the right to start making a generic of the ADHD drug by July 14, 2013. Impax says generic Concerta is included in a strategic alliance it has with Teva. Once its application is approved by the FDA, Teva has the right to make a generic as well.
Bayer to acquire Teva’s Animal health Business – 14 Sep 12
In the second animal health deal announced in two days, generic drug giant Teva Pharmaceutical Industries says it will sell its animal products line to Bayer of Germany for $145 million so it can concentrate on human drugs. Terms include $60 million upfront and up to $85 million in milestone payments dependent on the business hitting both manufacturing and sales targets. Bayer gets a portfolio that includes dermatology products sold under the DVM Pharmaceuticals brand, a line of nutraceuticals and a range of food animal products that include anti-infectives, in addition to parasiticides, anti-inflammatories and reproductive hormones such as Prostamate and Ovacyst. In a release, Bayer indicated that it is the food animal franchise that particularly interests it.
Alzheimer’s proves difficult for the pharma industy – 14 Sep 12
Alzheimer’s drug research has riddled biopharma with some of the worst odds of success in the already risky R&D game. And as the industry feels the sting from recent failures of two Phase III programs aimed at the memory-stealing disease, a U.S. pharma group has revealed the abysmal track record of Alzheimer’s drug R&D between 1998 and 2011 with a message that the losses could eventually contribute to big victories as scientists learn from their mistakes. In that 13-year stretch, drug developers have scrapped or halted development of 101 meds for the complex disorder and brought to market only three treatments for symptoms of the disease, according to the Pharmaceutical Research and Manufacturers of America (PhRMA). This should come as no surprise to those who have followed the recent late-stage disasters of Johnson & Johnson and Pfizer’s bapineuzumab and Eli Lilly’s solanezumab. Do the math on PhRMA’s figures and from 1998 to 2011 you end up with a sad win-to-loss ratio of one to 34.
Perrigo acquires Sergeant’s Pet Care business – 13 Sep 12
The Michigan-based company, which makes generic drugs and over-the-counter products, as well as infant formula and supplements, has expanded its universe again, buying a pet care business. Perrigo announced today it will pay $285 million for privately-held Sergeant’s Pet Care Products, Reuters reports. Based in Omaha, NE, Sergeant’s is expected to have over $140 million in sales this year, and puts Perrigo into an industry estimated to be worth $8 billion a year. The pet products business also has had steady growth, even in tough times, as consumers lavish attention on their pets.
Pfizer to double workforce at joint venture by year end – 13 Sep 12
In a very ambitious drive, Pfizer and its Chinese joint-venture partner Zhejiang Hisun Pharmaceutical intend to more than double the size of the Hisun-Pfizer workforce by the end of the year. The two say they intend to hire 600 new employees by year’s end, Bloomberg reports, bringing the total for Hisun-Pfizer to about 1,000 employees by December. It intends to have nearly 1,500 employees by the end of 2013, the head of the JV tells the news service. “We are trying to attract appropriate people for the positions,” Hisun-Pfizer CEO Kevin Xiao tells Bloomberg. “So far, in the sales force, we have more Pfizer people, but in manufacturing, it’s the other way around.”
Aubagio approval is a bright light in troubled times for Sanofi – 13 Sep 12
In these days of patent losses, falling revenues and massive layoffs, Sanofi could use some good news, and it got some late Wednesday with the FDA approval of its new multiple sclerosis (MS) drug Aubagio, a possible blockbuster if it can sweep up market share from some tough competitors. To start that process the company said it was pricing the drug at $45,000 a year, making it 7% less than Teva Pharmaceutical’s Copaxone and 28% less than Gilenya from Novartis, FierceBiotech reports.
Ranbaxy to build 2nd plant in Malaysia – 13 Sep 12
Indian generics giant Ranbaxy Laboratories is setting up a second plant in Malaysia. The company says it will invest about $40 million and will employ about 200 people at the facility. The plant will make tablets and capsules, primarily for cardiovascular, anti-diabetic, anti-infective and gastrointestinal treatments. The company says in a release that its total output in Malaysia will be increased from 1 billion doses to 3 billion doses a year when the new facility is fully operational. It already has a plant in Sungai Petani, Kedah, Malaysia, built in 1987, which has more than 300 workers. Ranbaxy Malaysia Sdn. Bhd. is a joint venture company of Ranbaxy Laboratories and Malaysian shareholders. It was formed in 1982.
Merck suffers generic attack as Singulair sales fall 90% in 4 weeks – 12 Sep 12
With all of the pressures in place to promote generics of popular branded drugs, the time it takes to go from blockbuster to just buster has become remarkably short. New data shows that sales of Merck’s asthma and allergy drug Singulair fell nearly 90% in just the four weeks since the generics were approved. “There’s been a rapid decline and loss of sales,” MarketWatch quotes Adam Schechter, president of Merck’s global human-health unit, telling investors in New York. Schechter told analysts in July that history indicated it would take two months to lose 90% of market share. Well, history indicated otherwise, since sales fell 87% in a month.
Pfizer’s Prevenar 13 gets WHO approval – 12 Sep 12
Pfizer, which has big expectations for its pneumococcal conjugate vaccine, got a boost toward its goals with a prequalification from the World Health Organization (WHO) for use of Prevenar 13 in adults over 50. That means WHO countries can now order it for older people. To meet demand, Pfizer says it is increasing its manufacturing capacity for the vaccine and also investing in a multi-dose vial which, if approved, would be a benefit in developing countries.
Takeda opens new generics plant in Russia – 11 Sep 12
Japanese drugmaker Takeda has completed construction of a nearly 260,000-square-foot plant in Yaroslavl, Russia, as it builds a presence in one of the most promising developing drug markets, but one that also is fraught with exceptional challenges to foreign players. The €75 million ($95.9 million) facility, about 175 miles from Moscow, also builds on the presence in Russia of Nycomed, the Swiss generic drugmaker Takeda bought last year in a $13.7 billion deal, The Financial Times points out.
FDA fully embraces Generic drugs – 10 Sep 12
With generic drugmakers now slated to kick in a significant piece of the FDA’s outside funding, the agency appears ready to give them the position they have earned. According to a letter from Janet Woodcock, director of the Center for Drug Evaluation and Research (CDER), the Office of Generic Drugs (OGD) is slated to become a “super Office,” and so will oversee other offices. It continues to be run by Dr. Greg Geba, who was recently named to that position, only now he reports directly to Woodcock. He will lead the office’s “expanding generic program with the goal of enhancing our ability to give consumers timely access to high-quality, safe, and effective generic drugs,” she said. In the letter, which is published by PharmaManufacturing, Woodcock says that with the passage of the Generic Drug User Fee Amendments of 2012 (GDUFA), and given that nearly 80% of all prescriptions in the U.S. are now of generic drugs, it makes sense to give generic drugs a superior position in FDA.
Novartis to employees “we need a quality reboot” – 6 Sep 12
It has been a tough year for Novartis CEO Joseph Jimenez. In the course of 9 months, the company received a three-plant FDA warning letter, closed its key OTC plant and had to tell shareholders that revenues slid 4% because the manufacturing mess kept it from having its most popular consumer products. So, Jimenez says maybe it is time the company thinks differently about quality.
Warner Chilcott investors revolt as company takes itself off the market – 6 Sep 12
A few months ago, Warner Chilcott put itself up for sale. Last month, it said “No deal.” Now, its top shareholders are conducting a sale of their own, aiming to cash out more than half of their stakes in the company. And after that news broke, other shareholders started unloading, too. Institutional investors Bain Capital, J.P. Morgan Partners,and Thomas H. Lee Partners–along with current and former top executives–are offering 42.9 million Warner Chilcott shares via a secondary public offering. Bain, JPMP and Thomas H. Lee each own 10.2% of the company, after taking it private in 2005–and then going public again in 2006. When the offering closes next week, they’ll hold 4.6% apiece.
Fresenius ups (3rd time this year) forecast for its kabi generics group – 5 Sep 12
One drugmaker’s problem is another’s opportunity. Just witness Fresenius Kabi, the generic injectables unit of Germany’s Fresenius group. Its parent just hiked its growth forecast for the business for the third time this year. Now, Fresenius expects Kabi to deliver 9% revenue growth for the year, with profit margins of around 20.5%. The key factor here is “generic injectables.” Of all the drugs now on FDA’s list of shortages, generic injectables are the most common. Quality problems, recalls, and other manufacturing issues have crimped supplies, and that opens the door for rivals to step in. One reason for Kabi’s accelerated growth, Reuters says, is propofol, the anesthetic that’s been running short ever since Teva Pharmaceutical Industries stopped production. Kabi has been the only propofol supplier in the U.S. since March, when Hospira had to stop production temporarily. Kabi thought its competitor would be back up to speed last month, but Hospira recently said the fixes will take several more months.
Emerging Markets proving to not meet expectations – 4 Sep 12
Emerging news about emerging markets has dampened some of the excitement for drugmakers. And today, there’s more: A report from the market research firm GlobalData finds that an unholy convergence of intellectual property worries, price controls and budget cuts is eroding earlier forecasts for emerging-market sales growth. And how: GlobalData says the gap between pharma’s expectations for emerging markets and the “actual realizable [yearly] revenue” could be a whopping $47 billion. Some Big Pharmas have started acknowledging the risks–and admitting that their earlier emerging markets predictions turned out to be a bit too rosy. “These companies had their own forecasts when moving into these emerging markets and they haven’t found what they expected,” GlobalData’s Adefemi Adenuga told the Financial Times.
Valeant continues shopping spree with acquisition of Medicis – 4 Sep 12
Just over a year ago, word was that Valeant Pharmaceuticals wanted to buy Medicis Pharmaceuticals. The dermatology specialist’s CEO, Jonah Shacknai, had just lost his son to an accidental fall, and his girlfriend had died in an apparent suicide. Medicis stock was down. Shacknai admitted to some “introspective thinking.” The time for a bargain deal looked right. Well, apparently the time wasn’t really right until now. Valeant has agreed to buy Medicis for $2.6 billion, or $44 per share. That’s a 39% premium to Friday’s closing price of $31.56. According to Wall Street Journal historical pricing data, in the weeks after Shacknai’s tragic losses, the stock traded not much lower than that. So, it appears that Valeant CEO J. Michael Pearson may have made a bargain deal anyway. That’s certainly Pearson’s modus operandi. He’s been on an acquisition spree since 2008, with around 50 deals to his credit since. The Medicis buy is his biggest since Biovail and Valeant merged two years ago, and it’s in line with Valeant’s stated mission to build a leading dermatology franchise. Medicis specializes in treatments for acne and other skin problems–and, most prominently, wrinkles.
Hospira acquires API plant and R&D facility from Orchid Pharma – 30 Aug 12
Hospira has snapped up an API plant and R&D facility from India’s Orchid Pharmaceuticals. The $200 million deal will secure supplies of active ingredients for certain antibiotics and will help it cut costs as well.
Novartis AH begs for loyalty as shortages hit its market share – 30 Aug 12
Novartis isn’t pussyfooting around its animal-drug shortages. But with supply problems still dogging the most popular products, veterinarians are howling–and switching their four-pawed patients to rival products. As the Veterinary Information Network reports, the Swiss-based drugmaker recently wrote vet customers to plead for patience. Novartis Animal Health Sales VP Andy Ferrigno admitted that the shutdown of a Lincoln, NE, plant last September has cut off supplies of key products, particularly the parasite-fighters Interceptor and Sentinel. But Novartis is “working diligently” to get its products back on the distribution list, he wrote. The problem for Novartis is that its competitors are ready and willing to take advantage of the market vacuum. “Your clinic will be approached in the coming months by our competitors, offering you load-in deals and terms that may draw your interest,” Ferrigno wrote (as quoted by VIN News). “[W]e hope you will seriously consider saving us a spot on your shelves.” That dog won’t hunt for some veterinarians, who tell VIN News that they’re moving away from Novartis products, probably permanently. Some are frustrated by a lack of information about when the drugmaker’s products will be available again. Others are angry that the Interceptor and Sentinel products–which are given monthly as a preventive measure–are still available via some online outlets.
Vertex’s Kalydeco drug hits a hurdel – 30 Aug 12
Vertex Pharmaceuticals ($VRTX) has hit an unexpected snag with its cystic fibrosis pill Kalydeco. The FDA is raising questions about a potential risk of cataracts in children using the drug, and asked the drugmaker to conduct a two-year study to assess that risk. The FDA’s worries arose after a study in juvenile rats. After receiving a dose of Kalydeco about one-tenth the maximum recommended for humans, the young rodents developed cataracts. Whether the rat results mean similar risks apply to humans is unclear, the agency said. And that’s why FDA asked Vertex to follow kids who are already taking Kalydeco, which targets cystic fibrosis in patients with a particular genetic mutation. The study would involve kids up to 11 years old, and would monitor participants for at least two years by providing eye exams every 6 months. In the meantime, the agency is adding information about the rat study to Kalydeco’s label.
Sunovion acquires Elevation Pharma – 30 Aug 12
A little more than three months since Elevation Pharmaceuticals boasted about the “gold standard” Phase IIb data generated by its nebulized LAMA product for COPD, Sunovion has stepped in to buy the company in a $430 million deal. Marlborough, MA-based Sunovion, formerly Sepracor, is putting down $100 million to buy the company and its lead drug EP-101, promising $90 million in research milestones, $210 million in commercial milestones and another $30 million if they see some additional advances on new products.
Sanofi to outsource API’s as it closes India plant – 21 Aug 12
GlaxoSmithKline will turn to outsourcing to replace APIs made at an Indian plant on its way to closure. Rather than sink more capital into improving the Thane, India, plant, the company will contract for those ingredients, which are “available at competitive prices from third-party manufacturers in India,” a spokeswoman said. Some 330 employees are taking “voluntary retirement.”
Cinven to acquire Mercury Pharma – 17 Aug 12
Mercury Pharma, a U.K.-based specialty drugmaker, has gone from one private equity owner to another. Cinven agreed to pay £465 million ($732 million) for the company, which HgCapital took private in 2009. The deal follows a couple of years of “streamlining” at Mercury, CEO John Beighton said in a statement. In an echo of Pfizer CEO Ian Read, Beighton explained that Mercury has been refocusing on its “core specialty pharmaceutical products” and plowing money into its pipeline. Right now, Mercury sells generic drugs and some branded products, including anesthetics, antipsychotics, cardiovascular drugs, pain meds and arthritis treatments. It’s focused mostly on the U.K., but sells its products in more than 50 countries, including Australia and New Zealand, South Africa and Kenya, and a variety of markets in the Middle East and Asia. It launched 15 new products since last January.