The IN VIVO Blog Podcast: Corporate Venture

Your amazing IN VIVO Blog team does it again--if we do say so ourselves. (And since we are incapable of humility, we will.) Another day. Another podcast.

Yesterday McAllen, Texas. Today the world of corporate venture capital, based on a comprehensive article Ellen Licking wrote for the May issue of START-UP. (Click here to take a gander at the story.)

Sadly, no word yet on whether President Obama has mandated this particular piece as required reading in the West Wing. Somehow we'll survive...

Don't feel inclined to dig into the story right now? Click the button below and listen to the podcast summary of what Roger Longman calls a "magnificent piece." Trust us, Roger never says that--unless he's trying to get a writer to do even more work. And don't forget, you can access the podcast via iTunes also.

Shameless Euro-Biotech Forum Promotion

Shameless. We think it's just shameless how some otherwise self-respecting bloggers, providing valuable, balanced, editorially-independent and intelligent industry commentary, lapse into the occasional fit of promotional madness.

Don't you? We mean, it's as if we were to use this space to plug our forthcoming Euro-Biotech Forum in Barcelona. There'd be plenty to say: the event, held June 29-July 1 in the classy Hotel Arts Barcelona, is simply the most productive partnering meeting out there.

That's why it'll be teeming with senior dealmakers, from Pfizer, GSK, Merck & Co., J&J, Sanofi-Aventis, AZ and plenty more, including the leading Big Biotechs and European mid-caps.

And as well as kicking off--or closing--their next set of deals, Euro-Biotech attendees will hear our own guru Roger Longman's view on dealmaking's new drivers, plus get to question our hand-picked panelists during discussions covering alternative biotech financing, and Big Pharma's risk-mitigating strategies in dealmaking. (If we were so inclined we could even link to the full schedule.)

That's not to mention presentations from leading European/US mid to large companies, acquirers, investors and private equity, and a couple of fantastic receptions. (Keen to come, know you'd be crazy not to? We happen to know where you can get great conference packages.)

You see? You see how easily it's done, this shameless self-promotion thing? Be warned. That it's easy is no excuse.

Random Observations from the Chaos of the JPMorgan Meeting

It's a hell of a show, the annual JPMorgan shindig, even when its slightly muted by the disastrous economy. We've heard some of Roger's early observations but let us weigh in with a few of our own thoughts. More, uh, serious insight to come at our annual Webinar.

• We're definitely behind the ban on bottled water and any other greenish campaign the folks in San Francisco undertake. This only led us to scratch our heads a bit when we walked into Union Square. How can any environmentally minded folks justify expending the energy necessary to keep an ice skating rink frozen on a sunny, 70-degree San Francisco day. Will this be a refuge for polar bears? According to one observer the influx of conference denizens this week made it seem more like "The Matrix On Ice." Now that's something people would pay to see.
  
  
• Who knew we'd have to travel to balmy San Francisco to learn about freezes and frosts? Stryker executives, speaking at the company's breakout session, confirmed that many hospitals were putting a lid on capital spending. In fact, over half of the hospitals surveyed recently said they'd implemented a freeze or frost. This lead one wiseguy in the back to holler, "What is a frost?!" Okay, we didn't know either. Well folks, a "frost" apparently has become acceptable salespeak for a soft, mushy freeze.

• Biotech CEOs! Need a quick buck? Start printing some T-shirts emblazoned either with "ObamaCare" or "Flat Rounds Are the New Up" or maybe "DRIPFED." Speaking of ObamaCare, popular opinion--at least among those willing to express themselves at the conference--is behind some form of nationalized health care plan in the US.
  
  
• Poor Merck & Co. Not only were they inexplicably bounced from the Grand Ballroom into the slightly cozier confines of the Colonial Ballroom (what, Storage Room B wasn't available, mmmkay?) but CEO Dick Clark was put in the unenviable position of taking the stage to the sounds of Queen's 'Another One Bites the Dust.' Clearly Merck hasn't been doing enough transactions with J.P. Morgan.
  
  
• If we handed out awards (perhaps they should be called Jamies) to the most entertaining presentation, NuVasive Inc. would be a definite nominee and likely favorite. Not too many other companies fit both Jeopardy and Ultimate Fighting into their 20 minutes. And even fewer CEOs have an MRI of their own spine, complete with implants, as their company logo. Yep, that's Alex Lukianov's spine profile that you're looking at. As he noted, he's not only CEO, he's also a client.
  
  
• The Jamie for subtlety goes to Art Levinson of Genentech. As the Wall Street Journal noted, not only did he set the record straight about the helix printed on conference badges, he also sent a subtle message to Roche and other big pharma about the role Genentech continues to play as an innovator. In his 25-minute presentation, he made sure to note the biotech's numero uno status for six of the past seven years as the best place to work according to Science magazine. He also pointed out that in 2007 the company earned the mantle of having the most life science patents issued, more than double what the US government's NIH behemoth were awarded. Nor is he so keen to diversify Genentech's business model. We're loosely paraphrasing here, but he intimated that while adding generic capabilities might be a perfectly good business strategy to hedge risk, if he went to his board proposing that kind of model, it would be grounds for firing. Indeed, it was an elegant performance--and likely his swan song given the rumors circulating about Roche's ability to finance the deal.
  
  
• Sometimes actions do really speak louder than words. Pharmas trawling for innovation have been buying up biotechs and ring-fencing them, running them as so-called independent entities. But you've got to wonder, isn't that really lip-service? In the case of GSK, maybe not. Christoph Westphal did his annual magic at the event, representing Sirtris, a GSK company. Contrast that approach with Takeda, which presented at J.P. Morgan for the first time, and is heavily reliant on the success of its Millennium franchise given the approval delays facing its other drugs. Did Millennium's Dunsire give the pitch? No but she was trotted out in the very limited Q&A session in the break-out room.
  
  
• Someone, somewhere out there did the math for a handful of normally easily accessed receptions: yep, it's cheaper to hire bouncers to keep out the riff-raff than to throw the doors open wide to assorted thirsty bloggers and other varieties of conference lowlife. Cheaper still to cancel the annual Monday night confab at City Hall.

--Ellen Licking, Tom Salemi, Chris Morrison

image from flickr user http2007 used under a creative commons license.

The IN VIVO Blog: Ahead of the News...

Don't mind if we toot our own horns for a second...

The Washington Post had a front page article January 8 on the pharmaceutical industry's efforts to burnish its image, including some remarks from Bill Burns at Roche about the damage done by DTC. But you already knew how Burns feels ...

And today The Wall Street Journal catches up on Sidney Wolfe's appointment to the Drug Safety & Risk Management Advisory Committee, which you read first here.

Its nice to be noticed! Now how do we get rid of this gold paint?

image by flickr user david's digits used under a creative commons license

Next Steps For Prasugrel: The Anatomy of an Advisory Committee

Eli Lilly and Daiichi Sankyo used the morning of New Years Eve (‘tis the season for hiding news) to announce that the delayed anti-clotting drug prasugrel will be considered by the Cardiovascular-Renal Advisory Committee February 3. (Shameless self-promotion alert: We predicted that February meeting in October.)

Now that a date has been offically set, let the next round of speculation begin.

That news can be viewed in two ways: optimists (like Lilly and Daiichi investors) will argue that the meeting is a signal that the review is wrapping up and a decision is close at hand. Pessimists will argue that the meeting is an indication of the internal strife at FDA over prasugrel’s benefit-risk profile—and that products that go before an advisory committee are less likely to be approved on the first cycle.

Here's our take. First, we should note that the confirmation of the advisory committee meeting is a milestone in prasugrel’s development. It’s the first word to come out of FDA on the drug since June, when the agency extended the review by three months. FDA then let the revised September 26 review deadline pass without an approvability decision.

Another positive indicator for Lilly and Daiichi is that FDA is only convening the Cardio-Renal committee—and is not asking for a joint review with the Drug Safety & Risk Management Advisory Committee. A joint meeting would indicate significant concerns at FDA regarding prasugrel’s safety profile, which we have delved into in this earlier post.

Of course, that certainly doesn’t preclude FDA from drawing from members of the Drug Safety & Risk Management Advisory Committee as needed—including its newest member, Public Citizen’s Sidney Wolfe, who is unlikely to look kindly upon the prasugrel NDA.

Wolfe is just one extra member that could be asked to show up on February 3, given the current vacancies on the Cardio-Renal advisory committee. There are just eight permanent Cardio-Renal members, including a consumer rep (Consumers Union’s Stephen Findlay) and a non-voting industry rep (AstraZeneca’s Jonathan Fox).

That can make for a lot of last-minute additions. At the committee’s last meeting, FDA added 13 temporary members, including two regulars: University of Washington statistician Thomas Fleming and Duke University human cognition expert Ruth Day.

So who might be asked to serve? With a product like prasugrel, one obvious choice for a temporary member is Steven Nissen, the head of cardiology at the Cleveland Clinic—an expert on cardiovascular drug safety and a former chair of the Cardio-Renal advisory committee.

Nissen’s participation on the committee would be a positive development for Lilly and Daiichi, given that he has come out in favor of prasugrel—first giving the drug a thumbs up for approval and then criticizing FDA for not delivering an on-time approvability decision. Nissen isn’t exactly a shrinking violet, so if he still favors a prasugrel approval, he stands a good chance of getting the committee to see things his way.

But those statements may prevent Nissen from serving—especially given FDA’s tougher line on conflicts of interest. Indeed, Nissen himself has questioned whether he is qualified to serve on an advisory committee under the new CoI guidelines. The meeting roster will be out in the next month. Lilly and Daiichi should hope Nissen's name is on it.

Human brain image courtsey of flickr user hduhadaway.

Obesity Drugs: Another One Bites the Dust

From time to time here at the IN VIVO Blog, we write about something not because it’s a clever deal, or a shocking policy out of Washington, or an interesting industry trend that we think you should be aware of—but simply because we were right.

This is one of those times.

Merck has decided to discontinue development of taranabant, its cannabinoid-1 receptor blocker in Phase III development for obesity. Why? Well, in short, the only doses that were effective in weight management also had an unacceptable level of psychiatric adverse events.

Indeed, Merck had already dropped the two high doses of taranabant in clinical studies (4 mg and 6 mg) due to statistically significant differences in crying, mood swings, anxiety and depression. At the lowest dose (2 mg), patients reported the same adverse events, although the results were not statistically significant.

The problem was that the efficacy at that low dose wasn’t terribly impressive. Among those patients, 57% lost 5% of their body weight and 28% lost 10% of their body weight. That sounds nice, but when you consider that these are obese patients with a body mass index of at least 30 kg/m2, it’s really not that much to lose—especially in light of the psychiatric adverse event trend.

Given that taranabant is in the same class of drugs as Sanofi-Aventis’ rimonabant (once Acomplia, later Zimulti), and had pretty much the same profile, we saw this one coming. We probably weren’t alone in that thinking, but we’ll continue with the shameless self-promotion anyway—click here for that story in The RPM Report.

But we also have to applaud Merck for having the courage to put a dead drug down—instead of being so blinded by dollar signs as to fail to see that there’s no chance for FDA approval until deep into the drug review process. Of course, when you bank much of a future franchise on a single product, it can be hard to see the forest through the trees.

The taranabant failure happened despite—or perhaps because?—Merck hired two prominent FDA officials that could offer advice on the application: Robert Meyer, the FDA division director that was in charge of reviewing taranabant, and Peter Honig, who was a prominent drug safety official in his days at the agency.

Perhaps it was that expertise that helped convince Merck of the bigger picture. FDA isn't going to approve a relatively ineffective drug that has that kind of a safety signal—especially given the agency's recent crackdown on drugs with psychiatric adverse events.

Or maybe Merck knew that already. Regardless, one thing is clear: like so many others before it, cannabinoid-1 receptor blockers are proving to be a tough drug class. Taranabant is just the latest drug to fall.

FDA's Next Steps on Epilepsy Drugs and Suicide

Man, we hate to say we told you so.

Today, the Wall Street Journal reported that several manufacturers of anti-epileptic medications met with FDA officials in New York to try and convince the agency not to add warnings to product labeling on an increased risk if suicidality.

During the closed-door meeting, three drug manufacturers—GlaxoSmithKline (which markets the epilepsy drug Lamictal), Pfizer (Neurontin and Lyrica) and UCB (Keppra)—made presentations to FDA, according to the Journal. Despite best efforts, the companies left the meeting “convinced” that the agency would revise labeling.

That was probably a foregone conclusion. Given that FDA believes that a two-fold increased risk of suicidality is a problem with all 11 anti-epilepsy medications, the agency is quite likely to ask for class labeling as a result. Indeed, FDA already issued a MedWatch alert on the risk in January; class labeling was just a matter of time.

But that won’t be all that FDA will be asking of drug sponsors. The agency is also interested in asking sponsors of new anti-epileptic medications to use the prospective Columbia Suicide Severity Rating Scale (C-SSRS) to predict whether the investigational drug might carry a higher risk of suicidality.

As Office of New Drugs director John Jenkins said in an interview in the April issue of The RPM Report, “it wouldn’t be illogical for us, now that we have observed this finding, to ask future anti-epileptic trials to include a C-SSRS-type of rating scale.” FDA already routinely asks antidepressant manufacturers to use a prospective scale like C-SSRS, and has started asking manufacturers of certain centrally-acting weight loss products (read: Merck’s taranabant) to use it as well.

Finding a link to psychiatric adverse events isn’t usually good for product sales—look no further than Pfizer’s smoking cessation drug Chantix (and our earlier blog post). But over the long term, manufacturers would be wise to take a cautious approach to psychiatric drug safety. FDA certainly is.

Deals of the Week: Signage

Another week, another big pharma reorganizes. This week comes news that Lilly's CEO John Lechleiter plans to reorganize several business units, including R&D, to "minimize bureacracy by reducing the layers of management." We wonder if that will impact Lilly's Chorus group, which is attempting to push drugs rapidly to proof-of-concept before investing significant dollars in development.

Shareholder activism reared it head again this week too. More than one third of Glaxo investors refused to endorse the consolation package--a stock bonus estimated between $4 and $5 million--of Chris Viehbacher, who lost out to Andrew Witty for GSK's top spot. (Perhaps they actually want the company to invest in something important, like pipeline? Nah, probably just share buy-backs.)

And Enzon shareholders are itching for that company to explore all strategic options for its remaining commercial operations, according to documents filed with the SEC. Apparently, the recently announced spin-off of the company's biotechnology businesses doesn't go far enough. The twist? DellaCamera Capital, which holds a 5.9% stake in the company, earns this week's award for stirring the pot--not Carl Icahn. (But for you Icahn watchers, fear not. Carl may be up to his old tricks. He's increased his shares in Byetta maker Amylin Pharmaceuticals and is reportedly in discussions with management about ways to maximize product sales and development.)

Meantime, the Institute for Safe Medication Practices published its list of most dangerous drugs and--surprise--Pfizer's Chantix took top billing. As we wrote here, Chantix has been steadily climbing to the top spot on ISMP’s list, based in large part on an increased incidence of psychiatric adverse events. Now comes news, published in Drug & Therapeutics Bulletin, that the Pfizer pill may cause--among other things--serious accidents and falls, potentially lethal cardiac rhythm disturbances, severe skin reactions, acute myocardial infarction, seizures, and diabetes. (Aren't you glad it's for healthy people?) The findings prompted the Federal Aviation Adminstration to ban pilots and air traffic controllers from using the drug. (That makes you feel much better, doesn't it?)

Another "top" list made headlines this week: World Pharmaceutical Frontiers published its annual top 40 most influential people in our industry. Sadly, our own Roger Longman was passed over yet again (hey, I need my job). Still the list was informative and indicative of the changes roiling the industry. In 2007, execs from Pfizer, Novartis, and Bayer all took top billing, but this year no single big pharma exec made the top ten. (Andrew Witty, at number 6, was the one exception, but he hasn't held his position long enough to really screw up.)

Interestingly, the group placed an emphasis on innovation (really!) and regulation, with Genentech's Arthur Levinson taking the number two spot, and NICE chairman Sir Michael Rawlins at Number 5. And guess who took the number 10 spot? Shlomo Yanai, CEO of TEVA, a company that's making a name for itself in follow-on biologics as well as generics. But lest you think Big Pharma has forgotten about innovation, you'll be happy to learn this nugget of truthiness: Joe Jimenez, who recently took charge of Novartis’s pharmaceutical division, told the WSJ that selling drugs is a lot like selling ketchup. It depends on "key account management," code for building better relationships with insurance companies. If that's not a sign of the times, I don't know what is.

Unless, of course, its my own personal favorite:

Myriad/Lundbeck: Myriad Genetics announced a critical tie-up for its Phase III Alzheimer's drug, Flurizan, with the Danish pharmaceutical company H. Lundbeck A/S on Thursday May 22. In exchange for merely European commercialization rights, Lundbeck has agreed to pay Myriad a generous $100 million up-front, plus an additional $250 million in regulatory milestones as well as escalating sales royalties in the 20-39% range. Undoubtedly, the deal terms for Myriad's so-called selective amyloid beta-42 lowering agent are rich, but the real upside seems likely to come later, when the Utah-based biotech looks to ink a revenue-sharing arrangement for the product in the US market. We've written extensively about the potential for alliances to bleed value, but in the case of Myriad's Flurizan, this is a deal that's likely to be validating. Lundbeck, after all, has both the largest CNS sales force in Europe and experience selling Alzheimer's meds. Moreover, Myriad can now afford to partner Flurizan in the US for a dear but not prohibitive price. That's a situation likely to interest partners who might be interested in a biggish deal but who couldn't otherwise afford world-wide rights. Potential interested parties? Forest Labs, which markets Alzheimer's medicine Namenda, comes to mind, as does Takeda, which needs to fill the hole left by the pending patent expiry of its blockbuster Actos. (For an update on the risks and rewards of investing in Alzheimer's drugs, see this recent START-UP piece.)

Medivir/Tibotec: HCV polymerase inhibition gets a boost as Medivir inked an R&D pact with J&J's Tibotec subsidiary. Medivir sees €5 million in cash now, potentially much more later if two compounds reach the market and are approved in two indications. Joining up with J&J keeps Medivir's NS5B polymerase activity in the family as it were, given the two groups' previous deal in the area of protease inhibition (TMC435350 is in Phase IIa trials). HCV polymerase inhibition has had a tough ride lately, with Wyeth/Viropharma and Novartis/Idenix each dropping mid-stage programs in the past ten months. Medivir has pretty extensive R&D experience in the polymerase area--it's developing compounds against herpes virus, shingles, HBV, CMV and HIV polymerases, and even has a five-year old deal with Roche in HCV polymerase (terms of which are/were undisclosed). As in it's 2003 deal with Roche, Medivir has hung onto Nordic commercialization rights in its deal with Tibotec.

Pfizer/FivePrime: Pfizer announced a research tie-up with next generation protein developer FivePrime this week. The collaboration will focus on the discovery of antibody targets and novel protein drugs to treat cancer and diabetes according to the press release. Specific deal terms weren't disclosed, but FivePrime will receive an up-front payment and three years of research funding for its efforts. In addition, Pfizer is taking an equity stake in the company. This deal highlights two major trends we've been watching for some time: the importance of bringing in biologics capablities and the flight to specialist markets. Pfizer has been slow to the biologics party, but has been attempting to make up ground with torrid deal-making, including the recent acquisitions of Coley Pharmaceuticals, CovX, and Biorexis. In addition, the at least partial focus of this deal on oncology represents a shifting attitude among Big Pharma away from the risky primary care markets to a focus on specialty, where there is still great unmedical need but also a less onerous regulatory path. Recently Pfizer CEO Jeff Kindler says he is putting "Pfizer's full scope and scale" behind a push into the cancer market. As part of that effort, he's hired Garry Nicholson, a 30-year veteran of Lilly, to oversee Pfizer's newly created oncology business from clinical trials through marketing.

Daiichi Sankyo/ U3: Another week, another Japanese pharma making noise. Takeda has taken top honors lately, with its big cancer deals with Cell Genesys and Amgen and its acquisition of Velcade developer Millennium. But the other Japanese pharmas aren't giving up on either oncology or their ability to become international powerhouses. Take this week's news that Daiichi Sankyo is buying German biotech U3 Pharma for $235 million in cash. Among the drugs in U3's pipeline: a fully-human anti-HER3 monoclonal antibody due to begin clinical trials this year that is partnered with Amgen. Daiichi is no stranger to the Thousand Oaks biotech. It has Japanese rights to market Amgen's denosumab, currently in Phase III trials for osteoporosis and bone metastases in patients with advanced breast cancer. In addition, Daiichi also has several other cancer products in development, including the Phase II CS-1008 to combat malignant neoplasms.

Photo courtesy of Flickr user ramson via a Creative Commons license.

While You Were All Growed Up

We've passed a milestone. Although if you go back and check you can find a few dozen earlier posts stretching back to late 2006, this weekend marked the one-year anniversary of the official launch of IN VIVO Blog. On April 26, 2007 we posted twice--two takes on Bristol-Myers Squibb Co.'s blockbuster deal with Pfizer on apixaban and its hybrid biotech/pharma strategy--and decided to pull back the curtain on our fledgling blogging efforts.

The response has been encouraging. Thanks to everyone who reads us on the web, subscribes (it's free!), links over, comments (we wish there were more--you can do it anonymously!), and/or mocks our sports team allegiences. We really do appreciate you dropping by.

So even though there was plenty of news out of ARVO and EASL this weekend lets highlight some sweet bloggy goodness for your weekend roundup:

• When Patent Baristas isn't dreaming up ways to celebrate World Intellectual Property Day 2008 (that explains all the drunken patent attorneys on Saturday) it's laying down the serious analysis. Friday the blog dispelled some myths about the difficulties of biotech co/university tech transfer.
  
• Derek Lowe takes another look at GSK/Sirtris and the ally-vs-buy question, from the GSK employee point of view and through the historic prism of Glaxo's nuclear receptor R&D push that yielded, well, not much.
  
• After a year of blogging over at VentureBeat Life Sciences, David Hamilton has new digs--check out his new Pharma Industry page at Bnet. (h/t pharmagossip)


• If you're not reading Pharma Giles, you're missing out on some hilarious skewering of the pharma world. This morning the target is off-label promotion.


• And finally, stop by IN VIVO Blog later today (hey, that's us!) for our take on the latest setback for the Merck/Schering-Plough joint venture, FDA's Friday night smackdown of the Singulair/Claritin NDA.

milestone photo by flickr user robw1882 used under a creative commons license.

Surprise Players in Follow-On Biologics?

Legislation authorizing FDA to develop an abbreviated pathway for follow-on biologics seems pretty much inevitable—at least, that’s the near-unanimous opinion of the experts we talk to over here at the IN VIVO blog.

So assuming legislation passes sooner rather than later—indeed, some industry watchers think it’ll be as soon as next year—it’ll be a boon for the generic drug industry. Right? Generic drug companies will easily transfer their small molecule expertise into developing biosimilars. Right? They’ll become the big players in the follow-on biologics market and make a gazillion dollars. Right?

Well, maybe not.

According to some analysts, like Cowen & Co.’s Ken Cacciatore, the market for follow-on biologics may not unfold in the way most expect. While the generic drug industry would appear to be the natural players for follow-on biologics (and indeed, they certainly think so), Wall Street is starting to look in a different direction altogether.

As we just wrote in a story for The RPM Report, Cacciatore and his colleagues at Cowen think that (surprise!) Big Pharma and biotech companies are actually better equipped to play in the follow-on biologics market. (You can read the whole story at TheRPMReport.com; if you’re not already a subscriber, you can sign up for a free trial.)

The branded companies, Cacciatore argues, have the clinical, manufacturing, and regulatory expertise to meet the relatively high bar for follow-on approvals. Sales and marketing will also be important, since the products are unlikely to be therapeutically substitutable. And when you think about the branded industry’s willingness to develop authorized generics of expired small molecules, it’s not such a crazy idea.

So who’s looking to play? Well, Pfizer for starters. In case you missed it, CEO Jeff Kindler acknowledged during Pfizer's recent investor day that there may be money to be made in follow-on biologics. And Pfizer’s not alone—there are a lot of other companies considering the jump as well. (Again, you can check out our story in The RPM Report for the complete list.)

Now, we don’t mean to suggest it is all doom and gloom for the generic drug industry. There are a few bigger generic companies—like Teva and Novartis’ Sandoz, for example—with the infrastructure and expertise necessary to compete with branded companies. But interestingly, Cacciatore points to both companies' brand-like features—not their generic capabilities—in outlining their FOB potential.

For the rest of the generic drug industry, there’s still good news. Even if Congress manages to push through legislation authorizing an abbreviated pathway, FDA’s part in all this isn’t going to happen overnight. Depending on Congress’ intent, it could take a while—perhaps even years—to develop the regulations. So for companies that aren’t ready, there’s still time to prepare.

One thing is clear: the participants in follow-on biologics aren’t going to be the same as the generic small molecule market. Wall Street is already starting to think in those terms. Industry should plan accordingly.

While You Were Eating Chili and Drinking Beer

Sometimes coming up with a headline for our weekend roundup can be difficult. This was not one of those times.

While we went with what we figured was the most universal of Super Sunday experiences, we had choices. Also considered: While You Were Watching It For the Ads, While You Were Giants, While You Were Eli-d, While You Weren't Going Undefeated, While You Were Choking, While You Were Jumping Off the Pats' Bandwagon, While You Were Participating in the Unauthorized Use of Game Footage Without the Express Written Consent of the NFL, and While You Were Praying There Would Be No Tom Petty Wardrobe Malfunction.

Some of us here at the IN VIVO Blog are Eagles fans (no, really, we probably haven't mentioned it before) and so the only suitable Superbowl outcome would have been for both teams to get disqualified somehow. But alas, at least it was a tight game.

Believe it or not there was more than Super Sunday and Super Tuesday prognosticating going on this weekend. Or so we heard.

• Amgen and Takeda inked a broad alliance to develop and commercialize 13 Amgen products in Japan. In a second and related deal, Takeda becomes Amgen's worldwide partner for the Phase II oncology candidate AMG-706 (motesanib). Amgen gets up-front payments of $200 million and $100 million respectively, and a further hundreds of millions in milestones and R&D expense sharing, plus royalties on Japan sales (and worldwide 50/50 profit sharing on motesanib). Takeda is also acquiring Amgen's Japanese subsidiary Amgen KK.
  
• From the Financial Times: a preview of GSK's forthcoming results this week with one key question--can the Big Pharma get FDA approval for Cervarix? We weighed in on this question on Friday.
  
• [Self Promotion Alert] The line-up for our Pharmaceutical Strategic Outlook conference in New York (March 18-20) keeps on getting better.

Photo from Flickr user jwinfred used under a Creative Commons license

The Top Ten IN VIVO Blog Posts of 2007

IN VIVO Blog started up in earnest about eight months ago, and in that time we've racked up hundreds of posts covering a wide variety of topics, like Big Pharma's pipeline troubles, biotech exit strategies, financing, drug regulation, managment succession, and the Philadelphia sports scene. But, you're wondering, what are our favorites? Well, reader, wait no longer. Because to jumpstart your workayear life we've completely unscientifically collected our Top Ten posts of 2007.

You'll notice that there are well more than ten posts below, but we've handily crammed them into a list of ten topics. It's our way of saying "Happy New Year!" or maybe "We can't count!"

10. The Importance of China: we spoke to VCs eager to invest there, we covered a few harbingeresque deals, and we analyzed the country's role as a gene therapy hotspot.

9. RNAi: We broke the news about the next-generation RNA interference company Dicerna, and followed up with news of its Series A & new competition from Nastech spin-out MDRNA. We also covered Alnylam's spectacular platform deal with Roche and AZ/Silence's smaller but important-to-the-biotech alliance.

8. Inhale, Exhale: We had a little fun with Pfizer's inhaled insulin Exubera troubles, like much of the rest of the blogs out there, and we also came through with some more serious content: the Gecko-esque play by Sanofi-Aventis, the ads that couldn't make enough people "get it," and an early look at the numbers that led to the drug's demise. Finally we unpacked some taken-out-of-context quotes that created just one of the several stories this year involving ADA president John Buse, MD.

7. Win Some, Lose Some: Carl Icahn succeeded in getting MedImmune on the block and sold to AZ for a handsome price. But his plans to put Biogen Idec on the block (see more below, in #1) and interest in Genzyme failed to achieve the desired M&A result, so far.

6. Diagnosis Negative: Icahn wasn't the only party rebuffed. Roche spent most of the year getting turned down by Ventana, which played down the pharma's $3 billion offer multiple times. First they said please, then highlighted its belief in the importance of its diagnostics business by promoting its dx head Severin Schwann to CEO of the whole Roche Group. We suggested soon thereafter that Ventana should do the deal, and in late November they indeed decided to at least think harder about it.

5. R&D: As the attempted revitalization of Big Pharma's R&D machines continues we observed that it is business development effectively displacing much of the research infrastructure and decisionmaking, for example at Johnson & Johnson, where that company's drug business has made its chief licensing honcho Tom Heyman head of discovery for the biggest R&D operation in its newly reorganized three-headed drug business. We also predicted, successfully, who might take over as Pfizer's R&D chief, and who the drugmaker could have considered instead.

4. Isn't that Special? We've observed several times the stretching and misappropriating of the label "specialty pharma," and in this post spelled out why many of these would-be specialists might be barking up the wrong tree.

3. Capital Connections: IN VIVO Blog would be less informative and well rounded without our colleagues from The RPM Report, who've written some brilliant posts regarding regulation and policy (not to mention biotech CEO entourages). Lets start with FDA and CMS teaming up against erythropoietin marketers J&J and Amgen, and our series of posts on the subject. And then there's our coverage of the Avandia situation, FDA's leadership, and drug safety.

2. Birth of a Hybrid: Bristol-Myers Squibb's innovative dealmaking this year drew our attention in a handful of posts analyzing the company's business model and dealmaking strategy. First it partnered two late-stage diabetes drugs with AZ, and followed up quickly with a monster deal with Pfizer on its anticoagulant candidate apixaban. Not quite a biotech, not quite a Big Pharma. As we discussed at our PSA conference in September, welcome to the hybrid future.

1. Biogen Idec: Shortly after we broke the news that Biogen Idec was retaining bankers to explore a potential sale of the company, we noted why such a sale, at the company's inflated valuation, wouldn't (or shouldn't) happen.

We look forward to the new year & hope you'll stay tuned. Thanks for reading.

The Cost of FDA's Credibility Gap

In previous posts, I have talked about the rising challenges facing the pharmaceutical and biotech industries stemming from FDA's credibility gap. In fact, I think FDA's credibility gap is one of the most pressing business problems for biopharma companies right now and for the foreseeable future.

I want to point you to a story I just wrote, hot off the Internet's virtual presses. The story, "Avandia and the Commercial Impact of FDA's Credibility Gap" can be found on our new website http://rpmreport.com/. Just register for the free trial, and you can read that, and many other stories we've written for our September issue.

Some of the takeaways from the story are:

1) FDA's credibility is one of the top commercial challenges facing biopharma decision makers.

2) Business leaders are re-thinking their drug development programs as a result of the current environment.

3) The FDA advisory committee on Avandia did more to hurt than help FDA's credibility crisis.

4) FDA is grappling with how to manage incoming information faster and more effectively.

Registration is easy, so go take a look. I'd love to hear thoughts from the investment community about this issue. Also, tell us what you think of the http://rpmreport.com website.

The Most Important Deal of the Last 12 Months

In preparation for our Pharmaceutical Strategic Alliances meeting in September, we decided to send the same question to 35 of our smartest friends in the business: what deal signed in the last 12 months said the most about the drug industry’s current situation?

The answer (caveat: responses are still coming in) was AstraZeneca’s acquisition of MedImmune.

We suppose the choice shouldn’t have been surprising. At $15.6 billion in cash, it was arguably the biggest biotech acquisition ever. (Amgen’s 2001 buyout of Immunex looked bigger, but what was worth $17.9 billion in a combination of cash and stock at the deal’s announcement had, thanks to the dip in Amgen’s shares, dropped below AZ/MedImmune all-cash price by the time Amgen/Immunex closed in 2002.) And you can read what IN VIVO said about AZ/MedImmune at the time by clicking here and scrolling down to the sidebar (“AZ Spends Big on MedImmune”).

At the PSA meeting, we’ll interview in front of the assembly the man who engineered this remarkable deal—MedImmune’s CEO David Mott, who is now going to run AZ’s combined biotech efforts. And we’ll ask him what appetites at Big Pharma drove that astonishing price —since the auction he ran allowed him peeks at a variety of companies and their challenges.

By and large, our polltakers (a mix of heads of Big Pharma R&D and business development organizations, a few biotech CEOs, a couple of bankers, and a handful of VCs) figure the deal’s real driver was product panic.

One typical comment came from a Big Pharma R&D chief: “The deal shows the magnitude of the desperation of the pharmaceutical industry, and how badly things are going right now.” Or from a Big Pharma’s head of business development: the deal’s price “illustrates the general paucity of pipelines in many major companies. Over time I believe this is a value destruction deal and if replicated too often will lead to trouble.”

But the price also reflected, said our respondents, the capability AZ badly wants – large molecules and specifically antibodies. Relatively representative was the comment of one biotech CEO (whose company is pursuing small molecules). The price, he said, represented the fact that “biologics are likely to represent 30% of any Big Pharma’s future product portfolio and that they have to get in the game now, not via this or that product but, rather, by acquiring a soups-to-nuts biologics capability.”

Later this week, we’ll detail some of the other deals selected by our respondents -- every single one analyzed at the PSA meeting by the executive responsible for it.