Pullan Consulting

Biotech Business Development Consulting

www.pullanconsulting.com and www.lindapullan.com

email:  lpullan@msn.com  805-558-0361

Issue #32

Pullan's Pieces

Commentary on Science & Business of Drug Development

For Business Development & Others

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Join us at the BioEurope Spring partnering meeting!

With the tough economy, partnering is more important than ever.  The BioEurope Spring partnering meeting (March 16-18th, Milan) is one of the best forums for meeting potential partners as well as investors, with a good attendance from all over the world. The EBD Group has built a great search system for matching up interested parties.  They also offer a lovely balance of talks, partnering and social events.  I’m representing partnering opportunities from multiple clients at the meeting, and look forward to meeting with many of you! 

I’d also like to invite you to my panel on cancer dealmaking.  I’m going to have a long list of questions for the panel, but I’m going to push for lots of audience participation.  Come and ask your burning questions on how to succeed in oncology deal making.  

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Big expectations from analysts, but many of forecasted top products of 2008 fail to launch as expected

A recent analysis (http://seekingalpha.com/article/120473-failure-to-launch-for-last-year-s-big-pharma-and-biotech-hopes?source=email) by EP Vantage noted that back in January of 2008, a list of the compounds expected by financial analysts to launch and generate the most sales in the following 12 months has had a disappointing outcome.  Of the 20 biotech and small molecule drugs identified, only 7 made to the market within 12 months.  I wanted to see what lessons were in the outcomes of the most promising drugs of January 2008.   

4 of forecasted top 10 small molecules launch in 2008

Of the small molecules, 4 of the forecasted top 10 launches actually happened within 2008.    Most were not first-in-class molecules, and all the small molecules approved got downgrades from analysts. 

So what were the successes (even with analyst downgrades)? 

·         Boerhinger Ingelheim’s dabigatran etexilate (Pradaxa) oral low molecular thrombin inhibitor prodrug got European approval but sales forecasts have been downgraded due to the presence of a rival Xarelto from Bayer approved later in the year.  

·         Methylnaltrexone (Relistor) for opiate induced constipation, licensed by Wyeth and Ono from Progenics, was approved in April 2008.  Its sales forecast was adjusted downward by analysts on disappointing early sales. 

·         UCB’s sodium channel blocker lacosamide (Vimpat) for epilepsy was approved in October of 2008, but the failure to get approval (with a not approvable letter from the FDA and a withdrawal of the application in the EU) in diabetic neuropathy meant the sales forecast was cut almost in half. 

·         Wyeth’s 5HT/NE uptake blocking antidepressant desvenlaxafine (Pristiq) got approval in the US but failed to get European approval, with questions on the risk benefit profile. 

Behind schedule but moving forward?  These 3 small molecules also were not first-in-class molecules. 

·         Lilly’s antithrombotic prasurgrel (Effient), licensed from Daiichi Sankyo, just got the unanimous approval of an FDA advisory committee Feb 3^rd.  They also got a positive opinion from the EMA and European approval could come next quarter.   

·         BMS’s DPP-IV diabetes drug saxagliptin (Onglyza), in co-development with AstraZeneca, is still awaiting a decision in the US and EU, but its forecast is decreased by the challenge of competing with the first DPP-IV to reach the market, Januvia from Merck. 

·         J&J got a complete response letter, asking for additional data but not additional studies, for the Elan nanocrystal formulation of the already launched 5HT2/D2 antipsychotic paliperidone (Invega) and its sales forecast was cut in half. 

And the disappointments?  Of the 3 disappointments, Merck’s combination was perhaps the most novel, adding a 2^nd agent to an approved drug to block a side effect. 

·         Merck’s combination (Tredaptive) of a prostaglandin D2 antagonist laropiprant with niacin to treat high cholesterol without the flushing effect of niacin was approved in Europe, but got an FDA non-approvable letter requiring a wait for an ongoing study to be completed in 2013. 

·         J&J’s injectable cephalosporin antibiotic licensed from Basilea got a complete response letter from the FDA in late 2008, indicating a problem with the clinical quality assurance for the submitted data. 

·         Ligand’s SERM bazidoxifene (Viviant) for osteoporosis, partnered with Wyeth, was first submitted in the US in 2006, but recently got its third approvable letter from the FDA, spelling out issues to be resolved, including risks of stroke and data collection. 

This suggests a success rate of 40% now, up to 70% possibly, for a list of drugs that were all at least in Phase 3 by January 2008.  Big company originators or big company partners were not enough to assure success.  A clinically validated mechanism was not enough to assure success. 

1 of forecasted top 10 biologics launched in 2008

For the biologics, there were some forecasts that perhaps did not reflect the high risks of the approaches, including 2 gene therapies and a cancer vaccine and two antibodies aimed at enhancing immune response to cancer, all paths with many past failures. 

The successes?

·         Zymogenetics topical human thrombin to control surgical bleeding, partnered with Bayer, has been approved, but sales have been disappointing so far, reducing the analyst forecasts.    

Behind schedule but moving forward?  

·         Roche’s IL-6 receptor antibody (Actemra) for rheumatoid arthritis got approval in Europe and Japan, but got a complete response letter from the FDA asking for more preclinical studies and a Risk Evaluation and Mitigation Strategy, delaying launch out to 2010. 

·         J&J’s IL-12/IL-23 antibody (Stelara) for psoriasis got approval in Canada, but got a complete response letter from the FDA asking for a Risk Evaluation and Mitigation Strategy but no further trials.  

·         The anti-TNF antibody (Simponi) from J&J, partnered with Schering Plough and Mitsubishi Tanabe, has a PDUFA date for FDA review by April 27, 2009 and a decision by European regulators is also expected this year.   

·         Glaxo’s vaccine (Synflorix) for prevention of acute otitis media (ear infections) was recommended for approval in Europe last month, but it may not launch in the US because “It's clear that Synflorix versus Prevnar is a much more competitive innovation outside of the U.S. because of the presence of different pneumococcal subtypes," according to CEO Andrew Witty. 

·         Ark Therapeutics gene therapy Cerepro, combining the Herpes simplex thymidine kinase gene with ganciclovir for glioma, has now been filed in Europe.   Ark Therapeutics has done it so far with no big pharma partner. 

The disappointments? 

·         Pfizer’s anti-CTLA4 immune-response-enhancing antibody (tremelimumab or CP-675,206, from Abgenix, now owned by Amgen) failed to demonstrate superiority to standard chemotherapy in a Phase III trial in melanoma.  Pfizer has a Phase II in colon cancer ongoing now. 

·         The FDA asked for additional survival data for Medarex’s competing anti-CTLA4 antibody (ipilimumab or MDX-010), partnered with BMS, delaying potential approval by two years.  

·         Favrille and partner Berlex (Bayer) have discontinued development of the personalized cancer vaccine Specifid or FavID for non-Hodgkin’s lymphoma (NHL); this had been seen by many as one of the best applications of a personalized immunotherapy. 

·         Introgen could not persuade the FDA to even review Advexin, the p53 gene therapy for cancer. 

The success rate for these biologics is now 10% and could go to 60% for drugs that were in Phase III or filed by January 2008.   Historically, the industry has seen higher overall success rates for biologics than for small molecules, but the historical numbers include many endogenous proteins as drugs, such as growth hormone, insulin, and erythropoietin.   

Assessing the probability of launch or forecasting sales for the most important drugs is tough even at Phase III and beyond.   

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Economic situation changing acquisition terms

The tougher financing market does seem to be giving the buyer the ability to spread out the terms of acquisition deals (as noted by Evaluate Pharma News, Jan 16th). 

·         Cephalon’s option to takeover privately held Ception Therapeutics pays Ception $100M upfront, with $250M more if Cephalon exercises the option after review of the ongoing Phase 2b/3 eosinophil esophagitis study results of the monoclonal antibody to IL5, and possible additional regulatory and clinical milestones. 

·         Endo Pharmaceuticals is offering $370M in cash now for public Indevus (which had a market cap of $235M at the time of the offer), the maker of treatments for urology indications, with an additional $267M in regulatory and sales milestones.

·         ViroPharma also spread outs its payments in the acquisition of public Lev Pharmaceuticals, Inc. Under the terms of the deal, Lev stockholders will receive a total of $442.9M upfront ($2.25 in cash and 0.042146 shares of ViroPharma common stock) and one non-transferable contingent value right that entitles the holder to receive up to two contingent payments of 50 cents each in cash — payable upon the achievement of certain undisclosed regulatory and commercial milestones — for each share of Lev common stock that they own, to make the deal potentially worth $617M.  After the deal was announced, the FDA approved Lev’s Cinryze for hereditary angiodema. 

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Pullan Consulting

Linda M. Pullan, Ph.D.

Biotech Business Development

www.pullanconsulting.com and www.lindapullan.com

e-mail: lpullan@msn.com

805-558-0361

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