Strategic Alliances: Filling Pharma's Pipeline Becomes a Two-Way Street
In 1970, 80% of drugs developed by pharmaceutical companies were created in-house. By 2000, the proportion had declined to 40% and industry observers estimate 50% of the revenue generated by large pharmaceutical companies in 2010 will come from licensed compounds.1 A combination of factors ─ large pharmaceutical firms seeking to fill pipelines more quickly and cheaply than they could on their own, a desire to spread the risk associated with drug development, a plethora of biotechnology companies with promising compounds and investors eager to fund potential blockbusters ─ are driving this trend.
A Pathway to Products
With 70% of industry drug trials failing at Phase II, the pressure is on for deals that could potentially reduce this failure rate and its associated costs. A published review of pharmaceutical data sources suggests in-licensed compounds are more likely to reach the market when compared with self-originated compounds, especially among compounds in the early clinical stages.2 In-licensing may make it easier for Big Pharma to fill pipeline gaps by partnering in areas outside of a large company's core competency, a strategy which permits in-house resources to be focused more efficiently.
The headlines of 2008 present compelling examples. In October, Bayer HealthCare licensed global rights to ImmunoGen's tumor-activated prodrug (TAP) technology platform, which combines monoclonal antibodies with molecules to target and kill tumor cells.3 In July 2008, Merck & Co., Eli Lilly & Co. and Pfizer Inc., which historically have competed to bring drugs to market, announced the formation of Enlight BioSciences LLC, a venture designed to speed the way drugs are discovered and developed. When Enlight identifies a promising technology, it will spin off new companies and Merck, Eli Lilly and Pfizer will have opportunities to license the technology and buy shares in the company.4
Biotech's Compounds = Partnering Leverage
As the examples mentioned above illustrate, large pharmaceutical firms are cross- licensing with one another and in-licensing with smaller firms that have developed promising compounds. Big Pharma's eagerness for in-licensing is altering the status quo and giving biotechnology firms new found leverage. Thanks in part to investors trolling for potential blockbusters, many biotechnology firms have considerable cash and no longer feel they need an alliance with a large pharmaceutical company to validate a business strategy. Unlike past eras, when large pharmaceutical firms were positioned to dictate terms, the tables have been turned and biotechnology firms are more selective in their alliances and are commanding more favorable terms and commercial benefits.5
In response to these circumstances, Big Pharma is structuring in-licensing partnerships with more flexible terms that include ceding commercial rights. As part of Novartis' agreement to license Antisoma's AS1404 vascular disrupting agent, Novartis promised to help Antisoma build its sales force, setting the stage for Antisoma to co-commercialize the product in the United States. Antisoma's prior deals with Roche and Abbott Laboratories were solely licensing agreements without commercial rights. In addition, Anacor Pharmaceuticals signed a $625 million agreement in February 2007 to license a Phase 2 antifungal ANA2690 to Shering-Plough while retaining the rights to co-promote the antifungal agent in the United States.
A Balancing Act
No matter how glaring the gap in Big Pharma's pipeline may be, identifying successful licensing agreements requires balancing the potential for commercial success with the risk inherent in yielding a degree of control in the drug development process. How Big Pharma approaches this balancing act may depend on the maturity of the therapeutic area under consideration and a company's financial situation.
Half of licensing compounds pharmaceutical companies in-license fail because the companies cannot produce the desired drugs despite initial promises of efficacy.1 Given this failure rate, some firms with more limited resources or a lower appetite for risk may consider a fast-follower strategy in which they license a second, third or later product in a class to gain a portion of revenue in an established market. Yet follow-on products may have limited commercial potential unless they present a significant advantage, such as fewer side effects or easier administration for the patient.6
A company's financial status also influences strategies for licensing agreements. When a small company's cash position is tight, it may look to out-licensing as a strategy for obtaining cash in the form of milestone payments and potential royalties. In contrast, when a large company is in a strong financial position, it may pay more upfront for licensing rights or acquire a partner outright.
Managing Pitfalls
Despite the commercial potential, managing licensing agreements is fraught with pitfalls. When life sciences executives were asked to identify their greatest concerns about alliance management, 31% indicated operational challenges, 31% lack of alignment, 22% poor communication, and 11% lack of visibility into relevant data.7
On the operational end, establishing procedures for identifying potential partners and conducting due diligence are key ingredients for success. A representative of Merck described the company's experience in these areas in an interview with Pharmaceutical Executive. At Merck, all parties involved in licensing agreements work within one umbrella group that is responsible for scouting, evaluating, conducting due diligence, structuring the agreement and establishing commercial terms. The scouting organization consists of scientists who formerly worked within the company's research labs, a practice Merck believes helps to entice scientists at partner organizations to want to team up with them.8
Lack of alignment may become an issue when competing priorities and core competencies are in evidence even when partners work towards a common goal. For a larger pharmaceutical firm, an in-licensing partnership may be one of many such agreements that have an established protocol for advancing through various stages. Start-up firms, in contrast, may be less experienced at managing internal and external resources devoted to drug development alliances. Smaller firms may excel in innovation and establishing efficacy but lack the skills to bring a product to market, a step that larger firms may have followed many times over. Capitalizing on one another's strengths, rather than adhering to rigid protocols, may be necessary to achieve maximum value from a partnership and to ensure that it evolves to capitalize on new opportunities.
Given the large number of therapeutic areas that the industry is addressing, there is no one-size-fits-all approach for making a drug-development licensing deal work. That said, understanding the dynamics that are making licensing deals more prevalent, potential pitfalls and strategies for success may help to pave the way for a winning combination.
1 Source: "Synthesis Stumbling Blocks in Pharma Licensing," in-PharmaTechnologist.com, February 6, 2008.
2 Source: "The ‘Not Invented Here' Myth," Nature Reviews Drug Discovery, June 2006.
3 Source: "Marcial: ImmunoGen Attracts Big Pharma," BusinessWeek, October 23, 2008.
4 Source: "Big Pharmas Join to Speed Discoveries," The Wall Street Journal, July 10, 2008.
5 Source: "Licensing Deals Morph to Acquisitions in Seller's Market," Nature Biotechnology, June 2007.
6 Source: "Driven to License," Pharmaceutical Executive, February 1, 2007.
7 Source: "IntraLinks Poll: Three-Quarters of Life Sciences Executives Say Licensing and Alliance Activity Will Increase in the Next 12-24 Months," September 16, 2008.
8 Source: "Q&A with Barbara Yanni," Pharmaceutical Executive, May 1, 2008.
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Finland's Orion files US suit to protect key drug
Shares Mag 2007 HELSINKI, Dec 8 (Reuters) - Finnish drug firm Orion (ORNBV.HE: Quote, Profile, Research, Stock Buzz) said on Monday it has filed a patent infringement lawsuit in the United States to protect its key drug Stalevo, used for treatment of Parkinson's disease.
Indian drug maker Wockhardt Ltd (WCKH.BO: Quote, Profile, Research, Stock Buzz) is seeking to sell a generic version of Stalevo in the United States and has filed an Abbreviated New Drug Application (ANDA) with the U.S. Food and Drug Administration seeking to sell the drug, Orion said.
"Stalevo is an enhanced levodopa treatment originated by Orion Corporation and marketed in the United States by its exclusive licensee, Novartis (NOVN.VX: Quote, Profile, Research, Stock Buzz)," Orion said in a statement.
Orion said by suing to enforce its patent, it is entitled to an automatic stay prohibiting the FDA from approving Wockhardt's application for 30 months -- or until an earlier court decision adverse to Orion's patent in the patent infringement lawsuit.
"As such, the realization of generic competition is neither certain nor imminent," Orion said, adding it would vigorously defend the intellectual property rights covering Stalevo. |
Recent business insight study and conclusions
.Benefits of R&D restructuring. The redesign of pharma R&D models within large companies is creating an entrepreneurial environment that enhances the flow of information and facilitates faster decision-making during product development. Strategic networking is also helping companies to expand their portfolios and develop a new generation of progressive blockbusters.
• New R&D approaches reduce consolidation. Innovative R&D strategies such as risk-sharing partnerships and strategic/tactical outsourcing are helping to combat the declining levels of productivity that are driving industrial consolidation.
• Role of ‘R&D spin-offs’. R&D spin-offs enable pharma companies to streamline their portfolios and reduce overheads, whilst retaining the option to license back successful candidates at a future date. The speed of product development can also be significantly improved away from internal pharma processes.
• Influence of emerging markets. Offshore R&D investments in emerging countires are becoming increasingly attractive following the lifting of WTO restrictions, tightened IP protections, infrastructure improvements and tax exemptions. India, China and Russia offer the most significant cost advatages. |
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Patent infringement can also occur by submitting an Abbreviated New Drug Application (ANDA) to the Food and Drug Administration (FDA)
The most familiar type of patent infringement is that which arises from the manufacture, use, sale, or offer for sale of a product falling within the scope of a patent. Patent infringement can also occur however by the simple act of submitting an Abbreviated New Drug Application (ANDA) to the Food and Drug Administration (FDA). A lawsuit that was recently resolved on appeal demonstrates how this can happen.
The Drug Price Competition and Patent Term Restoration Act of 1984 (the Waxman-Hatch Act) contained provisions that amended both the Food and Drugs statute and the patent statute, and the effect of these provisions is seen when an ANDA is filed for a new formulation of a known drug.
The FDA provisions require an ANDA applicant to list all patents that claim the drug in some form and to certify that the new formulation raises no infringement liability under any of those patents. The applicant must also notify the owner of each listed patent and explain why the new formulation is believed to not infringe the patent.
The patent provisions state that if someone submits an ANDA with the intention of manufacturing, selling or using a drug while a patent is in force that covers the manufacture, sale or use, the submission of the ANDA will itself constitute infringement.
Thus, under the FDA statute, the patent owner is notified that a competitor intends to market the drug and is told why the competitor believes it can do so without infringing the patent, while under the patent statute the patent owner can sue the competitor immediately if the patent owner disagrees with the competitor's reasons for noninfringement.
This is exactly what happened with a new drug formulation developed by Mylan Pharmaceuticals Inc. The drug is glyburide, which is known to be effective in reducing the level of glucose in serum and is useful for treating Type II diabetes. The effectiveness of the drug is limited, however, by its low bioavailability (rate of entry into the bloodstream), and various solutions have been proposed. One of these is to prepare the drug in micronized form, i.e., as micronized particles compressed into a tablet, since micronized particles have a high surface area which helps them dissolve faster. Tabletted drugs contain large amounts of excipients (inert substances that form a vehicle for the active ingredients), however, and particle size of both the drug and the excipients must be carefully controlled so that the tablet will have a uniform consistency and a uniform drug loading.
The excipient used with glyburide is lactose. Unfortunately, the formation of lactose particles with sufficient size control for use with micronized glyburide has been a cumbersome and costly process involving wet granulation, drying, and sizing or milling. A cheaper way was the subject of U.S. Patent No. 4,916,163, owned by Pharmacia & Upjohn Company, which was based on the discovery that lactose particles with a high degree of size control can be obtained directly by spray-drying. The patent therefore claims a micronized glyburide composition with "spray-dried lactose as the preponderant excipient."
The lactose in Mylan's glyburide formulation was not spray-dried but instead anhydrous, thereby differing both in its method of preparation and in its absence of the water of hydration present in spray-dried lactose. When Mylan submitted its ANDA, it listed the Pharmacia & Upjohn patent, notified Pharmacia & Upjohn, and explained that the formulation would not infringe the patent since the formulation did not contain spray-dried lactose. Pharmacia & Upjohn did not dispute the distinction but claimed that the two forms of lactose were equivalent and that the Mylan formulation infringed under the "doctrine of equivalents." (Chemical Engineering Progress, Nov. 1997, p. 26).
Patent law states that the doctrine of equivalents will not be applied if applying it would be contrary to positions taken by the inventor or the inventor's attorney while the patent application was pending. Before the '163 patent issued, it had been rejected over earlier patents on lactose-containing glyburide formulations. In response to that rejection, Pharmacia & Upjohn stated that the lactose in the earlier patents was not spray-dried, and that spray-dried lactose was a critical feature of the invention and provided test data showing the manufacturing advantages of the spray-dried form. This was sufficiently convincing that the patent was granted.
The argument and the test data, however, prevented Pharmacia & Upjohn from later extending the scope of the patent to any form of lactose other than spray-dried. The question of whether anhydrous lactose and spray-dried lactose were equivalents in the suit against Mylan was, therefore, never reached, and the patent was deemed uninfringed.
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New drug combination may halt rheumatoid arthritis
November 9, 2008 |
Trial data seems to suggest that a monthly injection may help to halt rheumatoid arthritis in almost half of all patients.
To halt the condition in which the body attacks its own joints, the antibody drug tocilizumb works together with a current treatment methotrexate.
The drug is still awaiting for approval by drugs regulators in the US and Europe and Roche will sell it under the brand name RoActemra after approval.
The study has been presented at a meeting of the American College of Rheumatology.
Though it is said that nothing can be done to reverse the damage that occurs due to RA, the new results indicate that if two drugs are taken together, they can get remission by halting the disease progression.
The trials (involving 1,190 patients) showed that the use of tocilizumab with methotrexate halted the condition in 47% of patients while it was only 8% when methotrexate was given alone.
X-rays revealed that the use of two drugs slowed joints structural damage by 85% on average.
The lead author of the study Professor Paul Emery says: “The results of the study show that tocilizumb can quickly decrease the painful and debilitating effects of RA.”
There are also many other drugs available that help to halt RA disease progression, but there use is restricted in the UK and some other countries
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Cholesterol Drugs
A New Age Of Statins?
Forbes Matthew Herper and Robert Langreth 11.09.08, 9:00 AM ET
A new study could lead millions more Americans to take cholesterol-lowering drugs and generate billions in sales for AstraZeneca, which funded it. But first comes a furious debate.
The study, called Jupiter, gave either AstraZeneca's (nyse: AZN - news - people ) Crestor or placebo to 18,000 patients who received bad scores on a little-known blood test for C-reactive protein (CRP) that is thought to measure inflammation in the arteries. Patients who took Crestor were half as likely to have heart attacks, strokes or operations to open clogged arteries as those getting placebo, an effect that ranks among the best results seen with the two-decade old class of cholesterol drugs called statins, of which Crestor is the most potent.
"It takes prevention to a new level because it applies to a whole group of patients who would not get a statin today," says Douglas Weaver, president of the American College of cardiology. In a statement, Elizabeth Nabel, head of the National Heart, Lung and Blood Institute, says adding CRP tests to those for blood pressure and cholesterol "could identify millions more adults for whom treatments with statins appears to lower the risk of heart attack."
So is every American going to get a CRP test now and, if they get a bad result, take Crestor? Twenty million Americans already take these drugs, and if the results of Jupiter were applied broadly, that number could double. But it won't.
Twenty top cardiologists who reviewed the results for Forbes expect both CRP testing and statin use to increase, but for every one who called the results "huge" or "a home run," there are some who say change will be slow and incremental. The drugs, though very safe, have side effects, and the test can be quite variable.
"I'm convinced CRP is a fad," says Sanjay Kaul, of Cedars-Sinai Medical Center in Los Angeles. "Maybe there will be a little blip in its use, but many physicians have given up on CRP."
Because the patients in the study had a relatively low risk of heart attack, the absolute benefit of taking Crestor was still very small. There were only 400 heart attacks, strokes or heart surgeries among all 18,000 patients in the study. Overall, 95 patients had to be treated with Crestor for two years to prevent one angioplasty procedure, heart attack or other cardiovascular "event."
Patients in the study had average bad cholesterol, or LDL, of 108 milligrams per deciliter, well below levels at which drug treatment is routinely recommended. But their cardiac risk was increased because their CRP levels were elevated (above 2 milligrams per liter). Crestor slashed their LDL levels to 54 and also reduced their CRP levels by 37%.
Crestor did better than experts expected. Statins are among the safest drugs on the market, but in patients at very low risk of heart attack, their potential muscle- and liver-damaging side effects become more worrisome. Howard Weintraub, who directs cardiovascular prevention at NYU Langone Medical Center, calls the results "pretty strong stuff" but worries "people will indiscriminately apply the findings of the study to the wrong group, [and] there may be adverse events." In addition to high CRP, patients in the study were older (around 66), overweight and had borderline high blood pressure.
In Jupiter, there was also an increase in the number of people who developed diabetes while on Crestor. "It's probably chance," says study statistician Robert Glynn of Harvard. "It's an incredibly interesting puzzle."
Current guidelines suggest using CRP as a tiebreaker only if patients have some risk factors like obesity or high blood pressure but don't clearly merit statin therapy. Stanford University's Mark Hlatky argues in an editorial in the New England Journal that these guidelines are about right.
C-reactive protein was first discovered in the 1930s as a protein the body made in response to a sugar (the C polysaccharide) made by bacteria. It came to be seen as a measure of how inflamed tissues all over the body are. In the mid-1990s, researchers started to notice that statins seemed to have benefits, like preventing stroke, that didn't seem to be explained by cholesterol lowering alone.
One explanation: Statins don't just lower blood levels of bad cholesterol, keeping it from sticking to artery walls, but they also reduce the inflammation that causes cholesterol plaques to burst and cause heart attacks and strokes. Paul Ridker, a researcher at Harvard's Brigham & Women's Hospital, thought to test for CRP in a huge database of heart data researchers there had been collecting for decades. He picked CRP because it was the easiest measure to use to test for inflammation.
By 2001, Ridker had presented analyses of CRP's importance from completed studies of statins. He argued that it was at least as good as LDL at predicting heart attack risk, and he published his results in places like the New England Journal. Based mostly on his work, CRP was added to guidelines as a tiebreaker test. The test is made by Siemens (nyse: SI - news - people ), and intellectual property related to it is held by Ridker and the Brigham.
Ridker wanted to conduct a big clinical trial to prove CRP's worth for guiding statin therapy. The National Institutes of Health told Ridker that such an expensive study should be funded by industry. But Pfizer (nyse: PFE - news - people ), seller of top-selling statin Lipitor, rejected his plan for such a study. Bayer (nyse: BAY - news - people ) was going to fund it, but then its statin was withdrawn from the market for side effects. The U.S. division of AstraZeneca agreed to fund the study, but it almost stopped over concern about Crestor's side effects. The trial had to be expanded from just the U.S. and Canada to 26 countries to get it done.
James Stein, a cardiologist at the University of Wisconsin, Madison, thinks the patients in Jupiter all had other risk factors besides CRP, but he's hopeful that the CRP test will get people who are middle-aged with thick middles and slightly high blood pressure on statin drugs.
"They found the sweet spot of risk," says Stein. "They found a way to identify the people doctors look at every day and say, 'This guy's at risk.' But he walks out the door without a prescription."
The patients who get statins, Stein notes, are likely to be men over 50 and women over 60, as in the study. Patients much younger than that have time to protect their hearts by losing weight and exercising.
Many doctors agree that cheaper generic statins may be good enough for many of these patients, although a few say they are a little uncomfortable extrapolating. "If a company is willing to fund the trial and they win, that should be rewarded," says Robert Harrington, a top cardiologist at Duke University.
For AstraZeneca, the competitive benefits of the study come not only from the increase in the size of the statin market, but from the fact that the drug now has hard evidence that it prevents heart attacks and strokes. Vytorin, from Merck (nyse: MRK - news - people ) and Schering-Plough (nyse: SGP - news - people ), the only equally potent cholesterol drug, contains one active ingredient that is not a statin, and there is no evidence it prevents heart attacks or strokes even though it reduces LDL and CRP. Citigroup (nyse: C - news - people ) estimates Crestor sales could double to $6.8 billion by 2012
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