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A post today on the Pharmalot blog suggests that Israeli generic manufacturer Teva is in talks to acquire US-based Barr Pharmaceuticals for  $7.0 -7.5$ billion. Barr’s present market cap is approximately $5.0 billion.

The acquisition would make sense for Teva to broaden its reach into the generic and branded generic markets in the US. Also, Barr recently acquired PLIVA which has active research programs on biosimilars and is currently selling its version of EPO in Croatia and other parts of Eastern Europe.

Teva has been trying to get into the biosimilar/follow-on biologics market for the past eight years or so. The company previously bought several early stage biogenerics manufacturers but have yet to advance their plans to formally enter the biosimilar/follow-on biologics market. This may be the opportunity that Teva has been looking for!

Check back for updates.

Until next time…

Good Luck and Good Job Hunting!!!!!!

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Richmond Va-based INSMED, a US-based follow-on biologics manufacturer, posted a press release on its website entitled: “Insmed Announces First Human Bioequivalence Data for a Follow-on Biologic by a U.S. Company” that reports on the results from a Phase I clinical trial that demonstrated that it lead product INS-19 was bioequivalent to Amgen’s Neupogen^(R) (recombinant G-CSF) in stimulating human white blood cell production. 

, Dr. Geoffrey Allan, President and CEO of Insmed said  "These results are very exciting, as they represent Insmed's ability to replicate a protein product, to bring that product rapidly through the clinic and to demonstrate clear bioequivalence to the innovator drug," said "To our knowledge, we are the first U.S. company to report human bioequivalence data for a follow-on biologic product, validating the idea that follow-on biologics can be a scientific reality in the U.S. and that Insmed is well positioned to be a leader in the field. “ The company has requested a meeting with FDA to discuss the design of a Phase III human clinical trial for INS-19.

I am not sure why INSMED is so excited about its results. Sandoz essentially accomplished the same feat with Omnitrope, its biosimilar version of recombinant human growth hormone (HGH)and it took a law suit and a loophole in the approval process for growth hormones for FDA to allow it to be sold in the US. In my opinion, until legislation is passed that provides a clearly defined legal pathway for approval of follow-on biologics I suspect that INS-19 will suffer the same fate (or perhaps worse) than Omnitrope. Bioequivalence is only legal defined for and relevant for approval of small molecule NOT BIOLOGICS when seeking expedited approval for generic versions of branded products. That said, I want to tip my hat to INSMED for its willingness to take a lead role in the fight to get follow-on biologics approved in the US. Finally, there is nothing like an edgy press release and a few bloggers to bring an issue that is rapidly losing momentum back to the forefront.

Kudos to INSMED!!!!!!

Until next time….

Good Luck and Good Job Hunting!!!!!!

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As many of you may know, Ranbaxy was involved in a bitter patent dispute with Pfizer over Lipitor, Pfizer’s blockbuster multibillion, dollar anti LDL-cholesterol drug. Ranbaxy was challenging the validity of Pfizer’s intellectual property estate for Lipitor which would have extended patent protection for the drug until 2013 or longer. The patent dispute began after Ranbaxy filled an ANDA with the US Food and Drug Administration to sell generic Lipitor after uncontested Lipitor patents expire in early 2010.

Conventional wisdom suggested that Pfizer would ultimately lose the patent dispute and that Ranbaxy would be able to immediately flood the market with a much cheaper generic version of Lipitor. This would have an enormous negative impact on Pfizer’s financial stability and its future (Lipitor had $12.8 billion in sales in 2007). Nevertheless, untilDaiicho-Sankyo announced its intention to acquire Ranbaxy last week, Pfizer was willing to gamble and run the risk of losing the lawsuit. Apparently, Ranbaxy impending sale was enough of an impetus for Pfizer to settle the patent dispute which has grown increasingly acrimonious over the past year or so.

According to agreement (which needs to be approved by the US Federal Trade Commission), Pfizer was able to get Ranbaxy  to agree to delay the release of generic Lipitor until November 2011 — up to 20 months later than many analysts had been expecting (some insiders believed that generic Lipitor could reach the market as early as March 2010). Further, as part of the agreement, Pfizer will allow Ranbaxy to sell its version of Lipitor in Australia, Canada, Belgium, Germany, Italy, the Netherlands and Sweden two to four months before Liptor’s patents expire. This is likely the sweet part of the deal for Ranbaxy because all of the above mentioned markets are top sellers for anti-cholesterol drugs. Finally, because Ranbaxy was the first to file an ANDA for generic Lipitor with the FDA, it will get 6 months of market exclusivity guaranteed (in the Hatch Waxman Act) to a generic manufacturer that is first to file for generic production of a brand name drug nearing patent expiry.   However, after quickly perusing the terms of the deal, I think that it more closely resembles an authorized generics deal rather than a “true” competitive generics launch.

Currently, Lipitor costs about $2.50 to $3 a day. Analysts predict that Ranbaxy can sell its generic Lipitor for about 75 cents to $1 a day, or as low as 10 cents a day at some discount pharmacies. The potential drastic price reduction coupled with Daiichi-Sankyo’s intention to purchase Ranbaxy (which would have provided Ranbaxy with more money underwrite and press on with IP lawsuit, it what I believe forced Pfizer’s hand to act as quickly as it did to settle the suit. The deal, if approved, allows Pfizer to dodge a near fatal financial bullet and will provide it with a potentially lucrative revenue stream from it authorized generics deal that it struck with Ranbaxy. 

Nevertheless, given the financial stakes associated with the Lipitor franchise, it may make more sense for Pfizer to purchase Ranbaxy rather than enter into the pending deal. Also, a Ranbaxy purchase would allow Pfizer to enter the biologics and biotechnology fields—something that Pfizer executives have been talking about publicly to insure the company’s future. Like most other pharmaceutical generics manufacturers, Ranbaxy has active research programs on biosimilar and other biotechnology products. If I was driving the boat at Pfizer I would offer Ranbaxy a lucrative counteroffer to block its sale to Daiichi-Sankyo. I don’t know—the deal just makes sense to me. That said, not many recruiters have been calling me about CEO jobs lately!!!!!!

Until next time…

Good Luck and Good Job Hunting!!!!

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In 2004, the European Commission adopted a new directive that paved the way for legal approval of biosimilars in the European Union (EU). To date, five (5) biosimilars have garnered marketing approval in the EU. Of the five, two are generic versions of recombinant growth hormone (rHGH)–Omnitrope (Sandoz) and Valtropin (Biopartners). The remaining three are “knock off” versions of erythropoietin alpha–Binocrit (Sandoz), Epoetin alpha Hexal (Hexal) and Abseamed (Medice Arneimittel Putter).

There is no doubt, at this point, that Europe is leading the way in the biosimilar space. However, it is important to point out that a variety of biosimilars, developed by Indian generic manufacturers and others, are already being sold in less- regulated Asian markets (see Table 1). Unfortunately, political issues and the fierce struggle between innovator

Table 1. Biosimilar Manufacturers and Their Products

biotechnology companies and generic manufacturers have delayed development of legislation for regulatory approval of follow-on biologics (American lingo for biosimilars) in the US. Further, and perhaps more perplexing, the FDA has been reluctant to issue any guidance on the topic. However, rising drug costs and increasing expenditures on biologics (both by Medicare and private insurers) have left American lawmakers with no choice but to craft legislation for approval of follow-on biologics.

In the first half of 2007 alone, three different bills were proposed to craft a statutory pathway for the approval of follow-on biologics under the Biologic License Application (BLA). The first of these bills–The Access to Life-Saving Medicine Act– was introduced into Congress by Representative Henry Waxman (CA) and into Senate by Senator Chuck Schumer (NY) in February. The second bill–the Patent Protection and Innovative Biologic Medicine Act –was introduced in Congress in April by Representative Jay Inslee (WA). Neither bill made any progress. This is because the Access to Life-Saving Medicine Act was considered to be heavily pro-follow-on whereas the Patent Protection and Innovative Biologic Medicine Act was deemed to favor innovator companies and did not provide any financial incentives for follow-on manufacturers.

A compromise was reached by both Republican and Democrat Senators and the Biologics Price Protection and Innovation Act was approved by the Senate on June 27.  It proposes 12 years of market exclusivity for the patent holders but also one year of exclusivity to the first follow-on biologic to be approved as interchangeable with the reference product.  I previously aired my views on the proposed legislation. For a more in depth analysis of the issues and the bills, please read this.

Recently, there was an important new regulatory development in the European biosimilar landscape. Sandoz’s EPO, Binocrit, received the same nonproprietary name (INN) as Amgen’s original erythropoietin alpha (Epogen in the US, Eprex in Europe).This was a big win for the biosimilar industry because the INN debate had been raging in the EU for the past several years. Innovator companies wanted biosimilars to have different INN than their products whereas biosimilar manufacturers were lobbying for identical INN designation. An identical INN designation allows for  interchangeability of medicines. The fact that EMEA granted Binocrit the same INN number as Eprex, means that the agency views the two products as biologically-equivalent and interchangeable. This paves the way for EU pharmacists to freely substitute Binocrit for the more expensive Eprex. Also, it sends a message to US lawmakers and FDA that the EU considers certain biosimilars as interchangeable with their innovator counterparts. As you may have guessed, the issue of interchangeability is being hotly debated and contested by advocates on both sides of the follow-on biologics fence.

The US is clearly dragging its feet in the follow-on biologics arena. The prime driver of this inertia is the imagined loss of revenue that many innovator companies fear will occur if the US ultimately divines a regulatory approval pathway for follow-on biologics. That said, with Europe and India leading the charge into Asia, it looks as though the US is going to loss a substantial amount of money (not to mention market share) anyway.

With regard to biosimilars in the US, it is no longer a question of “if” but “when.” That said, I think that the one seminal issue that needs to be addressed is what to call these things in the US?  In my opinion, the European moniker, biosimilar, is particularly apt and appropriate for this new class of medicines. Unfortunately, we Americans don’t like to play second fiddle to anybody, especially the Europeans. With this in mind, I have no doubt that they WILL NOT be called biosimilars in the US. Whatever they are called, don’t be surprised to find them your pharmacist’s shelves in the next couple f years!

Until next time….

Good Luck and Good Job Hunting!!!!!!!!!

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The first biosimilar version of granulocyte colony stimulating factor (G-CSF) received a positive opinion from EMEA last month.  The European commission is expected to grant marketing approval for the product in the EU. The product, developed by Israel-based Teva, a global generics manufacturer, will be sold under the brand name TevaGrastim. The company is seeking EU approval for TevaGrastim a as treatment of chemotherapy-induced neutropenia.  

Amgen’s Neupogen, the innovator product, yields annual revenues of approximately $300 million in the EU. Teva hopes to cash in on a piece of that action. It appears that biosimilars are alive, well and making money in Europe!

Until next time…

Good Luck and Good Job Hunting!!!!!

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Despite what the American public has been led to believe, the scientific, regulatory and safety issues related to biogenerics aka follow-on biologics, biosimilars, or subsequent entry biologics have been clearly are no longer controversial issues. They have been identified, analyzed and carefully vetted. This allowed EMEA, the European Medicines Agency in 2006 to craft a comprehensive regulatory approval pathway for biosimilars. For those of you who may not know, several biosimilar products are currently are the market and sold in all European Union member states. This begs the question–what is taking the US so long?

From the beginning, big pharma and big biotech have unequivocally and steadfastly opposed any legislation that would allow biogenerics to be approved and sold in the US. The trade groups BIO and PhRMA have literally spent millions of dollars lobbying members of Congress to oppose any legislation that would allow approval of biogenerics in the US. Now, in a sudden and unprecedented about face, big biotech and pharma have thrown their collective weight behind proposed biogenerics legislation that will be introduced in the near future by Representative Anna Eshoo (D-CA).

As far as I can tell, the primary reason for this sea change is the market exclusivity that may be afforded to innovator companies by the legislation. A quick perusal of the bill reveals that innovator companies will be granted 12-year market exclusivity for a product after its initial licensure. Further, under certain circumstances, this period of market exclusivity for an innovator product may be extended to 14.5 years. Also, reference product sponsors (innovator companies), as well as interested third parties (most notably universities) that own patents on the reference product may sue a biogeneric applicant for patent infringement. Under certain circumstances, such litigation could delay or prevent approval of the biogeneric product.

So what does the proposed legislation mean for biogeneric manufacturers seeking regulatory approval for their products in the US?  Unfortunately, it means that a biogeneric product application may not be approved or made effective until 12 to14 years after the original date of licensure of the innovator (reference) product. It also opens the door for patent litigation against biogeneric manufacturers to hinder or delay approval of their products. In my opinion, the proposed legislation is extremely one-sided and biased toward innovator companies. More importantly, it seems to me that the real intent of the legislation is to discourage (rather than encourage) biogeneric manufacturers from seeking US approval for their products, i.e. there are no real financial incentives or inducements for these manufacturers to seek approval because of the excessively-long market exclusivity period for innovator products.

On the surface, the proposed legislation would appear to be a long sought victory for biogeneric advocates and the American public which would benefit from less costly versions of potentially life-saving biotechnology drugs. That said, it seems to me that the proposed legislation is nothing more than a disingenuous attempt by big biotech and pharma to placate biogeneric advocates and the American public. In reality, the legislation provides innovators companies with a legally-binding regulatory approval pathway that will allow them to maintain or extend their monopolistic stranglehold on blockbuster biotechnology products. I think that the US Congress can do better when it comes to biogeneric legislation–the American public not only deserves it but demands it!

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!!

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The Bush administration's proposed 2009 fiscal year budget for the FDA includes not only a 5.7 percent increase but a plan to seek authority to allow the agency to approve abbreviated applications for follow-on biologics.

As part of the budget package, the administration said it is seeking regulatory authority for the FDA to approve follow-on biologics, also called biosimilars or biogenerics, which would be financed through user fees.

The House and the Senate both introduced follow-on biologics legislation in 2007, with the Senate's bill moving the furthest by achieving passage by the Health, Education, Labor and Pensions Committee. Lawmakers have pledged to move the legislation forward in 2008.

Jim Greenwood, CEO of the Biotechnology Industry Organization (BIO), said "BIO strongly believes that the FDA should have a pathway for the approval of follow-on biologics, which protects patient safety and promotes continued innovation," Greenwood added that "The creation of a pathway for follow-on biologics is a top legislative priority for BIO, and we are meeting with members of the House and Senate to encourage them to consider and pass follow-on biologics legislation this session." This is quite a policy turnaround for BIO which over the past 8 years has spent tens of millions or more lobbying against allowing follow-on biologics in the US.

Even more shocking than the BIO turn around, was the first ever plea last week by the Whitehouse to pass legislation to craft legislation to create a regulatory approval pathway for follow-on biologics-what’s up with that? I guess Bush and his big biotech buddies finally realized that large sums of money can be made in the follow-on biologics/biogenerics business. This possibility was not lost on the Europeans, who created a regulatory pathway for approval of biosimilars (what follow-on biologics are called in Europe) several years ago! Biosimilars are already on the European market–who said that Europeans were less entrepreneurial than Americans?

Contrary to statements made by FDA officials last week, which suggested that FDA would craft the follow-on biologics legislation, it now appears that FDA will  work closely with Congress to draft a legislative proposal for approval of  follow-on biologics. I don’t think that Congress’s involvement is a good idea given the political wrangling, deal-making and concessions that must be made in order to get legislation passed. As the old adage goes, something is better than nothing.

It looks as though follow-on biologics may become a reality in the US. As I mentioned in previous posts, I don’t think Americans will see follow-on biologics on the market before 2010 or 2011. That said, it gives us Americans something to look forward to!

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!!

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As the debate continues to rage in the US about how to regulate biogeneric drugs, the European Medicines Agency (EMEA) has given the go-ahead to Hospira and Stada to sell their copycat version of Johnson & Johnson's anemia drug Procrit.

The European Commission approved Retacrit (epoetin zeta), a biosimilar version of erythropoietin (EPO), to treat anemia associated with chronic renal failure and chemotherapy. EMEA regulators determined that the drug was comparable in efficacy and safety to Procrit.

The EPO market is a large one and more than 250,000 patients in Europe are estimated to be treated with epoetin alfa, which is marketed under various brand names, Procrit (JNJ; US), Eprex (JNJ; Europe) and Epogen (Amgen; US). Worldwide annual sales of EPO drugs are estimated at more than $7 billion, $600 million of which comes from Europe.

The approval for Retacrit comes some three months after Novartis’ generics unit Sandoz got the first go-ahead in Europe to develop its version of epoetin alfa. Sales of Retracrit will begin in Germany in early 2008.

When are American pharmaceutical and biotechnology executives going to wake up and realize that they will lose millions in revenue to biosimilar competition?  I think the old adage; “If you can’t beat ‘em, join ‘em” is apt when talking about the biogenerics industry.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!

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