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Annually, the Street.Com surveys its readers to identify the year’s worst biotechnology CEO. Yes, despite large salaries, great benefits and, in most cases, outstanding employees, the executives who make the list just can't seem to do the job right.

The 2011 survey was just released and this year’s five worst CEOs are: 

1. Mitch Gold—Dendreon Corp
2. Greg Divis, Jr—KV Pharma
3. Al Mann—Mannkind Corp
4. Joe Zakrzewski—Amarin Corp
5. John Martin—Gilead Life Sciences

Other notable nominees included: Elan Pharmaceutical’s Kelly Martin, Genzyme’s Henri Termeer and Dan Bradbury of Amylin Pharmaceuticals.

Honorable mention awards went to Jim Bianco of Cell Therapeutics, Doug MacLellan of Radient Pharmaceuticals and Brian Culley of Adventrx Pharmaceuticals.

Despite these dubious distinctions, I would like to be earning their annual salaries and bonus compensation packages!

Until next time...

Good Luck and Good Job Hunting (I would avoid the companies whose CEOs made the list)

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Despite a lull in layoffs over the past summer, this fall is shaping up to another bad one for pharmaceutical employees. Late last week Novartis announced that it was laying off about 2,000 employees. Prior to the Novartis announcement, Amgen, AstraZeneca, and Merck have all disclosed plans to eliminate thousands of jobs on a worldwide basis.  To add insult to injury, Sanofi Aventis told its employees today that the company would be shifting operations from New Jersey to Massachusetts and that hundred of employees would be losing their jobs. While a Sanofi spokesperson refused to specify the exact number of employees who may lose their jobs, estimates are in the hundreds, mainly in R&D and sales in the oncology and cardiovascular areas.

The announcement was not unexpected because several weeks ago the company announced that it would cut another $2.9 billion in costs to offset pending generic encroachment on its top selling medications Plavix and Avapro. Further, consolidation of Sanofi’s R&D operations and its early development work to the Boston area is mainly a result of its acquisition of Genzyme earlier this year. To that end, later-stage development work will remain at Sanofi’s headquarters in Bridgewater, NJ while pharmaceutical R&D, Sanofi Pasteur biologics and global oncology has already been moved to Massachusetts. At present, Sanofi employs about 3,000 people in New Jersey and 5,000 in Massachusetts (including Genzyme employees).

Interestingly, while job cuts are taking place in western markets, hiring is brisk in emerging like China and India. For example, several months ago Pfizer announced that it was closing down its antibiotic discovery program in the US and moving it to China. Likewise, Novartis plans on sending some medicinal chemistry and regulatory work overseas to India. If the downsizing and outsourcing trends continue at their current pace, it will become increasingly difficult for most Americans to find pharmaceutical R&D jobs in the US. Can anybody still wonder why we may be losing ground to countries like India and China?

Until next time...

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

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Despite the fact that no new jobs were added to the US economy in August, things were pretty quiet in the pharmaceutical layoff space. From what I was able to find, it appears that Alcon Laboratories will be moving about 100 jobs from Atlanta to Fort Worth Texas (I was recently in Fort Worth for the first time and I extend my sympathies to those Atlantans that may make the move). The consolidation is taking place because Novartis purchased Alcon in April and after acquisitions these sorts of things happen. Nestle, another Swiss company, had a majority ownership in Alcon. 

Interestingly, there appears to be some consolidation also taking place in the contract manufacturing space. Contract Pharma announced that it would close its Buffalo, NY manufacturing facility (purchased from Bristol Myers Squibb in 2005) and eliminate 128 jobs. Those employees who do not lose their jobs may have an opportunity to work in a nearby Ontario, Canada site. Likewise, UK-based United Drug, another CMO, will cut 150 jobs because of government-led regulatory decision to reduce health spending.

While none of these announcements were particularly noteworthy, Sanofi-Aventis’ announcement today that it will cut $2.9 billion in costs over the next few years was somewhat shocking but not unexpected. Most of the cuts will be in R&D and there will undoubtedly be massive downsizing and reorganization. 

According to a post on today’s Pharmalot blog “a presentation indicates that research and development costs are in the process of being cut by 12 percent from 2008 to about $1.1 billion, excluding Genzyme. And the total headcount over this same period is being reduced by about 22 percent, from roughly 13,000 positions to about 10,000 jobs by the end of this year, again excluding Genzyme.”

Today’s announcement of cut back is consistent with Sanofi’s business strategy over the past year or so which included plant closings and large sales rep layoffs Again, the Pharmalot blog reported “The upcoming round involves slashing about $700 million in expenses from Genzyme, the biotech that Sanofi purchased recently, as oncology units in the Boston area are combined.”

The cost cutting measures are in response to the impending loss of patent exclusivity for several of its blockbuster products most notably Plavix and unexpected attrition in the company’s late stage clinical development portfolio. This year sales of products facing patent expiry are expected to decline to $4.2 billion as compared with $10.6 billion in 2008. To cope with these difficulties, Sanofi has gone on a buying spree over the last couple of years spending $23 billion to acquire various companies with Genzyme being the crown jewel.

Meanwhile, Sanofi plans to file for approval of six new drugs this year and hopes that it can introduce 19 new drugs by 2015. I suspect that Sanofi’s aggressive M&A strategy may help the company reach that goal. That said, if I was a Sanofi or Genzyme employee, I would be dusting off the old resume right about now.

Until next time...

Good Luck and Good Job Hunting!!!!! 

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In the play Romeo and Juliet, William Shakespeare famously wrote:

"What’s in a name? that which we call a rose

By any other name would smell as sweet ..."

While I am not so sure about the “sweet part,”  French pharmaceutical giant Sanofi-Aventis believes that no matter what it calls itself it will still be the same old company. To that end, Sanofi-Aventis last Friday announced that it will officially shorten its name to simply “Sanofi.” 

Sanofi is one of the world’s largest pharmaceutical companies based on revenues. It was formed in 2004 in a merger between two French pharmaceutical companies, Sanofi-Synthelabo and Aventis. The reason for the name change; most people (me included) simply called it Sanofi rather than Sanofi-Aventis. And, perhaps more appropriately, the company wanted its name to be “recognizable and easy to pronounce” around the world.

In addition to the name change, the company also declared a dividend of 2.50 euro for its shareholders that will be paid either in cash or stock. The dividend payout will take effect by June 16, 2011

As you may recall, Sanofi purchased Genzyme last month in a $20.1 billion deal. Perhaps the name change was announced because Sanofi-Genzyme is much easier to pronounce and has a better “ring to it” than Sanofi-Aventis-Genzyme?

Until next time...

Good Luck and Good Job Hunting!!!

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It seems like hostile takeover bids in the life sciences industry may be de rigueur (how can anyone forget the Sanofi-Aventis/Genzyme hostile takeover saga that dragged on for almost a year). Interestingly, there have been 219 acquisitions of U.S. pharmaceutical companies in the past 12 months, with an average disclosed price of $153.7 million and an average premium of 44 percent!

Late yesterday, Valeant Pharmaceuticals announced plans for a hostile takeover bid for Cephalon, a 24 year old Pennsylvania-based biopharmaceutical company with eight products on the US market and more than 100 products worldwide. The takeover bid became “hostile” after Cephalon’s management team rejected earlier proposals.

Cephalon’s main focus is on nervous system disorders, pain and cancers. It is one of the world’s top 10 and most profitable biopharmaceutical companies. The company had revenues of $2.81 billion last year from sales of its narcolepsy treatment Provigil ($1.2 billion) and its leukemia treatment Treanda ($393 million). Also, according to the Cephalon website, there are several oncology products (lung, melanoma and solid tumors) in its development pipeline. In 2010 Cephalon announced seven acquisitions many of which were intended to bolster its oncology expertise.

Valeant Pharmaceuticals International, long a struggling speciality pharma company, merged with Biovail Corporation late last year and re-emerged as a re-invented company with substantial financial resources at its disposal. Prior to the Biovail merger, Valeant had a long history of acquiring smaller companies to bolster its R&D capability and its flagging drug development pipeline. The new company specializes in neurology and dermatology and has a diverse product portfolio that consists of branded pharmaceuticals, branded generics and over-the-counter medicines. In 2009, its revenues were $1.65 billion and 2010 revenues (to be released) are likely to exceed $2.0 billion. 

According to Bloomberg News, Valeant has offered to buy Cephalon for $5.7 billion in cash. Under terms of the offer, Valeant would pay $73 a share in cash; a 24 percent premium on Cephalon’s Tuesday closing stock price or a 29 percent premium to company’s 30 day trading average. Not surprisingly Cephalon executives summarily rejected the offer as “too low.” Several financial analysts concur with Cephalon and contend that the $73 per share cash offer undervalues the company’s true worth. Valeant and Cephalon are main competitors in the oncology and neurology markets.

Unlike the Sanofi/Genzyme bid, where it was clear at the outset to most observers that Sanofi would ultimately prevail, it isn’t clear whether or not Valeant will be successful in its attempt for Cephalon. While Cephalon has had its share of trouble with FDA over the past few years (for a variety of infractions including off-label marketing of Provigil), the company is in much better shape than Genzyme and the current management team has more resources at its disposable to ward off Valeant’s hostile takeover bid.

The downside of a Valeant-Cephalon merger would be job loss for many current Cephalon employees. This is because Valeant’s bid for Cephalon appears to be a “pipeline grab” rather than an R&D play. Typically, these types of acquisitions result in reorganization and downsizing of personnel because of duplication of effort. Only time will tell if Valeant will prevail.

Stay tuned for more late breaking news!

Until next time...

Good Luck and Good Job Hunting!!!

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The almost two-year manufacturing woes of orphan drug manufacturer Genzyme have been well documented and publicized. Despite these problems and an FDA consent decreed, it was not enough to stop Sanofi-Aventis from doggedly pursuing Genzyme as a take over target for the past year.

As you may recall, production shortages of several of Genyzme’s key products, most notably Fabrazyme, a treatment for Fabry disease (a rare genetically inherited lysosomal enzyme storage disease) forced Genzyme to ration Fabrazyme to patients. Fabrazyme is the only approved treatment for Fabry disease and the rationing plan called for patients already taking Fabrazyme to receive half the approved dosage while newly diagnosed patients were prevented from receiving the drug at all!

A post on the Pharmalot blog last week revealed that at least half a dozen patients with Fabry disease who were taking Fabrazyme filed a lawsuit against Genzyme and New York’s Mt. Sinai Medical School for the ongoing shortages and the ill-conceived rationing plan. According to the lawsuit, as many as three patients with Fabry disease have died as a result of the Genzyme rationing plan. Mt. Sinai was named as a co-defendant in the case because it licensed Fabrazyme to Genzyme and went along with the company’s rationing program. Further, the lawsuit contends that neither Genzyme nor Mt. Sinai had adequately tested whether or not the reduced dosage was effective as a treatment for Fabry disease. Obviously, the FDA approved Fabrazyme as a treatment for Fabry disease based on the dosage information that Genzyme determined to be optimal in it BLA.

The lawsuit will likely never make it to trial (Genzyme will undoubtedly settle) and therefore have little or no impact on the impending acquisition of Genzyme by Sanofi-Aventis. Companies that are being acquired or merging don’t like it much when there is outstanding litigation that may interfere with the transaction.

Nevertheless, Genzyme’s manufacturing problems highlights one of the weaknesses of the US Orphan Drug Act. For those of you who may not know companies granted approval of drugs for orphan indications (< 200,000 patients) are guaranteed seven years of market exclusively (along with tax credits, grants and less onerous clinical trials). This means that no other company (aside from the innovator company) will be granted regulatory approval for a similar orphan product for seven years from the approval date of the first product. Not surprisingly, this forces patients with orphan diseases to exclusively rely on a single drug that is manufactured by a single company i.e. there is no backup. And, if an orphan drug manufacturer has regulatory compliance issues or goes out of business etc the patients that rely on the drug are SOL (as it is said in the vernacular). Unfortunately, this was exactly what happen with Fabrazyme when Genzyme’s chronic manufacturing problems resulted in shortages of the drug.

While many people take drug companies to task for developing so-called “me too” drugs there is a reason why FDA and other regulatory agencies approve them. That is: when there is more than one manufacturer of drugs that treat a particular indication then there will be alternate treatments available to patients if something goes awry with one or another of the products. Although I am a strong proponent of the Orphan Drug Act, the recent entry of several major pharmaceutical companies like Pfizer, GlaxoSmithKline and others into the orphan drug development space suggests that the seven years of market exclusivity offered by the Act may no longer be necessary. Further, shortening or eliminated the market exclusivity term would like help to increase competition among orphan drug developers. Increased competition would, in turn, and then help to drive down the price of orphan drugs which are currently exorbitantly expensive and sometimes not covered by insurers. Changing the orphan drug act would primarily benefit patients with rare diseases and not drug makers. And, in the end, helping patients is admittedly all that matters!

Until next time...

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

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The French drug maker Sanofi-Aventis continues to reorganize and slash jobs in anticipation of its acquisition of Genzyme. Today the company disclosed that it would shed another 700 jobs from its European operations. The job cuts come amid the company’s reorganization of its units in Austria, Germany, Switzerland, Portugal Spain, Holland, the Czech Republic and the United Kingdom (basically the entire EU).  The goal is to consolidate and reorganize the 30 European subsidiaries into only 10.

In other news, the Japanese drug maker Eisai announced that it plans on cutting 600 jobs or 20 percent of its US workforce. This announcement comes only one week after the company disclosed that it would trim 900 jobs in the next five years from European and Japanese operations. Impending generic competition for Eisai blockbuster treatment for Alzheimer’s disease, Aricept, is largely responsible for the layoffs. Like most other big pharmaceutical companies there aren’t enough drugs in development pipelines to offset the loss of revenue from generic encroachment on blockbuster brands.

Until next time...

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

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Reuters reported today that Sanofi Aventis has reached an agreement in principle to purchase Genzyme for $19 billion in cash and future payments based on the performance of Lemtrada, Genzyme’s experimental treatment for multiple sclerosis.                     

The $19 billion dollar deal translates into $74 per share in cash plus a contingent value right for Lemada that Genzyme investors will receive. Interestingly, the $74 per share stock price is the original amount that Genzyme’s board asked for when the saga to purchase the company began last August. Go figure.....

The deal is the second biggest in biotech history (second to Roche’s acquisition of Genentech) two years ago. I don’t know about you but I am glad that the deal is almost done and we don’t have to hear about it anymore. That said, I hope that Sanofi gets what it paid for! And, if I were a Genzyme employee (especially Henry Termeer, Genzyme's embattled CEO) I would dust off the old resume or CV as quickly as possible. 

Until next time...

Good Luck and Good Job Hunting!!!!!

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According to a "mention" today on the Pharmalot blog, a French newspaper reportedly learned that Sanofi-Aventis may be spending up to $1 billion this year to acquire up to four ophthalmology companies. Although the companies were not identified, three of the companies that Sanofi is eying (pun intended) are located in the US and the fourth is reportedly in Israel.

An aging global population coupled with the diabetes epidemic plaguing the US and several other Western countries suggest that ophthalmology drugs may be a good bet for the future. This, coupled with the impending acquisition of Genzyme suggests that Sanofi-Aventis is trying to create somewhat of a soft landing for the company after patent expiry in early 2012 of Plavix, its major money maker.

Until next time...

Good Luck and Good Job Hunting!!!!!

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After seven months of public bickering over an appropriate sale price, the NY Time reports today that Sanofi Aventis may have hammered out a deal that would enable the French drug maker to acquire the world’s largest orphan drug manufacturer Genzyme for $19 billion. According to the report, Sanofi will acquire Genzyme for a $74 per share which is up from it previous offer of $69 per share.

Most analysts and the Genzyme management team felt that the previous $69 per share offer was too low and that the tipping price would be in the mid 70s. This made sense even to outsiders like me because Eli Lilly purchased ImClone, a company with only one approved product on the market, for $70 per share several years ago. Genzyme has multiple FDA-approved products with a strong late stage drug development pipeline. Not surprisingly, Sanofi tendered a low initial stock price purchase offer to give itself flexibility when it decided to enter into serious negotiations.

Despite the long drawn out and tiresome melodrama, the deal is a good one for Sanofi, a company that desperately needs to bolster its biotechnology pipeline and also for Genzyme which has been rocked by biomanufacturing and quality problems for the past couple of years.

Now that this deal is imminent, does anyone have an idea about which biotechnology company may be the next takeover target?

Until next time..

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

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After a five month-long series of  very public and often acrimonious negotiations, it appears that Sanofi-Aventis and Genzyme may be close to deal that would enable the French drug maker to acquire one of the world’s largest public biotechnology companies.

According to the NY Times and a number of life sciences blogs, both companies have agreed in principle on a framework for a takeover deal. The major sticking point in the negotiations is Sanofi’s tender offer of $69 per share of Genzyme stock. Genzyme executives and industry analysts view the offer as “too low” and believe that a stock share price in the mid-70s is more reasonable and likely in the end. Another sticking point is the success of Genzyme’s leukemia treatment Campath (alemtuzumab, which is in clinical development to treat multiple sclerosis but will be marketed under the brand name Lemtrada if approved). Genzyme believes that Campath will likely be a winner whereas Sanofi executives are not so sure. Consequently, the deal will likely include additional payments to Genzyme if the drug meets or exceeds certain sale targets for either or both indications.

Persons with knowledge of the negotiations suggest that the specifics of a deal will likely be worked out of the next week or so. This is because, on Monday, Sanofi signed a nondisclosure agreement with Genzyme to conduct due diligence for the deal. Really? What has Sanofi been doing for the past 5 months?

The Genzyme deal is critical for Sanofi which desperately needs to quickly get into the biotechnology game, particularly in the areas of oncology and neurological disorders. Last week, Sanofi’s experimental drug to treat breast cancer, iniparib failed to meet clinical endpoints in a late stage clinical trial. Also, Plavix, Sanofi’s top-selling anti-clotting drug will lose patent protection in May 2012 (FDA recently gave Sanofi an additional six months of marketing exclusivity based on a newly awarded pediatric indication). Plavix is the world’s second best selling prescription medication.

I don’t know about you, but I hope that this deal gets done soon! From the outset, it was apparent to most life sciences pundits and industry insiders that Sanofi would prevail and ultimately acquire Genzyme. Unfortunately, Genzyme’s ongoing manufacturing woes provided Sanofi with an excuse to “lowball” its initial offers. And, surprisingly, Genzyme’s management team had the chutzpah and wherewithal to push back hard.  The bottom line: it is a great deal for both companies—“Just Do It.”

Until next time...

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

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The buzz at the JP Morgan Healthcare Conference that is taking place in San Francisco this week is that Sanofi-Aventis and Genzyme are close to inking a deal. As you may recall, Sanofi made an unsolicited offer last summer to buy the troubled orphan drug manufacturer. Sanofi offered to purchase Genzyme for $69 per share but the offer was summarily rejected as “too low” by Henri Termeer, Genzyme’s embattled CEO who has been running the company for over 20 years since its inception.

The very public and often acrimonious haggling over the purchase price has become legion in some investment banking and bioventure circles. Nevertheless, most industry and financial analysts predict that Sanofi will prevail and ultimately acquire Genzyme possibly for a share price in the low to mid $70s.  Sanofi desperately needs Genzyme to get into the biotechnology fracas; a field that it seemingly chose to largely ignore for the past 20 years--go figure!  Consequently, it is likely that Sanofi will eventually give Genzyme everything it wants to consummate the deal

Yet, despite progress being reported from the conference, Termeer and Sanofi Aventis CEO Chris Viehbacher haven’t met face-to-face to discuss the terms of a possible deal. However, Viehbacher did mention that Sanofi was “still committed” to purchasing Genzyme.

Stay tuned for the next installment of the saga.

Until next time...

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

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The era of blockbuster drugs was officially declared over several years ago by many pharmaceutical analysts and pundits. Nevertheless, as the old adage goes “it’s difficult to treat old dogs’ new tricks!” After all, the blockbuster drug model has been the major driver of pharmaceutical and biotechnology markets for close to 50 years. Consequently, big pharma and biotech companies haven’t truly abandoned the possibility of finding potential new blockbusters. And, it appears that the blockbuster heir apparent may be drugs to treat rare aka orphan disease indications. 

At first blush, this strategy may not make a lot of sense. This is because rare diseases afflict only small numbers of patients (at least in the US and other Western nations). However, what may be considered a rare disease in Europe or the US may actually be less rare in countries with large populations like China and India. Further, while current rare diseases patient populations may be small, the cost of the drugs developed to treat them is extremely high. In some instances, the annual cost per patient can exceed several hundred thousand dollars. If you do the math, it becomes apparent that developing rare disease treatments or so-called niche busters can actually be very big business. 

The rare diseases business model has been perfected by Genzyme and many big pharma companies are trying to emulate it. To that end, big pharma’s push into rare diseases continues to gather momentum. So far this year Sanofi-Aventis has made an $18.5bn move for Genzyme, while Pfizer and GlaxoSmithKline have both created rare disease business units.

According to Glaxo’s estimates, 7,000 rare diseases have been identified and collectively this affects 6-8% of the world’s population; in the US and Europe alone rare diseases affect 25 million people. In addition mortality rates are very high, often at a very young age, and less than 10% of these diseases are treated with approved drugs.

To date, over 7,000 rare diseases have been identified. Companies involved in the new rare diseases treatment race have whittled the list down to roughly 200-250 disorders that represent a clear path for clinical, regulatory and commercial success. The criteria used to select these indications include identifying rare disorders with: 1) a relatively high prevalence rate, 20 an early age of onset, 3) a large unmet medical need and 3) a known molecular target. The indications have been broadly classified into four distinct groups:  metabolic disorders, autoimmune/inflammation, central nervous system and blood disorders.

While Genzyme identified, developed and commercialized its rare diseases treatments, it is likely that big pharma companies like Pfizer, Glaxo, and Merck will either in-license potential new treatments or acquire companies with platform technologies or drugs in various stages of clinical development. For example, Merck’s acquisition of Glycofi several years ago has allowed the company to enter into the rare diseases and biosimilar markets.

One of the major problems with extant rare diseases treatment is their excessive and oppressive costs. One can only hope that the increased competition in the rare diseases space will help to lower drug prices and make them more affordable for patients who suffer from these devastating and life-threatening disorders.

For more insights in to the orphan drug disease market, check out an article that I wrote for Life Science Leader this month

Until next time...

Good Luck and Good Job Hunting!!!!!

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Late last Friday, Sanofi-Aventis announced that it was restructuring it US pharmaceutical business to meet the demands of a more challenging American healthcare market. The company said that it will streamline U.S. Pharmaceutical Operations and reduce its workforce by an estimated 25 percent. This translates into eliminating approximately 1,700 positions. Decisions about the breadth and scope of the cuts will be finalized by mid-December.

Of the 13,000 US employees, 6,900 work in the Pharmaceutical Operations division. Other Sanofi-Aventis affiliates in the United States include its R&D group, Sanofi Pasteur Vaccines, BiPar and Chattem: its consumer healthcare business.

According to Gregory Irace, President of Sanofi-Aventis and CEO of Sanofi-Aventis US/.Canada Pharmaceutical Operations,

“Given the serious challenges facing our organization and the healthcare industry, it is important to act decisively now so that our organization has greater stability moving forward and that our resources are allocated to our strategic growth priorities. These changes will foster a renewed focus on the strong growth and pipeline opportunities that will drive our vision of being a diversified healthcare leader.” Sanofi faces a serious “patent cliff” in the very near future; mainly because its top selling anti-clotting drug Plavix is slated to lose patent protection in 2011. Also, the company lacks expertise in biotechnology: the discipline that most big pharma companies is going to drive future growth in the industry."

The lack of biotechnology prowess is largely responsible for Sanofi’s attempt to purchase Genzyme, one of the largest and profitable biotechnology companies in the world.

Last week, Sanofi confirmed that its bid for Genzyme had become hostile because its management team and board of directors failed to seriously consider a bid tendered at $69 per share or $18.5 billion. Genzyme’s management team and board of directors immediately rejected the hostile bid (as it did in the past when the offer was “friendly”). The hostile bid allows Sanofi-Aventis to bypass Genzyme’s Board and appeal directly to its shareholders to consider the offer.

Restructuring of its US pharmaceutical operations, may be a sign that Sanofi-Aventis is attempting to cut costs to finance the all cash deal.

I suspect that Sanofi-Aventis will prevail in its bid for Genzyme; but it will have to sweeten the offer to appease activist investor Carl Icahn who is likely seeking an offer in excess of $75 per share.

If I were a betting man, I would put my money on Icahn—a brilliant financial strategist who frequently gets what he wants

Stay tuned for more late-breaking Sanofi-Aventis/Genzyme news!

Until next time...

Good Luck and Good Job Hunting

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Yesterday, Genzyme announced it would cut about 1,000 jobs worldwide as part of a restructuring plan. In addition, company spokespersons indicated that the company may outsource some of the eliminated permanent position and impose a hiring freeze. As part of its restructuring plan, the company plans on eliminating about 10 percent of its 12,800-employee workforce by 2012. It is unclear how many of the 4,500 US employees will lose their jobs.

In addition to the job cuts, the company announced that it had agreed to sell its diagnostic testing unit (reproductive and genetic testing) to Laboratory Corp of America for $925 million in cash. Henri Termeer, Genzyme’s beleaguered CEO also announced that the company’s other two units, molecular diagnostics and pharmaceutical ingredient manufacturing on also on the block and will be sold.

While Termeer insists that the job cuts and sale of non-core business units has nothing to do with Sanofi-Aventis’ attempt to purchase the company, many analysts believe that these measures are being taken to induce Sanofi to sweeten its $69 per share takeover bid. The additional monies garnered from the layoffs and division sales, will allow Genzyme to strengthen its stock position and bolster its cash reserves to defend against a possible hostile takeover attempt by Sanofi. 

The demise of Genzyme, once one of the most highly regarded and ethical biotechnology company in the world is directly linked to manufacturing problems at its Boston-based facility. The ongoing and protracted quality problems at the plant resulted in a consent decree by the US FDA and penalties totaling about $175 million. As most quality experts will tell you, systemic quality control and assurance issues generally stem from a lack of commitment to quality by senior management; in this case Termeer! 

Despite repeated request for his resignation, Termeer, who has run Genzyme for the past 25 years or so, has steadfastly refused to relinquish his post. Instead of stepping down to save the company, Termeer has chosen to “take the ship” down with him; the sure sign of an out-of-touch CEO who apparently was willing to sacrifice the reputation and worth of a company for entirely self-serving reasons.

Until next time...

Good Luck and Good Job Hunting

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For those of you who can’t tear yourselves away from the ongoing, nail-biting Sanofi Aventis-Genzyme saga, the head of GlaxoSmithKline (GSK) R&D, Moncef Slaoui told a French newspaper that GSK will not “step in as a rival bidder for the US biotech Genzyme.”

Slaoui made his remarks at the christenings of a GSK research center in France. “An offer by GlaxoSmithKline for Genzyme does not make sense. It is too expensive” he said. Also, GSK already has a foothold in the orphan disease market through its partnership with JCR Pharmaceuticals. 

As negotiations between Sanofi and Genzyme began to stall over the $69 per share offer tendered by Sanofi, some analysts had predicted that a so-called white knight may enter the bidding war to drive the stock share price higher to the $75 per share wanted by Genzyme.

Today’s announcement by GSK likely produced a collective sigh of relief from Sanofi shareholders. Personally, I think Sanofi would be crazy to let this one get away; the deal is exactly what Sanofi needs to begin to compete in the lucrative biologics market. Until now, Sanofi’s focus has been almost exclusively on small molecule development.

Until next time..

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

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The Boston Globe reported today that this morning Henri Termeer, the embattled CEO of Cambridge, MA based Genzyme acknowledged for the first time that company was indeed up for sale. However, he was quick to point out that the $69 per share or $18.8 billion takeover bid from Sanofi Aventis was insufficient.

Over the past few days, Sanofi Aventis’ CEO Christopher A. Viehbacher turned up the heat on Termeer; forcing him to possibly take Sanofi’s latest offer directly to Genzyme shareholders. While Termeer acknowledged that the company was for sale, he hinted that other companies may join the bidding war to get the $75 per share price that the Genzyme board is seeking. 

The Sanofi Aventis-Genzyme situation is beginning to resemble the Bristol Myers Squibb (BMS)-ImClone standoff of two years ago. As you may recall, Jim Cornelius—BMS CEO at the time—publicly and repeatedly offered a “low-ball” price ($62 per share) to purchase ImClone despite admonishments from Carl Icahn, ImClone’s Chairman. As negotiations stalled, Icahn told Cornelius that there were other suitors who were willing to pay a higher price to acquire ImClone. Surprisingly, rather than continuing to negotiate in good faith, Cornelius decided to call Icahn’s “bluff.” In less than a week, Eli Lilly purchased ImClone for $70 per share ($6.5 billion); the price that Ichan had previously and publicly asked for to purchase the company.

Many of you already know that Icahn holds a substantial minority Genzyme stock position and is represented by two current Genzyme board members. That said, if I were Sanofi’s Viehbacher, I would proceed with extreme caution in future negotiations. Like him or not, Icahn is a financial genius and second-to-none negotiating M&A deals. 

Maybe Viehbacher ought to contact Cornelius for advice? Oh yeah...Cornelius retired as CEO earlier this year but he is still Chairman of the BMS Board of Directors. Maybe it is worth a call?

Stay tuned for new developments as the saga continues.

Until next time...

Good Luck and Good Job Hunting!!!!!

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As predicted by many industry insiders and Wall Street analysts, the Genzyme board may be  holding out for at least a $75 per share offer from Sanofi-Aventis.  Previously, Sanofi-Aventis offered Genzyme $69 per share despite clear signals from Genzyme's board and its shareholder that the proffered offer was inadequate.

The Genzyme board is likely under extreme pressure to hold out for the $75 per share price because that is the price being sought by its powerful and influential minority shareholders Carl Icahn and Ralph Whitworth.

Carl Icahn, no stranger to corporate buyouts, is a master at getting the price that he wants for the companies that he sells. He previously sold ImClone to Eli Lilly for $70 per share after Jim Cornelius, Bristol-Myers Squibb’s former CEO, refused to offer more than $64 per share of ImClone stock.

Conventional wisdom suggests that Sanofi will likely buy Genzyme for at least $75 per share if not more!

Stay tuned for updates!

Until next time..

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

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Can things get any worse at Genzyme? First there were the manufacturing problems that result in plummeting stock share prices and a proxy battle by Carl Icahn and company. Next up was a $175 million consent decree judgment levied by the US Food and Drug Administration for the manufacturing problems. Then came the $18 billion takeover bid from Sanofi Aventis. Now, patients affected by shortages of the drugs Fabrazyme three patients have petitioned the US Department of Health and Human Services (HHS) to disregard Genzyme’s patent for the medicine to overcome the drug shortages.

Because of the manufacturing problems, Genzyme rationed its supplies of Fabrazyme to one-third of the normal dose for Fabry disease patients. Some of these patients reported increased pain and no newly diagnosed patients could receive the drug. Meanwhile, Shire Pharmaceuticals has been trying to obtain FDA approval of its Fabry disease treatment, Replagal which is approved in Europe.

The patients who petitioned HHS contend that HHS can override the patents because the National Institutes of Health paid for research at the Mount Sinai School of Medicine, which exclusively licensed Fabrazyme to Genzyme. The goal of the action is to induce another company to produce the drug in case Genzyme is unable to deliver adequate quantities to new and existing patients. Provisions in the Bayh-Dole Act suggest that this action may not be unreasonable if ‘a licensee cannot reasonably meet the public health and safety needs of the American public.’

Stay tuned for the next installment of the continuing Genzyme saga!

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The New York Times reported today that French drug maker Sanofi Aventis has made a bid to purchase beleaguered orphan drug manufacturer Genzyme. According to the report, Sanofi approached Genzyme about two weeks ago about a possible sale. Sanofi is currently waiting for a response from Genzyme. If Genzyme rebuffs the takeover bid, persons close to the deal said that Sanofi may possibly try to acquire Genzyme via a hostile takeover bid.

Sanofi is facing revenue losses because many of its blockbuster products including the anti-clotting agents Plavix and Lovenox will or have lost patent protection. Plavix's patent expiry will occur in 2001 whereas Lovenox has already lost patent protection ( yesterday the FDA approved a generic version of the drug). Further, Sanofi, unlike most major pharmaceutical companies, is glaringly deficient in biotechnology products and has long been known to be seeking a quick entry into the biotech market. To that end, the Genzyme bid makes complete strategic sense to bolster sales and secure Sanofi's future.

Genzyme is the fifth largest biotechnology company in the world. Sales of it orphan drugs to treat Gaucher’s, Fabry and Pompe disease annually exceed $3.0 billion in sales even though they are used to treat small numbers of patients (<20,000).

Genzyme’s value has plummeted in the past year because of manufacturing problems and is currently operating under a US Food and Drug Administration consent decree after being fined $175 million by the agency. Many shareholders have called for the dismissal of Henri Termeer, Genzyme’s CEO for the past 25 years. To date, Termeer has refused to step down even though Genzyme’s stock continues to under perform. News of a possible takeover caused Genzyme’s stock price to soar; gaining more than 15 per cent on Friday to $62.50.

I believe that Sanofi is approaching Genzyme at the right time. Recently, Genzyme reached an agreement with Carl Icahn, who owns a substantially amount of stock, to prevent a proxy battle to reshape Genzyme’s board and oust Termeer. Also, another major shareholder, Ralph Whitworth, is unhappy with recent events at the company. Sanofi’s acquisition of Genzyme would provide a quick entry into the biotechnology and orphan drug markets and also appease shareholders like Icahn and Whitworth if the deal is rich enough. Also, Sanofi’s manufacturing experience would help Genzyme overcome its problems in that area.

Stay tuned for updates.

Until next time...

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

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After weeks of bad press regarding manufacturing problems and a narrowly-averted proxy contest, Genzyme today announced that its experimental drug for multiple sclerosis, alemtuzumab, received fast track approval status from the US Food and Drug Administration (FDA).

Alemtuzumab (marketed as Campath, MabCampath or Campath-1H) is a monoclonal antibody used in the treatment of chronic lymphocytic leukemia (CLL), cutaneous T-cell lymphoma (CTCL) and T-cell lymphoma. Alemtuzumab targets CD52, a protein present on the surface of mature lymphocytes, but not on the stem cells from which these lymphocytes are derived.

For those of you who may not know, FDA grants fast track status to experimental drug candidates that are designed to treat serious diseases, and may be superior to current treatments. Fast track status includes an expedited review and additional collaboration between Genzyme and the and the agency and allows Genzyme to submit portions of the alemtuzumab BLA as they are completed, rather than waiting to submit the completed application when testing is finished.

Until next time..

Good Luck and Good Job Hunting!!!

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Genzyme announced yesterday that it had reached an agreement with Carl Icahn to settle their very public and bitter proxy battle. As you may recall, Icahn, who controls approximately 4.9% of shares in Genzyme, sought to replace Henri A. Termeer, Genzyme’s embattled long-time CEO and three other company directors.

Under the terms of the agreement, Icahn will withdraw his slate of four nominees for the Genzyme board of directors and vote his shares in favor of two company nominees. Also, the Genzyme board will appoint two Icahn nominees Steven Burakoff, MD and Eric Ende, MD to serve as directors immediately following the company June 16, 2010 annual shareholders meeting. Dr. Burakoff is Professor of Medicine, Hematology and Medical Oncology at the Mount Sinai School of Medicine and Director of the Tisch Cancer Institute at the Mount Sinai Medical Center. Dr. Ende, a participant in the Icahn funds’ proxy solicitation, is a former biotechnology analyst with Merrill Lynch & Co. Inc.

This isn’t the first time that Icahn has threatened a proxy fight to get his nominees elected to the board of directors at companies where he controls a small but significant amount of outstanding shares of stock.  Previously, he attempted to wrest control of the Biogen and ImClone and Enzon Pharmaceuticals board of directors. While his attempt to commandeer the Biogen board failed, he was successful at ImClone, the maker of the anti-colon cancer drug Erbitux that he sold to Eli Lilly in 2008 for ca. $6.1 billion. In Enzon’s case, the CEO resigned about six months after accommodating Icahn’s demands.

It is patently obvious that biotechnology company executives don’t want Icahn to gain control of their companies. This is because once Icahn gains control of the companies he sells them to the highest bidder. While this may make sense to a financial guy like Carl, it doesn’t sit well with company executives who understand that they will likely lose their jobs once a company is sold! 

Although Carl’s public proxy contest strategy usually gets him most of what he wants, I am not sure that it is in the best interests of company stock price and shareholder. Publicly airing a company’s dirty laundry tends to reduce shareholder confidence and may push its stock price lower than necessary. I think that it may be in a company’s best interest to quietly negotiate with Icahn behind the scenes rather than take the fight to the public. In the end, Icahn invariably wins and the management team that is under fire may look less competent or weaker than it actually is. Biogen ultimately won but Enzon and Genzyme lost the public opinion battle.

Until next time...

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

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Beleaguered orphan drug manufacturer Genzyme responded to Carl Icahn’s attempt to remove current board members through a proxy fight by issuing a statement announcing a $2.0 billion stock buyback program. Also, the company announced that it would sell or spin off its underperforming genetic testing, diagnostics and pharmaceutical ingredient manufacturing divisions. Both initiatives were announced in an attempt to fend off Icahn’s current assault on the company.

Genzyme spokespersons stated that the company will repurchase $1.0 billion worth of stock in the near term and finance it with debt. An addition $1.0 billion of stock will be purchased over the next year, Genzyme said. While financial analyst believe that the announcement will please shareholders, it is unlikely to ward off the Icahn plan to wrest control of the company away from embattled CEO Henri Termeer.

Until next time..

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

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Carl Icahn, who controls about 4.9% of the outstanding shares of Genzyme’s stock, is trying to get himself and three persons loyal to him elected to the Genzyme board of directors via a proxy fight. 

Icahn has publicly stated that embattled Genzyme CEO, Henri Termeer must go after running the company for the past 25 years. Icahn contends that Termeer has made many bad decisions during his tenure and the recent highly publicized manufacturing problems at the company are causing Genzyme’s stock to plummet.

Icahn’s slate of proposed board members include himself, Dr. Richard C. Mulligan, a molecular biologist at Harvard Medical School, Dr. Alexander J. Denner an Icahn confidant and Dr. Stephen J. Burakoff, Director of the Tish Cancer Center at Mount Sinai School of Medicine in New York. If elected the Icahn slate will replace Mr. Termeer, are Connie Mack III, a former United States senator; Richard F. Syron, the former chief executive of Freddie Mac and of Thermo Electron, a scientific instrument company; and Charles L. Cooney, a professor of chemical and biochemical engineering at the Massachusetts Institute of Technology.

As many of you may know, Icahn, who is always referred to as an “activist investor” is no stranger to proxy fights or controversy. Previously, he attempted to oust members of the Biogen-IDEC board of directors—an underperforming company according to Icahn—and more recently, publicly out-maneuvered and humiliated Bristol-Myers Squibb (BMS) CEO Jim Cornelius by selling ImClone—a long-time BMS co-marketing partner of the blockbuster colorectal cancer drug Erbitux— to Eli Lilly.

Over the years, I have been a staunch critic of Icahn. However, I am beginning to realize that there is a “method to his madness” and surprisingly, things always seem to change for the better at companies that are on his radar screen. Like him or not, Icahn demands performance from the companies that he invests in and will relentlessly work on behalf of himself and other shareholders to get the ROI that he expects.

Until next time,

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

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Genzyme announced yesterday that it expects to be fined roughly $175 million in fines and penalties related to the manufacturing troubles at its Allston Landing, MA manufacturing plant that resulted in severe shortages of two of its best selling products, Cerezyme (Gaucher disease) and Fabrazyme (Fabry disease) 

The fines and penalties are part of a consent decree that the US Food and Drug Administration (FDA) intends to levy against the company for the manufacturing infractions. A substantial portion of the penalties included a disgorgement settlement, a process that allows FDA to collect a certain percentage of the sales of products made at the troubled Genzyme production facility.

According to an article in today’s New York Times business section, Genzyme representatives said that patients using Cerezyme would continue getting half a dose for two or three more months. It previously said full supplies would be restored May.

Patients who use Fabrazyme would continue to be allocated a third of their usual dose at least through the third quarter. The company had previously hoped to resolve the Fabrazyme shortage in the third quarter.

The highly publicized manufacturing problems at Genzyme, has shaken both physician and patient confidence in the company’s ability to safely manufacture and supply sufficient quantities of Cerezyme and Fabrazyme; two orphan drugs designed to treat patients with debilitating genetically-inherited diseases. 

Several physicians and patients who were previously loyal and ardent supporters of Genzyme, have indicated that they may switch to recently approved and new treatments being developed by Genzyme’s competitors that include Shire.

The lack of commitment to quality manufacturing by Genzyme executives has seriously tarnished the image of a once highly respected and reputable orphan drug developer.

Until next time…

Good Luck and Good Job Hunting!!!!!

Until next time…

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

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The recent manufacturing woes of orphan drug manufacturer Genzyme have been well documented and widely publicized. These problems resulted in massive shortages of some of its top selling drugs Cerezyme (Gaucher disease) and Fabrazyme (Fabry disease) causing many of the patients who depend on these drugs to maintain their quality of life to go without reduced or no treatments for months. 

Because both drugs were approved by the US Food and Drug Administration (FDA) as orphan drugs they enjoy seven years of market exclusivity from the date of regulatory approval which prohibits other companies from seeking approval and selling similar drugs in the US. Consequently, Genzyme is the only commercially-available source for the drugs. Genzyme’s ongoing biomanufacturing created massive shortages of both drugs last summer. Because of this, FDA allowed two other companies, Shire and Protolix Biotherapeutics (both have treatments for Gaucher (Protalix) and Fabry (Shire) disease in late stage clinical development), to make their drugs available (at no charge) to patients prior to regulatory approval. This was a relatively rare and bold move by the agency. But, to be fair, they had little choice because so many patients were suffering.  

In case you may be wondering there are approximately 1500 Cerezyme users and fewer than 1000 Fabrazyme users in the US. Despite the small numbers of patients, the cost of the treatments are extraordinarily high; costing patients as much as $200,000 per year for treatment.

According to an article in today’s NY Times as many a 15 percent of American Cerezyme users have switched to a different drug. Fewer patients with Fabry disease have switched mostly because Shire’s drug for Fabry disease Replagal was less widely available. The almost year-long shortages of both drugs have seriously tarnished Genzyme’s reputation. And previously loyal patients are questioning their almost decade long allegiance to the company. This, coupled with a 26 per cent decline in Genzyme’s stock price last year suggest that Genzyme’s standing as one of the top five biotechnology companies in the world may be in serious jeopardy. 

Despite calls for his resignation (and an attempt by Carl Icahn to wrest control of the company), CEO Henri A. Termeer, who has led Genzyme for over 20 years has vowed not to resign. While manufacturing problems are not uncommon in the biotechnology industry, the severity and ongoing nature of the manufacturing problems at Genzyme’s Allston Landing, MA production facility are unacceptable; especially for a company that specializes and prides itself in developing treatment for orphan disease indications. The FDA recently announced that it would fine Genzyme and place its manufacturing operations under a consent degree for an indefinite period of time.

Genzyme representatives now contend full supplies of Cerezyme will be available after May 1 and those for Fabrazyme possible in the third quarter of this year.

While so-called “copycat” or “me too” drugs developed by pharmaceutical companies tend to be vilified by consumers and patient advocacy groups, the agency prefers to approve more than one treatment option for a given disease indication in case one medication doesn’t deliver the intended therapeutic benefits or induces untoward adverse events. Unfortunately, the seven years of market exclusivity awarded to orphan drugs manufacturers that garner regulatory approval for their products prohibits this. The biomanufacturing fiasco at Genzyme suggests that it may be time to reexamine the Orphan Drug Act and modify some of the financial and regulatory terms that were included to induce drug companies to develop new treatments for orphan disease indications.

Until next time…

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

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Orphan drug manufacturer Genzyme today issued a press release that the US Food and Drug Administration (FDA) notified the company that it intends to take enforcement action to ensure that products manufactured at its troubled biomanufacturing facility in Allston Landing, MA are made in compliance with good manufacturing practice regulations.

The agency’s enforcement action will likely result in a consent decree under which a third party would inspect and review the plant’s operation for an extended period and certify compliance with FDA regulations. Under a consent decree, Genzyme also would be required to make payments to the government and could incur other costs.

The Allston Landing facility was experiencing product quality problems for some time before FDA intervened and threatened regulatory action and sanctions against the orphan drug producer. According to the press release Genzyme will:

work cooperatively with the FDA to restore the agency’s confidence in its ability to operate the Allston plant at the highest standards, building on the progress it has made over the past year to address the manufacturing deficiencies at the Allston plant. This progress includes:

• Retaining a leading quality assurance advisory firm to help develop a comprehensive strategy and risk mitigation plan. More than 30 expert consultants from this firm are currently working at the Allston plant or at other Genzyme manufacturing facilities.
• Naming a new site head and reorganizing and strengthening the management team at the facility.
• Hiring two highly regarded industry veterans to serve as President of Global Manufacturing and Corporate Operations and Senior Vice President of Global Product Quality.

While this is not good news for Genzyme, it is great news for patients who rely on Genzyme’s medicines to manage their oft times devastating and potentially life threatening genetically-inherited diseases.

Until next time…

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

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Carl Ichan, the billionaire, activist investor notified Genzyme that he will seek shareholder approval to seat four handpicked directors including himself to be appointed to the company’s board of directors in an attempt to remove embattled Chairman and CEO Henri Termeer who has led the company for the past 25 years.

The move was widely anticipated by industry analysts because Icahn own one percent of outstanding shares of Genzyme’s stock.  Icahn and other large shareholders believe the company would be better off under new leadership. Termeer has publicly stated that he has no intention of resigning.

Until recently, Genzyme’s standing and reputation in the biopharmaceutical and orphan drug industry was second-to-none. However, the company’s inability to quickly correct ongoing manufacturing problems at its biomanufacturing facilities for the past year has been extremely embarrassing and costly. Sloppy manufacturing and quality control problems this past year led to major shortages of two main products, Cerezyme and Fabrazyme. Consequently, in 2009 sales revenues dropped and company earnings were almost flat. Further, Genzyme shares lost 26% of their value in 2009, sinking to a five-year low.

Icahn is no stranger to hostile corporate takeovers and company sales. In spring of 2008, he unsuccessfully tried to gain control of the Biogen/Idec board to force the sale of the company (Ichan owns 5.6% of Biogen/Idec’s outstanding shares). Later that year, Icahn engineered the sale of ImClone to Eli Lilly for $7.0 billion; after getting into a very public and often acrimonious fight with Bristol-Myers Squibb CEO Jim Cornelius who tendered a “low-ball offer” (according to Icahn) to purchase ImClone.

According to my calculations, Icahn is batting .500 for his recent corporate takeover attempts. Do you think he will be able to go 2-for-3? I bet Henri Termeer is hoping that he can’t!

Until next time...

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

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A rare or orphan disease is defined in the US as one that affects fewer than 200,000 at any given time. It is estimated that there are 6000 to 8000 rare diseases in the world today. Because the number of patients afflicted with orphan diseases is so small, drug companies have historically been reluctant to invest money to discover and develop new treatments for them. The dearth of treatments for rare diseases induced Congress to pass the Orphan Drug Act in 1983 which provided market exclusivity, tax breaks and incentives and regulatory help for companies to development new drugs for orphan disease indications.

While many current blockbuster drugs including recombinant human insulin, growth hormone and erythropoietin originally garnered regulatory approval after receiving orphan status in the late 1980s, most big pharma and biotechnology companies (except Genzyme) largely abandoned orphan drug development until recently. The renewed interest in orphan drug development has been primarily driven by the demise of big pharma’s blockbuster business model that began in the early 2000s. The search for new, non-blockbuster drugs and fresh markets is what induced Pfizer, the world’s largest pharmaceutical company, to recently inked a multimillion dollar deal with Protalix Biotherapeutics, a small biopharmaceutical company developing a new treatment for Gaucher disease—an orphan indication.

Because of renewed interest and the ever increasing need for new orphan drugs, the FDA’s Office of Orphan Products Development is offering an Orphan Drug Designation Workshop that will provide a unique opportunity for all potential drug sponsors—including biotechnology companies, pharmaceutical firms and academic institutions—to learn about the application process for orphan drug designation.

The National Organization for Rare Disorders (NORD) is a co-sponsor of the workshops, which will take place on February 25-26 at Keck Graduate Institute and August 3-4 at the University of Minnesota.

Participants are encouraged to bring specific product proposals for at least one candidate orphan drug that holds promise for the treatment of a rare disease. A significant portion of the workshop will be dedicated to preparing applications, including one-on-one guidance sessions with FDA staff members. FDA will keep product and disease information confidential.

Final applications can be submitted to the FDA at the close of each workshop. For information or to register:

FDA Workshop Brochure
Registration for the February Workshop

Finally, February 28^th is Rare Disease Day. The event is sponsored by the EURODIS a European advocacy group that promotes awareness and research for rare diseases. NORD and Discovery Health are also sponsoring the day.

Until next time....

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

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Harrison Ford’s new movie “Extraordinary Measures” (also starring Brendan Fraser) is loosely based on John Crowley’s ongoing crusade to find a cure for Pompe Disease a genetically inherited illness that afflicts two of his three children.The film chronicles the 'extraordinary measures' taken by Crowley to find a treatment for the so-called orphan disease that affects the lives of about 40,000 persons worldwide. While I haven’t seen the film, it bears a striking resemble to the 1992 film “Lorenzo’s Oil” which chronicled the struggles of two parents to find a “cure” for their son’s adrenoleukodystrophy an another orphan disease.

Crowley’s story began about 12 years ago when his oldest child was diagnosed with Pompe Disease. For those of you who may not know, Pompe Disease is a progressive, multisystemic, debilitating, and often fatal neuromuscular disorder. The disease is linked to an inherited deficiency of the lysosomal enzyme acid alpha-glucosidase (GAA), which is responsible for the breakdown of glycogen inside the cells. The result is intralysosomal accumulation of glycogen, primarily in muscle cells, that leads to a progressive loss of muscle function and ultimately death. At the time of the diagnosis, Crowley, a Princeton, NJ resident, was working as a marketer for Bristol Myers Squibb. He quickly learned that there was no effective treatment for Pompe Disease and that his daughter may not live beyond early childhood. Further, because the disease afflicted so few individuals, no pharmaceutical or biotechnology companies were working on treatments for Pompe Disease. 

To stave off the likelihood of his daughter’s death, in 2000, Crowley raided his 401k plan and mortgaged his home to start a company called Novazyme that focused exclusively on developing treatments for Pompe Disease. Having no time to waste, Crowley and the Novazyme team worked feverishly to develop an alglucosidase alfa enzyme replacement therapy for Pompe. By 2001, the Novazyme team had identified a likely treatment and Crowley sold his company to Genzyme. As a senior vice president at Genzyme, he oversaw clinical development of the product which is now called Myozyme and is the first FDA-approved treatment for Pompe Disease. Crowley left Genzyme in 2004 and is currently CEO of Amicus Therapeutics a 100 person company focused on developing new treatments for Pompe Disease and other orphan indications.

At present, there are no other treatments besides Myozyme for Pompe Disease. This is because Pompe Disease is designated as an orphan indication and Genzyme received seven years of market exclusivity for Myozyme as stipulated in the Orphan Drug Act. Myozyme received FDA approval in 2006.

While Genzyme has been the only player in the Pompe Disease market for the past four years, manufacturing and scale up problems threaten to jeopardize the Myozyme franchise. Genzyme’s highly publicized problems at its Allston, MA-manufacturing facility have been well documented and Genzyme’s management team is taking bold steps to correct them (including hiring a new senior vice president for global product quality) and entering into an agreement with Hospira Worldwide Inc to provide fill and finish manufacturing services.

But perhaps more troubling, were the problems that the company experienced when attempting to scale up Myozyme production from the 160L to 200L bioreactor scale to meet growing demand for the drug.  FDA informed Genzyme that that Myozyme® (alglucosidase alfa) produced at the 160L bioreactor scale and Myozyme produced at the 2000L scale should be classified as two different products because of differences in the carbohydrate structures of the molecules. And, the company would have to file a new biologics application (BLA) for the 2000L product to garner regulatory approval.

Currently, Genzyme has U.S. approval to sell Myozyme manufactured at the 160L scale, and the company has been seeking clearance from the FDA for Myozyme produced at the 2000L scale (now marketed as Lumizyme). Lumizyme has already been approved in more than 40 countries. However, manufacturing problems and violations at the Allston facility forced FDA to delay a decision on the approvability of Lumizyme this past March. Earlier this week, Genzyme announced that FDA will issue a new decision on Lumizyme in June.

While originally spurned by large drug companies, orphan drug development is becoming much more attractive because of the lack of new blockbuster drugs in most company’s development pipeline. According to a recent report, the number of orphan product designations in the US more than doubled in the last decade rising from 208 in the 2000-02 periods to 425 in 2006-08. More recently, Pfizer, the world’s largest pharmaceutical company announced that it agreed to pay at least $60 million for rights to Protalix Biotherapeutics Inc.'s new treatment (taliglucerase alfa) for Gaucher’s Disease another orphan indication. This suggests that Pfizer has made a decision to directly compete with Genzyme, the world leader in orphan drug development.

Don’t be surprised when other large pharmaceutical and biotechnology companies announce plans to compete in the orphan drug market...there is money to be made!

Until next time...

Good Luck and Good Job Hunting!!!

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While Genzyme has begun to address its manufacturing woes and its CEO and top leadership have managed to keep their jobs, the specter of a possible forced sale of the company has emerged. This is because Carl Icahn, the billionaire, activist investor with a history of forcing the sale of financially-challenged and underperforming public biopharmaceutical companies like ImClone and MedImmune, owns 1 percent of the outstanding shares of Genzyme.

Speculation is rife that Icahn and Ralph Whitworth, a founder of Relational Investors which owns 4 percent of Genzyme’s stock, may force the company to put itself up for sale. While many experts contend that this may not be in the best financial interests of Icahn and Whitworth (or other institutional investors), the threat may allow both men to get themselves or their representatives on Genzyme’s board. This would allow them to control the direction of the company and better position the company (the fifth largest biotechnology company in the world) for future sale. Henri Termeer, Genzyme’s embattle CEO, said he has had no contact with Icahn.

Investors have not been pleased with Genzyme’s current management team’s decision to plow profits from its orphan disease business into R&D activities that have been unsuccessful. According to a recent Citigroup financial report, the company may have squandered over $1.0 billion (throughout its history) by investing into unprofitable, non-core research areas including kidney disease diagnostics and surgical products. Conventional wisdom suggests that if Icahn and Whitworth gain control of the Genzyme board that they could sell off Genzyme’s unprofitable kidney disease and surgical lines which would allow management to focus on orphan diseases drug development and allow the company to fix its recent highly publicized manufacturing problems.  Relational’s Whitworth hinted that this is one scenario that he may be interested in pursuing. To date, Icahn has been uncharacteristically mute on a possible takeover attempt.

Stayed tuned for more details.

Until next time....

Good Luck and Good Job Hunting!!!!!! (try Genzyme, they are probably looking for a few good biomanufacturing executives and managers)  

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Genzyme announced in a Securities and Exchange Commission filing on Monday that it inked a "fill and finish manufacturing services" deal with Hospira for several of its top selling drugs including Cerezyme (Gaucher disease), Fabrazyme (Fabry disease, Myozyme (Pompe disease) and Thyrogen (thryroid cancer). The move follows a series of highly publicized manufacturing problems at the company’s Allston Landing, MA biomanufacturing facility in 2009.

Beginning in March, Genzyme received a warning letter from the US Food and Drug Administration (FDA) detailing "significant objectionable conditions" at the Allston facility. The agency identified deviation and violations of current Good Manufacturing Practice (GMP) in four areas including: 1) maintenance of equipment, 2) computerized systems, 3) production controls and 4) the failure to follow procedures aimed at preventing microbiological contamination.

In June, Genzyme shut down the biomanufacturing plant to clean up viral contamination that had been slowing down production of Cerezyme and Fabrazyme. The virus, Vesivirus 2117, is known to interfere with the growth of Chinese hamster ovary (CHO) cells and is believed to have been introduced through a cell culture nutrient. The virus doesn’t infect humans, but the shutdown cost the company millions in revenue and caused shortages of Cerezyme and Fabrazyme. Production restarted at the plant in September.

Meanwhile, in November, the Food and Drug Administration said it found tiny particles of steel, rubber and fiber in finished vials of Cerezyme, Fabrazyme, Myozyme, Aldurazyme (mucopolysaccharidosis I) and Thyrogen. These and other violations are outlined in a 483 that was issued by FDA following inspection of the troubled facility.

The deal with Hospira, which makes drug and medication delivery systems,calls for the initial term to expire on Dec. 31, 2015. There are options for a two-year extension. The financial terms of the agreement were not disclosed. The deal is still subject to regulatory approval for manufacturing the products.

While GMP deviations and warning letters are common place at many biotechnology companies, Genzyme’s ongoing manufacturing problems had potentially grave medical implications. This is because, unlike most of its competitors, Genzyme focuses almost exclusively on the development of orphan drugs. Orphan drugs are used to treat diseases like Gaucher, Fabry and Pompe disease which are rare, afflict relatively small numbers of patient and usually result from genetic mutations. Generally speaking, there is usually only a single manufacturer of orphan drugs. Consequently, manufacturing problems can result in drug shortages which may inhibit access to these life saving drugs. As corny as it may sound, patients with orphan diseases have literally placed their lives in the hands of the drug companies that manufacture these orphan drugs.

Until last year, Genzyme had an outstanding and impeccable reputation and was regularly lauded by the orphan drug community. Unfortunately, its management team lost sight of its original to commitment to quality—a sign that changes may be necessary in the executive suite. Hopefully, the new fill and finish deal with Hospira will eliminate many of the company’s manufacturing problems and Genzyme can restore confidence in its brand!

Until next time....

Good Luck and Good Manufacturing !!!

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An annual survey conducted by Science magazine and the American Association has identified the 2008 top twenty life sciences employers in the world. The rankings were based on a company’s leadership, stability, social responsibility and treatment of its employees. Six of the top 10— Genentech, Gilead Sciences, Genzyme Corp., Schering-Plough Corp., Gilead Sciences are based in the US whereas the remaining four—Boehringer Ingelheim, Roche Pharmaceuticals, EMD Serono, and Millennium are headquartered outside of the US. For the first time, eight of the top 20 are located outside the United States.

In case you were wondering, Genentech was ranked number 1. This is the fifth time out of the past 6 years that the San-Francisco based company made it to the number one slot (it fell to second last year). Another notable is Massachusetts-based Genzyme which made it to the number 3 spot (out of 575 companies) for the second consecutive year. Surprisingly, Monsanto, the company that makes genetically modified seed crops, was number 2—this despite all of the negative press about genetically modified foods. Let see whether or not Genentech can retain its number 1 ranking after the Roche takeover of the company is completed.

Until next time....

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

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The National Institutes of Health (NIH) announced on Wednesday that it was creating a new program aimed at “finding treatments for some of the 6,800 rare diseases that collectively affect about 25 million Americans.” 

According to NIH officials, the NIH would work with researchers and patient advocacy groups to identify new molecular entities (NMEs) that represent potential treatments for rare disorders. Once identified, NMEs will be turned over to private companies for further development. Information about molecules that failed to make the cut for further development will be published in scientific and medical journals. The NIH stressed that the goal of the program is to work with the drug industry not compete with it to develop new treatments.

Because many rare diseases only affect a few hundred or a few thousand people, there are little financial incentives or profit motives for companies to develop treatments for them. To stimulate drug development for rare diseases, the US Congress passed The Orphan Drug Act (1983) that offers companies that develop drugs for diseases affecting fewer than 200,000 people tax incentives, financial support for clinical development and seven years of US market exclusivity, i.e. the company can sell the product without competition for seven years. Since its passage, the Orphan Drug Act has been a boon to many biotechnology companies, most notably Genzyme, a profitable biotechnology company whose business model is built almost exclusively on orphan drug development.

NIH’s entry into the orphan drug development arena ought to help speed discovery and development of potential new treatments for orphan indications. It will undoubtedly help to reduce some of the cost, time and risks typically associated will corporate drug discovery. Industry experts suggest that drug discovery can sometimes cost well over $10.0 million and take between two to four years to complete. However, the program is starting with only $24 million this year and is expected to receive the same level of funding each year until 2013. While this may limit the overall effectiveness of the program, it will likely bring government and the drug industry closer to forge new relationships with the common goal of discovering much needed new treatment for orphan indications.

Until next time...

Good Luck and Good Research!!!!!!!!

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Genzyme announced today that it plans to build a research and development center in Beijing as part of its continued global expansion. When completed, the 200,000 square-foot facility (which is expected to cost $90 million to build) will be able to accommodate 350 employees.  The company, which wants to establish a long-term presence in China, expects the facility to open in 2010.

Genzyme said it already has 25 employees working in offices in Beijing and Shanghai and has a pilot program for its cell therapy MACI at Beijing Wujing Hospital. Like other American biotechnology companies, Genzyme see a bright future in China. 

And since I am talking about China, I would be remiss if I didn’t mention that I will be in China in about three weeks to visit my friend who is an executive chef and will be managing food operations at the Beijing Olympics in August, 2008. I plan on visiting Beijing and Shanghai, so if you live in either of these cities and want to get together to chat about biotechnology, blogging or anything else, please feel free to drop me a line.

Until next time….

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

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Genzyme Corp announced yesterday that it plans to expand it research and manufacturing facilities in Waterford, Ireland. Genzyme originally set up the facility in 2001 and plans to add another 170 employees, expanding its Irish workforce to 600.

This is second time in less than a year that Waterford (internationally known for its crystal manufacturing) has received an investment from a foreign drug manufacturer. Israeli generic drug manufacturer TEVA made a $100 million dollar to expand its Waterford operations and boost its Irish workforce from 650 to 815.

The Irish government said it was offering assistance to subsidize the $200 million Genzyme expansion at the Waterford site. The amount and terms of the subsidiary were confidential and not disclosed. At present, drug companies with operations in Ireland  employ 25, 000 people.

Genzyme, with expertise in developing drugs to treat rare disorders, kidney disease and cancer, employs more than 10,000 people worldwide.

This is more good news for Ireland!

Until next time….

Good Luck and Good Job Hunting (in Ireland)!!!!!!!

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Is it luck or good planning that has prompted many pharmaceutical and biotechnology companies to set up manufacturing and research operations in Ireland? In my opinion, the recent Irish pharma and biotech explosion has little to do with luck and everything to do with strategic vision, excellent planning and a well trained, inexpensive workforce.

Currently, 28 out of the 50 top pharmaceutical/biotechnology companies in the world have facilities in Ireland. Some of these companies are Merck, Wyeth, Genzyme, GlaxoSmithKline, Pfizer, Johnson and Johnson, Schering-Plough and Bristol-Myers Squibb. Seven out of 10 of the world’s top selling blockbuster drugs are now manufactured in Irish production facilities. 

Pharmaceutical companies were the first to set up shop in Ireland. However, biotechnology is growing rapidly and biomanufacturing is starting to over shadow traditional small molecule production. Companies including Wyeth, Centocor, Bristol-Myers Squibb, Organon Biosciences (now part of Schering Plough) and Allergan manufacture biologics and biotechnology products in Ireland. In fact, Ireland is home to the world’s largest biomanufacturing facility, Wyeth’s € 1.3 billion Grange Castle near Dublin.

So why pharma and biotech are companies flocking to Ireland? First, the Irish labor force is well trained, everyone speaks English (albeit with an Irish lilt) and wages are still low. Second, Ireland has the lowest corporate taxes in the entire European Union. Further, there are R&D tax credits and financial support for start ups.  For example, there is financial support to purchase consultancy and innovation vouchers worth €10,000, a substantial amount of money for any startup! Finally, and perhaps most importantly, the Irish government had the foresight to create a public/private enterprise known as the National Development Plan (2000-2006) that invested € 2.5 billion to create an Irish R&D infrastructure.

The Irish strategy–“built it and they will come”– has certainly paid off handsomely for Ireland. Another country that has embraced a similar strategy is Singapore–which through a public/private initiative has been building a vibrant life sciences and biotechnology industry since 1999. Both countries now compete for pharma and biotech business. For example, in late 2007, Merck decided to build a € 200 million vaccine facility at Carlow Town in Southeast Ireland. Novartis, on the other hand, opted for Singapore to build a new $180 million pharmaceutical tabletting facility along side of its API production plant.

Unlike Ireland, the American pharmaceutical and biopharmaceutical industries are in trouble and losing their competitive edge. Perhaps the US can learn a thing or two from the Irish to give its bioscience industry a much needed shot-in-the arm.

Until next year….

Good Luck and Good Job Hunting (try Ireland)!!!!!!!!!!

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Just what the market needs—another cholesterol control medication. That said you can always count on Genzyme to bring its unique approach to drug development to an already overcrowded marketplace.  

The New York Times reported today that Genzyme inked a deal with Carlsbad CA-based Isis Pharmaceuticals, an early pioneer of anti-sense technology. Genzyme has agreed to pay at least $325 million to win the hotly contested rights to Isis’ potentially powerful cholesterol-lowering drug called mipomersen. Genzyme beat out at least another 10 companies that were interested in the deal. Genzyme, one of the world’s most successful biotechnology companies, primarily creates drugs that are used to treat small numbers of patients with rare genetic diseases like Fabry disease and Type I Gaucher disease.

Mipomersen is in Phase III clinical trials as a treatment for a rare genetic disease that causes people to have astronomical cholesterol levels, raising their risk of premature cardiovascular disease and death. There are only about 10,000 people in the world with the most severe form of the disease, which can cause heart attacks even in young children. According to Isis, the drug lowered levels of cholesterol and other blood lipids more than 40 percent beyond reductions achieved by statins and other existing drugs alone. Isis and Genzyme believe that the drug might also be used for 1.5 million people in the United States and Europe with less severe forms of the genetic disorder and also for millions of people who have high cholesterol that is not controlled sufficiently by statins like Lipitor.

Genzyme appears to be a logical partner for Isis because of its focus on developing medications to treat rare genetic disorders. However, Genzyme’s ability to penetrate the broader cardiovascular market may be hindered by its lack of a large sales force which is typically required to call on general practice physicians who frequently prescribe cholesterol-lowering medications.

Isis and Genzyme hope to submit a new drug application to the US Food and Drug administration in 2009 for approval of mipomersen.

Until next time….

Good Luck and Good Job Hunting (try Genzyme)!!!!!!!!

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