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After months of speculation and a nine month-long bidding war, Teva not Pfizer has emerged as the winner to purchase Ratiopharm; the financially-troubled, German generics manufacturer. Ratiopharm was Germany’s second largest generics manufacturer.

Teva Pharmaceutical Industries Ltd announced today that it has entered into a definitive agreement to acquire Ratiopharm, Germany's second largest generics producer (Novartis AG’s Hexal unit is first and Stada Arzneimittel AG is third) and the sixth largest generic drug company worldwide, for €3.625 billion ($ 5.0 billion). Teva expects to complete the transaction by year-end 2010.

The acquisition will position Teva as the leading generic pharmaceutical company in Europe. Ratiopharm's extensive product portfolio includes 500 molecules in over 10,000 presentation forms covering all major therapeutic areas marketed in 26 countries. Also, Ratiopharm has valuable know-how in biosimilars (a market that Teva has entered and is extremely bullish on) which consists number of products in advanced stages of development and a well-established sales and marketing team. The combined company will have 40,000 employees worldwide, of which 18,000 will be based in Europe. The purchase will bolster Teva’s visibility and standing in European markets.

Late last month, Ratiopharm board members implored Pfizer to enter a new bid, after it had rejected an earlier offer by the company. Apparently, the new bid was not sufficient to prevent Teva from acquiring the highly sought after generics manufacturer. Iceland-based generics manufacturer Actavis also put in a failed bid to acquire Ratiopharm.

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Earlier this week, an article appeared in the NY Times Business section heralding the entry of several large pharmaceutical companies into the branded generics industry. For those of you who may not know, generic drugs are lower cost versions of brand name prescription drugs that have lost patent protection. Generic prescription drugs are usually much cheaper than their brand name counterparts but generally deliver the same therapeutic effects as the branded product. In most cases, so-called “commodity generic drugs” are not branded and sold to consumers by their chemical names. A good example of a commodity generic drug is the anti-depressant sertraline HCl; which Pfizer sells under the brand name Zoloft. Pfizer still manufactures and sells Zoloft but Zoloft lost patent protection several years ago and a generic version of the active ingredient, sertraline HCl, is now available to consumers. Because sertraline HCl is much cheaper than Zoloft, pharmacists almost always substitute prescriptions for Zoloft with sertraline HCl. This is perfectly acceptable because sertraline HCl was approved by the US Food and Drug administration with an AB rating which means that sertraline HCl is biologically equivalent to Zoloft.

Unlike commoditized (no-name) generics, branded generics are off-patent prescription drugs that are sold to consumers—as the name implies—under a brand name. Typically, because these products are “branded” and actively marketed by manufacturers they are sold at higher prices than equivalent no-name generics. This is because consumers are generally willing to pay more for drugs that are manufactured by well known and trusted companies as compared with no-name generics which are usually produced by lesser known or unidentified manufacturers.

Branded generics are not a new or novel concept. They were previously championed by a number of generics manufacturers, most notably Barr Laboratories, which was recently purchased by the Israeli generics giant TEVA. In the past, when pharma embraced the blockbuster drug business model, drug manufacturers built in revenues— that eventually would be lost through patent expiry—into the price of their top selling drugs. This allows drug companies to maximize ROI early in a drug’s life cycle years before patent expiry Studies have shown that branded prescription drugs can lose as much as 90% of their original value two years after the introduction of generic equivalents. Consequently, because of drastically diminishing financial returns after patent expiry, it didn’t make economic sense to continue to promote and support a brand that was facing generic competition. Put simply, the company made its money on the drug and it is time to move on. 

However, the emergence in recent years of an affluent middle class in developing markets like China, India, Brazil, Eastern Europe and elsewhere is causing branded pharmaceutical companies to reconsider their generics strategy. In these markets, many people frequently pay out of pocket for their medicines but cannot afford to pay for the expensive brand name drugs. Also, in some emerging markets, where the threat of low quality or counterfeit prescription drugs may be high, consumers who can afford to purchase medicines are willing to pay more for drugs manufactured by well known and respected companies. Finally, IMS Health estimates that close to $89 billion in US drug sales alone will be lost to generic competition over the next five years or so.

In the absence of any new blockbuster drugs on the horizon, many big pharma companies have been scrambling to acquire or enter into relationship with established regional generic manufacturers. For example, GlaxoSmithKline recently bought a stake in Aspen a South African generics manufacturer and entered into an agreement with India-based Dr. Reddy’s laboratory to sell generic products in Asia and other emerging markets. Likewise, in the last year, Pfizer created an off-patent generics division (products are sold under Greenstone label which is a wholly owned subsidiary of Pfizer) and signed agreements with three Indian companies to sell their products in the US and other markets. These deals added about 200 products to Pfizer’s new generics portfolio. Further, Pfizer recently announced that the Greenstone brand has become the world’s seventh largest generics seller. In addition, Pfizer is expected to make a formal bid to purchase the financially-troubled German generics manufacturer Ratiopharm; one of Germany’s largest purveyor of generic drugs.

Not to be outdone by the competition, the French drug maker Sanofi-Aventis recently purchased Brazil-based Medley, a dominant player in the South American branded generics industry and Laboratorios Kendrik, a Mexican generics producer. Last year, the company also purchased Zentiva, a leading Czech generic manufacturer signally the company’s intention to move into financially-lucrative Eastern European markets.

Watson, one of the largest American generics manufacturers (which primarily operates in the US) recently purchased Arrow, a generic producer that operates in 20 different countries. Finally, Novartis, recognizing a business opportunity before most of its competitors, entered the generic market in 2003 following creation of Sandoz, a division of Novartis that manufactures and sells small molecule generic drugs and branded biosimilar products. Recently, Novartis purchased the German branded generics manufacturer Hexal, making it the world’s second largest generic drug manufacturer after Teva.

The entry of pharmaceutical companies into the generics business is allowing these companies to pursue a two-tiered business strategy in certain markets which is designed to preserve the long term value of their branded franchises. For example, companies can continue to sell their expensive name-brand drugs to the wealthy (or those that can afford them) and concurrently sell the more moderately priced branded generics which includes and over the counter products to the broader market. 

While some may lament the end of the blockbuster drug era, rising healthcare costs and generic competition is forcing big pharma to continue to explore novel and innovative strategies to reinvent itself.

Until next time...

Good Luck and Good Job Hunting (try the generic industry; business is booming)

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The Pharmalot blog authored by the intrepid Ed Silverman today reported that Dan Vasella is out as CEO at Novartis and there has been an executive shake up at the company. According to the post, Vasella is reliquishing his post a CEO but retaining his chairman title For a complete run down and a glimpse at the new Novartis org chart read Ed's post

Vasella has come under fire (literally and figuratively) over the past year or so.  Industry insiders and Novartis shareholders contended that he couldn't manage the day-to-day operations of companies and succeed as Chairman. Also, Vasella was the victim of  unwarranted, vicious attacks by animal rights activists who publicly denounced him and set his home on fire!

Vasella, one of the few physicians to head a pharmaceutical company, held the top position since 1996 following the merger of Sandoz and Ciba-Geigy to form Novartis. The company has expanded in to new therapeutic areas and markets and performed well under Vasella's stewardship. However, many industry experts contend that ten years is the optimum tenure for most life sciences CEOs. What's four years in the scheme of things?

Until next time....

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

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Pfizer today announced that it’s looking to increase its sales force in China to 3,200 by the end of next year, up from about 2,300. The company expects to have sales representatives in about 250 Chinese cities by the end of 2011. It presently has a sales presence in about 185 cities. Previously, Pfizer it will cut nearly 20,000 jobs as part of the Wyeth merger. Over the pass several years more than 50,000 US pharma sales reps have lost their jobs.

Eli Lilly said last fall that it would continue to hire in China, even as it cuts jobs in the U.S. and other developed markets. Novartis is also making a big push into China, hiring hundreds of workers and spending $1 billion to expand a research center in Shanghai.

With business tough in developed markets, drug makers are counting on the developing world for growth and are expanding into biotechnology and generic drug manufacturing.

Like it or not, the emerging markets in China, India, Brazil and elsewhere represent a substantial upside whereas markets in the developing world are becoming less profitable. Drug companies, like most other large multinational companies, always will follow the profit stream not matter where it takes them or at what cost to the folks at home.

Until next time...

 Good Luck and Good Job Hunting (Try China, I hear they are looking for sales reps)

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Pfizer is one of three companies vying for the opportunity to . Teva Pharmaceutical Industries Ltd, the Swedish private equity fund EQT and Pfizer are the three finalists to purchase Ratiopharm GmbH which is valued at about €2.8-3 billion. The finalists will make their bids in early February. France’s Sanofi-Aventis SA Euronext and China’s Sinopharm Group Co. Ltd. withdrew from the tender in December

Ratiopharm is a private company owned by the Merckle family. Ludwig Merckle put the company up for sale last year, after his late father Adolf Merckle committed suicide in early 2009 after losing control over his business empire to lenders. If Teva acquires Ratiopharm, it will win a major foothold in the German healthcare market, considered a large and growing market. Teva, the world’s largest generic drug company, is currently not a big player in the German market.

 The rising development and retail costs of name brand prescription drugs and the future possibility of price controls in the US is forcing pharmaceutical companies to reconsider the value of generic drugs. Currently, generic prescriptions are rapidly outpacing those for branded products and the size of the US and international markets for both small and large molecule drugs (biosimilars) growing daily. Previously, most innovator companies didn’t think the profit margins nor returns on investment were sufficient to add generic molecules to their product portfolios. However, a few large pharmaceutical companies have already entered the generics fracas; most notably Sandoz (a division of Novartis) which manufactures both generic small molecule and biosimilar biotechnology products and more recently established Merck BioVentures which aims to compete in the follow-on biologics market. 

Many experts believe that it is only a mater of time before most big pharma companies like Pfizer realize that they have to be in both the branded and generic sides of the business. Don’t be surprised over the coming months if other pharma companies consider doing deals to acquire generic drug manufacturers. Diversification will be the mantra of the next decade or so!

Until next time...

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

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Novartis AG today announced it plans to take over Alcon Inc. by paying $38.5 billion for the 77 percent stake it does not already own in a deal that would make it one of the biggest players in the global market for eye-care products.

The Swiss pharmaceutical and generics giant had already purchased 25 percent of Alcon from Nestle in April 2008 for $11 billion, with the option of buying the food and drinks company's remaining stake at a later date. With the acquisition of Alcon, Novartis will control about 70% of the world’s vision market (it already owns the Ciba Vision brand). Alcon is based in Huenenberg, Switzerland, and has its U.S. headquarters in Fort Worth, Texas. The company employs some 15,000 people worldwide and specializes in surgical equipment and devices, contacts lens solutions and other consumer eye-care products.

Daniel Vasella, MD, Novartis’ Chairman and CEO, said "This is the right time to simplify Alcon's ownership to eliminate uncertainties for employees and shareholders." He added "It will also allow us to strengthen innovation power by combining R&D efforts and grow our global market presence thanks to our complementary product portfolios."

If I were a betting man, I would say that Novartis is the pharmaceutical company to watch over the next decade. Like Johnson and Johnson, the company has diversified its business to include consumer goods, vaccines and perhaps most importantly generic pharmaceuticals via its Sandoz division. One area that Novartis hasn’t fully embraced to date is devices. However, as we enter the age of personalized medicine, don’t be surprised if the company acquires or invests in a variety of medical devices and diagnostic companies!

Until next time...

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

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Mark Sendak, author of the incisive EyeonFDA blog and social media enthusiast, has been keeping a watchful eye (pun intended) on the growing number of pharmaceutical companies that are adding channels and videos to YouTube. 

On his blog today, Mark reviews several new channels developed by Novartis, Johnson and Johnson, Teva, Boehringer Ingelheim and AstraZeneca. While a growing number of pharmaceutical companies continue to add new channels on YouTube, Mark contends that the “success of these channels has varied greatly and several companies have obviously developed the channels without any idea of what they would like to do with them and some of the channels show obvious signs of neglect.”

To learn more about pharma’s incursion on YouTube, read Mark’s post!

Until next time...

Good Luck and Good Video Watching

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Twitter, which is currently de rigueur in social media circles, is emerging as one of the most powerful branding and marketing social media tool that has been developed to date.   While other industries are already exploiting Twitter’s powerful marketing reach (to hawk their wares), drug makers have been reluctant to adopt Twitter and most other forms of social media. Industry analysts and company insiders contend that pharma’s reluctance to adopt social media can be attributed to the US Food and Drug Administration’s (FDA) lack of guidance on its use for promotional purposes. At present, it is anybody’s guess when this guidance may be issued, if ever.

Nevertheless, as always, there are a few daring companies willing to “boldly go where no pharma company has gone before”—in this case—Twitter! These companies include Boehringer Ingelheim (BI), Astra Zeneca, Novartis and Pfizer. According to a post on the Advance Market WoRx blog, BI is leading the way among pharma company Twitterers, with 679 following, 745 followers and 47 tweets. AstraZenecaUS has 136 following, 440 followers and 22 tweets. Pfizer has 351 following, 462 followers and 48 tweets.  Novartis has 0 following, 681 followers and 40 tweets (I guess Novartis has a thing” against following people).

Unlike its fellow pharma Twitters, BI—which began using Twitter in November 2008—actually uses it as an interactive and conversational microblogging platform (as it was intended). The other pharma company Twitters use it almost exclusively “as a one-way PR feed” says Ellen Hoenig Carlson at Advance Market WoRx. According to a post on the Pharmafocus website, "Boehringer has incorporated Twitter into its wider communications strategy and is using the site regularly to engage its stakeholders. In addition to posting press releases, BI uses Twitter to recommend web-based information about therapeutic areas and articles that its followers might find interesting or useful. To keep its finger on the pulse of the Twitterverse, BI uses media scanning programs to help monitor online conversations and responds quickly to join in or start up Twitter conversations.”

Kudos to Boehringer for recognizing Twitter’s potential to communicate with patients, physicians and other interested parties. I hope that more pharmaceutical companies begin to use Twitter and other forms of social media to engage and improve communications with their stakeholders.

Until next time...

Good Luck and Good Twittering (or should it be Tweeting?) 

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Today's New York Times reported that the US Food and Drug Administration (FDA) issued warning letters and ordered 14 pharmaceutical and biotechnology companies to stop running what it calls misleading ads on internet search pages displayed by search engines like Google. The agency faulted the companies for failing to identify product names (brand) and not listing potential side effects (only benefits) for the drugs. In other words, the ads lacked “fair balance” something that FDA stresses and that all drug makers are very familiar with. 

Drug makers and other interest groups pay search engines like Google to place ads on search result pages after someone types in a related search word. The sidebar ads typically contain a eye-catching headline about a relevant medical condition or product and links to websites promoting certain products. The companies receiving warning letters included: Bayer, Biogen Idec, Boehringer Ingelheim, Cephalon, Eli Lilly, Forrest Laboratories, Genentech, GlaxoSmithKline, Johnson and Johnson, Merck, Novartis, Pfizer, Roche, and Sanofi-Aventis. Not surprisingly, most of the world’s largest and most profitable were guilty of running misleading Internet search engine ads.

Historically, drug companies and FDA have engaged in a cat and mouse approach when it comes to advertising and marketing drug and medical devices and diagnostics. This is because FDA’s existing regulations that guide marketing and advertising practices are relatively lax and it provides drug makers with the opportunity to see how far they can push the agency before “they get caught.” While this practice may have been acceptable for print and television advertising, it may no longer be appropriate for Internet advertising— which potentially has a much broader and larger reach than traditional media because there are not national borders on the Web. Unfortunately, FDA has been slow (reluctant?) to react to digital media and is even more perplexed about social media and the drug industry. Rather than continue to play cat and mouse, I think it would be in the best interest of consumers if FDA and drug makers would sit down and craft new guidance on regulating Internet advertising and marketing practices. It is becoming increasingly apparent that the old rules are no longer sufficient as digital and social media continue to evolve.

Until next time....

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

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Rumors are rife that Novartis is going to purchase Lexington, MA-based Cubist for $1.6 billion. Wall Street analysts are speculating that Novartis may announce the deal as early as Monday.

Cubist manufactures Cubicin (daptomycin), one of only a handful of new antibiotics brought to market in the past 20 years that is effective against many infections caused by Gram-positive bacteria, most notably methicillin-resistant Staphylococcus aureus (MRSA). The company is developing new lipopeptide antibiotics similar to Cubicin and also has an active anti-viral drug discovery program.

Over the past 10 years, big pharma companies largely abandoned antibiotic research and placed all discovery efforts in the hands of only a few smaller public companies and startups. Cubist is the only independent biopharmaceutical company that successfully brought a new antibiotic to market. 

Novartis’ possible acquisition of Cubist signals, that at least one major pharmaceutical company sees opportunities and upside in the antibiotic drug discovery market. Several years ago, Pfizer acquired another antibiotic discovery company, Vicuron (formerly Versicor) but to date the acquisition has not yielded any new antibiotics. While Novartis’ acquisition of Cubist is yet another sign of consolidation that is taking place in the life sciences sector, it may bolster new efforts in the antibacterial drug discovery area. Unlike Cubist, Novartis has enough money and marketing muscle to increase Cubin sales and develop some of the exciting new molecular entities in Cubist’s drug development pipeline.

Until next time…..

Good Luck and Good Job Hunting!!!!

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The old baseball adage which says that  “you can’t tell the players apart without a program” is particularly apt when it comes to tracing the M &A activity that led to the creation of some today's largest pharmaceutical companies.

I used to be able to keep track of all of the moving parts  of most of these mergers but advancing age and unprecedented M&A activity in the pharma industry prevents me from successfully doing this any longer. To that end, about a week ago, the New York Times published a pretty cool and informative chart that historically traces the corporate mergers that lead to creation of Pfizer, Novartis, GlaxoSmithKline, Sanofi-Aventis and others.

Check it out!!!!!

Until next time...

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

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Twitter, the microblogging platform, is the current rage in social media. According to @Shwen, who writes the Med 2.0 Blog, it grew by 752% in 2008. Shwen is a social media enthusiast who is trying to convince the life sciences industry that Twitter and other social networks can be leveraged to improve drug development and deliver healthcare.

According to a recent post on Med. 2.0, there are currently three pharmaceutical companies that are actively using Twitter: Novartis (@novartis), Boehringer Ingelheim (@Boehringer) and Astra Zeneca (AstraZenecaUS). Also, it appears that Johnson and Johnson (@JNJcomm) launched an account last week. Tweets from @novartis and @Boehringer occur fairly regularly whereas AstraZenecaUS tweets are rare. Unlike YouTube, where pharmaceutical sponsors who create channels can regulate and control content, it is much more difficult to manage Twitter because tweets are in real time, uncensored (for the most part) and can be globally disseminated within seconds.

Despite these issues, Med 2.0’s Shwen muses “I can only imagine that more pharma companies are going to be jumping on board the Twitter-train sooner rather than later. How they use it to engage, on the other hand, is going to vary greatly from company to company. At the very least, I see companies setting up accounts as “listening posts”, but others may choose to engage, like @boehringer does in an informal manner. Whatever the case, Twitter is fast becoming the new dominant space for listening and/or engaging the life sciences community.”

Like Shwen, I believe that it a matter of time before pharma and biotech realize that they must embrace social media (in all of its various forms) to remain competitive in today’s increasingly interconnected marketplace.

For those of you who may be interested, you can follow BioJobBlog (@Biojobblog) and Biocrowd (@Biocrowd) on Twitter too!

Until next time…

Good Luck and Good Twittering

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The Pharmalot blog reported today that Bristol-Myers Squibb will be laying off 5% of its workforce (~ 34 employees) by year’s end at its manufacturing facility near Syracuse, NY. And, Sanofi-Aventis announced that it will be giving pink slips to about 10% of its sales force —about 650 reps—before the end of the year.

To make matters worse, Merck released its annual revenue projections for 2009 today which suggest that its earnings and revenue will not meet Wall Street expectations. Merck recently “cleaned house” and eliminated thousands of scientific and mid-management jobs. The list of pharmaceutical companies that have downsized in 2008 includes Merck, BMS, GlaxoSmithKline, Novartis, Schering Plough, Boehringer Ingelheim, Wyeth and Sanofi-Aventis. I probably missed a few but who is counting?

Until next time….

Good Luck and Hold On to Your Job (if you can)

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Novartis announced today that it will open a new research facility and hire an additional 150 people by the end of 2009 for a Research Center of Excellence in Virology in Cambridge, MA. That will increase the number of people employed by the company in Cambridge to more than 1,800 workers. Researchers at the new center will study vaccines for HIV/AIDS influenza, cytomegalovirus (CMV) and respiratory syncitial virus (RSV). 

The vaccine business once avoided like the plague by most pharma companies, has been growing by leaps and bound over the past five years and is sizzling hot these days. According to analysts, vaccines generated about $16 billion dollars last year. For example, Merck’s anti-human papilloma virus vaccine Gardasil generated $1.5 billion in sales in 2007.

Novartis clearly sees an upside in the vaccine business and is willing to make a wise investment for the future.

Until next time….

Good Luck and Good Job Hunting!!!!!

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First, King Pharmaceuticals posted a non-branded high blood pressure video on YouTube in early 2007. Next, Novartis added a 60-second commercial (as part of its Fluflix campaign) asking people to submit videos about what it's like to have the flu. Earlier this year, Insmed upped the ante by posting a video lobbying for new legislation for the approval of follow-on biologics in the US. However, these pharma assaults on YouTube pale in comparison to the launch of Johnson & Johnson’s health channel on YouTube earlier this week.

The channel currently showcases a small selection of health information videos created by NBC News chief medical editor Nancy Snyderman while she worked J&J. Video sites, like YouTube and Vimeo, offer pharma companies a place to feature expensive off media advertising assets (that are currently collecting dust) and to post ads for new drugs and products that are ready for launch.  J &J is the first pharma company to recognize that it can leverage the current social media craze to increase its visibility, sell more drugs and bolster its stock price!

While companies could host videos on their own websites,YouTube’s massive traffic of more than 80 million users offers companies a much larger and diverse audience. And unlike blogs or forums, pharma companies have complete control over the content of the videos that they post on video websites. Moreover, they don't have to worry about negative comments being left after a post (YouTube comments can be turned off), and they can brand and edit video content to target a particular demographic or audience. Finally, videos can be changed or removed by companies as needed.

The bad news is, that like all other forms of media on the Internet, there are currently no regulations for videos posted by pharma companies on video websites sites like YouTube. In other words, pharma companies can do or say whatever they want in the videos that they post—never a good thing! I suspect that at some point FDA will draft a guidance document or two on the topic. But pharma companies need not worry, it will likely be many years before the agency divines regulations guiding the messaging and content of online pharmaceutical videos.

The appearance of pharma videos on YouTube, and the growing number of pharma profiles on social networking sites indicates that pharma is ready to embrace social media as the next best thing since DTC advertising. I was wondering what took them so long?

I hope that J&J doesn’t start following me on Twitter!

Hat tip to Eye on FDA for the story!

Until next time,

Good Luck and Good Job Hunting!!!

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Daiichi Sankyo will buy a controlling interest (50.1%) of Ranbaxy, India’s third largest generic manufacturer.  Daiichi will pay as much as $4.6 billion for the opportunity.

The deal will put Daiichi Sankyo into ninth place in the $120 billion generic-drug market behind leaders Teva Pharmaceutical Industries Ltd. and Novartis AG's Sandoz unit. According to the report “Daiichi Sankyo is mimicking strategies pursued by Novartis and Johnson & Johnson to weather turbulence in the branded-drug industry by diversifying into other markets. The acquisition also gives the Japanese company more reach in emerging regions including India, China and Eastern Europe. “

I think after this deal, that other pharmaceutical companies may consider buying profitable generics businesses. I am not sure why it has taken innovator companies so long to realize that it is much easier to join (buy??) rather than compete with generic manufacturers. It just seems so obvious to me—and I don’t even have an MBA!  Maybe there is some truth to the age-old aphorism “missing the forest for the trees.”

Until next time…

Good Luck and Good Job Hunting!!!!!

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Novartis announced today that it intends to purchase Malvern, PA-based Protez Pharmaceuticals for $400 million. Protez is developing a novel spectrum carbapenem antibiotic that is active against variety drug-resistant Gram positive (most notably MRSA )and Gram negative bacterial pathogens. Its lead compound, PZ-601, is in Phase II human clinical testing. Protez acquired PZ-601 (formerly SMP-216601) in 2005 from Dainippon Sumitomo Pharmaceuticals.   

Novartis is buying Protez to sure up its antibacterial drug pipeline. Novartis already sells Cubicin, (manufactured by Massachusetts-based Cubist Pharmaceuticals Inc.,) in Europe and is developing other antimicrobials including Aurograb and Tifacogin to treat infections.

Like many of the newly marketed antibiotics, PZ-601 is injected and not orally bioavailable. Nevertheless, it is likely that PZ-601 will provide much needed help against the ever increasing number of drug resistant bacterial isolates. Swiss companies Basilea Pharmaceutica AG and Arpida Ltd. are also working on experimental medicines to treat MRSA.

It is not clear how the acquisition will affect Protez employees.  I suspect that most of the employees will keep their jobs except for Company officers.

Until next time…

Good Luck and Good Job Hunting!!!!!

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Takeda Pharmaceutical Co., Japan’s largest pharmaceutical manufacturer, announced that it has agreed to buy Cambridge MA-based Millennium Pharmaceuticals for $8.8 billion. Millennium, founded in 1993 by high profile MIT researchers and once heralded as one the most innovative American biotechnology companies, never lived up to analyst’s expectations. That said, the company did develop and win regulatory approval for an anti-cancer drug, Velcade, which is expected to garner additional approval for wider use in oncology later this year.

Velcade, which is used to treat relapsed multiple myeloma after other drugs fail generated more than $800 million last year. Millennium anticipates U.S. approval by June to promote Velcade as an initial therapy to treat these disorders. Millennium markets Velcade in the US and shares revenue with Johnson & Johnson which markets Velcade in 85 other countries. Analysts predict that the Takeda acquisition will help to propel Velcade to blockbuster status.

The Takeda-Millennium deal follows Eisai Co.’s (another Japanese company) agreement in December to buy the U.S.'s MGI Pharma Inc. for $3.9 billion as Japanese companies, aided by a weak dollar against the yen, seek growth abroad. Japanese companies have been hampered by government-ordered price cuts, weak pipelines and a lack of new products  As one financial analyst put it ``There's no doubt the weak dollar against the yen is making U.S. biotech very attractive right now to potential Japanese buyers,''

Takeda’s best seller is the diabetes drug Actos which is slated to lose patent protection in the near future. Acquisition of Millennium provides Takeda with an entrée into the oncology and cardiovascular markets both of which are poised for expansive growth in the next five years. Analysts also believe that the Millennium acquisition will boost Takeda’s drug discovery and development flow. Millennium is conducting human trials with experimental drugs for cancer, heart disease, gastrointestinal disorders and rheumatoid arthritis.

The ongoing acquisition of American biotechnology companies by Japanese pharmaceutical companies reminds me of  the Japanese foray into the US real estate market in the early 1990s. Only time will tell whether the Japanese will be able to hang on to their acquisitions this go around (they weren’t the last time).  Earlier this week, Switzerland's Novartis AG agreed to buy 77 percent of eye-care company Alcon Inc. in a two-step transaction totaling $39 billion. Does anybody else see a troubling trend developing here as a result of the recession that we are in or heading into?

Don’t be surprised to see some “asset reallocation” and downsizing at Millennium. The Japanese are well recognized for increasing efficiency and work output with smaller numbers of employees.

Until next time….

Good Luck and Good Job Hunting (not in Cambridge MA)!!!!!!!!

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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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Novartis announced late last year that it intends to invest about $700 million to build a new biomanufacturing facility in Singapore. Construction will begin in early in 2008 and the plant is expected to be fully-operational by 2012. The new cell culture production facility will employ approximately 300 people and support manufacturing of both clinical and commercially-available products, mostly monoclonal antibodies.

At present, biologics and protein-based biotechnology products represent about 25% of Novartis’ drug pipeline. Most of these products are owned and manufactured by Novartis’ wholly owned subsidiary .

You gotta tip your hat to Singapore—their government-sanctioned plan to invest billions of dollars into biomedical research seems to be paying off!

Until next time

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

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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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Ed Silverman at Pharmalot alerted me to this tidbit. Daniel Vasella, CEO of the Swiss drug maker Novartis AG, mentioned in an interview with The Wall Street Journal that he is planning a companywide restructuring aimed at reducing “layers of management and bureaucracy—following through on reorganization comments he made several months ago.

Novartis, plans to disclose more about its restructuring plans by mid-month and elaborate further in February, adding that the restructuring will involve some job cuts, but Vasella declined to say how many. In an October briefing for analysts, Novartis executives said there would be 240 jobs cut in US headquarter functions Hanover, NJ) and 510 sales reps and 510 contracted rep positions eliminated, for savings of $230 million.

Novartis is one of several big drugmakers to cutback - AstraZeneca, Pfizer, Bristol-Myers Squibb, Glaxo and Johnson & Johnson have all announced layoffs in the past year. And Merck and Wyeth continue to trim selectively as part of ongoing savings programs.

According to the Journal, the changes at Novartis will follow recent management changes and comes after a tough year for Novartis. The drugmaker, faced generic competition on some of its

biggest drugs and failed to gain FDA approval for two new products–including the anti-diabetes drug Galvus (vildagliptin) which was predicted to be a blockbuster. Earlier this year, it also was forced to withdraw from the US and Swiss markets its drug for irritable-bowel syndrome, Zelnorm, after safety concerns.

One new rule Vasella has set: There should be no more than six layers of employees in any Novartis division, from the lowest-ranking person up to the division head. Novartis has four divisions: pharmaceuticals, generics (Sandoz), vaccines and diagnostics, and consumer health, which includes over-the-counter medicines.

Vasella says he realized the pharma division, in particular, was bogged down with bureaucracy after he had recent lunch with a group of its employees. The reorganization will also cut costs from Novartis’s procurement activities. One area that will come under particular scrutiny: the use of third-party CROs to oversee Novartis’s clinical trials which has been extremely costly for the Company.

Until next time....

Good Luck and Good Job Hunting (China and India?)!!!!!!

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Ed Silverman who runs the  Pharmalot blog reported that Novartis is slated to cut about 1,200 jobs to save the company about $230 million a year.  According to the post at Pharmalot, Novartis will let 240 employees go at its US- based headquartersin Hanover, New Jersey and eliminate over 1,000 full time and contract sales representatives from its workforce.  Also reported was that Novartis is planning to create a biologics division within the company.  I find this extremely interesting because Novartis already has a strong footprint in the biologics biz  via its wholly-owned subsidiary Sandoz, which is one of the market leaders in the follow-on biologics aka biosimilar sector.

I guess having a biologics division is de rigueur these days if you are a big pharma company.  I am still wondering why it took so long for all of these high paid pharmaceutical executives to figure out that biotechnology was the next  big thing?  You would think that after 30 years, they would get the hint.  But then gain these are some of the same people who brought us Vioxx, Avandia, Exubera and ...go ahead ....pick your favorite.

Until next time....

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

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