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Sandoz, the generics division of Novartis, is currently the world leader in the biosimilar market. In fact, if it was not for Sandoz, the biosimilar industry may never have gotten started in the first place! As some of you may know, Sandoz sued FDA (and won) to gain approval of its biosimilar human growth hormone. While FDA contends that Omnitrope is not really a biosimilar (it was approved as a “drug” rather than a biologic) most analysts agree that it was the first biosimilar product ever approved and sold in the US. 

As part of its global biosimilar strategy, Sandoz today announced that it had initiated Phase III clinical trails for US approval of biosimilar version of recombinant human granulocyte-colony stimulating factor(G-CSF) or filgrastim (Amgen’s Neupogen®) and another for global launch of PEG-filgrastim (Amgen’s Neulasta®); a PEGylated form of G-CSF.

The filgrastim study is designed to evaluate the efficacy and safety of Sandoz's biosimilar filgrastim versus Neupogen® in breast cancer patients eligible for myelosuppressive chemotherapy treatment. These trials expected to support extension of commercialization to the US, the largest global market for biologics. The pegfilgrastim study, which is being conducted in breast cancer patients undergoing myelosuppressive chemotherapy treatment, represents the next major step in the Sandoz global biosimilar development program. Previously, Sandoz announced that it had initiated late stage clinical trials for a biosimilar version of Roche’s monoclonal antibody cancer treatment Rituxan®). Finally, Sandoz has eight to ten different biosimilar molecules at various stages of development in its pipeline.

Sandoz currently markets and sells three biosimilars: filgrastim (Zario®), somatropin (Omnitrope®) and epoetin alfa (Binocrit®) in countries across Europe and elsewhere. As mentioned above Omnitrope is also sold in the US. However, because FDA has yet to craft a regulatory approval pathway for biosimilars (despite legislation mandating their approval) it is illegal to sell biosimilars (with the exception of Omnitrope) in the US.

Once vilified and staunchly opposed by most major pharmaceutical and biotechnology companies, the biosimilar business has been picking up steam in the past few years. To that end, companies like Merck, Pfizer, Teva and more recently Amgen and Biogen (all of whom lobbied against an approval pathway for biosimilars in the US) announced plans to compete on the global biosimilar market.

The decision of these companies to enter the biosimilar market is largely a result of downward pricing pressures on pharmaceutical and biotechnology drugs and near-empty drug pipelines at most major life sciences companies. Nevertheless, it is still not clear whether or not a robust biosimilar market truly exists. To wit, biosimilars have been in the market in the EU for the past fiver years and have not gained much traction there. However, the real biosimilar markets probably exist in China, Brazil and other emerging countries where there are large populations and emerging middle classes but drug prices are under tight government regulation. Because of this, the uptake of biosimilars in these markets will likely be greater than in Europe and the US.

Until next time...

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

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I frequently tell persons who attend my career development seminars that looking for a job ought to be a fulltime job in itself. Unfortunately, while this may be accurate, it generally is not feasible for many scientists who are working toward an advanced degree working towards an advanced degree (they are suppose to spend all waking hours in the lab). Increasingly, the life sciences job market is becoming extremely competitive and fierce and gainful employment is much harder to come by than any time in the past. And, regrettably, most life scientists—unlike a majority of their non-scientist counterparts—have little or no training to prepare them to conduct even a basic job search. 

The lack of emphasis on job searching skills (resume writing, interviewing techniques, etc) for scientists is mainly rooted in an urban legend that asserts that a scientists’ worth (and ultimate employability) is contingent upon the quality of “the science that he or she conducts” or put another way “the quality of one’s science will speak for itself.” This attitude suggests that the ability of a scientist to land a job is based almost exclusively on the quality and number of his/her publications. And, perhaps even more egregiously, scientists are taught to believe that self promotion or attempts to market or brand oneself are abhorrent and strictly forbidden. 

Sadly, finding a job in the “real world” requires most jobseekers to develop a strategic plan, network and actively promote themselves to prospective employers. To that end, I found a brilliant and well crafted article by Marat Gaziev entitled “I Asserted Myself, and Got the Job.”

In the article, Gaziev, who is 24 years old and a search engine optimization (SEO) specialist, describes his self-discovered and ultimately pragmatic approach that he used to find a job. He nicely expressed the essence of his discovery in the following passage:

“When I was hunting last summer for a job in search engine optimization, I started by applying for positions advertised on major online job boards. I looked for openings in San Diego, where I was living, and used one résumé. I didn’t research the companies or consider gearing the résumé’s focus toward a particular job.

“I got calls from about five niche e-commerce companies, and all wanted phone interviews. The interviewers would tell me to describe what I did at my existing job, which was also in search engine optimization — how to drive more traffic toward a Web site — and I would tell them. Then they’d pose a hypothetical situation and ask me to respond. I’d answer and wait for the next question. I thought that the more questions I answered well, the better my chances of getting a job. But I never got a callback from any of them.

Looking back, I see what I did wrong. I had an outdated way of thinking about the interview process. I didn’t provide any detail, I didn’t talk about how I saw the industry, and I didn’t offer any tips on how they could improve their online presence. I was doing the bare minimum instead of trying to sell myself.

I guess I thought that I had the qualifications and that the interviewers would see them for what they were. But being passive doesn’t cut it. My capabilities just weren’t coming across. “

Later, he describes how he used his changed attitude and new job seeking approach to ultimately land a job at TMP WorldWide, which ironically is the company that owns Monster.com, the job board where he began his original job search!

Gaziev’s article is a MUST READ for all life scientists who are considering careers outside of academia. I suggest that if you follow Gaziev’s advice, your job search may likely be shorter, less stressful and much more successful!

Until next time...

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

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For the past three years, I assiduously have attempted to track all of the major layoffs announced by big pharma and biotechnology companies. Quite honestly, it has been hard to stay on top of these almost weekly announcements. To date, over 200,000 life sciences employees have lost their jobs. And, I don’t think that job layoffs will abate for a year or more.

While pharma layoffs make sense in the short term—most notably to insure that stock share prices remain as inflated as possible—they are not going to solve pharma’s lack of innovation and the rising attrition rates for new molecular entities. On paper, outsourcing R&D make perfect fiscal and scientific sense. After all, there are literal thousands of US-trained scientists all over the world these days; mainly in China, India and Eastern Europe and it is much more cost effective to do research in these regions. However, in my opinion, outsourcing R&D, like layoffs, is a short term strategy that will likely backfire and not deliver the anticipated ROI. For example, many US technology companies that outsourced sizable portions of their operations in the early 2000 are now beginning to bring them back to the US as Asian labor costs continue to rise and product quality declines. This begs the question: what should big pharma companies do to regain their edge to bring new medicines to market?

Allan Haberman, of Haberman Associates, wrote a compelling post several months ago on his blog the Biopharmconsortium Blog where he offers some insights and strategies that may help big pharma out of its current lack of innovation and new product development.  Until that happens, I will continue to track pharma and biotech company layoffs as they are announced.

Until next time....

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

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Those of us a certain age have all heard of the so-called new math—which by all accounts wasn’t much different than old math—that was suppose to revolutionize the way math was taught at the primary and secondary education levels. While new math may not have not have much different or better than old math from an academic perspective, pharmaceutical companies will have to reckon with the new math associated with the pricing of brand name prescription drugs if they want to remain competitive in the future.

According to statistics offered in a recent New York Times article on Teva Pharmaceuticals, the world’s largest generic drug manufacturer, generics now account for 75 per cent of the prescriptions filled in the United States. This figure is up 47 percent from a decade ago. Further, a recent study from IMS, the research firm that tracks prescription drug use, generic drugs saved the American healthcare system $734 billion between 1999 and 2008. These numbers, coupled with a paltry 25 per cent market share, suggest that brand name pharmaceutical companies must rethink the low volume, large margin pricing strategy that has guided big pharma for the past 50 years. 

As one Teva executive candidly put it, “If you are used to the fat margins of big pharma, it is hard to compete in the rough and tumble of price-cutting generics.” 

The push for wider adoption and use of generic pharmaceuticals and biologics (as compared with brand name drugs) suggests that there will likely be more belt-tightening at big pharma companies in the not-so-distant future.

Until next time..

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

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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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Preparing for and executing a job search can be both intimidating and overwhelming. While most job seekers approach a job search without much thought or planning, there actually is a “method to the madness” of a job search. And, if you take the time to develop a strategic plan, your likelihood of success increases almost exponentially. 

Unfortunately, the prodigious amount that has been written about conducting successful job searches suggests that reading and digesting it all may be more daunting than the job search itself! To that end, Kaitlyn Cole of Online Universities sent me a blog post entitled “100 Inspiring and Informative Blog Posts for Young Job Seekers” which may help to reduce the stress associated with job search planning. Although the title suggests that the list may be most informative for younger job seekers, I recommend that anyone looking for a job ought to take a quick look at the list!

A quick perusal of the list indicated that one or more BioJobBlog posts have been included. Read and learn!!!!

Until next time...

Good Luck and Good Job Hunting!!!!!

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Some of you may have been wondering why the$41.1 billion Merck-Schering Plough merger announced yesterday was designed as a reverse merger. For those of you who are not familiar with the reverse merger strategy, this is how it works. Generally speaking, a failing or failed publicly traded company that is listed on one stock exchange or another merges with a privately held company. The privately held company takes over the public stock listing and manages the day-to-day operations of the new business. Private companies that engage in reverse mergers are usually looking for cash infusions for product development or a stock listing (without going through an initial public offering) which offers it shareholders immediate cash value.  Investors who previously held stock in the public company are either compensated for their shares in cash or given shares (at a negotiated price) in the new entity. Any cash (or assets) left in the public company can be used to develop the formerly private company’s product(s) and if successful, shareholders in the old public company can eventually benefit. 

If reverse mergers are designed to bolster the prospects of private companies in need of cash why was the Merck-Schering Plough deal structured as a reverse merger? As I mentioned in a post yesterday, Schering-Plough markets Remicade outside of the US under an agreement with Johnson and Johnson which sells the drug in America. A termination clause in the original marketing agreement stipulates that the ex-US rights to Remicade (and another drug being developed) would revert to Johnson and Johnson if control or ownership of Schering Plough changes. Remicade, a treatment for rheumatoid arthritis, developed by Johnson and Johnson’s subsidiary Centocor, represented $2.1 billion in sales for Schering in 2008. Further, about 70% of Schering Plough’s revenue comes from outside the US. That said, the success or failure of the deal really hinges on whether or not Johnson and Johnson will challenge the change-in-control clause for Remicade. To obviate that possibility, Merck devised an unusual reverse merger strategy in which ownership of Schering Plough will not change hands—at least on paper anyway. Instead, even though Merck is putting up the money to purchase Schering, and Richard Clark, Merck’s Chairman and CEO, will run the newly combined company, Merck would technically become a subsidiary of Schering Plough and consequently there would be no change in Schering Plough management! Recall that Fred Hassan, Schering Plough’s CEO will remain with the newly formed entity during the transition. After the deal closes, Fred would step down as CEO, Merck’s current CEO—Richard Clark—would assume leadership and quietly change the name of the company from Schering Plough to Merck.

Of course, Johnson and Johnson could challenge the deal anyway, and if Merck was to lose in arbitration, it could possibly jeopardize the entire financial upside of the deal. Merck contends that even if it loses the rights to Remicade, the deal still makes sense.  Not so, said one Wall St analyst, “I think that is a lot of malarkey. You don’t take out 20 percent of a company’s revenue and their core international growth driver and say it is not worth anything,” he said. Other analysts think that the uncertainty over Remicade puts Schering Plough shareholders at a disadvantage and one response may be for Johnson and Johnson to make a higher bid for the company.  Still others believe that, while sale of Schering Plough makes sense, the $41.4 billion price offered by Merck is too low. Johnson and Johnson didn’t comment on the deal.

Schering Plough employees who I talked with yesterday after the deal was announced are not pleased with it either. They feel that Johnson and Johnson would be a more suitable partner and that Fred Hassan, who was under enormous shareholder pressure, had no choice but to sell the company as quickly as possible. It is not surprising that many Schering Plough employees would rather have the company sold to Johnson and Johnson rather than Merck. Unlike most pharmaceutical companies, Johnson and Johnson tends to leave the companies it purchases alone and runs them as wholly-owned after it purchases them.  Another reason why a merger with Johnson and Johnson makes more sense than one with Merck is that Johnson and Johnson has a very profitable consumer products division. This would be a better fit for Schering which has several highly visible and profitable consumer products like Coppertone and Dr. Scholl’s. In contrast, Merck sold its consumer products division years ago and will almost certainly divest itself of Schering’s consumer products division after the deal closes.

Now that Schering Plough is no longer in play, all eyes are on Bristol-Myers Squibb (BMS). BMS is about the same size as Schering Plough, has plenty of cash on hand and is thought to have a robust biotechnology pipeline. And, like Schering Plough,  it has been rumored to be a takeover target for the past 20 years!

Until next time...

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

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