Top Companies
The latest moves by the likes of Pfizer, GSK, AstraZeneca and others demonstrate that the walls between pharma, biopharma and generic players continue to crumble.
Tom Branna - Editorial Director
The winners and losers in the $550 billion global pharmaceutical industry are becoming more evident. While market leaders such as Pfizer continue to make gains, others, especially once-mighty Merck, continue to falter. In the generic sector, the market leaders are grabbing share by gobbling up their competitors. Over in the biopharma space, market leaders are eyeing the biogeneric sector with caution.
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Of course, these major moves by generic companies don’t mean that Big Pharma is sitting quietly on the sidelines. Many have taken steps to fill gaps within their product pipelines. As a result, Big Pharma is acquiring interests in biopharmaceutical companies and extending its reach in the generic space. These moves have somewhat blurred the lines between pharmaceutical, biopharmaceutical and generic firms.
In August, Pfizer completed its acquisition of Bioren for an undisclosed amount. Bioren is a California-based, privately-held company specializing in technology for optimizing antibodies. Bioren’s technology includes Walk-Through Mutagenesis and Look-Through Mutagenesis technologies to improve the drug development of antibodies.
“The acquisition of Bioren strengthens Pfizer’s commitment to the antibody space,” said Nick Saccomano, Pfizer’s senior vice president for worldwide research technology. “The ability to use and develop these technologies will help Pfizer identify new antibody leads as well as improve current antibodies in development.”
During the past five years, Pfizer has made several investments which have created a substantial portfolio of therapeutic proteins and other macromolecules currently in various stages of development. Vicuron has two products already under New Drug Application (NDA) review at the U.S. Food and Drug Administration (FDA): anidulafungin for fungal infections and dalbavancin for Gram-positive infections. Recently, Vicuron announced positive Phase III results on anidulafungin, demonstrating superiority over fluconazole in invasive candidiasis/candide- mia. Anidulafungin’s potential product profile will include broad spectrum activity against aspergillus and most candidal fungal infections. It is anticipated the product will be indicated for once-daily dosing for up to a month.
“This transaction builds on Pfizer’s extensive experience in anti-infectives and demonstrates our commitment to strengthen and broaden our pharmaceutical business through strategic product acquisitions,” said Hank McKinnell, chairman and chief executive officer of Pfizer.
Pfizer already has an existing collaboration with Vicuron that has made significant advances in the discovery of potential next-generation oxazolidinones, the first new class of antibiotics in more than 30 years. These orally active antibiotics are aiming to have improved potency and a broader spectrum of activity than existing classes of compounds. Several Vicuron compounds are currently being evaluated at Pfizer as potential clinical development candidates.
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Pfizer’s expansion into the bio space has been mirrored by many of its competitors. For example, GlaxoSmithKline, the No. 2 drug manufacturer, recently reached an agreement to acquire ID Biomedical, an integrated biotechnology company dedicated to the manufacturing and development of vaccine products, including influenza vaccines. ID Biomedical has facilities in Canada and in the U.S.
GSK’s proposed acquisition of ID Biomedical reflects its continuing commitment to address the public health need for increased supply of influenza vaccines. ID Biomedical is currently in the process of expanding and upgrading its Canadian manufacturing facilities, which are expected, beginning in 2007, to produce around 75 million doses per year of ID Biomedical’s Fluviral egg-based influenza vaccine.
“GSK has moved quickly over the past few months to meet the growing demand for flu vaccines worldwide and to transform GSK into one of the leading global influenza vaccine manufacturers,” said Jean-Pierre Garnier, chief executive officer of GSK. “The proposed acquisition of ID Biomedical is a unique strategic opportunity to increase current capacity of classic flu vaccines, to provide us with increased capacity for next generation flu vaccines under development and to help GSK prepare for the threat of a flu pandemic.”
In addition to acquiring an influenza vaccine business with sales to the Canadian public market, this transaction would enhance GSK’s vaccine presence in the U.S. where Fluarix, GSK’s existing influenza vaccine, received FDA approval at the end of August. ID Biomedical’s Fluviral has been granted fast track status by the FDA and is eligible for priority review.
“Combined with our recent investment to double influenza vaccine production capacity at our facility in Dresden, Germany, and our recent purchase of the Marietta vaccine site in Pennsylvania, where we will develop new flu vaccine production technology, the acquisition of ID Biomedical could also represent a major step in GSK’s approach against pandemic flu threat,” added Jean Stéphenne, president of GSK Biologicals, the vaccines division of GSK. “GSK is also developing an improved flu vaccine for the elderly.”
Even as they shore up their presence in the biopharma sector, many Big Pharma companies are also expanding into the generic space as well.
In September, Aventis Pharmaceuticals Inc., a subsidiary of Sanofi-Aventis, signed a distribution and supply agreement with Prasco Laboratories to launch an authorized generic fexofenadine hydrochloride tablet in the U.S. This generic product will be distributed in 30 mg, 60 mg and 180 mg formulations. Financial terms of the agreement were not disclosed. The move by Sanofi-Aventis came on the heels of an announcement by Barr Pharmaceuticals and Teva Pharmaceuticals that they would collaborate to launch a generic version of Allegra 30 mg, 60 mg and 180 mg. For its part, Sanofi-Aventis insists that the generic product of Barr Pharmaceuticals and Teva Pharmaceuticals infringes on its intellectual property rights.
The Case(s) Against Merck
There’s been plenty of news from Merck during the past couple of months. Unfortunately for the Whitehouse, NJ-based company, none was good. In Texas, Merck lost a $253 million lawsuit over its Vioxx painkiller (see p. 18 in this issue) and now the company is in a New Jersey courtroom fighting the same battle. What’s worse, there are thousands more Vioxx lawsuits in the pipeline, and the company’s own new drug pipeline remains dry.
To help remedy those pipeline problems, the company recently signed a pharmacogenomics collaboration agreement with FoxHollow Technologies of Redwood City, CA. The three-year collaboration will focus on analyzing atherosclerotic plaque removed from patient arteries as a means of identifying new biomarkers of atherosclerotic disease progression for use in the development of cardiovascular compounds in Merck’s pipeline.
The No. 6 player on the Big Pharma list, AstraZeneca, announced a string of alliances in July. The company is working with Schering AG of Germany to develop a new class of anti-inflammatory agents in the area of Selective Glucocorticoid Receptor Agonists (SEGRAs). Under terms of the three-year agreement, AZ and Schering will undertake a joint research and development program up to the end of Phase I clinical trials aimed at identifying novel SEGRAs.
In another move, AZ formed an alliance with Astex Therapeutics Ltd. to discover, develop and commercialize novel small molecule inhibitors of the anti-cancer target Protein Kinase B (Akt). Finally, AZ is working with Avanir to commercialize Reverse Cholesterol Transport (RCT)-enhancing compounds for the treatment of cardiovascular disease. According to AZ, RCT-enhancing compounds aim to improve the flow of lipids from tissues, such as blood vessel walls, and the transportation of lipids to the liver for excretion by promoting a natural process known as reverse cholesterol transport. Compounds that enhance this pathway may potentially reverse existing vascular disease in comparison with current agents that, up until now, have only been shown to prevent disease progression.
Novartis Makes a Bid for Chiron
On Sept. 1, Novartis proposed to acquire all of the remaining outstanding shares of Chiron that it does not already own and has filed an amended Form 13-D as required by the U.S. Securities and Exchange Commission. Novartis currently holds a 42.2% stake in Chiron and has submitted a proposal to acquire the remaining shares for about $4.5 billion. But only a few days later, the Chiron board rejected the bid, calling the offer “inadequate.” At presstime, there was no word on whether Novartis would increase its offer.
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Meanwhile, Amgen, the No. 1 biopharma company, initiated a Phase III trial to evaluate the impact of treating anemia with darbepoetin alfa in patients with heart failure to reduce mortality and hospitalization.
“Numerous epidemiological studies have consistently demonstrated that lower hemoglobin values, reflecting a condition known as anemia, are associated with increased hospitalizations and mortality in heart failure patients,” said James Young, M.D., chairman of the Division of Medicine at the Cleveland Clinic Foundation, Cleveland, OH, and co-chair of the executive committee for this trial. “These studies have generated a very strong hypothesis that if you raise hemoglobin values with darbepoetin alfa, you can improve outcomes in this patient population. This landmark trial will test this important hypothesis.”
While Novartis expands further into the biopharma segment, it is building a bigger presence in generics too. As already noted, the acquisition of Eon and Hexal will greatly expand Sandoz’s presence in the generics segment, as will Teva’s purchase of Ivax. While the competition focuses on the biopharma space, Novartis continues to make big gains in the generic sector. Back in February, the company acquired generic drug makers Eon Labs and Hexal for more than $7 billion, creating at the time the world’s largest generics drug company.
While the top players in the generic segment battle for the top spot, other top 10 companies are making moves of their own to increase sales. For example, on Sept. 2, Ranbaxy agreed to sell its allied business portfolio, consisting of fine chemicals, diagnostics and the animal health care business. ICICI Venture Funds will acquire all three units (with the exception of the Dade Behring diagnostic assets) for an undisclosed amount. The sale is expected to close by the end of 2005.
“In line with the Ranbaxy vision of becoming a research-based international pharmaceutical company, Ranbaxy has decided to divest its allied businesses,” explained Brian W. Tempest, chief executive officer and managing director, Ranbaxy. “This will enable Ranbaxy to focus more on its core pharmaceutical business in the future.”
Focusing on pharmaceuticals these days often requires the industry’s top companies to expand beyond their comfort zone and look for growth in new sectors, whether they’re in traditional pharma, generics, biopharma or a combination of all three.
