Saturday, November 17, 2007
Well, it looks like all good things must come to an end and perhaps it is now the turn of Pharmalyst's blogging career. During the recruiting season Pharmalyst interviewed with a few pharma firms. One offer was made and Pharmalyst has decided to accept the offer. So starting this summer, Pharmalyst will be one of the unwashed masses toiling away at a big pharma.
Pharmalyst wants to thank all his readers, other pharma bloggers and the many people who corresponded with him. All your insights really gave Pharmalyst a good understanding of the Pharma industry. While this may be the end of this blog (unless the blogging bug bites Pharmalyst again :-)), you may still see Pharmalyst lurking in the comments area of the many fine pharma blogs out there.
Thank you all again (and for those in the US - wish you a happy thanksgiving! Pharmalyst definitely has many things to be thankful for). Cheers.
Over and Out!!
Saturday, October 27, 2007
Wednesday, October 24, 2007
"For Kindler, this hardly seems like a fair shake for his first year as CEO. Will investors view him as a stoic leader making tough decisions to clean up someone else's mess? They may. However, this could be the last time Kindler gets the benefit of the doubt."
Pharmalyst's own view is that Mr. Kindler should not get any of the blame. In fact if anything, this is perhaps the one gutsy move where Mr. Kindler has shown that he is a "fact-based manager" rather than a "faith-based manager" or a "hubris-based manager" like his predecessor. Pharmalyst's very first blog post (on March 25, 2007) expressed the view that "with the benefit of hindsight, this product should never have been launched". It seems that Mr. Kindler has recognized that sunk costs are sunk and that there are other projects with prospects of a better RoI that could use the dollars that Exubera was sucking up.
Pharmalyst was even more impressed with Mr. Kindler's decision to kill their NextGen Exubera.This was supposed to address some of the issues of Exubera version1 - such as a bulky inhaler. In light of this decision, it is time that Lilly/Alkermes, Novo & others re-evaluate their inhaled insulin projects very carefully...if these are not viable, then these companies should pull the plug early and avoid PFEs fate of having to do a $2.8 billion write-off later. The following factors in Pharmalyst's view, bring the viability of these inhaled insulins into question:
1. Lung Function Tests: Just yesterday Alkermes reported that their product also showed slightly reduced lung function. This alone may be enough for NICE etc to deny reimbursement. In the US, private and medicaid insurance will have a zillion complications with the billing codes for the tests etc and physicians will view this as a hurdle. There are also concerns around lung cancer etc over the long term.
2. Dosing: Looks like some of these products are providing better options here than Exubera but this too may be a challenge
3. Cost: Exubera had a higher price point than the injectable versions.So it was not a viable product in emerging markets (some of which do have a high prevalence of diabetes). The payers in Europe will not reimburse unless clear economic value (higher compliance etc is demonstrated and Pfizer seems to have failed in this area). In the US, the insurers force customers to pay higher co-pays or will not cover the costs for the inhaler. So in both developing and developed markets, the price point of these inhaled insulins will be a critical factor.
4. Using insulins early: Witness the full page ads that Sanofi has been taking out in US newspapers asking patients to consider insulin early....this has proved to be a hard sell.
5. Finally there is the prospect of being blindsided by some other way of delivering insulin. Look at this BBC report showcasing a project by UK company Diabetology and Cardiff University - apparently they are exploring ways to deliver insulin in a pill.
Thursday, October 18, 2007
Mannkind and Lilly inhaled insulins may be better but this is not a sure bet. Though inhalers here may be much smaller than Exubera, several problems remain:
1. Continued hassles of checking lung function test; reimbursements for these etc
2. Precision dosing/titration of an inhaled powder always a challenge
3. Still not cost-effective in Asia and other developing markets
These are perhaps the reasons that Pfizer decided to abandon Exubera part deux and Lilly & Mannkind better take a critical look at their inhaled insulin programs.
Sunday, October 14, 2007
Buying a French "national champion" is never easy politically & given Sanofi's size this is no cakewalk for Pfizer. From an alliance perspective though a number of planets line up:
- Sanofi is coming up with a Zetia like molecule. This could present some interesting combination opportunities with Pfizer's Lipitor?
- They could leverage Pfizer' s US sales & marketing machine for their smoking cessation treatment dianicline
- Both companies are also researching obesity/diabetes compounds (similar class as Accomplia). Perhaps there exist some opportunities to pool risks.
Mega mergers haven't worked but alliances in the industry seem to have (Schering - Merck on Vytorin, Bristol - Sanofi on Plavix, Pfizer - Eisai on Aricept, J&J - Bayer on rivaroxaban(perhaps?) etc). Time for Pfizer to consider such an alliance with Sanofi.
So Pfizer finally settled on its lead internal candidate Dr. Martin Mackay, to lead its research labs (PGRD). But looks like their CEO Jeff Kindler hedged his bets a bit. Pfizer is going to run a biotech startup out of San Franciso headed by Dr. Corey Goodman. According to Pfizer's press release Dr. Goodman will also report to Mr. Kindler. Dr. Mackay's leash however was shortened a bit by Mr Kindler. Dr. Briggs Morrison from Merck was hired as Dr. Mackay's top deputy overseeing all of clinical development. Should Dr. Mackay screw up, Dr Morrison will be ready, willing and able to take over.
Mr. Kindler may be hedging his bets with a structure like this but Pharmalyst thinks that with this approach, Mr. Kindler is being more of a lawyer than a manager. This convoluted cluster of their R&D organization has no single point of accountability - no one head of R&D with whom the buck stops. Dr. Mackay was probably hired so as to not upset their mid-stage pipeline which if they are to be believed, is looking strong (it probably also helped that no outsider was willing to step into this clusterf***).
Mid-stage pipeline aside, there could be serious problems longer term. The biotech in San Francisco could blame the R&D organization for not supporting its ideas enough & the R&D group could blame the biotech. Two strong executives in this sort of a role is ripe for ego clashes etc. A powerful strong deputy like Dr. Morrison could also end up looking over the shoulder of his boss & second guessing him all the time. So from an organizational theory standpoint, this new approach could have serious problems.
A long time ago, Pharmagossip had this interesting post about investors clamoring for a GSK consumer division spin off (See Pharmalyst's posts on the same here). The BreakingViews column (subscription required) of this past wednesday's WSJ makes a string case for a divestiture of GSK's consumer biz. They point out that branded consumer goods companies like P&G and Reckitt Benckiser are trading at higher multiples than GSK. New consumer brands are not easily built and so GSK's division should fetch a good multiple should their new CEO Mr. Witty consider a spin off or sale. By BreakingView's math, this division will earn about $1.5 billion in operating profit this year and should fetch $25 billion in a sale!!
That is a huge multiple indeed and GSK will probably not miss brands such as Tums and Horlicks. Horlicks to Pharmalyst's amusement is an improbably named "malt beverage" (no...not the kind readers in the US are thinking) that is well liked among the UKs senior set (supposedly useful in getting a good nights sleep).
If GSK brass consider such an option they have to weigh whether to float the new subsidiary (lower taxes) or sell it to another buyer (taxes on capital gains will accrue). Pharmalyst thinks that there are plenty of buyers like P&G who will be willing to pay a premium to make a sale worthwhile.
Wednesday, October 3, 2007
To quote a couple of excerpts:
- "About a month ago, we heard some rumors and there was some [options] activity and then it stopped," said Joe Kinahan, chief derivatives strategist for thinkorswim. Now we're starting to hear again that Bristol-Myers might be in play, that a few of the other drug companies are starting to take a look at it, and that seems to be bearing out in some of the activity we're seeing," he said.
- Almost 26,700 call options on Bristol-Myers changed hands yesterday, compared with only 2,800 puts, according to Track Data. Investors focused on November calls that convey the right to pay $30 a share for the stock in the weeks ahead.
BMS of course didn't comment and Sanofi's name was widely bandied. Given all the negative news regarding Accomplia, Sanofi does need something like Bristol's Apixaban to shore up its revenues (Plavix LoE in a few years and serious competition for Lovenox).
That pretty much leaves Sanofi & Pfizer as the two most likely candidates interested in an M&A deal. Sanofi as a European company will probably have to pay a premium to Bristol's American shareholders compared to Pfizer - but that shouldn't be a problem at all given the weak dollar & the consequent appreciation of Sanofi's stock & cash position. Pfizer on the other hand may be more desperate. PFE probably needs all of the potential Apixaban revenues to offset its LoEs (Lipitor in 2011, Norvasc, Zoloft etc) & Bristol's heritage in the oncology area would be a good fit with Pfizer's emerging oncology pipeline. Other BMS products (Sustiva, Orencia) may also offer interesting combo molecule opportunities. According to some IMS data Pharmalyst has seen, Abilify too is seeing some commercial success. Certainly a BMS+Sanofi or BMS+Pfizer deal makes more sense than say a Pfizer+Wyeth deal. However it would have to be a friendly merger rather than an acquisition and that leaves the amount of efficiencies that can be extracted from such a deal in question.
Friday, September 28, 2007
Pharmalyst's own view is that it is high time that Pfizer's board saw some changes of this nature. The previous board tolerated their previous CEO McKinnell for too long and let him walk away with an obscene pension package. At one time, their board included people like Frankin Raines (former CEO of Fannie May and who according to many had a key role in the accounting scandals in that company...to Pfizer's credit, Mr. Raines didn't stand for re-election once the scandals at Fannie May emerged).
If you look at Pfizer's current board (see here) it is clear that this board could use people like Mr. Kilts and Ms. Johnson. The board does have eminent scientists, academics and policy wonks. However on the corporate side (corporate strategy, finance, governance etc) it does seem to lack heavyweights with the notable exception of William C. Steere Jr. (he was their CEO before Mr. McKinnell). Based on what Mr. Kilts did at Gillette (& later the deal with P&G) and what Ms. Johnson did at Goldman, Pfizer's CEO could get some real adult supervision now.
These changes coupled with a few other things such as the ones below bode interesting times for Pfizer ahead.
- Selzentry being studied for RA
- Neurontin patent litigation heading to the supremes
- Chantix sales are smokin' hot :-)
- New CFO announced
- New head of R&D (To be announced)
Friday, September 21, 2007
One of these is a smoking cessation drug called dianicline. Perhaps Pfizer's Chantix/Champix will see competition from this drug before other products in this category (such as the Novartis/Cytos nicotine vaccine deal). Meanwhile, WSJ Health Blog just reported that the sales of Pfizer's Chantix are "on fire" in the US.
Another interesting product is a Zetia like compound - AVE5530. Sanofi wants to sell it separately and pair it with a statin. Sanofi plans to file the drug for approval in 2010. Given that Vytorin has been such a huge success, Sanofi ought to be selling the statin combo from day one. If they plan to file in 2010, they probably have already selected the statin to pair this with - either Lipitor or Crestor (Sanofi are unlikely to pair it with the generic simvastatin given the competetive positioning of this product wrt Vytorin). Since AZ is already working on other combo options for Crestor (with Abbott's Tricor), it is quite likely that this drug will be sold in combination with Pfizer's Lipitor. Exactly how much such a combo drug would benefit Pfizer is unclear to Pharmalyst given that Lipitor's patent is set to expire in the US in 2010. Merck and Schering have already announced that they will sell the Zetia Lipitor combo once Lipitor goes generic.
Wednesday, September 19, 2007
Meanwhile ABC news featured a rather unusual & bizzare story on Chantix here.
Tuesday, September 11, 2007
If so, this is very interesting news. So far most of the private equity interest has been in the generics sector where the risks of new drug discovery & development are non-existent and the cash flows very predictable. However, after years of treading water, perhaps big pharma investors and these private equity groups are taking a second look.
One way to make sense of a private equity deal for a research-based big pharma is to spin off parts that are less risky and have predicable cash flows. Take for instance GSK. Even if one ignores the consumer health biz, they sell nearly 50 products. Out of the 23.2 billion pounds of 06 revenues, roughly 20 billion came from the pharma biz (rest from consumer health. See here.). The top ten drugs (such as Avandia and Advair) accounted for almost 10 billion implying that the 40 or so smaller products almost generated 10 billion. Arguably not much research or new risky development work is going on for many of these smaller products and they generate very predictable cash flows.
Unlike GSK's consumer health biz, these 'boring' products will not have much of a strategic fit with other buyers like a P&G & so would be ideal candidates for a private equity shop to take over. These private equity firms could really pay a premium to current GSK shareholders, load up the spun off company with debt, cut the fat and almost run it like a utility company. They could then use the strong cash flows to pay off debt. Of course even half of GSK's pharma biz is probably still too big for the private equity players to do a club deal....they probably are looking at a player much smaller than GSK. Also while with the sub prime & other issues while floating debt may have become difficult, looks like AZ was able to issue $9 billion worth of bonds last week. Interesting times ahead indeed!
Thursday, September 6, 2007
Meanwhile it looks like the Asian launch of this drug is under way and the PR arm of Pfizer is in full swing. Take a look at this puff piece in a UAE newspaper. According to this article:
"Dr Bassam Mahboub, incoming head of the national anti-tobacco committee, advised smokers against attempting to quit on their own."
Rather strange given that in most countries (US CDC Survey, UK NHS Surveys etc) cold turkey is the most effective method and with that method you don't deal with the side effects. Here is the head of the "national anti-tobacco committee" recommending that people don't try cold turkey and instead implying that they try stuff like Champix. And look at the Pfizer spokesman giving quotes that are not really backed up by the data. According to him/her:
"Smoking is not only a habit like many people would think. It is a real addiction and the smokers need medical help to be able to successfully quit," he said, promising that varenicline tartrate would "multiply your willpower (to quit) by four."
Gee I wonder if the UAE package insert makes that claim.
Friday, August 31, 2007
"Zero-interest financing, a familiar sales incentive at car dealerships and furniture stores, has found its way to another big-ticket consumer market: doctors’ and dentists’ offices.
For $3,500 laser eye surgery, $6,000 ceramic tooth implants or other procedures not typically covered by insurance, millions of consumers have arranged financing through more than 100,000 doctors and dentists that offer a year or more of interest-free monthly payments.
Of course, going into debt to pay for medical procedures is nothing new for many people. And this type of financing is still only a fraction of the nation’s $900 billion market for consumer revolving credit.
But as the price of health care continues to rise and big lenders pursue new areas for growth, this type of medical financing has become one of the fastest-growing parts of consumer credit, led by lending giants like Capital One and Citigroup and the CareCredit unit of General Electric.
Big insurers, too, are devising new financing plans with various payback options. Upstart players have also aggressively cut deals with doctors."
As the movie "Sicko" and others have illustrated, besides large number of uninsured people, we Americans also have a significant number of under insured folks. Will this new lending market take off given such large numbers of the un and under insured? What is the next step for the Wall Street lenders in this? Securitize these loans like mortgages, auto loans and credit card debt and sell them off as CDOs to investors worldwide? Start selling credit default swaps on these :-)?
If this market were to grow, much of that growth would have to come from the subprime sector (the more wealthy are well insured and/or don't need the loans). In the event of rising defaults, it will be fun to watch say a bunch of Australian hedge funds trying to foreclose on a bunch of dental crowns in New Jersey!
As the NYT reports, banks, insurance companies and doctors are getting into the lending act. May be big pharma (which is sitting on buckets of money) too? Perhaps big pharma can extend its "patient assistance" programs to include loans. If your insurance company won't reimburse that $10,000 a year drug, big pharma can lend you the money if you are above a certain income level and don't qualify for their assistance. I'm kidding........but the way big pharma has invested its money lately, may be this is better for both patients and big pharma investors. I'm hoping that this "phoni patient assistance program" will be the subject of a future post on PharmaGiles.
And finally what happens when these loans go bad? Will there be a federal bail out? Boy that would be one convoluted way to expand govt subsidized health care!
Friday, August 24, 2007
A couple of semesters ago, Pharmalyst took a course in corporate strategy & the Professor had some interesting insights on why most mergers fail. According to her, most companies tout the cost savings that any proposed merger is likely to generate (by reduction of overlapping functions, facilities etc). However most of these cost savings barely cover the premium that the acquiring company pays. Then there are the merger related costs (integration of systems, severance packages etc). Once you add it all up, most mergers end up destroying value. She had a few interesting case studies to illustrate this (like the merger of Diamler and Chrysler). According to her, the only merger that generates value is the one that has what she called "unique synergies"...above and beyond the usual cost savings.
With that insight, Pharmalyst would like to present some numbers from Feb 2000, when Pfizer acquired Warner Lambert. This merger was has widely been viewed as a success.
Deal Size: $90 billion
Premium Paid: $30.6 billion (34% premium). There was also a break up fee paid to Wyeth (AHP then) of $1.8 billion
Combined market cap of the entity after the merger: $230 billion
Recent market cap of Pfizer: $170 billion (that is some amazing value destroyed over the years..don't forget that this includes Pfizer gobbling up Pharmacia and some other small companies & just one big divestiture of its consumer health business)
Annual Cost Savings Generated by Merger (from 2002): $1.6 billion
As you can see from the figures above the cost savings is hardly the factor that made this merger work. The redeeming factor for this merger was the drug Lipitor. Around the time of the merger, Lipitor had annual sales of around $5 billion. In seven years, this has grown to around $12 to $13 billion (though it is on its way back to 5!). This growth in Lipitor revenues was the unique synergy and the sole thing that justified the $30 billion premium paid.
I haven't had time to google the Pharmacia data but doesn't look like any Pharmacia drugs saw that kind of a spike in revenue (in fact Pfizer probably had similar expectations for the COX-2 franchise but that turned out to be quite the opposite!). Not sure what in Wyeth's current set of products can show the Lipitor kind of growth if Pfizer were to acquire them...unless Pfizer feels there are some gems in the Wyeth pipeline that it could grow dramatically and that the current valuation of Wyeth doesn't reflect those prospects, it is a safe bet that any such merger will destroy value.
Thursday, August 16, 2007
Thanks to this post on Experimental Chimp blog, Pharmalyst recently became aware of how someone on the Astra Zeneca corporate network (someone in PR perhaps?) made some mods to the wikipedia entry on Seoquel.
Here is the before version:
"Quetiapine has the United States Food and Drug Administration (FDA) and international approvals for the treatment of schizophrenia, treatment as an adjunct to either Lithium or Divalproex, and acute mania in bipolar disorder. Quetiapine was first approved by the FDA in 1997. In October 2006, Seroquel was also approved by the FDA for the treatment of depressive episodes associated with Bipolar I (or Bipolar-II) Disorder and is the only agent approved for this indication as a single agent monotherapy. Despite a general National Institutes of Health recommendation against its use in children or those under 18, as well as a known risk that teenagers taking the drug “may be more likely to think about harming or killing themselves or to plan or try to do so”, Seroquel is controversially marketed to parents of moody and irritable teenagers in magazines such as Parade and TV Guide…"
Now here is the after version:
"SEROQUEL is indicated for the treatment of schizophrenia as well as for the treatment of acute manic episodes associated with bipolar I disorder, as either monotherapy or adjunct therapy to lithium or divalproex. SEROQUEL received its initial indication from the FDA for treatment of Schizophrenia in 1997. In 2004, it received its second indication for the treatment of Mania associated Bipolar Disorder. Seroquel is controversially marketed to parents of moody and irritable teenagers in magazines such as Parade and TV Guide…"
Wikiscanner reports, you decide. Wikiscanner is a new app started by a UCal graduate student that attempts to match Wikipedia edits to the networks those edits originate from. NPR's morning edition did a good segment on this today morning which you can listen to here.
Tuesday, August 14, 2007
Hat Tip: Pharmalot
Sunday, August 12, 2007
While the beta crystal form may be marginal innovation at best, India should have granted patent protection to the initial version of Glivec - however at the the WTO rules had not kicked in at the time and the government there was pretty much looking out for their generic drug makers.
However sound the Indian Patent Office's judgment regarding incremental innovation in this matter may be - it better be prepared to face the unintended consequences of its decision. Under the new WTO IP regime, Indian drug makers are bracing for more competition from western multinationals. Many generic drug makers are trying to develop new molecules instead of making copycats of big pharma's gems. Take the intriguing case of Sun Pharma Advanced Research (SPARC). According to this Economic Times (an Indian newspaper) article, many of this company's Phase II molecules are incremental improvements on compounds from big pharma. For instance these guys are working on new forms of the anti-epilepsy medication Neurontin. The Indians could get a taste of their own medicine, if say the Swiss government were to deny IP protection to SPARC's "innovative" version of Neurontin or if SPARC's patents were challenged in India itself on the basis of the treatment Glivec has received there.
Friday, August 10, 2007
So, has Pfizer lost its marketing mojo? Exubera has some fundamental issues that no amount of marketing could fix (and to be sure Pfizer's management has cited bad market research as the cause of their flawed initial projections). Setting Exubera aside, Pharmalyst looked for other indicators of Pfizer's marketing prowess and below is a summary of what he found:
Chantix/Champix: As this post from Pharmalot shows, this drug is really generating a lot of prescriptions. Smoking cessation has historically been a category where initial high expectations have subsequently been dashed (Zyban, NRTs etc). Pfizer's low key unbranded campaign coupled with reps pounding the pavement has so far worked. Pharmalyst gives their marketing & sales group an A here.
Sutent: Perhaps the performance of this drug is best compared to Bayer/Onyx's Nexavar. Nexavar was approved before Sutent and Bayer just reported Nexavar's Q2 sales at $82.4 million (up 161%). Now compare that to Sutent's Q2 sales which according to their Q2 earnings release stood at a whopping $141 million - up almost 300%. This despite the fact that Nexavar has lots of good stuff going on for it in areas like liver cancer. Here their marketing & sales group gets an A+.
Viva Viagra: Their new ad has come under a lot of criticism and Viagra is losing market share to Cialis. Pharmalyst agrees with most bloggers that the Viva Viagra ad (which you can see here) is definitely not an "ethical pharmaceutical" ad. But as an ad for a "recreational" drug, it is really good. Catchy tune, all American roadhouse, macho imagery all provide tonnes of self expressive benefits to the target audience (in this case somewhat young men who do NOT have ED). Their marketing prowess is the sole reason that this drug has not become another Levitra against the "Le weekend" pill Cialis. An A grade here too (not for ethics but for marketing).
Lipitor: This may be the one place where the marketing pfolks get a C. A semester ago, Pharmalyst took a marketing class where the Professor offered an interesting insight...according to him, increasingly in all categories there is a tendency towards bifurcation - one set of brands finds success in the low-cost/value end of the spectrum and the other set of brands finds success in the premium end of the spectrum. Any brand that tries to straddle the middle gets creamed (one of his examples was the retail sector where brands like Target have done well on the low end and brands like Nordstrom's have done well in the premium segment but a brand like a Sears or a JC Penney in the middle gets clobbered). Since simva going generic, this appears to be the case with Lipitor. Simva owned the value end of the market and Vytorin/Crestor owned the premium end. Pfizer did not lower the price of Lipitor & they did not do any licensing deals to make a Vytorin like compound. They pretty much played in the middle. Also all their talk about 5 new indications & outcomes did not really differentiate the product. These new indications did not offer them a sustainable advantage as all the benefits were perceived to be a class effect. The Robert Jarvik DTC campaign was also vague and did not really make Lipitor stand out. In contrast the Vytorin ads really hammered home the point that it works against two sources of cholesterol & was a home run.
So in general looks like Pfizer still has plenty of marketing juice left but the longer the drought of good products to market, the faster the erosion of sales & marketing talent. They may lose their marketing mojo unless they can bring promising products like apixaban to market faster.
Saturday, August 4, 2007
Given all the issues with Rezulin, Avandia, Pargluva etc, that does take some solid cojones. What the IN VIVO folks did not report in their post was that Novo Nordisk (an almost pure play diabetes company) had previously decided to stop developing balaglitazone (this is one Dr. Reddy's first forays into original molecules). See press article on Novo's decision here ). Either Rheo sees the partial agonism aspect as truly unique with this compound or they are just desperate.
Correction: In Vivo did reference Novo's decision in their post. The link is fixed too. I'm sorry
Image Courtesy: Wall Street Bull by Jermany on Flickr.
Wednesday, August 1, 2007
People (including yours truly) have previously commented about Eli Lilly's doggie prozac. WSJ health blog, Pharmalot and others have also featured Pfizer's Slentrol & Cerenia. (Update: See Pharmalot's postings here, here and here . Ed - thanks for links via comments).
The latest issue of BusinessWeek has some staggering statistics on the pet market. No wonder Lilly & others are gravitating to this market. You can read the full BusinessWeek article here. Here are some select stats:
- Neuticles - A patented testicular implant for neutered pfidos has sold over 240,000 pairs at $900+ a pair
- Americans spend $41 billion a year on pets (more than what they spend on movies and video games - about 10 to 12 billion each)
- 42% of dogs sleep on the same bed as their owners
- 77% of dogs have been medicated in the past year
- 71 million US homes have at least one pet
In a related note, everyone has been receiving loads of spam e-mails for Viagra, Xanax, Prozac, Vicodin etc. etc....This morning however Pharmalyst was amused to receive this spam for pet medications. When the spammers have caught on, you know that this is a big trend.
That doggie picture at the top was due to courtesy of the WSJ health blog & flickr.
Friday, July 27, 2007
"Same stories as every other Blogger, shameless self promotion, a lot of stories are just copied and pasted from other sites, questionable knowledge of the Pharma Industry, would sell-out to Big Pharma in a second."
Then he proceeds to rate PharmaGossip, BrandweekNRX and Pharmalyst as "A small step above Pharmablogosphere".
To Jim Edwards (of BrandweekNRX) and Insider (of PharmaGossip): Pharmalyst is honored to be lumped together with your blogs. As for the other charges leveled, I would like to address each one of them here.
- Shameless self promotion: Guilty as charged. I guess self promotion is always one of the many sub-conscious motivating factors influencing any blogger....and that includes you PharmaFraud.
- Questionable knowledge of the Pharma Industry: Guilty as charged. As this post from Pharmalyst indicates, the purpose of writing this blog is to learn more about the industry through comments and e-mail from readers (many of who appear to be from the industry and have graciously shared their insights via comments and e-mails)
- Would sell out to big-pharma in a second: You betcha. From the same post as above, Pharmalyst wants to work in business analytics or finance related fields in the pharma industry. When you have the loans and commitments that Pharmalyst has, you would sell out to big-pharma in a second. And what about you PharmaFraud? Looks like you were selling out to big-pharma till you got your gag orders and (hopefully soon) some settlement monies.....
Pharmalyst thinks that there may be a grain of truth in PharmaFraud's rant on all blogs but blogging is inherently about linking, commenting etc. Pharmalyst was also curious as to why s/he reviewed Pharmalyst and not other fine and more knowledgeable blogs like PharmaGiles, In Vivo, Pharma's Cutting Edge, Clin Psy etc etc
What about the rest of PharmaFraud's blog? Pharmalyst read a few posts and here is Pharmalyst's take.....hey everyone can be a critic sometimes...
PharmaFraud looks like a pharma insider who probably used work in the business development or wholesaler management or some such department of a big pharma (J&J or Pfizer perhaps). Looks like s/he departed after some serious litigation which is still ongoing and there is a lot of pent up angst and frustration that is all bottled up and waiting to come out. As for the posts themselves, looks like PharmaFraud is not above 'cutting and pasting' as this posting shows. Many of the other posts (like this one) appear to be a bit rambling and lack focus....in fact it almost appears that PharmaFocus knows of so much and hence knows so many problems that s/he doesn't know where to strike first. Also while some posts have lots of inner workings of the industry that people like Pharmalyst enjoy reading, many others seem to be pure vendetta (understandable given PharmaFraud's apparent situation). Most of PharmaFraud's attempts at humor also fall flat in the eyes of Pharmalyst - s/he is no PharmaGiles or PharmaGossip.
All that being said, PharmaFraud is an interesting blog that Pharmalyst will follow (and hopefully will get better once some of PharmaFraud's angst & rage subsides as whatever litigation s/he is involved in unwinds).
"my initial hypothesis is that it is a huge market that looks very attractive (large numbers etc), but that the market will be very, very challenging to commercialize. Compare the people who buy smoking cessation drugs (by choice, out of pocket) to the people who would need anti-alcoholism drugs. These patient groups are very different, leading to very different market dynamics. So I do not think the alcoholism market would be 1/4 of the smoking cessation market, even if the patient numbers give that break. If anyone could 'create the market', I suppose Pfizer could."
S/he then proceeds to note that the launch of Vivitrol by Cephalon has not followed a great trajectory. Does anyone have any further thoughts on this market? If so please comment or e-mail Pharmalyst. Many thanks in advance.
Thursday, July 19, 2007
The big news appeared to be Pfizer's poor earnings. The extent of the decline of Lipitor's US sales surprised some. Time for Pfizer to move beyond Lipitor (they appear to be doing so if their new measure of earnings for non-patent expiry products per this post from Dr. Peter Rost is any indication). Dr. Rost also raises the issue of Lipitor channel stuffing by Pfizer.
Pharmalyst tries to listen in on all the analyst call webcasts and did listen in on the Pfizer call day before yesterday. Many of the analyst questions were precisely regarding this issue. Unlikely that Pfizer did any channel stuffing like BMS though sure looks like they may have indirectly & unintentionally forced wholesalers to buy more by their price increase schedules etc (some analysts were asking questions around this yesterday). In any case Pfizer clearly disclosed the impact of the channel inventory in both Q1 and Q2 earnings releases and their vice chairman David Shedlarz indicated during the call yesterday that lower inventories may be a hint of wholesaler's expectations of future Lipitor sales. Can't get any clearer than that and so they can hardly be accused of channel stuffing like BMS.
Wednesday, July 11, 2007
Some of you may have read Pharmalyst's previous posts regarding the prospects of Chantix, Pfizer's drug for smoking cessation. Now ABC news and others are reporting on a new study that offers the possibility, that this could be used to treat alcohol addiction as well... and perhaps other types of addiction too.
How big could the alcohol addiction market be? Pretty big (though not as big as the smoking market). According to this source, there were an estimated 12 million alcoholics in the US in 1993. That is roughly one fourth of the number of smokers....presumably this alcohol addiction market size will be a fourth of the smoking cessation market? Though the number of alcoholics is fewer than the number of smokers, Pharmalyst thinks that the % of alcoholics who want to try Chantix will be higher than the % of smokers.....This of course supposes that the product is effective in treating alcohol addiction and that is a big if.
Pharmalyst had previously posted about the wide range in the pricing of PAH drugs approved currently (summarized below).
Thanks to all the comments and some direct feedback via e-mail, there is better clarity on the issue. Here is a synopsis:
1. Flolan: Well worth its 100,000K+ costs. It is very effective and very inconvenient (frequent infusions, injection site pain etc). This class of drugs is the only deal for stage IV PAH patients.
2. Letaris & Tracleer: Comparably priced at 40K plus. Effective but has liver tox issues and needs frequent monitoring. Letaris claims much lower liver tox than Tracleer. Is effective in patients with stage II and stage III PAH.
3. Revatio: Cost wise, it can not be more than Viagra (since Revatio is same as Viagra). Common dosing is 20mg three times a day. At Viagra's cost of $8 per pill it works to approximately 10K per year. Also many physicians want to use higher doses. However safety at much higher doses and over much longer periods of time under chronic use conditions has not been studied. Suitability in more advanced stages of PAH has also not been studied.
Consensus Opinion: Revatio will be the initial choice for phase I patients. Phase II and III patients will probably use Revatio and Letaris in combination therapy. However if long term safety of Revatio in chronic and high dose setting is established, it will capture more share from Letaris and could be used as monotherapy in Phase II and Phase III patients. Other PDE 5 drugs like Cialis are also doing studies for PAH.
Monday, July 9, 2007
Pharmalyst's previous post on June 30th had mentioned that Bayer/J&J's Rivaroxaban could be a looming threat to Sanofi's LMWH Lovenox (which had 06 sales of almost 3 billion Euros)
Today we read from this Reuters article that:
Bayer's blood-clot drug beats Lovenox in key study
"Sunday July 8, 3:41 am ET By Ben Hirschler LONDON (Reuters) - Bayer AG's (XETRA:BAYG.DE - News) experimental pill rivaroxaban is significantly more effective than standard injections of Lovenox in preventing blood clots after knee surgery, researchers said on Sunday.
new class of oral anticoagulants to market.
Results of a large Phase III trial showed only 9.6 percent of patients given rivaroxaban experienced venous thromboembolism (VTE), or blood clots, following total knee replacement against 18.9 percent of those on Sanofi-Aventis SA's (Paris:SASY.PA - News) Lovenox.
Major life-threatening VTE occurred in 1 percent of rivaroxaban patients against 2.6 percent for the Lovenox group."
BMS/Pfizer also had encouraging news on Apixaban. According to CNN Money:
Bristol-Pfizer anti-clotting drug clears hurdle"July 8 2007: 7:58 AM EDT
NEW YORK (Reuters) -- An experimental anti-clotting medicine from Bristol-Myers Squibb Co. and Pfizer Inc. met its main effectiveness and safety goals in a mid-stage study, researchers said Sunday, positioning it as a future option over current popular but problematic drugs.
Patients treated with apixaban, a pill, had comparable rates in two main measures to those on the standard of care - an injected therapy plus one drug from the class that includes the widely used warfarin. The measures included rates of blood clots and dangerous bleedings."
Saturday, June 30, 2007
Both Rivaroxaban and Apixaban are Factor Xa inhibitors. Rivaroxaban will probably be the first drug on the market in this class and is being developed by Bayer and J&J (which owns the US rights). They expect to file for approval in 2008. Apixaban was discovered by BMS and is being jointly developed by BMS and Pfizer.
Both Rivaroxaban and Apixaban are expected to be indicated for Venous Thromboembolism VTE (Both prevention and treatment) and for stroke prevention in atrial fibrillation. There could be additional indications like acure coronary syndrome. So how big is this market? In a word - HUGE. According to the CDC, every year, thromboembolic disease is a leading cause of mortality in the US with Actute MI leading to 171,000 deaths, Ischemic Stroke leading to 139,000 and Pulmonary Embolism leading to 29,000 deaths in 2006. Perhaps one can expect similar numbers for Western Europe.
Courtesy: JNJ Investor Relations Site
The current US anticoagulant market is estimated to be $3.1 billion annually. Looks like J&J and Decision Resources expect this market to grow to $8.4 billion by 2014....a compounded growth rate of 13%. Some of the current therapies like Warfarin and Heparins have been used for over 50 years.
Courtesy: JNJ Investor Relations Site
If Rivaroxaban and Apixaban are successful, one company that will be hurting is Sanofi, given that their low molecular weight heparin Enoxaparin, generated 3 billion euros in sales last year (it maybe a trifecta for Sanofi with Ambien going generic and Zimulti/Acomplia being rejected by the FDA).
Stay tuned for parts 2 & 3
Part 2 - Unmet needs in the anticoagulation market
Part 3 - Factor Xa inhibitors value proposition
Sunday, June 24, 2007
Wednesday, June 20, 2007
From the Associated Press yesterday:
Pfizer Senior Vice President John L. Lamattina Sells 36,066 Shares NEW YORK (AP) -- A senior vice president of drug maker Pfizer Inc. sold 36,066 shares of common stock, according to a Securities and Exchange Commission filing Monday.
In a Form 4 filed with the SEC, John L. Lamattina reported he sold the shares Friday for $26.48 apiece.
Today we hear that:
It is estimated that 75,000 to 90,000 people in the US have PAH (half of them undiagnosed). The annual costs for various FDA approved drugs for the treatment of PAH is provided below.Interesting that there is such a huge range. Gilead claims that their drug has lower liver toxicity than rivals. Revatio (which actually is just re-branded Viagra) is the cheapest option. Given that the other drugs are priced much higher, Pharmalyst is guessing that it probably is not as effective - let me know if that is not the case because then then this sort of range in pricing can not be easily explained.
PS: Of late, several visitors have found Pharmalyst by typing phrases like "rivaroxaban sales forecast" or "apixaban peak sales" in their Google searches. Pharmalyst has been researching these products and guesstimates of sales will be the subject of a forthcoming post. Stay tuned.
Friday, June 15, 2007
Pharmagossip has an interesting post regarding some GSK investors clamoring for a divestiture of GSK's Consumer Healthcare business. Pharmalyst thinks that this might be a good idea, especially if GSK can get the kind of multiple that Pfizer received for the sell off of their consumer division to JNJ (Approx 4 times revenues. See here).
Insider (author of PharmaGossip) has expressed his view: "It could all come down to "alli" and its performance in the US.
If early sales reports are correct and lots of people suffer "treatment effects" the bottom could fall out of GSK's market!"
Pharmalyst thinks that if Alli sells well (Day one sales look encouraging), then the pressure to sell this division will be greatly amplified due to the higher valuation that this division could command.
Who could pony up that kind of cash? Some of the folks who lost out to JNJ in the bidding wars for Pfizer's Consumer division would be interested in this....though Pharmalyst tends to doubt it. GSK's consumer division is much bigger than Pfizer's and the likes of Reckitt Benckiser can't probably afford it. However there are other players like P&G, Unilever and even Novartis, who may be interested in paying that kind of change and could afford it. Another probability of course is private quity (may be this will be one of ex AZ CFO Jon Symonds' early deals)....though looks like the private equity boom is ending given higher interest rates and the likes of Blackstone trying to cash out by dumping their shares to the public.
Will be interesting to see what kind of shareholder pressure the brass at GSK will face in the coming months.
Wednesday, June 13, 2007
Currently Crack and Alli are winning. Pharmalyst has voted for Alli. Please cast your votes here if you haven't already. Pharmalyst's rationale for pulling the lever for Alli is as follows:
1. Accomplia/Zimulti - May not be approved in the US. Even if it is approved, there is enough concern regarding safety. Plaintiff lawyers are another force to be reckoned with here (see how Lilly is complaining about lawyer ads here).
2. Alli - Prior to fen-phen's withdrawal, it was one of the fastest drug launches...on track to generate $1b (see here). Granted Alli has worse (superficially!) side effects....however GSK will provide good DTC messaging on how these can be mitigated. If GSK's campaign is effective anyone (ranging from those needing to lose 5 pounds to those needing to lose 50) may be tempted to try Alli.
3. Xenical - Too strong a dose...and so side effects much worse than Alli. Only those really really in need will try. Past performance is best predictor of future results.
4. Slentrol - Woof! Barc! - Pfizer claims that 17 million dogs in the US have "excess baggage" (Hat Tip to Pharmalot for the phrase). Even if 0.5 million owners try this at around $300 a year, the numbers may not be enough to catch up with Alli.
PS: Congratulations to PharmaGossip and Pharmalot for being named the Top 50 business blogs by the Times of the UK.
PPS: As Pharmalyst was posting this, Pharmalot just reported that the FDA panel has rejected Zimulti.
Tuesday, June 12, 2007
Nothing new for pharma regulars...but a few good sound bites nevertheless...
"FDA: Lapdog instead of a watchdog"
"Caduet (Norvasc+Lipitor) is like Shampoo and conditioner in one bottle"
"Pharma has bought Congress....and politicians need the money.....but the only thing they need more than money is votes."
Download mp3 here (also available on iTunes - Radio OpenSource Podcast).
Site URL: http://www.radioopensource.org
Saturday, June 9, 2007
A casual Google search reveals that the prevalence of this condition is anywhere from 11% to 70% with most estimates around 29-30%. JNJ reports (from an American Urological Association study) that only 4% of patients seek treatment. So this drug, if approved, could be a big deal for JNJ (if there are no safety concerns - this is a differentiated SSRI).
Also the "recreational" use segment for this will be sizeable. If this product gets approved in the US, the DTC campaigns should be interesting. While JNJ's advertising will initially start with sober clinical definitions of this condition and the need for treatment, it is only a matter of time before they take the "downward" spiral that ads for Viagra etc have taken (see here and here).
Wednesday, June 6, 2007
The exodus of big pharma CFOs has received wide coverage in various blogs (Pharmagossip, WSJ, Pharmalot). While the reasons for the exit of CFOs at AZ, Merck and Amgen are ostensibly known, the departure of those at Wyeth and Pfizer is somewhat of a mystery.
Wyeth is really coming out of a rough patch and it would be an odd time for the CFO to leave (good news on the HRT/Diet Pill litigation front, approval of new molecules etc). If anyone has any theories on this one, please comment or e-mail.
Pfizer's CFO's departure too is somewhat of a mystery. One theory is that this is due to the shenanigans at Pfizer India (as reported by Dr. Peter Rost). Pharmalyst agrees with Dr Rost that it does appear that Pfizer India's top brass was involved in some sort of a kickback scheme (selling a plant for $3million which was subsequently valued by Indian tax authorities at $40 million is definitely suspicious). However looks like most of the wrong doing here rests with the people at Pfizer India. Unless the CFO (who if Pharmalyst's recollection is right was not the CFO when these events occurred) was directly responsible for overseeing the sale of plants in India, it is hard to see howthis could have precipitated in the CFO's departure.
Others have speculated that Pfizer's new CEO Jeffrey Kindler is looking for a CFO with more visibility and "Wall Street" experience. Pharmalyst believes that this is perhaps the more likely reason for their CFO's departure. One pure speculation on the part of Pharmalyst is whether the CFO was forced to resign because Pfizer lost the bidding war for MedImmune? Pharmalyst has no evidence of this but Pfizer brass have expressed an interest in acquisitions (esp biologics) and looks like there was another bidder at $51 for MedImmune (which was of course beaten by Astra's offer of $58 per share). Pharmalyst wonders if this had something to with the departure of Pfizer's CFO. Let me know what you think about this speculation on Pharmalyst's part.
Monday, June 4, 2007
If anyone has some early IMS/other numbers on how Tekturna is doing, please e-mail. Looks like Novartis is making some waves in the hypertension market with the launch of Tekturna.
They also recently received approval for Exforge (combination of their Diovan and Pfizer's Norvasc molecules). Exforge may do well....What Pharmalyst has read so far from Novartis is that the combo offers better hypertension control than either component individually.
Many of these combo molecules though have one component which is still under patent (Vytorin - Zocor and Zetia, Caduet - Norvasc and Lipitor, Exforge - Norvasc and Diovan). Can anyone let me know if these things are still patented once both the constituents of the combo come off patent? If so, it will be interesting to watch the incentives PBMs offer for people to take the pills individually.
Thursday, May 31, 2007
Pharmalyst had previously posted about the faltering of some of big pharma's evergreening efforts. Per this post on the WSJ health blog, looks like UCB & Sanofi's Zyrtec to Xyzal switcheroo efforts are likely to stumble.
Well, my little poll was not of much help in guesstimating the price of this product in China (too few & scattered responses - but thanks anyway!). Pharmalyst was initially thinking that the price would be lower due to lower incomes and lower costs of cigarettes in China. Also in markets like China & India one has to look at the fakes that will inevitably enter. If the product were priced at $40 in China, then presumably fewer counterfeiters would be tempted to enter the market.
However after considering the poll and other factors, Pharmalyst believes that Pfizer will price this product at the $300 level in China (at least initially). The Cutler & Gleaser study points out that smoking rates tend to decline with increasing incomes. However this only happens on the upper part of the income scale. On the lower part of the income scale, smoking rates actually rise with increasing incomes given that the product suddenly becomes more affordable. Given GDP and other figures, a majority of China's smokers will presumably fall in this bucket. So the customer segment that is most likely to want to quit is the really high income segment and this segment will probably try Chantix if things like quitting cold turkey fail. And this upper income segment will probably be willing and able to pay the $300 for 12 weeks price tag.
From a counterfeiting standpoint too, the $300 pricing may not be so bad. If the product were priced at say $50, it would make it a mass market product and would still be attractive to counterfeiters given the larger volumes. Finally, pricing the product at the same levels as in Europe & US ensures that incentives for arbitrage/parallel trade/re-importation are minimized.
The US figures show that roughly 10% of smokers are likely to try Chantix over the next couple of years. Given lack of DTC and lower income levels the percentage of people in China who may try this product will be a fraction of the US/Europe figures. Even if only 0.1% of China's smokers were to try this product by say 2010, that works out to roughly $90 million in revenues if this product is priced at $300 (given that China has 300 million smokers!).