Pharma’s Cutting Edge

Since I’ve been spouting off vociferously on this deal, I just wanted to provide some closure, in case you missed the story yesterday. OSI did indeed go through with the merger as planned. I will follow-up on the progress of Macugen, Tarceva and the rest of OSI in 6 months to a year from now, unless readers have a specific issue you would like me to address before then.

One of the most important factors damaging the public’s perception of the pharmaceutical industry, is the persistence of health claims emanating from purveyors of natural supplements. In this recent announcement, FDA is cracking down on 16 of these of these manufacturers…a drop in the bucket.

FDA believes it is limited by law in its ability to regulate certain claims of natural supplements. You will note, for example, that there are no companies being warned against claims of weight loss, increased energy, increased libido, virility, slowed aging, orgasm improvement, penile enlargement or erectile enhancement. Such claims are generally not prosecuted by FDA because they have been determined to fall outside the bounds of health claims. Another factor limiting FDA enforcement of medical claims by supplment manufacturers is FDA’s limited human resources to enforce such actions. FDA simply isn’t adequately equipped to review the large number of advertisements for “natural healing” products.

Allowing supplement manufacturers to make untested health claims harms the public image of the pharmaceutical industry immeasurably. Lacking adequate studies and their attendant efficacy and safety information, the public is unaware that natural remedies might offer no measurable benefits and/or be associated with potentially serious, even fatal, side effects when used according to manufacturer’s suggested (and unregulated) regimens. As a result, the general public has come to believe that “natural product” means safe and probably effective, and “pharmaceutical product” means associated with side effects or outright dangerous with limited effectiveness. Suprisingly to me, the pharmaceutical and biotechnology industries have done nothing of consequence to alter this pervasive perception. It is a major public relations (and public education) failing of industry; one it could correct if it tried. Apparently less easily addressed is FDA’s persistent failure to crack down on unsupported health claims for natural products, the present actions notwithstanding.

You’ll recall my stance against the merger, as I believe it is unfavorable to Eyetech shareholders in the long-term, despite the short-term premium to market value it brings. Apparently, OSI is either re-thinking the merger (I doubt it) or using the ANCHOR study results to get a better price (I don’t doubt it). The merger is expected to close Monday. Given the market’s reaction (Eyetech is down over 8% and OSI is up nearly 2% as of this writing), most active traders seem to believe that the deal will be changed from its original terms. If Eyetech’s press release is to be believed, the company will fight hard to maintain the original terms on the original schedule. Do I think the merger will go through Monday as planned? I have no f***in’ idea, because neither side has enough of a track record upon which to make that judgment, and I’m not going to investigate the track record of every OSI board member (that’s what you should do if you want a better answer).

See story here.  King will make an upfront payment of $150 M for Remoxy. I need to do some fact-checking, but this sounds like it could be the largest upfront fee for a Phase 2 product ever. The deal presents a bit of conundrum to Pain Therapeutics investors, who must add the recent poor judgment of King (see my other posts on King’s settlement over Medicaid fraud charges) into the risk equation. The large upfront suggests that Pain Therapeutics certainly has.

Below is the complete text of Joppi’s response to my letter to the BMJ, which I wrote in response to their article entitled Disappointing Biotech. Note that a subscription is required to read the published version of my letter.  I’m not going to get into a back and forth with them in the blog, because it’s my blog and readers cannot be assured that I’m giving them a fair hearing. However, I will respond to a couple of their inflammatory comments. First, I declared no competing interests, because I made it clear in my letter that I worked for Lilly when discussing teripratide, and I also make it clear with the name of my consulting firm that I work in the interests of the pharmaceutical industry generally. A competing interest declaration is intended to declare an interest in a specific company whose product is discussed, thus revealing an otherwise hidden bias on the part of the author. I never hide my pro-pharma bias. Therefore, I had no competing interests to declare. That Joppi et al declare their “bias on the side of patients” implies that mine is not. That was unfair of them. Indeed, although I support the industry, readers of these pages will readily determine that I am also quick to criticize industry practices that I believe do not ultimately serve the interests of patients. I have no doubt that Joppi and I disagree completely on which practices qualify.

FJC

Biotech: less innovation than expected 2 November 2005

Roberta Joppi,
Visiting scientist
“Mario Negri” Institute for Pharmacological Research, 20157 Milan, via Eritrea 62,
Vittorio Bertele’, and Silvio Garattini
Send response to journal:
Re: Biotech: less innovation than expected

Readers will be grateful to Fredric J Cohen for providing a balanced view (on line Rapid response of October 18 and BMJ 2005; 331:1025) on the topic we dealt with so unfairly (BMJ 2005; 331: 895-897). As President of Pharma Growth Strategies(http://www.pharmagrowth.com/index.html), with no declared competing interest he is in an ideal position to give an independent opinion, while admittedly we have to declare our bias on the side of patients.

With regard to the issues that disappoint our independent reader, however, we should like to make the following points:

A. According to European legislation, biotechnological products are those medicinal products which are developed by recombinant DNA technology, by controlled expression of genes coding for biologically active proteins in prokaryotes and eukaryotes including transformed mammalian cells, and by hybridoma and monoclonal antibody methods (1). The list of the products obtained by biotechnological methods that we evaluated was downloaded from the EMEA web site.

B. Although the cost of biotech products may not surprise some, it is clear to everyone that these drugs are more expensive than traditional ones. This cannot be justified solely by their development or production costs, since advertising still uses up double the resources devoted to research. Real innovation should reach the market with no such marketing effort and cost less or at most not much more. Read the rest of this entry »