Pharma’s Cutting Edge

I remember back in the late 1990’s being intrigued by the science behind Onyx’s lead product, Onyx 015, an adenoviral-based therapy for head and neck cancer. To this day, I consider the underlying concept behind 015 ingenious; too bad that ingenuity does not a successful drug make. When 015 was eventually killed in 2003, it signalled the beginning of the end of Onyx. No wait. That didn’t happen, did it? We all know what actually happened, Onyx wasn’t done in by the loss of their lead product; they succeeded this week in taking a drug to market. Why did Onyx succeed? What can other development-stage companies learn from Onyx’ experience, and can it be replicated today? I don’t have all the answers, but I do know that Onyx was never a one-trick pony. Spun off from Chiron in 1992, from the beginning Onyx pursued more than one line of discovery research. Sure, viral-based oncology products were their initial focus, but they also made concurrent substantial investments in small molecule research related to cell cycle regulation, including a collaboration with Bayer that began in 1994 aimed at discovering novel ras pathway modulators and other (not-to-be) collabortions with Warner-Lambert and Pfizer. Tuesday’s approval of Nexavar is the culmination of the Bayer collaboration. So, the strategy of pursuing multiple lines of discovery research can succeed in a startup. But can that model be replicated anew today? It’s increasingly tough to do. In fact, if Onyx hadn’t been spun out from Chiron, I’m not sure we’d be celebrating its success today. The limitation is money. Discovery research is very expensive and very risky. Increasingly, early-stage investors are unwilling to focus risk in any single management team; they’d rather spread out risk among different small organizations, each focused tightly on one one target, chemical class, or technology platform. So, we’re seeing lots of one-trick ponies springing up, each with enough just-in-time funds to carry out their primary mission. Startups with cash for multiple robust discovery programs are the exception today, and maybe it’s for the better. We won’t know for several years down the road. In the meantime, we can celebrate Onyx’ success and admire their tenacity. This is likely to be my last note in 2005. I wish all of you a very happy holiday and look forward to sharing 2006 with you. Until then.

For the record, I have no financial interests in Pharmacyclics or its competitors. I’ll assume you will read the linked press release, so I can keep my comments brief. I have a question. Why was there a 50% improvement in the primary endpoint measure without statistical significance? One person on this morning’s conference call asked about variability in response but didn’t really understand what he was asking, and the respondent apparently didn’t either. No one on the call asked how the p-value was calculated, or about the confidence interval around the hazard ratio, or even how the hazard ratio was derived. Any of these would have been reasonable questions; take your pick. When a drug purportedly fails to deliver on its promises in Phase 3 investors, patients, regulators and investigators all want to know why. It’s not an excuse that there is a limited time (in this case 48 hours) to promulgate the top-line data. If a company discloses data and infers truths about its drug based on those data, it had better make the data clear. To do less is, at best, unfair to all interested parties. In this case, interested parties were not told why a 50% increase in the median time to progression of neurological symptoms (the primary endpoint) was associated with a hazard ratio of just 0.78 (p=.12). In my experience, this apparent discrepancy is unusual in cancer trials. Usually, the median TTP corresponds closely with the hazard ratio, reflecting proportional hazards of therapy. So, something strange is going on with the data or the analyses or both; too bad the public has no idea what.

I got back from travels to find that Amgen had made an offer to purchase Agenix for $2.2 B . In June, I named four likely small-firm takeover targets by pharma on Pharma’s Cutting Edge. Abgenix and Neurocrine were the two I named without major obstacles against them. I named Amgen as Abgenix’ likely suitor. Neurocine remains unpaired for now and Pfizer is the likely suitor. As far as the proposed deal itself, I haven’t yet looked at the terms, but I’ll review the SEC filings and write a brief follow-up note.

I submitted the following to the editors of the NY Times in response to the above editorial, which itself was a reaction to the NEJM’s call for a correction from the authors of the VIGOR trial. They didn’t publish it, so I’m posting it.

The Times should have mentioned that it is atypical to include in the body of a clinical research article data derived past a pre-specified cutoff date. This editorial practice deters authors from “cherry-picking” data to inflate an article’s importance. Notably, the statistical and clinical inferences regarding Vioxx’ safety don’t change with inclusion of the additional data in question. The relative risk estimates in the overall study population (4.25 and 5.0) are not meaningfully different, given the wide 95% confidence intervals around them. Likewise, confidence intervals around the similar estimates of relative risk in the low-risk population (2.25 and 3.0) both include 1.0, precluding reliable inferences of increased risk. The above notwithstanding, clinicians should view all journal-published clinical trial findings skeptically, regardless of funding source, as all journals limit the quantity and types of data published, and all authors and editors hold biases that influence what readers see.

Pharma’s Cutting Edge
Vol. 3 Number 12 - December 2005

What Might Judge Alito on the Supreme Court Mean to Pharma?

When U.S. Supreme Court Chief Justice John Roberts was nominated to the position he now holds, I wondered the same question I will address here. Unfortunately, Judge Roberts didn’t have enough history of rulings to allow legal experts to agree on his likely positions of relevance to pharma. With Judge Alito, the situation is better. According to the database service, asksam.com, Judge Alito has rendered roughly 350 opinions while serving on the U.S. Court of Appeals Third Circuit (since 1990). That’s enough opinions for many legal scholars to comment on aspects of Judge Alito’s legal reasoning and his likely positions as a Justice. For those of us specifically interested in pharmaceuticals and biotechnology, however, there is less to rely on. I briefly reviewed cases decided by Judge Alito involving pharmaceutical and other health care industry firms. Most of these cases involved a dispute alleging employee discrimination, fraud or contractual breach. There were no Alito opinions available for cases specifically concerning pharmaceutical patent protection, antitrust (e.g. innovator-generic deals) or product liability. These types of cases have the largest potential financial impact on pharmaceutical firms, so it would have been useful to have some specific precedents to consider. Failing that, I have abstracted some public comments on Judge Alito’s opinions in these areas, when available, that involved non-pharma/biotech firms. I’ll leave it to you to draw your own conclusions.

*****************************
This is the last issue of PCE this year. I really enjoyed expanding the newsletter from a quarterly to a monthly and posting it online in blog format. It’s much more accessible to readers and commentators this way. I hope you enjoy reading it. I appreciate all of the positive feedback you’ve given me. As long as I think it’s useful to someone besides me, I’ll keep writing it. If there are topics you’d like to see covered in future issues of PCE, just drop me a note.

Next month, I will kick off 2006 by reviewing my 2005 industry predictions and making some bold new ones for 2006. May you have a peaceful and joyous holiday season and a prosperous new year.

Fred
******************************

Judge Alito on Product Liability
From news.com:
Technology companies are likely to find Alito an appealing nominee because for the most part he’s “business-friendly,” said David Bernstein, a law professor at George Mason University. “He’s generally skeptical of open-ended liability, and seems to be inclined to strictly construe contracts, including contracts that dictate where and under what law a dispute will be resolved.”

Judge Alito on Intellectual Property
From news.com:
Alito’s strict view on the kinds of inventions that merit copyright protection should also be a comfort to high-tech businesses, said William Patry, a partner at Thelen Reid & Priest and author of The Patry Copyright Blog. Alito demonstrated this strict approach in 2004 when he denied Southco, a manufacturer of screws and industrial fasteners, copyright protection for its part numbers. Alito said the part numbers, which Southco alleged that its rival Kanebridge copied, lacked the originality and creativity required for copyright protection.

Judge Alito on Free Speech (relevant to advertising and promotion)
From news.com:
On free speech topics, the First Amendment Center said in a report, Alito is “fairly strong.” Alito wrote the opinion in a 2001 case that said a school’s “anti-harassment” policy amounted to an unconstitutional speech code: “There is also no question that the free speech clause protects a wide variety of speech that listeners may consider deeply offensive.” [wrote Alito] Read the rest of this entry »