Pharma’s Cutting Edge

OTC drugs in the U.S. have been making news lately: cough medicines, orlistat, and inhaled epinephrine. For me personally the epinephrine story is particularly gratifying. A brief anecdote to explain. Some 13 years ago I treated a patient who was severely harmed by repeated use of OTC epinephrine MDI; she developed refractory atrial flutter resulting in severe congestive heart failure and nearly died. It was a classic case of OTC epinephrine MDI misuse. She was a poor woman without adequate healthcare. She never went to a doctor to receive appropriate asthma treatment. Incensed that a powerful and potentially dangerous drug like epinephrine was available to anyone without a prescription, I wrote a plea to FDA requesting that the drug’s OTC status be revoked. Surprisingly, I received a relatively rapid written response from Carl Peck, who was then a senior policy executive at the agency. The response was voluminous, consisting of a portfolio of materials that purportedly demonstrated support for the continued marketing of the drug OTC. Interestingly, Dr. Peck noted that no company had applied for a prescription version of the product. I reviewed the book of materials and was left with the same impression as when I had made my plea: there was a dearth of data that could support safe use of an OTC version of this drug. At that point I became derelict in my public-health responsibility and dropped the issue. Read the rest of this entry »

This is a continuation of the article written earlier this month.

Where else is the industry headed in 2006? Any big news in store? As promised, I’ve taken a look outside my window to see which way the weather is turning.

Deals. There is every reason to believe that big pharma’s appetite for high-quality external research programs will continue. Earlier-stage deals worth more money are a result. Because of the seller’s market, licensor’s will continue demanding more control during collaborative R&D projects, with higher rewards for technical and commercial success. That’s all well and good, but which small companies have early-stage technologies worth buying? Limiting the list to companies with small, un-partnered Phase 1 oncology (the most active deal-making area) drugs in development, here’s a handful.

• Ariad AP23573. This is an oral/iv mTOR inhibitor in Phase 1b. It has fast-track status for bone and soft-tissue sarcomas. There could be a deal in 2006, depending on the progress of the ongoing clinical studies.
• Array BioPharma ARRY-334543. An oral EGFR/ErbB-2 inhibitor. Array already has a collaboration with AstraZeneca for their other Phase 1 drug, an orally active MEK inhibitor, and AZ is a player in this therapeutic space.
• Celera Genomics CRA-024781. An oral HDAC inhibitor in Phase 1. This drug is still early in Phase 1 and few details have been made public. Still, it’s a hot target and Celera could use the credibility from an early-stage partnership. On the other hand, they can afford to wait until late Phase 2.
• Insmed rhIGF-BP3. Kudos to Insmed for gaining FDA approval for their first product, Somatokine (IGF-1/IGFBP-3), for a rare form of short stature. Because of their experience with Somatokine, Insmed knows a great deal about delivering and manufacturing IGFBP-3. This reduces risk for a potential licensee. However, they will need to demonstrate some efficacy in cancer patients before a suitor will come forward.

Any mega-mergers in the works for 2006? In the pure-pharma space I’ll say no. I made a call last year that pharma would look to diversify into devices and molecular diagnostics ala J&J and Abbott. It didn’t happen in 2005. Look for a deal this year. Most likely candidates would be those companies who have significant exposure to generics in the next couple years and have a relative dearth of potential blockbusters in the clinic. Pfizer and AstraZeneca come to mind.

Financing. The short-term trend in 2005 was tighter; not a terrible year for fledgling firms, but not nearly as good as 2004. 2006 should be tighter still. IPO plans will be delayed or cancelled, as VCs focus on exits via early-stage deals instead of public markets. Private equity has played an increasing role in more mature firms, and this trend should continue. We should also continue to see creative financing, such as limited partnerships funding collaborative R&D (e.g. Exilixis/Symphony). If there is an IPO worth talking about in 2006, it will likely be Jazz Pharma, although they seem to have plenty of cash to grow organically for a while.

Laws. Despite the attention being paid to the plan’s operational struggles, I don’t expect to see any new legislation around this program in 2006. In fact, I don’t expect any highly significant legislation affecting the industry in the U.S. in 2006 at all. No new U.S. federal clinical trials registration/results laws will be passed, as WHO, ICMJE, ISRCTN, PhRMA and other industry interests and regulatory groups (including, unfortunately, U.S. state legislatures, tackle the issue). We might see U.S. Senate hearings later in the year re-examining Hatch-Waxman. Congress will want to know whether it needs to strengthen incentives for early generic entry, now that authorized generics have become an established practice. So far, there is little evidence that generic companies are unwilling to challenge pharma patents well before Orange-book expiry dates. We’ll also continue to see movements towards uniform outcomes-based formulary decisions in the U.S., but I don’t expect major federal program announcements or laws passed this year this year. We won’t see any new laws allowing re-importation of drugs into the U.S. We will see more settlements between pharma and states over allegations of Medicaid fraud.

R&D. The numbers aren’t all in yet, but it looks like 2005 was a disappointing year in terms of number of NMEs approved in the U.S. and Europe. 2006 will be better, not only in terms of number but of apparent quality as well (as reflected by first-year sales). As I had indicated in early 2005, this increase in NMEs in 2006-2007 was predictable based on the late-stage industry pipeline. So, no surprises if this call is correct. We’ll continue to see great interest in “personalized” approaches to R&D. Look for at least one drug “killed” by big pharma to make the news in 2006, as it is resurrected into the later stages of clinical development using composite predictors of efficacy and safety.

As always, the biggest stories of the year won’t be predictable; they’ll be surprises. Is it too much to ask that they be pleasant surprises?

Here’s a follow-up story from the Washington Post on the preamble to the new labeling guidance that aims to limit states’ rights to sue drug manufacturers.

The National Conference of State Legislatures (NCSL) is charging the FDA with pre-empting states’ rights to prosecute drug product liability laws by proposing a drug-labeling policy change. The NCSL says that FDA refused to provide the exact language of the proposed rule but said the rule would impact several cases already under way. I’ll keep an eye on this evolving story.

From the I-had-no-idea file: OTC cough suppressants apparently don’t work. I knew they didn’t work well, but I figured they worked well enough to at least reduce symptoms of cough a bit. Chest physicians obviously don’t agree. I loved Wyeth’s comment that “people wouldn’t purchase and re-purchase” the drugs if they weren’t working–yeah, right. Placebo effect and synchronicity, combined, they sell a hell of lot of cough syrup.