There have been a lot of predictions about Johnson & Johnson’s suffering reputation in the wake of highly public consumer-drug recalls. But Advertising Age has some numbers. J&J’s business in internal analgesics–including Tylenol and Motrin products, which accounted for several of those recalls–has dropped by nearly two-thirds year-over-year.

For the four weeks that ended June 13, J&J’s internal analgesics sales are down 65 percent, AdAge reports, quoting numbers from Deutsche Bank. Market share has dropped accordingly. Meanwhile, cough, cold and allergy drug sales have plummeted. They’re down 59 percent for the same period.

Now, some of that drop is a direct effect of the production halt at J&J’s McNeil Consumer Healthcare plant in Fort Washington, PA. Drugs can’t sell if they’re not on store shelves. It’s impossible to fully know how J&J’s eminent brands are suffering from the recalls until after their supplies are back to normal.

Source: FiercePharma

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GlaxoSmithKline Plc has settled thousands more lawsuits brought by patients alleging its Avandia diabetes drug caused heart attacks, in a move that may defuse potentially massive claims over the medicine.

A company spokeswoman said on Tuesday that consolidated cases which had been due to come to court in Philadelphia this month had been settled. She declined to give further details and said the terms remained confidential.

The first product liability case involving Avandia will now go to court in the United States in October, she added.

The move follows the separate settlement of some 700 cases last month for about $60 million.

Analysts estimate Glaxo had faced a total of 13,000 claims for damages involving Avandia, of which around 5,000 were consolidated in Philadelphia, and there had been fears it could face damages of up to $6 billion.

However, last month’s relative modest settlement deal and the latest settlement in Philadelphia suggests the amount paid out by the British-based drugmaker is likely to be a lot lower.

“This implies that close to half of the cases have now been settled and should ease some fears about Vioxx-type liabilities,” said Deutsche Bank analyst Mark Clark.

He believes the cost is likely to be comfortably covered by the company’s 2 billion pounds ($2.9 billion) of litigation provisions.

And the total could be a lot less than that. Assuming the average pay-out rate of around $86,000 per claimant for the first 700 cases was applied to all 13,000, the amount would be just over $1.1 billion.

Merck & Co Inc agreed a $4.85 billion settlement with plaintiffs in 2007 after its arthritis pain drug Vioxx was pulled from the market in 2004.

Commercially, Avandia is no longer a major product for Glaxo, with sales declining sharply following controversy over the drug’s heart risks in 2007, and the medicine is set to lose exclusivity in the United States in 2012.

But worries about liability claims have spiked up since February, when two U.S. Senators published a highly critical report on Avandia. A Food and Drug Administration advisory panel will consider possible further restrictions on the drug in July.

In the first quarter of 2010, Glaxo reported increased legal costs of 210 million pounds, up from 51 million in the year-ago period, which it said reflected progress toward settling a number of cases. Glaxo has consistently defended the safety record of Avandia and says it acted properly in communicating with regulators and physicians about the medicine’s potential cardiovascular risks.

Source: Reuters

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More cancer drugs are showing promise at keeping the disease at bay when they’re used as maintenance treatments. Rituxan, marketed by Roche’s Genentech unit and Biogen Idec, cut the risk of lymphoma relapse by half when used for two years after initial treatment was over. And ongoing use of Celgene’s multiple myeloma treatment Revlimid doubled the number of patients whose disease stayed in remission three years after treatment began.

The research is being hailed as more evidence that certain cancers could be more like chronic diseases than terminal illnesses. “This [Rituxan] study suggests lymphoma, like many human cancers, is a chronic disease and increasingly is likely to require chronic therapy to maintain remission,” Dr. George Sledge, an Indiana University oncologist and president-elect of the American Society of Clinical Oncology, tells the Wall Street Journal.

Chronic treatment would mean higher sales for drugmakers. In Rituxan’s case, Roche has already asked the FDA for a new indication as a maintenance treatment. Deutsche Bank analyst Tim Race tells investors in a note that the Swiss drugmaker could see a half-billion in additional sales if Rituxan is broadly accepted as a maintenance drug. Already, some 70 percent of patients in the U.S. use Rituxan as a maintenance therapy, Citigroup analysts estimate, compared with 10 percent or 15 percent in other countries.

Source: FiercePharma

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Big Pharma earnings reports are winding down now with numbers from two of the world’s largest drugmakers, both of which pulled off megamergers with rivals last year. We’re talking about Pfizer and Merck, of course, and Q1 numbers show just how beneficial those mergers have been so far.

Pfizer’s first-quarter profits grew more than analysts had estimated, thanks to products added to the company’s arsenal with the Wyeth buyout. Sales came in at 54 percent higher, at $16.75 billion; Wyeth products accounted for $5.3 billion of that. And thanks to drugs that are already heavily discounted, the company doesn’t expect an overwhelming impact from healthcare reform this year. The new law cut quarterly sales by $56 million.

“Many of Pfizer’s largest products are already in very competitive areas and are likely to already carry greater discounts than those being implemented with the new law,” Deutsche Bank analyst Barbara Ryan said in a note to clients (as quoted by Bloomberg).

Meanwhile, Merck saw its profits drop, but only because of costs related to its merger with Schering-Plough. Here are the numbers: Merck posted profits of $299 million or 9 cents per share, way down from last year’s $1.43 billion, or 67 cents per share. Without those special charges, the company posted EPS of 83 cents, beating analyst estimates by 8 cents. And sales more than doubled to $11.42 billion from $5.39 billion.

Still, the company barely lived up to Wall Street expectations with its full-year profits forecast. The company said it’s expecting 2010 earnings of $3.27 to $3.41 per share; analysts had forecast $3.41, Reuters notes.

Source: FiercePharma

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Merck’s Kenneth Frazier must be a happy man. As many expected, Frazier was promoted to president of the company and now stands as Chairman and CEO Dick Clark’s apparent successor. Given that Clark reaches mandatory retirement age next year, Frazier won’t have too long to wait in the wings.

As president, Frazier will shepherd Merck’s three biggest global divisions: pharma and vaccine sales and marketing, R&D, and manufacturing and supply, the company says in a statement. Getting these three units to collaborate as much as possible is “critical to the success” of Merck’s recent merger with Schering-Plough, Merck says. Adam Schechter, head of Merck’s U.S. pharma business, will step into Frazier’s old shoes as president of Global Human Health.

Frazier has been something of a golden boy at Merck. He enhanced his rep as general counsel during the Vioxx fiasco, then took over as president of Global Human Health in 2007. In that job, he overhauled the company’s sales model and steered a big efficiency–a.k.a. cost-cutting–drive. He also played a big role in the Schering merger, the company says.

So Frazier’s new job is a natural step upward for him and a natural choice for the company to make. But as Forbes points out, it also says something about Merck’s strategy going forward: It’s sticking to its knitting. The company has already “done a lot internally” to overhaul its structure and culture, Deutsche Bank analyst Barbara Ryan told the magazine. Now, it’s time for “blocking and tackling,” she figures, not for a new playbook.

Source: FiercePharma

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That $80 billion cost-cutting deal the pharma industry made to help advance healthcare reform is already showing its teeth. In reporting its first-quarter results today, Eli Lilly says it expects higher government rebates to cut $350 million to $400 million from its top line this year, and $600 million to $700 million in 2011. And it’s taking an $85 million charge to earnings for drug subsidies to its retirees.

Healthcare reform was supposed to increase drugmaker revenues by growing the pool of insured patients. However, the cost cuts are going into effect now, and the big expansion won’t happen for several more years. So drugmakers will feel the pain before they get the gain.

What we don’t know is whether the rest of Big Pharma will lower their 2010 forecasts or if they have already built the reform cuts into their predictions. “Now the question is, is everyone else going to lower their guidance,” Deutsche Bank analyst Barbara Ryan tells Reuters. “We don’t know, but everyone is going to worry that that is going to be the case.”

Back to Lilly: The company reported a 9 percent increase in global sales to $5.49 billion, a tad lower than Wall Street estimates. Profits came in at $1.25 billion, down from $1.31 billion a year earlier. Top performers: antidepressant Cymbalta, which posted a 13 percent rise to $803 million; and lung cancer med Alimta, whose sales skyrocketed by 57 percent to $527 million.

Source: FiercePharma

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Roche Holding’s cancer drug Avastin missed its main target in a late-stage trial when used with chemotherapy to treat patients with advanced stomach cancer, the Swiss drugmaker said on Tuesday.

Roche had indicated peak sales of the drug for the disease could have hit between 500 million and 1 billion Swiss francs ($466-$933 million), according to Deutsche Bank analysts.

The miss could take 0.5 to 2 percent off consensus sales estimates and around 1 to 4 percent from core earnings per share, Deutsche Bank said.

Avastin failed to meet its target of extending overall survival in patients treated with the drug in combination with chemotherapy when compared with the same chemotherapy treatment plus placebo in the trial, Roche said.

Roche, the world’s largest maker of cancer drugs, said no new safety issues were observed in the AVAGAST Phase III trial and Avastin’s broad development programme in other tumour types would continue.

“We are disappointed with these results because treatment options for stomach cancer are limited,” Chief Medical Officer Hal Barron said in a statement.

At 0833 GMT, Roche’s stock was trading 1.1 percent lower at 179.80 Swiss francs, underperforming a near flat DJ Stoxx European healthcare index.

“We note that this is the first of three new indications for Avastin reporting in 2010/2011, all of which are higher risk than previous usages of the drug. Next up in 1H10 we expect data from Avastin in ovarian cancer,” they said.

Roche will present the data at the American Society of Clinical Oncology annual meeting in June and Kepler Capital Market analyst Martin Voegtli said the failure in this trial could still be partly covered if Avastin is able to meet secondary endpoints, such as progression-free survival.

Avastin, which works by starving tumors of blood and is made by the recently acquired Genentech unit, is already used to treat lung, colon and breast cancers, and had 2009 annual global sales of 6.2 billion Swiss francs ($5.77 billion).

Around 1 million people are diagnosed with stomach cancer each year, making it the fourth most common cancer and the second leading cause of cancer-related death worldwide, Roche said, adding the median survival time after diagnosis of advanced stomach cancer is around 10 months with conventional chemotherapy.

Source: Reuters

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Novartis AG handed drugs head Joe Jimenez its top job on Tuesday with a mission to guide the Swiss drugmaker through ever-increasing competition to its key medicines.

The chatty 50-year-old American steps up after just over two years running Novartis’s dominant drugs unit and faces a tough industry landscape as more blockbuster medicines lose patent protection and the sector struggles to generate new products.

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He takes over from Swiss Daniel Vasella, a medical doctor and the longest-serving CEO among big European drug companies, who steps down on February 1 after overseeing the acquisition of U.S. eyecare group Alcon Inc.

Vasella will remain as chairman.

“One thing we are aligned on is the strategy of the company, which is … one of focused diversification,” Jimenez told Reuters. “We both believe that the portfolio now is broadly right to help us grow into the future so I don’t anticipate seeing significant changes there.

“I’m going to step back and think through how we’re going to set the agenda for the next few years.”

The departure of Vasella, who headed Novartis since the merger that created it 14 years ago, marks the completion of a changing guard at the top of the European industry after rivals GlaxoSmithKline, Sanofi-Aventis, AstraZeneca and Roche all brought in new CEOs.

Novartis Chief Operating Officer Joerg Reinhardt, who had been tipped as a possible successor to Vasella, will leave the company and his position will disappear.

Jimenez joined Novartis’s consumer health unit in 2007 and soon took over the pharmaceuticals business, overseeing the progression of several promising new medicines including multiple sclerosis pill FTY720, or Gilenia, and cancer drug Afinitor.

His appointment at the head of a slimmed-down executive board came as the company reported a 54 percent rise in fourth-quarter net profit to $2.3 billion, helped by sales of its H1N1 swine flu vaccines — not far from analyst expectations of a 53 percent jump to $2.4 billion.

Novartis shares rose 1.5 percent to 56.50 Swiss francs by 1030 GMT, outperforming a slightly stronger DJ Stoxx European healthcare sector.

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“We see this as positive, placing a well respected progressive thinker as CEO,” Deutsche Bank analysts said in a note. “Together with new CFO Jon Symonds we expect Jimenez to tackle pharma costs.”

Shareholder group Ethos welcomed Novartis’s decision to give shareholders a vote on executive pay, a hot topic during tight economic times and particularly for the drugmaker as Vasella’s salary of over 20 million Swiss francs ($19 million) often draws criticism from the press and investors.

Novartis has agreed to buy a majority of Alcon from Nestle SA , using the acquisition to insulate against losing exclusivity on treatments like top-selling blood pressure drug Diovan, and has since come under fire for its lowball offer to minority shareholders.

Jimenez said he was happy with the current line up of new drugs and wide spread of the business into areas such as emerging markets and eyecare, which could all help offset lost Diovan sales when it loses patent protection in 2012.

The group still considered its Alcon offer — originally worth $11.2 billion but dependent on share price moves — as fair, Vasella said. Novartis has had no negative feedback from its own shareholders on the Alcon deal, said Vasella.

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Novartis expects group sales to grow at a mid-single-digit percentage rate this year, but said profit was difficult to predict given the Alcon deal.

Sector investors will be closely eyeing results from another diversified healthcare group, Johnson & Johnson, due later on Tuesday, for more clues on whether tapping new markets away from prescription medicines is helping some drugmakers.

Novartis trades at a premium to GlaxoSmithKline, AstraZeneca and Sanofi-Aventis thanks to promising new drugs such as multiple sclerosis pill FTY720 and a broad business base, but lags Swiss rival Roche.

Source: Reuters

Popularity: 5% [?]

Pfizer is raising its dividend, and the company plans to keep hiking payouts to shareholders in years to come (”barring significant unforeseen events,” of course).

Still, even barring those unforeseen events, it could be a while before the company gets back to the fat dividends it was paying before it spent $68 billion to buy Wyeth.

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The company cut its quarterly dividend in half, to 16 cents a share, in a cash-saving move connected to the Wyeth acquisition. The hike announced today will boost the payout to 18 cents, payable in March of next year.

The market had been expecting something along these lines, and the company’s shares were basically flat today. Analysts seem to agree with Pfizer’s board that further increases are likely. Barbara Ryan of Deutsche Bank said the annual dividend could hit $1 by 2013. And Chris Schott of J.P. Morgan said the dividend could “approach pre-Wyeth levels by 2015.” Schott also noted that the dividend announced for next year represents a 3.9% yield based on the current share price.

Source: The Wall Street Journal

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Celegene could get a big boost from new data set to be reported next week. Revlimid, its best-selling multiple myeloma pill, could emerge as a first-line treatment rather than Johnson & Johnson’s IV drug Velcade. Right now, Revlimid is typically used as a second-line treatment for patients who don’t respond to other meds.

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Preliminary info from a study of Revlimid as a first-line treatment–dubbed MM-015–indicated that the drug might help patients live longer, Bloomberg reports. Plus, the research appeared to show that Revlimid’s action bested Velcade’s results in a similar trial. Cancer experts say that if the MM-015 study pans out in Revlimid’s favor, it could change the standard of care.

Analysts are already counting the change–or in this case, the billions of dollars. Mike King of Merriman Curhan Ford told Bloomberg that broader use of Revlimid could boost sales to $4.4 billion by 2016, up from $1.3 billion in 2008. And another analyst, Mark Schoenebaum of Deutsche Bank, said that the better the data from MM-015, “the more market share Revlimid gains.” Even if Revlimid just ties with Velcade in terms of efficacy, it’s a win for Celgene, some say, because, as a pill, Revlimid is easier for patients to take.

We’ll have to wait and see how the data comes in, of course. It’s scheduled for presentation at the American Society of Hematology meeting that begins Dec. 5.

Source: FiercePharma

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