German pharmaceuticals and chemicals company Merck KGaA is banking on an experimental multiple sclerosis (MS) pill to lift operating margins at its embattled drugs unit, it said on Wednesday.

Earnings before interest, tax and special items at its Merck Serono prescription drugs unit could rise to 25 percent of sales in the long term, up from 22.4 percent in the first quarter, analysts at Exane BNP Paribas quoted the unit’s head, Elmar Schnee, as saying in remarks confirmed by a Merck spokesman.

Merck resubmitted the U.S. application for its MS pill cladribine on June 8, trying to catch up with Novartis AG in the race to bring to market the first oral treatment against the debilitating disease.

If key pipeline drugs such as cladribine get rejected by regulators the margin could be 20 percent in the long term, Schnee said.

Merck’s drug unit, which accounts for about three quarters of group sales, is in need of a morale booster after it failed last year to win regulatory approval for the use of its blockbuster-hopeful Erbitux against lung tumors, the most common form of cancer.

In addition, prospects remain uncertain for U.S. approval of its experimental multiple sclerosis pill cladribine and for its cancer vaccine Stimuvax.

Schnee also told the BNP analysts he expected the U.S. Food and Drug Administration (FDA) to formally accept its reworked request for regulatory approval of cladribine in early August.

The pill could still win U.S. priority review status, as long as Novartis’ rival product Gilenia has not yet come to U.S. markets, he added.

Schnee also said he expected rival Gilenia to have only limited impact on demand for the current standard treatment of MS, so-called interferon beta injections, citing concern about Gilenia’s side effects.

Interferon betas, which account for much of the $8.6 billion spent each year on MS treatments, include Merck’s best-seller Rebif, Biogen Idec Inc’s Avonex, Bayer AG’s Betaferon and Novartis’ Extavia.

Schnee’s assessment contrasts with a ringing endorsement from U.S. experts for Gilenia this month, which cemented the pill’s blockbuster potential and suggested consensus sales estimates need to rise.

Gilenia is likely to be approved to treat U.S. patients with relapsing multiple sclerosis (MS) as early as the third quarter.

Some investors had been skeptical about Gilenia due to its side effects, but feedback from a panel of experts advising the FDA was more positive than many had expected.

Source: Reuters

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Much of the focus at the annual American Society of Clinical Oncology meeting is on experimental meds: What pipeline remedies are proving most effective for the companies testing them? But existing drugs sometimes steal the spotlight, at least temporarily. And this year’s meeting was no exception. Celgene’s Revlimid, Roche’s Avastin, and Bristol-Myers Squibb’s Sprycel are just three of them. Here’s a roundup of some of this year’s most interesting bits.

• The Bristol-Myers Squibb cancer drug Sprycel may be superior to the already highly effective standard medicine Gleevec in treating newly diagnosed patients with chronic myeloid leukemia, a new trial suggests. Sprycel is currently approved as a second-line treatment for CML, but Bristol is planning to use this data to support approval as a first-line drug.

• Roche’s Avastin can help keep ovarian cancer in check, but only if used for a long period of time, researchers reported. The study found that patients whose ovarian cancer had spread held off the disease for four months longer on a regimen of Avastin plus chemo compared with Avastin alone.

• Surprisingly, the Eli Lilly-BMS drug Erbitux didn’t work so well on patients with early-stage colon cancer, even after researchers screened patients to make sure they had a favorable genetic profile for the drug. The study “says what we learn in metastatic disease does not always apply to the adjuvant setting,” one of the lead authors said at a news conference (as quoted by the Los Angeles Times). “It also indicates that disease in early stage may be different than in later stage.”

• Two major studies of Celgene’s multiple myeloma drug Revlimid showed that when taken as maintenance therapy following stem-cell transplantation it reduced the risk of disease progression more than 50 percent.

• The Amgen drug just approved to treat osteoporosis, Prolia, outperformed the Novartis bone drug Zometa at delaying fractures and other skeletal events in men with advanced prostate cancer. The study is part of Amgen’s case for a cancer indication for its key new drug.

• Abraxis Bioscience’s cancer drug Abraxane outperformed the generic drug Taxol in patients with non-small cell lung cancer, without requiring patients to take steroids or antihistamines, U.S. researchers found.

Source: FiercePharma

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Researchers at Amgen found more mutations that show who will not be helped by its colon cancer drug Vectibix and said on Sunday the study shows companies can find efficient ways to find the right drugs for the right patients.

The company did a unique analysis of nine different genes that are mutated in colon cancers, all at once, to see if they could parse out any mutations that would lead to patients more likely to benefit from the drug, a so-called targeted therapy.

They did not find anything that pointed to patients who should take the drug, but found more mutations that show who should not, said Amgen’s Dr. David Reese.

“We have to identify the patient population that will benefit from the drug,” Reese told a news conference at a meeting of the American Association for Cancer Research.

Companies making targeted therapies for cancer have realized that they will also need to identify just who will be helped by these drugs. Standard cancer chemotherapy and radiation both target any growing cell — tumor or healthy cells.

That makes cancer treatments highly toxic. Targeted therapies can be gentler and more effective but only work against certain tumors.

Vectibix, known generically as panitumumab, is an engineered immune system molecule called a monoclonal antibody. It goes after a gene called EGFR, mutated in several types of cancer.

But cancer involves mutations of many genes and for some reason, patients who have a mutation in another gene called KRAS are not helped by Vectibix and some other drugs that target EGFR. About 40 to 50 percent of colon cancer patients have KRAS mutations.

MUTANT COUSIN

The Amgen team tested some other genes and found when a cousin of KRAS called NRAS was mutated, those patients also got no benefit from Vectibix. A second gene, BRAF, may also have interfered with the drug’s success but Reese said the results were unclear.

Mutations on the six other genes — AKT1, CTNNB1, EGFR, PIK3CA, PTEN and TP53 — did not predict how well a patient would do on the drug, Reese said.

But he said the study was proof of principle that next-generation sequencing, looking at many mutations in many genes all at once, would be useful for cancer biomarker testing.

“For each patient specimen all genes could be analyzed in the same sequence run,” Reese said.

The researchers also noticed that 50 of the patients had more than one of the mutations.

Erbitux, discovered by ImClone which is now part of Eli Lilly and Co. and sold by Merck KGaA and Bristol-Myers Squibb, dominates the so-called anti-EGFR market with 2008 sales of $1.6 billion — 10 times more than Vectibix.

Erbitux also only works in patients whose tumors contain the normal, or wild-type, version of KRAS.

Colon cancer is the second-biggest cancer killer in the United States, after lung cancer. More than 106,000 cases are diagnosed in the United States alone in a year and nearly 50,000 people will die of it.

Source: Reuters

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Merck KGaA is taking its magnifying glass to the data on Erbitux safety. That’s because European regulators, in reviewing and rejecting the drug for lung cancer earlier this month, uncovered an increase in “cardiac events” in older lung-cancer patients treated with Erbitux. The incidence appeared greatest in high-risk patients with existing heart problems, Bloomberg reports.

Merck spokeswoman Phyllis Carter tells the news service that the company is expected to follow up by looking at the data on patients given Erbitux for other indications. The drug is approved to treat colon cancer and head-and-neck cancers, and Merck doesn’t expect the labeling to change for those uses.

But that all depends on what the company finds when it analyzes the data, and even if new labeling just affects off-label use–or potential new uses–that could hurt. Analysts worry that any link to heart problems might force the sort of labeling change that would significantly eat into sales. Citigroup analyst Mark Dainty tells Bloomberg that, if a cardiac risk is found, the drug’s sales could drop by as much as $534 million. “Risk exists that a stronger label with warnings may result,” the analyst writes.

Source: FiercePharma

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Merck KGaA, the world’s largest maker of chemicals for flat screens, gave a cautious 2010 outlook well below market forecasts and cut its dividend reflecting uncertainty over its drugs pipeline.

The family controlled drugs-to-chemicals company said on Tuesday it was targeting 3-13 percent growth in core operating profit this year, below the 25 percent seen in a Reuters poll.

“The guidance for the pharmaceuticals business is very weak and there’s also little transparency,” LBBW analyst Hanns Frohnmeyer said.

The shares were down 6.8 percent to 60.07 euros at 0920 GMT, the lowest in almost a year, while the European DJ Stoxx Health Care Index was down 0.4 percent.

The German company proposed the first cut in its regular dividend since 2004, down to 1 euro per share from 1.5 euro last year, while analysts had predicted an unchanged payout.

Companies around the world including German carmaker Daimler have been slashing their 2009 dividends amid the economic crisis. Still, fellow drugmakers Novartis and Roche are paying higher-than-expected dividends.

FALLING BEHIND

Merck has fallen behind rival Novartis in the race to get the first oral multiple sclerosis treatment to market after U.S. regulators held up Merck’s application to bring its cladribine pill to market.

In addition, Europe’s drugs watchdog last year rejected Merck’s application to use its key cancer drug Erbitux against lung tumors, the most common form of cancer.

“It seems Merck has budgeted marketing and development expenses for cladribine for this year even though uncertainty over regulatory approval lingers,” another analyst said, speaking on condition of anonymity.

“The wide range given for the expected operating profit is particularly ill-received by the market,” he said.

Fourth-quarter core operating profit — excluding one-off items tied to its 2007 takeover of Swiss biotech company Serono — slipped 16 percent to 258 million euros ($351.5 million), missing the average estimate of 309 million in a Reuters poll.

That was mainly due to 170 million euros Merck set aside for pending legal disputes linked to its former generics business — sold to Mylan in 2006 — and to licensing and development agreements over its best-selling Rebif MS drug.

On the upside, the liquid-crystals unit — the world’s No. 1 maker of chemicals used in for TV-, computer- and hand-held displays — posted an operating margin of 45.3 percent, better than expected and up from 31 percent last year, as demand for consumer electronics picked up, especially in China.

Merck shares trade at about 12 times estimated earnings over the coming 12 months, below the average multiple of more than 13 for drugmakers, amid uncertainty over future sales of cladribine and Erbitux, based on StarMine data.

Thomson Reuters StarMine weights estimates according to analysts’ accuracy track record.

Source: Reuters

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Sam Waksal, the founder of ImClone Systems who fell from grace before the company became $6.5 billion takeover property for Eli Lilly, is back in the biotech world, trying to raise $50 million for a start-up, according to TheStreet.com.

Waksal (pictured at right in 2003) has an up-and-down bio highlighted by getting Imclone’s cancer drug Erbitux on the road to market. His lowlight came with a guilty plea to insider-trading charges for selling ImClone shares knowing FDA was going to issue a negative report on the drug before the agency’s eventual approval of it. Lifestyle diva Martha Stewart also avoided losses by selling ImClone shares, leading to her conviction on obstruction of justice charges.

Now Waksal wants to buy, develop or license new drugs aimed at cancer or infectious diseases, according to a prospectus being circulated to potential investors, according to TheStreet. It says $50 million would buy a 50% stake in the venture, which is called Kadmon.

Kadmon spells out its plans this say, TheStreet says:

We intend to replace the traditional, quantitative development paradigm of the pharmaceutical industry with a model that seeks out the most innovative elements of academia, and innovative activities in the private sector, dramatically increasing the number of high-value drugs we discover and develop, while keeping costs to a fraction of the industry mean.

Meanwhile, Lilly and Bristol Myers, which co-markets the drug, are trying to get it approved for an expanded list of uses. Erbitux produced 2009 revenue of $390.8 million of Erbitux, Lilly says.

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Is there a ceiling on the price of cancer drugs?

A medicine called Folotyn, approved earlier this year for patients with a rare form of lymphoma, costs $30,000 per month, the New York Times reports.

The drug hasn’t been proven to extend patients’ lives; in a study cited by the FDA, tumors shrank in 27% of patients who took the drug.

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The price of cancer drugs has been rising, and many now cost thousands of dollars per month. Erbitux for colon cancer, co-marketed by Bristol-Myers Squibb and Eli Lilly, costs $10,000 a month, to give one example cited by the NYT.

Allos, the company that sells Folotyn, tells the Times it made a significant investment to develop the first drug for peripheral T-cell lymphoma. The company says the price isn’t out of line with other drugs for rare cancers, and patients are likely to use the drug for only a few months, because the cancer it treats is so aggressive.

The new wave of expensive cancer drugs for very sick patients, combined with pressure to slow the rising cost of health care, makes this a thorny issue. Here’s further reading on how docs are learning to talk about drug prices with cancer patients, and on the regulations that limit Medicare’s ability to control the use and cost of cancer drugs.

Source: The Wall Street Journal

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Merck KGaA announced that it requested a re-examination of the negative opinion issued by the EMEA’s Committee for Medicinal Products for Human Use (CHMP) regarding the proposed use of Erbitux (cetuximab) to treat patients with non-small-cell lung cancer. The company said the decision “follows consultation with key stakeholders in the NSCLC treatment community, coupled with Merck’s confidence in the clinical data.”

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The drugmaker cited data from the late-stage FLEX study, and stated that “Erbitux is the first and only targeted compound in clinical development in more than 10 years to increase overall survival in an NSCLC patient population including all histologies.” Company spokesman Gangolf Schrimpf commented that Merck is open to restricting which patients with lung cancer are recommended to take Erbitux and does not intend to conduct additional testing to support the appeal.

The CHMP issued the negative opinion in July, saying it was concerned that Erbitux provided only a “modest” survival benefit to patients with lung cancer when added to standard chemotherapy. The committee also noted that some patients experienced severe side effects, which “were similar to the side effects seen in patients treated with Erbitux for other types of cancer.”

Source: FirstWord

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A European Medicines Agency committee did the unexpected late yesterday, recommending that the cancer drug Erbitux be rejected as a treatment for non-small-cell lung cancer.

That caught the investment community by surprise, according to DJ Newswires and Bloomberg. A Q&A about the refusal was posted on the European Union regulator’s Web site today.

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Shares of Merck KGaA, which markets Erbitux in Europe, were down over 14% in today’s trading in Frankfurt. Investors also weren’t pleased with second quarter earnings posted by the German company, which isn’t related to U.S.-based Merck. Bristol-Myers and Eli Lilly, which co-market Erbitux in the U.S., were relatively unaffected in early New York Stock Exchange Trading.

Merck thought the committee might impose some restrictions on the product’s use, as both the EU and U.S. regulators have required for Erbitux treatments in other patient populations.

“We never detected that a no-approval could be an option,” Elmar Schnee, chief of Merck’s drugs unit, said on a conference call with analysts. Merck will appeal the decision but expects a year’s delay in the drug launch even if Erbitux is approved for this use, notes DJ Newswires.

The committee felt that the benefits of Erbitux, when added to chemotherapy, were “modest in terms of survival times” and didn’t appear to slow down the cancer. And, side effects for patients could be severe, according to the document released today.

“The benefits of Erbitux in the treatment of non-small cell lung cancer did not outweigh its risks,” wrote the committee.

Source: The Wall Street Journal

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Amid much discussion around comparative effectiveness of medical treatments and whether cost should be a factor in treatment decisions, a new article in the Journal of the National Cancer Institute estimates it would cost $440 billion to extend life by one year for the 550,000 Americans who die annually of cancer, reports the WSJ.

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The authors, from the National Cancer Institute and National Institutes of Health, say that 90% of cancer drugs approved in the past four years cost more than $20,000 for 12 weeks worth of treatment.

Some drugs have limited upsides, and these shouldn’t be developed unless they will cost patients less than $20,000 for a standard course, they say. Two more recommendations from the authors: doctors shouldn’t prescribe cancer medicines for non-approved purposes, and new medicines with marginal benefits shouldn’t be used for those with advanced cancer.

Treating lung-cancer with Erbitux, a Bristol-Myers and Eli Lilly drug, costs $80,000 for an 18-week regimen but extends life by only 1.2 months, the authors estimate. Bristol-Myers says the real-world cost number of Erbitux is closer to $10,000 a month. Drug makers say the cost estimates are often exaggerated because most patients are only on them for limited amounts of time and many received financial assistance, according to the WSJ.

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So the challenge is this: How to develop new medicines — especially those that might help certain individuals a lot even if the benefit to patients as a group isn’t impressive — while trying to keep costs in check.

“We can’t add on Mercedes-like drugs one after another and have every single patient cost the system phenomenal amounts of money,” Eric Winer, chief scientific adviser to Susan G. Komen for the Cure, a breast-cancer advocacy group, told the WSJ. “But we have to be careful not to slow down the process of drug development. Ultimately it is medical therapy that will make a huge difference in people’s lives.”

Source: The Wall Street Journal

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