Just a few days after Seattle Genetics bid goodbye to Roche as the pharma giant pulled out of an $860 million partnership deal, the developer pulled the wraps off a new development pact with Takeda’s U.S. cancer subsidiary Millennium. Seattle Genetics gets $60 million upfront, development funds and a schedule of milestones that could total more than $230 million from Millennium as they team up on a promising ”empowered antibody” now in a pivotal trial for Hodgkin’s disease and lymphomas.

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The Seattle-based developer put this program–brentuximab vedotin–in the spotlight at the 2008 summer ASCO meeting. At that point, researchers stirred considerable interest in the antibody, with early-stage data demonstrating that it had either eradicated or was able to shrink tumors in 12 of 38 patients in a clinical trial. And as Xconomy notes, follow-up data on the program underscored its potential. Pivotal Phase II data is due in the second half of 2010 with marketing applications expected for the U.S. and Europe in 2011.

The Takeda Group snared commercial rights to the drug outside of the U.S. and Canada, where Seattle Genetics retains full rights. And Takeda also says that it expects to provide $75 million in development funding over the next three years.

“This collaboration closely aligns with our growth strategy, which includes both internal and external opportunities,” said Millennium CEO Deborah Dunsire. “We are very excited to bring forward a novel medicine which will help us increase our reach in oncology throughout Europe and the rest of the world.”

Source: FierceBiotech

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One more Japanese drugmaker is making a big buy overseas: Dainippon Sumitomo Pharma said it’s planning to pay $2.6 billion for Massachusetts-based Sepracor, which sells the sleeping pill Lunesta.

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The agreement announced by both companies today is the latest effort by Japan’s pharamaceutical industry — Dainippon is the country’s No. 7 drug maker by sales –- to reach overseas to replace revenue streams as patents expire on domestic products. Earlier deals have included Takeda spending almost $9 billion to buy Millennium and Eisai shelling out nearly $4 billion for MGI Pharma.

Sepracor has patent issues of its own, however, as Lunesta and another big seller, the asthma treatment Xopenex, are set to lose protection in the next few years, notes Dow Jones Newswires. Lunesta’s sales already have been hurt by competition from generic versions of Sanofi-Aventis’s Ambien.

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Still, Dainippon plans to seek U.S. approval soon for its antipsychotic drug Lurasidone. And Sepracor’s U.S. presence could help the company market the drug in this country.

Still, there are skeptics about the wisdom of the deal — the company will have to take out a bridge loan for more than $2 billion to pay for the deal.

Source: The Wall Street Journal

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The publically traded biotechnology industry is entering a period of significant change in our view. Companies in the industry are always in need of cash, and with big pharmaceutical firms cash-rich and in desperate need of pipeline drugs, M&A and licensing activity has been taking place at a torrid pace over the past few months. That being said, biotech firms are being divided up into two categories, the haves and the have-nots.

The haves are getting stronger. These are firms with access to cash either through their own product revenues or through big pharma licensing deals. They are being acquired and are doing the acquiring. The have-nots are cash-strapped and struggling to survive.

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Of the 225 publically traded biotechnology firms in our database, only 10 trade with a market capitalization over $2 billion, according to the Zacks database. Only 18 trade with a market capitalization over $1 billion. There are only five large-cap firms, or those that have a market capitalization over $10 billion: Amgen, Genzyme, Gilead Sciences, Biogen Idec, and Celgene.

Survival of the Fittest
The truth is, it’s hard to find a successful large-cap biotechnology company because most get acquired before they reach large-cap status. Names including Immunex, Myogen, ICOS, ImClone, MedImmune, Millennium, and Serono all had the potential to become large-cap biotechnology firms but were acquired instead.

The days of the independent large-cap biotechnology company are coming to an end. Two of the largest biotech companies in the world, Genentech and Centocor, are owned by pharmaceutical companies Roche and Johnson and Johnson, respectively. Of the independent big-cap names, we would not be surprised to see Gilead, Biogen, and Celgene all gone within the next few years.

We are witnessing a period where the strong get stronger, while the weak are left fighting to survive. An astonishing 148 companies of the 225 in our database (66%) are considered microcap, i.e., they trade with a market capitalization below $100 million. Only 57 stocks (25%) trade above $5 per share. Nearly half the industry at 109 firms (48%) trades below $1 per share.

There’s a reason for that: Cash is drying up, and big pharmaceutical companies are cherry-picking the winners. And among those companies left independent, a large percent trade at sub-$1 levels, because biotech drug development is both extremely expensive and very high-risk. As a result, most biotechnology companies either fail in the clinical program or run out of money while trying.

Big Pharma Should Use Their War Chest More
Having said that, M&A activity could increase further. There seems to be a significant psychological impediment to pharma-biotech M&A activity. Large pharmaceutical companies have been far too slow to spend money on biotechnology M&A or licensing. Most pharmaceutical names are sitting on billions of dollars in cash, while their late-stage research pipelines are drying up. Pharmaceutical companies made so much money in the 1990’s and early 2000’s that there is almost a lasting hubris that has yet to allow reality to sink in for some of the upper level managements.

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Big pharmaceutical executives can be kids in a candy store with respect to the number of deals available right now. Roughly 40% of the industry has less than 12 months of cash on hand, according to Biotechnology Industry Organization (BIO). Asset prices are cheap for early-stage molecules. There are some great deals available right now for big pharma to take advantage of. Instead of actually going into the store and buying the candy, however, pharma managements are waiting outside the store, confused and overwhelmed.

Biotech Firms Need to Cash Out Earlier
On the flip-side, most management at biotech firms are overconfident, underexperienced, and fail to truly understand the competitive landscape for their drug. This results in biotech companies reluctant to partner with pharmaceutical companies too early in the development process, because they think they can either do it alone or they will command a far greater price the further along they develop the asset.

In theory, this is true. The difficulties of commercializing a successful biotech drug, however, only increase as development pushes further along. And successfully completing a Phase III trial is not the finish line, it is just the start of a whole new marathon that now includes preparing an NDA/BLA, getting that application passed by the FDA, manufacturing the drug, and then, managing a sales force, as well as Wall Street expectations. As a result, an asset that was partnerable after encouraging Phase II data becomes unpartnerable after the Phase III trial fails or the FDA requests additional data prior to approval.

Like watching NBC’s “Deal or No Deal,” knowing when to take the money and run is a difficult task. And like most participants on the TV show, most biotech companies take things one step too far. Most biotechnology companies are started by a brilliant scientist with an idea. These companies dream of becoming the next Genentech, Amgen, or Genzyme. But building a successful biotechnology company takes a lot more than just a brilliant scientist with a great idea. Management must have expertise in designing a clinical trial to prove the drug does what they theorized. They need expertise in filing an NDA/BLA, dealing with the FDA, and manufacturing the drug. And once the company commercializes the product, a whole new slew of challenges relating to selling and managing the brand ensue. Very few biotechnology companies do this well.

A brilliant scientist is not always a brilliant businessman. Enbrel was a product that was significantly hammered by manufacturing issues early on in the launch. As a result, Immunex stock struggled. Amgen management, though, saw an opportunity to take the expertise they obtained with Epogen and Neupogen and turn Enbrel into the mega-blockbuster it is today.

Similarly, sales of Cialis were never the reason why ICOS stock suffered. It was the massive operating expenses necessary to drive those sales and the mounting losses associated with the company’s joint venture with Eli Lilly. Companies like MedImmune and CV Therapeutics were sold at significant premiums not because things were going so well, but because the managements at those firms had taken the products as far as they could, and larger organizations such as AstraZeneca and Gilead Sciences, with expertise on the commercial end of the busines, saw an opportunity.

The majority of brilliant scientists who start biotechnology companies seem hesitant to monetize their assets, because they are waiting around for the big payoff. They fail to take the deal in hopes that going one more round will bring an even bigger payout. Half the industry is trading below $1, though. A good chunk of those names had an opportunity to partner, license, or sell prior to the stock falling to that level.

It is likely that several micro-cap biotechnology companies would have never declined to micro-cap status had they partnered the drug with a more seasoned pharmaceutical company with expertise in how to design a clinical program or how to successfully file an application with the FDA. These are no easy tasks. Such significant hurdles that exist beyond the science of drug discovery are what caused a large portion of the above 148 firms to fail.

Industry Requires More M&A
Too many biotechnology companies are in desperate need of cash. And too many pharmaceutical companies, ripe with cash, are in desperate need of drugs. It’s natural order that these firms should be getting together. Yes, we have seen a torrid pace of biotech-pharma M&A activity so far this year. That pace is still, nonetheless, far below what it should be. This has created a rather difficult market for their respective stock prices.

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Perhaps, if the psychological barriers to partnering are lifted. more deals would get done. Biotechnology companies should focus on discovering new drug candidates up to the proof-of-concept stage. And once proof of concept is achieved, larger pharmaceutical organizations should pay up for the technology.

If this starts to happen at an accelerated pace, both pharmaceutical and biotech stock prices should rise in concert. Perhaps, scientists that start biotechnology companies should set aside their goals of becoming the next Genentech, Amgen, or Genzyme. Instead, they should be focusing on becoming the next ICOS, CV Therapeutics, or Immunex. Know when to take the deal.

This story was written by Jason Napodano, senior biotech analyst at Zacks Investment Research.

Source: GEN News

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Amgen and Millennium: The Takeda Oncology Company, a subsidiary of Takeda Pharmaceutical Company Limited (TSE: 4052), today announced that enrollment in the Phase 3 MONET1 trial evaluating motesanib (AMG 706) in combination with paclitaxel and carboplatin for the first-line treatment of advanced non-small cell lung cancer (NSCLC) has been temporarily suspended following a planned safety data review of 600 patients by the study’s independent Data Monitoring Committee (DMC). Motesanib is part of a broad co-development program between Amgen and Takeda.

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The DMC recommended that enrollment in the study, which allowed both squamous and non-squamous NSCLC patients, be suspended based on an observation of higher early mortality rates in the motesanib group compared to the placebo group. In addition, the DMC recommended that the patients with squamous NSCLC immediately discontinue motesanib therapy based on an observation of a higher incidence of hemoptysis. The DMC did not recommend discontinuation of motesanib therapy for the patients with non-squamous NSCLC. The DMC will review updated data after three months. Amgen, in collaboration with Takeda Bio DevelopmentCenter, is implementing both of the DMC’s recommendations and notifying worldwide regulatory agencies, including the U.S. Food and Drug Administration (FDA), European Medicines Agency (EMEA), and Japan’s Pharmaceuticals and Medical Devices Agency (PMDA), as well as motesanib clinical investigators.

“While we are disappointed in this outcome, it is consistent with data seen with some other anti-VEGF therapies and appears to constitute a class effect of these types of agents,” said Roger M. Perlmutter, M.D., Ph.D., executive vice president of Research and Development at Amgen. “Patient safety is our top priority, hence we have acted quickly to implement the recommendations of the DMC. Working with our development partner, Takeda, we will continue to evaluate the therapeutic potential of motesanib in non-squamous NSCLC and metastatic breast cancer, as well as in other solid tumors.”

“NSCLC continues to be an area where new and effective therapies are needed. We look forward to the follow up recommendations from the DMC in order to chart the best path forward for the development of this molecule,” said Nancy Simonian, M.D., chief medical officer, Millennium: The Takeda Oncology Company.

MONET1 (Motesanib NSCLC Efficacy and Tolerability Study) Trial Design

This Phase 3, multicenter, randomized, placebo-controlled, double-blind trial has enrolled 1,100 of 1,240 planned patients with advanced NSCLC. Patients with either squamous or non-squamous NSCLC were allowed in this study. Squamous NSCLC is a histological subtype of NSCLC and accounts for approximately one-third of the study population. The primary endpoint is overall survival, and secondary endpoints include progression-free survival, objective response rate in patients with measurable disease, duration of response and safety. Patients were randomized 1:1 to receive carboplatin and paclitaxel administered every three weeks with or without 125 mg motesanib taken daily.

About Motesanib

Co-developed by Amgen, Takeda Pharmaceutical Company, and Millennium: The Takeda Oncology Company, motesanib is an investigational, highly selective, oral agent that is being evaluated for its ability to inhibit angiogenesis by targeting vascular endothelial growth factor receptors 1, 2 and 3 (VEGFR1-3). It is also under investigation for its potential direct anti-tumor activity by targeting a family of proteins called tyrosine kinases, including platelet-derived growth factor receptor (PDGFR), and stem cell factor receptor (c-kit), two proteins involved in cell proliferation.

About Amgen

Amgen discovers, develops, manufactures and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science’s promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disorder, rheumatoid arthritis, and other serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people’s lives. To learn more about our pioneering science and our vital medicines, visit http://www.amgen.com.

About Takeda

Located in Osaka, Japan, Takeda Pharmaceutical Company Limited (TSE:4502) is a research-based global company with its main focus on pharmaceuticals. As the largest pharmaceutical company in Japan and one of the global leaders of the industry, Takeda is committed to striving toward better health for individuals and progress in medicine by developing superior pharmaceutical products. Additional information about Takeda is available through its corporate website, http://www.takeda.com.

About Millennium

Millennium: The Takeda Oncology Company, a leading biopharmaceutical company based in Cambridge, Mass., markets VELCADE, a novel cancer product, and has a robust clinical development pipeline of product candidates. Millennium Pharmaceuticals, Inc. was acquired by Takeda Pharmaceutical Company Ltd. in May, 2008. The Company’s research, development and commercialization activities are focused in oncology. Additional information about Millennium is available through its website, http://www.millennium.com. Forward-Looking Statement

This news release contains forward-looking statements that are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including estimates of revenues, operating margins, capital expenditures, cash, other financial metrics, expected legal, arbitration, political, regulatory or clinical results or practices, customer and prescriber patterns or practices, reimbursement activities and outcomes and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those discussed below and more fully described in the Securities and Exchange Commission (SEC) reports filed by Amgen, including Amgen’s most recent annual report on Form 10-K and most recent periodic reports on Form 10-Q and Form 8-K. Please refer to Amgen’s most recent Forms 10-K, 10-Q and 8-K for additional information on the uncertainties and risk factors related to our business. Unless otherwise noted, Amgen is providing this information as of Nov. 19, 2008 and expressly disclaims any duty to update information contained in this news release.

No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Discovery or identification of new product candidates or development of new indications for existing products cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate or development of a new indication for an existing product will be successful and become a commercial product. Further, preclinical results do not guarantee safe and effective performance of product candidates in humans. The complexity of the human body cannot be perfectly, or sometimes, even adequately modeled by computer or cell culture systems or animal models. The length of time that it takes for us to complete clinical trials and obtain regulatory approval for product marketing has in the past varied and we expect similar variability in the future. We develop product candidates internally and through licensing collaborations, partnerships and joint ventures. Product candidates that are derived from relationships may be subject to disputes between the parties or may prove to be not as effective or as safe as we may have believed at the time of entering into such relationship. Also, we or others could identify safety, side effects or manufacturing problems with our products after they are on the market. Our business may be impacted by government investigations, litigation and products liability claims. We depend on third parties for a significant portion of our manufacturing capacity for the supply of certain of our current and future products and limits on supply may constrain sales of certain of our current products and product candidate development.

In addition, sales of our products are affected by the reimbursement policies imposed by third-party payors, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment as well as U.S. legislation affecting pharmaceutical pricing and reimbursement. Government and others’ regulations and reimbursement policies may affect the development, usage and pricing of our products. In addition, we compete with other companies with respect to some of our marketed products as well as for the discovery and development of new products. We believe that some of our newer products, product candidates or new indications for existing products, may face competition when and as they are approved and marketed. Our products may compete against products that have lower prices, established reimbursement, superior performance, are easier to administer, or that are otherwise competitive with our products. In addition, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors and there can be no guarantee of our ability to obtain or maintain patent protection for our products or product candidates. We cannot guarantee that we will be able to produce commercially successful products or maintain the commercial success of our existing products. Our stock price may be affected by actual or perceived market opportunity, competitive position, and success or failure of our products or product candidates. Further, the discovery of significant problems with a product similar to one of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products and on our business and results of operations.

The scientific information discussed in this news release related to our product candidates is preliminary and investigative. Such product candidates are not approved by the U.S. Food and Drug Administration (FDA), and no conclusions can or should be drawn regarding the safety or effectiveness of the product candidates. Only the FDA can determine whether the product candidates are safe and effective for the use(s) being investigated. Further, the scientific information discussed in this news release relating to new indications for our products is preliminary and investigative and is not part of the labeling approved by the FDA for the products. The products are not approved for the investigational use(s) discussed in this news release, and no conclusions can or should be drawn regarding the safety or effectiveness of the products for these uses. Only the FDA can determine whether the products are safe and effective for these uses. Healthcare professionals should refer to and rely upon the FDA-approved labeling for the products, and not the information discussed in this news release.

Source: Amgen

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