Biotech Strategy Blog

Commentary on Science, Innovation & New Products with a focus on Oncology & Hematology

Posts tagged ‘Biotech’

I will be at WordCamp Phoenix tomorrow, along with 650 other attendees, for what is set to be an exciting meeting. Not only is it a great opportunity to escape the lousy New Jersey weather, but the meeting program is awesome.

I’m looking forward to learning from WordPress experts and enthusiasts about how I can improve this blog, its design, marketing and functionality. Saturday’s session schedule can be found here.  I have to say the volunteers who set up this meeting have done a great job!!

What’s more, I will be giving a lightning talk (20 slides in 5 minutes) on how to submit a takedown notice under the Digital Millennium Copyright Act (DMCA).  This is my first time doing an Ignite style lightning talk, and the first time speaking before 650 people, so I’m a bit nervous, but life is about new challenges and opportunities.  Should be fun, and if all fails there’s the after party to look forward to!!

I’m looking forward to meeting new people and having a good time at WordCamp Phoenix this weekend.

A conference on Innovation in Healthcare is being held in Cambridge, MA on Tuesday, February 1, 2011.

The speaker list is impressive and includes Michael Porter (Porter’s 5 forces model is well known to all MBA students), John Mendelsohn (President of MD Anderson), Janet Woodcock (Director of Center for Drug Evaluation and Research at FDA) and Peter Senge (author of the Fifth Discipline: The art and practice of the learning organization).

The symposium, whose lead sponsor is Merrimack Pharmaceuticals, will discuss how to to improve the system for delivering healthcare services, and how to increase the productivity of translating biomedical research into medical innovation.  The conference certainly has ambitious goals in the topics it plans to cover!

Innovation to me is about adding value, whether that be in the delivery of a service or the development of a new product by a biotechnology company.  If you are in the Boston area on February 1, this one day symposium at MIT looks well worth attending, and the registration fee is inexpensive ($50).

In a case that is set to have major impact on the biotechnology industry, the United States Supreme Court heard oral argument yesterday in the case of Matrixx Initiatives Inc. v. Siracusano. The question presented to the court is:

“Whether a plaintiff can state a claim under § 10(b) of the Securities Exchange Act and SEC Rule 10b-5 based on a pharmaceutical company’s nondisclosure of “adverse event” reports even though the reports are not alleged to be statistically significant.”

You can find all the briefs and documents related to the case on the excellent Scotusblog. website.  A transcript of yesterday’s oral argument has been published on the U.S. Supreme Court website.

At issue is whether knowledge of possible adverse events is material information that must be disclosed to investors, even if not statistically significant.  The biotechnology industry argue that such a requirement would impose an unreasonable burden upon them and could lead to drugs not being developed.

Matrixx Initiatives is a pharmaceutical company that sells OTC cold remedy products including Zicam Cold Remedy Nasal Gel that was recalled in 2009 following an FDA determination that the product was not safe.  During the period 2002- 2004 the company became aware of reports that use of its nasal gel was linked to a loss of smell, anosmia.  The company did not announce this information to investors until after several law suits were filed and several notifications of a possible link between the smell loss and Zicam nasal gel had been made to it.

Shareholders subsequently brought a class action law suit alleging that the company and its executives violated the Securities Exchange Act of 1934 by failing to disclose material information.  The District Court granted Matrixx’s motion to dismiss the complaint and action for a failure of the shareholders to make a claim.  The U.S. Court of Appeals for the 9th Circuit in a June 2009 opinion reversed this decision, and the U.S. Supreme Court granted a writ of certiorari to hear an appeal.

Rule 10b-5 of the Securities and Exchange Commission (SEC) states that:

“It shall be unlawful for any person directly or indirectly…. to make any untrue statement of a material fact or to omit to state a material fact …in connection with the purchase or sale of any security.”

In the Matrixx case, the shareholders claimed that the failure of the company to disclose information regarding the possible link between Zicam and anosmia was the omission of a material fact.  In other words had they known that there was a possibility that Zicam could cause a loss of smell, they would not have bought shares in the company at the price they paid for them or would have sold them.

What is the standard for deciding if something is material?  It is “…whether there is a substantial likelihood that a reasonable shareholder would consider the fact important” TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976).

The District Court dismissed the complaint against Matrixx on the basis that the reports of anosmia were not statistically significant, and therefore not material.

The U.S. Court of Appeals for the 9th Circuit reversed the trial court’s decision, based on the U.S. Supreme Court decision in Basic Inc. v. Levison, 485 U.S. 225, 236 (1988) that held “[t]he determination [of materiality] requires delicate assessments of the inferences a “reasonable shareholder” would draw from a given set of facts and the significance of those inferences to him.”

The 9th Circuit rejected the use of a bright line test of statistical significance as the standard to apply in deciding whether data was material or not.  Instead, the Court of Appeals engaged in a fact-specific inquiry and concluded that between 2002 and 2004 there was sufficient information to make a plausible claim that should be put to a jury.

In reversing and remanding the district court’s dismissal of the shareholders action, the 9th Circuit concluded that “the District Court’s reliance on the statistical significance standard to conclude that Appellants failed to establish materiality is inconsistent with the Supreme Court’s rejection of bright-line rules and its emphasis on having materiality determined by the trier of fact.”

The case is now on appeal to the United States Supreme Court, and several leading biotechnology associations have filed amicus briefs seeking to have this decision over-turned.  Bay Bio argue that the non-disclosure of statistically insignificant adverse event reports does not make a company’s statements about its products or earnings fraudulent under the securities laws.  Bay Bio raises the concern that failure to disclose isolated reports of adverse events, even if not medically or statistically significant, will lead to potential liability.  In their amicus brief, Bay Bio argue that:

“If left standing, the Ninth Circuit’s rule will require companies to make boilerplate disclosures of adverse event reports virtually every time that they make a statement, along with a disclaimer that the company does not believe that such reports have any bearing on their statements. Such an information dump will add nothing to the mix of information already available to reasonable investors. At the same time, such disclosures will needlessly cause consumers to avoid using safe, beneficial drugs.”

I am not sure that I agree with this position.  Are adverse events material information – yes?  If only statistically significant data mattered, then scientific papers and presentations of clinical trial results would not include non-significant information.  In fact, an adverse event may be significant in one trial and not in another, based on the sample size, power of the study, patient selection criteria and clinical trial design.

I am not persuaded that only statistically significant data are material to physicians, investors and patients.

As to the burden on the industry, I am also not sure that I accept the dark picture painted that making adverse event data available will be an unreasonable burden, in light of existing reporting mechanisms.  One has to remember that Zicam nasal gel, the product in question in this case, was being sold to consumers – it was not an investigational product.  Looking at the totality of the information about a potential serious adverse event such as loss of smell, one has to believe that after several reports and law suits, there was some obligation to let investors and consumers know.

What’s the outcome in the U.S. Supreme Court – clearly to grant a writ of certoriari, there are at least four justices who wish to hear this case.  Whether they have a pro-business view that requires this case be overturned or a pro-consumer view that favors full disclosure of information to investors, I have no crystal ball as to the outcome.

Justice Kagan in oral argument was razor sharp, noting that:

“the FDA takes action all the time as to drugs, they force the withdrawal of a drug from the market, they force relabeling of a drug on the basis of findings that are not statistically significant. Now, clearly in those cases the market has a right to know the very things that are going to make the FDA take action against a product and that are going to severely affect the product’s value to the company. Not statistical significance there.”

She pointed out to Jonathan Hacker, Esq. the attorney for Mattrix that he was:

“suggesting a test for what counts as material, which is statistically significant, a test that the FDA itself doesn’t use when it thinks about what it should what should regulate.”

Justice Kagan clearly was on good form and went on with the following hypothetical, how would you answer it?

“There’s a pharmaceutical company and it comes out with its first and only product, it’s 100 percent of the sales, and it’s a new contact lens solution.  And it sells this product to many, many, many hundreds of thousands of people.  And most of them use this product with no adverse effect whatsoever, but there are ten cases where somebody uses this product and they go blind.  Three of those ten cases, the person had to borrow a contact lens from a friend, only used it in one eye, they go blind only in that one eye.  This is not statistically significant.  There is no way that anybody would tell that you these ten cases are statistically significant.  Would you stop using that product and would a reasonable investor want to know about those ten cases?”

My answer would be “yes” I would want to know and even though not statistically significant, this is material information that I would want to know about before it was talked about on “Good Morning America” and everyone then dumped their stock.

So at the risk of alienating those in the biotechnology industry who think otherwise, my money is that the court will uphold the 9th Circuit opinion and not impose a bright line rule that materiality is governed by statistical significance.  We can expect a decision towards the summer on a case that may lead to major changes in how adverse events are reported by pharmaceutical and biotechnology companies.

As an update to this morning’s blog post that mentioned Vertex’s VX-770, the company have just announced their key business objectives for 2011.  Further information will be included in the presentation by Vertex at the JP Morgan Healthcare conference scheduled for later today.

The news in Cystic Fibrosis is that if the phase 3 clinical trial data is positive the NDA for VX-770 is expected in the second half of 2011.  The following are the relevant sections from the press release:

Cystic Fibrosis: Phase 3 Registration Program for VX-770 Nears Completion

VX-770 NDA Submission Planned for Second Half of 2011

  • Three trials of the novel cystic fibrosis transmembrane conductance regulator protein (CFTR) potentiator VX-770 are fully enrolled and ongoing as part of a global Phase 3 registration program focused on patients with the G551D mutation. The G551D mutation is present in approximately four percent of people with CF.
  • The first Phase 3 data for VX-770 are expected in the first quarter of 2011 and will come from the Phase 3 STRIVE trial in people aged 12 and older with at least one copy of the G551D mutation. Data from the Phase 2 DISCOVER trial, which was primarily a safety study that enrolled people aged 12 and older with two copies of the F508del mutation, are also expected in the first quarter of 2011.
  • Data from the Phase 3 ENVISION trial in people aged six to 11 with at least one copy of the G551D mutation are expected in mid-2011.
  • If positive, the results from the Phase 3 program for VX-770 could support the submission of an NDA for VX-770 in the second half of 2011.

In addition, Vertex announced that they expected interim data in the first half of 2011 from the phase 2 trial that combines VX-770 with VX-809:

Combination of Two CFTR Modulators for the Treatment of People with the Most Common Mutation of Cystic Fibrosis

  • Vertex is conducting a Phase 2a clinical trial to evaluate multiple combination regimens of its lead CFTR Modulators – VX-770, a CFTR potentiator, and VX-809, a CFTR corrector – in people with the most common mutation of CF, known as F508del. Enrollment is ongoing in Part One of the trial, which is designed to evaluate VX-809 (200 mg), or placebo, dosed alone for 14 days and in combination with VX-770 (150 mg or 250 mg), or placebo, for 7 days. Vertex expects to obtain interim data from Part One of the trial in the first half of 2011.

2011 looks to be an interesting year for Cystic Fibrosis and it is certainly positive to see biotechnology companies such as Vertex developing new products for this debilitating illness.

One of the exciting things about the biotechnology industry is its ability to innovate and translate developments in basic science into potential new drugs.

I previously wrote about denufosol in cystic fibrosis (CF), a disease that affects about 30,000 people in the United States and 70,000 worldwide.  The disease is characterized by the accumulation of mucus that leads to bacterial overgrowth and chronic lung infections. Mucus cannot be removed from the lung in CF due to abnormal mucociliary transport resulting from impaired epithelial chloride secretion and sodium hyperabsorption.  This is now known to be due to defective cystic fibrosis transmembrane regulator (CFTR) protein. A good overview of this can be found in the 2006 New England Journal of Medicine Editorial by Felix Ratjen, “Restoring Airway Surface Liquid in Cystic Fibrosis.”

A good overview of the pipeline of new drugs in development for CF can be found on the Cystic Fibrosis Foundation web site.  Vertex in particular has two drugs  (VX-809, VX-770) in late stage development that are cystic fibrosis transmembrane conductance regulators, aimed at increasing CFTR function.  Phase 3 registration data for VX-770 is expected in the first half of 2011. I look forward to writing about the results.

Recently, a team from Johns Hopkins led by Neeraj Vij published a paper in the January 2011 issue of Journal of Immunology on the “Critical Modifier Role of Membrane-Cystic Fibrosis Transmembrane Conductance Regulator-Dependent Ceramide Signaling in Lung Injury & Emphysema.”

The researchers found that lung damage in mice was associated with changes in the amount of CFTR in the cell surface membrane.  Decreases in the amount of CFTR were associated with increased ceramide, a trigger of inflammation of cell-death. Or as the the paper describes it:

“CFTR expression inversely correlates with severity of emphysema and ceramide accumulation in chronic obstructive pulmonary disease subjects compared with control subjects.”

The emergence of inflammation as a key role in chronic disease was the subject of a previous blog post about diabetes, so is interesting to see another area where it is involved.

This basic research shows that developing drugs that target CFTR and mediate ceramide may have an important role to play in the treatment of emphysema, a chronic obstructive pulmonary disease (COPD) that affects 2 million Americans.  Translational medicine that can take basic science and apply it to clinical practice is key to the long term success of the biotechnology industry.

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Following on from the recent rise in Xoma shares, that i discussed in yesterday’s blog post, the company announced this morning that they have signed a commercialization deal with Les Laboratoires Servier, France’s largest privately held pharmaceutical company (2010 revenue 3.7 billion euros).

According to the press release, the key elements of the deal are:

  • XOMA will receive approximately $35 million upfront, up to approximately $470 million in milestone payments and tiered royalties up to a mid-teens percentage rate.
  • XOMA retains development and commercialization rights for Behcet’s uveitis and other inflammatory and oncology indications in U.S. and Japan. Servier receives similar rights in the rest of the world.
  • Servier will fund the first $50 million of XOMA 052 development expenses and 50% of further expenses for the Behcet’s uveitis indication. XOMA 052 is expected to advance into Phase 3 development in Behcet’s uveitis in 2011.
  • Servier will fund development for diabetes and cardiovascular disease indications in exchange for worldwide rights.
  • XOMA retains an option to reacquire the development and commercialization rights to the diabetes and cardiovascular indications in the U.S. and Japan by paying an option fee and partial reimbursement of incurred development expenses. If XOMA reacquires these rights, it has the ability to license them to one or more third parties.

It is a large injection of cash into Xoma that will help fund phase 3 clinical trials.  The regional deal also keeps open the possibility of licensing U.S. marketing rights to another partner in the future. The only surprise perhaps is the timing of the announcement which is in advance of the phase 2 clinical trial results for Xoma 052 in diabetes. The expectation from all the signals is that this data will be positive.

There are no guarantees in clinical research, so it will be interesting to see what happens to Xoma 052 as it moves forward in development.

Thanks to Adam Feuerstein of TheStreet for breaking the news this morning, that shares in Inspire Pharmaceuticals (NASDAQ: ISPH) have plunged following the announcement of negative data from the phase 3, TIGER-2 clinical trial for denufosol in cystic fibrosis.

According to the Chief Medical Officer at Inspire Pharma: “The analysis of the primary endpoint, key secondary endpoints and select subgroup populations in TIGER-2 indicates an absence of meaningful treatment benefit in this patient population.

I wrote a blog post last week about denufosol and the hope that this drug offered to cystic fibrosis patients despite the uncertainty about its clinical effectiveness.

The latest data is disappointing and a major setback to Inspire Pharma. It highlights the risk/reward situation that many emerging biotechnology companies face with new product development, the hope that they will make it to market, coupled with the reality that many will fail.

World Intellectual Property Organization LogoIntellectual property (IP) rights are important in the biotechnology industry; one only has to look at a licensing, consulting or service agreement to appreciate this.

If you are a non-lawyer new to the area, and wish to gain a basic understanding of the different types of intellectual property protection such as copyright, trademarks, industrial design, patents and unfair competition, then the World Intellectual Property Organization (WIPO) Academy offers a free general course (DL-101).

The course is delivered online, twice a year, over 6 weeks.  If you are a native English speaker, it takes far less time to complete than the 50 hours suggested.  What makes the course work well is you can download the study material as PDF files. These can then be read anywhere – I used my kindle.

An additional benefit, if you have an ego wall in your den or office, is that WIPO send you a certificate after you pass a final exam.  When I lived in the UK, I put all my certificates on the wall in the downstairs toilet,  an idea I “borrowed” from Mrs Thatcher’s eye surgeon when I had dinner at his home. British understatement at its best.

Although the WIPO general course is not focused on biotechnology or the life sciences industry, it does provide a useful overview of international treaties and IP regulation to build upon.  It is worth considering if you are new to the area.

With best wishes for the New Year, may it bring you good health, happiness and prosperity.

A company I have been watching for a while is Philadelphia based Avid Radiopharmaceuticals, now a wholly owned subsidiary of Lilly. They have a novel imaging biomarker, florebetapir (18F-AV-45) in development for the detection of Alzheimer’s disease.

In a press release last week, Lilly announced that the FDA had assigned a priority review to the marketing application of florebetapir. The Peripheral and Central Nervous System Drugs Advisory Committee of the FDA meet on January 20, 2011.

Bayer have a competitor product in development, forebetapen (BAY 94-9172). Both florebetapir and florebetapen are 18F radiolabelled imaging biomarkers that bind to amyloid plaque in the brain.  When used in conjunction with a Positron Emission Tomography (PET) scan, they enable the accumulation of amyloid that occurs in Alzhemeir’s disease to be visualized.

Phase 3 trial results for florebetapir published earlier this year showed that the brain amyloid burden seen in the PET scans positively correlated with the plaques seen in autoposies of the same patients.  Proof that what the imaging biomarker shows is an accurate representation of the underlying pathology.

What makes the use of florebetapen and florebetapir interesting is that it is already common practice to use imaging tracers with PET scans. Fluorodeoxyyglucose (FDG) is widely used in the diagnosis, staging and treatment of oncology patients as a result of its ability to show the intense glucose uptake that occurs with most cancers.

Both Avid and Bayer products are most likely to be approved based on the clinical data presented to date.  It will be interesting to see the prices that they intend to charge.

As for the market opportunity, they are likely to have a role to play in the early diagnosis of patients with mild cognitive impairment, since at present it is difficult to diagnose these patients and differentiate Alzheimer’s disease from other forms of dementia.  Most likely, models will be developed that look for a correlation between accumulation of amyloid plaque and decline in cognitive function, from which a probability of developing Alzheimer’s disease can be calculated.

Imaging biomarkers are likely to place an increasingly important role in the development of new products by biotechnology companies and in the design of clinical trial endpoints.

The race to bring a biosimilar version of Sanofi-Aventis’ low molecular weight heparin, Lovenox® (enoxaparin sodium), to market had three players, Momenta Pharmaceuticals in partnership with Sandoz, Amphastar Pharmaceuticals and Teva.

The winner was Momenta/Sandoz who (as mentioned in a previous post) recorded $292 million of sales in 69 days post launch.   As reported by the Wall Street Journal, Amphastar are now suing the FDA alleging the agency acted arbitrarily in delaying its imports of raw heparin.  There certainly seems to be no love lost between Amphastar and the FDA, who earlier this year alleged a conflict of interest between Janet Woodcock, the Director for the Center for Drug Evaluation and Research (CDER) and Momenta as a result of the collaboration that identified the contaminant in chinese heparin that killed patients in 2008.  Following an FDA investigation, Woodcook was cleared of any conflict of interest but announced she would not participate in the biosimilar approval decision.

In the run up to the approval, the FDA visited the manufacturing facilities for all three companies. Afterwards the status of the Amphastar application became less certain. Unlike Amphastar, both Teva and Sandoz had prior experience of obtaining FDA approval for biosimilar products.

Given the amount of money at stake, its easy to see why Amphastar are unhappy. However, alleging conflicts of interest and arbitrary practices does not exactly win friends and influence people.  I am sure the FDA have a credible factual basis for their decision making, in which case Amphastar is unlikely to get anywhere, other than generate negative publicity for themselves.  Others may differ in that opinion, and if you want to read a legal analysis of the Amphastar complaint, the FDA Law Blog’s post is worth reading. It also has a link to the actual complaint filed.

The more interesting question is when is the FDA going to approve the Teva biosimilar version of Lovenox®? When this happens, Sandoz’s first mover advantage will come to an end and further price erosion is likely. According to Reuters, analysts predict this may happen before the end of 2010.

Update: Amphastar gains FDA approval for generic Lovenox

As reported by Ed Silverman on Pharmalot (September 19, 2011), “Amphastar Pharmaceuticals has finally won approval to sell a generic version of Lovenox

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