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News in brief, March 21, 2007

The latest news in brief

Industry news

Shire and Servier break ABPI Code of Practice
UK and French pharmaceutical firms, Shire and Servier, have been the subjects of admonishments through advertisements in the medical and pharmaceutical press which highlight breaches of the ABPI Code of Practice for the pharmaceutical industry. The Prescription Medicines Code of Practice Authority (PMCPA) advertises brief details of all cases where companies are ruled in breach of Clause 2 of the code, are required to issue a corrective statement or are the subject of a public reprimand.

Shire breached the code by failing to comply with an undertaking in relation to a claim that had already been ruled in breach of the code under case AUTH/1825/4/06. As a result, the company was ruled in breach of the following:

  • Clause 2 - Bringing discredit upon, or reducing confidence in, the pharmaceutical industry
  • Clause 9.1 - Failing to maintain a high standard
  • Clause 22 - Failing to comply with an undertaking

Servier breached the Code by using inappropriate material when training representatives on how to target hospital staff. As a result, the company was ruled in breach of the following:

  • Clause 2 - Bringing discredit upon, or reducing confidence in, the pharmaceutical industry.
  • Clause 9.1- Failing to maintain a high standard.
  • Clause 15.9- Failing to make available appropriate briefing material to instruct representatives on how to engage with health professionals.

Sun spins off R&D unit
Indian pharmaceutical company, Sun Pharmaceuticals, has revealed it will spin off its existing R&D functions into a new company called Sun Pharma Advanced Research Company (SPARC) at a cost of USD 45m (EUR 33.8m/ GBP 23m). The move will include the companyís New Chemical Entity and New Drug Delivery System programmes. Total investment in the new R&D arm has been cited at around USD 70m over the next three years. Sun will retain generic drug development and research within the parent. Sun recently revealed its R&D pipeline, which includes an anti-allergic treatment in phase II, as well as three new preclinical drugs for epilepsy, muscular pain and Chronic Obstructive Pulmonary Disease (COPD) ready for phase I testing in 2008. In drug delivery development, Sun has a gastro-retentive, wrap-matrix nanotechnology immersion technology, biodegradable implants and an ophthalmology technology at various stages of development. Sun says the spin off will benefit investors by permitting them to hold investments which offer different return characteristics. SPARC has received analyst valuations of approximately USD 450m (EUR 338.4m/ GBP 229.7m), while its strategy of decentralising R&D activities distances risk from the parent company is seen as an attempt to increase investor confidence. Sun says its R&D costs could be reduced 35 per cent by the move, adding to net profits. Domestic competitor, Dr Reddyís, set up drug development company, Perlecan Pharma, in 2005, receiving an equity commitment of USD 45m from Citigroup and ICICI Venture as a result.

Former DongA CEO urges support for foreign investors
Ousted CEO of South Korean pharmaceutical company DongA, Moon-Seok Kang, has issued a shareholder letter in connection with the upcoming contested meeting of shareholders of the firm. In it, he cites the board of directors' illegal attempts to disenfranchise shareholders by omitting properly submitted proposals overturned by court rulings, which required inclusion of proposals on the agenda for the upcoming meeting. He warned that in order to support the candidates, non-Korean investors should submit voting instructions by 19 March 2007.

Zogenix Closes USD 10m deal with GE Healthcare Financial Services
Privately held, US neuroscience company has received USD 3.5m of a USD 10m loan facility with GE Healthcare Financial Services (GEHFS). Zogenix will use the loan to finance the launch of its first product, sumatriptan Intraject, for the treatment of acute migraine. Intraject is Zogenix's proprietary needle-free, pre-filled, single-use delivery technology for subcutaneous drug administration. Roger Hawley, Zogenix's CEO said of the deal: "GE understands our business and quickly knew what we were trying to accomplish with this financing. With this loan, we are taking a critical step towards achieving our goal of becoming a fully-integrated specialty pharmaceutical company. Completing the product development and commercial manufacturing readiness for our first product launch are key priorities for 2007 and goals we are committed to achieving." GEHFS' life science finance group has partnered with more than 500 companies throughout the US, Canada and the EU, providing over USD 2bn in financing to the life science market. Zogenix said it is looking for licensees for its patented Intraject drug delivery system.

Value of new cancer drugs questioned
A report in the Los Angeles Times on 18 March 2007 has questioned the value of the expensive, new generation cancer drugs, which it says extend lives by only a few months. The drugs, which can cost as much as USD 100,000 for a year's supply, and their relatively limited health benefits have caused fierce debate among policymakers and medical professionals about what to do with the growing number of people spending their life savings on the drugs. Drug companies and some patients "insist even incremental gains" in their health "are worthwhile", even as the cost burden of such drugs grows for patients, who increasingly are paying percentages of treatment rather than co-payments, says the Times. In addition, because insurers typically pay for FDA-approved drugs, the cost of covering the treatments "would eventually spill into the nation's overall medical bill and therefore would raise everyone's insurance premiums". FDA approval of the drugs for use in early-stage cancers also could significantly expand use, which could increase healthcare costs overall. Some physicians have begun to offer payment plans to patients who use the drugs, while some biotech drug manufacturers have placed caps on patient spending. For example, patients can receive Amgen's Vectibix for no cost after co-payment for the drug exceeds five per cent of their adjusted gross income. Meanwhile, patient advocacy groups, such as Breast Cancer Action, are pushing for legislation to limit the prices drug companies could charge for biotech drugs. Peter Neumann, director of the Center for the Evaluation of Value and Risk at Tufts-New England Medical Center, said: "In terms of the cost of a life saved, it's possible other areas of medicine, like better disease prevention or better cardiovascular care, may be more effective".

Marketing news

Critical Therapeutics to co-promote SkyePharma's Zileuton CR with DEY
UK-based SkyePharma has revealed that its co-marketing partner for chronic asthma treatment Zileuton CR, Critical Therapeutics (CTI), is to enter into a co-promotion agreement with US-headquartered developer, manufacturer and marketer of airway and allergy medications, DEY, an affiliate of German pharmaceutical firm, Merck KGaA. The agreement will unleash a combined sales force of 240 representatives to promote the drug, once it receives approval in the US . The FDA is reviewing the New Drug Application for Zileuton CR, which has a Prescription Drug User Fee Act (PDUFA) date of 31 May 2007. Product launch is scheduled for H2 2007, pending regulatory approval. Zileuton CR uses SkyePharma's proprietary GEOMATRIX oral drug controlled release technology, which permits the simultaneous release of two different drugs, at different rates, from one tablet. It can deliver an initial burst of a drug for fast therapeutic effect, followed by controlled-release at a constant rate, or can deliver a drug to specific sites within the patient's digestive system, through either a single or multiple dose release.

HES launches medical education courses in the US
UK-headquartered, Healthcare Education Services (HES), has introduced a range of medical education courses to the US market. HES' training courses provide medical education in a range of therapy areas and a variety of marketing issues. They are led by expert faculty and involve lectures, case discussions and group work, encouraging delegates to develop a thorough understanding of the topic concerned. The courses are provided for medical and non-medical staff within the pharmaceutical industry, including those from clinical research, medical information, regulatory affairs, biometrics and strategic marketing departments. HES' Director, Valerie Smith, said: "We have planned a series of four courses to be held in the US in 2007. All to be held in Princeton, New Jersey, the topics will be Pricing & Reimbursement Master Class, Introduction to Oncology & Chemotherapy, Haematological Malignancies, Psychiatric Disorders." To access more information on the courses click on the following link: www.healthcare-ed.com/courses

Pharma marketers not using digital marketing effectively at work
A survey conducted by US market research companies, Medical Broadcasting Company (MBC) and CBI Research has revealed that a "relevance gap" between how most marketers in the pharmaceutical industry use the Internet for personal reasons, compared with how they market to consumers and healthcare practitioners. While the majority reported they used social media, two-way communication, personalised content and product comparison, fewer than half implemented those options in dealings with customers. For personalised content, 72 per cent of respondents used this functionality for private use, while only 42 per cent implemented it in their marketing plans. The gap was even wider in the case of advanced technologies, showing that 82 per cent of the marketers surveyed report using interactive tools out of work, compared with a mere 20 per cent using it with customers. Finally, 71 per cent of the marketers surveyed regarded the Internet as a channel for providing information and services on demand, rather than the kind of awareness-generation typified by mass-media direct-to-consumer (DTC) advertising. Of those surveyed, 37 per cent planned to increase spending on DTC campaigns, while 47 per cent planned to increase spending to target healthcare professionals in 2007.

Pfizer launches new Lipitor campaign
Pfizer will launch a new advertising campaign for its cholesterol-lowering drug Lipitor (avorstatin) during the first week in April in the US. The new campaign will run on television and in print and will add information about the new uses of Lipitor. The FDA approved Lipitor earlier this month to reduce the risk of several problems in patients with heart disease including hospitalisation for heart failure. In June 2006 Merck & Co. lost patent protection of its cholesterol-lowering agent Zocor and health plans began promoting the generic form (simvastatin) over Pfizer's product.  Lipitor is the world's best-selling drug, with annual sales of USD 12.9bn in 2006.

Report identifies how pharma and doctors can improve patient compliance
A Datamonitor Research and Markets report entitled "eHealth for the Pharmaceutical Industry: What Companies Need to Know about Trends in Physicians and Consumers Use of the Internet" details the key characteristics of patients who use or would be willing to use eHealth applications and services Identification of the most commonly used sources of online health information. The report reveals how end users navigate to these sources and analyses the opportunities to meet the online needs of doctors and consumers. The report concludes pharmaceutical companies providing online resources which help doctors practice medicine more efficiently and effectively will attract return site users and foster brand loyalty. Marketing initiatives can be developed to accommodate varying levels of usage: risk-assessment surveys or dosing calendars and disease and product information can be offered in a printable format so frequent Internet access is unnecessary. A trend toward gaining voice among prescribers is to reach them online, though not through Internet-enabled mobile technologies, but through home computers. Fifty per cent of doctors in the US and the EU and thirty-three per cent of physicians in Japan access the Internet for work-related purposes from home at least 50 per cent of the time. Click on the link to access the report: http://www.researchandmarkets.com/reports/c52361

GSK fined for predatory pricing
GlaxoSmithKline (GSK) has been fined USD 13.2m (EUR 9.9m/ GBP 6.7m) for hindering the use of generic drugs in French hospitals by dramatically lowering the price of an injectable antibiotic. The Conseil de la Concurrence ruled that GSK sold injectable Zinnat below cost in 1999 and 2000 in order to push generic companies out of the hospital market. GSK is appealing the decision. This is the first case in France to penalise predatory pricing, a policy where pharma companies set a very low price that doesnít cover production costs in order to freeze out competitors. Then the companies typically increase prices when competition has left the market to recoup the money lost.

Half of early-stage pharma marketing budgets spent on KOLs
US drug companies spend an average of 37 per cent of their drug's marketing budgets on thought leader development, programs and activities in the early development stages, according to a new report, entitled "Early-Stage Pharmaceutical Marketing Budgets: Preparing for Product Launch", published by US business intelligence firm Cutting Edge Information. An extra 10 per cent of overall commercialisation spending goes toward developing new thought leader relationships, an activity that most brand teams consider crucial to shaping the clinical development of new drugs and preparing the markets to accept new drugs after product launch. Market research is the only other area besides thought leader development and programmes that consumes more than 10 per cent of early-stage commercialisation budget. According to Cutting Edge Information's report, drug companies spend an average of 29 per cent of their overall marketing budgets on market research activities. More information on the report can be accessed by clicking on the link: www.EarlyStageMarketing.com

Understanding clinical trials in Poland and other CEE countries
French market research company, Reportlinker.com, has published a new report related to the Eastern European pharmaceutical market, entitled "Clinical trials in Poland 2007: A comparison of Poland and other Central and Eastern European countries". The report is based on a survey conducted in Q3 2006 among the management staff of 110 companies operating on the Polish market, with around 60 per cent representing clinical research divisions of pharmaceutical companies and the remaining 40 per cent representing CROs. Since these organisations account for 80 per cent of all businesses of this type present in Poland, the research findings are representative of the entire population. The survey focused on enterprises that in 2005 and 2006 conducted clinical drug trials, excluding those that engaged in testing of medical equipment, cosmetics, bandaging, etc. The publisher also carried out interviews with selected industry experts who were asked to compare the clinical research environment in Poland to that in other countries in the region. Details of the report can be accessed by clicking on the following link: http://www.reportlinker.com/p046321/clinical-trials-poland.html

Biotech news

New Polish biotechnology firm created
A group of private pharmaceutical firms and scientists from Polish scientific institutions, supported by Polish Technology Platform for Biotechnology, have created a new biotechnology company in the country. Created on 22 March 2007, the new entity will develop, manufacture and sell therapeutic monoclonal antibodies. The firm will also invest PLN 50m (EUR 13m) over the next three years to develop new drugs. Financing for the development of the company will come from partners and funds made available by the Polish government and the EU, which support such initiatives. Investors will also provide the firm with regulatory, marketing and financial support. The as yet unnamed company plans to place its shares on the technology firms listing currently in development with Warsaw Stock Exchange (WSE). FY2006 global sales of monoclonal antibodies exceeded USD 15bn, with a growth rate six times higher than the total pharmaceutical market. In the next five years, sales from this drug category are forecast to exceed USD 40bn, or 60 per cent of the value of all biotechnology drugs.

Financial news

Global pharma sales rise seven per cent in 2006
A new IMS report has revealed strong US sales and growth in specialty areas, such as cancer, which in turn supported a seven per cent rise in the global pharmaceutical market in 2006 to reach USD 643bn. The rise was also helped by emerging markets and changed the downward trend seen in the past four years. Pharmaceutical sales growth has been curtailed by patent expirations, tougher reimbursement policies and lack of research productivity. Drug sales have declined annually since rising 11.8 per cent in 2001, including a 6.8 per cent increase in 2005. In 2006, sales of products prescribed mainly by specialists helped drive growth, rising 11 per cent to USD 230bn. Cancer drugs topped the specialist categories, with sales up nearly 21 per cent to USD 34.6bn. Sales in the US, the world's largest pharmaceutical market, gave a big boost to global 2006 results, rising 8.3 per cent, much in advance of the 2005 5.4 per cent increase. The Indian market rose 17.5 per cent to USD 7.3bn, making it one of the fastest-growing, with IMS citing a robust economy and acceptance of intellectual property rights as the major factors aiding growth. Market growth in China was restrained, rising a mere 12.3 per cent to USD 13.4bn in 2006, compared with nearly 21 per cent in 2005. IMS said the lower growth stemmed from a government campaign to limit physician promotion of pharmaceuticals.

Vindon profits up on safe storage demand
UK headquartered Vindon, which provides controlled storage for the pharmaceutical industry, has posted a rise in pre-tax profit with current trading buoyed up by strong demand for in-house storage. Current order books and enquiry levels indicate that steady growth should continue to be achieved in the coming year, claimed the company. Pre-tax profit for FY06 rose to GBP 849,000 from GBP 499,000 in FY05. Turnover rose to GBP 3.8m from GBP 2.6m in FY05. On a pro-forma basis, turnover rose 22.4 per cent to reach GBP 702,000, reflecting an increase in storage revenue with a number of new clients gained. The group said it hopes to expand its operations by opening a site in Ireland for late 2007. No dividend for the year was proposed.

Sanofi-aventis cuts 200 jobs in Ireland
Sanofi-aventis (S-A) has become the latest pharmaceutical company to announce job cuts, axing 200 jobs at its Waterford plant in Ireland. The Franco-German company will cut the jobs by the end of 2007 at the plant which manufactures mature and OTC products including Essentiale (polyene phosphatidylcholine) for liver protection and Flagyl (metronidazole) for microbial infections. The proposed job cuts have to undergo a 30-day consultation period looks likely to go ahead. An evaluation of the company's plant network, concluded there was an excess capacity and that S-A's other sites would be able to absorb Waterford's product volume without much extra investment. S-A said the site had suffered from the continuing decline of European market due to generic competition. Pfizer recently announced 500 job cuts in Ireland, but it is not all bad news; GlaxoSmithKline last month announced Waterford as the location for a EUR 23m OTC production site.

Regulatory and approvals news

Tykerb gets green light from FDA
US regulators gave the green light to Tykerb (lapatinib), the GlaxoSmithKline once-a-day pill which could revolutionise the treatment of breast cancer. Tykerb has been christened the "Trojan Horse" because it gets inside the proteins which promote cancer. It will be used to treat a range of solid tumours. The FDA has initially allowed GSK to sell Tykerb to patients with advanced cases of breast cancer and is to be taken together with chemotherapy. GSK believes Tykerb could supersede Swiss pharmaceutical company Roche's Herceptin (trastuzumab) as the top drug to treat the HER2 strain of breast cancer. City analysts reckon Tykerb will become a blockbuster drugs with annual sales of at least GBP 520m. Further good news on GSK's pipeline of drugs is expected in April 2007, when the company is expected to file cervical cancer vaccine Cervarix for approval in the USA.

FDA warns against Zyvox
The FDA has issued a safety alert regarding Pfizer's antibiotic Zyvox (linezolid) after a recent clinical trial found a higher chance of death in patients treated with it compared to other antibiotics. The study compared Zyvox to antibiotics vancomycin, oxacillin and dicloxacillin, in the treatment of patients with bloodstream infections related to catheters. In the trial, the chance of death was also related to the type of organism related causing the infection. The choice of antibiotic did not affect the chance of death for patients with Gram positive infections. However patients infected with Gram negative infections, both Gram negative and positive infections, and no infection at all had a higher chance of death. Earlier this month the MHRA ordered Pfizer to withdraw all advertising claiming Zyvox had superior cure rates to vancomycin. Pfizer was also sent a warning letter by the FDA in July 2005, regarding Zyvox advertising which claimed it was superior to vancomycin.

People news

New managing director for Sentrix
The Sudler network of healthcare communications companies has promoted Wayne Traub to the position of managing director of its New Jersey Sentrix Global Communications office. Traub was previously executive vice-president and client service director at Sudler & Hennessey in New York City. He joined the firm in 1983 and focused during his time there on "the proven power of the 'white coat endorsement'" in marketing over-the-counter healthcare products, according to Sudler. He has particular expertise in oral care and dermatology, the agency added. US-headquartered Sentrix also has offices in Milan and Paris. The company focuses on providing marketing support to pharmaceutical and biotech clients.

Edelman enters Indonesia
US-based Edelman's Hong Kong office has entered into a partnership with Indo Pacific Public Relations (IPPR), Indonesia's largest independent PR firm, to create a new brand, Indo Pacific Edelman (IPE), which will be launched in April. IPPR Senior Technical Advisor Chadd McLisky will continue to lead the team of 114 staff, working closely with Bob Grove, Edelman's managing director for Southeast Asia. Edelman said the new brand will focus on serving clients in the healthcare, technology, FMCG and oil and gas sectors. Edelman noted that its revenues in Asia Pacific have grown an average of 25 per cent year-over-year for the past three years, and that additional regional growth is expected to result from "increasing client demand for social media campaigns and acquisition of consumers at the 'bottom of the pyramid' in countries such as Indonesia, Malaysia and India." IPPR, which was founded 14 years ago, has particular expertise in crisis management and issues management.

Euro RSCG Life restructures
Euro RSCG Life has formed Euro RSCG Life x 2, a new company that consolidates five of its former divisions into one organisation in order to offer healthcare clients integrated, comprehensive solutions rather than "silos of independent expertise," according to the firm. The divisions that have been merged are Euro RSCG Life Adrenaline, Interaction, Lightning Communications, Managed Edge, and Medical Education. An executive board formed to aid in the transformation from five divisions to one organisation includes Jeff Hoffman, who will lead client services; Gene Cavazos, who will lead business development and marketing; Terry Gallo, who will lead creative; Frank Buchner, who will lead technology; and Michelle Savaglio, who will lead operations.

21st March 2007

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