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Week-in-Review Editorial: 14 to 20 September

Welcome to the Week-in-Review editorial for 14 to 20 September 2007

Cuts or no cuts?
This week press stories have been following AstraZeneca's (AZ) supposed move to outsource its drug manufacturing operations over the next 10 years.

In an interview with The Times, AZ's executive vice-president of operations, David Smith, said that manufacturing for the company was no longer a core activity. The Times also quoted him as saying he was heading up a restructuring move which would cut costs and augment profits and that the company would reposition itself as a pure research, development and marketing concern.

However, the UK's second-largest pharmaceutical company responded the next day by saying that the original purpose of the Times interview was to discuss how the pharmaceutical industry was looking to other industries for Supply Chain practices and philosophies and that outsourcing supply and manufacturing activities, as implied in the article, was not part of AZ's overall company strategy.

The company added that it would, however, use outsourcing where there was a sound business case. For example, it is currently exploring the manufacture of Active Pharmaceutical Ingredients (API) the basic chemicals used to formulate conventional medicines.

Pfizer isn't denying anything
AZ's denial may possibly be a PR exercise to calm employees who must be worried, especially in the wake of Pfizer's decision close its UK manufacturing operation plant in Kent. Over 400 jobs will go. Pfizer stressed that the closure was part of its previously announced plans to consolidate its worldwide manufacturing operations to manage global capacity and demand more efficiently.

Cuts are inevitable for pharmaceutical companies looking to streamline operations as upcoming patent expiries threaten top-selling products, while the drug pipelines have gaping holes in them.

sanofi-aventis' R&D meeting disappoints
Beleaguered French pharmaceutical company, sanofi-aventis (S-A) held a press meeting in Paris this week, identifying a potential successor to Lovenox (enoxaparin), the company's top-selling anti-thrombotic. At 20 mg, AVE 5026 is already showing 40 per cent less post-operative bleeding than Lovenox.

The replacement drug can now be administered once weekly instead of daily. Initially, it sounds great, but since German-headquartered Boehringer Ingelheim (BI) this week released positive data regarding its daily oral thrombin inhibitor dabigatran showing it was equal to Lovenox, S-A's revelations start to look less promising.

Dabigatran will be popular among patients and healthcare providers as Lovenox and its replacement still require patients to self-inject or have a healthcare professional do it. The new drug will also be a potential rival to Bayer's BAY 59-7939 (rivaroxaban), which proved superior to Lovenox, when given after knee surgery in a clinical trial earlier in 2007.

More failures confirmed, but repositioning could save the day
Back at S-A, reports of the late stage failure of paliroden were confirmed by Jean-Marc Podvin, vice-president of media relations for S-A, who said it was no longer in the portfolio and was discontinued due to poor efficacy.

Better news from S-A was the announcement that it was planning to submit its obesity treatment Acomplia (rimonabant) for worldwide approval in 2009 for a new indication to treat type II diabetes, after clinical trials showed it was comparable with anti-diabetics. The potential blockbuster tumbled after the FDA refused to approve the drug in the US for obesity due to safety concerns.

Despite a desire to appear more open, S-A has not appeased analysts, and its share price dropped on Monday and ended 2.3 per cent lower at EUR 60.8 following the meeting.

20th September 2007

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