Pharma news in brief

BMS probe rolls on

The latest news on the inventory probe that has plagued Bristol-Myers Squibb (BMS) for more than a year is that the firm has put yet more cash into its litigation reserve, adding $110m to total $140m. The company, which received a subpoena from federal prosecutors in the US last week for information on antipsychotic treatment Abilify ñ one of BMSí biggest hopes ñ has been dealing with private litigation and government investigations since 2003, relating to an accounting scandal. The company admitted to overstating revenue by $2.5bn between 1999 and 2001 in a bid to meet sales targets. In a recent filing with the US Securities and Exchange Commission, the firm said that bolstering its litigation reserves would dent first quarter 2005 earnings by 16 per cent.

ABPI Code reviewed

The Association of the British Pharmaceutical Industry (ABPI) has seen a strong response to a public consultation on the review of its Code of Practice, which covers company promotion of prescription medicines to healthcare professionals in the UK, as well as provision of information to the public. Some 21 professional bodies, patient advocacy groups, campaigning organisations and private individuals, expressed their views on a range of topics, including the Codeís effectiveness and relevance to the NHS, ways in which to make improvements, awareness of the Code, and the quality of promotional activities undertaken by the industry. The full review process is expected to finish by the end of the year.

GSK buoyed on Corixa buy

GlaxoSmithKline (GSK) saw its sales reach the highest level since late in 2003 as the market reacted to its well-received move to buy US biotech firm, Corixa, which owns the rights to an integral component of GSKís vaccine products. The substance, called monophosphoryl lipid, is used to boost the effectiveness of the firmís cervical cancer vaccine, Cervarix, as well as Fendrix, its recently-approved (in Europe) vaccine for hepatitis B. Analysts said the buy out made sense for GSK, and was a good strategic decision as the company has several promising products in its pipeline that also contain monophosphoryl lipid. Completion of the buy-out is conditional on shareholder approval and regulatory clearance.

Hefty pharma float to test water

Pro Strakan, a marketing-led drugs firm led by Harry Stratford who also set up Shire in the mid 90s, is believed to be seeking a valuation of more than £250m and looking to raise up to £100m in one of the largest recent flotations for a company in the emerging pharma sector. The flotation is expected to provide a telling sentiment of investors towards emerging drugs firms. Pro Strakan, which is based in Scotland, is yet to turn a profit from its portfolio of womenís health treatments and products for older men, yet it generates some £20m a year in sales, operating across five European countries. The firm is expected to confirm plans to float later this month and has already started approaching investors.

AaiPharma eyes bankruptcy

AaiPharma, a specialist US drugs firm focused on pain management, is set to start Chapter 11 bankruptcy proceedings in early May having agreed to sell its pharma divisions for $170m. The cash-strapped company, which, in addition to developing and commercialising its own molecules, marketed several hospital products for use in critically ill patients, has also been delisted from the Nasdaq market and will undergo an investigation into its sales practices by the Securities and Exchange Commission. Under the sale agreement, AaiPharma will provide manufacturing and support services to the, as yet unnamed, purchaser of its pharma offering.