I don’t typically do this, but there have been a flurry of press releases with news from companies I cover so below you will find quick comments on each:
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Alnylam $ALNY presented phase 1 data from its ALN-TTR01 RNAi program on 11/21/2011 at the VIIIth International Symposium on Familial Amyloidotic Polyneuropathy conference. Click here for ALNY research page. Click here for slide deck. Check out the complete webcast recording on EarningsCast.com. Also read my notes from a related Burrill Report podcast with ALNY management Keep reading for my notes from the conference call. Alnylam $ALNY President and COO Barry Greene appeared on a Burrill Report podcast following the announcement of phase 1 ALN-TTR01 data demonstrating RNAi proof of concept in humans. Visit the ALNY research page for additional company, partnership, and drug candidate info. Keep reading below for my notes from this podcast. ALNY also held a conference call on 11/21 and I will post notes separately from that event.
Pfizer this morning announced a buyout of privately-held Excalliard. Excalliard is developing EXC001, an antisense drug against CTGF for scarring (their trials to date have been in abdominal and breast revision surgery). You can get more info on the drug, clinical trials, and some photos of results on my ISIS research page. This is a surprise to me, because while PFE is interested in fibrosis, they have appeared to be the large pharma least inclined to delve into the realm of antisense and RNAi drugs. EXC001 has successfully completed several phase 2 studies, but they announced the need for additional phase 2 work before phase 3. Since the company didn't have the money to execute this program, a buyout is not a huge surprise. The terms are not disclosed, but consist of an upfront payment plus contingent payments. The details in a press release from ISIS, plus knowledge of their license agreement with Excalliard can put a reasonable estimate on the terms. ISIS receives $4.4m of the upfront and currently owned somewhere less than 10% of Excalliard. I believe the ownership stake is at least 5% if it mirrors similar deals by ISIS (and they have participated in later financings by Excalliard to maintain their stake), which would value the upfront payment at $88m. The minimum upfront value would therefore be $44m. ISIS stands to receive up to $9.6m regulatory and commercial contingent payments from PFE, placing the total deferred amount in the range of $96-192m. Of course if I am wrong and the ISIS stake was lower than 5%, then the size of the deal is even larger. Not back for a virtual biotech started about 4 years ago. Isis also still can receive payments under the terms of their license agreement with Excalliard. ISIS can receive up to $10.5m additional milestone payments, plus (presumably single digit) royalties on sales of EXC-001. EXC001 was the subject of an IND filing in 2009 and positive phase 2 data from three trials was announced in early 2011. A new phase 2 trial initiated in 2q2011 and appears to have completed enrollment. A presentation at the last ISIS annual shareholders meeting projected a 2015 NDA filing for this program.
A commentary entitled "The Shortage of Essential Chemotherapy Drugs in the United States" by Drs Mandy Gatesman and Thomas Smith appeared in the New England Journal of Medicine on October 31, 2011. There are some interesting takeaways from this piece, including some perspective on the ongoing market conditions between Spectrum Pharma's (SPPI) Fusilev (levoleucovorin) and generic leucovorin. "In a survey from the Institute for Safe Medication Practices, 25% of clinicians indicated that an error had occurred at their site because of drug shortages. Many of these errors were attributed to inexperience with alternative products — for instance, incorrect administration of levoleucovorin (Fusilev) when used as a substitute for leucovorin or use of a 1000-mg vial of cytarabine instead of the usual 500-mg one, resulting in an overdose" "The main cause of drug shortages is economic. If manufacturers don't make enough profit, they won't make generic drugs. There have been some manufacturing problems, but manufacturers are not required to report any reasons or timetable for discontinuing a product. Contamination and shortages of raw materials probably account for less than 10% of the shortages. In addition, if a brand-name drug with a higher profit margin is available, a manufacturer may stop producing its generic. For instance, leucovorin has been available from several manufacturers since 1952. In 2008, levoleucovorin, the active l-isomer of leucovorin, was approved by the Food and Drug Administration. It was reportedly no more effective than leucovorin and 58 times as expensive, but its use grew rapidly. Eight months later, a widespread shortage of leucovorin was reported." Generic leucovorin costs $32 per dose, whereas Fusilev costs $1284 - these extreme price differences also exist between other older generics (paclitaxel and doxyrubicin also cited) and their brand name competitors. This cost disparity contributes to the lack of commitment to generics in another way - the way that oncology drugs are purchased by doctors and then reimbursed by the healthcare payers. These rules were changed in 2003 to be a fixed 6% above cost - this provides incentive to prescribe the higher priced drugs since they make more money for the oncology practice. The article goes on to discuss various reform possibilities that would address this and other issues in the healthcare system - I'll leave those discussions for another day! This issue also was raised on a recent Sanofi conference call - speaks to the possibility that the generic leucovorin suppliers may not have much incentive to quickly resolve production delays. This would of course be a positive for SPPI's continued strong Fusilev sales. SNY call quotes: "So the issue in the U.S. is that there is an extreme shortage of certain older generic injectible drugs, principally. This appears to be a result of the fact that, as the FDA is busy becoming more demanding on inspections throughout the industry, including the generic sector. We all know that you have to continuously invest in injectible manufacturing technology. This is some of the most sophisticated and demanding production in the biopharmaceutical space. And it appears that some companies are finding that the upgrades to manufacturing are not really justified, given the really low margins on some products. So a number of companies appear to have gone out of stock. I encountered this in meetings with the FDA in the U.S. I was actually surprised to learn that this isn’t really a short-term issue, this has been going on for a minimum of a year. So – and you’ve seen that the president has actually asked the FDA – it’s the first, I think, executive order that president of the United States has given the FDA in over 40 years – to actually look actively at how the FDA can facilitate others to come into the market and supply some of these products. Some of these are Sanofi products that we produce in Europe and around the world. And so we have made an offer that we could potentially – if there was a regulatory path, that we could potentially provide product. But at this stage, there’s nothing concrete to report and not clear whether the FDA will in fact provide that regulatory pathway."
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