Pharma News Analysis

Safety Not Guaranteed of Vaccine Manufactured in the USA - Merck's Hib Recalled in China

When most people all over are worried about the safety of products manufacured in China, here is another unfortunate twist...

"Merc announces voluntary recall of certain lots of edvaxhib(R) and Vomvax(R)...

Some fun commentary from Seeking Alpha.com:

"Showing that drug product safety concerns cut both ways, Chinese officials pulled more than 100,000 vials of a childhood vaccine manufactured by Merck (MRK) from Chinese shelves. However, it may be better to import than to produce domestically, as China officials claimed that parents need not be worried because foreign-sourced drugs are subjected to regulatory scrutiny before they are allowed into China. That scrutiny did not stop China from removing the drug from further sales.

The vaccine, known as Hib, protects against meningitis, pneumonia and other infections. It is administered as a three-dose regimen to children under age five. Typically, the first dose is given at the age of two months.

Last Wednesday, Merck made the announcement that it could not guarantee the sterility of a run totaling 1.2 million vials of its Hib vaccine, made in a Pennsylvania manufacturing facility. Once China officials received the recall notice, they realized that almost 10% of the recalled supplies were in China.

The vaccine has been administered since October. So far, no serious adverse effects have been noted. Experts told parents to check for redness around the administration site as a precaution.

The 1.2 million vials of possibly-contaminated vaccines made their way to eight municipalities and provinces in China, including Beijing."

This could be a huge nightmare for Merck to recall in China...

Favorite CEO to Retire Next Year... Mr. Sidney Taurel of Eli Lilly

One of my favorite pharma leaders, Mr. Sidney Taurel will retire next year... Here is a press release from Lilly.com ...

"Sidney Taurel to Retire as Lilly CEO; John Lechleiter Named as Successor

December 18, 2007

Lechleiter to assume CEO role on April 1, 2008; Taurel will continue as Chairman of the Board until end of 2008

INDIANAPOLIS, Dec 18, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Eli Lilly and Company (NYSE: LLY) today announced that Sidney Taurel, chief executive officer and chairman of the board, will retire as CEO effective March 31, 2008. Taurel will remain chairman of the company's board of directors until December 31, 2008, at which time he will retire from the board and from the company. John C. Lechleiter, Ph.D., currently president and chief operating officer, will assume the role of president and chief executive officer as of April 1, 2008.

Taurel has been the company's chief executive officer since July, 1998, and the chairman of its board of directors since January 1, 1999. He joined Lilly in 1971 as a marketing associate in Eli Lilly International. After sales and marketing experiences in Brazil, Eastern Europe and France, he became general manager of the company's affiliate in Brazil in 1981. He subsequently assumed the London-based role of vice president of Lilly's European Operations in 1983, and then moved to Indianapolis in 1986 as president of Lilly International. In 1993 he was named an executive vice president of the company and president of the pharmaceutical division, and in 1996 was promoted to president and chief operating officer of the corporation.

....

"I am grateful to have spent nearly 37 years with this great company, and deeply honored to have had the opportunity to lead it for the last ten. I am very proud of what my Lilly colleagues around the world have accomplished together during a decade of both successes and challenges," said Taurel. "I believe that 2008 is the right time for me to retire for a number of reasons. First, the company has executed very well over the past couple of years, exceeding both our and our shareholders' expectations. As a result, the company is operationally very sound and positioned for continued success. Second, I and the senior leadership team have laid out a vision for the company that will guide Lilly for many years to come, and this gives me great confidence about Lilly's future success. And third, John has been preparing for his new role as my successor for several years, and 2008 is the right time for him to assume his place as the leader of the company."

Upon Taurel's recommendation, the company's board of directors has unanimously elected Lechleiter chief executive officer and president effective April 1, 2008. Lechleiter has served as president and chief operating officer since October 2005.

Lechleiter joined Lilly in 1979 as a senior organic chemist in process research and development, and he became a head in that department in 1982. In 1984 he began serving as director of pharmaceutical product development for the Lilly Research Center (Erl Wood) in Windlesham, England, and he subsequently returned to the U.S. in 1986 as manager of research and development projects for Europe. In 1988, he became director of development projects management, and in 1989 assumed additional responsibility for pharmaceutical regulatory affairs, chemistry, manufacturing and control. In 1991 he was named executive director of pharmaceutical product development and became vice president in 1993. Lechleiter was appointed vice president of regulatory affairs in 1994, vice president of Lilly Research Laboratories in 1996, and senior vice president of pharmaceutical products in 1998. In 2001 he became executive vice president for pharmaceutical products and corporate development, and then became executive vice president of pharmaceutical operations in early 2004.

Lechleiter received a Bachelor of Science degree summa cum laude in chemistry from Xavier University in 1975. He then studied organic chemistry as a National Science Foundation Fellow at Harvard University, where he was granted his master's and doctorate degrees in 1980.

Lechleiter is a member of the American Chemical Society. He currently serves on the Visiting Committee of the Harvard Business School and as a member of the Board of Trustees of Xavier University (Cincinnati). In addition, he serves as a distinguished advisor of The Children's Museum of Indianapolis, and is a member of the boards of directors of the Fairbanks Institute and the United Way of Central Indiana.

"John is as prepared to lead this company as any chief executive in our history," said Taurel. "His decisive leadership, his personal style, and his deep experiences across the entire value chain of our business uniquely qualify him to step in to this role in April. He is well-respected across the industry, he inspires Lilly employees, and he embodies the company's core values."

"I am humbled and excited by this opportunity to lead Eli Lilly and Company, particularly during a time of profound challenge and unprecedented opportunity. We will stand firm by the timeless values laid down by our founders, yet act decisively to maintain our strong competitive position," said Lechleiter. "We will be guided by an exciting new vision for our future that places individual patient outcomes at the core of our endeavors."

Continued Lechleiter, "For more than three decades Sidney has provided invaluable leadership for Lilly and for our industry. His consistent and resolute focus on innovation, globalization and transparency has distinguished our company. With the support and engagement of Lilly employees around the world, I look forward to building on Sidney's legacy and to leading this company to even higher levels of achievement as we go forward."

Said Karen Horn, senior managing director of Brock Capital and lead director of Lilly's board, "On behalf of Lilly's entire board of directors, I would like to recognize Sidney's significant leadership over a challenging period for both the company and the industry. He has been seen as a leader among his peers in the industry for many years, and Lilly's external stature as well as operating performance have both benefited from his leadership and guidance. Strong leaders require strong successors, and the board is pleased to appoint John to the role of CEO and president. His experiences and personal style equip him well for the challenges ahead, and we are confident that he will build upon the strong foundation that Sidney has built."

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of first-in-class and best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers -- through medicines and information -- for some of the world's most urgent medical needs. Additional information about Lilly is available at www.lilly.com. "

A New Low for the Pharmaceutical Industry? Write Prescriptions in Exchange for Domestic Cattle, Air Conditioners, College Tuition for the Children of Physicians & more…

Physicians in the US are used to being dined and wined by the Pharmaceutical industry…but they are getting nothing compared to what is being offered to their counterparts in the developing world, at least that is according to the report titled, “Drugs, Doctors, Dinners” by Consumers International, a London based NGO of consumer rights group.

A brilliant and satirical video on YouTube brings attention to this matter and launches the report.

“The scheme of the [pharmaceutical] company was as follows: ‘On sale of 1,000 samples of the drug, get a Motorola handset. On sale of 5,000 samples get an air cooler. On sale of 10,000 samples get a motor bike.’”

"It is estimated that up to 50% of medicines in developing countries are

inappropriately prescribed, dispensed or sold."

All kidding aside, reports like this one will increase pressure and scrutiny on our industry... Look out for more backlash.

Doctor from India, Mumbai India (2003)

An Insider's View on Pharmaceutical Outsourcing

Since 2001, I have been working with Senior Executives from Pharmacutical industry to develop and implement outsourcing and off-shoring strategies. Seven years later, I am still asked by industry insiders and those from outside asking me if I still think Outsourcing has any legs? NO, I AM NOT KIDDING!

So, here goes a bit of my own perspective:

Pharma industry has been outsourcing for a long time. It is NOT a new phenomenon. Yes, acceptance of outsourcing and off-shoring to India and China may be relatively new (new meaning post 2000).

Yes, I believe and support that Outsourcing is here to stay. However, I believe that Outsourcing will increase even more. The types of deals and their complexities will be even more and across the value chain.

"Learning While Earning": Look for some outsourcing companies to move up the value chain - especially from India and China.

Regional / Country Wide Subsidiaries to play a big role: Country managers in India, China and Russia will (or SHOULD) play a bigger role in managing outsourcing relationships.

Small and mid-sized Outsourcing companies in the US and EU will find it difficult to justify their existence - unless they provide unique and compelling value proposition.

Look for consolidation, mergers, acquisitions and more joint ventures in 2008.

PE, VC and Institutional investors are pouring in more money in India and China.

New Countries/Regions/Economies to play a role: Some of my clients are already looking towards Phillipines, Brazil and Russia.

Watch Accenture, GVKBio, WuXi Pharmatech, Hikal, Jubilant, Quintiles, Siro, iGate, Degussa, Lonza, Zydus, Divi's Labs very closely.

Pharma CEOs & Leaders to keep an Eye On in 2008

A good friend (and a regular reader of this blog) who is also a leader of a major Pharmaceutical Executive Search firm in London, asked me to write about pharma leaders that he (and everyone else) should keep an eye on in 2008. After giving it much consideration, here it goes, in NO particular order:

1. Christine Poon: Vice Chairman of J&J and a member ofthe Office of the Chairman. She is responsible for J&J's Pharma business, J&J Development Corp., Corporate office of Science and Technology, Information Management as well as Worldwide Procurement and Worldwide Opeations. Ms. Poon is seen as the heir-apparent to Mr. Weldon,J&J's current CEO. Charismatic, dynamic and highly inspirational, J&J insiders put a great deal of trust and faith in what Ms. Poon has to say. Watch as she steers this massive company into its next phase.
2. Fred Hassan: Chairman & CEO of Schering-Plough (SP), Mr. Hassan is no stranger to turn arounds and value creation out of distressed companies. He wants SP to "become even stronger, even better, in our people, our products, our science." Acquisition of Organon and Intervet helps his cause. After stabilizing the company (the worst is behind), it is now time for Mr. Hassan to do something big in 2008.
3. Sidney Taurel: Chairman & CEO of Lilly, Mr. Taurel is truly transforming - NOT just Lilly but also the pharma industry. Keep an eye on Lilly to see how Mr. Taurel takes the old, cumbersome, expensive, massive Pharma business model into a newer, leaner, truly globally leveraged model.
4. Glen Saldanha: CEO of Glenmark Pharmaceuticals, India. Mr. Saldanha has turned many industry non-believers into his admirers. Amongst other things, watch for his uncanny ability to execute, develop NCEs at record speed and low cost and license them at record breaking valuations. In an industry that is filled with folks with gray hair (or no hair), it is also noteworthy that Mr. Saldanha is very young (under 40). Mr. Saldanha is separating Glenmark's Generics and other businesses and listing them on various global and Indian exchanges - in turn, creating even more wealth for himself and his shareholders in 2008.
5. James Mullen: President & CEO of Biogen Idec (BI). Now that BI is officially "off-the-block", Mr. Mullen has to convince the board of BI that he and his executive team are the right leaders to take the company further. BI plans to generate at least 40% of their revenue internationally and this is exciting.
6. Robert Wessman: CEO of Actavis. Now that Actavis is private, pay attention to Mr. Wessman as he pushes Actavis into becoming one of the best, biggest and most profitable Global generics companies and possibly enter other areas as well.
7. Jeffrey B. Kindler: CEO of Pfizer. Need I say more about Mr. Kindler and the task ahead of him? "The world's largest research based company", as positioned on Pfizer.com, now needs to fend off competitors, shareholders, analysts, regulators and payors in a big way. Good luck!
8. Deborah Dunsire: CEO of Millennium. There is nothing more powerful than the vision statement of Dr. Dunsire, "The right drug for the right patient at the right time." Under her leadership, Millennium is lean, hungry, execution oriented and going in the right direction.

With best wishes to all those listed above and everyone else in the industry. 

AstraZeneca Sues Seven Generic Pharmaceutical Companies...& More May be on Way

Apotex, Aurobindo Pharma, Cobalt, Mylan, Par Pharmaceutical, Sandoz and Sun Pharmaceutical have been sued by AstraZeneca for submitting ANDAs for Crestor (an AstraZeneca drug with sales of about $2 billion). According to today's Wall Street Journal article, AstraZeneca may also sue Teva and Glenmark.

"...it filed patent-infringement lawsuits against seven generic drug makers that have submitted so-called abbreviated new drug applications for the company's blockbuster cholesterol treatment Crestor.

While Crestor was AstraZeneca's third-best-selling drug last year at $2 billion, the drug has begun competing with generic versions of Merck & Co. Inc.'s cholesterol blockbuster Zocor, which lost patent protection last year.

AstraZeneca is just one of several branded pharmaceutical companies struggling with expirations of key drug patents and subsequent competition from cheaper, generic drugs. In addition, the company has faced the loss of late-stage drug candidates in recent years."

Source: WSJ.com

Transformation at Novartis... Job Cuts in Management and Sales Departmet saving the company $1.6 billion annually

Here is one more "Transformation" story. This time, it is from Novartis. Today's Forbes online reports in its article titled, "Novartis Scales Back In Tough Times" the details of the strategy deployed by Novartis:

"Switzerland's Novartis (nyse: NVS - news - people ) is the latest drug company to slash away. It's cutting 2,500 jobs, or 2.5% of its global staff, over the next two years because of increasing competition from generic medicines, as well as delays in developing its own products.

Novartis said it would take a $450 million charge for the restructuring in the current quarter, but it would save $1.6 billion annually by 2010. It said that the job cuts would help prepare the company for a "new growth cycle" that would begin in the second half of 2008. The layoffs will come in management and sales."

Source: Forbes.com

More Scrutiny, More Pressure... Merck and Schering Plough Under Close Watch for Zetia Trials

Merck and Schering Plough are under scrutiny by the United States Government for one of their Blockbuster drugs: Zetia.

As reported in today's New York Times, the House Committee on Energy and Commerce is asking the two companies why there are delays in reporting the results of a clinical trial called "Enhance" that was completed in April of 2006.

"In a letter to Merck and Schering, the committee’s top two members asked officials at both companies to agree to talk to investigators and said both companies should retain important documents about the trial, called Enhance.

Independent scientists have viewed Enhance as crucial because it is the first trial that would answer whether Zetia’s ability to lower cholesterol has real biological benefits for patients. The results might also help answer nagging questions about Zetia’s safety.

Zetia and Vytorin, a companion drug, are among the most popular of all prescription medicines. One million prescriptions are filled worldwide each week, at a cost of $5 billion annually. But compared with other cholesterol drugs there is far less evidence of their safety and effectiveness.

“We are concerned with the delay in releasing the results of the study,” said the letter, which was signed by two Michigan Democrats, John D. Dingell, the committee’s chairman, and Bart Stupak, the chairman of the committee’s subcommittee on oversight and investigations.

The letter asked the companies to provide their records to the committee by Dec. 25."

As reported in today's New York Times, the House Committee on Energy and Commerce is asking the two companies why there are delays in reporting the results of a clinical trial called "Enhance" that was completed in April of 2006.

"In a letter to Merck and Schering, the committee’s top two members asked officials at both companies to agree to talk to investigators and said both companies should retain important documents about the trial, called Enhance.

Independent scientists have viewed Enhance as crucial because it is the first trial that would answer whether Zetia’s ability to lower cholesterol has real biological benefits for patients. The results might also help answer nagging questions about Zetia’s safety.

Zetia and Vytorin, a companion drug, are among the most popular of all prescription medicines. One million prescriptions are filled worldwide each week, at a cost of $5 billion annually. But compared with other cholesterol drugs there is far less evidence of their safety and effectiveness.

“We are concerned with the delay in releasing the results of the study,” said the letter, which was signed by two Michigan Democrats, John D. Dingell, the committee’s chairman, and Bart Stupak, the chairman of the committee’s subcommittee on oversight and investigations.

The letter asked the companies to provide their records to the committee by Dec. 25."

Transformation of Pharma Companies

As predicted in the previous posts, below is an additional proof of Pharma companies' Transformation and becoming leaner...

Transformation of Lilly:

"Transforming Lilly to Deliver Better Patient Outcomes

"We are changing our business model to provide a better value proposition to our customers," said Sidney Taurel, chairman and chief executive officer. "The Lilly we are evolving to will be a patient-centered enterprise that leverages the increasing role of tailored therapeutics. More specifically, we will focus our business on optimizing individual patient outcomes by providing patients with the right drug at the right dose at the right time. We are already seeing this concept put into action, most recently as we complete the submission package for prasugrel, where a tailored dose may provide a more favorable outcome for specific patient subpopulations."

Taurel then laid out a forward-looking transformation plan for the company. "We will also create greater value by fundamentally transforming the way we are organized and the way we work. Our goal is to build out a fully integrated pharmaceutical network, leveraging talent, expertise and resources on a global scale. This new way of doing work expands our capacity and our reach, reduces our fixed infrastructure, increases our flexibility and lowers our costs and risks. It is one part of our broader productivity strategy, which also includes reducing on-board headcount and using Six Sigma to continuously improve performance."

I am fascinated by the concept of "Building a Fully Integrated Pharmaceutical Network" leverages global resources... What does this mean:

- More outsourcing

- More licensing

- More doing with less internal resources/employees

- More accountability

Is this the right approach for Pharma? Absolutely. Once again, we like Mr. Sidney Taurel's vision and approach.

(Source of Mr. Sidney Taurel's picture:   http://www.lilly.com/about/management/taurel_sidney_bio.html )

 

Pharma Industry Needs to Make a Note of the Fact that "Human Evolution (is) Speeding Up..."

Times sure are changing for the Pharma industry. Well, here is another thing for the industry to keep in mind... According to a study in this week's Proceedings of the National Academy of Sciences, the human evolution is speeding up faster than ever before.

"Explosive population growth is driving human evolution to speed up around the world, according to a new study.

The pace of change accelerated about 40,000 years ago and then picked up even more with the advent of agriculture about 10,000 years ago, the study says.

And while humans are evolving quickly around the world, local cultural and environmental factors are shaping evolution differently on different continents.

"We're evolving away from each other. We're getting more and more different," said Henry Harpending, an anthropologist at the University of Utah in Salt Lake City who co-authored the study.

For example, in Europe natural selection has favored genes for pigmentation like light skin, blue eyes, and blond hair. Asians also have genes selected for light skin, but they are different from the European ones.

"Europeans and Asians are both bleached Africans, but the way they got bleached is different in the two areas," Harpending said.

He and colleagues report the finding this week in the journal Proceedings of the National Academy of Sciences.

Snips of DNA

The researchers analyzed the DNA from 270 people in the International HapMap Project, an effort to identify variation in human genes that cause disease and serve as targets for new medicines.

The study specifically looked for genetic variations called single nucleotide polymorphisms, or SNPs (pronounced "snips"), which are mutations at a single point on a chromosome.

"We look for parts of chromosomes that are common in the population but are new, and if they are common but recent, they must have gotten to high frequency by selection," Harpending explained.

"And the reason we know they are new or recent … is that they haven't had time to break and re-form," he added.

Over time, chromosomes randomly break and recombine to create new sequences of SNPs along the chromosome. A large number of identical SNPs means the mutation is advantageous and new.

The researchers' analysis found that 7 percent of human genes have been undergoing rapid, recent evolution.

If humans had always evolved at this rate, the difference between modern humans and chimps should be 160 times greater than it really is.

(Read related story: "Chimps, Humans 96 Percent the Same, Gene Study Finds" [August 31, 2005].)

"We realized we must be in a transient [phase], that evolution hasn't been going this fast for long in our species," Harpending said. "And so we wondered why."

According to Charles Darwin's famous theory, evolution happens faster in big populations.

Harpending said the timing of the newly observed evolution acceleration coincides with explosive growth in human population, coupled with humans living in new environments and changing cultures.

The biggest changes have come since the end of the last ice age, about 10,000 years ago, which opened up new environments for the quickly expanding human population to grow from millions to billions.

More people mean more mutations, Harpending noted.

"You are also giving them the potential to be adaptive mutations," said Brian Verrelli, who studies population genetics and evolution at Arizona State University in Tempe and was not involved in the research.

Regional Differences

Verrelli said the new study is interesting and accurately explains the accelerated evolution with a plausible model based on demographics.

Importantly, he said, the research indicates that any speed-up in evolution "had to have happened differently in different geographic regions."

While Harpending and colleagues have yet to connect all the different evolving genes with specific traits, they have linked a few.

For example, Europeans as recently as 8,000 years ago developed lactose tolerance, which allows adults to drink fresh milk—a staple of the agricultural economy.

Genes that suppress body odor and dry ear wax are spreading rapidly in Asia. In Africa, a speed-up is found in genes that thwart malaria.

Many of the evolving genes appear related to changes in diet that accompanied the widespread adoption of agriculture, Harpending noted.

For example, Europeans can easily digest cereal grains, but Kalahari bushmen in Africa, Australian Aborigines, and Native Americans often become diabetic when eating a high-carbohydrate diet.

"We can see the genes changing. We are evolving to cope with these new cereals," Harpending said.

Eventually, this rapid pace of genetic evolution should slow, assuming the human environment and diet stabilize, Harpending said.

However, infectious diseases evolve more quickly in large, sedentary populations, which may keep the adaptation cycle ramped up for the foreseeable future.

"It's going to take a while to stabilize," he said. "By 'a while,' I'm talking tens of thousands of years."