Merck Goes Generic

Merck (MRK) announced that it will be pursuing a “follow-on biologics” program through its Merck BioVentures Division.  Merck is signaling that it plans to manufacture and sell generic versions of the most popular biotech compounds on the market.  

Merck is expecting it can demonstrate the bioequivalence of its products without having to conduct expensive Phase III trials.  If this turns out to be true, this generic strategy could prove very profitable for Merck.

But at what expense?  It is interesting that Merck, long known for its R&D capabilities, has chosen a path of emulation over discovery.  Is this a signal that pharma’s innovative future is winding down, or is this simply a smart way to capitalize on a unique opportunity?

So, VC’s Broke… Can We Fix It?

There was a terrific interview with Alan Frazier (from Frazier Healthcare Ventures) posted on Xconomy’s site.  I encourage everyone to check it out.  

Here’s the major passage I took away (quoting Mr. Frazier):

We are investing a little more than half in biotech, and the balance in medical devices. We are, for sure, doing less startups and more later-stage companies. We do a lot of new companies, still, probably one-fourth of our companies are new companies. But a lot of them are like Calistoga where it starts out with a product pretty much ready to go, where we pull it from someone else and try it in a new indication.

So, it seems to me like there is a new equation for VC that looks a lot more like private equity.  In other words, VC’s will be looking for enterprises in the future that are closer to positive cash flow, and they will be looking for companies that will make attractive acquisition targets (as opposed to potential IPOs).

Genentech Purchase?

The proposed deal that would involve Roche’s (RHHBY) outright purchase of Genentech (DNA) may not go through.  The rumored bid of $43.7B for the remaining 44% of Genentech that Roche does not presently own would require a $45B loan, which appears to be hung up at the moment.  

The lending squeeze is apparently the culprit, as reported by Reuters.  The deal itself makes sense, but the magnitude of the required loan is just not feasible in the present economic climate.

Nonetheless, the Genentech buyout remains on the table. Read this article over at Pharmalot for further analysis on the matter.

All Just a Memory

Roche Pharmaceuticals (RHHBY) announced a $50M acquisition purchase of Memory Pharmaceuticals, a small-cap biotech developing CNS compounds that had an existing partnership with Roche.

Memory has developed a class of nicotinic alpha-7 agonists, which are in Phase II trials for the treatment of Alzheimer’s and schizophrenia.  The drugs treat the cognitive dysfunction of these CNS disorders through their interaction with nicotinic receptors in the brain.

Chris Viehbacher: Sanofi-Aventis, CEO

Divisional President/Director

GlaxoSmithKline PLC

Brentford, Middlesex ,  EN

Sector: HEALTHCARE  /  Drug Manufacturers – Major

Officer since January 2003

 

Bio (from Forbes.com)

47 Years Old

Christopher Viehbacher, Appointed on 31st January 2008. President, US Pharmaceuticals. Mr Viehbacher joined the Group in 1988 and has held a variety of senior positions in Europe and Canada. He was appointed President, US Pharmaceuticals in January 2003. He served on the European Commission approved G10 working group to restore the competitiveness of the EU Pharmaceutical industry. He is a board member of PhRMA, the CEO Roundtable on Cancer and Research!America.

King and Alpharma = $1.6B Deal

After months of courting (read, hostile negotiation) King Pharmaceuticals has finally reached a deal to acquire drugmaker Alpharma for $1.6B.  An earlier bid of $1.4B was rejected in August.

Alpharma made news earlier this month when it’s painkilling compound, Embeda, was shown to have less potential for addiction than stand-alone morphine.  

Analysts commented that the deal clearly made sense, though the currently unfavorable economic climate led to a less attractive loan package for King.

Richard Clark: Merck, CEO

CEO/President/Director/Chairman of the Board

Merck & Company, Incorporated

Whitehouse Station ,  NJ

Sector: HEALTHCARE  /  Drug Manufacturers – Major

Officer since January 2000

 

61 Years Old

Richard T. Clark, Chairman of the Board (since April 2007), President and Chief Executive Officer (since May 2005), President, Merck Manufacturing Division (June 2003-May 2005) of the Company; Chairman, President (January 2000-December 2002) and Chief Executive Officer (January 2003-June 2003), Medco Health Solutions, Inc., formerly a wholly owned subsidiary of the Company Director, Project HOPE and United Negro College Fund; Chairman, Federal Health Care Legislation Committee of Pharmaceutical Research and Manufacturers of America; Trustee, Washington & Jefferson College and The Conference Board.

Christoph Westphal: Sirtris, CEO

 

Christoph Westphal, M.D., Ph.D., co-founded Sirtris in 2004 and has since served as Chief Executive Officer.  Under his leadership, Sirtris has become a recognized pioneer in the research and development of small molecule drugs that target the sirtuins, a family of enzymes that control the aging process.

In 2007, Dr. Westphal successfully led the company through its initial public offering, resulting in recognition by the Boston Globe as one of the Globe 100 top IPOs of 2007.  In June 2008, GSK acquired Sirtris for $720 million, and Dr. Westphal continues to lead Sirtris as an independent discovery performance unit within GSK.

Prior to establishing Sirtris, Dr. Westphal co-founded Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY), Momenta Pharmaceuticals, Inc. (NASDAQ: MNTA) and Acceleron as CEO.  Dr. Westphal was formerly a general partner at a venture fund and a consultant with McKinsey.  He earned his M.D. from Harvard Medical School and Ph.D. in genetics from Harvard University.  He graduated with a B.A. summa cum laude and Phi Beta Kappa from Columbia University.

Dr. Westphal currently serves on the Board of Directors for Alnara Pharmaceuticals, Concert Pharmaceuticals and Magen BioSciences, and he serves on the Board of Fellows of Harvard Medical School.  Dr. Westphal has been the lead or senior author on several patent applications and scientific papers in journals including Cell, Nature and Nature Genetics.

Dr. Westphal has received a number of industry awards, including the 2008 Outstanding Individual of the Year Award at the annual Laguna Biotech Meeting; recognition in the Pharmaceutical Executive “45 Under 45” andPharmaVOICE 100 issues, both in 2008; Mass High Tech All Star Award in 2007; and Ernst & Young’s New England Entrepreneur of the Year award in the Biopharmaceutical category in 2006.

Dr. Westphal enjoys traveling (he has visited over 130 countries) and playing the cello.  He is also fluent in English, German, Spanish and French.  Dr. Westphal is married with three young children.

Has Pharma Lost its Heart?

 

Pfizer’s announcement that it was planning to discontinue its cardiovascular (CV) research and development program about a month ago sent signals throughout the life sciences industry that the rule of CV pharmaceuticals may be coming to an end.

 

Pfizer is the maker of the all-time largest blockbuster drug, Lipitor, which is used to lower cholesterol.  And although the drug has been a veritable cash cow, analysts expect its revenue generation to dwindle as it faces competition from generics.

That being said, Pfizer has chosen to pursue what it sees as more promising avenues of research focus such as neurology and oncology.

Major competitor, Merck, made a Saturday announcement “reaffirming” its commitment to CV development.  This release offered no real news to speak of, but comes at a time of pronounced uncertainty in the life sciences industry, where entire research programs are being scrapped.

Merck has definitively confirmed that they do not plan to follow suit in respect to Pfizer’s CV restructuring, as VP of Cardiovascular Clinical Research at Merck, Dick Pasternak, stated (pointing out the obvious), “… CV is still the number one killer.”

So, does Pfizer’s decision to bail out now indicate an isolated event, or will other companies (other than Merck) decide to leave their CV prospects undeveloped?