Brennan’s ouster at AstraZeneca sets stage for big changes in R&D

Posted under AstraZeneca, Blog, Chutes and Ladders, Companies, David Brennan, Diagnostics, Funding, generic competition, Leif Johansson, Medical Devices, Medical Supply, MedImmune, patents, Pharmaceuticals, R&D, Simon Lowth, Startups, Universities, Videos by john

The ongoing restructuring underway at AstraZeneca ($AZN) claimed one more employee today: The chief architect. 

CEO David Brennan has abruptly resigned--pushed out in a coup, according to the BBC--with plans to hand over the reins to CFO Simon Lowth as the pharma giant begins the hunt for a new chief. Leif Johansson will move in to the non-executive chairman's spot June 1, moving up the date on the planned switch out at the top to provide some stability for a company undergoing wrenching changes.

Brennan's departure marks the end of a 6-year stint plagued with R&D setbacks capped by layoffs and a showdown with a restive crowd of investors and analysts increasingly frustrated by the company's failure to execute an effective round of acquisitions and licensing deals. His resignation will take him out of the firing line for the annual meeting after the company reported a 44% plunge in first quarter profits, a predictable result of new generic competition for Seroquel.

Brennan's R&D strategy in anticipation of the patent cliff has been widely viewed as a complete bust, leaving the company with the weakest late-stage pipeline in Big Pharma. His $15 billion deal to acquire MedImmune has netted no new big products. And a string of clinical setbacks was capped recently by the failure of a Phase III depression program. In response, Brennan has been axing staffers, most recently offering plans to chop 2,200 research workers in a new round of layoffs. 

The focus now is on AstraZeneca's next steps on the deal-making side. The company has been scrambling to come up with a round of acquisitions, like its recently announced plan to buy Ardea for $1.26 billion. And Brennan said today that that strategy will continue as the company adds more such deals in the single-digit billion dollar range.

AstraZeneca has emerged as one of the most likely companies to play White Knight to Amylin ($AMLN), which has been fending off a reported buyout offer from Bristol-Myers Squibb ($BMY). The company's willingness to go in any disease direction to strike new deals will make it a possible bidder for a range of biotechs. And in this heated M&A environment, with a string of companies like Bayer already scouting significant buyouts, keeping AstraZeneca in the M&A game will likely help add to the premiums sellers can expect. 

- here's the press release
- get the BBC story

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Supreme Court: Prometheus Decision a Harbinger for Myriad?

Posted under Blog, Companies, Diagnostics, Funding, gene therapy, IP, Legal, Medical Devices, Medical Supply, patents, Pharmaceuticals, Regulatory, Startups, Strategy, United States Supreme Court, Universities, Videos by Ben Comer

In judging the Prometheus patents invalid, the Supreme Court may have shown its hand on the upcoming Myriad Genetics case.

In a unanimous decision on Tuesday, the Supreme Court stripped two Prometheus patents on the grounds that the company didn’t go far enough beyond merely identifying a natural law. Natural laws – a product of the natural phenomenon doctrine in patent law, are the province of everyone in the US, ever since Justice Rehnquist wrote in 1981 that “laws of nature, natural phenomena, and abstract ideas” aren’t patentable.

But to what extent must a biopharma organization show an application of a natural law, to support a claim? In Mayo Collaborative Services v. Prometheus Laboratories, the latter held two patents describing a method for optimal dosing of thiopurine for autoimmune disorders. To wit: if metabolite levels are too high with patients using thiopurine drugs, toxicities are likely to occur; if they’re too low, the drugs lose efficacy in the patient. Prometheus markets a blood test to measure metabolite levels, and the Mayo Clinic, acknowledging the relationship to thiopurine dosage and efficacy, created it’s own blood test to be used by physicians. Prometheus (acquired by Nestle last May) sued, claiming the Mayo Clinic violated its patents, and despite winning a Federal Circuit decision, the Supreme Court begged to differ.

With the Myriad Genetics case on the Supreme Court’s horizon, some attorneys following both cases are predicting another reversal. In the Prometheus decision, the court directly cites an amicus brief from two organizations – the American College of Medical Genetics, and the Association for Molecular Pathology – in defense of its judgment; both organizations are also named plaintiffs in the Myriad case. The amicus brief quoted in the Prometheus decision argues that if “claims to exclusive rights over the body’s natural responses to illness and medical treatment are permitted to stand, the result will be a vast thicket of exclusive rights over the use of critical scientific data that must remain widely available if physicians are to provide sound medical care.”

This is precisely the argument being made against Myriad, which holds patents on two genes known as BRCA1 and BRCA2; mutations in those two genes are associated with increased risk of breast and ovarian cancer, and Myriad sequences the genes to reveal the mutations. In light of the Prometheus decision, “there is a good chance the Supreme Court will remand the pending Myriad Genetics case to the Federal Circuit, to have it reconsider its opinion,” says Craig Smith, a partner at Lando & Anastasi. The Federal Circuit court ruling on Myriad upheld patent claims on isolated DNA, defined by patent law as composition of matter claims, but the diagnostic claims made by Myriad – first debunked by United States District Court Judge Robert Sweet – were similarly refuted by the Federal Circuit. Judge Sweet also stripped the BRCA1 and BRCA2 gene patents, but the Federal Circuit court reinstated those patents.

Many companies have gene patents; Myriad is hardly the first to receive composition of matter patents on genes. However, the argument that patents stifle, or erect barriers to medical research, seems to be gaining traction with the Supreme Court. “I’m not buying the argument that the court threw in there as a policy palliative…it seems to me that the court is saying the [Prometheus] claims go to far, and any benefits from patent protection are outweighed by the chilling effect on future innovation,” via medical research, says James Mullen, partner at Morrison & Foerster. How strongly this argument is made will have a least some bearing on the Myriad outcome, although gene patents are more or less entrenched as precedent.

What does this mean for industry? Unfortunately, the Promethius case offers little in the form of new guidance. If a claim is so broad as to state a law of nature, with the added suggestion that it be applied, it won’t be considered patentable, but “everyone knew that ahead of time,” says Mullen. “I think the decision creates more uncertainty,” because “the Court didn’t give any signposts as to what level of post-solution activity is necessary to go beyond the order to ‘go out and apply this law,’ which isn’t a patentable claim…there was no detail as to what application – by doing a, b, or c – by opening the mold for your rubber plant, at a particular temperature point, like the Court did with Diamond v Diehr.”

D’vorah Graeser, CEO at Graeser Associates International, says the Prometheus decision, and the upcoming Myriad case, may cast a “pall over the entire diagnostic industry.” Without specific guidance, “Where do you draw the line?” wonders Graeser. “Is it having an antibody involved, or some kind of machinery? From the Prometheus decision, it’s impossible to tell.”

Experts jab over drug patent reform and the best approach to innovation

Posted under Blog, Companies, comparative effectiveness, Diagnostics, Funding, innovation, Medical Devices, Medical Supply, patents, Pharmaceuticals, Startups, Universities, Videos by John Carroll

One of the most persistent arguments in the biopharma business these days is focused squarely on the length of patent protection a new treatment has when it goes on the market. The industry has always wanted more, basing its argument on the idea that shorter periods of market protection reduce the earnings it can expect and undercut the ability to innovate. Patient advocates typically cry out for less, maintaining greedy pharma companies just want more money and longer patents don't translate into innovation anyway.

The Wall Street Journal has produced one of its pro/con segments, with two experts taking opposite corners in the battle over which approach is right.

Josh Bloom, director of chemical and pharmaceutical sciences at the American Council on Science and Health, paints a woeful picture of Big Pharma today. With regulatory demands rising, it takes much longer to gain an approval. Costs have soared while the length of patent protection has dwindled. Drug companies are turning to line extensions, usually simple tweaks to meds that can be used to extend patent protection. Furthermore, a weakened pharma industry overall has been shedding hundreds of thousands of jobs.

Interestingly, Bloom believes those line-extension patent periods should be cut, thereby allowing pharma to stay focused on true innovation of important new treatments. And he wants a longer period of patent protections on the new meds to reward the companies' true innovators.

Els Torreele, director of the Access to Essential Medicines Initiative of the Open Society Foundation's Public Health Program, counters that pharma companies stopped innovating a long time ago. Real breakthrough drugs took the back seat to anything that could earn cash. And they don't have to prove that a treatment is superior to existing drugs--a comparative effectiveness approach.

Torreele calls on the agency to start applying the new comparative effectiveness metric before companies can earn patent protection. And she rejects the argument over the R&D costs at pharma, noting that the companies typically earn many times what they invested in their top earners. Extending patents might make companies more profitable, but it would do nothing to improve innnovation.

There's something in these arguments for everyone in the industry to chew on. But there's also little indication that a divided Congress has any ability to reach consensus on just how drug patents might be reformed in the near-term.

- here's the WSJ article

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