Lilly CEO avoids Pfizer-like cuts, focuses on pipeline

Posted under Blog, Companies, Diagnostics, Eli Lilly, Funding, Generic, John Lechleiter, layoffs, Medical Devices, Medical Supply, Pfizer, Pharmaceuticals, Pipeline, R&D spending, solanezumab, Startups, Universities, Videos by rmcbride

Drugmakers have axed thousands of R&D workers and tightened their belts to weather the patent cliff and other troubles facing their industry, but Eli Lilly ($LLY) CEO John Lechleiter has held firm to his position that cutting expenses alone isn't a solution to the challenges at his company. And he thinks that the way forward for the Indianapolis-based pharma group resides in its pipeline.

Singing a familiar tune in an interview with Bloomberg, Lechleiter said: "I don't think we can save our way out of the enormous challenge we face. The best course is to maintain our focus on advancing our pipeline." He also makes a case for R&D investment in a Forbes commentary posted yesterday afternoon.

Ticktock. The clock is ticking for Lilly, as time is winding down to perhaps the biggest moment of the year for the drugmaker in the second half of 2012 when data from a pivotal study of its Alzheimer's disease drug solanezumab are revealed. Many analysts and industry watchers are giving the program slim chances of success, but a victory would certainly go a long way to replacing revenue from Lilly's drugs that face competition from generic meds.

Sanford C. Bernstein analyst Tim Anderson calls the experimental Alzheimer's drug Lilly's "lottery ticket" that could bring the company $9 billion in revenue if approved, Bloomberg reported. The chilling aspect of that analogy, of course, is that lottery tickets aren't often winners.

In the meantime, Wall Street has been cheering Pfizer ($PFE) CEO Ian Read as he slashes expenses from the drug giant's budget, which he vows will fall by another $1 billion this year.    

- here's the Bloomberg article
- check out Lechleiter's Forbes commentary

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Embattled AZ chief: Bigger R&D bets, megadeals not the answer

Posted under AstraZeneca, Blog, Companies, David Brennan, Diagnostics, Funding, M&A, Martin Mackay, Medical Devices, Medical Supply, Pharmaceuticals, R&D, R&D spending, Startups, Universities, Videos by rmcbride

AstraZeneca ($AZN) has been in a race against time to fuel its pipeline with new drugs as its big-selling meds face generics competition, and some of the London-based drugmaker's investors have become antsy with calls for change at the highest levels of the organization. But AstraZeneca CEO David Brennan appears to be sticking to his guns, telling Bloomberg that he's undeterred by those challenging his leadership at the embattled company.

"I'm plugged in, my role hasn't changed a bit," Brennan told Bloomberg during the annual Pharmaceutical Research and Manufacturers of America meeting in Boston. "I read and hear and see lots of things, but we're here trying to change policy, make good decisions and execute our strategy."

Yet according to a Financial Times report earlier this week, some investors aren't too happy about the state of affairs over at AZ. The company has suffered a string of setbacks in clinical trials and delivered among the industry's worst returns on R&D dollars invested in recent years. Nevertheless, Brennan believes that the company won't quell the problems with a major merger or a steep increase in research spending. He and R&D chief Martin Mackay have touted a plan to make smaller acquisitions in the near term to build the pipeline.

Last week, AZ announced a partnership with Amgen ($AMGN) on inflammatory disease drugs that even Mackay acknowledged wasn't going to fix the problems at his company, Bloomberg reported. A series of deals appears to be in the offing, yet such bolt-on transactions are popular among big biopharmas and competition for the deals will be fierce.

"If it's about restructuring, we can do that without a big deal," Brennan told the news service. "Maybe somebody sees something different, but spending more money does not have a linear increase in the number of returns you get from a research and development perspective."

- get more in the Bloomberg article    

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UPDATED: Biopharma lobby members pumped $49.5B into R&D

Posted under Blog, Companies, Diagnostics, Funding, Medical Devices, Medical Supply, patent expiration, personalized medicine, Pharmaceuticals, PhRMA, R&D, R&D budget, R&D spending, Startups, Universities, Videos by rmcbride

As the pharma industry rethinks the way it brings new drugs to market, drugmakers around the world haven't backed down from their multibillion-dollar research budgets. The Pharmaceutical Research and Manufacturers of America (PhRMA) revealed yesterday that its global membership of most of the largest drugmakers spent an estimated $49.5 billion on R&D in 2011.

The estimated sum fell slightly from the $50.7 billion that PhRMA members invested in 2010, but the real story appears to be how drugmakers are changing the ways they dedicate R&D dollars and whether they are getting their money's worth. More than ever, biopharma companies are spreading their R&D bets with a variety of experts and other companies outside of their organizations, and most of the companies are emphasizing research on targeted drugs and personalized therapies, according to PhRMA.

Much has been written about how drugmakers have altered their R&D strategies and spending habits in the face of a rash of patents expiring on blockbuster brands. Sanofi ($SNY) and AstraZeneca ($AZN), for instance, have called on their R&D chiefs to build a greater percentage of the companies' respective pipelines via partnerships, and Pfizer ($PFE) has taken an axe to some of its research operations and narrowed its R&D focus. All these companies are grappling with patent cliffs, and they desperately need their R&D bets to pay off in the coming years.

Last year, as PhRMA noted, the FDA stamped approvals on 35 new medicines, including Merck's ($MRK) and Vertex's ($VRTX) hepatitis C drugs, 11 treatments for rare diseases and the first new med for lupus since 1955, Human Genome Sciences' ($HGSI) Benlysta. Yet one could argue that the sales of new drugs aren't supporting the mammoth investments in R&D that have been made over the past decade. The industry group estimates that the cost of bringing a new drug to market is about $1.2 billion, and, depending on how you do the math, the sum could be much higher.

Companies are also taking more shots on goal in the clinic. According to PhRMA, there are now more than 3,200 meds in trials or under FDA review, a big jump from the 2,400 drugs in development in 2005 (when its members spent $39.9 billion on R&D).

The industry is holding out hope that the emergence of new genomics and computational tools as well as newfangled strategies to improve ROI on R&D spending could boost productivity in drug research. And the confluence of these elements is in personalized medicine R&D, where deeper understandings of the drivers of individual patients' illnesses are being translated into new drugs for cancer and other diseases. Tufts University Center for the Study of Drug Development surveyed biopharma companies and learned that 94% were pursuing personalized treatments.

Drugmakers' ambition in personalized medicine isn't a new story in the biopharma industry, of course, but actually realizing those ambitions would be a major step forward. Then drugmakers could feel like their huge R&D budgets were worth the investment.

- here's the release
- see the PharmaTimes article
- check out this piece from Dow Jones

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EC outlines new incentives to spur antibiotic R&D

Posted under antibiotic, Blog, Companies, Diagnostics, Europe, Funding, Medical Devices, Medical Supply, Pharmaceuticals, R&D spending, Startups, Universities, Videos by John Carroll

Faced with a growing threat from a phalanx of superbugs and a long-standing industry disinterest in committing resources to low-margin antibiotics, European officials are hoping to jumpstart R&D work in the field with a set of tailored incentives for drug developers. The move drew quick support from Europe's pharma trade association, the EFPIA, and GlaxoSmithKline ($GSK) CEO Andrew Witty, whose company remains among a handful of big players that retain an interest in the field.

The European Commission says that it wants to adapt the existing €2 billion Innovative Medicines Initiative--a public/private venture--to spur developers. And officials laid out a strategy that includes swifter approvals along with a commitment to gain governments' support for adequate pricing.

"We need to take swift and determined action if we do not want to lose antimicrobial medicines as essential treatment against bacterial infections in both humans and animals," EU health commissioner John Dalli told reporters, according to Reuters.

"Unfortunately, the current commercial model doesn't stimulate the innovation needed in this area," GSK chief Andrew Witty told Reuters' Ben Hirschler. "We need a fundamentally different approach and public-private collaboration, with the sharing of information and funding, provides us with a significant opportunity to reduce the hurdles in our way."

"This program of collaborative research needs to facilitate the involvement of large and small pharmaceutical companies and the antimicrobial research community at large," said Richard Bergström, director-general of the EFPIA. This is very new ground for the industry and over the course of the next few months we will be finalizing the details, but the shape we hope to create for the initiative is clear."

- read the press release from the EFPIA
- here's the Reuters article

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