Feb
29
Posted under
Arena Pharmaceuticals,
Blog,
Companies,
Diagnostics,
Funding,
Medical Devices,
Medical Supply,
Mergers and Acquisitions,
obesity,
Orexigen Therapeutics,
Pharmaceuticals,
Qnexa,
Startups,
Universities,
Videos,
Vivus,
ZafGen by John Carroll
In yet another sign of just how quickly biotech investors can change their minds, Bloomberg is running a piece today speculating on which Big Pharma company is most likely to swoop in and pay a big premium for Vivus ($VVUS)--which has been flying high on its recent lopsided panel vote favoring approval of the weight drug Qnexa. And the suddenly popular obesity field--which had been relegated to the dust heap of biotech history by a number of observers--has even inspired takeover interest in the fledgling Zafgen, a 2009 Fierce 15 company.
A year ago Vivus was a cautionary tale. Stiff-armed by regulators concerned by safety concerns, it appeared indefinitely stymied alongside rivals Orexigen ($OREX) and Arena ($ARNA). But after managing to resolve most of the panelists' concerns by its willingness to restrict the pill to a carefully defined patient population, Vivus is now the odds-on winner in the race to an approval. And analysts have dollar signs in their eyes as they share gossip on a multibillion-dollar takeover bid by the likes of J&J ($JNJ) or Merck ($MRK).
Rodman & Renshaw has helpfully outlined potential peak sales at a mammoth $5 billion, according to Bloomberg, making Vivus a valuable prize for a Big Pharma company looking to beef up its income. It should be noted that other analysts have been far more cautious in their projections, but few doubt that the drug could be a blockbuster once on the market.
"The FDA has clearly crossed the Rubicon of balancing risk and benefit, understanding that the obesity problem is a pandemic," Rodman's Michael King tells the business news wire, which always enjoys a good M&A rumor story. "There are not a lot of products around in the pharmaceutical industry that address such large market opportunities. Vivus is not going to give this up cheap."
Vivus and its rivals have been criticized for offering up drugs with only marginal impact on body weight. But the same can't be said for Zafgen, which has racked up some inspiring early-stage results for its approach. And CEO Tom Hughes says that he's received overtures from pharma companies interested in buying him out.
Of course, despite the panel vote, some observers still have a nagging feeling that regulators will go ahead and require a cardio safety study ahead of an approval, rather than after. And that would crash the stock price. Vivus isn't waiting to find out, though. Vivus is offering 8.5 million shares while the stock price is high. And several insiders, including the CEO, have been cashing in on their options.
- here's the article from Bloomberg
Related Articles:
UPDATE: Vivus soars after experts offer surprising support for weight drug
FDA notes concerns about Vivus diet pill safety ahead of panel
Arena shares shine, briefly, as it presents its case for obesity drug
Zafgen banks $33M C round as it preps for Ph2 obesity study
Feb
07
Posted under
Bernard Munos,
Blog,
Companies,
Diagnostics,
Funding,
Medical Devices,
Medical Supply,
Pharmaceuticals,
Startups,
Universities,
Videos,
ZafGen by John Carroll
The R&D Revolutionary
Bernard Munos
Consultant
Bernard Munos is the Big Pharma veteran who's been prescribing a radical dose of R&D change to the industry.
Long before Pfizer drew cheers from Wall Street with its insistence on deep cuts, Munos was pointing to the blockbuster-sized cost of drug research and preaching that the giant pipelines have to be restructured. And he's been winning over some of the leading figures in the industry along the way.
"Bernard put on the table that we don't just need a Band-Aid. We need transformational change." Corey Goodman told Matthew Herper at Forbes.
That means an end to these giant operations that too often focus on tiny improvements in health and an urge to embrace a big risk, and a turn to small, nimble operators like Zafgen to brew up big new drugs that change the standard of care.
The status quo, he warns, is a threat to the very existence of the industry. This new model, he adds, may be its only hope for survival. Tracking the steadily rising cost of drug development and a decadelong drought in new drug approvals--only slightly alleviated last year--more and more of the industry is coming to see it Munos' way.
When we were putting this report together, FierceBiotech asked Munos whether the industry was finally making progress on the R&D side. True to form, he turned to the numbers, detailing the low rate of approvals that has afflicted the biggest players in the industry for the past decade. Despite a surge of approvals in 2011, if you strip down the results you'll find that Big Pharma hasn't enjoyed great success.
"But I see the industry splitting down the middle," he adds.
"I am optimistic about Novartis, and cautiously optimistic about GSK and Sanofi. They have worked hard to retool themselves, and recreate an innovation culture in their R&D divisions. Novartis did it first almost 10 years ago. Sanofi started with an especially dire situation, but Chris Viehbacher has been deft at turning his company around. It's not easy, and the howls of protest coming out of GSK last fall when it was deciding which teams to fund or terminate, illustrate that challenge.
"I am apprehensive about AstraZeneca, Lilly, Merck, Pfizer, Amgen. Those are companies that have embraced a strong process culture, and insist on running regimented R&D divisions. It's a bankrupt model that has never delivered (for good reason). I fear real trouble in that group.
"I scratch my head (for different reasons) about Roche, Bristol-Myers, Bayer, Abbott and J&J. Genentech used to be the premier innovative company, but I hear ominous things since Roche has asserted its control. I am also not impressed with the Illumina bid. I am concerned Roche's senior management may be messing up a good thing. Bayer and BMY were really ailing a few years back. They have shrunk themselves and seem to be doing better, but I'd like to see more/better innovation from their labs before I feel better. J&J has a lot going for it, except its leadership, which is incompetent. Abbott is essentially a Humira company. It has produced very little innovation. The CEO is about to run with the better half of the company, a big red flag in my view."
FierceBiotech: Is the R&D model changing?
"Yes, for GSK and Sanofi. They are much more pragmatic, leverage external resources, have embraced open innovation and innovation networks. GSK has not always been the best implementer, but they are still serious about change.
"Novartis' problem is different. It's been producing more/better innovation than its peers for some time. But it must also produce affordable innovation. Joe Jimenez understands that, and is determined to take on the R&D cost issue (which is out of control across the entire industry). He's done it elsewhere, and seems to be pretty shrewd about it. I think he can pull it off. He is the only CEO who is addressing R&D costs, perhaps because he in as an outsider. The other CEOs, all of whom are insiders, prefer to regard high R&D costs as a fixture of the industry. ...
"Lilly is also doing interesting things with open innovation, but I don't think it is yet into the company's DNA. It's ironic for a company that pioneered the concept. Pfizer is trying hard, and doing some good things (e.g., various initiatives with academia), but it is so dysfunctional that it will take a while before it emerges, if it does."
Munos' willingness to call it like he sees it adds significantly to his influence in the industry.