BioPharm Executive: 2012 in Review

What important stories shaped this past year...and promise to influence the year ahead? In our tradition of touching on some unscientifically selected highlights from the past year, here are some developments and trends that stood out in 2012 and that may reverberate into next year.

Clinical and Product Highlights...

Hepatitis C: If last year was about furious M&A leading to a swelling hepatitis C bubble, this year is about the apparent winners and losers starting to emerge. It has come down not just to efficacy but side effects and quality of life--in particular, who can develop an all-oral regimen that doesn't involve interferon. Bristol-Myers Squibb emerged as a frontrunner with its combination of HCV NS5A inhibitor daclatasvir, the protease inhibitor asunaprevir, and the non-nucleoside HCV NS5B polymerase inhibitor BMS-791325. Abbott Laboratories (soon to be AbbVie) looks strong with its similar trio of ABT-267, ABT-450, and ABT-333.

But it's hard to say any company is in a better position than Gilead Sciences and its combination of GS-7977 and GS-5885, plus ribavirin. The first-generation battle between Vertex Pharmaceuticals' Incivek and Merck's Victrelis demonstrated that while this is not exactly a winner-takes-all race, relatively modest edges in safety, efficacy or convenience can lead to huge advantages in the marketplace.

HIV: This year saw the approval the first at-home HIV diagnostic and the first drug to prevent HIV infection (Gilead's Truvada). It also saw the launch of Gilead's Stribild ("Quad"), which the company hopes will help its HIV franchise weather both eventual patent expirations and the potential launch of ViiV Healthcare's dolutegravir as early as late 2013.

Cystic Fibrosis: This genetic illness has gone decades without meaningful new options, but that is changing. The year began with the approval of Vertex Pharmaceuticals' Kalydeco for a tiny percentage of CF patients. Promising results of Kalydeco plus the company's experimental VX-809 raise hopes that far more patients with this disease will soon be helped.

Antibody-drug conjugates: Seattle Genetics won approval of the first-ever antibody-drug conjugate with its lymphoma drug Adcetris. And despite some early worries, sales look pretty good! It looks likely the Roche/ImmunoGen's breast cancer drug T-DM1 will soon follow (there is a February 26 PDUFA date).

Weight loss drugs: Arena Pharmaceuticals won approval for Belviq (lorcaserin) and Vivus got approval for the combo Qsymia--the first new obesity drugs approved since 1999. Unfortunately for the companies, this hasn't thus far translated into great sales.

Cancer advances: New molecular entities include Sanofi-Aventis' Zaltrap (colorectal cancer), Onyx Pharmaceuticals' Kyprolis (multiple myeloma), Pfizer's Inlyta (renal cell carcinoma), Genentech's Erivedge (basal cell carcinoma), Pfizer's Bosulif and Ariad Pharmaceuticals' Iclusig (both for chronic myelogenous leukemia), Exelixis' Cometriq (medullary thyroid cancer), and Astellas' Xtandi (prostate cancer).

Not so hot--Alzheimer's research: In addition to the clinical failure of antibodies targeting beta amyloid plaques--bapineuzumab and solanezumab--there was also the failure of Pfizer/Medivation's Dimebon, an antihistamine that showed some early promise. Alzheimer's is a tough nut to crack, but we need to keep cracking.

Hot Trends in 2012

M&A winds down: We bid adieu to a couple venerable biotechs this year. GlaxoSmithKline bought Human Genome Sciences, while Amylin Pharmaceuticals was acquired by Bristol-Myers Squibb (with a little help from AstraZeneca). Still, it's been a very slow year for biotech M&A overall--slower even than an already sluggish 2011. Last year, $245 billion was spent on life sciences acquisitions, according to Deloitte Recap. For the first nine months of 2012, the total was just $142 billion, and there hasn't been any major pickup in the fourth quarter. That's not exactly the bargain shopping that some people (um, like me) had expected in the wake of the financial crisis.

Emerging markets still emerging: Things may be sluggish overall, but not in the so-called "pharmerging" markets. Companies foreign and domestic have spent a record $20 billion on M&A in emerging markets so far this year, up 65% from the year before, according to Thompson Reuters and other sources. The biggest recipient, not surprisingly, was China.

Patents problems? Still, it's not business as usual in these new markets. Novartis is still waiting to hear from India's highest court on its Glivec patent, but early signs haven't been all that encouraging. Still, there are some hopeful signs for Western companies: At the end of November India's Supreme Court told the Indian patent office to reconsider a patent on Pfizer's Sutent (sunitinib) that had previously been yanked. That could prove to be a landmark case for Western companies hoping to find protection for proprietary drugs.

Not everything is smooth sailing on the home patent front, either. This summer, the U.S. Court of Appeals for the Federal Circuit reaffirmed much of its original decision in Association for Molecular Pathology v. Myriad Genetics, confirming for the time being the patentability of genes. Is that an end to the matter? Not quite. On December 4, the U.S. Supreme Court agreed to look at the case again. Given the high court's previous stance, there's reason for those who favor gene patents to be nervous.

Open source research: While it may be premature to call this a trend, there are some encouraging signs that large companies are becoming more willing to pool data and other resources. This September, the formation of Transcelerate Pharma brought together 10 leading pharma companies to pool certain information and expertise. A further collaboration in November among three companies was aimed at streamlining the identification and approval of clinical trial sites.

This past year has also brought life science companies together with other financial and research institutions for other risk-sharing arrangement. Companies have partnered with VCs (e.g., J&J and Polaris Ventures; Sanofi-Aventis and Greylock Partners), with academia (e.g., Merck's California Institute for Biomedical Research), with charities (e.g. the Bill and Melinda Gates Foundation), and even with each other (e.g., the Massachusetts Neuroscience Consortium formed by seven pharma and biotech companies).

Will 2013 bring more collaboration, openness...even transparency? Stay tuned. In the meantime, have a great holiday and a happy New Year!

-Karl Thiel

Read the BioPharm Executive online newsletter December 19, 2012.

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