Bureaucratic Shakeup and More Layoffs at Merck?

Posted in BioBusiness

The Twitterverse was buzzing with activity late last week about a possible shakeup at Merck as Roger Perlmutter takes control as its new head of R&D.  As many of you may know, Perlmutter used to work at Merck but left to become Amgen’s Executive VP of R&D when Peter Kim, the now former Head of Merck’s R&D, was hired several years

Kim’s tenure at Merck was rife with missteps, misdirection and drug approval failures. So, when Amgen replaced its CEO and Merck fired Kim, Perlmutter saw an opportunity to return to the fold with Merck now under the tutelage of CEO Ken Frazier (the man who engineered the company’s Vioxx legal strategy).

Fierce Biotech substantiated the Twitter rumors that a major shakeup may be underway at Merck. According to an article published early on Friday, a Merck spokesperson confirmed that Perlmutter is indeed shaking things up and reorganizing Merck’s R&D infrastructure.

The spokesperson said

“I can confirm that some members of management, but not all Franchise leadership, are leaving the company but are working to ensure a smooth transition.”

The departure of several senior leaders was later confirmed by the Wall Street Journal.  While not confirmed, rumors suggested that Rupert Vessey will lead Merck’s Discovery and Early Development programs.

While Merck spends close to $8 billion annually on R&D, its late stage development pipeline is thin and Perlmutter was hired to strengthen it. Changes at the top usually mean that other changes will take place among the rank and file. That said, stay tuned for possible additional layoffs among Merck R&D personnel.

Until next time….

Good Luck and Good Job Hunting!!!!!!!

More Evidence That Big Pharma's Investment in R&D Will Continue to Wane

Posted in BioBusiness

There is no longer any doubt that big pharma companies are beginning to reduce their emphasis on internal R&D activities. Instead the companies will increasingly rely on outsourcing, partnerships, closer collaborations with academia, public private partnerships and M&A to keep their drug development pipelines full

Therefore it was not surprising when Merck’s new CEO, Kenneth Frazier recently mentioned in a conference call to financial analysts and investors that its multi-billion spending on new drug R & D will likely decline as a percentage of overall sales in the coming years. Merck is one of the largest pharmaceutical companies in the world

According to an article on Nasdaq.com, in 2010, Merck spent $11 billion on R&D, or 24% of total sales. Adjusted to exclude certain acquisition-related and other costs, R&D spending was $8.1 billion. Merck has predicted 2011 adjusted R&D spending would be $8.1 billion to $8.5 billion for 2011.

Frazier, the first African American CEO of a major pharmaceutical company, came under pressure earlier this year after he decided to not substantially cut R&D as many of Merck’s rivals, most notably Pfizer, did. He noted that cuts in R&D spending would have jeopardized Merck’s long term product development pipeline.

While rumors persist that Merck may be seeking to jettison its non-pharmaceutical consumer health and animal health businesses, Frazier insisted that the two units are complementary to its core pharmaceutical and vaccine focus and are not for sale. That said, if I was a Merck employee in either of those divisions, I would be updating my resume just about now.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!

 

Research Fads in the Life Sciences

Posted in Career Advice

Despite assertions to the contrary, scientists are pretty much like most other people. They eat, sleep, work, party and for the most part are social creatures. Therefore, it should come as no surprise that scientists are also susceptible to hype and succumb to research “fads.” In my former life as an academician, these fads were not so obvious and, for the most part, they unobtrusively helped to advance scientific research. However, after I abandoned academia for the private sector, these fads became blatantly obvious to me.  And, for the most part, were primarily driven by potential profits rather than advancing scientific knowledge for the common good.

First, there was combinatorial chemistry in the mid-1990s. Honestly, I never understood the hubris of the pioneers in this field who thought that by randomly mixing chemicals in a laboratory they could outdo nature when it came to creating new drugs. Nevertheless, the combinatorial chemistry fad over time resulted in high throughput screening, laboratory automation and sophisticated assay development technologies which serve as the foundation for modern drug discovery and development.

Next, there was the Human Genome Project that was supposed to provide drug developers with a plethora of previously undiscovered, potential new drug targets. While sequencing the human genome did provide scientists with a treasure trove of new biological targets, drug makers quickly ascertained that progress in drug discovery was not being hindered by the lack of targets but by a dearth of new drug candidates! Ironically, the lack of drug candidates resulted mainly from abandoning natural product drug discovery in favor of combinatorial chemistry. Like combinatorial chemistry, sequencing the human genome helped to improve DNA sequencing technology, sequence analysis and ushered in the fields of genomics and bioinformatics.

After the human genome was sequenced, scientists began to focus on the fields of computational biology and molecular modeling to help to discover and develop new drugs. While computational biology and molecular modeling yield some small successes, its use in drug discovery and development was limited. Ultimately, these fields morphed into something called translational science or medicine; a discipline that I don’t fully understand.

Finally, in the early 2000s, RNA interference (RNAi) became the technology du jour. RNAi was a powerful laboratory-based discipline that was sexy enough to garner its creators a Nobel Prize. Because of this, many drug companies had high hopes for RNAi and quickly jumped on the RNAi bandwagon. Billions of dollars were invested in the technology with the hope that RNAi would speed new drug discovery and also yield new drug candidates. At the outset, it was clear to many industry experts that RNAi molecules would be difficult to develop as new drug candidates. This is because RNAi molecules are difficult to deliver to cell-based targets and have short biological half lives. Despite these obvious shortcomings, many venture capitalists and large drug companies adopted a “damn the torpedoes, full-speed ahead” attitude and invested countless dollars and hours into RNAi research.  A doubter from the beginning (and pretty vocal about it too), I was not surprised to read an article in today’s Science Times entitled “Drugmakers’ Fever for the Power of RNA Interference Has Cooled” which describes the likely demise of RNAi as a source of new drug candidates.

Today, the new fad appears to be personalized medicine. While I don’t think that personalized medicine is yet “ready for prime time” I believe that it will become a commercial and medical reality in the next 10 to 20 years. Yet, despite lessons learned from past research fads, personalized medicine is being over hyped and oversold by the scientific and medical communities as well as the lay press.

Fads come and go in science as they do in real life. After all, we scientists are humans! That said, scientists are obliged to “go where the data takes you rather than where you (financially or intellectually) want it to go.  If scientists fail to live by this credo, countless research hours will be spent on ideas that cost a lot but yield little.

Until next time..

Good Luck and Good Job Hunting!!!!!!!!

 

Mirror, Mirror on the Wall Who's the Most Ambitious Big Pharma Company of Them All?

Posted in BioBusiness

Since I don’t have a magic mirror, I can only go on what I read in the Internet. And, it appears that Roche may be the most ambitious pharma company of them all; at least by 2013. According to a post on PharmLive, “Roche’s late-stage pipeline is progressing well with potentially ten regulatory submissions of new molecular entities until the end of 2013.”

So what drugs make up this rather full pipeline?

  1. T-DM1 (trastuzumab-DM1)-antibody-drug conjugate for Her-2 positive breast cancer
  2. Pertuzumab/trastuzumab (Herceptin)-monoclonal antibody cocktail to treat Her-2
  3. positive breast cancer
  4. MetMab-a unique monovalent monoclonal antibody for non-small cell lung cancer
  5. GA101/RG7159-the first glycoengineered type II humanized anti-CD20 monoclonal for relapsed/refractory progress non-Hodgkins lymphoma
  6. RG7204-anti-BRAF protein monoclonal antibody for BRAF-mutation-positive metastatic lung cancer
  7. RG1678-first-in-class glycine reuptake inhibitor that normalizes glutamate neurotransmission for schizophrenia and other psychiatric indications
  8. RG1594 (ocrelizumab)-humanized anti-CD20 monoclonal for multiple sclerosis

Not surprisingly, many of these molecules were developed at Genentech, the world’s largest biotechnology company that was purchased by Roche almost two years ago.

Until next time…

Good Luck and Good Job Hunting!!!!

 

More Biotechnology Industry Consolidation: Astellas Pharmaceuticals to Acquire OSI Pharmaceuticals

Posted in BioBusiness

Melville, NY-based OSI Pharmaceuticals, the maker of the cancer drug Tarceva and arguably one of the most successful biotechnology companies in the New York metropolitan area, has finally agreed to be purchased by Japan’s Astellas Pharma.

Earlier this year, Astellas announced a hostile takeover bid for OSI. After a two month long battle, the OSI board agreed to sell the company to Astellas for $4.0 billion. According to the terms of the deal, OSI shareholders will receive $57.50 per share; a 55 per cent premium to the company’s share price in February. The price represents a 10.5 percent increase over Astellas’ original proposal of $52 per share.

Tarceva is OSI’s only product but sales last year reached about $1.2 billion. The drug has been approved to treat various cancers including non-small cell lung cancer (second line treatment) and first-line advanced pancreatic cancer. OSI has been trying to garner approval for Tarceva to treat other types of cancer in recent years. While sales of Tarceva have been growing annually, OSI’s new drug pipeline has been relatively thin.

OSI was founded in 1983 and is one of the oldest biotechnology companies in New York State. The company currently employs about 524 people. It is not clear what effect, if any, the acquisition may have on those jobs.

Astellas Pharma is Japan’s largest pharmaceutical company which has been on something of a buying spree to enhance its oncology portfolio and expand its US presence. Last year, Astellas lost a battle to acquire CV Therapeutics which was ultimately purchased by California-based Gilead Sciences for $1.4 billion.

Over the past few years Japanese pharmaceutical companies, flush with cash, have been aggressively pursuing American biotechnology companies with oncology expertise. Two years ago, Takeda Pharmaceuticals purchased Boston-based Millennium Pharmaceuticals for $8.8 billion to gain access to Velcade, its multiple myeloma drug and oncology drug pipeline.

The recent Japanese biotechnology buying spree is reminiscent of the Japanese real estate grab in the late 1980s which resulted in the sale of some of America’s iconic buildings including Rockefeller Center and the Empire State Building. Ironically, those buildings are again owned by American companies and private equity groups! 

Until next time…

Good Luck and Good Job Hunting!!!

 

Merger Aftermath: Pfizer Refocuses

Posted in BioBusiness

While I never was involved in a corporate acquisition or merger, I have many friends who have lived through them and based on their experiences it is a never a “pretty sight.” Merger aftermaths usually feature massive layoffs, executive management disputes and turf wars and corporate culture clashes tha occur when two workforces are forced to merge as one. However, sometimes mergers may be a good thing for struggling companies. To that end, Pfizer may actually benefit from it $68 billion acquisition of Wyeth late last year.

The acquisition will cost at least 20,000 employees their jobs—not a good thing in a national economy where unemployment is well over 10 percent (despite claims to the contrary). However, this merger is strikingly different than Pfizer’s questionable past mergers and acquisitions which were primarily engineered to procure one or two drugs that had blockbuster potential e.g. Lipitor and Celebrex. This time around, Pfizer’s management team is actually re-evaluating its entire drug development portfolio and attempting to expand the company’s pipeline to include vaccines, therapeutic proteins and other biologics. As I previously noted, most major pharmaceutical companies believe that biologics will be the major driver of pharmaceutical markets in the not so distant future.

According to a post on PharmaLive, Pfizer announced that it will discontinue research and development on roughly 100 experimental new drug candidates. Pfizer officials revealed that the company will continue with 500 research projects in six areas of: 1) Alzheimer’s disease, 2) diabetes, 3) pain, 4) cancer and 5) mental illness (including schizophrenia).

Of the 500 projects, 30 drugs are being tested for cancer indications, 10 for Alzheimer’s disease, eight for pain and 11 for inflammation. Further,133 are in various stages of human clinical testing, including several that are awaiting regulatory approval in the US and elsewhere. 

On the biologics front, Pfizer has six vaccines and 27 biopharmaceutical drugs in development. Prior to the Wyeth acquisition, the company only had one vaccine and 16 new biologics that it was testing. Like most other pharmaceutical companies, Pfizer wants to be a major player in the biopharmaceutical and biologics markets by 2015.

Only time will tell!

Until next time,

Good Luck and Good Job Hunting!!!!!!!

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