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PRESCRIPTION PHARMACEUTICALS AND BIOTECHNOLOGY Founded 1939 | Vol. 73, No. 6

february 7, 2011

top stories Litigation When Will FDA Apply The Park Doctrine? Almost a year after signaling its intent to target more executives with misdemeanor prosecutions when their companies have broken the law, FDA has published its criteria for pursuing such cases. Evidence that an executive played a role in or had knowledge of the ongoing violation is not necessary, FDA says............... 19

European Update Swiss Pharma Seeks Policy Changes The Swiss pharmaceutical industry is seizing upon the deficit that hit the country’s drug sector in 2010 – the first in nearly 50 years – to launch a campaign against the policies of the Swiss Federal Office of Public Health. Price revisions, patent expirations, and generic competition contribute to the bleak picture.............................14

Business & Finance Pharma Looks To Share Buybacks Pfizer’s plan for an enormous, near-term share repurchasing program caught investors’ attention and highlighted a persistent, if sometimes muted, ongoing debate in the industry about the best use of its cash.......................................................7

Health Reform Schedule For Drug Fee Estimates Slip The IRS pushes back some of the implementation deadlines for the new market share-based fees on drug manufacturers by a couple of weeks to accommodate issues raised in response to its November guidance................................................. 11

Table of Contents > 3

Reading Into Pfizer’s Changes: First Steps For New CEO Jessica Merrill j.merrill@elsevier.com

fizer Inc.’s new CEO Ian Read came out of the gates strong during the company’s year-end financial presentation Feb. 1, with news that investors greeted warmly: additional, unexpected cuts to R&D and further R&D reorganization, a $5 billion share buyback program, and assurance that all options are on the table when it comes to Pfizer’s diversified portfolio of businesses. Pfizer’s stock closed the day up 5% at $19.22, though the boost isn’t likely to linger. Read has enormous work ahead if he is to turn around the struggling drug giant, which is facing the loss of exclusivity of its top-seller Lipitor (atorvastatin) in the U.S. in November. Lipitor is already generic in some parts of the world, which pushed down its sales by 6% to $10.73 billion in 2010. The quarterly presentation marked Read’s first public comments to investors since taking over the CEO Pfizer CEO Ian Read post from Jeffrey Kindler in a sudden transition in December (“Pfizer Turns To Insider Ian Read To See It Into Post-Lipitor Era,” “The Pink Sheet” DAILY, Dec. 6, 2010).

Pfizer Lowers Costs With An Eye On EPS Read outlined plans for lowering expenses, namely in R&D – cuts that along with the share repurchase program will help to assure investors Pfizer will meet its earnings forecast in 2012, the year the financial impact of Lipitor will truly hit. Management reaffirmed its 2012 adjusted diluted EPS target of between $2.25 and $2.35 per share.

Pfizer’s 25% reduction in R&D spending could spark scrutiny of other companies’ research budgets. However, the company lowered its 2012 revenue target to between $63 billion and $65.5 billion from a previous target of $65.2 billion and $67.7 billion. The lower revenue estimate isn’t altogether surprising. Analysts have long questioned how Pfizer would meet targets it laid out when it announced the Wyeth acquisition, given the loss of Lipitor and a dearth of new products to replace Story continues > Page 4

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the news this week Regulatory •• With Federal Dollars Scarce, FDA May Fundraise

For Regulatory Science Initiative – Industry and other federal agencies could end up helping fund Commissioner Margaret Hamburg’s regulatory science initiative, as FDA searches for money outside the appropriations process . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

•• PDUFA

V: FDA Application Completeness Crackdown Continues – FDA appears to be sticking to one of its credos in this User Fee Act negotiation: applications should have everything required when submitted to increase the number of reviews completed on time . . . . . . . . . . . . . . . . . . . . 23

Advisory Committees •• Pediatric Studies In Off-Label Indications Needed,

Advisory Cmte. Tells FDA. . . . . . . . . . . . . . . . . . . . . . . . . 30

•• Recent And Upcoming FDA Advisory Meetings . . . . . . Business & Finance •• Reading Into Pfizer’s Changes: First Steps

For New CEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cover

•• Pharma, Uncertain Of What To Do With its Cash,

Turns To Share Buybacks. . . . . . . . . . . . . . . . . . . . . . . . . . 7

•• Rare Disease Improvements Planned Soon, And Up To

•• Switzerland’s Poor Performance In 2010 Heralds

•• NDA Data Standardization Efforts Emerging Along

•• Deals Of The Week: Alexion/Taligen, AstraZeneca/

Five Years From Now. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Public, Private Fronts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

•• Privacy Laws Remain Hurdle To Utilizing Personalized

Uncertain Future For The Industry. . . . . . . . . . . . . . . . . 14 WellPoint, Allergan/Map. . . . . . . . . . . . . . . . . . . . . . . . . . 12

•• Business And Finance News, In Brief . . . . . . . . . . . . . . . . 9

Medicine Through HIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Health Care Reform New Products •• FDA’s ANDA Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . 27 FDA •• FDA Faces Potential 14% Budget Cut As Rep. Kingston

Develops His First Spending Plan. . . . . . . . . . . . . . . . . . 22

Litigation •• FDA Prosecution Criteria For “Responsible” Execs

Includes Seriousness, Obviousness Of Violations. . . . . 19

•• Schedule For Drug Fee Estimates Slips As IRS Revises

Guidance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

•• PCORI To Start Funding Studies Before Methodology

Committee Work Begins – Group’s board proposes that early funding should go to CER projects that could be completed in one to two years. . . . . . . . . . . . . . 16

People •• People In The News: Tracking The Latest Industry

Personnel Moves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

•• Policymakers, In Brief. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

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Reading Into Pfizer’s Changes...

Frazier to comment on Pfizer’s action and his own plan for Merck’s R&D spending.

continued from cover

it. The company already lowered its 2012 revenue forecast twice in 2010. Pfizer had originally targeted $70 billion in revenues when it announced the Wyeth merger. ”My job as CEO is to manage and focus our capabilities, assets and talent to drive the most value for our shareholders,” Read said. “We will invest our human and financial capital in those areas where we can lead, and where we don’t have core capabilities we will look to partner or license assets.” Despite being at the helm less than two months, Read has made difficult decisions regarding the research organization. The company is cutting its R&D budget for 2012 to between $6.5 billion to $7 billion, down from a previous target of $8 billion to $8.5 billion. That comes on top of deep cuts already made; Pfizer’s research budget was $9.4 billion in 2010. At the time it announced its merger with Wyeth in January 2009, the companies had a combined R&D budget of $11 billion.

Pfizer’s 2011 Guidance

Merck, which spent $11 billion in R&D in 2010, is projecting lower spending in 2011, about $8.1 billion to $8.5 billion, a potentially 22% reduction over 2010. That figure means Merck spending will be on par with Pfizer for the year, but potentially greater than Pfizer’s R&D spend in 2012. Frazier said he stands by Merck’s R&D model in place of what he referred to as “indiscriminate short-term cost cutting.” He said, “We are mindful of the need to drive greater productivity in our R&D program …. [but] we are committed to innovation as a strategy, and we believe that over the longterm it will pay off.” Those comments came as Merck withdrew guidance for a high single-digit earnings-per-share compound annual growth rate to 2013 – an announcement that generated considerable frustration on Wall Street, which questions the company’s official explanation for the cut, and is concerned that it raises a red flag on its ability to meet its targets for integrating Schering-Plough.

Merck’s 2011 Guidance Total revenues

$46 billion with low- to midsingle-digit growth, including full Remicade/Simponi marketing rights and animal health*

$8 billion to $8.5 billion

Gross margin

No guidance

Other income

Approximately $1 billion

Merger & acquisition

No guidance

Tax rate

Approximately 29%

Research & development $8.1 billion to $8.5 billion

Adjusted diluted earnings per share

$2.16 to $2.26

Equity income

No guidance

Tax rate

20%-22%

Earnings per share

$3.64 to $3.76 including full Remicade/Simponi marketing rights and animal health

Total revenues

$66 billion to $68 billion

Gross margin

79.5% to 80.5%

Sales, general & admin.

$19.2 billion to $20.2 billion

Research & development

Source: Pfizer, Bernstein Research

Pfizer’s Move Could Spark A Chain Reaction The link between R&D spending and productivity is an issue of serious debate across the industry, as the rising R&D budgets of the last decade haven’t borne fruit in the form of innovative new drugs, especially in the face of increased regulatory and commercial burdens. Big pharmas from Sanofi-Aventis SA to Eli Lilly & Co. and GlaxoSmithKline PLC have retooled their research organizations recently, in an attempt to create more entrepreneurial, accountable models. But now that Pfizer has announced a dramatic 25% cut in spending from 2010 to 2012 levels, other big pharmas may be pressured to similarly lower investments. The issue came up days later at Merck & Co.’s year-end financial call Feb. 3, when analysts pushed CEO Kenneth

4 | February 7, 2011

*Merck is involved in an arbitration with Johnson & Johnson over full rights to Remicade/Simponi ex-U.S. (excluding certain territories.) The arbitration hearing took place in October 2010 and a decision is expected this year. Source: Merck, Bernstein Research

Analysts largely took a more favorable view of Pfizer’s decision than Merck’s. “Merck seems to be either taking an overly conservative approach to the future or the company is looking for cushion to spend more on R&D and/or commercial support,” Credit Suisse analyst Catherine Arnold said in a Feb. 3 research report. “We support investment in R&D and thinking long-term, but it seems like they are asking shareholders to absorb all

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the extra expenses rather than finding internal sources to share resource needs.” Goldman Sachs analyst Jami Rubin applauded Pfizer’s decision. “There is no correlation between spending on R&D and R&D productivity,” she said in an interview.

In R&D, Job And Program Cuts Pfizer is eliminating jobs, closing facilities and narrowing its therapeutic focus to meet the lower bar. “I fundamentally believe in the power of innovation in pharmaceuticals, but I recognize to be successful over time, we need to substantially improve the rigor of our approach,” Read said. “We will sharpen our focus on the core research areas that give us the best promise of scientific and commercial success.” ”We will do fewer, more well-funded efforts,” R&D President Mikael Dolsten added in a follow-up interview. Pfizer’s five core remaining areas of research will be: neuroscience, cardiovascular/metabolic disease, oncology, inflammation/immunology and vaccines. Three other specialized research units will focus on pain, sensory disorders and biosimilars. At the same time, the company will exit several areas of research that it now views as greater risk or less productive, including allergy/respiratory, urology, internal medicine and tissue repair. Pfizer wouldn’t elaborate on how many programs will be impacted by the realignment, but allergy/respiratory appears to have the largest number of drugs in clinical development (10) among the therapeutic areas that are being eliminated, based on Pfizer’s most recent public pipeline update. The company will retain some key assets in those areas “if they can be well managed,” Dolsten said, but others could be divested, partnered or even spun out. Pfizer already pared down its therapeutic focus and cut its R&D budget under former management, including Kindler and then R&D President Martin Mackay, in 2008 (“Pfizer Plots Major Phase III Push,” “The Pink Sheet” DAILY, March 5, 2008). The company also announced a decision to exit most cardiovascular R&D at the time. The inclusion of CV/metabolic as a core research area now does not represent a reversal of that decision, Dolsten maintained, but rather reflects the company’s focus on diabetes and its related complications, including cardiovascular disease. Each of the research units will operate as a separate unit led by a chief scientific officer, with close interface with colleagues in the business units, he added.

Impact To Be Felt In UK And Groton, Conn. In connection with the research changes, Pfizer announced it will close its research facility in Sandwich, U.K., and reduce Unauthorized photocopying is prohibited by law.

the number of employees at its Groton, Conn. research campus, the company’s largest research site. The Sandwich facility employs 2,400, and while Pfizer said it hopes to transfer “several hundred” positions to other Pfizer sites or external partners, many positions will be eliminated. The current research focus in Sandwich is in areas that are now less of a priority, including allergy/respiratory, with a focus on inhaled drugs, as well as internal medicine, urology, virology and renal disease, Dolsten said. However, he said Pfizer remains committed to having a presence in the U.K. and will move pain research, currently done in Sandwich, to its Cambridge, U.K. site to create “more of a biotech pain unit there.” In Groton, Pfizer expects to eliminate about 25% of the 4,500 positions, though the company plans to move some of those jobs to Cambridge, Mass., where Pfizer is looking to develop one of several research “hubs.” Other hubs include San Francisco, New York and Cambridge, U.K. Pfizer, like its peers, plans to outsource more R&D. The company is on the cusp of signing “major strategic partnerships” with contract research organizations in clinical operations or pharmaceutical sciences, Dolsten said. The Groton site will be an “excellence center for discovery and development sciences,” but will also become the main operating center for working with CROs, he added. But research wasn’t the only topic of discussion during the presentation. Read also offered his insights on Pfizer’s business development strategy and the company’s mammoth diversified business model, which has come under fire by some analysts as being less valuable as a whole than in parts.

Read plans to spend 2011 conducting a portfolio review, and reach decisions by year-end. Pfizer’s Diversified Portfolio Is Up For Review Regarding business development, Read said Pfizer will continue to be “opportunistic and disciplined.” The company cut projected revenue from future business development out of its 2012 guidance, which led some analysts to question if that decision reflected a change in strategy. “This does not mean that we have decided to pull back on pursuing business development,” Read said. Pfizer is interested in “bolt-on” acquisitions, he added, and Chief Financial Officer Frank D’Amelio said future collaborations would be along the lines of Pfizer’s recent deals with India’s Biocon to develop biosimilar insulins, in which Pfizer paid $200 million upfront, and the acquisition of King Pharmaceuticals for $3.6 billion (“Pfizer To Buy King For February 7, 2011 | 5

Elsevier Business Intelligence

$3.6 Billion In Order To Strengthen Pain Franchise,” “The Pink Sheet” DAILY, Oct. 12, 2010). ”There are no sacred cows,” Read said of the portfolio, referencing both the pharmaceutical business, as well as the portfolios within Pfizer’s other business units. Pfizer’s diversified businesses include Animal Health, Consumer Healthcare, Nutrition and Capsugel, which makes empty gelatin capsules. Pfizer has already said it is exploring strategic alternatives for Capsugel, which generated $752 million in sales in 2010. ”I’m not driven by the size of the business and I’m not driven by diversity,” Read said. “I believe that the whole has to be more than the sum of the parts, and I am focused on ensuring that it is.”

Pfizer’s non-pharma businesses are the most obvious candidates for a spin-off or sale, but Rubin also said the Emerging Markets and Established Products business units could be spun-off as a separate generics company. Those two units combined generated sales of $18.76 billion in 2010, already bigger in terms of sales then Teva Pharmaceuticals Industries Ltd. – the largest generics firm – which generated sales of $13.9 billion in 2009. (Both figures include some branded sales.) Read may be making some assertive action now, but whether he will be willing to make a move that bold remains to be seen. With the loss of Lipitor, however, he may find his hands are tied.

Read said he plans to spend 2011 conducting a portfolio review, and will reach decisions by the end of the year. Goldman’s Rubin is one analyst that believes Pfizer should spin off or divest non-core businesses or break into smaller companies. Pfizer’s parts are worth more than its whole, she said in a Jan. 28 research report, where she determined the implied equity value of Pfizer’s pieces are worth $25 per share (“A Management Shake-Up At Pfizer Raises Questions,” IN VIVO, January 2011).

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Related Reading

”Pfizer Turns To Insider Ian Read To See It Into Post-Lipitor Era,” “The Pink Sheet” DAILY, Dec. 6, 2010 ”Pfizer Plots Major Phase III Push,” “The Pink Sheet” DAILY, March 5, 2008 ”Pfizer To Buy King For $3.6 Billion In Order To Strengthen Pain Franchise,” “The Pink Sheet” DAILY, Oct. 12, 2010 ”A Management Shake-Up At Pfizer Raises Questions,” IN VIVO, January 2011 Access these articles at our online store www.ElsevierBI.com

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6 | February 7, 2011

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Pharma, Uncertain Of What To Do With Its Cash, Turns To Share Buybacks Wendy Diller W.Diller@elsevier.com

fizer Inc.’s announcement on Feb. 1 that it plans an enormous, near-term share repurchasing program caught investors’ attention and highlighted a persistent, if sometimes muted, ongoing debate in the industry about the best use of its cash. Companies’ priorities for using cash vary widely, of course, but each has to grapple with similar concerns about whether to invest for long-term or near-term payoffs. With the pharma business model under stress, the stakes are high. At the same time, the industry –including foreign-based and U.S. firms – is sitting on a record pile of cash: about $233 billion as of the end of 2009, according to Moody’s, up 25% from 2006 (“So Much Cash For Pharma, But Nowhere To Spend It,” “The Pink Sheet,” Dec. 20, 2010). Companies are seeing fewer opportunities to spend that cash on R&D or business development, areas critical to long-term growth, however. In the case of the former, the industry widely perceives that more money won’t fix R&D’s productivity problems. With the latter, Big Pharma sees a diminishing field of attractive small-to-mid-sized M&A targets and remains leery of big acquisitions – a wariness that justifiably or not seems reinforced by recent setbacks at Pfizer and Merck & Co., which in 2009 acquired Wyeth and Schering-Plough, respectively, in two of the industry’s biggest-ever deals. With investors clamoring for better returns, the industry is placing greater emphasis on dividend growth and stock buybacks. This is not out of line with pharma’s traditional focus or with general trends in American industry. A Standard & Poor’s survey published in December 2010 found that in the three years ended June 30, 2010 companies in the S&P 500 Index – which includes the telecommunications, financial services and energy sectors, among others – spent about 40% of their cash on dividends and stock buybacks and about 48% of their cash on capital expenditures and acquisitions. Among health care companies, the figures were even more skewed toward givebacks to shareholders: they spent 22% of their cash on dividends and 33% on buybacks. But, in a change from the past, during the period covered by the survey, the sector spent more than a third of its cash – an estimated 36% – on acquisitions. To put those figures in perspective, however, they include the Pfizer-Wyeth and Merck-Schering-Plough mega-mergers. Another 16% of the cash went to capital expenditures. The survey does drill down to pharma briefly, noting that healthcare in general, and pharma in particular, has a long

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history of dividend payouts. For the most part, it has consistently raised dividends gradually over the past three years. But during the time covered by the survey, pharma has engaged in very little buyback activity, even though buybacks are considered a tax-efficient way of returning value to shareholders. The survey noted two exceptions to the dividend trend, however. In 2009, following announcement of its purchase of Wyeth, Pfizer cut its quarterly dividend in half to $0.16 a share – a move that angered investors, already upset by Pfizer’s other missteps (“Reading Into Pfizers Changes: First Steps For New CEO,” “The Pink Sheet,” Feb. 7, 2011). Merck, which undertook the other key mega-merger during three-year period of the study, did not cut its dividend to help fund its purchase of Schering-Plough. But it had not raised its dividend since 2005.

Pharma At Crossroads Because, for the most part, it didn’t break out different subsectors of health care, the study isn’t a granular barometer for drawing conclusions about pharma. But it has special pertinence for pharma because the industry is at a crossroads and facing challenges on several fronts, for which a consensus on solutions does not exist. Those in favor of rewarding current shareholders argue that throwing money at R&D has not led to greater productivity. Pfizer spent more than $60 billion on R&D between 2000 and 2008, and launched nine new molecular entities during that time, of which the only meaningful drug was its cancer medicine Sutent (sunitinib), argues Barclays Capital analyst Tony Butler. “There does not appear to be a direct correlation between dollars spent” and products produced, he pointed out. As a result, he and other analysts argue, the money that Pfizer might have put to R&D should go back to shareholders – even though R&D traditionally drives the industry’s long-term value. They’re supportive of the new Pfizer CEO Ian Read’s initiatives to cut R&D costs by $1 billion more than it had guided for in 2010, repurchase $9 billion of Pfizer stock (roughly 5% of total stock outstanding) in the next two years, and conduct a review of businesses to determine the best mix for Pfizer going forward. “The general responsiveness to long-standing shareholder concerns is a strong positive, in our view,” Cutler noted. In contrast, those who argue that shareholder buybacks and other short-term fixes hurt the industry’s long-term value, note that buybacks ultimately have minimal effect on corporate returns. What’s more, companies that commit to share buybacks have in the past issued convertible debt to pay for the shares they intend to buy. More than once, those same companies have had to issues shares – at a lower price – to pay back debt that was never converted (“Are Share Buybacks A Wise Investment For Biopharma?” IN VIVO, June 2007). February 7, 2011 | 7

Elsevier Business Intelligence

The S&P study, which is based on a nuanced analysis of different kinds of buybacks and their timing, generally says companies that employ buybacks offer slightly better returns than dividend-only paying companies. But it does point out that that while stock buybacks can improve earnings per share as the outstanding share count moves lower, the repurchased shares often are offset by those that are issued to cover stock options.

Related Reading

”So Much Cash For Pharma, But Nowhere To Spend It,” “The Pink Sheet,” Dec. 20, 2010 “Reading Into Pfizers Changes: First Steps For New CEO,” “The Pink Sheet,” Feb. 7, 2011 “Are Share Buybacks A Wise Investment For Biopharma?” IN VIVO, June 2007 Access these articles at our online store www.ElsevierBI.com

Big Pharma On Share Repurchase Polices Pharmaceutical Company

Share Buyback Promise

Abbott Laboratories Inc.

Abbott repurchased approximately $800 million of stock each year in 2009 and 2010. It has not announced a buyback initiative for 2011.

AstraZeneca Plc

Extended its share buyback program to $4 billion shares in 2011, after buying back $2.1 billion in 2010. AZ says it “is committed to reinvesting cash in its business and a progressive dividend policy.” It will invest in a stock repurchase program if it generates more cash than it needs for the business and to meet dividend commitments.

Bristol-Myers Squibb Co.

Announced a multi-year, $3 billion share repurchase program in April 2010. Use of cash also includes a 3% dividend increase announced in December 2010 and a focused business development program.

Eli Lilly & Co.

Lilly initiated a $3 billion program in 2001, of which it has repurchased $2.6 billion but has no nearterm plans to repurchase more shares. Its priorities for cash utilization in 2011 consist of R&D, operations, capital expenditures and business development.

GlaxoSmithKline Plc

Reinstated its share buyback program in 2011, after a two-year hiatus. It will pay out £1 billion to £2 billion ($1.6 billion-$3.2 billion) in shares in 2011. The firm said it has more money to put into buybacks because in 2010 it spent only one-third of what it spent in 2009 on M&A activities and expects a relatively low level of acquisitions this year as well.

Johnson & Johnson

J&J completed a $10 billion share buyback program in 2010 and has not announced another one as of yet. Its main uses for excess cash, if any, are dividends, business-building investments and other means of returning value to shareholders.

Merck & Co.

In 2010, Merck repurchased $1.6 billion of stock. It has $1.4 billion remaining on the $3 billion share repurchase authorized by its board in November 2009 but has not provided guidance on timing of additional purchases.

Novartis AG

Novartis reinstated its share repurchase program in December 2010 to compensate for the dilutive nature of its Alcon purchase, but did not name a dollar amount.

Novo Nordisk

New DKK 10 billion ($1.82 billion) program announced Feb. 2, 2011, with DKK 2 billion ($364 million) to be repurchased between Feb. 2, 2011, and April 26, 2011.

Pfizer Inc.

The world’s largest pharmaceutical company pledged to buy back up to $5 billion shares in 2011, with an additional $4 billion share repurchase in 2012 and beyond.

Roche Holdings

Does not have a share repurchase plan in place.

Sanofi-Aventis SA

No updates on share repurchase programs prior to Feb. 9, 2011, when it reports 2010 earnings.

Source: Company reports and earnings calls.

8 | February 7, 2011

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Business And Finance News, In Brief Hospira Reports Lower Earnings Growth Specialty pharma and medical device maker Hospira reported weaker than expected fourth-quarter earnings due to a number of setbacks in its pump business and the delay of one of its key generic products. Hospira has been having problems over the last quarter meeting demand for its specialty injectable drugs and had to put a voluntary hold on shipments of the Symbiq drug-infusion pumps due to alarm-failure issues. The company will file an upgrade plan with FDA during the quarter. Beyond that, the company’s generic version of Sanofi-Aventis’ cancer drug Taxotere (docetaxel) has hit a regulatory snag, and is unlikely to be approved before the end of the first quarter. “We are frustrated regarding the pace of approval of the drug,” CEO Christopher Begley said on a conference call Feb 2. Begley will retire once a successor is found for the position. The company earned $60.6 million, or $0.36 per share, for the three months ended Dec. 31, down 37% from $96.7 million, or $0.58 per share, in the year-ago period.

Valeant Buys Zovirax Rights From GSK In a deal that should increase its geographic reach and profitability, Valeant Pharmaceuticals International acquired all U.S. and Canadian rights to topical herpes drug Zovirax (acyclovir) from GlaxoSmithKline Feb. 3 for $300 million. Part of legacy Biovail business Valeant obtained when it merged with Biovail last year, Zovirax is one of Valeant’s top sellers. Biovail previously was GSK’s exclusive distributor of the drug in the U.S. under a discounted supply contract that expired last year. With the new deal in place, Valeant ameliorates the increased supply price and adds commercial rights in its home country of Canada. Although Valeant did not break out individual sales totals for Zovirax during its most recent earnings call last November, analyst Randall Stanicky of Goldman Sachs estimated the drug brought in U.S. sales of $165 million in 2010.

Biogen Looks To Move Beyond MS Biogen Idec reported strong year-end results for 2010, with total revenues increasing 8% versus 2009 to $4.7 billion and non-GAAP earnings-per-share of $1.42, above analysts’ consensus estimates. Lower R&D costs driven by the firm’s $300 million restructuring and an uptick in drug sales contributed to the strong performance. Still, the company could have trouble repeating its efforts in 2011, especially if its multiple sclerosis warhorses Avonex (interferon beta-1a) and Tysabri (natalizumab) lose market share to newer oral agents such as Novartis’ Gilenya (fingolimod). That’s one reason the company has been

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talking up its “focused diversification” strategy, which aims to move Biogen beyond MS into other neurological diseases like amyotrophic lateral sclerosis. For now, Biogen’s aggressive steps to support its Avonex franchise, which included increasing the sales force 20%, have clearly paid off, resulting in an 8% jump year-over-year to $2.5 billion in the once weekly therapeutic’s revenues. Buttressing Tysabri sales will be more difficult, however, given that drug’s link to progressive multifocal leukoencephalopathy. Biogen has submitted a request to U.S. and EU regulators to change the medicine’s label to include mention of an anti-JCV antibody test as a possible risk stratification tool, but it’s not certain whether regulators will accept the data (“Biogen Idec Charts A New Course,” IN VIVO, January 2011).

Allergan Results Buoyed By Botox Lifted by sales of Botox as both a cosmetic and therapeutic, Allergan reported Feb. 2 that 2010 sales were $4.9 billion, up 8.4% over 2009, and earnings per share were $3.16, up nearly 14%. The portfolio includes cosmetics such as breast implants and skin care, ophthalmology therapeutics and the gastric restriction implant LAP-BAND for obesity. The fourth quarter was particularly strong for cosmetic products: Botox, facial fillers and breast implants. Botox recently was approved for migraine, and executives on the earnings call said the firm would spend heavily to expand Botox into more neurological indications, as well as continue investment in its eye-care franchise, especially in glaucoma. The firm is more dependent than usual on consumer spending, so analysts were enthusiastic about the company’s prospects in the face of a recovering economy. CEO David Pyott told analysts that the firm expected EPS in 2011 between $3.54 and $3.60, or 12% to 14% growth, tempered by $100 million in “incremental costs” due to U.S. health care reform, European price cuts and rebates. Executives forecast 2011 sales between $5 and $5.2 billion. Get a FREE issue!

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February 7, 2011 | 9

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Schedule For Drug Fee Estimates Slips As IRS Revises Guidance Cathy Kelly c.kelly@elsevier.com

he Internal Revenue Service has pushed back some of the implementation deadlines for the new marketshare based fees on drug manufacturers by a couple of weeks to accommodate issues raised in response to its November guidance. The fees, to be assessed based on branded biopharmaceutical sales to government programs, is a new revenue-raiser mandated by the Affordable Care Act and must bring in a total of $2.5 billion from the industry in 2011, the program’s first year. The total amount will increase in later years, reaching $4.1 billion in 2018.

also collect information on drug payments from the relevant government agencies. In other revisions to its earlier guidance, the IRS clarifies that company subsidiaries or affiliates that must be reported in form 8947 should include only manufacturers or exporters with gross receipts from the sale of branded drugs to government programs.

The guidance also addresses the provision of the law exempting orphan drugs from the fees. It states that products eligible for the exemption should include all those that have qualiDrug Fee Timeline fied for the orphan drug research •• Feb. 11: Form 8947 due to IRS and development tax credit, even if the current owner of the drug •• May 16: IRS issues preliminary fee calculations is not the entity that received the •• June 15: Comments due on preliminary fees credit originally. •• Aug. 15: IRS issues final fee calculations

In response to questions on how to account for rebates paid under •• Dec. 15: Form 8947 due to IRS for 2012 the Medicare Part D or Medicaid programs, the IRS states that only Analysts are watching individual those rebates paid in a given year company obligations closely to assess the impact of this before form 8947 is filed should be included. new cost of doing business. •• Sept. 30: Fees due

Under the updated schedule, manufacturers and importers will get a preliminary look at how much in fees they will owe in 2011 by May 16, according to an IRS notice released in midJanuary. The earlier guidance had set May 2 as the date that preliminary estimates would be distributed (“Market-Based Drug Fees: IRS Will Release 2011 Estimates In May, Guidance Says,” “The Pink Sheet,” Dec. 1, 2010). To allow companies time to review the preliminary estimates, comments on the estimates or other aspects of the IRS guidance are now due by June 15; previously, comments were requested by June 2. The final fee calculations are still scheduled to be released by Aug. 15 and the fees collected by Sept. 30. The delay in issuing the preliminary fee estimates reflects IRS’ decision to allow manufacturers and importers extra time to file reports – designated form 8947 – detailing relevant products and revenues that will provide the basis for calculating the fees. The reports had been requested by Jan. 20 but are now due by Feb. 11. Form 8947 reports include the national drug codes, Medicare Part D rebates and state supplemental rebates under Medicaid for all of a company’s branded drugs, as well as information on when any orphan drug indications were approved.

A number of questions regarding the program remain. For biotech firms, one important issue is how new companies will report sales if they had none in the previous two years.

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r e g u l at o r y a f fa i r s & c l i n i c a l d e v e l o p m e n t Vol. 15, No. 12

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top stories

PIPELINE UPDATES

R&D NEWS Another Chance For Ampligen? Hemispherx is hoping to capitalize on recent discoveries of the potential role of a retrovirus in chronic fatigue syndrome to breathe new life into the nda for ampligen. firm is applying retrospective analyses to existing dataset, hopes that will avoid the need for an additional trial . . . . . . . . . . . . . . 15

FDA POLICY Non-Inferiority For Antibiotic Trials fda’s final guidance on non-inferiority trials for antibiotics provides clarity for sponsors working under a special protocol assessment. sponsors with spas will still have to provide evidence supporting the choice of non-inferiority margin and primary endpoints . . . . . . . 8

PIPELINE UPDATES Daiichi Sankyo Realigns R&D Priorities

IRS has decided that the information in the reports will be drawn from two years previous; therefore reports used to calculate the 2011 fees will include 2009 data.

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the Japanese pharma announces during r&d day that it will focus on first-inclass compounds, due to the regulatory and commercial hurdles for follow-on products. the company is still confident, however, that its factor Xa inhibitor edoxaban can compete in a potentially crowded market . . . . . . . . . . . . . . . . . . . . 5

Achillion Aiming For Best-In-Class Protease Inhibitor, Working On HomeGrown Hep C Cocktail Shirley haley s.haley@elsevier.com

hile hepatitis c drug developers ponder the safety and tolerability issues likely to arise when direct-acting antivirals are combined in cocktails against the virus, Achillion Pharmaceuticals, Inc., a small company in new Haven, ct, is working on a portfolio of candidates it says not only combine safely, they work better in combination. in fact, achillion is positioning itself as a specialist in “intra-company combinations,” ceo michael Kishbauch said in an interview at the november american association for the study of liver diseases meeting in Boston. “We believe the greatest value in achillion as a partnership play is in the synergies in our pipeline, the degree to which several of our agents work together nicely,” and the company likely will not be convinced to separate those assets. ten-year-old achillion has three different Hcv pipeline programs in directacting antivirals, the class to which Vertex Pharmaceuticals, Inc.’s telaprevir and Merck & Co.’s (formerly schering-plough’s) boceprevir, both protease inhibitors, belong.

vertex announced nov. 23 that it had completed the nda for telaprevir and asked fda for a six-month priority review; merck says a boceprevir filing is imminent. the Hcv community is excited about the first new treatment in a long time and looking forward to the possibilities of the breakthrough therapies. spring 2011 approvals are widely assumed for both drugs: either would be added to the current standard of care, a combination of pegylated interferon and ribavirin, though eventually the hope is to replace that regimen. physicians and their patients will have to work out case-by-case which daa to use.

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But even before those highly anticipated approvals, all eyes are on the future. While both telaprevir and boceprevir significantly improve chances of achieving a sustained virologic response (undetectable virus at six months, considered a cure) compared to the current standard of care, which cures far fewer than half of patients treated, they also have shortcomings, and the contest is on to improve on these first-generation daas (“Start-Ups Look For Places In Future HCV Combo Regimens,” Start-Up, November 2010).

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Deals of the Week Each week, “The Pink Sheet” presents commentary on some of the week’s most interesting business deals, contributed by the editors of the IN VIVO blog.

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BIOPHARMACEUTICAL AND MEDICAL DEVICE INDUSTRY INTELLIGENCE AND ANALYSIS News, insight and analysis from the writers and editorial teams of

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Start-Up: Emerging Medical Ventures The RPM Report: Regulation | Policy | Market Access

Alexion/Taligen, AstraZeneca/ WellPoint, Allergan/Map Paul Bonanos p.bonanos@elsevier.com Jessica Merrill j.merrill@elsevier.com Ellen Foster Licking e.licking@elsevier.com Cathy Kelly c.kelly@elsevier.com Joseph Haas j.haas@elsevier.com John Davis j.davis@elsevier.com

Alexion Pharmaceuticals/Taligen Therapeutics Announced Jan. 31, the union of Alexion and Taligen is designed to be complementary in more ways than one. Both companies have designed drugs that inhibit pathways in the complement system, a subset of the body’s innate immune system in which blood-borne proteins attack pathogens. Alexion, which thus far has specialized in orphan diseases, said it would pay $111 million upfront plus unspecified milestone payments for Taligen, whose lead program has been studied for ophthalmology as well as other disorders. Taligen had been planning to partner its lead program, TT30, for age-related macular degeneration while keeping it in-house for orphan indications such as atypical hemolytic uremic syndrome and paroxysmal nocturnal hemoglobinuria (PNH), two rare disorders linked to deficiencies in complement factor H. Based in Cheshire, Conn., Alexion already markets a complement inhibitor for PNH, Soliris (eculizumab), although it affects a different pathway. Robert W. Baird analyst Christopher Raymond speculated that TT-30 could replace Soliris as Alexion’s lead program. The deal represents a payday for Taligen’s venture investors, which had supplied at least $40 million to the Cambridge, Mass., startup since 2004. They include Sanderling Ventures, Clarus Ventures, Alta Partners and High Country Venture.

AstraZeneca/WellPoint A new agreement between Britain’s second-largest pharma and U.S.-based health benefits provider WellPoint is designed to give AstraZeneca deeper insights into “real world data” surrounding post-market outcomes for its medications. AstraZeneca struck a four-year deal to harvest information from WellPoint’s clinical outcomes 12 | February 7, 2011

research unit HealthPoint, which will deliver data concerning cost effectiveness, clinical effectiveness and comparative effectiveness. That information could prove influential as AZ negotiates with payers to cover new pharmaceuticals. The agreement will focus especially on medications for chronic disorders including diabetes, cardiovascular disease and dyslipidemia, and will draw from a database covering 36 million enrollees in 16 U.S. states. Specific terms of the contract weren’t disclosed, although the companies said the agreement could be extended beyond its initial term. The agreement also could be used to identify areas of unmet need in order to spur research and development initiatives, according to AstraZeneca executive James Blasetto. Although AZ has contracted WellPoint to study specific disorders before, their latest deal is the broadest yet.

Allergan/Map Pharmaceuticals Botox marketer Allergan paid $60 million upfront for rights to co-promote Map Pharmaceuticals’ orally inhaled migraine therapy Levadex, which has completed Phase III clinical trials and could be ready for an NDA submission in the first half of 2011. The deal value could increase to $157 million if milestones tied to Levadex’s approval in additional indications such as adolescent migraine are met. The first order of business is getting approval for acute migraine; while the companies establish joint steering committees, Map retains ownership of the NDA, which also means it bears the costs associated with the submission. The amount of upfront money is worth noting, given what the deal doesn’t include: Map keeps rights to promote to primary care docs in the U.S. and elsewhere, meaning it ostensibly could capture more value for the product through a series of smart licensing deals. Still analysts and investors were puzzled why Map, which can’t afford the costs of primary-care marketing in a competitive space like migraine, didn’t seek a partner from the get-go that could broaden Levadex’s commercial reach to U.S. internists and family-practice doctors, as well as physicians practicing abroad. © 2011 F-D-C Reports, Inc., an Elsevier company. All rights reserved.

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Valeant Pharmaceuticals International/PharmaSwiss

Apeiron Biologics/Merck KGaA

Focusing its growth almost completely on deal-making, Canadian specialty firm Valeant got off to a quick start this year, announcing a €350 million ($480 million) purchase of PharmaSwiss on Feb. 1. Having said in early January that Valeant planned at least five ex-U.S. deals this year, including one of significant size, CEO Michael Pearson looks to have made a smart move in acquiring the privately held generics and over-the-counter products firm.

Austrian immunotherapy firm Apeiron has licensed a fusion protein consisting of interleukin-2 linked to a GD2 antigen-targeting antibody from Merck KGaA, and it aims to conduct Phase II/III trials with it. Money from an out-licensing deal struck with GlaxoSmithKline a year ago enabled Apeiron to snap up the product, which CEO Hans Loibner said he has kept tabs on for some time.

PharmaSwiss has averaged growth rates of 20% the past five years and with its management team staying on, the company will transition into Valeant’s European base of operations one year after Valeant expanded via last year’s $3.3 billion reverse merger with Biovail. In addition to tax benefits from operating in Switzerland, PharmaSwiss offers its status as partner of choice for companies such as Pfizer, Eli Lilly and Amgen that want to commercialize products in Eastern Europe without adding infrastructure. Pearson said PharmaSwiss will continue that practice under the Valeant umbrella.

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Separately, in a deal announced Feb. 3, Valeant acquired all U.S. and Canadian rights to topical herpes drug Zovirax (acyclovir) from GlaxoSmithKline for $300 million.

Apeiron believes it has the knowledge necessary to conduct trials in the very small number of children who develop neuroblastoma, and Merck probably recognized that, Loibner said. The immunocytokine has shown preliminary activity in a subset of children with neuroblastoma in a Phase II study. Apeiron now has full development and commercial rights and would like to take the product to market, but that decision may change, Loibner added. The companies did not disclose financial terms of the deal. Apeiron’s previous deal came in October 2010, in-licensing a recombinant human superoxide dismutase (SOD) from fellow Austrians Polymun Scientific, which Loibner believes has potential as a dermatological for the treatment of skin damage associated with radiotherapy.

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Switzerland’s Poor Performance In 2010 Heralds Uncertain Future For The Industry Faraz Kermani f.kermani@elsevier.com

he Swiss pharmaceutical industry is seizing upon the deficit that hit the country’s drug sector in 2010 – the first in nearly 50 years – to launch a campaign against policies instigated by the Swiss Federal Office of Public Health (BAG). Significant pressure on prices and patent expirations have contributed to the first deficit in the Swiss pharmaceutical market since 1963, when such statistics started to be compiled for the country. Moreover, data published by IMS Health on Jan. 24 in its report, “The Swiss Pharmaceutical Market 2010,” suggest that the year ahead also is looking bleak. Patent expiries will cost research-based manufacturers some CHF 30 million, price revisions a further CHF 60 million and the need to cut prices to keep pace with generic competition another CHF 45 million, IMS said. Moreover, while the Swiss market stagnates at between 1% and -1% growth, other European markets will experience growth of between 2% and 4%, the report predicts. Two Swiss pharmaceutical industry associations, Interpharma – which represents the leading companies of the research-based sector – and vips – whose members account for some 70% of the Swiss market by value – point out that increased government regulations could seriously damage the industry. The associations consequently have issued a joint statement, positioning the deficit to mount a fight back against pricing controls. Whilst Switzerland may have a small pharmaceutical market, valued at roughly CHF 4.8 billion ($ 5.1 billion) in exfactory sales in 2010 (compared to the $300 billion market in the U.S.), it is home to a prominent section of the European industry. Domestic companies include Novartis, Roche, Actelion, Basilea and Addex, among others.

The originator industry fears that over the next decade it will experience further losses in the region of CHF 650 million ($690 million), as a result of the loss of many branded products to generics. Meanwhile, the tightening of pricing regulations by the Swiss Federal Council in 2009, which are being implemented progressively over the following two years, will cost originator companies some CHF 400 million by the end of 2011. Last year, the market contracted by 1.3% to CHF 4.82 billion, compared to growth of 3.4% in 2009. Walter Hölzler, president of vips, has said that Switzerland’s population boom and its increasingly elderly population would suggest that the pharmaceutical industry should be growing. 14 | February 7, 2011

However, while volumes actually rose by 0.5% to 205.3 million packs in 2010, prices were pushed down.

Government-Imposed Pricing Pressures Since 2006, there have been a total of 7,000 price reductions for products on the so-called Specialty List, amounting to a total of CHF 1.9 billion. The list contains those medicines that have fulfilled the assessment requirements, based on efficacy and value-for-money, for reimbursement via basic health insurance. There were 2,900 price reductions in 2010 alone, most of these resulting from government pricing regulations. After a drug obtains approval from the medicines agency (Swissmedic), a company may apply for a price and reimbursement. In order to do this, it has to compare existing prices in six countries: the U.K., Germany, Denmark, the Netherlands and – since 2009 – Austria and France. It then must calculate the average, set a reimbursement price and gain approval from the BAG. “The addition of France and Austria had a large negative impact on prices, particularly on drugs for the elderly,” Hölzler said. The problem for the industry is that price checks are carried out on products every three years and drug prices are reduced accordingly during the patent life of the product. Interpharma Secretary General Thomas Cueni noted that as drug prices continue to fall, R&D costs are rising. Cueni complained that the strength of the Swiss Franc was making the country less attractive as a haven for R&D. “For the research-based Swiss pharmaceutical companies, this is becoming an increasing problem, because amongst Interpharma members, expenditure on R&D now corresponds to six times domestic turnover,” he added. Although figures for 2010 are not yet available, in 2009, total turnover for Swiss pharmaceutical manufacturers was marginally above CHF 1 billion. Over the same period, companies spent CHF 6.5 billion on R&D. Cueni added that the strong Swiss Franc, coupled with the weakening of the Euro, was having a significant negative effect on export income. Despite this problem, pharmaceutical export growth was 4% in 2010, slightly over CHF 60 billion and accounting for a third of total product exports from Switzerland. So, although the industry is used to higher levels of growth, this figure is at least positive.

Patent Cliff Looming However, the Swiss industry’s, and indeed the global pharmaceutical industry’s, problems do not stop there. A large number of innovator products are set to go off patent over the next two years, thereby impacting industry profit levels.

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“Patent losses have not been significant over the past two years, but the forthcoming years will be far more impacted by this phenomenon,” Hölzler said. He added that due to the off-patent pricing regulations, the Swiss drug market would stagnate in 2011. This also could be the case for 2012, when the brand sector will be impacted by Pfizer’s Lipitor (atorvastatin) going off patent, as well as many others (“Bye Bye Lipitor: 2011 Presents A Big Opportunity For Generic Drugs,” “The Pink Sheet,” Jan. 10, 2011). “Our prediction for 2011 is between -1% and +1%, but next year will have the heaviest impact ever,” Hölzler said. Cueni suggests that the heyday of the Swiss pharmaceutical industry appears to be waning. “Although medicines account for only 12% of the health care expenditure in Switzerland, they have been over-proportionally hit with cost control measures,” he complained. The industry now is calling for a packet of measures to increase Switzerland’s attractiveness for pharmaceutical manufacturers. Their aim is to: •• dispense with price control measures that take advantage of a weak Euro; •• increase Switzerland’s standing as a place to do R&D through a revision of the Therapeutic Products Act;

•• ensure that the forthcoming Human Research Act improves conditions for clinical trials in Switzerland; •• and improve access to innovative medicines. Faced with aging populations, in Europe both Member States and non-EU countries are looking to tighten their health care budgets as they prepare for the impact the aging population will have on their health services (“EU Pricing: The Only Way Is Down,” “The Pink Sheet,” Jan. 24, 2011). With the Swiss government pointing out that its pricing controls have brought stability and affordability to the health care sector, the pharmaceutical industry is likely to have a fight on its hands to convince the BAG that no further restrictions are necessary and that many of those in place should be rescinded. But with foreign trade by Swiss drug makers still accounting for a third of all exports from the country, they have some leverage left. Related Reading

”Bye Bye Lipitor: 2011 Presents A Big Opportunity For Generic Drugs,” “The Pink Sheet,” Jan. 10, 2011 “EU Pricing: The Only Way Is Down,” “The Pink Sheet,” Jan. 24, 2011 Access these articles at our online store www.ElsevierBI.com

Policymakers, In Brief Nancy Ann DeParle Takes Broader Policy Role White House Office of Health Reform Director Nancy Ann DeParle is taking on a broader policy role in the administration with her appointment as assistant to the president and deputy chief of staff for policy. The White House has not announced leadership plans for the Health Reform Office going forward. However, former Senate Finance Committee staffer Yvette Fontenot recently joined the reform office as senior policy director.

CCIIO Director Is Steve Larsen The newly-formed Center for Consumer Information and Insurance Oversight at CMS has a new director. Steve Larsen, who headed oversight activities in the center’s predecessor organization, the HHS Office of Consumer Information and Insurance Oversight, will become director of CCIIO. He succeeds Jay Angoff as head of the organization, which is charged with implementing changes to the commercial insurance market under the health care reform law. Angoff is now a senior advisor to HHS Secretary Kathleen Sebelius. OCIIO was reorganized as a center within CMS as one of a number of recent changes

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at HHS (“Hash Will Be HHS Health Reform Office Director As Administration Regroups For New Congress,” “The Pink Sheet,” Jan. 7, 2011).

Health IT Chief Blumenthal To Step Down David Blumenthal will be stepping down from his role as the HHS National Coordinator for Health Information Technology to return to his academic post at Harvard University, HHS Secretary Kathleen Sebelius revealed in a Feb. 3 e-mail to HHS staff. In the e-mail, she credits Blumenthal’s efforts during the past two years with gaining momentum in the use of health IT, particularly electronic health records. Following the enactment of the HITECH Act as part of the 2009 stimulus package and Blumenthal’s “adept and powerful leadership in implementing the principles of ‘meaningful use’ of EHRs, America is finally on the road to harnessing the full power of EHRs to improve the quality, safety and value of health delivery,” Sebelius wrote. Blumenthal’s last day will be “later this spring,” the e-mail said. A nationwide search for his successor is planned.

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PCORI To Start Funding Studies Before Methodology Committee Work Begins

Seeking Short-Term Opportunities

Gregory Twachtman g.twachtman@elsevier.com

It was proposed that early funding should be for projects that could be completed within one to two years – pilots and demonstrations that are “looking into the area of patient knowledge, decision making and evidence dissemination and by evaluating and supporting needed capacity and infrastructure for patient-centered outcomes research as defined by the statute,” Kuntz said.

he Patient-Centered Outcomes Research Committee is planning to move forward with some short-term projects despite the fact that the newly formed Methodology Committee is still in the early stages of organization. During a Jan. 19 meeting of the PCORI board of governors, Richard Kuntz, member of the board and senior VP and chief scientific, clinical and regulatory officer at Medtronic Inc., presented an outline to build a charter for the public/private institute that looks to begin research activities as soon as possible, the funding of which will “balance both the urgency to get things moving with the responsible process.” At the time of the meeting, the Government Accountability Office had not named the appointments to the Methodology Committee, and that raised some questions about whether the board should go forward with seeking opportunities to fund any kind of opportunity without the full input of the Methodology Committee. GAO released those appointments Jan. 21 (“Who’s Who On The PCORI Methodology Committee,” “The Pink Sheet,” Jan. 31, 2011), but it is expected that it will take a bit of time to get the committee up and running from an organizational standpoint. With that in mind, members of the board questioned whether they should delay moving forward until the committee is performing its duties, namely developing and updating methodological standards and guidance to conduct comparative effectiveness research. “Before we can actually move forward with carrying out the research project agenda, there is supposed to be put in place a methodology committee that guides our thinking and actually guides the conduct of that research,” Steven Lipstein, vice chair of the board and president and CEO of BJC Health Care, said. Board member Robert Zwolak, Dartmouth Medical School, noted that it will take the committee “some number of weeks to get going and my question is can we, PCORI, prior to the organization and function of the Methodology Committee, start funding pilots or these demonstration grants or are we obliged to wait until we get input from the Methodology Committee?” Kuntz replied that it “is not clear to any of us that those have been defined as roles for the Methodology Committee” and added that the board will help define the committee’s charter. As for whether PCORI can move forward with funding shortterm research opportunities, “I think the simple answer is I think we are equipped as a group to start the process now” and the lack of input from the Methodology Committee “should not be a limiting step,” Kuntz added. 16 | February 7, 2011

The board of governors is looking to move forward with some short-term funding opportunities as it establishes processes for funding and conducting longer-term projects.

The meeting produced a wide range of suggestions for the direction of early research, covering a number of topics brought up in past CER discussions, such as building capacity and infrastructure, developing methods of improving transparency and stakeholder input, conducting an environmental scan aimed at determining gaps in evidence, and more focused work related to health outcomes. On the capacity side, Kuntz said that investment “should build capacity and improve access to data so that there are sufficient numbers of top investigators in the country to conduct patient-centered outcomes research both at the federal and state level.” He also called for building links between researchers, stakeholders and decision makers as well as building synergies with public entities such as the National Institutes of Health, the Agency for Healthcare Research and Quality and the Department of Veterans Affairs, and private entities. Another board member, Ellen Sigal, chair and founder of Friends of Cancer Research, suggested that there are a number of “shovel ready” projects in both the near and long term that can address disparities in health care delivery. In an effort to get short-term research projects under way quickly, a strict timeline was proposed, including seeking input on research priorities by mid-April, and then soliciting comments on the research agenda and the peer review process by the middle of June. Getting projects funded and completed early could help PCORI demonstrate its usefulness to a Republican-run House that is already showing skepticism over how money for comparative effectiveness research is being used. The House Energy and Commerce Committee has begun looking into CER activities conducted by HHS using 2009 stimulus package funds (“House Committee Questions HHS On Spending Of Comparative Effectiveness Research Funds,” “The Pink Sheet” DAILY, Feb. 4, 2011). Related Reading

“Who’s Who On The PCORI Methodology Committee,” “The Pink Sheet,” Jan. 31, 2011 “House Committee Questions HHS On Spending Of Comparative Effectiveness Research Funds,” “The Pink Sheet” DAILY, Feb. 4, 2011 Access these articles at our online store www.ElsevierBI.com

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Privacy Laws Remain Hurdle To Utilizing Personalized Medicine Through HIT Gregory Twachtman g.twachtman@elsevier.com

rivacy laws need to be updated to get the most out of personalized medicine when channeled through health information technology, including the ability to analyze personal information for research purposes and the provision of data to patients to better inform decision about their own care. “Current limits on data sharing and secondary analysis of de-identified data make it difficult to get the benefits of genomics,” Brookings Institute VP and Director of Government Studies and Senior Fellow Darrell West said in the Jan. 28 white paper, “Enabling Personalized Medicine Through Health Information Technology.” “Data access is not just a question of the risks of unwanted information releases, but what benefits arise from data sharing,” West continued. “For example, it is nearly impossible to evaluate treatment effectiveness without being able to aggregate data and compare results. Researchers need to be able to re-use information so that data can be employed to improve health care quality and cut costs.” But at the same time, it could take very little information that supposedly is de-identified from electronic health records to actually identify patients, raising more concerns about maintaining patient privacy within digital sharing and analysis of information. “Some experts have suggested that as few as 13 specific genetic features can identify a particular person with a one in a billion certainty,” West notes. “There are certain molecular genotypes that are rare enough to be able to identify a specific individual. Indeed, de-identified qualities nearly evaporate under the notion of personalized medicine.” West adds that under current privacy rules, “it is impossible to gain any of the benefits of genomics when patients have to approve any current or future specific use of the tissue sample.” Speaking at a Brookings event on the same day the white paper was released, David Brailer, chairman of Human Evolution Partners and the first National Coordinator for Health Information Technology under the Bush administration in 2004, said the Health Insurance Portability and Accountability Act is “inadequate” for the digital age. “It is antithetical to the digital age both in terms of how it allows control and privacy of information, but, more importantly, how it allows for the control and portability of information,” Brailer said. One area Brailer identified that could bring more clarity to how information is used, particularly through electronic health records, is ownership of the data produced. “I think

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there’s not a social accord on what that ownership means,” Brailer noted. “HIPAA largely and perhaps unintentionally said that people that produce the data own it. … I think we will see that one of the key steps in our health information and personalized medicine journey is a refresh of the concepts of portability and ownership that are currently locked, largely, in HIPAA.” In addition to addressing privacy concerns in light of current HIPAA requirements, another area that needs strengthening if the benefits of personalized medicine, as well as comparative effectiveness research, are to be realized is the quality of data captured. HHS through its meaningful use criteria already is beginning to standardize the types of information that need to be routinely collected to qualify for incentive payments (“EHR Meaningful Use Could See Optional Items Become Requirements In Stage 2,” “The Pink Sheet” DAILY, Jan. 14, 2011). Additionally, the newly created Patient-Centered Outcomes Research Institute is planning to look for ways to leverage meaningful use in CER (“PCORI Board Eyes Connection Between Meaningful Use And Comparative Effectiveness Research,” “The Pink Sheet” DAILY, Nov. 24, 2010). But one area where researchers see a gap in information is in patient-reported outcomes. Janet Corrigan, president and CEO of the National Quality Forum, noted during a Jan. 20 eHealth Initiative conference that it would be a “big step” to begin collecting that kind of data routinely. Another matter that will need to be addressed in terms of using data generated not only through EHRs, but through medical claims data and other data sources, is finding ways to utilize data infrastructure to better access that data to determine what works. An avenue to do that could be public/private partnerships, which Amol Navathe, medical officer and senior program manager of the Comparative Effectiveness Portfolio at HHS, and Patrick Conway of the University of Pennsylvania described as “essential for health IT to enable CER that has maximal value.” In a December 2009 article in the American Journal of Managed Care, Navathe and Conway note that the federal government is working on bringing together large volumes of data from various sources into a common database, and similar initiatives are going on in the private sector. Where private sector involvement will be key is in gathering more complete administrative payer data. And while the federal government is working to make data available and CMS in particular is a necessary source of data, “these data are not sufficient to support the comprehensive study of clinical or health care delivery. … Although the federal government can play a critical role in contributing public data and providing funding to key initiatives, private sector entities across the health sector must increase participation to create resources that maximize the ability to improve patient care.”

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People in the News by

Tracking The Latest Industry Personnel Moves

On the first Monday of each month, “The Pink Sheet” chronicles employment changes, professional awards and other news about people in the pharmaceutical industry.

Gregory Twachtman

Submit announcements to: g.twachtman@elsevier.com

Tracking The Latest Industry Personnel Moves Presidents and CEOs Genelux Corp. hires Jodi Devlin to serve as president. She most recently served as a VP at Abbot, leading that company’s global pipeline marketing for all therapeutic areas … Affymax Inc. appoints John Orwin CEO and member of the company’s board of directors. He succeeded Arlene Morris, effective Feb. 1. She remains with the company as a consultant until September … Crescendo Biologics Ltd. promotes Mike Romanos to CEO from his position as chief scientific officer, a title he has held since May 2009 … Genocea Biosciences promotes Chip Clark to president and CEO. He joined the company in August 2010 as chief business officer and was the co-founder and former chief business officer at Vanda Pharmaceuticals.

Chief Officers Tetraphase Pharmaceuticals appoints Patrick Horn chief medical officer. He joins the company from Dyax Corp., where he most recently served as VP of clinical and medical affairs … Trius Therapeutics Inc. hires Craig Thompson to the newly created position of chief commercial officer. He comes from Pfizer’s Specialty Care Business Unit, where he was VP of marketing … Cardioxyl Pharmaceuticals Inc. names James Gilbert chief medical officer. He brings more than 25 years of experience to the new position and most recently held the same title at Archimex Corp … Daniel Von Hoff joins ISYS Therapeutics/NeoPharm as chief development officer. He takes on the title as he continues to serve as physician in chief and distinguished professor at the Translational Genomics Research Institute, chief science officer for US Oncology and for Scottsdale Healthcare, and holds an appointment as clinical professor of medicine at the University of Arizona College of Medicine … Regulus Therapeutics promotes Garry Menzel to chief operating officer and executive VP of finance. He joined the company in August 2008. Sean McCarthy brings more than 15 years of industry experience to his new role as chief business officer of CytomX Therapeutics. He most recently worked for venture capital firm Pappas Ventures where he was a transactional partner … Cigna names Jon Maesner chief pharmacy 18 | February 7, 2011

officer. He has been with the private payer since 1996 … Ziopharm Oncology Inc. hires Mark Thornton to serve as executive VP and chief development officer. He most recently was chief medical officer at Novavax and previously worked as medical officer in FDA’s Center for Biologics Evaluation and Research … Constellation Pharmaceuticals announces two new appointments: James Audia will serve as chief scientific officer after a 23-year tenure at Eli Lilly & Co., where he achieved the highest level on the company’s scientific ladder. Michael Cooper is named chief medical officer after most recently serving as clinical head of oncology translational medicine at the Novartis Institutes for Biomedical Research.

New Hires ImmunoGen Inc. hires Theresa Wingrove to serve as VP of regulatory affairs after she leaves Histogenics, where she was VP of regulatory and clinical affairs … Biogen Idec appoints Doug Williams executive VP of research and development. He most recently served as CEO of ZymoGenetics. Steven Holtzman is named executive VP of corporate development. He was a founder and CEO of Infinity Pharmaceuticals (“Biogen Continues To Plot New Course In Naming Two Key Executives – But Is Independence Part Of The Plan?” “The Pink Sheet,” Jan. 10, 2011) … Young Kwon joins Momenta Pharmaceuticals as VP of business development after leaving his role as senior director of business development at Biogen Idec … Novo Nordisk names Anne Phillips VP for clinical, medical and regulatory affairs for North America. She most recently served as VP and medicine development leader within GlaxoSmithKline’s oncology R&D organization … Lightlake Therapeutics Inc. appoints former FDA deputy commission and senior advisor and current Pendergast Consulting President Mary Pendergast as the company’s advisor for regulatory and strategic matters.

Legal David Joy leaves his senior staff attorney position at FDA’s Center for Drug Evaluation and Research to join the legal team at Venable LLP as Of Counsel … Billy Tauzin, former president and CEO of the Pharmaceutical Research and Manufacturers of America (“PhRMA Chief Billy Tauzin Stepping Down,” “The Pink Sheet,” Feb. 15, 2010) and member of the House of Representatives, D-La., joins Alston & Bird to serve as special legislative counsel. © 2011 F-D-C Reports, Inc., an Elsevier company. All rights reserved.

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FDA Prosecution Criteria For “Responsible” Execs Includes Seriousness, Obviousness Of Violations David Filmore d.filmore@elsevier.com

lmost a year after signaling its intent to target more individual executives with misdemeanor prosecutions when their companies have broken the law, FDA has published its criteria for pursuing such cases. The criteria, which make up a newly added section of the agency’s “regulatory procedures manual,” include a handful of factors that may drive FDA to recommend that federal attorneys go after individuals rather than just a corporation when Food, Drug and Cosmetic Act violations are alleged. Among the considerations: the individual’s position and authority within a company; whether a violation is likely to have harmed the public; the obviousness of the violation; and more practical-minded considerations such as “whether the proposed prosecution is a prudent use of agency resources.” But FDA suggests it has significant leeway that goes beyond what can be described in a single document. “As the Supreme Court has recognized, it would be futile to attempt to define or indicate by way of illustration either the categories of persons that may bear a responsible relationship to a violation or the types of conduct that may be viewed as causing or contributing to a violation,” the new guidelines note.

a misdemeanor in 2007 tied to felony counts for the company for misbranding the pain drug Oxycontin (oxycodone). HHS already has issued guidance on how corporate officers could be excluded if they knew about misconduct (“Presumed Guilty: HHS Exclusion Guidance Shifts Burden Of Proof To Corporate Officers,” “The Pink Sheet,” Oct. 25, 2010). Ever since FDA signaled a greater focus on the legal strategy last year, questions have circulated about how strictly government attorneys will interprete the Park Doctrine. One burning question will be whether an executive is liable simply for being at the company when the violations occurred or if some limited evidence is needed suggesting prior knowledge or negligence by the official. The new criteria do not appear to provide a clear-cut answer to that question. “I think it is going to be fleshed out on a case-by-case basis as the agency starts to increase enforcement under the Park doctrine,” Bruce Manheim, a partner with the law firm Ropes & Gray, said in an interview. FDA signaled last fall it wanted to target flagrant off-label promotion in its first Park Doctrine case, in part because the agency has not been satisfied with prior attempts to curb the conduct (“Off-Label Prosecution May Be Where FDA ‘Parks’ Aggressive Enforcement Tools First,” “The Pink Sheet,” Oct. 18, 2010).

Knowledge By Exec Not Required

Ropes & Gray has pursued the publication of FDA’s Park Doctrine criteria since the firm filed a Freedom of Information Act request with the agency last March. The firm says it was informed by an agency staffer on Feb. 2 that the criteria had been posted.

FDA has powerful legal authority to pursue executives under a 35-year-old Supreme Court precedent (U.S. v. Park), but attention to the issue has swelled since last March, when the agency disclosed plans to pursue that authority under what is called the “responsible corporate officer” doctrine, or Park doctrine.

“I think it is significant that we now at least have a pronouncement by FDA that is transparent to the industry and allows the industry to understand what the criteria and procedures will be for these types of actions,” Manheim said. That said, he does not see anything particularly surprising in the general guidelines that are provided.

Agency officials warned companies that cases would be brought and the Department of Justice, whose participation is necessary for such cases, made clear that it is also putting renewed emphasis on holding executives personally responsible under the Park doctrine (“Corporate Responsibility Standards Coming; Don’t Be First Case, FDA Warns,” “The Pink Sheet,” May 24, 2010).

The guidelines confirm that no proof of intent, negligence or even knowledge of a specific offense is needed to win a case under the Park doctrine, but also note these “are factors that may be relevant when deciding whether to recommend charging a misdemeanor violation.”

Under the doctrine, executives can be found guilty of a misdemeanor by virtue of having authority to prevent, detect or correct company violations of the FD&C Act. Evidence that the official played a role in or had knowledge of the ongoing violation is not necessary. Penalties can be steep, such as income disgorgement and exclusions from federal health programs, which was the fate of three executives from Purdue Pharma who pled guilty to

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Other factors cited are whether a violation reflects a pattern of illegal behavior; whether it is widespread; whether it is serious; and “the quality of the legal and factual support for the proposed prosecution.” The agency stresses that these factors are “intended solely for the guidance of FDA personnel, do not create or confer any rights or benefits for or on any person and do not operate to bind” the agency’s actions. “Further, the absence of some factors does not mean that a referral is inappropriate where other factors are evident.”

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With Federal Dollars Scarce, FDA May Fundraise For Regulatory Science Initiative Derrick Gingery d.gingery@elsevier.com

ndustry and other federal agencies could end up helping fund Commissioner Margaret Hamburg’s Regulatory Science Initiative, as FDA searches for money outside the appropriations process.

FDA officials are not expecting the ambitious plan to boost the agency’s capacity to approve and monitor new drugs will be funded next year. The agency already said no money is available for the initiative because Congress was “reverting to a simple continuing resolution to operate” through March 4.

The agency already is in the crosshairs for fiscal year 2011 spending cuts. House Appropriations Committee Chairman Hal Rogers, R-Ky., on Feb. 3 announced a proposed 14% discretionary spending reduction from FY 2010 levels for the Subcommittee on Agriculture, Rural Development and FDA (“FDA Faces Potential 14% Budget Cut As Rep. Kingston Develops His First Spending Plan,” “The Pink Sheet,” Feb. 7, 2011). Pandemic flu money intended to pay for regulatory science upgrades as part of a government-wide effort to boost development and production of medical countermeasures also is out for now. The funding depends on congressional approval of FY 2011 appropriations (“FDA Regulatory Science Gets The Flu (Funding) In HHS Overhaul Of Bioterror Product Development,” “The Pink Sheet” DAILY, Aug. 19, 2010).

Now the agency is looking for help from other government entities like the National Institutes of Health, as well as through public-private partnerships with industry and other stakeholders.

Seyfert-Margolis said the agency wants to get the maximum effect from the limited resources it will have. That includes using “very targeted direct funding mechanisms” for pilot studies related to regulatory science.

That could include loosening the chains on the controversial Reagan-Udall Foundation, Vicki Seyfert-Margolis, senior advisor for science, innovation and policy in the Office of the Commissioner, said during a Jan. 28 webinar on advancing regulatory science sponsored by the Drug Information Association.

FDA also wants to work with the National Institutes of Health on joint-funding opportunities, such as those brokered through the Foundation for the National Institutes of Health, a sister entity to Regan-Udall, Seyfert-Margolis said.

Reagan-Udall was created by the 2007 FDA Amendments Act but has not been funded because Rep. Rosa DeLauro, D-Conn., felt it would allow industry to exert too much influence over the agency. At the time DeLauro chaired the Appropriations subcommittee that handled FDA (“Congressional Obstacle for Reagan-Udall Foundation,” “The Pink Sheet,” Nov. 5, 2007). DeLauro lost her chairmanship this year because Republicans won a majority in the House of Representatives, meaning she now would have a much tougher time stopping funding for the foundation. Seyfert-Margolis said the foundation can help build consortia and other partnerships and raise money to help bring about aspects of the Regulatory Science Initiative.

FDA and NIH already are working together to develop new scientific methods to improve drug, biologics and medical device reviews (“Regulatory Science: FDA Gets Help From NIH, But Is It Enough?” “The Pink Sheet,” March 1, 2010). The Critical Path initiative, another earlier attempt to improve clinical trial design and biomarker qualification to streamline drug development also will be reformulated into an external arm of the Regulatory Science Initiative. That program struggled in its infancy, but spent $16 million on projects in fiscal year 2009 and was expected to spend $18 million last year (“Next Up Parkinson’s: Coalition Against Major Diseases Moves To Link Neurodegenerative Ailments In Database,” “The Pink Sheet” DAILY, June 11, 2010). Seyfert-Margolis said Critical Path will remain an important piece of the agency’s efforts.

“I think we have to be as innovative and as creative as possible to try to engage as many external stakeholders as we can both from the perspective of bringing in the different scientific and intellectual viewpoints, but also from the perspective of leveraging funds, both governmental and nongovernmental,” she said.

Critical Path “will be very involved in engaging external stakeholders, both through some direct funding efforts, through workshops and through some very targeted initiatives that I think will be coming out of the Critical Path that address the broader advancing Regulatory Science Initiative,” she said.

FDA Not Immune To Proposed Spending Cuts

Attitude Toward Funding Changed

It now appears FDA may have no other choice than to go after industry and stakeholder money to help pay for regulatory science upgrades, assuming Congress continues on its trend to cut spending.

Hamburg was somewhat optimistic the Regulatory Science Initiative would get congressional support when she announced it in October. She said FDA’s unique job made it worthy of the funding increases to establish the

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new Office of Regulatory Science (“FDA Has Regulatory Science Plan; Now It Needs Funding,” “The Pink Sheet” DAILY, Oct. 6, 2010). By December, CDER Director Janet Woodcock was not as optimistic. In a speech to the FDA-CMS Summit, sponsored by Elsevier Business Intelligence, publisher of “The Pink Sheet,” Woodcock said the agency would have to cut back in the coming year and cautioned that CDER will be in belttightening mode. “One of the things we have to do is figure out how to do more with less, how to accomplish our objectives at a time of probably potential shrinking resources,” she said. Woodcock said the center likely will not be starting any new initiatives in 2011. Instead, CDER will attempt to deliver on the mandates already given to it. “For us, this 2011 period is kind of going to be a period of consolidation where hopefully we won’t see any spectacular new legislation that we’ll be implementing and we’ll be finishing initiatives or consolidating them and really delivering on some of the promises and things we’ve been working on,” she said. CDER still plans to implement its new Regulatory Science Initiatives, despite the financial pressures, Woodcock said. “We hope to keep going forward with everything,” she said in an interview after the speech.

FY 2011 Freeze Included More FDA Money FDA missed out on a funding increase when Congress decided to go with a continuing resolution. The House-approved funding bill, which would have held federal appropriations at $1.09 trillion, still would have shifted more funds to FDA (“House Bill Would Spare FDA From Federal Funding Freeze,” “The Gray Sheet,” Dec. 13, 2010). The offices of the commissioner, chief scientist, foods, international programs, administration, and policy, planning and budget would have received $224.1 million in the Houseapproved funding resolution and Senate Consolidated Appropriations Act. The new Office of Regulatory Science, a key part of Hamburg’s regulatory science plan, was to be housed within the Office of Chief Scientist. Instead, Congress approved a continuing resolution Dec. 21 that keeps all government agencies running at 2010 budgetary levels until March 4. Some changes were made, but did not include FDA.

Bioequivalence Issues Need Research Funding While the Regulatory Science Initiative is not expected to get off the ground this year, other regulatory science questions Unauthorized photocopying is prohibited by law.

may not be answered for some time because of funding issues, according to Woodcock. Among them are bioequivalence standards for generic respiratory drugs, she said. They require research, which cannot happen without funding. The generic respiratory market is considered lucrative, but difficult to enter in the U.S., in part because no bioequivalence standards have been established for generic inhaled respiratory drugs. A call for research on the topic was considered by an advisory committee in 2008, but has not been resolved (“Respiratory Generics: Big Potential But A Tough Market To Crack,” “The Pink Sheet,” May 24, 2010). Woodcock said in some cases, the generic company may be better off developing a competitor because FDA has no way of determining bioequivalence. “The way to answer these questions is to get data … and the way to get the data is to do the research,” Woodcock said. “And in a constrained fiscal environment it’s going to be difficult for us to do these experiments.” A similar argument was made by former House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., about the abbreviated biosimilars pathway. Waxman said the extensive requirements for approval were not practical and likely would push sponsors to file full biologics license applications instead (“Waxman Says Biosimilar Pathway Will Push Applicants To BLA,” “The Pink Sheet,” Nov. 22, 2010).

Related Reading

“Congressional Obstacle for Reagan-Udall Foundation,” “The Pink Sheet,” Nov. 5, 2007 ”FDA Faces Potential 14% Budget Cut As Rep. Kingston Develops His First Spending Plan,” “The Pink Sheet,” Feb. 7, 2011 “FDA Regulatory Science Gets The Flu (Funding) In HHS Overhaul Of Bioterror Product Development,” “The Pink Sheet” DAILY, Aug. 19, 2010 “Regulatory Science: FDA Gets Help From NIH, But Is It Enough?” “The Pink Sheet,” March 1, 2010 “Next Up Parkinson’s: Coalition Against Major Diseases Moves To Link Neurodegenerative Ailments In Database,” “The Pink Sheet” DAILY, June 11, 2010 “FDA Has Regulatory Science Plan; Now It Needs Funding,” “The Pink Sheet” DAILY, Oct. 6, 2010 “House Bill Would Spare FDA From Federal Funding Freeze,” “The Gray Sheet,” Dec. 13, 2010 “Respiratory Generics: Big Potential But A Tough Market To Crack,” “The Pink Sheet,” May 24, 2010 “Waxman Says Biosimilar Pathway Will Push Applicants To BLA,” “The Pink Sheet,” Nov. 22, 2010 Access these articles at our online store www.ElsevierBI.com

February 7, 2011 | 21

Elsevier Business Intelligence

FDA Faces Potential 14% Budget Cut As Rep. Kingston Develops His First Spending Plan Cathy Dombrowski c.dombrowski@elsevier.com

verything is on the table as a House Appropriations subcommittee seeks to cut fiscal 2011 spending at the Department of Agriculture, FDA and related agencies by about $3 billion from FY ‘10 levels. Details of the cuts will be worked out during the next week as each appropriations subcommittee puts together its portion of a continuing resolution to provide funds for the federal government to operate through Sept. 30, 2011, the end of the fiscal year, according to an aide to Rep. Jack Kingston, R-Ga., the incoming chairman of the Agriculture/FDA panel. No decisions have been made about where or how steep the cuts will be at either FDA or at the Department of Agriculture, the aide noted. The allotment to the subcommittee would reduce overall spending at the agencies by 14% compared to the money they received for fiscal 2010. Kingston is committed to FDA’s mission of ensuring safe food and drugs for the American people, the aide said, so the question is how to achieve that given the current economic situation. Kingston has not been as involved in FDA policy issues to the extent of his predecessor, Rep. Rosa DeLauro, D-Conn., who has pushed to divide the agency into separate entities – one to oversee food safety and the other medical products. When he has stepped into that arena, Kingston has demonstrated his fiscally conservative credentials. In the last Congress, the Georgia Republican co-sponsored the follow-on biologics bill introduced by Rep. Henry Waxman, D-Calif., that would have cut drug spending more quickly by enabling biosimilars to enter the market sooner than under the bill that ultimately was incorporated into health care reform legislation. He also has supported allowing the importation of lower cost drugs made at U.S.-approved overseas facilities. Regardless of what FDA’s budget ends up being this year, the agency already appears to be preparing for an era of austerity (“With Federal Dollars Scarce, FDA May Fundraise For Regulatory Science Initiative,” “The Pink Sheet,” Feb. 7, 2011). The Alliance for a Stronger FDA, which advocates for increased appropriations, noted in Feb. 4 statement that, because almost half of the year will be over by the time the current continuing resolution expires on March 4, the impact of the proposed cuts could be greater than 14% in order to achieve the savings targets. 22 | February 7, 2011

”For example, a 14% decrease reduces a $100 million program to $86 million. However, if the program spent $50 million in the first half of the year, then there will only be $36 million to spend in the second half of the year. This would constitute a 28% cut in the amount the agency would have available to spend in the second half of the year,” the alliance stated. The Alliance noted, however, that “when agencies are operating under a partial year continuing resolution, they usually do not spend half of the amount in the first 6 months of the fiscal year. This is likely to be true of all programs in the Agriculture Appropriations subcommittee’s jurisdiction, including FDA. To some degree, this would lessen the impact of a full year’s cuts being spread across six months.”

Two New Faces Atop The Appropriations Subcommittee As Kingston assumes the reins of the Agriculture/FDA subcommittee, he finds himself working with a new partner across the aisle. While DeLauro remains on the panel, she has opted to become ranking member of the Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies. There she will be involved in overseeing NIH funding of biomedical research and other Department of Health and Human Services programs. Replacing DeLauro as top Democrat on the Agriculture/ FDA subcommittee is Sam Farr, who represents an agricultural district in California and has been vocal during panel hearings on the need to ensure food safety. In the area of health care, Farr has pushed for health insurance coverage of routine HIV screening and radiation therapy for breast cancer patients, as well as adequate reimbursement of physicians treating Medicare patients.

After The House, A Battle In the Senate, the Appropriations Committee is waiting to see the funding levels approved by the full House (a floor vote is scheduled for the week of Feb. 14) before moving forward on an FY 2011 measure. Majority Leader Harry Reid, D-Nevada, has panned the House Republicans’ proposed cuts, setting the stage for a contentious debate between the two houses of Congress as they attempt to complete action before the current continuing resolution expires March 4. The results could be another short-term funding measure while the two sides seek a compromise. Even as spending figures for the remainder of fiscal 2011 remain in doubt, President Obama is expected to send his budget proposal for fiscal 2012 to Capitol Hill on Valentine’s Day. © 2011 F-D-C Reports, Inc., an Elsevier company. All rights reserved.

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PDUFA V: FDA Application Completeness Crackdown Continues Derrick Gingery d.gingery@elsevier.com

DA remains firm in its push for application completeness in PDUFA V, despite its willingness to add two new review cycle meetings with sponsors.

Industry asked for some leniency in sending additional submissions while the application is undergoing filing activities under the proposed new review model. The agency offered a little slack, but indicated it is not likely. FDA appears to be sticking to one of its credos in this Prescription Drug User Fee Act reauthorization negotiation: Applications should have everything required when they are submitted in order to increase the number of reviews completed on time. Industry asked the agency to accept a filing during the filing period, when the review clock’s start would be held for 60 days, if it had been discussed during a pre-submission meeting. But FDA implied in the minutes there should be no reason for sending additional submissions at that time. “The pre-submission meeting should partially serve to document what items will constitute a complete application,” the agency said in minutes of a Dec. 13 PDUFA Pre-Market Sub Group meeting. Agency officials would not ban all additional submissions once the application is filed. They said in limited circumstances additional submissions for some priority applications may be accepted, according to the minutes. Office of New Drugs Director John Jenkins already said the agency will not back away from its submission expectations. Meanwhile, industry has been asking for clarification of what constitutes a complete application. Sponsors also want to know the FDA’s data threshold to make an approval decision, arguing it now appears to be a moving target (“What’s A ‘Complete’ Application? Clarity From FDA Could Speed Review Times,” “The Pink Sheet,” Jan. 17, 2011). Under the new review model proposal, applications would be expected to be submitted with complete lists of manufacturing facilities and possibly clinical investigation sites along with other required documentation.

Sponsors Would Get More Timely Information The longest and most extensive debates throughout the PDUFA reauthorization discussions have focused on changing the application review process. Industry has been looking for more communication with reviewers and faster decisions, while FDA wants to improve its record of first-cycle approvals. The proposal on the table would indirectly extend the review cycle two months for NME new drug applications and novel Unauthorized photocopying is prohibited by law.

BLA applications, with the potential for extending it another three months. But it also would create a mid- and late-cycle meeting between sponsors and FDA officials to talk about application issues. The review clock on NME NDAs and novel BLAs would not begin for 60 days after submission to allow FDA to ensure the application is filed, pushing the goal date to one year for standard applications. Major amendments, no matter when they were submitted, would warrant an automatic threemonth extension, which could push the goal to 15 months. In return for the wait, sponsors would get a mid-cycle meeting with project managers during the 30-day period following an FDA internal mid-cycle meeting, according to the latest PDUFA negotiation minutes. In addition to updating the sponsor on application progress, reviewers also could talk about “high-level deficiencies.” After the agency finishes its primary and secondary reviews, a late-cycle meeting would be scheduled with higher-level FDA authorities. The agency also agreed to give the sponsor the advisory committee briefing package prior to that meeting (“FDA Floats 15-Month Review Timeline For PDUFA V; Firms Mull Tradeoff On Speed Vs. Certainty,” “The Pink Sheet,” Dec. 13, 2010). Under the new review model, FDA also would write and issue Discipline Review Letters once its secondary review is finished, which would give sponsors a clear indication of the deficiencies found. Industry officials said those problems may not be included in the advisory committee background package and sponsors can better use the information if it is received prior to the late cycle meeting, according to the minutes. FDA also seemed to be establishing ground rules for the late cycle meetings to control the flow of extra submissions, which can slow reviewers’ progress. The agency said discussions about deficiencies in late-cycle meetings would not necessarily be considered a solicitation for another sponsor submission. FDA said in the minutes the review division could accept the filing, but would be under no obligation to conduct a late review of it. And if the submission was large enough, it could be considered a major amendment and garner a three-month goal extension.

Defining “Major Amendment” Industry and FDA also discussed what constitutes a major amendment, but the minutes did not provide any more detail of the definition. Questions also remain about when major amendments will constitute a review clock extension. FDA said modifying a REMS proposal submitted with the application could count as a major amendment and be subject February 7, 2011 | 23

Elsevier Business Intelligence

to the automatic extension. The additional time would be needed because REMS can only be reviewed after labeling and other issues are completed, according to the minutes. The agency already is trying to deal with the squeeze on review resources stemming from increased application complexity by adjusting user fee calculation formulas, which help determine personnel levels (“User Fee Inflation Calculations May Need To Change Due To Slow Economic Recovery,” “The Pink Sheet,” Jan. 17, 2011). Review cycle discussions were expected to continue at additional meetings scheduled for early this year. Related Reading

“What’s A ‘Complete’ Application? Clarity From FDA Could Speed Review Times,” “The Pink Sheet,” Jan. 17, 2011 “FDA Floats 15-Month Review Timeline For PDUFA V; Firms Mull Tradeoff On Speed Vs. Certainty,” “The Pink Sheet,” Dec. 13, 2010 “User Fee Inflation Calculations May Need To Change Due To Slow Economic Recovery,” “The Pink Sheet,” Jan. 17, 2011 Access these articles at our online store www.ElsevierBI.com

NDA Data Standardization Efforts Emerging Along Public, Private Fronts Derrick Gingery d.gingery@elsevier.com

DA appears to be using a multi-front strategy for designing and implementing plans to standardize electronic data formats and application filings.

It also involves industry members working together to create voluntary data standards for research of major diseases like cancer, which could create another option for widespread adoption. The agency is pushing for applications and other filings to be sent electronically through a common format. Those submitted on paper or in different electronic formats prevent staff from performing advanced analyses and asking in-depth questions, FDA has argued. Using Commissioner Margaret Hamburg’s Regulatory Science Initiative is one potential route for the standards, but its funding remains in limbo amid proposed federal budget cuts (“With Federal Dollars Scarce, FDA May Fundraise For Regulatory Science Initiative,” “The Pink Sheet,” Feb. 7, 2011). The agency also could use the Prescription Drug User Fee Act reauthorization to implement the standards, but industry does not appear enthusiastic about giving FDA unilateral authority in writing them. CDER Director Janet Woodcock said in December the lack of data standards makes the effort required to review applications less predictable.

24 | February 7, 2011

Speaking during the FDA-CMS Summit, sponsored by Elsevier Business Intelligence, publisher of “The Pink Sheet,” Woodcock said standardization of data submissions, along with other changes, would make significant improvements possible. “All the efficiency and all the consistency people are asking for, we don’t even know whether we have it or not until we get data standards and standard analyses … in place,” she said. In fiscal year 2010, CDER received on average about 62% of NDA-related submissions in electronic common technical document format, according to agency data. During the year, the percentage ranged from as low as 58% to as high as 66% during an individual month. The electronic submission tally represents significant progress; in FY 2008, only 33% of NDA submissions used the eCTD format. Data contained on paper or in portable document format (pdf) is not “mineable” and makes it nearly impossible for reviewers to do cross-study assessments, said Vicki SeyfertMargolis, senior advisor for science, innovation and policy in the Office of the Commissioner. By 2013, the agency hopes to have a data repository in place to integrate all its data for use by reviewers looking at product classes and other issues, she said. “This scientific enclave will allow us to pilot out a number of analytical strategies, software, development of algorithms and a variety of other approaches that enable scientists and ultimately reviewers to search, model and analyze data and enable personalized medicine or tailored therapies and conduct better safety and efficacy analyses,” Seyfert-Margolis said Jan. 28 during a webinar sponsored by the Drug Information Association. As part of PDUFA negotiations, the agency asked for the ability to circumvent the formal regulation writing process so it can produce new data submission standards faster. Industry was concerned about allowing standard-setting without the formal comment process (“PDUFA Update: FDA Wants To Automatically Extend Complex Application Reviews,” “The Pink Sheet,” Oct. 4, 2010). FDA has revised the proposal to implement the new electronic standards through the guidance process and allow stakeholders to give input. The agency said it would issue guidance outlining the new data standards and implementation timeline so industry could plan ahead and comment, if necessary, according to minutes of a Nov. 22, 2010, negotiating session. The new standards would be tested prior to implementation to ensure they meet users’ needs. The agency also intends to include tools that ensure application data meets the standards prior to submission.

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FDA agreed, at industry’s suggestion, to revise the proposal to allow for waivers of the standard format requirements under certain circumstances, according to minutes of a Dec. 13, 2010, negotiation.

CDER Data Standards A Priority The electronic data standards issue has been percolating for some time. CDER issued a draft data standards plan last spring that outlined the potential approaches to developing and managing data standards. New regulatory requirements for electronic submissions are a priority for CDER during the next two years, Woodcock said in presentation slides. A proposed rule requiring submission of electronic data also is in the works as well as enhanced guidance and reviewer resources, she said. Hamburg also included data standards development for electronic submissions as part of the regulatory science initiative, announced last October.

Even data submitted in Excel spreadsheets is difficult to interpret, FDA says

That plan called for the creation of an Office of Regulatory Science to oversee the initiative, but pending budget cuts could leave the proposal without its necessary funding (“FDA Has Regulatory Science Plan; Now It Needs Funding,” “The Pink Sheet” DAILY, Oct. 6, 2010).

Research Data Standards Being Designed Outside FDA The Critical Path Institute also has partnered with the Clinical Data Interchange Standards Consortium to set clinical data standards to improve drug development for major diseases. Critical Path President and CEO Raymond Woosley said standards for neurodegenerative diseases like Parkinson’s are upcoming. Woosley also said FDA has asked the group to work on data standards for diabetes, cancer and pain conditions because those are priorities. He said lung cancer standards are going to be the next big target. “It’s all a voluntary standard,” Woosley said. “The companies have indicated that it’s for their best interest to use the same data and of course the FDA really likes that because they can compare data on different biomarkers and different diseases across companies.” A common standard was used when Critical Path created its Alzheimer’s disease clinical trials database, which includes data from 4,000 patients from 11 control trials. Companies have agreed to use the standards in future trials and the database now is available to researchers

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to help design clinical trials for new treatments (“Next Up Parkinson’s: Coalition Against Major Diseases Moves To Link Neurodegenerative Ailments In Database,” “The Pink Sheet” DAILY, June 11, 2010). Woosley said he expected major efficiencies in the application review process once the new standards are completed and embraced. Now companies use different biomarkers in their research, leaving reviewers unsure of the data because they may not be qualified. If FDA qualifies the biomarkers, those along with the data standards will lessen the reviewers’ workload, Woosley said. “The reviewers can say, ‘OK they used methods that we already evaluated so I don’t have to worry about those,’” he said. “I can just look at the drug.”

Related Reading

”With Federal Dollars Scarce, FDA May Fundraise For Regulatory Science Initiative,” “The Pink Sheet,” Feb. 7, 2011 “PDUFA Update: FDA Wants To Automatically Extend Complex Application Reviews,” “The Pink Sheet,” Oct. 4, 2010 “FDA Has Regulatory Science Plan; Now It Needs Funding,” “The Pink Sheet” DAILY, Oct. 6, 2010 “Next Up Parkinson’s: Coalition Against Major Diseases Moves To Link Neurodegenerative Ailments In Database,” “The Pink Sheet” DAILY, June 11, 2010 Access these articles at our online store www.ElsevierBI.com

February 7, 2011 | 25

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Rare Disease Improvements Planned Soon, And Up To Five Years From Now Derrick Gingery d.gingery@elsevier.com

FDA officials already are expecting to be forced to do more with less funding this year, due to expected cuts in appropriations (“With Federal Dollars Scarce, FDA May Fundraise For Regulatory Science Initiative,” “The Pink Sheet,” Feb. 7, 2011).

FDA Wants More Development Involvement

Industry also appears to be on board with growing the program as more drug developers attempt a move into rare diseases, attracted in part by the premium prices the therapies can demand and the keen regulatory interest in getting products approved for the conditions.

FDA approved 105 orphan drug applications from 2005 through 2010, an average of more than 17 per year, according to orphan drug data on FDA’s website.

DA has short- and long-term plans to improve its rare disease program under PDUFA V, and next month the agency will continue its efforts to boost drug development in the sector.

On March 2, the agency will conduct an advisory committee meeting to talk about drug development in the sector. The topic for the Advisory Committee for Pharmaceutical Science and Clinical Pharmacology is the best use of biomarkers and “how lessons learned from other applications of clinical pharmacology tools in pediatrics and oncology can be applied to orphan and rare diseases.” In addition, rare disease program improvements would continue throughout PDUFA V, with benchmarks scheduled as long as five years from now. A proposal is on the table as part of the reauthorization of the Prescription Drug User Fee Act that would “increase the agency’s capacity in CDER and CBER to focus on rare disease product development,” according to minutes of a Dec. 13 PDUFA Pre-Market Sub Group meeting. The minutes did not provide more detail, but increased capacity likely refers to providing for more personnel for orphan drug application reviews and regulatory science research. The proposal also allows for both the drug and biologics centers to develop guidance, hold a public meeting and develop new tools to measure the success of the rare disease development program, according to the minutes. FDA told attendees at a Jan. 11 PDUFA stakeholders meeting that the proposal includes a staffing and implementation plan that would be in place by the end of fiscal year 2013, according to presentation slides. The public meeting on rare disease clinical development and complexity would be held by the middle of FY 2014 and evaluation tools would be ready by the end of FY 2016, according to the slides. Guidance and policy development would be ongoing throughout PDUFA V, and a rare diseases staff training program would be implemented by FY 2015. The proposal is expected to be discussed again in a subgroup meeting. FDA also cautioned the stakeholders in its presentation that progress and implementation will depend on resources. 26 | February 7, 2011

The agency also has seen its approvals in the sector decrease as it has increased its push for more and efficient rare disease drug development.

That average has decreased more recently, however. From 2008 through 2010, the agency approved an average of 16 orphan drug applications per year, while from 2005 through 2007, the average was 19 per year. Large pharmaceutical companies have been attacking rare diseases lately because of a lack of competition and pricing pressure. The Orphan Drug Act gives designated products market exclusivity upon approval. But the proportion of approvals with orphan drug status to all novel applications in 2010 was about one in four, considered an average year during the past decade (“Few, But Fast And On Time: 2010 Saw Low NME Count, But Almost All Were First-Cycle Approvals And FDA Met Most User Fees,” “The Pink Sheet,” Jan. 24, 2011). FDA recognized an increase in orphan drug applications was imminent last fall when it announced its push for regulatory science improvements. The agency wants to be involved in orphan drug development long before a sponsor submits an NDA or BLA, as is now the case. Ideally, the agency would be consulted before the pre-IND phase and remain involved through Phase IV and post-marketing, according to the presentation slides. The agency now has a specialized internal review group for rare diseases that was created as part of the FY 2010 FDA Appropriations Act. The group includes 24 agency scientists from pre-clinical and clinical disciplines and will evaluate agency practices for reviewing rare disease drug, biologic and medical device applications and whether it can be optimized, FDA Chief Scientist Jesse Goodman told the Senate Appropriations Committee’s Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies last summer. Sen. Sam Brownback, R-Kan., implored Goodman and the agency during the hearing to be more aggressive and identify priority neglected and rare diseases for drug development (“Sen. Brownback Wants FDA To Aggressively Coordinate Drug Development For Neglected/Rare Diseases,” “The Pink Sheet” DAILY, June 24, 2010). The Rare Disease Review Group is required to report to Congress on its progress by next month. Guidance and

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internal review standards for rare diseases, another legislative mandate, are expected to be issued in September, according to the slides.

speakers asked the agency to be more flexible in clinical trial design and allow for more surrogate endpoints to expand the development pipeline.

The agency also is promoting scientific development and has conducted workshops on biomarkers, novel therapies and other topics related to rare diseases which will inform the upcoming advisory committee meeting.

Several also wanted a new office for biochemical and genetic diseases that would centralize agency expertise and conduct all application reviews. The proposed FDA budget for fiscal year 2011 also included money for additional staff and drug development grants for the Office of the Associate Director for Rare Diseases in CDER (“User Fee Discussions Include Funding Parts Of FDA Regulatory Science Plan,” “The Pink Sheet,” Oct. 25, 2010).

Reviewer Training Upcoming, Advocates Want More Drastic Changes The agency already has announced a training schedule for staff, intended to help them better understand rare diseases and their applications. Drugs and biologics in the category can be difficult to review because rare diseases affect small populations, making trial designs and endpoint selection challenging. The training would keep reviewers current on emerging science and other issues. Reviewer training is scheduled to run from February through April and has attracted interest from CDER, CBER and the Office of Orphan Products staff (“FDA To Offer Reviewers Rare Disease Training; Patient Groups Want Separate ODE,” “The Pink Sheet,” Dec. 6, 2010). Advocates have called for more drastic changes at FDA, however. During a public hearing on rare disease policy,

Related Reading

“With Federal Dollars Scarce, FDA May Fundraise For Regulatory Science Initiative,” “The Pink Sheet,” Feb. 7, 2011 “Few, But Fast And On Time: 2010 Saw Low NME Count, But Almost All Were First-Cycle Approvals And FDA Met Most User Fees,” “The Pink Sheet,” Jan. 24, 2011 “Sen. Brownback Wants FDA To Aggressively Coordinate Drug Development For Neglected/Rare Diseases,” “The Pink Sheet” DAILY, June 24, 2010 “FDA To Offer Reviewers Rare Disease Training; Patient Groups Want Separate ODE,” “The Pink Sheet,” Dec. 6, 2010 “User Fee Discussions Include Funding Parts Of FDA Regulatory Science Plan,” “The Pink Sheet,” Oct. 25, 2010 Access these articles at our online store www.ElsevierBI.com

FDA’s ANDA Approvals” Applicant

Active Ingredients

Number

Date Approved

Sandoz

Oxaliplatin, 50 mg/10 mL (5 mg/mL) and 100 mg/20 mL (5 mg/mL) IV (infusion) inj.

78-817

1/24/2011

Mylan

Nisoldipine, 8.5 mg, 17 mg, 25.5 mg and 34 mg extended-release tabs.

91-001

1/26/2011

Sagent

Topotecan HCl, EQ 4 mg base/vial inj.

91-284

1/26/2011

West Ward

Clonidine HCl, 1 mg/10 mL (0.1 mg/mL) and 5 mg/10 mL (0.5 mg/mL) inj.

200-300

1/26/2011

Zydus

Glipizide/metformin HCl, 2.5 mg/250 mg, 2.5 mg/500 mg and 5 mg/500 mg tabs.

78-905

1/31/2011

Amneal

Ondansetron HCl, EQ 4 mg base/5 mL oral solution

91-483

1/31/2011

Zydus

Tramadol HCl, 50 mg tabs.

90-404

1/31/2011

Epic

Phentermine HCl, 37.5 mg tabs.

200-272

1/31/2011

Tentative Approvals Aurobindo

Famciclovir, 125 mg, 250 mg and 500 mg tabs.

91-114

1/26/2011

Sandoz

Epinastine HCl, 0.05% ophthalmic solution

90-950

1/27/2011

Dr. Reddy’s

Clopidogrel, 300 mg tabs.

91-023

1/27/2011

Hikma

Levofloxacin, 250 mg, 500 mg and 750 mg tabs.

78-767

1/31/2011

Dr. Reddy’s

Amlodipine besylate/benazepril HCl, 5 mg base/40 mg and 10 mg base/40 mg caps.

90-149

1/31/2011

Pharmaforce

Latanoprost, 0.005% ophthalmic solution

200-925

2/1/2011

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February 7, 2011 | 27

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Pediatric Studies In Off-Label Indications Needed, Advisory Cmte. Tells FDA Sue Sutter s.sutter@elsevier.com

DA is uncertain how to wield its new regulatory powers to pursue pediatric studies in off-label indications despite pressure from its Pediatric Advisory Committee, which sees a gap in such research for some products. At a Dec. 7 meeting, committee members encouraged FDA to work with companies or other entities to pursue additional pediatric studies for two products, GlaxoSmithKline PLC’s Flovent HFA and Amgen’s Neulasta. Yet, FDA officials highlighted regulatory and legal limits in their ability to pursue such studies, and they were non-committal about requesting additional pediatric trials under either the drug safety authorities of the FDA Amendments Act or the Patient Protection and Affordable Care Act’s biosimilar provisions. The discussions surrounding Flovent and Neulasta also highlighted an ongoing quandary for the agency: how to encourage research on safe use of a product in a pediatric age group for which the drug is not approved and efficacy has not been clearly established. The committee was convened to discuss pediatric-focused safety reviews and updates for 12 products. Such reviews originally were required for drugs granted six-month pediatric exclusivity pursuant to the Best Pharmaceuticals for Children Act of 2002. FDAAA, signed into law in 2007, expanded the committee’s review activities to include products receiving pediatric labeling changes based on studies conducted under BPCA and the Pediatric Research Equity Act. The reviews of adverse events that have occurred with offlabel pediatric use of Flovent and Neulasta drew the most discussion among committee members.

Growth, Dental Concerns Surround Flovent Approved in 2004, Flovent HFA (fluticasone propionate) is indicated for the treatment of asthma in patients ages four years to adult. Labeling states that safety and effectiveness in children younger than four years have not been established. Also included is a class warning for orally inhaled corticosteroids on potential reduction in growth velocity. Among the four studies conducted in patients under four years, one 52-week study showed Flovent HFA to be associated with 2.5 cm less growth than cromolyn. Patients ages 0-16 years accounted for 42% of Flovent HFA prescriptions dispensed (approximately 2 million) from July 2009 to June 2010, an increase from about 34.5% in the July 2004-June 2005 period. Although the majority of pediatric prescriptions were dispensed to patients ages 4-11 years, approximately 17% (350,000) were dispensed offlabel to patients 0-3 years. 28 | February 7, 2011

FDA’s review identified 212 pediatric adverse event reports; 45 of these occurred in the off-label population under four years old.

FDA was non-committal about requesting pediatric trials under the safety authorities of FDAAA or the biosimilar provisions of the Affordable Care Act. There were a total of 15 pediatric reports involving dental issues, including eight cases of tooth discoloration, five cases of dental caries and two cases of enamel anomalies. The agency is working with GSK to add dental caries and tooth discoloration to the post-marketing section of labeling. While the committee generally agreed with this approach on the dental issues, some panelists believed that Flovent HFA’s effects on growth and other potential risks had not been adequately studied in the 0-3 age range, considering the extensive off-label use. Temporary voting member and pediatric pulmonologist Jeffrey Wagener, University of Colorado Medical School, said FDA’s review raised “huge concerns with me.” Almost 20% of the drug’s use is occurring in children ages three years and younger, a population for which “there is no good data suggesting efficacy. It’s used because it’s used in older patients,” he said. “We’re identifying two potential major side effects: one is tooth decay. In 0-3 there is no data on oral or dental issues related to inhaled steroids, and yet that’s a principal time of early tooth development.” Wagener’s second concern related to effects on growth. Drug effects on growth are usually studied in children ages 4-12 years old, a time of linear growth. Yet, the highest growth velocity occurs between 1-2 years of age, he said. The only growth study that looked at a population this young found reduced growth with fluticasone. FDA Office of Pediatric Therapeutics Director Dianne Murphy said the agency often struggles with the question of how to get additional clinical data in an unapproved population. Since the Division of Pulmonary, Allergy and Rheumatology Products does not want to increase use in patients under four years, it has not asked for additional studies in that population, Murphy said. She suggested the agency would have to examine its authority under FDAAA to require a safety study in an off-label population for which the sponsor is not seeking an indication. “That’s where you get into what our authority is and how we can get it done. We’re not saying it can’t be done …. We’re getting studies done in some of the population, but obviously there still continues to be a lot of off-label use in populations that aren’t getting studied.” © 2011 F-D-C Reports, Inc., an Elsevier company. All rights reserved.

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The panel’s industry representative, Brahm Goldstein, Ikaria, questioned whether FDA, in issuing written requests following the future approval of new moieties, could leave the door open to seeking additional studies at a later time if utilization or safety issues suggest a problem in other pediatric populations. ”Obviously we’ll think about it,” Murphy replied. “One of the things with the written request though is … you want the data to come in in a reasonable period of time, and we do ask for studies that can come in at different times,” although the agency does not grant exclusivity until all of the studies requested are completed. She questioned how a written request could be legally framed so as to hold a place open for further research in case new information arises. Committee members recommended that FDA strengthen Flovent HFA’s labeling to more prominently highlight the lack of demonstrated efficacy, and the occurrence of adverse events, in patients under four years old.

Pediatric Overdoses With Neulasta The committee encountered a similar quandary – the desire for more research on an off-label indication – in its review of Neulasta (pegfilgrastim). The biologic was approved in 2002 to decrease the incidence of neutropenia in cancer patients receiving myelosuppressive therapy. It is distributed in a single-use, prefilled syringe containing the adult dose. Neulasta is not indicated for pediatric use, though the label contains pharmacokinetic data from a study of 37 pediatric sarcoma patients. FDA’s utilization review indicated that around 330 pediatric patients ages 16 years and younger used the drug from 2006-2009. FDA identified three pediatric adverse event reports involving medication errors since the PK data were added to the label in November 2008. Two of these cases involved overdose, with the patients receiving the entire contents of the prefilled syringe. The agency also identified 29 reports of medication errors in adults since November 2008. Ten involved the incorrect dose, and another 10 involved the incorrect drug. FDA staffers are currently reviewing all Neulasta medication errors since the biologic’s approval. Panelists questioned whether FDA could require Amgen to create an alternative dosage form that would avoid the overdose errors seen with pediatric patients. ”I realize that the company has absolutely no impetus to do this because they would be being asked to do something for an indication that they don’t have, but the solution to this … is a human factors solution and making it so it is possible in some way to deliver the correct dose,” said committee member Carl D’Angio, University of Rochester. The prefilled syringe is a problem, because everyone is used to giving all of it. “To have a drug packaged in a way … where you have to go against every instinct that you have to give Unauthorized photocopying is prohibited by law.

all of the prefilled syringe sets people up for this problem,” he said. Temporary voting member and consumer representative Sidney Wolfe, Public Citizen Health Research Group, said the label should be strengthened to discourage misuse in children. “The label could be much stronger and make it clear that this company can’t make it available in a pediatric dosage form because it isn’t approved for that age range,” he said. “FDA can’t approve a pediatric dosage form for something that does not pass muster in that age range.” Murphy agreed that FDA could not try to make Amgen develop a different delivery system for an unapproved indication.

New Exclusivity Under Health Care Reform The discussion veered into whether additional studies for Neulasta could be requested under the biosimilar provisions of the health care reform bill. Under the Patient Protection and Affordable Care Act, sponsors of innovative biologics can potentially obtain an additional six months of exclusivity in exchange for conducting pediatric studies. The statutory language also allows for issuance of written requests and six-month pediatric exclusivity extensions for “already-marketed biological products.” However, it appears FDA is wrestling with how to implement this provision. “I can’t tell you how that’s going to work for a biologic that’s been on the market” for several years, said Jeff Summers, medical officer in FDA’s Division of Biologic Oncology Products. FDA officials also cautioned that the Neulasta studies envisioned by the panel would likely be difficult to conduct because pediatric oncology research tends to focus on cancer treatments rather than supportive care. The pediatric PK study was a post-marketing commitment in conjunction with Neulasta’s approval. Amgen had trouble recruiting for the study, which took several years to complete. FDA eventually released Amgen from its post-marketing commitment to develop a pediatric dosage form due to the limited number of patients accrued in the trial. ”Under the new biosimilars legislation there may be a financial incentive,” in the form of pediatric exclusivity, that could speed the completion of such studies, Summers said. “With the biosimilar legislation, this biologic might be able to fall under that.” Most panelists supported changing the label to state that because the drug is not approved in children, it is not available in a pediatric dosage form and the adult dosage form should not be used. Panelist D’Angio dissented on the proposed labeling change. “What we’ve done is made it more difficult for people to use the drug,” he said. “We haven’t provided any guidance or any suggestion about how to make the device, that will continue to be used, safer in children.” February 7, 2011 | 29

Elsevier Business Intelligence

Recent And Upcoming FDA Advisory Meetings Topic

Advisory Committee

Date

Updates on ImClone’s Erbitux (cetuximab), GlaxoSmithKline’s Bexxar (tositu- Oncologic Drugs momab) and Arranon (nelarabine), Genzyme’s Clolar (clofarabine), Amgen’s Vectibix (panitumumab), and Novartis’ Gleevec (imatinib mesylate), with the goal of improving post-marketing trials and the accelerated approval process

Feb. 8

Selection of strains to be included in the influenza virus vaccine for the 2011-2012 season; update on pandemic influenza surveillance

Vaccines and Related Biological Products

Feb. 25

Selection of dose, trial design, and use of tools such as biomarkers, pharmacogenetics, modeling and simulation in drug trials for orphan and rare diseases

Pharmaceutical Science and March 2 Clinical Pharmacology

Novartis’ Arcapta Neohaler (indacaterol maleate) for long-term, once-daily Pulmonary-Allergy Drugs maintenance bronchodilator treatment of airflow obstruction in patients with chronic obstructive pulmonary disease, including chronic bronchitis and/or emphysema

March 8

Implications for clinical practice and preclinical and clinical studies of findings on degeneration in the nervous system in juvenile animals exposed to anesthetic drugs, and from human epidemiological studies on the use of anesthesia in children

Anesthetic and Life Support March 10 Drugs

Use of historical-controlled trials in antiepileptic drugs already approved as adjunctive therapy for use as anticonvulsant monotherapy for seizures of partial origin, including consideration of GlaxoSmithKline’s Lamictal XR (lamotrigine) for monotherapy in patients age 13 years and older

Peripheral and Central Nervous System Drugs

March 10

Optimer Pharmaceuticals’ fidaxomicin tablets for Clostridium difficile infection in adults

Anti-Infective Drugs

April 5

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2011 Ho

7–8 April 2011 Vancouver RAPS.org/Horizons2011

Regulatory and beyond. The global healthcare product industry is at a tipping point. Challenges ranging from the research pipeline and the role of patients, payors and regulators to the global landscape and the economics of sustaining effective healthcare are shaping decisions today that will form the foundation for the future. Regulatory professionals need to be more innovative and develop broader skills and knowledge to address current and future regulatory, scientific and business challenges or risk becoming devalued organizationally. The profession is uniquely positioned to identify the road ahead and serve as a change agent. These challenges require creative regulatory professionals with broader skills and richer experience than ever before. A strong understanding of science and regulation will continue to be the cornerstone for regulatory professionals; however, political and economic acumen, strategic global thinking, risk management and an ability to drive innovation, particularly in the area of regulatory science, will become more critical for future regulatory success. The stakes have never been higher. The opportunity has never been greater.

FACING THE CHALLENGE Against the backdrop of these challenges, RAPS will convene 2011 Horizons: Regulatory and Beyond, 7–8 April in Vancouver; bringing together global regulators, leaders, thinkers and innovators to examine: • Factors driving change in the healthcare product sector and those impacting regulatory processes and management • Positive and negative factors in the current regulatory environment and their sustainability and importance in the future • Key considerations that can and should be incorporated into new models for the healthcare product sector • The role of the regulatory profession in actively shaping and refining future models

NEW HORIZONS Since 2006, the RAPS Horizons Conference & Exhibition has brought together regulatory leaders from across the globe to examine science, innovation and economics, and to connect business and regulatory strategy. The conference has always been at its best when tackling real-world challenges head on through provocative discussions and open dialogue. For 2011, RAPS is taking the Horizons concept a step further—no longer is it defined by a single event alone; Horizons represents a commitment to “forward thinking for healthcare leaders.” The gathering in Vancouver is specifically designed to stimulate critical discussion, reflection and creative ideas. Participants and speakers alike will be expected to engage, share knowledge and be heard. There will be required readings and preparation before the program, interactive breakout groups and presentations by attendees during the program, and contribution to the development and dissemination of a white paper after the program. A post-event white paper will outline open research questions and identify opportunities for industry, academia and government to work collaboratively to advance and shape the future of regulatory professionals and regulatory science.

2011 Horizons Elsevier Ad.indd 1

PROGRAM FORMAT The program will begin with a half day of prepared material to set the regulatory landscape, followed by a day and a half of breakout sessions and plenary sessions in which participants will report and discuss findings of each breakout session. Understanding the magnitude of the challenges faced by senior regulatory professionals, the prepared material will be broad in scope by design, intended to feed provocative breakout sessions. These intimate group discussions will be organic in nature, powered by program participants and steered by skilled moderators. Rigorous analysis will take place throughout, driving new ideas and forward thinking.

ADVANCE THINKING. NOT AGENDAS. RAPS recognizes that the traditional conference format is not ideal to support an open exchange of dialogue between industry, agency and academic delegates. That is why 2011 Horizons is different. It aims to capitalize on the synergy created when a diverse group of thinkers works toward developing an effective way forward. To facilitate openness and thought flow, the gathering will remain true to the spirit of the Chatham House Rule. “When a meeting or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed.” Critical questions to be examined: • How can we develop regulatory systems to respond to scientific advances, economic perspectives and shifts in healthcare needs and other factors? • Will the same or similar models apply to the more established regulatory systems versus up-and-coming regulatory systems? Will the developing systems drive new regulatory process and frameworks? Will there be differences between the approaches of established and up-and-coming systems? • What is the capacity of government, industry and academia to address resulting regulatory requirements? You are invited to… • Gain insight into the future of the global healthcare products industry, regulatory’s role in shaping that future, your organization’s role and your role. • Engage with 200 global regulators, industry leaders and academicians through open dialogue and critical analysis. • Discover how regulatory science and practices can keep pace with advances in technology. • Grow your network through formal and informal opportunities to converse with industry leaders. • Contribute to a white paper outlining open research questions and opportunities to work collaboratively to advance and shape the future of regulatory professionals and regulatory science.

Registration is now open. RAPS.org/Horizons2011

1/26/11 3:29 PM