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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (7533)	12/18/2002 9:14:16 AM
From: Biomaven	Respond to of 52153

Another in a long line of articles grumbling about the paucity of new drug approvals. I think the article understates the impact of the FDA tightening - at very least it stretches out timelines and causes drugs on the cusp of a good risk/reward ratio to be dropped by their developers. Another driver they don't mention is that the increase in generics acts to close off development of improved drugs in that entire class. Reuters New drug approvals slump as R&D labs hit buffers Wednesday December 18, 8:53 am ET By Ben Hirschler, European Pharmaceuticals Correspondent LONDON, Dec 18 (Reuters) - The global pharmaceutical industry has had a dismal year, with new drug approvals at the lowest level in over a decade and no sign of productivity picking up in 2003.Despite record research and development investment, so far in 2002 a mere 15 novel drugs have been approved by the U.S. Food and Drug Administration (FDA), the main gatekeeper to the $400 billion-a-year medicines market. Even if a few more get under the wire this month, 2002 is unlikely to match last year's already poor total of 24. In 1996, by contrast, a bumper 53 new drugs got a green light. And there is little hope the drought will end anytime soon since applications for new marketing authorisations are also down, implying continued disappointing returns on the more than $35 billion that companies pour into R&D each year. Data to be published shortly by the European Medicines Evaluation Agency in its annual report will show the number of applications to the London-based equivalent of the FDA has fallen to just 31 this year from 58 in 2001. The EMEA has already said fees paid by industry will have to rise sharply to compensate for the slump, since the agency relies on income from individual submissions for funding. "Never has so much money been spent on research and development with so little results," the EMEA's executive director, Thomas Lonngren, told a committee of members of the European parliament last week. The number of both novel and other new drug applications received by the FDA, meanwhile, fell to 98 in 2001 from 115 in 2000, the first time it has dipped below 100 since 1993. R&D BOTTLENECKS Worries about a chronic decline in research productivity have contributed to a one-third fall in the market value of big pharmaceutical stocks on both sides of the Atlantic this year. Industry analysts estimate that each of the top 10 firms needs three new products a year to ensure the double-digit earnings growth that investors have come to expect. But the new product approval rate has actually reverted to the kind of levels seen in the 1970s and 1980s, when it averaged 17.3 and 21.7 respectively -- a far cry from the "golden years" of 1995-99, when annual FDA approvals averaged 37. It is a big disappointment for an industry that two years ago was riding high on talk of a wave of revolutionary medicines created by our new understanding of human genetics. In fact, turning ground-breaking science into products on pharmacy shelves is proving much harder and slower than expected. "There are a lot of bottlenecks in drug discovery," said Jonathan de Pass, director of London-based consultancy Evaluate. "The new technologies should eventually help, for example by predicting which groups of patients will respond to a new treatment, but it's not going to make much of a difference for at least the next five years." Hank McKinnell, chairman and chief executive of Pfizer Inc (NYSE:PFE- News), the world's largest pharmaceuticals concern, says a tripling of R&D spending in the past 10 years without any increase in output is the "most vexing paradox" facing the industry. "Discovery scientists within our industry are coming to grips with a bitter reality -- many of them will never see one of their discoveries become available to patients," he wrote in recent Ernst & Young global pharmaceuticals report. SHOPPING FOR PRODUCT But adapting to the post-genomic era of research may not be the only reason for the current productivity trough, according to the EMEA's Lonngren. He believes recent consolidation, which has seen firms like Pfizer and GlaxoSmithKline Plc (London:GSK.L- News) merge vast R&D empires, has also cut the number of new drugs, as managers concentrate on multi-billion-dollar sellers rather than smaller products. Some in the industry complain that regulators are taking a tougher stance or dragging their heels on approvals but Lonngren rejects this, pointing to standardised practices now adopted by watchdogs around the world. Officials say approval times and rates are not much different than they have always been. Few big pharmaceutical concerns have escaped without product setbacks this year. Casualties include Bristol-Myers Squibb and Co's (NYSE:BMY- News) failure to win approval for blood pressure drug Vanlev and delays to key new drugs from AstraZeneca Plc (London:AZN.L- News) and Merck & Co Inc (NYSE:MRK- News). The response of industry leaders to waning in-house productivity has been to step up the hunt for licensed-in products, with firms now touting themselves as partners to smaller players. Success, however, is not guaranteed. Bristol-Myers in 2001 struck a record $2 billion deal -- equivalent to virtually its entire annual R&D budget -- for rights to ImClone Systems Inc's (NasdaqNM:IMCL- News) Erbitux cancer drug, only to see the drug's application shot down by the FDA. biz.yahoo.com Peter

To: Biomaven who wrote (7533)	12/18/2002 11:45:57 AM
From: Vector1	Read Replies (2) \| Respond to of 52153

Thanks Peter. The meeting was illuminating as to the reason for the long delay. I think there were four reasons: 1. The FDA became uncomfortable with the original trial design which did not have a control group but rather the patients own records on prior chemo regiments. Unfotunately they were in a box because one of their own committees approved the design. I think the result was a lot of consternation and discussion and a view that the data submitted on prior regimes had to be very very good. 2. The origingal package submitted by Coulter was massively deficient. One FDA reviewer said that there was missing data in ovver 90% of the case files. Even though many of the omissions might have been minor the FDA was already concerned about the lack of a control group. The FDA ultimately required two independant panels to review aspects of the data. When you read through the FDA safety analysis it is clear they took a negative view on any potential area of ambiguity. 3. According to the FDA the sponsor changed manufacturers twice creating concern about whether all patients were in effect getting the same drug. Combine this with the fact that a radioconjugated MAB was novel at the time this gave the FDA fits. They pointed out that they are currentlly not finished with the manufacturing review but made it clear that the lines of communication are much better with CRXA than they had been with Coulter and they did not see this as a major stumbling block. 4. According to the FDA the acquisition of Coulter by CRXA caused some delay. I don't buy this one. The FDA has made it clear that Coulter was a major problem that has been improved by CRXA. Listening to the FDA folks at the panel it is seems to mean they are earnest people trying to do what they think is best. I think the problem is that culturally they are focussed on finding issues not ways to solve them. A young aggressive company in Coulter that had an inexperienced team doing the trials did a lot of damage. What is clear, and the FDA heard this loud and clear is that this drug should be approved ASAP. It is the only compound to result in long term CRs in multiple refractory patients. The committee members (mostly practicing oncologists) were particulary interested in the followup studies inlcuding: Bex v Zev with a safety endpoint powered to show lack of inferiority. Bex v. Rit Bex in front line with long term follow up. One other note. I was quite impressed and moved by the 6 survivors who spoke to the panel. They were strong, intelligent and articulate advocates for the drug. One made the point that most NHL patients become highly educated on treatment options and care deeply about quality of life. God bless these people and may their remissions continue indefinitely. V1