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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: Andrew H who wrote (14443)	2/8/1998 7:11:00 AM
From: Henry Niman	Read Replies (1) \| Respond to of 32384

Here's what the FT had to say about pharmas and Biotechs: Merger: Drugs hit gene gridlock SATURDAY FEBRUARY 7 1998 Driving brains not profit, is the task facing Glaxo and SmithKline, says Daniel Green There can be nothing more frustrating for a Ferrari driver than getting stuck in atraffic jam. That is what has happened to the drugs industry, and the proposed œ100bn merger between Glaxo Wellcome and SmithKline Beecham is an attempt to get the traffic moving. It is a risky strategy because it involves people rather than mere money. Glaxo and SmithKline are prepared to take that risk even though, by the standards of any other industry, they are enormously rich. The combination would be a behemoth with annual sales of œ17bn, employing more than 100,000 people and, if City analysts are to be believed, making œ5bn a year in pre-tax profits early next decade. Why should the rich take risks? Because they have a problem that could seriously damage their wealth if their rivals solve it first. The problem is that their gridlocked Ferraris - the glittering research centres and sales forces packed with PhDs - cost billions of pounds a year. If only there was a way they could go faster . . . Start with sales. Drugs are tested through clinical trials that should give an objective evaluation of how good they are. They do not. Patients are different (do you prefer aspirin or paracetamol?) and trials are different (should you measure how quickly your headache goes or how long before the next one starts?). The bottom line is that doctors and patients are eminently persuadable about medicines. The more sales people there are on the road, the more drugs are sold. And anyone who has watched US television in the past three years will have noticed that drug companies have discovered television advertising. The Glaxo SmithKline combination would be the biggest drugs company in the world, able to afford a huge sales force, negotiate for the best advertising slots, and sell more. The R&D jam is not harder to understand, but the description takes a little longer. Seventy years ago, new medicines were discovered with what scientists call "bucket chemistry". Plants and soil gathered outside the factory or on a seaside holiday would be tested on animals and people in the hope that some medical effect would turn up. If something looked promising, chemists would try to make a similar compound to see if it worked better, or hurt less. It was a slow process, but aspirin and penicillin were high spots. After the second world war, the doctors moved in. They wanted to understand how a disease worked before looking for a drug to treat it. The great pioneer was ICI's James Black, who studied how adrenalin affected the heart in the 1950s. He found chemical "receptors" for adrenalin and suggested that a drug might occupy the receptors and keep the adrenalin out. Knowing roughly what to put in his bucket, and what to test it on, led to a group of best-selling drugs to treat high blood pressure. These beta-blockers helped bring Black a knighthood and a Nobel Prize. The Black model is still how drugs companies work. The difference is that understanding how diseases work is largely about studying genes, and finding the key to fit the genetic lock involves computers, miniature robots and finding people who understand how to apply them in molecular medicine. In the past five years, SmithKline has built a Ferrari of genetics research. It has identified thousands of pieces of DNA, the chemical that holds genetic material, and probably has more genetic information than any other company in the world. The trouble is that knowing chemical structure is just the start. A gene is not a medicine. A gene is something that makes a protein in the body. A disease may start when a gene misbehaves. But how, where, when and why the gene does what it should not remain to be answered. There are so many possibilities that SmithKline has offered some data to other drugs companies in the hope they get somewhere. Glaxo has a solution. It is one of the top companies in the computerisation of bucket chemistry which goes by the more high falutin' name of combinatorial chemistry. It is a way to put together pieces of molecules in different ways very quickly. Specialist combichem companies in the US claim to be able to make a million different compounds a week, and Glaxo is probably not too far off that number. But Glaxo's Ferrari is also stuck in a jam. How do you test so many potential drugs before the next million come through the door? Glaxo - and about every other drugs company - have part of the solution: banks of robot arms working day and night testing molecules against targets like James Black's adrenalin receptors. What Glaxo needs is many more targets, and that is what SmithKline's genetics research is producing. It sounds such a sensible merger, then. Not according to some, such as Merck in the US and the UK's Zeneca. They may yet change their minds but for the moment can point to lots of problems. First, the available evidence suggests that people are more productive in small laboratories. There are more than 2,000 biotechnology companies, and Jan Leschly, SmithKline's chief executive, once said: "Biotech companies can turn geniuses into millionnaires. We can't." Second, there may be more efficient ways to clear the traffic jam. How about learning more about what the genes and molecules do before doing millions of potentially useless screens? Third, and most importantly, is the damage big mergers can cause. Michael Standing, a vice-president with management consultancy Gemini, points out that Glaxo has a market valuation of œ60bn. Its annual accounts show its assets are worth less than œ2bn Much of the difference lies in the value of people's ideas, techniques and skills. Standing says that both companies could get the financial side of their merger perfect, but if they mess up the human side, they risk destroying most of their value. We are likely to hear a lot over the next few weeks about the finances of this proposed merger. The figures will sound convincing. But investors considering the prospects of these companies and the alternatives should remember that the numbers are a small part of the story. People who buy cars for their theoretical top speed sometimes find that a people-mover would have been a better idea.

To: Andrew H who wrote (14443)	2/8/1998 11:11:00 PM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

Cancer discussions seem to be everywhere: Tobacco Settlement Should Include Funds for Cancer Research BY DAMARIS CHRISTENSEN c.1998 Medical Tribune News Service WASHINGTON -- Any settlement in the legal dispute with tobacco companies must include sufficient funding for biomedical research as part of a long-term strategy to stop the epidemic of tobacco-induced cancers, public-health experts said at a congressional hearing here Thursday. Smokers and former smokers account for a substantial portion of all lung cancer cases in the United States. Current smokers are 15 times more likely to develop lung cancer than those who have never smoked. And although the risk of lung cancer declines after a person stops smoking, former smokers still are up to four times more likely to develop lung cancer than never-smokers, said Donald S. Coffey, president of the American Association for Cancer Research and a cancer researcher at Johns Hopkins University in Baltimore. Lung cancer is the leading cause of cancer death among Americans, killing about 160,400 people each year. ''And lung cancer was not a major cancer until around 1940,'' soon after cigarettes were introduced, Coffey said. At the hearing, Coffey noted that health-care costs for all cancers exceed $107 billion each year, most due to the treatment of lung, breast and prostate cancers. ''However, we only invest about 2 percent of cancer's health-care costs in research to find effective prevention measures, treatments and cures for cancer,'' he said. The tobacco settlement was worked out between the major tobacco companies and several state attorneys general. Under the proposed settlement, the tobacco industry would gain immunity from further class-action lawsuits in exchange for paying $368.5 billion over 25 years to settle smoking-related health claims in 40 states. As currently proposed, the settlement does not require the money to be used for biomedical research into tobacco-related ailments. But the tobacco settlement ''is probably the most promising source for increased biomedical funding,'' said Sen. Orrin G. Hatch (R-Utah). Hatch said he was ''heartened'' by Clinton's proposed 8.4 percent budget increase for the National Institutes of Health, but noted that Clinton's dependence on funding from the tobacco settlement for a number of issues ranging from child care to Medicare support of clinical trials could make it harder to get a tobacco settlement through Congress. Nonetheless, the proposed settlement is a once-in-a-generation opportunity to make a difference in the health of all Americans, especially the young, Hatch said. ''I think we have to do this.'' ''The tobacco settlement represents a historic opportunity in this country,'' agreed Dr. Harmon J. Eyre, executive vice president for research and cancer control at the American Cancer Society in Atlanta. He noted that the public-health community is divided over whether to grant the tobacco industry immunity from some types of liability and thus far had not united behind one bill in Congress. Just in case the tobacco settlement does not pass Congress, funding increases at the National Institute of Health should not be solely drawn from these potential funds, Coffey said. He called for a stronger emphasis on clinical research - ''the link between laboratory discoveries and the advances in prevention, diagnosis and treatment that improve medical practice.'' ----- (The Medical Tribune Web site is at medtrib.com )