Market Place
As
compared to the previous months, September was a slower month for dealmaking.
The Wall Street Journal recently attributed the drought in big biotech deals to the riskiness of the business. In a note to clients, a Jefferies health care trader wrote: “What appears to be a best-in-class drug on a Monday can often be deemed obsolete headed into the weekend, given the pace of development”.
Last
month, Novartis continued its strategic revamp by selling selected portions of its Sandoz US generics portfolio and Alexion diversified its rare disease pipeline. In addition, a lot of companies announced large investments into manufacturing.
Novartis unloads troubled US generics to India’s Aurobindo Pharma
Novartis finally got rid of some troubled US generic assets when it sold 300 products and several development projects in
its Sandoz US generic oral solids and dermatology business to
Indian drug maker Aurobindo Pharma for US$ 1
billion. Aurobindo agreed to pay US$ 900 million upfront and up to
US$ 100 million in performance payments.
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The deal
relieves Novartis of a troubled franchise, while catapulting Aurobindo to the position of the
second-largest generics player by prescriptions in the US.
The deal with Aurobindo is part of Novartis’ effort to focus Sandoz’s US operations on higher-margin assets like biosimilars and complex generics, which would include injectables, respiratory drugs and eye therapies.
As part of the deal, Aurobindo also gets Sandoz’s dermatology development center, as well as manufacturing facilities in Wilson, North Carolina, and Hicksville and Melville, New York, which Aurobindo said are “highly complementary” to its existing production footprint.
When the deal was announced, investors in two other drug companies — Mylan and Teva — weren’t so happy. The reason? The US$ 900 million upfront payment reached by Novartis and Aurobindo was less than the 2017 annual revenue the portfolio sold, Wells Fargo analyst David Maris said.
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“Although clearly Teva and Mylan have very different businesses than the largely commodity and dermatology portfolio Sandoz is selling, we believe some investors are looking at this as a proxy for what the commodity portions of Teva’s US and Mylan’s US businesses might be worth,” said Maris.
According
to Aurobindo, the acquired portfolio brought in sales of about US$ 1.2 billion
in 2017, higher than the US$ 1 billion the deal could eventually be worth if
performance-related payments are added.
Novartis’ US Sandoz business has been suffering due to the
increased pricing pressure that has wreaked havoc across the entire US generics
industry. Mylan and Teva face the same pricing pressures in the US as
Novartis.
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Meanwhile,
Mylan finally revealed what it had bought during the last quarter for US$ 463 million. The company had purchased Novartis’ Tobi Podhaler and Tobi liquid, two cystic
fibrosis products. The company expects to pay US$ 240 million of that sum this
year.
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Last month, Olon S.p.A., a leading
active pharmaceutical ingredients (API) contract development and manufacturing
organization (CDMO) and generics supplier, announced the acquisition of a local
generics chemical operations API manufacturing facility in Mahad, India,
as part of a continuing expansion of its global footprint.
Olon is a division of Italy’s P&R Group, which had acquired the Infa Group in 2016. P&R rolled Infa’s manufacturing sites in Labochim and Sifavitor in Italy and Derivados Químicos in Spain into the Olon operations. Last year, Olon bought the chemical division of Ricerca Biosciences, a CRO and CDMO based in Concord, Ohio.
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Alexion, Roche, Amicus lead deal making for new developments
Massachusetts-based Alexion announced
its plans to acquire Syntimmune, a
clinical-stage biotechnology company developing antibody therapeutics targeting
the neonatal Fc receptor (FcRn), a protein that is encoded by the FCGRT gene in
the human body.
Alexion would pay US$ 400 million upfront for Syntimmune, and follow it up with US$ 800 million in
milestone payments.
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Syntimmune’s lead candidate, SYNT001 – a humanized monoclonal antibody — is currently being evaluated in Phase 1b/2a studies in patients with warm autoimmune hemolytic anemia (WAIHA) and in patients with pemphigus vulgaris (PV) or pemphigus foliaceus (PF) and has demonstrated proof of mechanism showing rapid IgG reduction.
Alexion sees “potential for broad application across a number of indications” for SYNT001. A related company presentation listed potential indications in neurology, hematology,
nephrology, rheumatology and dermatology.
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Roche acquires Tusk Therapeutics: Tusk Therapeutics Ltd announced it
would be acquired by Roche. Under the
terms of the agreement, Tusk’s shareholders will receive an upfront cash payment of Euro 70 million (US$ 79.79 million), plus additional contingent payments of up to Euro 585 million (US$ 666.8 million) based on achievements of certain predetermined milestones.
Tusk has developed an antibody with a novel mode of action aimed at
depleting regulatory T-cells (Tregs). Tregs suppress immune responses,
including those against cancer cells.
Preclinical data has shown that depleting Tregs from the tumor microenvironment can enhance and/or restore anti-tumor immunity. Tusk’s antibody has been designed to deplete these harmful Tregs, while not interfering with other immune cells acting against the tumor.
In other deals, Amicus Therapeutics paid
US$ 100 million upfront to obtain worldwide development and commercial rights
for 10 gene therapy programs developed at The Center for Gene Therapy at The Research Institute at Nationwide Children’s Hospital and The Ohio State
University.
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The 10 programs are licensed to Amicus from Nationwide Children’s Hospital through the acquisition of Celenex, a private, clinical stage gene therapy company. The lead programs in CLN6, CLN3, and CLN8 Batten disease are potential first-to-market curative therapies for these rare diseases.
Celenex shareholders are also eligible for up to US$ 15 million in
development milestones and US$ 262 million in BLA/MAA submission and approval
milestones across multiple programs.
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As demand for drugs surge, so do manufacturing investments
Regeneron plans
to invest approximately US$ 800 million over seven years to expand its
laboratory space, manufacturing capacity and warehouse facilities at its
Rensselaer, New York campus. The expansion will create 1,500 new full-time jobs
in the area.
Alvotech of Iceland, an independent sister company of US pharmaceutical firm Alvogen Group Inc, joined hands with China’s Changchun High & New Technology Industries group to develop, manufacture and commercialize its biosimilar portfolio in China. The
collaboration will see a new joint venture with manufacturing capabilities in
China's Jilin province, which will be equally funded by both the companies.
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This collaboration aligns the interests and strengths of Alvotech and
Changchun, A new state-of-the-art biologics drugs manufacturing facility will
be built in Changchun, China. Under the terms of the agreement, Changchun will
fund the joint venture with US$ 100 million while Alvotech will contribute
additional capital and six drug market authorizations for its monoclonal
antibodies, used in advanced therapy of cancer and autoimmune diseases, valued
at US$ 100 million. The construction of a jointly owned facility is expected to
start as early as in the first half of 2019.
BioMarin, a
pharmaceutical company focused on developing drugs for rare diseases, said
it will invest US$ 43 million to further
expand its manufacturing plant in Cork, Ireland, adding drug product filling
capabilities to help meet the growing demand for its rare disease medicines.
BioMarin produces the APIs for Vimizim (a drug for the treatment of Morquio syndrome) and its second-newest drug Brineura (enzyme replacement treatment for Batten disease) at the Cork facility.
Click here to view the major deals in September 2018 (FREE Excel version available)
As the
need for contract development and manufacturing grows, Lonza announced a CHF 400 million (US$ 400.87
million) investment at its biopark in Visp, Switzerland, to expand its drug
substance development and drug substance and drug product manufacturing
offerings.
With the
objective to allow customers to manage the complete product lifecycle in one
site and shorten time to clinic and to market by 2020, Lonza will offer a
fixed-price gene-to-vial package with terms under which Lonza will deliver drug
product based on at least 1 kg drug substance within 12 months.
Lonza will also be offering services that
enable biologics license applications (BLAs) to be submitted within 22 months
from the start of process characterization.
Click here to view the major deals in September 2018 (FREE Excel version available)
Our view
Given the pace of deal making we have seen during much of 2018, September was a bit of an outlier as there weren’t too many multi-billion dollar deals.
However, the month saw a stock market launch. Since
Pfizer listed Zoetis Inc, the largest animal health company, five years ago, the firm’s value has nearly tripled. In September, Eli Lilly followed Pfizer’s footsteps. Elanco Animal Health
Incorporated, a subsidiary of Eli Lilly held its initial public offering (IPO) of
62.9 million shares of its common stock at a price to the public of US$ 24.00
per share.
Following the IPO, Lilly holds over 80 percent of
Elanco and a month after the IPO, the share is up over 30 percent and trading
at US$ 32, indicating the opportunities which reside within pharmaceutical
companies to generate value for their shareholders.
Keep track of dealmaking in the world of pharmaceuticals with PharmaCompass’ compilation of Top Pharma & Biotech Deals — PharmaFlow.
Click here to view the major deals in September 2018 (FREE Excel version available)
Impressions: 2692
https://www.pharmacompass.com/radio-compass-blog/top-pharma-biotech-deals-investments-m-as-in-september-2018
#PharmaFlow by PHARMACOMPASS
25 Oct 2018
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GSK, Google form first bioelectronics firm; 11 generic companies benefit from the Teva Allergan deal
This week,
Phispers brings to you the details of the bioelectronics firm formed by GSK and
Google. There is also news on companies like Teva, Takeda, Jinan Jinda and Eli
Lilly, besides two other news snippets pertaining to the FDA -- while the first
one pertains to generic approvals, the other one relates to an additional black
box warning on a few antibiotics. GSK and Google
join hands to form first bioelectronics startupGlaxoSmithKline and Google’s parent company – Alphabet – have joined hands to create a new company that is focused on fighting diseases by targeting electrical signals in the human body. This way, GSK and Alphabet’s life sciences unit – known as Verily Life Sciences – will be jump-starting a new field of medicine known as bioelectronics.Verily Life
Sciences and GSK will together contribute US $ 715.12
million
over seven years to the startup Galvani Bioelectronics. The startup will develop
miniature electronic implants for the treatment of asthma, diabetes and other
chronic conditions. The
implantable devices developed by Galvani, which is owned 55 percent by GSK and
45 percent by Verily, can modify electrical nerve signals. The aim is to
modulate irregular or altered impulses that occur in many illnesses.The
new company
will be based at GSK’s Stevenage research center north of London, with a second research hub in South San Francisco.The announcement comes just weeks after GSK had said it was going to use Apple’s HealthKit to conduct clinical trials.Three years ago, GSK had first unveiled its ambitions in bioelectronics in the journal – Nature. Bioelectronic remedies attach battery-powered implants the size of a grain of rice (or even smaller) to individual nerves to correct faulty electrical signals between the nervous system and the body’s organs.GSK believes altering these nerve signals could open up the airways of asthma patients, reduce inflammation in the gut from Crohn’s disease and treat patients with a range of other chronic ailments such as arthritis. So far, the implants have only been tested on animals but the aim is to produce treatments that will supplement or replace drugs that often come with side-effects.GSK
has been working on bioelectronic medicines since 2012 in a push to develop new
patentable treatments, since its Advair respiratory treatment faces competition
from generic versions. It has invested US $50 million in a venture capital fund
for bioelectronics and provided funding to scientists working in the field. Teva divests 79
products to 11 generic players to close Allergan dealTeva
Pharmaceutical Industries – the world’s largest generics drug company – won a US
anti-trust approval to purchase Allergan's generics
business, after agreeing to divest 79 generic drugs to rival firms. This was arrived
at to settle Federal
Trade Commission (FTC) charges that its proposed US $ 40.5 billion acquisition of Allergan’s generic pharmaceutical business would be anti-competitive. The remedy requires Teva to divest the drug portfolio to 11 firms, and marks the largest drug divestiture order in a FTC pharmaceutical merger case.The Teva-Allergan deal, which was announced in July 2015, solidifies Teva’s position as the world's largest maker of generics while freeing Allergan to focus on branded drugs.The
companies that
have acquired
the divested products are Mayne Pharma
Group, Impax
Laboratories, Dr Reddy’s Laboratories, Sagent
Pharmaceuticals, Cipla Limited, Zydus Worldwide
DMCC, Mikah Pharma, Perrigo Pharma
International, Aurobindo
Pharma USA,
Prasco and 3M Company. Eli Lilly CEO
steps down; company under probe by US Justice Department Eli Lilly CEO John
Lechleiter has stepped down after steering the pharma company through long R&D droughts. The company’s president David Ricks will move up to the top spot. And after a brief spell as executive chairman, Lechleiter will leave the company next spring.Lechleiter
has been the company's CEO since April 1, 2008, and the chairman of its board
of directors since January 1, 2009.The
announcement has come at a time when Eli Lilly has been asked by the
Justice Department to disclose information on relationships with pharmacy benefits
managers (PBMs), the companies that negotiate prices and set reimbursement
conditions.It
has not been clear what exactly the department of justice is looking for. In
the past, drug makers such as Novartis and AstraZeneca have agreed to
pay fines and penalties to settle allegations pertaining to PBMs. FDA continues
to race ahead with generic approvals The
American regulator has reduced its pile of ANDA (abbreviated new drug
applications) by about 500
applications in the first six months of 2016. The FDA has also approved 315 more ANDAs over the same time period and has sent 66 more complete response letters — or rejections — to drug makers.This
news comes after Bloomberg reported
last month that the FDA has become ‘something of a bogeyman’ for India’s stock markets by approving generic drug applications from India at a record place. Similarly, PharmaCompass
had reported last week that Indian
companies have been fixing compliance issues. China’s Jinan Jinda fails another EDQM inspection; compliance troubles in Denmark In
regulatory news from across the world, Jinan Jinda, a Chinese API
manufacturer that had failed an inspection by Italian regulators in June 2015,
had more bad news awaiting it a year on. In
a June 2016
re-inspection, this time by the Spanish Health Authority, the regulator maintained the ‘facilities non-compliance standing’ since two critical observations were made and the corrections from the previous inspection “were found as not having been implemented in a satisfactory way”. And critical deficiencies were found on raw data.In
the June 2015 inspection, the critical observation was related to an unofficial
and non-controlled storage area containing mainly raw materials and finished
products which had been made
inaccessible to inspectors as the door had been removed and replaced with a panel fixed with
screws to the wall.Meanwhile,
the FDA issued an untitled letter (dated July 15, 2016) to Danish allergy
immunotherapy company ALK-Abelló (ALK) over manufacturing and quality control issues at its Horsholm, Denmark facility. The letter comes after a 12-day inspection of the facility in March 2016. During the inspection, the FDA had cited ALK for four “significant deviations” from cGMP requirements. Another black
box warning added to antibiotics like Cipro and LevaquinThe
FDA has upgraded
warnings on
certain antibiotics, such as Johnson & Johnson’s Levaquin, Bayer’s Cipro
extended-release tablets and Merck’s Avelox. The FDA had
added a black box warning in 2008 about the increased risk of tendinitis in
which the tissue connecting muscle to bone becomes inflamed. In
May this year, the FDA had advised restricting the use of fluoroquinolone antibiotic for certain uncomplicated
infections and had warned about the disabling side-effects of the drug.The new warning talks about long-term risks to the drugs’ current black box warning. The agency also advised using the drugs only for serious infections. Manufacturers of fluoroquinolone have faced thousands of lawsuits from patients who claim that their injuries were caused by the drugs. J&J alone faced 3,400 lawsuits over Levaquin’s links to tendon problems and has also settled many of those cases. Takeda to
overhaul R&D, downsize operations in the UKTakeda Pharmaceutical of Japan has
said it plans to build a new pipeline of drugs. It plans to revamp its
research operations at the cost of around US $ 727 million.. The
company also plans to close some of its R&D operations in the UK. Takeda is
beginning the first ‘consultation stage’ of the layoff process in the UK, which hosts a pre-clinical R&D operation in Cambridge as well as a development center headquarter with facilities in the UK, Switzerland and Denmark.Under the revamp, Takeda’s R&D activities will be concentrated in Japan and the US, the 235-year old drug company said in a statement. Takeda plans to now focus on the three therapeutic areas of oncology, gastroenterology and the central nervous system.“We need to first build new capabilities and embrace new ways of working,” Andy Plump, Takeda’s chief medical and scientific officer, said in the statement.
Impressions: 2757
https://www.pharmacompass.com/radio-compass-blog/gsk-google-form-first-bioelectronics-firm-11-generic-companies-benefit-from-the-teva-allergan-deal
#PharmaFlow by PHARMACOMPASS
04 Aug 2016
Peter J. Werth, President and Chief Executive Officer, ChemWerth, a US-headquartered full-service generic active pharmaceutical ingredient (API) development and supply company providing cGMP quality APIs to the regulated markets, is a proponent of removing data to a data-integrity (DI) file from data history, if it isn’t linked to product quality. According to Werth, FDA is unnecessarily obsessed with data integrity issues, and pharma companies have begun to fear FDA inspections. This needs to change, Werth tells PharmaCompass.
Excerpts from the interview.
Can you tell us about your journey in the world of
pharmaceuticals?
I
began by supplying generic cough and cold APIs by setting up a chemical
business back in 1975. There was a small group of companies (first generic companies)
that mainly sold cough and cold products. These companies wanted to sell patent-expired
generics and we developed select APIs for them. There was no real FDA (US Food
and Drug Administration) approval process involved.
By 1982, I realized the generic industry would be big business and API sourcing was key to success. Since I knew the API business, my wife and I formed ChemWerth – a company that supplied generic APIs.
By
1988, ChemWerth was working with 10 American and three Chinese manufacturers.
But the generic scandal changed everything. My American partner factories gave
up the API business when new
regulations came in. Chemical plants could no longer manufacture APIs. From my
previous 11 years of dealing with China, I knew that almost all of the dosage
form factories also produced APIs. This was especially important for the
injectable grade products. By the early 1990s, ChemWerth was developing APIs
for highly toxic oncology injection drugs and many antibiotics. We successfully
introduced doxorubicin, daunorubicin, mitomycin, bleomycin, etoposide, ifosfamide and several antibiotics such as lincomycin, clindamycin phosphate, amikacin sulfate, tobramycin and vancomycin (all from China).
Today, ChemWerth represents 25 Chinese factories for about 100 products. We still represent one American API supplier along with several Indian manufacturers. We recently expanded to supply veterinary drugs and partnered with a major supplier of polypeptides and a world-class supplier of heparin and related products.
You have been working with China for many years now. When
did you first come to China and how has the Chinese pharmaceutical industry
transformed over the years?
I first went to China in 1979. During that
trip, I realized I could successfully deal with the Chinese. Most of my friends
who went to China said it was impossible to deal with them. I always thought
this gave me an advantage in China. Over the next seven years, I kept in touch
with China, but did very little business.
In 1986, I was running ChemWerth and was a
consultant with a company to help its large pharmaceutical facility produce generic
APIs. We targeted clindamycin phosphate for development, since the product had
good sales, and was off patent. It also had no competition because Upjohn
(an erstwhile US-headquartered pharma company that got merged with Pharmacia in
1995, which in turn got bought over by Pfizer) controlled all the key starting material – lincomycin
hydrochloride. Using my contacts and my ability to deal with Chinese factory directors, I managed to break Upjohn’s stronghold in lincomycin. I convinced three factories to work with me so that I could file a DMF (Drug Master File). Clindamycin became a very good product for ChemWerth and gave me reason to visit China regularly to develop new business.
In those days, factories were generally old and needed upgradation. Documentation was always good, and in detail. However, it was mostly in codes and therefore useless to most others. It was extremely difficult to convince the factory to provide a true and detailed process to ChemWerth to file a DMF with the FDA. There is still a tendency (amid factories in China) to hide important facts. As a result, it takes ChemWerth at least three versions/iterations before we think we have got the right process details.
Today, the hardware in China’s pharmaceutical factories is excellent, and is usually purchased from the best overseas manufacturer. The software is good too and is likely to improve drastically as manufacturers realize software is equally important as hardware.
In view of the current GMP concerns being uncovered at
Chinese companies, are you still focused on China as a source of
pharmaceuticals?
In my mind, and in the ChemWerth representative factories, there are no
GMP concerns, no quality concerns, and no data history concerns. The FDA's
fascination with data integrity focuses on a problem that does not exist in more
than 90 percent of the pharmaceutical factories. There are at least 18 reasons
to remove data from data history. All of these 18 reasons are related to
analyst error and equipment failures (laboratory gross errors) and not related
to quality or GMP manufacturing. (Click here to read Werth’s 18 reasons to remove data).
I agree that gross errors/laboratory gross errors should not be deleted. I also agree that deleted gross errors/laboratory errors not related to quality do not deserve a warning letter.
However, the FDA should also know the main reason data is deleted is because the analyst (often) knows the result is not correct for reasons not related to quality (gross errors/laboratory gross errors). They do not want to conduct an expensive, time-consuming, and cumbersome OOS (out-of-specification) investigation. Therefore, they delete the data, weigh out new samples, fix the problem, analyze, and either receive acceptable results or rejection results.
Today, China has the most modern manufacturing facilities and the money to invest in software to manufacture the highest quality with the best traceable records. The Chinese need to trust the FDA to treat them fairly and not rely on two and three-year-old DI information. They will do the job correctly now and in future. But they cannot change the past. As stated earlier, all DI product-related observations have proven that the product quality and product history were acceptable.
China can only become a stronger API supplier. China’s volumes will increase and costs will decrease, because the domestic market is growing rapidly. The country will have cost/pricing pressures and will need to concentrate more on the difficult products that require expensive equipment. The standards set by the China FDA (CFDA) match the US FDA standards. And this will make it easier to operate under one quality and documentation system. Most importantly, they have the money to invest in the latest technology, best scientists, and equipment.
In your view, what can pharmaceutical regulators and the industry
do differently in order to communicate that the product quality is not at risk,
given the environment where data-integrity violations have become commonplace?
The FDA needs to understand that DI has no relationship with product quality. We have two recent examples. In the first case, DI issues applied to 70 batches. All 70 batches were retested and all were found to be in specification. The second case gave the same results – between two inspections over 100 batches were considered potentially fraudulent. All 100 batches were retested and were found to meet the specification. At both the factories, the data history showed all the batches are in specification – this implies 100 percent correlation to quality. The data integrity listed 100 batches and no batch failed specification – this shows 0 percent correlation to quality.
From a DI perspective, FDA inspections in factories that only produce APIs for export should be different from inspections in pharmaceutical companies that export APIs and dosage form. In reality, API manufacturers cannot cheat. They sell their product to dosage form manufacturers, which in turn are responsible for the quality that goes into the dosage form.
Off specification batches will be rejected and returned to the API manufacturer. While inspecting factories’ customer complaint file, it is rare to find batches being rejected and returned to the factory. The same does not apply to pharmaceutical companies that produce both API and finished dosage. They can hide information. Data integrity is more of an issue with companies that manufacture both API and dosage form.
What steps is ChemWerth taking with its partners in China
to improve compliance standards?
ChemWerth is addressing this issue with the FDA and ChemWerth representative factories. In broad terms, data history should be paramount, since it is related to product quality. Data integrity is a part of data history. ChemWerth has prepared a standard operating procedure (SOP) to handle electronic data.(Click here to read ChemWerth’s SOP). A simple version is that when one or both samples are out-of-specification, the analyst’s supervisor (who committed the error) reviews the data with the analysts. If they determine that one of the 18 reasons for analyst error or equipment failure is the cause of the failure, then this is noted. Three new samples are prepared, the error is corrected, and the samples are run and if all samples pass then these results are retained in data history and the product is passed. The previous bad result is documented and removed to the data integrity file. No lengthy, time-consuming, and expensive OOS report is conducted. This makes the procedure factory-friendly.
In the above example, if one of the three new samples fails, then all results are retained in the data history. The batch is rejected for rework or reprocessing.
I believe the present atmosphere between the
FDA and API manufacturers is at an all-time low. The industry feels the FDA
inspectors are looking at mostly irrelevant data to prove that the factory
operates fraudulently. Factories no longer welcome FDA inspections, out of fear
of DI failure. Factories feel the FDA is using DI to point out fraud where
there is none (excluding Hisun
and Ranbaxy).
In the past, we always welcomed FDA inspections as part of doing business. We
need to get back to that time and place.
Impressions: 6148
https://www.pharmacompass.com/radio-compass-blog/data-integrity-has-no-relationship-with-product-quality
#PharmaFlow by PHARMACOMPASS
07 Jul 2016
